Sabbagh and Tax Practitioners Board - [2020] AATA 5106

Sabbagh and Tax Practitioners Board [2020] AATA 5106 (17 December 2020)
Administrative Appeals Tribunal
ADMINISTRATIVE APPEALS TRIBUNAL )
) No: 2020/2115

TAXATION AND COMMERCIAL DIVISION )
Re: Antoine Sabbagh
Applicant

And: Tax Practitioners Board
Respondent
CORRIGENDUM
TRIBUNAL:  RL Hamilton SC, Senior Member
DATE OF CORRIGENDUM:            19 April 2021
PLACE:           Sydney
The Tribunal directs the Registrar, pursuant to subsection 43AA(1) of the Administrative Appeals Tribunal Act 1975 (Cth), to alter the text of the decision in this application. Such that the following typographical errors in the Reasons for Decision dated 17 December 2020, be edited as follows:
a.the words “as a tax agent” be deleted in the sentence “The Tribunal varies the decision under review such that the applicant may not apply for registration as a tax agent pursuant to section 40-25 of the Tax Agent Services Act 2009 (Cth) until 31 December 2022”; and
b.the reference to (lowercase) “tax agent” be changed to “BAS agent” in each of paragraphs [3], [5], [23], [42], [51], and [52].

............................[sgd].............................
RL Hamilton SC, Senior Member
Division:TAXATION AND COMMERCIAL DIVISION
File Number: 2020/2115
Re:Antoine Sabbagh
APPLICANT

Tax Practitioners Board And
RESPONDENT

DECISION
Tribunal:RL Hamilton SC, Senior Member
Date:17 December 2020
Place:Sydney

The Tribunal varies the decision under review such that the applicant may not apply for registration as a tax agent pursuant to section 40-25 of the Tax Agent Services Act 2009 (Cth) until 31 December 2022.
........[sgd]................................................................
RL Hamilton SC, Senior Member
CATCHWORDS
TAX AGENT – prohibition on applying for registration as a tax agent – prohibition of five years – breach of Code of Professional Conduct – failure to honestly disclose convictions – fit and proper person requirements – failure to disclose tax obligations – TASA – prohibition period reduced – decision under review varied
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
Tax Agent Services Act 2009 (Cth)
CASES
Australian Petroleum Pty Ltd v Australian Competition and Consumer Commission (1997) 143 ALR 381
Frugtniet v Tax Practitioners Board [2017] AATA 1393
Hill v Tax Practitioners Board [2020] AATA 678
Kishore v Tax Practitioners Board (2017) AATA 271
Middlebrook and Tax Practitioners Board [2020] AATA 3698
Rent to Own (Aust) Pty Ltd and Australian Securities and Investments Commission [2011] AATA 689
Stasos v Agents’ Board (NSW) (1990) ALD 437
SECONDARY MATERIALS
Australian Government Tax Practitioners Board: Explanatory Paper TPB(EP) 02/2010

REASONS FOR DECISION
RL Hamilton SC, Senior Member
17 December 2020

Ultimately, this matter resolves itself into an appeal against severity of the orders of the respondent Tax Practitioners Board (TPB). The applicant has submitted as much.
There is little dispute about the facts of the matter, except in one area involving responsibility for lodgement of a document with the Australian Securities and Investments Commission (ASIC).
By a decision dated 12 March 2020, the applicant’s registration as a tax agent was terminated by the TPB with effect from 17 April 2020, and he was prohibited from applying for re-registration for a period of five years pursuant to division…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Sabbagh and Tax Practitioners Board

Details

AGLC: Sabbagh and Tax Practitioners Board [2020] AATA 5106
Case: [2020] AATA 5106
Decision Date: 17 December 2020

CaseChat Overview and Summary

This matter concerned an application by Mr Sabbagh (the applicant) to review a decision by the Tax Practitioners Board (the respondent) to prohibit him from applying for registration as a tax agent for a period of five years. The prohibition arose from the applicant's failure to honestly disclose convictions and tax obligations, which constituted breaches of the Code of Professional Conduct and raised questions about his fitness and propriety to be a registered tax agent.

The Tribunal was required to determine whether the five-year prohibition imposed by the Board was appropriate, considering the applicant's conduct, the objectives of the *Tax Agent Services Act 2009* (TASA), and relevant factors for assessing fitness and propriety. Specifically, the Tribunal had to weigh the public interest in maintaining confidence in the tax profession against the personal circumstances of the applicant, including the seriousness of his conduct, the potential for repetition, and any demonstrated contrition.

The Tribunal acknowledged that registered tax agents have continuous obligations to disclose matters affecting their good fame and character, and that failure to do so, particularly in relation to convictions and tax obligations, breaches the TASA. However, the Tribunal considered that a five-year prohibition was too severe in this instance. It took into account that the applicant had not renewed his registration, which could be seen as an act of contrition, and that he was able to maintain his livelihood as a bookkeeper. The Tribunal also noted the applicant's long registration history without prior offences.

Consequently, the Tribunal varied the Board's decision, reducing the period of prohibition. The applicant was prohibited from applying for registration as a tax agent from 17 April 2020 until 31 December 2022, a period significantly shorter than the five years initially imposed by the Board.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

In the present case, it seems too severe to impose a ban on him from applying for registration for five years. Perhaps in recognition of the gravity of the situation, the applicant did not renew his tax agent registration in April 2020. This may be regarded as a further act of contrition. Therefore, the Tribunal cannot make an order in relation to cancellation of his registration. Apparently, he is able to maintain his livelihood by working as a bookkeeper. The applicant is a mature man who has been registered for many years with no prior offences brought to the Tribunal’s attention.DECISION The Tribunal considers that it is necessary in these circumstances, taking into account the factors set out above, to sanction the applicant and to demonstrate to the public and to the profession its disapproval of the applicant’s conduct, that the applicant be prohibited from applying for registration as a tax agent until 31 December 2022. The decision of the Tax Practitioners Board of 12 March 2020 is varied accordingly so that the period of prohibition runs between 17 April 2020 and 31 December 2022.

Ratio Decidendi

Legal Principle Established

The respondent has submitted that the applicant’s conduct shows dereliction over a considerable period of time. Further, that he fails to meet the necessary standard of probity and good fame required of tax agents to protect the public and maintain confidence in the profession. Protection of the public interest is one of the principal objectives of the TASA scheme (see section 2-5 and cases discussed below).CONSIDERATION Tax agents are required, as a condition of registration to be fit and proper persons which involves good fame, integrity and character (see section 20-5 TASA). Registered tax agents are continuously subject to the Code of Professional Conduct and have obligations to notify the TPB on a continuing basis of matters relevant to their fitness to practise (section 30-35 TASA). Section 40-5 of the TASA gives the Board power to terminate registration including for a breach of the Code of Professional Conduct which is prescribed by section 30-10. This includes an obligation to act with integrity and, lawfully in the best interests of the client. Section 40-25 of the TASA empowers the TPB to determine that a person may not apply for registration for a period of not more than 5 years. A TPB Explanatory Paper of 2010 (TPB (EP) 02/2010) which deals with the fit and proper person test for initial and continuance of registration, indicates some of the factors taken into account in dealing with the application for registration. It provides guidance, which though not binding, assists the Tribunal in reaching its decision. It makes specific reference to receiving a sentence of imprisonment at paragraph 31, and also discusses the continuing disclosure obligations of registered persons relevant to the fit and proper requirement at paragraph 35. This Tribunal gave guidance about the relevant factors to be taken into account in a registration determination decision in Kishore v Tax Practitioners Board [2017] AATA 271. These include: the seriousness of the conduct, the potential for repetition, the impact of the sanction on the individual and its effect on his or her capacity to earn a living, the public interest in seeing appropriate sanctions, whether the individual recognises the seriousness of the breach(es) and whether they have demonstrated genuine contrition or remorse. Preventing re-registration of a defaulting tax agent should strengthen public confidence in the integrity of a tax system, balanced against the personal circumstances of the agent including ability to earn a livelihood, number of dependents, financial position, the seriousness of the conduct, and whether it was isolated or repeated, and whether the person had insight into their offending and recognised it through contrition or remorse. On the failure to disclose a conviction, this constituted not only a breach of the continuing obligation to notify the Board in writing of matters affecting good fame and character imposed by section 30-35 of the TASA, he also answered wrongly on the 2018 and 2019 Annual Declarations which contained a number of questions relevant to this.