Robert Trevaskis and Tax Practitioners Board
[2013] AATA 301
[2013] AATA 301
Division GENERAL ADMINISTRATIVE DIVISION File Number(s)
2013/0773
Re
Robert Trevaskis
APPLICANT
And
Tax Practitioners Board
RESPONDENT
DECISION
Tribunal Deputy President P E Hack SC
Date 14 May 2013 Place Brisbane (heard in Maroochydore) The decision under review is affirmed.
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Deputy President P E Hack SC
CATCHWORDS
TAX AGENT – REGISTRATION – termination of registration – discretion to terminate registration enlivened upon conviction – serious tax offence – offence involving dishonesty – sentenced to term of imprisonment – disqualification from managing corporations – lack of contrition – conduct of applicant warrants termination of registration – decision affirmed
LEGISLATION
Tax Agent Services Act 2009 (Cth), ss 20-5(1), 20-15, 20-45, 40-5
CASES
Stasos v Tax Agents’ Board of New South Wales (1990) 21 ATR 974
Su v Tax Agents’ Board, South Australia (1982) 61 FLR 1REASONS FOR DECISION
Deputy President P E Hack SC
The applicant, Mr Robert Trevaskis, was a registered tax agent for many years until 16 January 2013. On that day the respondent, the Tax Practitioners Board (the Board), terminated his registration.
Mr Trevaskis seeks a review of the Board’s decision to terminate his registration.
Registration of tax agents is now dealt with by the Tax Agent Services Act 2009 (Cth) (the Act). Those who seek to provide tax agent services for a fee breach the provisions of that Act unless registered under the Act. The Board has the task of administering the system of registration of tax agents including that of determining whether persons seeking registration satisfy the requirements for registration.
By virtue of s 20-5(1) of the Act an individual, aged 18 years or more, is eligible for registration if the Board is satisfied:
(a)that the individual is “a fit and proper person”, and
(b)that the individual satisfies the prescribed requirements relating to qualifications and experience.
The criteria for determining whether an individual is a fit and proper person are set out in s 20-15 of the Act in these terms:
20-15 Criteria for determining whether an individual is a fit and proper person
In deciding whether it is satisfied that an individual is a fit and proper person, the Board must have regard to:
(a) whether the individual is of good fame, integrity and character; and
(b) without limiting paragraph (a):
(i) whether an event described in section 20-45 has occurred during the previous 5 years; and
(ii) whether the individual had the status of an undischarged bankrupt at any time during the previous 5 years; and
(iii) whether the individual served a term of imprisonment, in whole or in part, at any time during the previous 5 years.
The Act, by s 20-45, specifies certain events that “may affect … continued registration as a registered tax agent”. They include:
·being convicted of a serious taxation offence, as that term is defined in s 90‑1 of the Act,
·being convicted of an offence involving fraud or dishonesty, and
·being sentenced to a term of imprisonment.
Where an event affecting registration occurs a registered tax agent must notify the Board in writing within 30 days of the day on which the tax agent became aware, or ought to have become aware, of the event.[1]
[1] See s 30-35
Part 4 of the Act deals with termination of registration as a tax agent. The circumstances under which the registration as a tax agent of an individual may be terminated are set out in s 40-5 of the Act as follows:
40-5 Termination of registration—individuals
(1) If you are a registered tax agent or BAS agent and an individual, the Board may terminate your registration if:
(a) an event affecting your continued registration, as described in section 20-45, occurs; or
(b) you cease to meet one of the tax practitioner registration requirements; or
(c) you breach a condition of your registration.
Where the Board terminates registration it may also determine a period of not more than five years during which the person may not apply for registration.[2]
[2] See s 40-25
There is no dispute about the events that prompted the Board’s decision to cancel the registration of Mr Trevaskis as a tax agent. On 13 February 2012 he was convicted on his own plea of two offences against s 134.2(1) of the Criminal Code Act 1995 (Cth), offences shortly described as obtaining a financial advantage by deception. He was sentenced to a term of imprisonment of 6 months but the sentencing magistrate ordered, pursuant to s 20(1)(b) of the Crimes Act 1914 (Cth), that he be released forthwith on a recognizance to be of good behaviour for a period of 12 months. Mr Trevaskis was ordered to pay reparation[3] in the sum of $60,428. The two charges arose from Mr Trevaskis’ conduct in obtaining refunds of GST input tax credits as a consequence of lodging false business activity statements for two companies of which he was a director between November 2005 and December 2007[4]. As he accepted in the course of his evidence, the falsity arose from Mr Trevaskis overstating the amounts of creditable acquisitions in order to inflate the entitlement to input tax credits. He accepted as well that the amount of $60,428 was the amount wrongfully received as a consequence of his deception.
[3] See s 21B, Crimes Act
[4]In the case of Global Solar Solutions Pty Ltd, false monthly BAS were lodged between November 2005 and December 2007. The range for the other company, Southern Star Forest Products Pty Ltd, was between September 2006 and November 2007.
Mr Trevaskis did not notify the Board of these matters.
Additionally, the Board relied on, and continues to rely upon, conduct of Mr Trevaskis that led to the Australian Securities and Investments Commission, on 22 June 2011, disqualifying him from managing a corporation for a period of two years. That disqualification was made under s 206F of the Corporations Act 2001 (Cth). Mr Trevaskis had been the director of five corporations that had gone into liquidation in circumstances where the liquidators reported that each corporation was likely to be unable to pay unsecured creditors more than 50 cents in the dollar. In fact, in each case, the liquidator reported the likelihood of no dividend for unsecured creditors.
In the circumstance of the present case it is material to note some further details in relation to those companies. Robert J. Trevaskis Pty Ltd was wound up on 19 March 2009. It had a deficiency of $30,708.00. Its sole creditor was the Deputy Commissioner of Taxation in respect of unpaid income tax and interest for the 2003 and 2004 income years. Mr Trevaskis was the sole director. Astor International Pty Ltd was also wound up in March 2009. Its sole creditor was the Deputy Commissioner of Taxation in relation to a running balance account deficit of $149,332.85 for BAS amounts. That company had not lodged its 2007 and 2008 income tax returns. Mr Trevaskis had been a director from 1 December 2003 and the sole director from 23 July 2006. Southern Star Forest Products Pty Ltd was also wound up in March 2009 with a total deficiency of $44,702.83. Mr Trevaskis had been a director from 25 August 2005 to 1 November 2008.
401 Freight Pty Ltd was wound up in June 2009 with an estimated deficiency in excess of $865,000.00. Mr Trevaskis had been a director from 10 July 2007 to 1 October 2008. Finally, Mr Trevaskis was a director, and from September 2008 the sole director, of Trevaskis Pty Ltd, which was wound up in October 2010 with a debt to the Deputy Commissioner of Taxation in the sum of $271,000.00.
It is not open to doubt that the Board’s discretion to terminate Mr Trevaskis’ registration was enlivened upon his conviction on 13 February 2012. The convictions were in respect of offences against s 134.2 of the Criminal Code and the offences related to a tax liability within the meaning given to that term by the Taxation Administration Act 1953 (Cth) (the Administration Act)[5]. They are then serious tax offences as defined in s 90-1 of the Act. Moreover the offences were ones involving dishonesty – dishonestly obtaining property is an element of the offences. Finally, Mr Trevaskis was sentenced to a term of imprisonment. It is not to the point that the sentence was not served.
[5]The term “tax liability” is defined in s 2(1) of the Administration Act as meaning a liability to the Commonwealth arising under, or by virtue of, a taxation law. That latter term is defined in the same section by reference to the definition in the Income Tax Assessment Act 1997 (Cth) (the ITAA 1997). The ITAA 1997 defines “taxation law” in a way that includes Acts of which the Commissioner of Taxation has the general administration. The Commissioner has the general administration of indirect tax laws under s 356-5 of Sch 1 of the Administration Act.
That being so the question that arises is whether the discretion to terminate ought be exercised. In my view the Board's decision was, in the circumstances of the present case, the preferable decision.
In Su v Tax Agents’ Board, South Australia[6] Davies J, as President of the Tribunal, said that a tax agent,
…should be a person of such reputation and ability that officers of the Taxation Department may proceed upon the footing that the taxation returns lodged by the agent have been prepared by him honestly and competently.
Mr Trevaskis stresses that he has had an unblemished record as a tax agent for a period in excess of 25 years. Yet despite that, it is concerning that he engaged in fraudulent conduct over an extended period of time, a period in excess of two years, and obtained public money by lodging fraudulent returns regarding the financial affairs of the two companies. The conduct was not isolated; it was persisted in over a lengthy period of time. It was not minor; it involved a loss to the Commonwealth in excess of $60,000. In Re Su Davies J said this,
There are certain convictions which, in themselves, may be inconsistent with the holding of a tax agent’s registration. If a lawyer is convicted of fraud, his name may be struck from the roll of practitioners, for fraud is inconsistent with the practice of the law. If a doctor is convicted of a serious offence relating to illegal drugs, his name may be struck from the register because the offence is inconsistent with the task which medical practitioners perform. If a tax agent is convicted of an offence of tax evasion, his name may be taken from the register, for tax evasion is inconsistent with the role which tax agents are called upon to perform.
If offences for which a tax agent is convicted are not of that character, they may nevertheless justify the removal of his name from the register if, of themselves, or in combination with other factors, they indicate that the tax agent is not a person of such integrity and competence that the clients’ affairs should be entrusted to him or that he is not of such integrity and competence that officers of the Taxation Department may place reliance upon returns prepared and lodged by him.
[6] (1982) 61 FLR 1 at 5.
In Stasos v Tax Agents’ Board of New South Wales[7] Hill J, after referring to the decision of Davies J in Re Su, said,
However, a person who has been shown to be other than a fit and proper person to be registered must satisfy the Tribunal considering his re-registration or cancellation of his registration as the case may be, that he appreciates the significance of his wrongdoing, that he regrets it and that he has rehabilitated himself such that it is truly unlikely that there will be any lapse in the future of the standards which are required of him. The more serious his dereliction from duty the longer may be the time necessary to show this. It will not be sufficient for him to merely express his contrition. The Tribunal must be satisfied on the balance of probabilities that not only is that contrition actually felt, but that he will not again deviate from the high standards required of him as a registered tax agent.
I was unable to discern in Mr Trevaskis that contrition to which his Honour made reference. On the contrary, he seems to refuse to accept the gravity of his errant conduct. In one of his communications to the Board[8], and after his plea of guilty, he made reference to “the alleged offence in 2008” and seemed to suggest that he pleaded guilty only because he could not afford legal fees to engage, or continue to engage, legal representation and contest the charges. His written and oral evidence was replete with references to the injustices he claimed had been done to him by various officers in the employ of the Commissioner of Taxation.
[7] (1990) 21 ATR 974 at 985.
[8] Exhibit 1 at page 121.
The conduct of Mr Trevaskis as a director of five companies that have been wound up is also concerning but to a lesser extent than that of his criminal conduct. It does display an absence of commercial morality. Moreover, it does Mr Trevaskis no credit that he seeks to attribute the demise of all of the companies to wrongful actions on the part of officers employed by the Commissioner of Taxation. Again, he demonstrates no contrition and no insight into the failings in his conduct.
It is, as well, of concern that the responses by Mr Trevaskis to the enquiries by the Board about the circumstances of his offending were incomplete and in many respects quite misleading. As to the latter, he suggested that the criminal conduct was as a consequence of a diagnosis of terminal illness in 2010 and his physical and mental health at that time yet it is plain that those matters post-dated the criminal conduct. I should also add that I place little weight on Mr Trevaskis' failure to notify the Board of the fact of the convictions; it demonstrates ignorance on his part of his obligations, I do not consider that it represented a deliberate ploy to conceal the fact of his convictions from the Board.
But despite that I regret to say that I have no confidence that Mr Trevaskis would not again deviate from the high standards required of him as a registered tax agent. I am satisfied that the conduct demonstrated by Mr Trevaskis is such as warrants the termination of his registration. Mr Trevaskis made no submissions about the length of time within which he may not seek re-registration. The period of two years is not, in the circumstances of this case, excessive. Thus the decision of the Board will be affirmed.
Mr Hodge, counsel for the Board, also advanced its case on the footing that the conduct demonstrated on the part of Mr Trevaskis warranted the conclusion that he was no longer a fit and proper person. I think it likely that that conclusion would be reached were it necessary to do so; I find it unnecessary to consider that aspect of the matter and I expressly do not do so.
I certify that the preceding 19 (nineteen) paragraphs are a true copy of the reasons for the decision herein of Deputy President P E Hack SC. ..................[Sgd]......................................................
Associate
Dated 14 May 2013
Date(s) of hearing 2 May 2013 Applicant In person Counsel for the Respondent Mr M Hodge Solicitors for the Respondent Australian Government Solicitor