Tax Practitioners Board v Hacker

Case [2020] FCA 1047

FEDERAL COURT OF AUSTRALIA

Tax Practitioners Board v Hacker [2020] FCA 1047

File number: QUD 106 of 2019
Judge: RANGIAH J
Date of judgment: 27 July 2020
Catchwords:

TAXATION – alleged contraventions of s 50–5(1) of the Tax Agent Services Act 2009 (Cth) – where respondents provided unregistered tax agent services – whether an individual who provides tax agent services and a company which provides tax agent services through the individual can both contravene s 50–5(1) – whether individual respondent received fee or reward for providing tax agent services – where individual respondent was shareholder of company which charged for his tax agent services – where individual respondent was paid a wage by company which charged for his tax agent services – contraventions established

TAXATION – alleged contraventions of s 50–5(2) of the Tax Agent Services Act 2009 (Cth) – whether individual respondent provided unregistered BAS services for reward – whether individual respondent knew or ought reasonably to have known that services were BAS services – contraventions established

PRACTICE AND PROCEDURE – application to amend statement of claim – application made after evidence was closed – error made by applicant in allegations pleaded  – whether respondents acquiesced in presentation of applicant’s case in a manner different from the pleaded case – where inadequate explanation for applicant’s delay – prejudice to the respondents by reason of respondents’ inability to investigate the new allegations – application dismissed

Legislation:

Australian Consumer Law (Sch 2 of the Competition and Consumer Act 2010 (Cth)) s 224

Competition and Consumer Act 2010 (Cth) s 139B

Evidence Act 1995 (Cth) ss 56 and 140

Fair Work Act 2009 (Cth) ss 550 and 793

Tax Agent Services Act 2009 (Cth) ss 2–5, 2–10, 20–5, 20–20, 20–30, 20–45, 30–5, 30–15, 40–5, 40–10, 40–15, 50–5, 60–15, 90–1, 90–5 and 90–10

Federal Court Rules 2011 (Cth) rr 1.41 and 16.53

Cases cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175

Australian Securities and Investment Commission v Rich (2004) 213 ALR 338; [2004] NSWSC 1062

Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279

Briginshaw v Briginshaw (1938) 60 CLR 336

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466

Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155

Hamilton v Whitehead (1988) 166 CLR 121

Jackson v Crosby (1977) 16 SASR 1

Jones v Dunkel (1959) 101 CLR 298

Minister for Immigration and Citizenship v Haneef (2007) 163 FCR 414

Saunders v Cadman (1990) 54 SASR 534

The Queen v Goodall (1975) 11 SASR 94

Trustees of the Property of Cummins (a Bankrupt) v Cummins (2006) 227 CLR 278

Water Board v Moustakas (1988) 180 CLR 491

Date of hearing: 10–13 February 2020
Registry: Queensland
Division: General Division
National Practice Area: Commercial and Corporations
Sub-area: Regulator and Consumer Protection
Category: Catchwords
Number of paragraphs: 125
Counsel for the Applicant: Mr S Couper QC with Mr D…

Continue reading Tax Practitioners Board v Hacker

Sign in free to access the full text

Details
AGLC
Tax Practitioners Board v Hacker [2020] FCA 1047
Case
[2020] FCA 1047
Decision Date

CaseChat Overview and Summary

The case of Tax Practitioners Board v Hacker involved the Tax Practitioners Board (Applicant) bringing action against Mr. Hacker, OSGS, and Naleview (Respondents) for alleged contraventions of sections 50–5(1) and 50–5(2) of the Tax Agent Services Act 2009 (Cth). The Applicant alleged that the Respondents provided unregistered tax agent services for a fee or reward, contravening section 50–5(1) of the Act. It was also alleged that Mr. Hacker provided unregistered BAS services for reward, contravening section 50–5(2) of the Act. The court had to decide whether an individual providing tax agent services and a company providing such services through the individual could both contravene section 50–5(1), whether the individual received a fee or reward for providing tax agent services, and whether Mr. Hacker knew or ought reasonably to have known that the services he provided were BAS services.

The court found that the Respondents did contravene section 50–5(1) of the Act, as Mr. Hacker provided tax agent services for a fee or reward, and both he and the companies he was associated with were not registered tax agents. The court also found that Mr. Hacker provided unregistered BAS services for reward, as he knew or ought reasonably to have known that the services he provided were BAS services, and he was not a registered BAS agent. The court dismissed the Applicant's application to amend the statement of claim after evidence was closed, as there was no acquiescence by the Respondents, and the delay in amending the statement of claim prejudiced the Respondents.

The court ordered the Applicant to file and serve written submissions and any affidavits concerning penalties and other relief for the contraventions of sections 50–5(1) and 50–5(2) of the Tax Agent Services Act 2009 (Cth) by 4.30 pm on 21 August 2020. The Respondents were required to file and serve written submissions in response by 4.30 pm on 11 September 2020. The Applicant was then to file and serve any written submissions in reply by 4.30 pm on 18 September 2020. The hearing of the question of penalties and other relief for contraventions of sections 50–5(1) and 50–5(2) of the Tax Agent Services Act 2009 (Cth) was set down for 10.15 am on 28 September 2020.

Orders

Orders of the court

1. By 4.30 pm on 21 August 2020, the applicant file and serve written submissions (not exceeding 10 pages) and any affidavits concerning penalties and other relief for contraventions of ss 50–5(1) and (2) of the Tax Agent Services Act 2009 (Cth).

2. By 4.30 pm on 11 September 2020, the first and second respondents file and serve written submissions in response (not exceeding 10 pages) and any affidavits.

3. By 4.30 pm on 18 September 2020, the applicant file and serve any written submissions in reply (not exceeding three pages) and any affidavits in reply.

4. The hearing of the question of penalties and other relief for contraventions of ss 50–5(1) and (2) of the Tax Agent Services Act 2009 (Cth) be set down for 10.15 am on 28 September 2020.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

In respect of the allegations of contravention of s 50–5 of the TAS Act, I propose to proceed by:·Describing the factual background against which the proceedings arises. ·Setting out the relevant statutory provisions.·Identifying the allegations in the existing pleading which are admitted, and those which are contested.·Considering the applicant’s application to file its further amended pleading.·Considering the contested allegations.Background The applicant is responsible, under s 60–15 of the TAS Act, for administering the system for registration of tax agents and BAS agents, and for investigating and prosecuting conduct which breaches the TAS Act. Mr Hacker is the sole director and secretary of OSGS. The single share issued by OSGS is held by Naleview. Mr Hacker is a director of Naleview, together with one other person. Mr Hacker is its secretary. Mr Hacker holds half of Naleview’s shares, while the other director holds the other half. The other director has not received any benefit from, or participated in the management of Naleview since 2000. OSGS operated from premises including Suite 6, Level 17, 141 Queen Street, Brisbane City. I will refer to these premises as, “the City Office”. Naleview operated from premises at Unit 1, 27 Windorah St, in Stafford, a suburb in the northern suburbs of Brisbane. I will refer to these premises as, “the Stafford Office”. The respondents admit that none of Mr Hacker, OSGS or Naleview are, or have ever been, registered under the TAS Act as a registered tax agent or as a registered BAS agent. They admit that none of them are, or have ever been, entitled to conduct a legal practice in Queensland. The applicant alleges that Mr Hacker prepared income tax returns for numerous clients in the 2015/16, 2016/17 and 2017/18 financial years. It is alleged that the services were provided at Naleview’s Stafford Office or OSGS’ City Office. It is alleged that the clients who attended the Stafford Office would be charged and pay fees for Mr Hacker’s services to Naleview, while those who attended the City Office would be charged and pay fees to OSGS. It is alleged that the respondents provided unregistered tax agent services for fee or other reward in contravention of s 50–5(1) of the TAS Act. Further, it is alleged that Mr Hacker (but not OSGS or Naleview) prepared BAS statements on three occasions, for which OSGS charged and received a fee. It is alleged that Mr Hacker provided unregistered BAS services for reward in contravention of s 50–5(2) of the TAS Act.The statutory provisions Section 2–10 of the TAS Act provides:2–10 General guide to each Part(1)You need to be registered to provide *tax agent services for a fee or to engage in other conduct connected with providing such services. Part 2 sets out the requirements for registration.…. Section 50–5 of the TAS Act provides:50–5 Providing tax agent services if unregistered(1) You contravene this subsection if:(a)you provide a service that you know, or ought reasonably to know, is a *tax agent service; and(b)the tax agent service is not a *BAS service or a *tax (financial) advice service; and(c)you charge or receive a fee or other reward for providing the tax agent service; and(d)you are not a *registered tax agent; and(e)if you provide the tax agent service as a legal service—either:(i)you are prohibited, under a *State law or *Territory law that regulates legal practice and the provision of legal services, from providing that tax agent service; or(ii)subject to subsection (3), the service consists of preparing, or lodging, a return or a statement in the nature of a return.Civil penalty:(a) for an individual—250 penalty units; and(b) for a body corporate—1,250 penalty units.…(2) You contravene this subsection if:(a)you provide a service that you know, or ought reasonably to know, is a *BAS service; and(b)you charge or receive a fee or other reward for providing the BAS service; and(c)you are not a *registered tax agent or BAS agent; and(d)if you provide the BAS service as a legal service—either:(i)you are prohibited, under a *State law or *Territory law that regulates legal practice and the provision of legal services, from providing that BAS service; or(ii)subject to subsection (4), the service consists of preparing, or lodging, a return or a statement in the nature of a return; and(e)if the BAS service relates to imports or exports to which an *indirect tax law applies—you are not a customs broker licensed under Part XI of the Customs Act 1901.Civil penalty:(a)for an individual—250 penalty units; and(b)for a body corporate—1,250 penalty units.…

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.