Tax Practitioners Board v Dedic

The case of Tax Practitioners Board v Dedic was heard in the Federal Court of Australia, where the Tax Practitioners Board, the applicant, sought to impose pecuniary penalties on Zada Dedic, the respondent, for 86 contraventions of the Tax Agent Services Act 2009. The contraventions involved Ms Dedic providing tax agent services without being a registered tax agent between July 2010 and October 2012. The court had already declared these contraventions and issued an injunction requiring Ms Dedic to comply with certain requirements before providing specified tax agent services for three years. The primary legal issue in the penalty hearing was whether the Tax Practitioners Board could submit its view on the appropriate range of penalties for the contraventions, following the High Court's decision in Barbaro v The Queen; Zirilli v The Queen. The court found that the principle of deterrence, which is a primary purpose for imposing a pecuniary penalty, supported the practice of regulators making submissions about the appropriate penalty amounts in civil penalty proceedings.

Davies J held that the Board could indeed make submissions about the appropriate penalty range, distinguishing between the roles of prosecutors in criminal proceedings and regulators in civil penalty proceedings. The court concluded that the primary purpose of imposing a pecuniary penalty is deterrence, and accepted that the principle of deterrence justified the Board's submissions on penalty amounts. The court fixed a penalty of $500 for each of the 86 contraventions, amounting to a total penalty of $43,000, considering Ms Dedic's limited capacity to pay but emphasizing the importance of an appropriate deterrent penalty. The court also ordered that the penalty be paid in instalments due to Ms Dedic's financial position and allowed her the liberty to apply to vary the payment dates on good reason. Additionally, Ms Dedic was ordered to pay the Board's costs of the hearing.

The court's decision underscores the importance of deterrence in setting penalties for contraventions of the Tax Agent Services Act 2009 and recognises the distinct roles of regulators in civil penalty proceedings compared to prosecutors in criminal proceedings. The outcome reflects a balanced approach, considering both the deterrent effect of the penalty and the respondent's financial circumstances.