Federal Court of Australia
Tax Practitioners Board v Caolboy [2020] FCA 1559
ORDERS
VID 6 of 2020 BETWEEN: TAX PRACTITIONERS BOARD
Applicant
AND: ARLENE CAOLBOY
Respondent
order made by:
WHEELAHAN J
DATE OF ORDER:
29 October 2020
PENAL NOTICE
TO:ARLENE CAOLBOY
IF YOU (BEING THE PERSON BOUND BY ORDERS 1 AND 2 OF THESE ORDERS):
(A)REFUSE OR NEGLECT TO DO…
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- AGLC
- Tax Practitioners Board v Caolboy [2020] FCA 1559
- Case
- [2020] FCA 1559
- Decision Date
CaseChat Overview and Summary
The court acknowledged that while the statutory maximum penalties for each contravention were substantial, imposing the maximum penalty for each of the over 500 contraventions would result in an excessively high total penalty. Instead, the court adopted a totality approach to view the conduct as a whole, which was supported by precedents where numerically high contraventions from a course of business or conduct were considered together. The court found the respondent's conduct to be objectively serious, given the vulnerable nature of the public she provided services to and the calculated intent behind her actions. The court also took into account the difficult personal circumstances of the respondent, although these did not override the need for penalties that serve general deterrence and uphold the integrity of the tax agent registration system.
In determining the appropriate penalty, the court imposed a total penalty of $40,000, to be paid in eight annual instalments, recognising the need for a penalty that is both punitive and manageable for the respondent. The court also granted injunctions to prevent the respondent from engaging in certain activities without being registered as a tax agent, for a period of three years. These injunctions were intended to protect the public and further the protective objects of the Act. The court did not order any costs to be paid by either party. The final orders included the injunctions, the payment of penalties, and provisions for the enforcement of these orders.
Orders
Orders of the court
1. The respondent, for a period of three years from the date of this order, if requested to provide to another person or entity a service whether by her employees, agents or however otherwise, that relates to one or more of:
(a) advising another person or entity in relation to entitlements, liabilities or obligations in relation to an Australian taxation law;
(b) completing or lodging for another person or entity a return, statement or correspondence with the Commissioner in relation to an Australian taxation law; or
(c) representing another person or entity in their dealings with the Commissioner of Taxation,
must, before providing or agreeing to provide the said service, and unless then registered as a tax agent pursuant to the Tax Agent Services Act 2009 (Cth), inform the person of the matters referred to in paragraphs [1]-[8] of Form A annexed to these orders and, if the person or entity still requests the service be performed by the respondent:
(i) have the person or entity complete and sign a copy of Form A annexed to these orders;
(ii) retain a copy of the completed and signed form for a period of three years; and
(iii) provide any such completed and signed form to the applicant within 14 days of its request.
2. The respondent, for a period of three years from the date of this order, must not, unless then a registered tax agent pursuant to the Tax Agent Services Act, make any reference, in connection with the description or promotion of any services she offers to provide, to matters involving taxation or the Australian Tax Office unless that reference is a statement, or is closely accompanied by another statement, to the effect that she is not registered pursuant to the Tax Agent Services Act to provide tax agent services or BAS services.
3. The respondent pay penalties in the total amount of $40,000 to the Commissioner of Taxation, who is to receive those penalties on behalf of the Commonwealth. Those penalties are to be paid, as follows:
(a) $5,000 on or before 29 October 2023;
(b) $5,000 on or before 29 October 2024;
(c) $5,000 on or before 29 October 2025;
(d) $5,000 on or before 29 October 2026;
(e) $5,000 on or before 29 October 2027;
(f) $5,000 on or before 29 October 2028;
(g) $5,000 on or before 29 October 2029; and
(h) $5,000 on or before 29 October 2030.
4. There be no order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
Ratio Decidendi
Legal Principle Established
It was agreed that the respondent contravened s 50-15 of the Act on three occasions by representing that she was a registered tax agent, when that representation was untrue. In dollar terms, that maximum penalty amounts to $9,000 for each contravention up until 30 June 2017, and $10,500 thereafter.Consideration of the appropriate penalty Normally, in determining an appropriate penalty, careful attention should be given to the statutory maximum: Markarian v The Queen [2005] HCA 25; 228 CLR 357 at [31] (Gleeson CJ, Gummow, Hayne and Callinan JJ). Here, the statutory maximum is of limited utility, because if each contravention were to attract a maximum penalty, the total sum would exceed $26 million, which in the circumstances of this case, is not a useful starting point. The respondent committed over 500 of contraventions of the Act spanning 2016, 2017, and 2018 which took the form of a consistent course of business activity. In this sense, all the contraventions are factually linked. In my view, it is appropriate in assessing a proportionate response to the respondent’s contraventions to stand back and to view the conduct in its totality as a means of properly informing the assessment of penalties. This approach takes the totality principle as a starting point. Taking a broad view of a contravener’s conduct in this way has been endorsed in other cases of numerically high contraventions of civil penalty provisions resulting from a course of business or conduct: see, Australian Competition and Consumer Commission v Coles Supermarkets [2015] FCA 330 at [17]-[18] (Allsop CJ); Australian Securities and Investments Commission v Commonwealth Bank of Australia [2020] FCA 790 at [65] (Beach J). And in an appropriate case, the Court may impose a single penalty for multiple contraventions where that course is agreed or accepted as being appropriate by the parties: Australian Building and Construction Commissioner v Construction Forestry Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 at [149] (Dowsett, Greenwood and Wigney JJ). I accept the Board’s submissions that are set out at [57] above about the seriousness of the respondent’s contravening conduct. I find that the respondent’s contraventions were calculated, and occurred for the purposes of achieving financial gain. Taken as a whole, the contraventions are towards the serious end of the spectrum. The factors that contribute to the seriousness of the conduct include the vulnerability of those members of the public to whom the respondent provided tax agent services. Those persons were vulnerable to the risk inherent in having their tax affairs managed by a person without the requisite qualifications to obtain registration by the Board. Further, the circumstances that the respondent continued to provide tax agent services and advertised for them after giving a commitment to the Board not to do so, and the admitted false representations that she was a registered tax agent that she made to three persons, reinforce the objective seriousness of her contraventions.