Thomas and Tax Practitioners Board - [2023] AATA 757

Thomas and Tax Practitioners Board [2023] AATA 757 (14 April 2023)
Division:TAXATION AND COMMERCIAL DIVISION
File Number(s): 2022/6204-6206
Re:Jacob Thomas
APPLICANT
Taxation and Accounting Australia Pty Ltd
APPLICANT
Accounting Solutions Australia Pty Ltd
APPLICANT

Tax Practitioners Board And
RESPONDENT

DECISION
Tribunal:Senior Member G Lazanas
Date:14 April 2023
Place:Melbourne

The applications for stays of the decisions under review are refused. The interim stay order dated 12 August 2022, as varied on 26 August 2022, is discharged on 21 April 2023.
.........................[Sgd]...............................................
Senior Member G Lazanas
CATCHWORDS
PRACTICE AND PROCEDURE – application for stay of decisions – termination of tax agent registrations and imposition of four-year bans – whether stays should be granted pending decisions on applications for review – factors relevant to the granting of a stay – poor prospects of success and public interest considerations paramount – misleading statements to Board – stay applications refused
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth) s 41
Tax Agent Services Act 2009 (Cth) ss 2-5, 20-5, 20-15, 30-10, 30-15, 30-30, 40-15, 40-5, 40-25, 60-125
CASES
Evans and Tax Practitioners Board [2019] AATA 1408
G J Brown & Co Pty Ltd at Tax Practitioners Board [2016] AATA 740
Le’Sam Accounting Pty Ltd and Tax Practitioners Board [2020] AATA 890
Poidevin and Australian Securities and Investments Commission [2018] AATA 124
Scott and Australian Securities and Investments Commissioner [2009] AATA 798
Thomas and Tax Practitioners Board [2021] AATA 2164
Australian Securities and Investments Commission v Administrative Appeals Tribunal [2009] FCAFC 185
REASONS FOR DECISION
Senior Member G Lazanas
14 April 2023
INTRODUCTION

On 16 June 2022, the Tax Practitioners Board (the Board) terminated the tax agent registrations of Mr Jacob Thomas, Taxation and Accounting Australia Pty Ltd (TAAPL) and Accounting Solutions Australia Pty Ltd (ASAPL) to take effect from 1 August 2022, and imposed a four-year preclusion period during which Mr Thomas and ASAPL may not re-apply for registration. The Board’s decisions were made under the Tax Agent Services Act 2009 (Cth) (the Act) and are referred to as the Decisions Under Review.
On 29 July 2022, Mr Thomas, TAAPL and ASAPL (together, the Applicants) applied for a stay of the operation of the Decisions Under Review (the Stay Applications) pursuant to
s 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act). On the same day, the Applicants also filed applications seeking a review of the Decisions Under Review (the Applications for Review).
On 12 August 2022, the Tribunal ordered, by consent, a stay of the Decisions Under Review on an interim basis until the Tribunal determines the Stay Applications. On 26 August 2022, the Tribunal varied the interim stay order of 12 August 2022 by including a condition that the Applicants must not take on any new clients.
The hearing of the Stay Applications took place in November 2022 following some unavoidable delays, including due to pre-arranged personal leave of Mr Thomas. There were then…

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.

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Details

Case: [2023] AATA 757
Decision Date: 14 April 2023

CaseChat Overview and Summary

The matter before the Tribunal concerned applications for stays of decisions made by the Tax Practitioners Board. The Board had terminated the tax agent registrations of Mr Thomas, ASAPL, and TAAPL, and imposed four-year preclusion periods on Mr Thomas and ASAPL. These decisions were made on the basis that Mr Thomas was not a fit and proper person to be a registered tax agent. The applications for stay were sought pending the determination of Mr Thomas's and the companies' applications for review of the Board's decisions.

The Tribunal was required to determine whether to grant stays of the Board's decisions to terminate the tax agent registrations and impose preclusion periods. In considering these applications, the Tribunal had to assess the relevant factors for granting a stay, including the prospects of success of the applications for review and the public interest considerations.

The Tribunal reasoned that the prospects of success for the applicants were poor, based on the limited materials before it. It also considered that granting a stay would not serve the public interest, particularly in relation to the integrity of the tax agent registration regime. The Tribunal noted that the applicants' businesses would not be rendered nugatory if they ultimately succeeded in their review applications, as they could continue to practice and rebuild their client base. The Tribunal also referred to a previous decision concerning Mr Thomas's son, Jeremy, where a stay was refused due to fraudulent conduct over a long period, which adversely affected the standing of the profession.

Consequently, the Tribunal refused the stay applications and discharged the interim stay order.

Orders

Orders of the court

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Background

Background to the litigation

As stated at the outset, on 16 June 2022, the Board decided to terminate the tax agent registration of Mr Thomas pursuant to s 40-5(1) of the Act on the basis he is not a fit and proper person, and to impose a preclusion period of four years from the date the termination of his tax agent registration takes effect during which he may not re-apply for registration, pursuant to s 40-25(1) of the Act. On the same day, the Board decided to terminate ASAPL’s tax agent registration pursuant to s 40-15(1) and to impose the same preclusion period pursuant to s 40-25(1) of the Act. Additionally, the Board decided to terminate TAAPL’s tax agent registration pursuant to s 40-15(1).THE FACTUAL BACKGROUND Mr Thomas has been a registered tax agent in Australia since mid-2006. He stated that he has been working in the accounting profession since 1972. In 1977, he became a qualified accountant. Mr Thomas worked in professional accounting firms in London and Malaysia before coming to Australia in about 1989. At or about that time, Mr Thomas was admitted as a chartered accountant with the Institute of Chartered Accountants in Australia and worked in companies and accounting firms. He later set up his own tax agent private practice. ASAPL and TAAPL have been registered tax agents since about mid-2012 and 2019, respectively. At all material times, Mr Thomas has been a director of TAAPL, and he has been the sole director of ASAPL since 27 September 2021. Mr Thomas is one of three supervising registered tax agents for ASAPL although at the hearing Mr Thomas stated that ASAPL does virtually little tax agent work nowadays. He added that that the Applicants run their businesses “like a franchise operation” and that other offices rely on the Applicants to help them set up, and the Applicants also provide some supervision. In early 2021, ASAPL and Mr Thomas were investigated by the Board in relation to a lack of supervision and control over employees. That investigation focused initially on Mr Jeremy Thomas, one of Mr Thomas’s sons. Jeremy was an employee of ASAPL and was himself, at that time, a registered tax agent. However, Jeremy’s tax agent registration was terminated by the Board and a five-year preclusion period was imposed from 11 June 2021 to 11 June 2026. Although Jeremy had disputed the Board’s decision and applied to the Tribunal for an order staying the operation of the termination decision, he was unsuccessful. The Tribunal decided that “[g]ranting a stay where there has been fraudulent conduct over a long period would adversely affect the standing of the profession in the community”: see Thomas and Tax Practitioners Board [2021] AATA 2164 at [22] (Senior Member Kelly). It is also noteworthy that Senior Member Kelly recorded in the written decision at [13] that, after the oral decision was made on 11 June 2021 to refuse the stay, Jeremy “asked the [Board’s] legal representative if he could do administration work in the practice”. This is noteworthy because the misleading statements made by the Applicants to the Board that are in issue relate to Jeremy’s employment status, as detailed further below.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Finally, if the Applicants were to ultimately succeed, the Applications for Review would not be rendered nugatory. The Applicants could continue to practice as registered tax agents and notify clients and rebuild their businesses even though there may have been some disruption. CONCLUSION The consideration of the abovementioned factors weighs overwhelmingly against granting the stays. In particular, based on the limited materials before the Tribunal, I consider the Applicants’ prospects of success to be poor, and the public interest considerations regarding the integrity of the tax agent registration regime would also not be served by granting stays. The Tribunal refuses the Stay Applications and the interim stay order dated 12 August 2022, as varied on 26 August 2022, is discharged on 21 April 2023.

Ratio Decidendi

Legal Principle Established

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