S & A Financial & Accounting Services Pty Ltd and Tax Practitioners Board (Taxation)

[2021] AATA 5402

S & A Financial & Accounting Services Pty Ltd and Tax Practitioners Board (Taxation) [2021] AATA 5402 (14 October 2021)

Division:TAXATION AND COMMERCIAL DIVISION

File Number(s):               2021/2287

Re:S & A Financial & Accounting Services Pty Ltd

APPLICANT

Tax Practitioners BoardAnd  

RESPONDENT

DECISION

Tribunal:Deputy President Bernard J McCabe

Date:14 October 2021

Place:Sydney

The application for reinstatement is refused.

.........................SGD..........................

Bernard J McCabe, Deputy President

Catchwords

PRACTICE AND PROCEDURE – reinstatement – whereas the applicant brought an application in the name of the company – the applicant is no longer a director of that company – the current director of the company requested that the application be withdrawn – applicant applied for reinstatement after being authorised to represent the company – application for reinstatement refused – Tribunal does not have the power to reinstate proceedings

Legislation

Administrative Appeals Tribunal Act 1975 (Cth)

Tax Agent Services Act 2009 (Cth)

REASONS FOR DECISION

Deputy President Bernard J McCabe

12 October 2021

1. S & A Financial and Accounting Services Pty Ltd is a registered tax agent. The Tax Practitioners Board decided to cancel the company’s registration as a tax agent in a reviewable decision dated 12 March 2021. The cancellation decision was premised on the Board’s finding that the company’s former director, Ms Alfy, was not a fit and proper person. Ms Alfy’s fitness was a problem for the company because s 20-5 of the Tax Agent Services Act 2009 (Cth) says each director of a corporate tax agent must be a fit and proper person. The Board decided Ms Alfy’s continued involvement in the company meant the company did not meet the registration requirements and its registration was cancelled.

2. Ms Alfy has resigned as a director of the company. Her departure appears to have satisfied the Board that the company now meets the requirements for registration. In any event, the company has since been re-registered as a tax agent with a different director. But Ms Alfy still feels aggrieved. She says it is all very well for the company to be re-registered but it was formerly her business and she wants to remain involved – or she may want the opportunity to start a new company that could be registered as a tax agent. She believes she cannot do either of those things given the black mark against her name in the form of the Board’s finding that she was not a fit and proper person. This is where the problem becomes procedurally complicated.

3. The Board points out Ms Alfy cannot contest the finding about her fitness in isolation. That finding is not a reviewable decision in and of itself. The finding was incidental to the Board’s decision dated 12 March 2021 to terminate the company’s registration. She can only upset the fitness finding the Board made in relation to her if she can find a way to challenge the substantive decision. (I suppose she could establish a new company and take issue with the Board in due course if it declined to register the new entity as a tax agent because she was not a fit and proper person. But it appears she wants to bring the dispute to a head before that.)

   Background

4. Ms Alfy applied to the Tribunal in the company’s name on 8 April 2021. Ms Alfy purported to speak for the company when she asked the Tribunal to review the Board’s cancellation decision. When it became aware of the application, the Board raised a question over Ms Alfy’s authority to act on the company’s behalf. The Board was under the impression the company was, in effect, under new management. The Board and the Tribunal wrote to the company inviting it to confirm Ms Alfy was acting with its authority. Mr Heinrich, the company’s director, replied in an email dated 2 July 2021. He disclaimed knowledge of the proceedings and asked for them to be withdrawn. The Tribunal confirmed the proceedings had been withdrawn at the request of the company in a letter from the Tribunal’s registry dated 20 July 2021.

5. Ms Alfy subsequently communicated with Mr Heinrich about the issue and he thereafter advised the company no longer had any objection to Ms Alfy continuing the proceedings on the company’s behalf. This less-than-fulsome endorsement of Ms Alfy’s authority prompted a further request for clarification of Ms Alfy’s status as a representative in proceedings that would be binding on the company. Mr Heinrich wrote a further email dated 6 September 2021 in which he explained:

   Whilst I still do not understand why the company and myself are involved in these proceedings I wish to advise that I have no objections to Ms Alfy representing the company in the forthcoming proceedings.

6. With the question of authority resolved, Ms Alfy pressed an application for reinstatement. A timetable was set down for her to make submissions and provide supporting material. The Board provided submissions in which it explained its opposition to reinstatement. I had regard to all of that material in advance of the interlocutory hearing.

   The Tribunal’s Power

7. It occurred to me when reading the material provided by the parties that there was a problem with the reinstatement application. Everyone was proceeding on the assumption the original application was withdrawn by the company by giving notice in writing pursuant to s 42A(1A) of the Administrative Appeals Tribunal Act 1975 (Cth)(AAT Act). Section 42A(1B) provides a withdrawal in those circumstances is taken to result in a dismissal of the proceedings by the Tribunal without proceeding to a review of the substantive decision. Herein lies the procedural problem: there is no power to reinstate proceedings at the behest of the applicant where those proceedings were dismissed at the request of the applicant under s 42A(1A) unless the applicant is able to establish the proceedings were dismissed in error. If there was an error, the applicant might seek reinstatement under s 42A(10). In the absence of error, the discretion in ss 42A(9) is not available to the applicant (although it might be available to another party to the same proceedings): s 42A(8).

8. One approach to this predicament is for the company to argue it was never a party to the proceedings in the first place because the proceedings were not properly brought on its behalf. In that event, it would follow there was no dismissed application that could be reinstated because the company was a stranger to the dismissed proceedings. That approach would leave open the option for the company to make an application for review of the reviewable decision if it was minded to do so. Of course, if the company did lodge such an application, the company would presumably be required to ask for an extension of time under s 29 of the AAT Act given the time for making an application for review has now passed. The Board has not yet indicated what its attitude would be to a request for an extension of time. That is fair enough, given the possibility of this course was only canvassed for the first time at the interlocutory hearing. The Board may have a variety of reasons for opposing such a request, including an argument about futility given the company has already been re-registered. But that may be a question for another day.

9. If the proceedings were taken to be dismissed at the request of the company pursuant to s 42A(1A) of the AAT Act, it could not request reinstatement although another party might do so as contemplated in s 42A(8). The Board is not seeking that opportunity. If Ms Alfy were a party, she could request reinstatement under this sub-section. She is not currently a party.

10. It may be that Ms Alfy has standing to challenge the reviewable decision in her own right given she is, at least arguably, a person “whose interests are affected by the decision” under review within the meaning of s 27(1) of the AAT Act. This possibility was raised at the interlocutory hearing. Ms Alfy indicated she thought that was an attractive course because it was something she could accomplish without reference to the company. Of course, the company would have to be informed of the application since its interests would plainly be affected. It might seek to be joined as a party to the proceedings on that basis pursuant to s 30(1A). It is not clear whether the company’s involvement in the proceedings which were subsequently withdrawn would pose any difficulty to a joinder application.

11. If Ms Alfy were to lodge an application for review in relation to the reviewable decision, she would presumably be required to request an extension of time. I imagine she would seek to explain the delay in bringing those proceedings by pointing out she had not rested on her rights but had made the mistake of commencing proceedings in the company’s name. It remains to be seen whether that excuse would be satisfactory, and whether that would be enough in any event to justify an extension of time. The Board might have something to say about that should the application be lodged and the request be made.

    Conclusion

12. For now, I do not need to reach a conclusion about the merits of the different alternatives that might (or might not) be open to Ms Alfy and the company. It is enough that I conclude the reinstatement application before me on this occasion cannot succeed because the Tribunal lacks the power to reinstate the proceedings at the request of the company given the circumstances in which they came to be dismissed. The dismissal was not the product of error within the meaning of s 42A(10), and there is no power to reinstate pursuant to s 42A(9) of the AAT Act given the company’s earlier decision to withdraw.

I certify that the preceding 12 (twelve) paragraphs are a true copy of the reasons for the decision herein of Deputy President Bernard J McCabe

.....................SGD.....................

Associate

Dated: 14 October 2021

Date(s) of hearing:	29 September 2021
Applicant:	Self-Represented
Respondent:	Self-Represented
Advocate for the Respondent:	Ms Lisa Chen