Aalders v Tax Agents' Board of Queensland

BACKGROUND 2 Mr Aalders, a chartered accountant who was a registered tax agent in New Zealand, applied to the Board for registration as a tax agent in Queensland on 2 August 2002. The application was on two grounds: first, under the Trans-Tasman Mutual Recognition Act 1997 (Cth) ('the TTMR Act'), and second, under the Income Tax Assessment Act 1936 (Cth) ('Tax Act'). 3 The Board refused Mr Aalders' application for registration under both acts, and he applied to the Administrative Appeals Tribunal ('the Tribunal') for review of that decision. 4 The Tribunal delivered its decision on 29 July 2005. In that decision, the Tribunal: · affirmed the decision of the Board to reject Mr Aalders' application for registration as a tax agent in Queensland pursuant to the TTMR Act, but · set aside the decision to reject the Mr Aalders' application for registration as a tax agent pursuant to the provisions of the Tax Act, and remitted the matter to the Board for reassessment with the direction that Mr Aalders qualified for registration as a tax agent in Queensland. 5 It is common ground that Mr Aalders is now registered as a tax agent in Queensland. The chronology filed by the Board indicates that Mr Aalders was registered as a tax agent on 10 August 2005. 6 Mr Aalders has now appealed the decision of the Tribunal, but only in respect of the Tribunal decision Q2004/110 with respect to his application for registration as a tax agent pursuant to the TTMR Act.

SUBMISSIONS OF THE BOARD 7 The submissions of the Board in support of this notice of motion may be summarised as follows:

1. there is a clear case for summary dismissal of the appeal on the grounds that there is no actual controversy between the parties as to Mr Aalders' legal or practical right to be registered as a tax agent.
2. at its highest, the appeal involves consideration of one of perhaps multiple alternate bases for his current registration.
3. even if Mr Aalders were successful in the substantive appeal, the appeal would not provide the appellant with any consequential relief as the Tribunal has already remitted the matter to the Board for reconsideration with directions necessitating the registration of Mr Aalders as a tax agent.
4. Mr Aalders has acknowledged that he has no personal interest in the outcome of the appeal, and in effect he seeks a hypothetical opinion from the court on the application of the TTMR Act to the registration of tax agents.
5. this is not a matter where, notwithstanding the lack of practical outcomes of the appeal, the appeal would resolve an important issue of public law as was the case in Vanstone v Clark [2005] FCAFC 189.

SUBMISSIONS OF MR AALDERS 8 The submissions of Mr Aalders in response may be summarised as follows:

1. The governments of Australia and New Zealand have put in place a mutual recognition regime as part of the creation of a free trade area.
2. the courts in New Zealand in relation to medical practice have enforced the principles of mutual recognition and he would have expected the Australian judiciary, including the Tribunal, to do the same.
3. section 28 of the TTMR Act and the provisions of the Trans-Tasman Mutual Recognition Arrangement ('TTMR Arrangement') allow a person in an occupation or profession registered in New Zealand to practise in Australia and vice versa. The Arrangement was ignored as irrelevant by the Tribunal.
4. the position taken by the Board before the Tribunal was a ploy or disguise to attempt to defeat the intent and spirit of the Arrangement and the TTMR Act.
5. the Tribunal failed to give proper consideration to the equivalence of tax agents in Australia and New Zealand.
6. the Tribunal failed to consider for mutual recognition purposes the ability and fitness of Mr Aalders.
7. as a result, tax agents from jurisdictions including New Zealand are discriminated against in Australia.
8. the decision of the Tribunal in relation to TTMR is fundamentally wrong and unjust, and breaches the spirit of the TTMR and the TTMR Arrangement. Unless the precedent is overturned the entire concept of mutual recognition will be 'killed off by a bureaucracy unwilling to follow the direction given by the Government'.
9. the application by the Board to have Mr Aalders' appeal struck out prejudices every New Zealand educated chartered accountant in public practice, who in terms of the TTMR Act is entitled to practise in Australia and who is afforded educational and qualification equality by the Institute of Chartered Accountants in Australia.
10. if there is a defect or bias in the Tribunal hearing, it is unjust to deny examination of the decision simply because Mr Aalders partly succeeded in an appeal under different legislation.
11. to uphold the ruling of the Tribunal would create a situation which requires the New Zealand government to give up its right to its own sovereign decisions and to make those subservient to whims of the tax bureaucracy of Australia in order for the TTMR regime to apply. 9 Mr Aalders subsequently filed further written submissions including:
12. there prevails unwarranted discrimination against New Zealand Chartered Accountants based on supposition and assumptions based on ignorance and prejudice rather than on fact.
13. the Tribunal is biased in its approach to New Zealand tax agents. 10 Mr Aalders also referred in detail to Crowley v Tax Agents' Board of NSW (1989) 90 ATC 2005, a decision of the Tribunal.

SUMMARY DISMISSAL 11 The relevant powers of the Federal Court are found in s 23 Federal Court of Australia Act 1976 (Cth) and O 20 r 2 Federal Court Rules: Beitseen v Johnson (1989) 29 IR 336 at 338. Section 23 provides: 'The Court has power, in relation to matters in which it has jurisdiction, to make orders of such kinds, including interlocutory orders, and to issue, or direct the issue of, writs of such kinds, as the Court thinks appropriate.' 12 Order 20 r 2 Federal Court Rules provides: '(1) Where in any proceeding it appears to the Court that in relation to the proceeding generally or in relation to any claim for relief in the proceeding - (a) no reasonable cause of action is disclosed; (b) the proceeding is frivolous or vexatious; or (c) the proceeding is an abuse of the process of the Court, the Court may order that the proceeding be stayed or dismissed generally or in relation to any claim for relief in the proceeding. (2) The Court may receive evidence on the hearing of an application for an order under subrule (1).'

GENERAL PRINCIPLES IN RELATION TO MOOT POINTS 13 Historically, courts have been disinclined to hear and determine matters where the issues in controversy no longer have real practical significance. In Glasgow Navigation Company v Iron Ore Company [1910] AC 293 at 294, Lord Loreburn LC stated that it was not the function of a Court of law to advise parties as to what would be their rights under a hypothetical state of facts (cf Sutch v Burns [1944] KB 406, King v Lewis [1949] NZLR 779, Sumner v William Henderson & Sons [1963] 2 All ER 712, Ku-Ring-Gai Municipal Council v Suburban Centres Pty Ltd (1971) 2 NSWLR 335, and Swift Australian Co (Pty) Ltd v South British Insurance Co Ltd [1970] VR 368, City of Norwood, Payneham and St Peters v Baker [2004] SASC 135). A useful illustration of the principle is the decision of the Full Court of the Supreme Court of Victoria in Hole v Insurance Commissioner [1962] VR 394 where the respondent had obtained a judgment for the sum of £300 and costs against the Insurance Commissioner. The Insurance Commissioner appealed to set aside the judgment. The appeal involved the construction of a section of an exclusion clause in a policy of insurance. The court was informed however that the Insurance Commissioner had paid the judgment debt and costs to the respondent, and that the parties had agreed that the Insurance Commissioner would neither seek the return of those moneys nor a new trial should the appeal succeed. In refusing to proceed further with the appeal, the Full Court observed: 'There is, therefore, now no real contest between the parties as to the right to that £300. We have, therefore, a position in which this Court is asked to deal with a matter where the legal rights of the parties to that £300 are not now in actual controversy…we think, as the matters now stand, what the Court is really asked to do is to give an advisory opinion on the construction of the policy of insurance.' (at 394) 14 The principle has also been applied in the Federal Court in a number of cases (for example Beitseen v Johnson (1989) 29 IR 336, La Roche v Cormack (1991) 33 FCR 414,Rocklea Spinning Mills v Anti-Dumping Authority (1995) 56 FCR 406 at 423, Mayne Nickless Ltd v Transport Workers Union of Australia [1998] 984 FCA, Civil Aviation Safety Authority v Administrative Appeals Tribunal [2001] FCA 1319, Vanstone v Clark [2005] FCAFC 189). In Beitseen, to which I was also directed by Ms Brennan acting for the Board, the trial judge had made orders directing members of a union to perform and observe the rules of that organisation by treating the respondent as having been validly appointed to the position of secretary in the union, and by treating as null and void a purported resolution of the union that an election be held for that position. The respondent's appointment was for the unexpired term of the previous incumbent in that role, however it was common ground that the unexpired term would expire shortly afterwards, and that an election was in progress to determine who would fill the office for a full term from that time. The appellants sought to appeal the decision at first instance on the basis of issues including whether the respondent was eligible to be appointed to the position pro tem, whether the union could have filled the position by appointment a casual vacancy, and whether the appointment of the respondent had not been effectively revoked by a subsequent meeting. Woodward, Northrop and Ryan JJ held that: · in the circumstances there was no real contest between the parties as to the right of the respondent to occupy the position · resolving those questions would be to furnish an advisory opinion which courts traditionally, and for good reason, have been averse from doing · although the appellants genuinely desired to agitate the issues involved in the grounds of their notice of appeal, such a desire does not satisfy the requirement that the legal rights of the parties should be in actual controversy as articulated Hole v Insurance Commissioner. As explained by their Honours: 'On our understanding that requirement entails that any judgment which might be given on the appeal should confirm or modify rights which remain capable in a real and genuine sense of being enjoyed.' (at 337-338) 15 Notwithstanding this general rule, the courts have also recognised that, even where hypothetical issues are involved, the court preserves a discretion to determine an issue where the determination would be in the public interest: Eastman v Newcastle United Football Club Ltd [1964] 1 Ch 413 at 440, Veloudos v Young (1981) 56 FLR 182 at 190, Douglas v Tickner (1994) 49 FCR 507 at 521, Mosman Park Town v Esther Investments Pty Ltd (1996) 93 LGERA 38, the Full Court of the Federal Court in MIMIA v Al Masri (2003) 126 FCR 54 at 62, Vanstone v Clark per Black CJ at [8] and Weinberg J at [38], and more recently the Court of Appeal of Western Australia in Kennedy ex parte West Australian Newspapers [2006] WASCA 172 at [27]. 16 Identifying 'the public interest' for the purposes of exercising this discretion is no easy task. In Kennedy, Steytler P observed: 'Examples of cases in which the public interest exception has been said to apply include cases in which the issues raised in the appeal have a significance wider than for the purposes of the particular case: Mosman Park at 39, Al Masri at 62; or in which the issue raised in the appeal is otherwise one of continuing importance: Al Masri at 62; or in which there is a conflict between inconsistent decisions which needs to be resolved: Mosman Park at 39.' 17 Perhaps other categories to add to that list include where the issue raised involves the administration of justice, as was the case in Al Masri (immigration detention) and Kennedy (suppression orders), or where there is an issue involving a public authority as to a question of public law, as was the case in Australian Competition and Consumer Commission v IMB Group Pty Ltd [1999] FCA 313 (regulator seeking penalty for conduct in breach of the Trade Practices Act 1975 (Cth) notwithstanding that conduct had ceased).

APPLICATION OF PRINCIPLES TO THIS CASE 18 In the case before me there is no question that Mr Aalders is genuinely desirous of resolution of the issue of the application of the TTMR Act to New Zealand tax agents seeking to practise in Australia. From the facts of the case before me, however, it is equally clear that, so far as Mr Aalders is concerned, the point is moot. Whether the TTMR Act applies to New Zealand tax agents seeking to practise in Australia is, considered objectively, no longer relevant to his circumstances. Mr Aalders was registered as a tax agent in Australia following the decision of the Tribunal, on a different basis to the application of the TTMR Act. To paraphrase the words of their Honours in Beitseen and Hole: · there remains no real contest between Mr Aalders and the Board as to his registration as a tax agent · his desire to agitate the issue of the application of the TTMR Act to New Zealand tax agents does not satisfy the requirement that the legal right of the parties should be in actual controversy · no outcome from Mr Aalders' substantive appeal, irrespective of whether I were to find in his favour or against him, and no direction I could give to the Tribunal in relation to his case, could confirm or modify any rights he already has. 19 There is no doubt that Mr Aalders is asking the court to advise the parties as to what their rights would be under a hypothetical state of facts - the hypothetical state of facts being the circumstances if Mr Aalders were unable to obtain registration as a tax agent on any other basis. As I have already pointed out earlier in this judgment citing Lord Loreburn LC in Glasgow Navigation Company v Iron Ore Company, that is not the function of a court of law. 20 The only question which remains then is whether determination of the issue of the application of the TTMR Act to New Zealand tax agents in these circumstances would be in the public interest. Mr Aalders made strong submissions both in writing and orally to the effect that: · the Tribunal treated New Zealand qualifications with disdain, and discriminated against him as a New Zealand tax agent · the courts in New Zealand have enforced the Trans-Tasman arrangements, for example in relation to medical practice, and the Australian courts should also do so · the position taken by the Board before the Tribunal was a 'ploy or disguise' to attempt to defeat the intent and spirit of the Arrangement and the TTMR Act · the decision of the Tribunal requires the New Zealand government to give up its right to its own sovereign decisions and to make those subservient to whims of the tax bureaucracy of Australia in order for the TTMR regime to apply. 21 Mr Aalders' commitment to his principles, and the broader policy objective of the TTMR Act and the TTMR Arrangement to removing regulatory barriers to trade and commerce between Australia and New Zealand as evidenced in the Explanatory Memorandum to the Trans-Tasman Mutual Recognition Bill 1996, are not in dispute. However, with respect, I am not satisfied that Mr Aalders' submissions raise issues of genuine public interest sufficient to displace the traditional approach of Courts to what are, at the end of the day, hypothetical questions in the context of this case. While Mr Aalders submits that the principle he seeks to agitate has wider significance than the circumstances of his individual case, there is, for example: · no evidence which could lead me to the conclusion that the differences in the taxation regimes between Australia and New Zealand do not warrant different approaches to registration as tax agents or that there is an issue of public policy in ensuring that New Zealand tax agents are able to be registered in Queensland without complying with requisite Australian standards. · no evidence before me which could lead me to the conclusion that appropriately qualified New Zealand tax agents are not able to be registered in Queensland on other bases, including under the Tax Act (as Mr Aalders was). · no indication of the scale of the problem - if any - facing New Zealand tax agents seeking to be registered in Queensland. · no evidence that the inability (to the extent there is an inability) of New Zealand tax agents to be registered as tax agents in Queensland creates an issue of public interest in Australia, as distinct from New Zealand (to the extent that it is an issue of public interest in New Zealand, which is also unknown and may indeed be irrelevant for the purposes of the exercise of my discretion in this matter). · notwithstanding Mr Aalders' claims concerning the approach by New Zealand courts to Australian medical practitioners seeking to practise in New Zealand - no evidence there is a conflict between inconsistent decisions between Australia and New Zealand in the interpretation of the TTMR statutes on each side of the Tasman which it would be desirable to resolve. Further, notwithstanding Mr Aalders' submissions concerning Crowley v Tax Agents' Board of New South Wales (1989) 90 ATC 2005 and its undesirability as a precedent in reinforcing discriminatory treatment of New Zealand-educated chartered accountants, I am not persuaded that it is appropriate at this stage to revisit the approach taken in that case. · no issue involving, for example, the administration of justice, public safety, issues of public or media attention or difficult issues of law which have been raised and which should be resolved. · no longer 'a matter' between Mr Aalders and the Board in relation to his registration as a tax agent, with the exception of what he described as the offence he took at his perceived treatment by the Tribunal (TS p 18 ll 4-11) and his desire that the Board take a different approach to other New Zealand tax agents seeking registration. 22 Indeed the last point in many ways crystallises the issue concerning whether there is a public interest in the Court hearing Mr Aalders' appeal. Mr Aalders in his written submissions asks: '…that if he is not allowed to appeal a questionable determination of equivalent occupations, which discriminates against NZ educated Chartered Accountants in public practice (often included in the omnibus description of Tax practitioners) under the Trans Tasman Mutual Recognition Act 1997 and the TTMR arrangement, who else, other than him, may bring such a proceeding to bring about a correction of a most curious decision?' 23 One obvious answer to the question of 'who else, other than Mr Aalders' is - a New Zealand tax agent who seeks registration as a tax agent in Australia, who cannot be registered by means of the Tax Act or other avenues, and therefore who cannot achieve registration as a tax agent in Australia other than by reference to the TTMR Act. Should such a person be unsuccessful before the Board and subsequently before the Tribunal, their application might very well come to the Federal Court of Australia for determination. However Mr Aalders is not such a person. He was successful in his case before the Tribunal against the Board, and has been registered as a tax agent. Other than what are clearly his strong feelings in relation to the relevant issues, he has no personal interest in general principles applicable to New Zealand tax agents becoming registered as tax agents by the Board. 24 In concluding that it is not appropriate for the Court to continue with this matter, I adopt the comments of the Full Court of the Federal Court in Mayne Nickless Ltd v Transport Workers Union of Australia [1998] 984 FCA: 'The courts have an obligation to conduct their proceedings, and to deal with an ever-increasing workload, with as much expedition as the overriding demands of justice permit. No encouragement should be given, therefore, to the use of scarce judicial time to decide appeals that are essentially moot. There are other litigants with cases pending before the Court for hearing or delivery of judgment and their claims involve the determination of substantial legal rights of practical importance. This is not the situation in this appeal (see and compare Beitseen).' 25 In the circumstances I am of the view that, in the exercise of the Court's discretion, the appeal should be dismissed. Accordingly I propose to grant the notice of motion sought by the Board.

ORDERS

1. The notice of motion filed 20 October 2005 by the Tax Agents' Board of Queensland be granted.
2. The appeal against Administrative Appeals Tribunal Decision Q2004/110 be dismissed.
3. Henry Anthony Aalders pay the costs of the appeal and the notice of motion of the Tax Agents' Board of Queensland, to be taxed if not agreed. I certify that the preceding twenty-five (25) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.

Counsel for the Applicant: The Appellant appeared in person

Solicitor for the Respondent: Australian Government Solicitor