Having established that the applicant committed a "serious taxation offence", the question confronting the Tribunal is whether "special circumstances" exist which, pursuant to section 251BC(3)(c) of the Act, would warrant the offence being disregarded in determining whether the applicant is a fit and proper person to be a tax agent. Unquestionably, the applicant has been subject to serious stresses in both his domestic and business affairs over the past 10 years, many of them beyond his own control, but the existence of such stresses, unfortunate as they may be, does not necessarily constitute a "special circumstance".

The term "special circumstances", which is not statutorily defined, was considered in different circumstances, Re Beadle and Director-General of Social Security (1984) 6 ALD 1. It was said at page 3 that such circumstances need not be unique "but they must have a particular quality of unusualness that permits them to be described as special". In Re Ivovic and Director-General of Social Services [1981] AATA 57; (1981) 3 ALN N95, it was said at N97 that "special circumstances" are such that would render strict imposition of liability "unjust, unreasonable or otherwise inappropriate" and that while such circumstances did not have to be extreme or unique, "there needs to be something that takes the matter out of the usual or ordinary case".

In Reichert and Tax Agents' Board of New South Wales [2005] AATA 188, the Tribunal summarised the issues confronting it in similar circumstances at paras 18-20:

...

The question is as to whether there was anything that was unusual, extraordinary, peculiar or special that occurred in his accounting practice or his life. Was there something that went beyond the vicissitudes of life that explains let alone justifies his conduct? Do the circumstances of his life have that necessary particular quality of unusualness of being uncommon or exceptional that permits them to be described as special.

...

The taxation legislation is designed to give protection and to guard the welfare of those who would rely upon the professional assistance afforded by tax agents. Clients rely upon their agent to proffer appropriate advice and attend to their affairs in a timely and proper manner. Commission of a serious taxation offence is taken to be an indicia of a lack of fitness and ability to discharge the duties and responsibilities of a tax agent. It is only where strict enforcement of the prohibition created by the Act would be unjust, unreasonable or otherwise inappropriate that re-registration should be permitted.

No-one would deny that the applicant has experienced a difficult and distressing period of his life over the last 10 years or so. However, I find it difficult to accept, that these events are sufficiently unusual as to amount to "special circumstances" as that term is used in the Act. Family sickness, bereavement, domestic responsibilities, personality clashes in the workplace, fluctuating work loads and failed business ventures are not uncommon. Unquestionably the applicant's misfortune was accentuated by the fact that all of these challenging personal events confronted him within a relatively short period of time; but this does not alter the fact that such events are prone to occur to anyone. No doubt, some people are better equipped, psychologically, than others to cope with these vicissitudes, but this cannot alter the characterisation of the events themselves. In making an allowance for "special circumstances", the authorities provide that something more than misfortune is required. The existence of professional standards would become impossibly compromised if they were to be subject, as a matter of course, to the prevailing domestic harmony, physical wellbeing and general equanimity of the individual professional.

The applicant contends that the respondent's decision to deny re-registration has damaged his partnership will cause him personal hardship and will jeopardise the livelihood of his existing employees. The Tribunal accepts that this might well be the case but such considerations cannot in themselves be categorised as "special circumstances". Rather, these are the inevitable consequences of the sequence of events which led to the respondent's decision.

In reaching this conclusion, the Tribunal is mindful that the Act is designed to protect the public. As stated by Davies J in Re Su and Tax Agents' Board of South Australia (1982) 61 FLR 1 at page 11, "...this is not a situation where personal hardship [to the applicant] can be allowed to prevail over community interest".

CONCLUSION REGARDING "SERIOUS TAXATION OFFENCE AND "SPECIAL CIRCUMSTANCES

The Tribunal therefore concludes that the applicant has been convicted of a "serious taxation offence during the previous 5 years" for the purposes of section 251BC(1)(e) of the Act and is thus deemed by the legislation to be "...not a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers..." in the absence of "special circumstances". The Tribunal further concludes that "special circumstances" as required by section 251BC(3)(c)(i) of the Act do not exist, such as to justify the disregarding of the conviction. Having reached this conclusion, it follows from section 251JC(1)(a)(i) of the Act that the applicant is deemed not to be a "fit and proper person" and that, pursuant to section 251JC(2), re-registration must be refused.

It follows from the above conclusions that it is unnecessary to consider, separately, whether the applicant is "not of good fame, integrity and character" for the purposes of section 251BC(1)(d) of the Act. Nevertheless, I will do so for the sake of completeness.

I am of the opinion that a refusal to re-register the applicant would also have been justified under section 251BC(1)(d). There are a number of bases which, individually and collectively, support this conclusion.

The fact of the applicant's conviction of a "serious taxation offence" is an issue which is relevant to section 251BC(1)(d) as well as section 251BC(1)(e) of the Act. The two are not mutually exclusive (section 251BC(2)). The integrity of a tax agent who has been convicted of an offence, albeit in a personal capacity, which is of a nature integral to his professional duties, must necessarily be called into question.

The applicant's repeated failure to respond in a timely fashion to communications from the respondent evinced at best a prevailing state of inefficiency, and at worst a cynical disregard for the authority and role of the respondent. As stated by Senior Member Dwyer in Re Pappalardo and Tax Agents' Board of Victoria [2003] AATA 990 at paragraph 32, "[a] person who is competent, and fit and proper to be a tax agent would clearly appreciate the importance of responding fully and promptly to correspondence from a regulatory authority". Similarly, it was stated in Re Cowlishaw and Ors and Tax Agents' Board of Queensland [1999] AATA 412 at paragraph 9 that "[t]he Tribunal regards the failure to treat the Tax Agents' Board with proper respect, as a serious neglect of the business of a tax agent". It may be the case that the applicant had explanations for his failures to communicate in respect of his threatened suspension of registration in 2001 and his failure to lodge returns in 2003, but he still missed the initial deadlines for responses in both instances. There were no excuses for his tardiness in communicating with the respondent in respect of the Welch and Sharp complaints, and I consider the occasional attempts to leave messages to be inadequate and somewhat cynical and insincere.

The repeated failure of the applicant to lodge his own income taxation returns likewise calls into account his fitness to practise as a tax agent. It is insufficient for the applicant to state that he disregarded his own obligations because he was giving priority to his clients. While this explanation may be true, it evinces either severe personal disorganisation (which in turn is likely to impact adversely on his professional duties) or a severe lack of regard for the very legal framework within which he practises his profession. Either way, this places the applicant's clients at risk. As Davies J stated in Re Su at page 7:

"...It is not necessarily the case that a practitioner who does not look after his personal affairs does not properly attend to the affairs of his clients. But incompetence in relation to one's own affairs more often than not has an effect sooner or later in relation to the affairs of a client..."

Similarly, In Re Pappalardo Senior Member Dwyer stated at paragraph 19 that a failure of a tax agent to lodge a taxation return beyond the period allowed in a final notice served on the tax agent was an indication that the person was not a "fit and proper person" to perform the functions of a tax agent.

In relation to the complaints lodged against the applicant, the cumulative effect is of more significance than then individual effect. Looked at individually, it can be seen that some matters were resolved and some did not, in the respondent's view, warrant further action (although it must be emphasised that this does not equate with exoneration). In a busy practice, it is perhaps not surprising or particularly unusual that an individual client might, reasonably or unreasonably, become frustrated by a perceived lack of attention or oversight on occasions. Nevertheless, the pattern of escalating complaints in more recent times cannot be ignored; it is suggestive of a practice in danger of spiralling out of control, and of a practitioner who is seemingly unable to cope with either the volume or complexity of his business.

The applicant's failure to disclose his prior conviction over non-lodgement of his personal income taxation returns, when applying for re-registration, is of particular concern. I have difficulty accepting that this was a mere oversight by the applicant. At its best, it was an oversight so gross as to call into question the applicant's ability to function competently at the time; more likely, however, it was an attempt by the applicant to conceal a material fact from the respondent. Although the factual situations are not identical, I note the conclusion of Senior Member Fayle in Re Carbery and Associates Pty Ltd and Tax Agents' Board of Queenland [2001] AATA 107; (2001) 46 ATR 1106 at paragraph 18 that a failure to disclose information regarding a prior serious tax offence "raises questions about [the] honesty and integrity" of a tax agent. Similarly, in Re Su Davies J stated at page 10 that "[a] person who does not complete such a form accurately is not a person of sufficient competence and integrity to hold the privilege of acting for clients in the preparation and lodgement of their income tax returns".

I observed that the applicant exhibited a strong proclivity to blame others for his mistakes. At various times he attributed responsibility to his staff, his business partners (at both the accountancy business and the florist/café), the ATO and to the respondent itself. It may well be the case that in isolated or even repeated instances, others contributed by their actions to the difficulties which confronted the applicant. This does not excuse, however, an inability to meet those challenges (which are, after all, a fact of life) and to conduct his business with a level of professionalism achieved by the vast majority of practitioners who confront their own personal obstacles on a periodic basis. As stated by Davies J in Re Su at page 7), "...all these matters were matters with respect to which [the applicant] had ultimate responsibility and the duty to take a personal interest. The problems that arose reflect upon his competence".

In a similar vein, I formed the view that the applicant's expressions of regret or contrition were largely confined to circumstances in which there was simply no-one else to blame. In my opinion, the applicant's expressions of regret did not evince an adequate appreciation of his shortcomings and did not provide me with confidence that he accepted any degree of responsibility or that there would be no further demonstrations of inadequate performance in the future.

Accordingly I am of the view that the respondent was entitled to deny re-registration to the applicant under section 251BC(1)(d) of the Act on the grounds that the applicant is "not of good fame, integrity and character". For the same reasons expressed above, in relation to section 251BC(1)(e) of the Act, I do not accept that "special circumstances" existed which would, under section 251BC(3)(c)(ii) or (iii), justify the disregarding of the behaviour which lead to this conclusion.

For the above reasons, the Tribunal affirms the decision under review.

I certify that the eighty-five [85] preceding paragraphs are a true copy of the reasons for the decision herein of

Dr G. Hughes, Member

(sgd) Olympia Sarrinikolaou

Clerk

Date of Hearing: 14 July 2005

Date of Decision: 20 September 2005

Counsel for applicant: Mr D. Gillard

Solicitor for applicant: Consult Solicitors

Counsel for respondent: Mr P. Sest

Solicitor for respondent: Australian Government Solicitor