Plaskitt and Tax Practitioners Board

[2022] AATA 267

Plaskitt and Tax Practitioners Board [2022] AATA 267 (18 February 2022)

Division:TAXATION AND COMMERCIAL DIVISION

File Number:          2019/7312

Re:Richard Geoffrey Plaskitt

APPLICANT

Tax Practitioners BoardAnd  

RESPONDENT

DECISION

Tribunal:Mr Rob Reitano, Member

Date:18 February 2022

Place:Sydney

I affirm the decisions of the Board.

.....................................[sgd]...................................

Mr Rob Reitano, Member

CATCHWORDS

Termination of registration as tax agent – non-application period of 5 years imposed – contraventions of the Code of Professional Conduct – applicant failed to comply with taxation laws in the conduct of its personal affairs – misappropriation of funds – decisions affirmed

LEGISLATION

Tax Agent Services Act 2009 (Cth)

CASES

Ridden and Tax Practitioners Board [2020] AATA 422

REASONS FOR DECISION

Mr Rob Reitano, Member

18 February 2022

Introduction

1. On 16 October 2019 the Tax Practitioners Board (Board) told Richard Geoffrey Plaskitt (Mr Plaskitt) it had decided on 3 October 2019 that Mr Plaskitt’s registration as a tax agent was to be terminated because the Board not satisfied he was a fit and proper person under subparagraph 20-5(2)(a)(ii) of the Tax Agent Services Act 2009 (Cth) (Act). The Board also decided that Mr Plaskitt would be prohibited from applying for registration for a period of five years. The decisions were to take effect from 18 November 2019.

2. The decisions followed adverse findings that were made after an investigation into the partnership of which he was the sole supervising agent and a partner which was known as Danielle Elizabeth Plaskitt and Richard Geoffrey Plaskitt (Partnership). Danielle Elizabeth Plaskitt (Mrs Plaskitt) was the other partner of the Partnership and Mr Plaskitt’s wife.

3. Mr Plaskitt has asked the Tribunal to review the Board’s decisions to terminate his registration and to impose a non-application period of five years.

4. I have decided to affirm the Board’s decisions and what follows are my reasons for doing so.

   How did the matter come to the Tribunal?

5. The Act provides a scheme for the registration of taxation agents which has as one of its core objectives making sure that taxation services are provided to the public with appropriate standards of professionalism and ethics. That object is achieved both by providing minimum ‘eligibility requirements’ for those who seek and have registration and by providing for other sanctions against those who breach prescribed standards of conduct.

6. An important eligibility requirement for registration that must be maintained whilst a person is registered is that a person be a fit and proper person. If a person is registered but subsequently ceases to meet an eligibility requirement, their registration as a taxation agent can be terminated. If a person’s registration is terminated because they are not a fit and proper person to be registered as a taxation agent, the Board can also prescribe a period up to five years during which they are precluded from seeking registration again.

7. I have already referred to the Board’s decision by which it was not satisfied that Mr Plaskitt was a fit and proper person to be a taxation agent. The reasons for that lack of satisfaction arose from the circumstances that I deal with in detail later, but for now it is sufficient to set out the chronology.

8. The Partnership provided various bookkeeping, accounting, and taxation services to its clients. Mr Plaskitt was most recently registered as a tax agent on 29 February 2016 but had two other stints when he was registered between March 2010 and April 2012 and between July 2012 and August 2015. His registration came to an end on each of those occasions because it was not renewed before it expired.

9. On 20 May 2019 the Board commenced an investigation into the conduct of the Partnership and in its notice about the investigation foreshadowed that any adverse findings would have consequences for Mr Plaskitt.

10. The Board’s investigation into the Partnership had its origins in a complaint that was made to the Board by Dr Robyn Cosford (Dr Cosford) in November 2018.

11. Dr Cosford had known Mrs Plaskitt for about 26 years. She did not consider Mrs Plaskitt a close friend although Mr Plaskitt suggested otherwise. She has known Mr Plaskitt for a long time too but perhaps slightly less than she has known Mrs Plaskitt.

12. Dr Cosford was and remains a medical practitioner who at the relevant times had interests in, amongst other things, a business known as the Northern Beaches Care Centre (Centre) and in the R Cosford Superannuation Fund (Fund). Dr Cosford and the various entities related to her were clients of the Partnership.

13. Dr Cosford said she contracted Mrs Plaskitt as her bookkeeper in 2008 and Mr Plaskitt as her accountant in 2009. Mrs Plaskitt also became Dr Cosford’s practice manager sometime later. Dr Cosford relied upon the Partnership and Mr Plaskitt to assist her in managing her accounting and taxation affairs and those of the Centre and the Fund.

14. From January 2016 to March 2018, Mr Plaskitt was the tax agent responsible for representing Dr Cosford’s interests and the interests of the entities associated with comprising as the Centre and the Fund.

15. On 12 September 2019 the Board wrote to Mr Plaskitt enclosing a copy of the submission to a Conduct Committee of the Board which set out matters that were relevant to the investigation that had been conducted. Very many of the allegations related to Dr Cosford and her associated business and other financial interests.

16. On 3 October 2019 the Board made the decision to terminate Mr Plaskitt’s registration as a tax agent because it was not satisfied that he met the eligibility requirements of being a fit and proper person and to prohibit him from applying for registration for 5 years on the basis that he had ceased to be a fit and proper person. That decision was communicated to Mr Plaskitt on 16 October 2019 and was to be effective from 18 November 2019.

    What are the issues?

17. The main issue is whether Mr Plaskitt’s registration as a tax agent should be terminated because he no longer satisfies the criteria that he be a fit and proper person which is one requirement that must be maintained in order for a person to continue to be registered. The other and related issue is whether Mr Plaskitt should be subject to a period during which he is prohibited from applying for registration for a period of five years.

18. The Tribunal stands in the shoes of the Board and must determine for itself whether it is satisfied that Mr Plaskitt is a fit and proper person to be a taxation agent and whether, if he is not, there should be a period for him to be prohibited from applying for registration.

    Why is it claimed that Mr Plaskitt is not a fit and proper person?

19. The Board’s claim that Mr Plaskitt is not a fit and proper person was informed by a series of allegations concerning Mr Plaskitt’s conduct as a partner. The allegations relied on were that Mr Plaskitt as a partner and as the sole supervising agent for the partnership:

    (a)allowed the Partnership to misappropriate funds belonging to Dr Cosford, the Fund and the Centre’s business management account which funds were used to make:

    (i)unauthorised payments to the Partnership’s accounts with the Australian Taxation Office;

    (ii)payments for personal and business expense of the Partnership and Mr and Mrs Plaskitt;

    (iii)loans to the Partnership, Mr and Mrs Plaskitt and to others; and

    (iv)payments which were represented as loan repayments in the bank accounts of the Fund and the Centre without reimbursing Dr Cosford for the money belonging to the Centre or the Fund.

    (b)allowed the Partnership to breach its taxation obligations by:

    (i) failing to lodge the 2018 income tax return by its due date;

    (ii) failing to lodge six business activity statements (BAS) for each of the quarters ending between 31 March 2018 and 30 June 2019 by their due dates; and

    (iii) failing to pay its taxation debts in its Integrated Client Account (ICA) and its superannuation guarantee charge;

    (c)allowed the Partnership to breach the obligation to have in place adequate arrangements for the management of conflicts of interests that might arise in relation to its activities as a registered tax agent, BAS agent or tax (financial adviser) by:

    (i) failing to have written loan agreements in place in relation to loans that were claimed to be in place with Dr Cosford, the Centre or the Fund;

    (ii) using the Centre’s EFTPOS facility to process transactions for the partnership’s pony party business;

    (iii) making personal transactions from the Fund or the Centre’s accounts without having proper records to evidence those transactions; and

    (iv) purporting to give the partners authority to make third party payments that related to the Partnership business on behalf of the Centre;

    (d)allowed the Partnership to breach the requirement to act competently by failing:

    (i) to lodge 23 tax returns for Dr Cosford or entities related to her by their due dates;

    (ii) to lodge 53 BAS statements for Dr Cosford or entities related to her by their dates;

    (iii) failing to ensure that the Cosford Family Trust complied with payment arrangements between 21 April 2017 and 6 March 2018 in order to pay its ICA debt;

    (iv) failing to ensure Dr Cosford’s company Care Centre of Australia Pty Ltd paid its tax debts when they fell due; and

    (e) by allowing the Partnership to breach a requirement to respond to requests and directions from the Board in a timely, responsible and reasonable manner which concerned the failure to provide supporting evidence for a request for an extension of time to respond to the Board’s letter of 20 May 2019 and a failure to provide a response to the letter of 20 May 2019 by the requested date.

20. I will deal with each of the alleged matters in turn.

    The misappropriation allegations

21. The Board produced bank statements for Dr Cosford, the Centre and the Fund from 1 July 2011 to 31 March 2018. From these bank statements the Board said that some transactions could be identified as payments made to the Partnership or to one of the partners or alternatively as payments that were ‘suspicious’ because they were large and there was no explanation for the payment. There was not much said about why large payments were ‘suspicious’.

22. I will group the payments that were alleged as part of this allegation into five separate groups because that is a convenient way to approach them. The five groups of payments are: first, payments which were made regularly from the Centre’s bank account to the Partnership’s ATO accounts; second, payments totalling $60,500 to Mrs Plaskitt; third, nine payments that were ‘unexplained’ totalling together $92,603; fourth, a payment of $1,292.00 to a professional association; and fifth, a series of payments described as ‘loans’ and ‘loan repayments’.

23. It should be borne in mind that Mr Plaskitt’s responsibility lay in the fact that as the sole supervising partner and a partner, he by his conduct allowed these things, the payments, to happen.

    The Partnership’s tax debts

24. The first matter alleged that the Partnership had made unauthorised payments from Dr Cosford’s accounts to pay the Partnership’s tax debts to the ATO.

25. These involved payments to the ATO out of the Centre’s bank account (which was styled Northern Beaches Care Centre – Business Management Account) where two particular series of transactions are identified.

26. The first series involved 77 transactions in the period between 15 May 2017 to 16 March 2018 that totalled $44,300 from the Centre’s bank account which had as the description for the payment ‘Internet Bpay Tax Office Payments 980353566035160’. The number referred to in the description was the Partnership’s Client Activity Centre Account - 1. 

27. The second series involved 51 transactions in the period between 19 January 2017 to 20 March 2018 totalling $39,900 which bore the description ‘Internet Bpay Tax Office Payments 2980353566032360’. The number referred in the description referred to in the description was the Partnership’s Client Activity Centre Account - 2.

28. There was no issue that the transactions were undertaken by the Partnership and that the Partnership had access to and did transact on the Centre’s bank account. The issue concerned the question of authority to make the payments.

29. Dr Cosford was clear in her evidence that Mr and Mrs Plaskitt had authority to transact on the Centre and Fund’s accounts to pay creditors. Dr Cosford said that at no time did she give Mr and Mrs Plaskitt authority to pay from the Centre’s or Fund’s accounts Mr and Mrs Plaskitt’s own personal creditors, to make personal ‘loans’ or to pay their personal tax debts. Dr Cosford denied that she had ever authorised payments ‘to the tune of $44,300’ over 77 transactions from the Centre’s accounts to the Partnership’s ATO accounts. Dr Cosford denied that she had ever authorised payments of $39,900 over 51 transactions to the Partnership’s ATO account. Dr Cosford at no time authorised Mr and Mrs Plaskitt to take funds from any bank account she controlled to pay the partnership’s tax bills.

30. Mr Plaskitt accepted that these payments had been made and were undertaken by the Partnership. Mr Plaskitt said that the payments were authorised by Dr Cosford. The basis for that authority was unclear but Mr Plaskitt referred to the letter dated 10 July 2019 which responded to specific questions that the Board asked as part of its investigation. In answer to an inquiry about why funds from the Centre’s bank account were used to pay money into the Partnership’s CAC account, the letter said that:

    From the beginning of our contract with Dr Cosford, NBCC, RCSF, Dr Cosford had approved and we agreed that monies owed to us for fees could be paid to nominated third parties on our behalf, directly on our advice and authority. At first it was a necessity as we were always owed payments and were not receiving them in time to pay our own bills, so to speed up that we paid direct from the Cosford accounts to creditors. It was a convenience as Danielle spent every day managing the Cosford’s finances.

    We provided an “Authority to Pay” {see item 6b)i) to each of the Cosford businesses every year agreeing to this ongoing arrangement. Dr Cosford was aware of all transactions. Dr Cosford reviewed the bank statements online as well as the paper bank statements. Dr Cosford would question any transactions she felt she required further explanation of. As part of our contract Dr Cosford also authorised Danielle and Richard Plaskitt as her business managers to make any payments to creditors by any method chosen without further reference to her.

31. The document referred to at ‘item 6b)i)’ was a letter dated 1 July 2017. It was on the letterhead of ‘DE & RG Plaskitt’ and signed by Mrs Plaskitt. It was addressed to Northern Beaches Care Centre. It commenced with the words ‘Dear Accountant’. In the subject line the words ‘RE – DIRECTION AND ORDER TO PAY THIIRD PARTY AUTHORITY’ appeared. The letter said:

    We hereby authorise, order and direct you to make payment due for professional services provided to Northern Beaches Care Centre for remuneration, invoices, fees or other monies payable to Danielle and Richard Plaskitt, to any third parties as nominated and authorised by Danielle and Richard Plaskitt for part or full settlement of such funds. Third parties may include any personal or business contact, association, creditor, or otherwise as elected and paid by any financial instrument as chosen by Danielle or Richard Plaskitt.

32. The letter then said it was a ‘continuous authorisation and is valid for twelve months from today’ and concluded, ‘Please consider this as an official authorisation to you to make any such payments’. The letter was curious for a number of reasons: it was addressed to ‘Dear Accountant’ which suggested that it was written to the Partnership by Mrs Plaskitt in circumstances where she was the signatory and conferrer of authority. Also, the letter referred to ‘we hereby’ but there is only one author. It seems the intention was that Mr Plaskitt would author the letter too. The letter was described as a ‘sample of letter authorising third party payments’, but no other ‘sample’ was produced and there was no letter produced that related to payments made before 1 July 2017, noting that many of the transactions involved occurred before then. The letter is consistent with one thing, namely that it appears it was never brought to the attention of Dr Cosford; it was addressed to someone else. That fact is almost as curious as to why Mrs Plaskitt was writing a letter to herself or to her husband. There was no other letter or particular conversation, or document produced that supported or evidenced the existence of any authority. I do not consider that the letter provided any authority to pay Dr Cosford’s money to the Partnerships accounts with the ATO.

33. Even if the letter were to be accepted as somehow authorising payments from Dr Cosford’s accounts to Mr & Mrs Plaskitt, it only authorised such payments so far as ‘remuneration, invoices, fees or other monies payable to Danielle and Richard Plaskitt’ was concerned. There was no material at all produced that disclosed that the amounts that were paid to the Partnership’s Client Activity Centre Accounts with the ATO were remuneration, invoices, fees or other monies payable to the Partnership. There was no evidence at all about any money that was claimed to be owing to Mr & Mrs Plaskitt in relation to what was owed to them by the Centre. It would have been a fairly simple task to have provided that evidence if it existed. There was simply nothing that suggested any money was owing to the Partnership or to Mr and Mrs Plaskitt at the time the payments were made that could possibly be supported by the doubtful authority that has said to be found in the letter.

34. Further, on 24 May 2019 the ATO remediated the amounts in question by reversing the transactions. There was no suggestion that the Partnership did anything about that or was contesting or protesting what the ATO had done. Again, it would have been a fairly simple exercise to have produced evidence of any money that was said to have been owed to the Partnership that would have shown that the payments were in fact for those services.

35. Nor do I consider it much of an answer to suggest that Dr Cosford reviewed the bank statements and had knowledge of the transactions. Dr Cosford relied upon, and trusted, Mr and Mrs Plaskitt in relation to all matters connected with her accounts and her taxation. The description given to the payments in the bank statements does not disclose at all on whose behalf the money paid to the ATO was being paid and all that is disclosed is that money was being paid to the ATO. A review of the bank statements would only have informed Dr Cosford that payments were being made to the ATO which having regard to the evidence generally about her tax affairs would have come as no surprise to her at all. Dr Cosford would have needed to have known the precise number of her accounts with the ATO to know that the money was not going to her account with the ATO but rather to that of the Partnership. Dr Cosford would have needed to have known and remembered the number of the Partnership’s accounts with the ATO to know it was going to their account.

36. Finally, I prefer the evidence of Dr Cosford that she did not give authority for the Centre’s bank account to be used to pay amounts to the ATO on behalf of the Partnership. Her evidence was very clear and concise about that. She was direct and straightforward in her evidence. It is the kind of thing that one would generally expect someone in her position to have some recollection about if it happened. Mr Plaskitt did not point to any particular or specific conversation in which it was said authority was given by Dr Cosford to make the payments. I refer later to some of the reasons for not preferring Mr Plaskitt’s evidence but here it is sufficient that he gave no specific evidence about when and in what means authority was conferred other than a reference to the 1 July 2017 letter. The 1 July 2017 letter was not authored by him and was not, so it seems, sent to Dr Cosford. There is no support in the evidence that any monies that were sent to the Partnership’s ATO accounts were sent because monies were owed to the Partnership.

1. I am satisfied that the Partnership did not have authority to pay amounts from the Centre’s bank account to the Partnership’s ATO accounts and in doing so the Partnership misappropriated those monies and Mr Plaskitt allowed that to happen on his watch as the sole supervising agent and as a partner.

   The payments to Danielle Plaskitt

2. The second group of transactions involved three transactions between 29 August 2017 and 1 September 2017 described as ‘Plaskitt Danielle E Agent’ which was in each case followed by a series of numbers and a date. The transactions were for a total amount of $60,500. The transactions were not explained in the bank statements other than by reference to their description from which I infer the monies were paid to ‘Danielle E Plaskitt’.

3. Mr Plaskitt was not able to offer any explanation for the three transactions and was not able to point to any explanation that he had ever provided for them. The letter of 10 July 2019 said that no explanation could be given for the transactions without more information but that it may have been part of the end of month ‘money go round’ that accompanied payment of Dr Cosford’s credit cards. That would not explain why the transactions were described with Mrs Plaskitt’s name in their description. The bank statements were provided as part of the case so more information was available by the time the matter was heard, but still no explanation was offered. Dr Cosford gave evidence so she could have been asked to provide any relevant information to assist Mr Plaskitt in explaining the transactions.

4. Dr Cosford gave evidence that the amount of $60,500 paid in three tranches in the period between 29 August 2017 to 1 September 2017 was ‘perhaps’ for ‘background bookkeeping duties’ but she did not approve them. I accept her evidence that she did not authorise the payments totalling $60,500. The failure to explain the payments is significant. If the payments were because of monies owed by way of remuneration to the Partnership or Mrs Plaskitt personally, it would have been a fairly straightforward task to either have said that or, more obviously, to provide documents such as invoices and receipts evidencing the payments themselves, their reason and the work done. No records of any kind were provided.

5. I am satisfied that the Partnership did not have authority to pay amounts from the Centre’s bank account to Mrs Plaskitt for the amounts totalling $60,500.

   The payment of professional fees

6. The third payment concerns a single transaction in the bank statements showing a payment from the Centre’s bank account on 9 August 2017 for $1,292 which has the description ‘Internet Bpay Inst Public Accnt’.

7. There was no oral evidence given about this payment, but it is plain enough that that it is likely to have been for the payment of the Partnership’s or Mr Plaskitt’s professional fees. Like with the payments to the ATO account, if the explanation lay in the letter of 1 July 2017, it would have been a simple task for Mr Plaskitt to bring evidence of monies the Partnership was owed which authorised this payment. Dr Cosford was not asked specifically if she authorised the payment, but her evidence generally was that she had not authorised payments of personal or business creditors of the Partnership.

8. I am satisfied that the payment was a payment in respect of the Partnership or of Mr Plaskitt and there was no authority to permit that to happen.

   The unexplained transactions

9. There were a number of other transactions in the Centre’s bank statements, seven of which totalled $61,903.92, paid in the period between 28 August 2017 and 30 August 2017 for unexplained transactions and two transactions totalling $30,700 on 30 August 2017 that were unexplained. There is no evidence that would allow any safe conclusion about the destination of these payments and without such evidence I am not prepared to make any findings about them, especially findings so serious as would involve misappropriation. I note also they did not feature in any particular way in the Board’s case before me. The Board found that the amounts were ‘suspicious’ because of their size, but absent something linking them to the Mr and Mrs Plaskitt or the Partnership, I am unable to find that the transactions were unauthorised.

   The loans

10. The final set of transactions were found in another bank account styled the ‘R Cosford Superfund – Business Cheque Account’. That account recorded 32 transactions in the period between 5 July 2012 to 20 February 2018. The amounts for the transactions varied with the largest amount in a single transaction being on 5 July 2012 in the amount of $30,000 which is described as ‘Plaskitt Loan Rcsf’.

11. The transactions were all for what were described in the bank statements with the word ‘Loan’ in the description. There was no controversy that they were loans. All of them involved drawing down the funds by internet transfers. There were various descriptions such as ‘Plaskitt Loan Rcsf’, ‘Loan Springer Rcsf’, ‘DP Loan Nbcc’, ‘Loan H Baldock R Cosford Super’, ‘H Baldock Loan Nbcc’, ‘H Baldock Loan Rcsf’, ‘Hp Loan Nbcc’, Hp Loan Fnl PMT Nbcc’, Hp Loan Rcsf’, ‘Jt Loan Nbcc’, ‘Jt Loan Rcsf’, ‘Jt Loan Ext Rcsf’, ‘Jr Loan Rcsf’, ‘Jr loan Nbcc’, ‘Ts Loan Nbcc’, ‘Ts Loan Rcsf’, ‘Ts loan instlmnt Rcsf’, ‘Rb Loan’ and ‘Hb loan ext’. Many of the descriptions are self-evident about to whom the loan relates such as those with the words ‘Plaskitt’, ‘Springer’ and ‘H Baldock’. Others are not so clear such as those involving ‘Ts’ or ‘Hp’ or ‘Jt’. The total amount of those transactions is $184,410.

12. It is necessary to refer back to the Centre’s bank account. There were many transactions involving transfers of money from the Centre’s bank account to the R Cosford Superfund Business Cheque Account that appear relevant to the loans. The descriptions afforded to the transactions in the Centre’s bank account are a little curious in that they record what are described as ‘repayments’ with the names ‘G Springer’, ‘A Ahola’, ‘D and R Plaskitt’, and ‘H Baldock’ and with what appears to be the initials, words and letters alongside them ‘Jt Loan Rpmt Nbcc Jt’ and ‘Jr Loan PMT Nbcc Jr’ even though the source and destination of the payments appears to have had nothing to do with those people or people having those initials because the transfers were between the two accounts.

13. Those transactions in the Centre’s bank account involve 95 regular payments of $150 in the period between 8 January 2016 to 21 March 2018 so far as ‘G Springer’ is concerned; 90 payments of $150 in the period between 18 January 2016 to 20 March 2018 so far as ‘A Ahola’ is concerned; 90 payments in the period between 12 January 2016 to 20 March 2018 so far as the ‘D and R Plaskitt’ is concerned; 52 payments in the period between 8 January 2016 to 13 March 2017 so far as ‘H Baldock’ is concerned, 25 payments in the period between 10 July 2017 to 19 March 2018 so far as ‘Jt Loan Rpmt Nbcc Jt’ is concerned and 26 payments of $300 in the period between 24 July 2017 to 20 March 2018 so far ‘Jr Loan PMT Nbcc Jr’ is concerned. Those transactions totalled $83,800.

14. On 1 June 2009 Dr Cosford lent Mr and Mrs Plaskitt $50,000. The loan was formally minuted in the minutes of a meeting of the Fund and was also reduced to writing in an agreement that was signed by Mr Plaskitt and Dr Cosford. The loan was to be repaid by 30 June 2012. There was no evidence concerning its repayment or indeed anything more about it. It was the only evidence of any loan document and the only evidence of any terms or conditions associated with any loan to anyone. The fact of that written agreement would suggest at least that someone was aware that it was prudent and appropriate to put such things in writing.

15. Dr Cosford gave evidence that she had not authorised Mrs & Mr Plaskitt to make loans from the Centre or the Fund either to themselves or to family members from the Fund. In particular, Dr Cosford was shown entries in documents that brought together payments made out of the Fund’s bank account that were styled ‘loan repayment G Springer’. Dr Cosford said she had never made a loan or authorised any loan repayments to be made to or from G Springer and that she had never entered into a loan agreement with anyone by that name. G Springer was known to Dr Cosford as one of Mrs Plaskitt’s children. She said the same about transactions that appeared in the Centre’s and Fund’s bank accounts that included in their description loan repayments involving A Ahola. A Ahola was Mrs Plaskitt’s daughter.

16. Dr Cosford’s evidence concerning the transaction involving H Baldock was a little different. She said that insofar as Ms Baldock was concerned, she knew that she was a friend of Mr and Mrs Plaskitt who Dr Cosford had employed in her business. She recalled that Mrs Plaskitt had spoken to her about Ms Baldock having a car problem and specifically about making a loan to her. Oddly, Dr Cosford did not know any of the details about the loan but appears to have nonetheless approved it. There was no written agreement about the loan and Dr Cosford did not know about $250 being transferred periodically in respect of things concerning Ms Baldock.

17. Dr Cosford did not give any evidence specific to the other loans, that is the loans to ‘Jt’ and ‘Jr’ except for her general evidence concerning the fact that she did not authorise any loans with the exception of that concerning K Baldock.

18. Dr Cosford did not have any conversations with Mr and Mrs Plaskitt about loan repayments that were made in the period between 23 April 2015 to 20 March 2018 which involved weekly transactions of $350 during that period. Dr Cosford said that there was no loan agreement with Mr and Mrs Plaskitt during that period.

19. Mr Plaskitt was unable to explain why funds were transferred between the Centre account and the Fund account with the entries ‘loan repayment G Springer’ or ‘AAA loan repayment A Ahola’ as the description for the transactions even though he understood that those transactions were ‘at the heart of the dispute you’ve had with the Board that’s been on foot now for a series of months?’. 

20. More significantly in the circumstances, Mr Plaskitt did not do anything to find how these transactions appeared in Dr Cosford’s accounts. G Springer and A Ahola were Mrs Plaskitt’s daughters and Mr Plaskitt’s stepdaughters. Mr Plaskitt did not ask his wife about the transactions. He did not ask her daughters any questions about the transactions. In fact, his evidence was that he did not even think of doing that. This was in a context where Mr Plaskitt’s evidence was ‘interrupted’ by a period of several months because of some issues personal to him, but even then he made no enquiries before the hearing resumed, that is between the first hearing day on 14 August 2020 and the second hearing day on 16 April 2021 even though he was squarely on notice that an explanation was being sought. His only answer for why he did not make any such enquiries was ‘I have not given this matter the professional treatment it deserves’.

21. Mr Plaskitt was also unable to explain the entries that were described as ‘Jt loan repayment’ although at one stage in his evidence he said, ‘I think they were to do with payment of our fees’. No documents were provided to support that and nor was there any other evidence about it. Mr Plaskitt was asked to explain the entries in the bank accounts for the period January 2016 to March 2018 that showed regular transfers, with few exceptions every week, of $350 which were described as ‘DP Loan repayment D and R Plaskitt’. He identified them as loan repayments by he and his wife which was for an amount of $10,000.

22. Mr Plaskitt said in relation to the loans that there existed some documents about the loan, some minutes and a loan agreement and that they had been provided. There were no such documents provided to the Board with the letter of 10 July 2019 or to the Tribunal as part of the hearing other than in relation to the 2009 loan which was to be repaid by July 2012 to which I have already referred. Nor was he able to provide any details about any of the loans such as their repayment, interest rate and so.

23. Many of the things that Mr Plaskitt told the Tribunal about the loans was inconsistent. At one stage when asked about whether Dr Cosford and G Springer had done business with each other, Mr Plaskitt answered yes. This potentially might have thrown light on why G Springer’s name was mentioned in the Centre and Fund bank accounts. That potential was put firmly to rest when Mr Plaskitt was challenged about his answer later on and he said the correct answer was ‘probably not’. He explained the inconsistency by suggesting he may have misunderstood the question or ‘maybe I just wasn’t paying attention’. In relation to other questions he at times simply did not answer them and at one stage refused to answer at all. He said one of his answers was ‘a guess’ when it was pointed out that his evidence about the date that a loan was entered was inconsistent with other evidence he had given. This was in a context where Mr Plaskitt in his evidence indicated several times that he did not wish to answer questions by speculating. I am unable to accept Mr Plaskitt’s evidence about the loans. I prefer Dr Cosford’s evidence.

24. I am satisfied that the loans referred to with the exception of the loan to H Baldock were not authorised by Dr Cosford. I am also satisfied that the payments made as ‘loan repayments’ between the Centre and the Fund bank accounts were not loan repayments as they failed to reimburse her for the amount of any loan and simply represented transfer between those accounts.

    Payments of personal and business expenses

25. On 29 September 2018 Dr Cosford gave to the ATO an MYOB report for the Centre for the period between 1 April 2016 to 29 March 2018. On its face, that report suggested that the partnership had used the Centre’s account to operate the partnership’s other business which was known as ‘My Pony Party’. The business it seems involves providing ponies for parties and things like that. There were 31 transactions recorded which could be linked to that business because of words like ‘pony party’ or ‘pony hire’ appearing in the accounts. The transactions totalled a little over  $8000.

26. Over the course of her evidence, Dr Cosford was shown what was described as the sales summary for the Centre which covered the period between 21 September 2016 to 28 September 2018, even though its title suggested it went back further than that date. Dr Cosford said that she had not authorised the accounts of the Centre to be used for the pony business. This was at odds with a letter dated 15 October 2010 which authorised the use by Mr and Mrs Plaskitt of the Centre’s EFTPOS facility to receive payments to pay to Dr Cosford a fee for doing so. I am not satisfied that this allegation has been made out.

    Failure to adequately deal with conflicts of interest

27. This aspect of the matter focused attention on the failure on Mr Plaskitt’s part to have in place adequate measures to deal with conflicts of interest insofar as the Partnership’s dealings with Dr Cosford were concerned. The issue arises primarily because of the matters that I have dealt with earlier concerning the payments to the Partnership’s ATO account and loans to Mr and Mrs Plaskitt and his stepdaughters referred to earlier and the failure to have written agreements and documents in place evidencing and recording the terms of those loans. There was also an issue raised about the Partnership having ‘intermingled’ its business interests with those of Dr Cosford.

28. The Partnership and Mr Plaskitt were in a position of trust so far as Dr Cosford was concerned, being trusted as her tax agent and her accountant to act in her best interests. The Partnership and Mr Plaskitt as well as his stepdaughters were deriving a benefit from her, payments of their tax debts in the case of the Partnership and the making of loans so far as Mr and Mrs Plaskitt and the stepdaughters were concerned, that were potentially inimical to Dr Cosford’s best interests. In very simple terms, she may have been better off lending her money elsewhere or doing things with her money rather than giving it to the Partnership or lending to Mr Plaskitt’s stepdaughters. It was in Mr Plaskitt’s interests to have her give it to the Partnership or lend it to him or his stepdaughters. That was at the very minimum potentially in conflict with Dr Cosford’s interests. It was no answer, as Mr Plaskitt suggested, that Dr Cosford had ‘full knowledge’ or approved of the transactions, which in any event I have found that she did not. That completely misunderstands the obligation to avoid conflicts of interest and has consequences for the issues with which I am concerned to which I will return later.

29. To avoid any conflict of interest, if it was avoidable at all, at the very least appropriate steps to document and record the detail of the transactions should have been taken. In that way, with the benefit of hindsight, it would have been possible, perhaps, to have made some assessment as to whether the conflict had in fact materialised. Even after the hearing it is impossible to determine anything about whose interests the loans were in. There was no evidence at all provided by anyone about the terms of the loan such as the interest rate, date of repayment or term. There was apparently no security given for the loans either. All those things at the very least should have been agreed and documented so as to protect Dr Cosford and insofar as possible make the transactions something that was in her best interests. On another view, the conflict should have been avoided by declining to participate in the transactions at all.

30. Mr Plaskitt conceded he took no steps when loans were being entered into between his stepdaughters and Dr Cosford or her associated entities to protect Dr Cosford’s interests. Mr Plaskitt accepted, eventually, that the Partnership acting for both Dr Cosford and his stepdaughters in respect of loans concerning his stepdaughters had a conflict of interest although he said there was ‘doubt’ about that. He did not accept that he should have told Dr Cosford to get independent advice before proceeding with the loan. He accepted he did not do anything to manage that conflict of interest because he thought ‘full knowledge and approval’ was an appropriate step to have taken. Mr Plaskitt’s lack of understanding of his obligation so far as the avoidance of conflicts of interest is a matter of concern to which I will return later.

31. Mr Plaskitt accepted that the Partnership had run transactions for its pony business through Dr Cosford’s accounts but did not accept that that was ‘wholly inappropriate’ because his evidence was that Dr Cosford knew what was being done. The conflict that inheres in intermingling his business with that of his client, Dr Cosford, is stark. Again, the potential for his judgment about his own interest, for example in claiming money from the Centre’s accounts was at odds with Dr Cosford’s interests in maximining the money she had in her account to her benefit. Mr Plaskitt’s failure to appreciate the potential conflict of interest that existed is significant. At the very least something needed to be erected to prevent any prospect of the wrongful accounting for funds in the respective businesses.

32. Finally, although the matter was not developed fully in argument or in written submissions, it was raised in the contentions filed by the Board that there was a conflict of interest involved in the letter of authority dated 1 July 2017 whereby the Partnership gave authority for it on behalf of the Centre to pay moneys owed to it by Dr Cosford to third parties. Again, the prospect of potential conflict of interest is stark given the competing interests of the Partnership in maximising the benefit to it and Dr Cosford wishing to maximise the benefit to her.

    Failure to comply with taxation obligations

1. The ATO records indicate that the Partnership had failed to conform to a number of its obligations. These failings were admitted by Mr Plaskitt at the commencement of the hearing.

2. First, the partnership as at 26 June 2019 had failed to lodge its tax return from the 2018 year which was due to have been lodged on 26 June 2019. Also, Mr Plaskitt failed to lodge his personal return for the same year which was due to be lodged in 31 August 2018. It remained outstanding as at 5 July 2018. Second, the partnership had failed to lodge six BAS for the quarters ending 31 March 2018 to 30 June 2019 by their due dates and had not lodged them by 26 June 2019. Third, the partnership had outstanding debts to the Australian Taxation Office in its ICA totalling $132,562.61 and a Superannuation Guarantee Charge debt of $18,526.41. The former debts existed before the ATO took ‘remediation action’ concerning the amounts paid from Dr Cosford to the partnership’s accounts but they were for a lesser amount totalling $41,219.76.

3. In 2015 there were a series of steps taken by the ATO against the partnership in order to recover what was a tax debt of $149,119.39 which resulted in a judgment of about $154,000 being entered against Mr Plaskitt in May 2015. Some of the general interest charges and penalties were later remitted and a payment plan was entered into. Mr Plaskitt failed to comply with the payment plan.

4. In the letter of 10 July 2019, Mr Plaskitt set out a series of matters that were related to personal matters concerning him and Mrs Plaskitt and various medical conditions and other things that were taking place in their lives at the time. That perhaps explains how things came to be as they were. There was no evidence that these matters were rectified at the time of the hearing although it was said in the 10 July 2019 letter that steps were being taken to bring matters up to date.

   Failure to act competently

5. There was not much attention directed to this allegation at the hearing. The allegation was that Mr Plaskitt as partner and sole supervising partner of the Partnership allowed the Partnership to breach the requirement to act competently in failing to lodge 23 tax returns for entities related to Dr Cosford, failing to lodge 53 BAS statements for entities related to Dr Cosford, failing to ensure that the Cosford Family Trust complied with payment arrangements between 21 April 2017 and 6 March 2018 in order to pay off its ICA debt and failing to ensure Dr Cosford’s company Care Centre of Australia Pty Ltd paid its tax debts as and when they fell due.

6. In the letter to the Board of 10 July 2019, Mr Plaskitt said that the Partnership were not the tax agents for Dr Cosford in the 2009 to 2012 tax years. Mr Plaskitt said when he became the tax agent, the files for the Fund had gone missing and he did not receive them until sometime in 2016 when he became ill. He said that he completed the 2009 return in 2016. No explanation was offered about the 53 BAS statements that were not lodged.

7. In the end, because of the lack of evidence before me about these matters and because they were not addressed in any detail in submissions, I do not make any findings about them.

   Failure to provide evidence and respond

8. Like with the previous allegation, no detailed submissions were directed to this allegation by the Board. The allegation was by breaching of the requirement to respond to requests and directions from the Board in a timely, responsible and reasonable manner which concerned the failure to provide supporting evidence for a request for an extension of time to respond to the Board’s letter of 20 May 2019 and a failure to provide a response to the letter of 20 May 2019 by the requested date. The response to the letter of 20 May 2019 was required by 7 June 2019. It was not provided by then.

9. Although the allegations do appear on the face of things to have been made out because of the lack of attention given to the matters during the hearing, I do not intend to make any finding about this allegation.

   Is Mr Plaskitt a fit and proper person?

10. A person is only eligible to be registered as tax agent if the Board is satisfied that the person is ‘a fit and proper person’. On this review, it is the Tribunal that stands in the shoes of the Board in making that evaluative judgment about whether it is satisfied that Mr Plaskitt is a fit and proper person.

11. The Act specifically requires that in addressing the question of whether a person is a fit and proper person, the Board, in this case the Tribunal, must have regard to whether the person is of good fame, integrity and character. That of course does not limit the matters that can be considered, but simply requires that matter in particular to be taken into the assessment.

12. In general, it is accepted that the phrase ‘fit and proper’ in itself has no exact meaning. In the context of tax agents, the question is generally addressed by having regard to the fact that a tax agent is someone who prepares and lodges tax returns on behalf of others, most usually clients. Such a person needs to be both competent and honest because they are trusted to take care of the affairs of other people. A tax agent is an intermediary with government officials, most usually those working in the ATO. So too then must those officials have confidence that the agent has acted not only competently but also honestly. A fit and proper person in general is of such character that they carry out their affairs professionally.

13. I have found that Mr Plaskitt, as the sole supervising partner of the Partnership, allowed the Partnership to misappropriate the funds of Dr Cosford. I have found that the Partnership made loans from Dr Cosford’s money to itself and to two of the stepdaughters of Mr Plaskitt without the authority of Dr Cosford. I have found that Mr Plaskitt allowed these things to happen whilst he was involved in the Partnership as the sole supervising partner.

14. These are serious matters that ultimately affect a person’s fitness and propriety, especially the former as it involves dishonesty or, so far as Mr Plaskitt was concerned, at least, allowing the Partnership to engage in conduct that was dishonest. In that light, it is relevant that Mr Plaskitt denied that anything dishonest had happened so far as the payment of the Partnership’s tax debt was concerned and so far as the payments to Mrs Plaskitt were concerned. These things strongly suggest that I cannot be satisfied that Mr Plaskitt is a fit and proper person to be a registered tax agent.

15. Also, Mr Plaskitt’s evidence concerning the unauthorised loans to G Springer and A Aloha had an added dimension so far as fitness and propriety was concerned in that he, knowing that an allegation was made that concerned loans to his stepdaughters, failed to make any enquiries of them or his wife or anyone in order to find out exactly what had gone on. This was in circumstances where he was aware that his wife Mrs Plaskitt, was likely to know what had happened because she was the other partner. The mention of his stepdaughters’ names obviously would have put him on notice that they might know something about the loans. His conduct in that regard speaks of a complete failure, not simply as he put it to act professionally, but also in a manner that would engender no confidence that he could be trusted. His failure to take any steps at all in that regard does no more than confirm that I cannot be satisfied that he is a fit and proper person. I should add that given that the case was before the Tribunal, and he had many months to make enquiries, it is simply mindboggling that he did not. A person who was fit and proper and who would be trusted would have done everything possible to get to the bottom of the matter and assist the Tribunal in its deliberations.

16. I have also found that Mr Plaskitt failed to adequately manage the conflict of interest between the Partnership and Dr Cosford, in particular, by failing to put in place loan agreements and making sure proper records were kept in relation to transactions between Dr Cosford and the Partnership or close family members of the partners. Again, in this regard it is of particular importance that Mr Plaskitt displayed a fairly abject failing in his evidence: he lacked any real understanding about the conflict of interest, he and the Partnership had placed themselves. Further, he lacked any real understanding about what in fact a conflict of interest was and how it should be managed or avoided.

17. Next, the management of Mr Plaskitt’s own personal taxation matters and those of the Partnership. It is to be remembered that Mr Plaskitt is the sole supervising partner and this is a significant point that suggests he is not a fit and proper person. As at the time of the hearing, the Partnership had a total outstanding debt to the ATO of $153,623.29 which comprised an ICA debt of $134,379.44 and a superannuation guarantee debt of $19,243.85. It is significant that no payment arrangement had been made.

18. Further, six BAS statements for the Partnership remained outstanding as did the Partnership’s and Mr Plaskitt’s 2018 tax returns. The failure by Mr Plaskitt to comply with his tax obligations and this failure to ensure that the Partnership complies with its obligations is a significant matter because a failure by a tax agent to abide by those obligations is a matter that undermines confidence in the tax agent’s themselves; if a tax agent cannot get their own affairs in order, it does not auger well for them getting other people’s affairs in order.

19. Having regard to this consideration, I am not satisfied that Mr Plaskitt is a fit and proper person so that his registration as a registered tax agent should be terminated.

    Should Mr Plaskitt be subject to a prohibition upon reapplying for registration?

20. The matters that I have found are serious in particular so far as the payments to the partnership’s ATO accounts and to Mrs Plaskitt are concerned. Those payments were for significant amounts. The making of unauthorised loans is equally a serious matter. Both of those things combined with Mr Plaskitt’s abject failure to get his personal taxation affairs in order, as well as those of the Partnership, are serious matters such that I am satisfied that there should be a prohibition imposed upon Mr Plaskitt reapplying for registration.

21. The length of time of that prohibition is a difficult one in this case because the seriousness of the matters is accompanied by two other significant things.

22. First, there is the complete lack of any acknowledgement of wrongdoing in respect of the issue of conflict of interest and almost complete lack of understanding about what that involved. Although Mr Plaskitt said that he regretted that his personal tax affairs and the Partnership’s tax affairs were not up to date even at the time of hearing him about the length of time of any preclusion period for reapplication, he had done nothing to rectify those things. Actions speak louder than words. He continued to deny the allegations involving Dr Cosford’s funds.

23. Second, on 17 February 2017, the Board issued a formal written caution to Mr Plaskitt for breaches of the Code that involved the failure to lodge the 2015 Partnership return in time, the failure to lodge four BAS in time and having an outstanding debt to the ATO. The caution warned that suspension or termination might be the product of further contraventions.

24. There is no formula to be applied in determining an appropriate period for prohibiting an application for registration although there is a maximum period of five years. The matter is very much one of impression and judgment having regard to all of the circumstances. It necessarily has regard to the seriousness of the conduct in question and the need to deter the particular individual and other registered tax agents more generally from engaging in misconduct. The primary matter to which any prohibition from reapplication is directed is the protection of the public.

25. Although the dishonest conduct in the circumstances cannot be found to be directly that of Mr Plaskitt, it is relevant in assessing the seriousness of the matter more generally that dishonesty is at the core of the main allegation. I have found Mr Plaskitt allowed that conduct to take place. I have serious concerns as well about Mr Plaskitt’s understanding of his obligations so far as conflicts of interest and managing them are concerned. His abject failure to assist the Tribunal get to the bottom of the unauthorised loans only suggests that there can be little confidence that he will in future adhere to his relevant obligations.

26. It has been said that ‘a five year ban would be reserved for the most serious cases of misconduct that result in termination. That would include cases of out-and-out dishonesty, persistent and serious bad behaviour, or gross incompetence.’[1] Here the dishonesty was not attributable directly to Mr Plaskitt but rather was directed to what he allowed the Partnership to do; the conduct was nonetheless conduct that occurred on his watch in a small partnership where there were only two partners.

    [1] Ridden and Tax Practitioners Board [2020] AATA 422.

27. The conduct was egregious because it involved a serious form of dishonesty. The failure by the Partnership or Mr Plaskitt to regularise its own tax affairs by the time of the hearing is a significant factor as well. Mr Plaskitt’s failure to explain the loans is a significant matter which requires a clear message to be sent to him and the tax agent community that conduct is not appropriate and will be the subject of a significant sanction. The tax agent community must be deterred from engaging in such conduct.

28. Mr Plaskitt suggested that a period of three years would be more appropriate because that would allow him to re-establish his business sooner rather than later. I do not consider that a period like three years marks the conduct with sufficient disapproval so as to deter others from engaging in similar conduct in the future. 

29. In these circumstances, I consider that a prohibition on reapplication for registration for a period of five years is appropriate. I note in that regard it will be necessary for Mr Plaskitt to make an application and for the Board to be satisfied that he is a fit and proper person at that time before he can obtain re-registration. It is hoped by then that Mr Plaskitt will have his house in order and will have done things put himself in a position to demonstrate to the Board that things have changed for the better.

    Decision

30. I affirm the decisions of the Board.

I certify that the preceding 98 (ninety-eight) paragraphs are a true copy of the reasons for the decision herein of Mr Rob Reitano, Member

...................................[sgd].....................................

Associate

Dated: 18 February 2022

Dates of hearing:	14 August 2020; 16 April 2021; 16 February 2022
Applicant:	Self-Represented
Counsel for the Respondent:	Greg O'Mahoney
Solicitors for the Respondent:	Tax Practitioners Board Legal Unit