Background
Background to the litigation
For the reasons below I impose on the first respondent a sentence of four months’ imprisonment for each of the contempts of court, to be served concurrently, but cumulative on the outstanding balance of the sentence imposed by Rangiah J on 18 December 2020. Of the sentences imposed, I order that after Mr Hacker has served two months of the sentences of imprisonment I have imposed, the balance will be suspended from execution on the conditions detailed at [63]. I impose on the second respondent a fine of $5000. Factual background On 18 December 2020, Rangiah J imposed penalty orders for breaches of the TAS Act on the respondents. Significantly, Rangiah J also found the respondents guilty of a number of offences of contempt. The history of the proceedings, and the contempts then in question, were summarised by Rangiah J in Hacker (No 3) at [109]-[123]. It is appropriate and sufficient at this stage to recite that summary: [109] On 12 February 2019, the applicant filed an Originating Application commencing the principal proceedings against the respondents for contraventions of s 50–5 of the TAS Act (the Contravention Proceedings). The Originating Application also sought interlocutory injunctions restraining the respondents from providing tax agent services or BAS services for fee or reward.[110] On 1 March 2019, I dismissed the application for interlocutory injunctions upon the giving of the following undertaking by the respondents:On a without admissions basis, until further order of the court or final disposition of this proceeding, each respondent (and in the case of the first respondent, either personally or on behalf of another entity) will not provide tax agent services within the meaning of s 90–5 of the Tax Agent Services Act 2009 (Cth) or BAS services within the meaning of s 90–10 of the Tax Agent Services Act 2009 (Cth) for fee or reward to any person or entity with the exception of those entities in respect of which the first respondent holds an officer position (being either director, company secretary and/or public officer), and, for the avoidance of any doubt, the undertaking does not prohibit the first respondent from receiving a fee or reward in respect of his officer role for those entities.(Emphasis added.)[111] On 17 June 2019, the applicant filed an interlocutory application and Statement of Charge (as was required under rr 42.11(1) and 42.12(a) of the Federal Court Rules 2011 (Cth)) alleging that Mr Hacker and OSGS had breached their undertaking, and seeking the imposition of penalties upon them for contempt of court. An Amended Statement of Charge filed on 27 September 2019 alleged that Mr Hacker and OSGS committed contempts of court on three occasions by breaching the undertaking of 1 March 2019 as follows:(a)on 6 March 2019, preparing a 2018 Income Tax Return (ITR) for Palwinder Lore for $132;(b)on 13 March 2019, preparing a 2018 ITR for Jeremy Park for $132;(c)on 18 March 2019, preparing a 2018 ITR for Mohammed Rizwan Shaikh for $132.[112] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved in the transactions. On 1 July 2019, OSGS admitted the allegations, but they were denied by Mr Hacker. In Tax Practitioners Board v Hacker (No 2), I found the allegations of contempt to be proven against both Mr Hacker and OSGS (the First Contempts).[113] By a further interlocutory application and Statement of Charge filed on 13 November 2019, the applicant alleged that Mr Hacker and OSGS committed contempts of court on five occasions by breaching the undertaking of 1 March 2019 as follows:(a)on 6 September 2019, preparing a 2019 ITR for Hyuna Kim for $132; (b)on 20 September 2019, preparing a 2019 ITR for Rosemary Amali Delwala for $132; (c)on 24 September 2019, preparing 2017, 2018 and 2019 ITRs for John Melvin Claveria for $396; (d)on 24 September 2019, preparing a 2019 ITR for Thi Cam Giang Pham for $132; (e)on 25 September 2019, preparing a 2019 ITR for Tri Huu Le for $180.[114] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved. On 10 February 2020, Mr Hacker and OSGS admitted the contempts. I formally made findings in Tax Practitioners Board v Hacker (No 2), that the contempts were proven against Mr Hacker and OSGS (the Second Contempts).[115] On 26 November 2019, upon the provision of an irrevocable authority by the respondents, I adjourned the hearing of the principal proceedings and the applicant’s interlocutory application in respect of the First and Second Contempts. Mr Hacker, on behalf of himself and in his capacity as director of OSGS and Naleview, provided an irrevocable authority to authorise and direct his solicitors to hold $15,000 and transfer all or part of that sum to the Court or the applicant in accordance with any order or direction in these proceedings. The authority was intended to provide a security against further contraventions of the undertaking.[116] On 13 February 2020, I reserved judgment in respect of the allegations of contravention of s 50–5 of the TAS Act and the First and Second Contempts. After I had reserved judgment, three further proceedings for contempt were brought.[117] On 23 March 2020, the applicant filed an interlocutory application and Statement of Charge alleging that Mr Hacker and OSGS committed contempts of court on eight occasions by breaching the undertaking of 1 March 2019 as follows:(a)on 3 September 2019, preparing a 2019 ITR for Braulio Omanbac Bahan for $352; (b)on 3 September 2019, preparing a 2019 ITR for Carol Bahan for $352;(c)on 27 September 2019, preparing a 2019 ITR for Darrien Murphy for $132;(d)on 29 November 2019, preparing a 2019 ITR for Sarah Debesay Tagg for $132;(e)on 2 December 2019, preparing a 2019 ITR for Jared Michael Tagg for $132;(f)on 6 January 2020, preparing a 2019 ITR for Emily Louise Martin for $132; (g)on 26 February 2020, preparing a 2019 ITR for Dawni Jose for $132;(h)on 26 February 2020, preparing a 2019 ITR for Nisha George for $132.[118] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved. On 6 April 2020, Mr Hacker and OSGS admitted the contempts. I find those contempts to have been proven (the Third Contempts).[119] On 30 June 2020, the applicant filed a further interlocutory application and Statement of Charge alleging that Mr Hacker and OSGS committed contempts of court on three occasions by breaching the undertaking of 1 March 2019 as follows:(a)on 8 April 2020, preparing a 2019 ITR for Rose Jaguru for $132; (b)on 17 April 2020, preparing a 2019 ITR for Lissy Palliyan Anthony for $130;(c)on 22 April 2020, preparing a 2019 ITR for Ramandeep Singh Deol for $132.[120] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved. On 10 July 2020, Mr Hacker and OSGS admitted the contempts. I find those contempts to have been proven (the Fourth Contempts). [121] On 10 July 2020, I also ordered, by consent, that:Within 3 business days of the date of this order, and subject to the applicant providing the notices to the first respondent within 2 business days of the date of the order, the first respondent publishes or causes to be published notices in the form and terms of Annexure A to this order, by ensuring that:(a)a notice in A2 size is affixed in a prominent place to the front door of the office at Suite 6, Level 17, 141 Queen Street, Brisbane QLD 4000; and(b)a notice in A2 size is affixed in a prominent place to, or otherwise displayed in a prominent place on, the reception counter at the office at Suite 6, Level 17, 141 Queen Street, Brisbane.[122] On 19 August 2020, the applicant filed yet another interlocutory application and Statement of Charge. It was alleged that Mr Hacker failed to comply with the order made on 10 July 2020. It was also alleged that Mr Hacker and OSGS committed contempts of court on nine occasions by breaching the undertaking of 1 March 2019 as follows:(a)on 20 May 2019, preparing a 2018 ITR for Mohammad Rahimi for $132; (b)on 8 August 2019, preparing a 2019 ITR for Irish Dela Pena for $132; (c)on 13 July 2020, preparing a 2020 ITR for Bahaa Okbi for $187; (d)on 13 July 2020, preparing a 2020 ITR for Hamideh Gharekhanian for $132; (e)on 14 July 2020, preparing a 2019 ITR for Mohammad Rahimi for $220;(f)on 15 July 2020, preparing a 2019 ITR for Irish Dela Pena for $132; (g)on 17 July 2020, preparing a 2020 ITR for Catherine James for $132; (h)on 17 July 2020, preparing a 2020 ITR for Jeffrey Rice for $132; (i)on 20 July 2020 preparing a 2020 ITR for Stephen Magot for $132.[123] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved. On 1 September 2020, Mr Hacker and OSGS admitted the contempts. I find those contempts to have been proven (the Fifth Contempts).
Evidence
Evidence Before The Court
On 28 January 2021, before the warrant was executed, Mr Hacker and OSGS, the second respondent, committed the contempts the subject of this application.Evidence relied on in this application The applicant read the affidavits of Ms Jasvir Kaur affirmed on 9 April 2021, Ms Gina Bradley affirmed on 12 April 2021, Mr Kurt Bragg affirmed on 16 April 2021 and his further affidavit affirmed on 14 June 2021. The respondents read the affidavits of Dr Joseph Hui sworn on 7 July 2021 and Mr Kent Scott Hacker sworn on 8 July 2021. Each party provided written submissions in advance of the oral hearing.Legal principles The rationale of sentencing for contempt is the protection of the effective administration of justice. As the Full Court explained in Kazal v Thunder Studios Inc (California) [2017] FCAFC 111; (2017) 256 FCR 90 at [97] (Besanko, Wigney and Bromwich JJ) (Kazal):The plurality in [Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375] observed at [41], endorsing the statement of principle by Hayne J in Re Colina; Ex parte Torney (1999) 200 CLR 386 at [12], that the ‘cardinal feature of the power to punish for contempt’ was as an exercise of judicial power to ‘protect the due administration of justice’. Viewed in that way, contempt proceedings are essentially protective in nature as to the judicial function and the role of the courts, even if they also serve to vindicate private interests and rights. Contempt proceedings are therefore to be viewed as essential in facilitating courts being able to function properly. That includes being, and being seen to be, effectual in adjudicating upon and resolving disputes, and in particular making orders that will ordinarily be obeyed. This means that individual contempt cases have an importance transcending the instant case by supporting and enhancing the integrity of judicial proceedings, both in respect of orders made, and more generally. That view of contempt proceedings can be seen to permeate longstanding sentencing authority in this area. Considerations relevant to determining an appropriate penalty for contempt of court have been identified, in a non-exhaustive manner, to include: the contemnor’s personal circumstances; the nature and circumstances of the contempt; the effect of the contempt on the administration of justice; the contemnor’s culpability; the need to deter the contemnor and others from repeating contempt; the absence or presence of a prior conviction for contempt; the contemnor’s financial means; and whether the contemnor has exhibited general contrition and made a full and ample apology: Director of Fair Work Building Industry Inspectorate v Cartledge (No 2) [2015] FCA 851 at [6]; Louis Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83; (2006) 149 FCR 494 at [25]; Kazal at [101]-[103]; Matthews v ASIC [2009] NSWCA 155 at [129]. Recognising there are number of authorities in this Court which refer to the relevant matters for consideration, the position was summarised in Kazal at [103]: … The focus remains on the core themes of the objective seriousness of the conduct and, in particular, its effect on the administration of justice, subjective factors such as the contemnor’s culpability, antecedents and attitude, including in particular any apology or other palpable sign of contrition, the capacity to pay a fine, and imprisonment being a last resort. Deterrence remains a dominant theme, both specific and general. Even denunciation and punishment can be seen as bolstering deterrence. That is especially so when the conduct entails contemplation and the opportunity to reflect and desist.
Ratio Decidendi
Legal Principle Established
Mr Hacker accepted that he must serve the period of imprisonment imposed by Rangiah J, and that the sentence for these contempts would be served cumulatively on that period. In that context the respondents directed their submissions to advancing what they contended were mitigating factors, which affect the length of the period of imprisonment to be imposed, and the fact and amount of any fine or other penalty imposed. Consideration Before addressing those matters relied on by the respondents, it is necessary to consider the contempts admitted.Circumstances of the contempts The contempts committed by the respondents the subject of this application are factually indistinguishable from the gravamen of the first five groups of contempts (apart from one charge). Those five groups comprise 27 previous contempts. On 28 January 2021, Mr Hacker and OSGS provided a tax service for a fee. They prepared the returns for Ms Kaur and Mr Singh, and charged $308 for their services. This conduct was in breach of the recently made orders of Rangiah J. When sentenced in Hacker (No 3), Rangiah J described the respondents’ conduct at [139]-[140] as follows: [139]In my opinion, the conduct of Mr Hacker and OSGS demonstrates blatant indifference to the undertakings they offered to, and which were accepted by, the Court. Each contempt was committed in wilful and flagrant disregard of their undertaking. The breaches were contumacious, and are criminal contempts: cf Witham v Holloway (1995) 183 CLR 525 at 538–539. Apart from the assertion of frontotemporal lobe damage which I have rejected, no explanation or excuse has been offered. Each contempt can only be described as very serious. [140]The contempts generally followed a pattern. Mr Hacker and OSGS would be caught out by the applicant providing unregistered tax agent services for fee or reward in contravention of the undertaking; the applicant would commence proceedings for contempt; Mr Hacker and/or OSGS would admit the contempts; then they would promptly commit further breaches of the undertaking. The admissions acknowledged the contempts, but the contempts continued. In view of this pattern of conduct, I regard each contempt as progressively more serious. These contempts were committed in the context of those findings having already been made. The wilful, deliberate and blatant disregard for the Court’s orders means this conduct committed in the face of those findings, can only be characterised as contempts of the most serious kind. The breaches were contumacious, and are criminal contempts: cf Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 at 538–539. The respondents’ submission that the factual circumstances of the contempt charges relate only to one appointment involving a married couple, that the fee charged was relatively modest in the amount of $308, that there is no evidence that the respondents advertised or otherwise promoted tax agent services in the period following the making of the orders, and that the evidence indicates that no penalty was imposed on Ms Kaur or Mr Singh in respect of the lodgement of their 2020 tax return, attempts to minimise the seriousness of the conduct.
