Consequence for the Applicants of refusing the stays

1. I accept that the refusal of the stays would have substantial adverse effects on the Applicants, resulting in the closure of their business and severe financial consequences, having regard to Mr Birdseye's limited financial means and obligations to dependents to which he deposed in general terms.[51]
2. These are, of course, inevitable consequences of the terminations, especially since the Applicants are prohibited from re-applying for registration for the maximum period of five years. However, persons who enjoy the benefits of regulated occupations but fail to observe the requirements of registration do so at their peril. Nevertheless, these factors weigh to some extent in favour of granting the stays.

1. The public interest in the integrity of the tax agent registration system in my view would not be served by granting stays in circumstances where I have concluded that the Applicants have not presented a foundation on which I could be satisfied they have reasonable prospects of success in the substantive applications and most findings of serious, repeated non-compliance with the requirements of registration have either been implicitly accepted or not denied. This weighs heavily against granting the stays.

Consequences for the Board in carrying out its functions

1. I do not accept that granting stays would entirely impede the Board in carrying out its functions. The mere fact that it has terminated the registrations sends a strong message to the tax agent community. It is, however, not irrelevant that granting the stays would mean that clients would be exposed to risk notwithstanding the Board having carried out its function of investigating the conduct of the Applicants, finding what appears to be serious and repeated non-compliance and taking what it regards as appropriate action. Exposing clients to such risk is contrary to the object of the TASA to ensure that tax agent services are provided to the public in accordance with appropriate standards of professional and ethical conduct.

Whether the applications for review would be rendered nugatory if stays are not granted

1. If the Applicants were to succeed in the substantive reviews in having the terminations set aside or the five-year prohibition period shortened, the reviews would not be rendered nugatory. They could recommence and rebuild the tax agent services practice.
2. Nevertheless, it is self-evident that there would be a substantial adverse effect upon the Applicants in dislocation of their business and consequent lost income and reputation that a successful outcome in the substantive reviews would not remedy. Many clients forced to go elsewhere may not return to the Applicants even if the decisions were to be set aside in the substantive reviews. Again, these are inevitable consequences of termination of which tax agents who repeatedly fail to comply with registration requirements place themselves in jeopardy.

1. The closure of the tax agent services practice would have an adverse effect on employees of Applicants' practice who would lose their current employment. This weighs in favour of granting the stays.
2. It would also be disruptive to the practice's clients who would need to engage other tax agents. As the Applicants submit, this would be particularly acute for those clients needing immediate assistance to access support under the COVID-19 assistance measures.
3. On the other hand, granting the stays would continue to expose clients to the risk of their tax affairs being handled by a tax agent against whom serious findings have been made in circumstances where, based on the material currently before the Tribunal:
   • (a) to a considerable extent the findings are not denied;
   • (b) there is no indication that the Applicants accept the seriousness of the findings;
   • (c) the history of non-compliance with registration requirements provides no confidence that during the period of any stay the Applicants would be compliant.
4. Further, the risk for clients but also the broader community is in fact more acute during the forthcoming period where the community will rely upon tax agents to conduct themselves with diligence and integrity in acting for clients seeking to access the COVID-19 assistance measures.
5. On balance, in the particular circumstances with which I am confronted, the interests of clients provide some, but limited, support for granting stays.

1. As pointed out by Davies J in Dekanic, refusing the stays but expediting the substantive applications could result in the determination of the applications being rushed and the decisions of less quality than might otherwise be the case.[52] That consideration is perhaps more acute in this case because of the large number of findings and allegations especially in relation to taxpayers' affairs. This factor provides some weight in favour of granting the stays.
2. Finally, as the interim stays were expressed to be "subject to" the conditions, and the conditions were not complied with, it might be thought that the interim stays ceased to be operative from 8 April 2020 and that accordingly the terminations took effect again from that date. If that is so, to the extent the Applicants provided tax agent services on and from that date without being registered as tax agents they may have been in breach of the TASA. However, since the Board did not raise the prospect that the Applicants have been committing criminal offences by providing tax agent services while unregistered, I have not pursued this aspect further, nor taken it into account in consideration of whether to grant the stays.

1. I have carefully weighed up the considerations outlined above. Having regard to all of those considerations, I am not satisfied that it is desirable to grant the stays even on the conditions sought by the Applicants. In particular, the view I have formed that the material before me does not provide a foundation for concluding that the Applicants have reasonable prospects in the substantive reviews of having the terminations set aside - or at least the period of prohibition against re-applying for registration reduced to a period that would be shorter than that likely to be required for the Tribunal's final decision on the substantive reviews to be made if the Applicants pursue the applications diligently - militates against granting the stays. That in turn is supported by the fact that on the material before me I could not have a reasonable level of confidence that the Applicants would comply with registration requirements during the period of any stays.[53]
2. Further, the Applicants' approach to the conditions upon which the interim stays were granted - recalling not just that the Applicants failed to comply with those conditions, but did not advise or approach the Tribunal for additional time in which to comply - I am not confident that conditions imposed on further stays would be complied with. That is so whether I consider the conditions sought in the Applicants' submissions or extended conditions of the kind imposed by the Tribunal in Norman which Dr Gray in oral submissions also urged me to consider.
3. I have also carefully considered whether stays should be granted only until consideration of an application by the Applicants for determination of the procedural fairness issue as a preliminary point. This has the attraction that such stays would be for relatively short periods, thus reducing the risk to the community while avoiding the immediate disruption of clients and adverse consequences of the terminations for the Applicants and their staff. However, for the reasons already indicated I am not satisfied that such an application would have reasonable prospects of success and that the benefits to the Applicants and their staff and clients would outweigh the risks to clients and the community. Nor, for the reasons already indicated and on the basis of the material before me and the history of this matter, am I satisfied that the Applicants would comply with registration requirements or conditions upon which the stays might be granted in the period during which such stays might be operative.

1. As I am not satisfied that it is desirable to stay the operation of the decisions, it follows that the applications for stays must be refused. Consequent upon that refusal the interim stays are discharged.

I certify that the preceding 122 (one hundred and twenty-two) paragraphs are a true copy of the reasons for the decision herein of Senior Member R J Olding

...........................[SGD].............................................

[1] TASA, s 2-5.

[2] TASA, s 20-5.

[3] TASA, s 20-15.

[4] TASA, s 30-10(1).

[5] TASA, s 30-10(2).

[6] TPB Information Sheet TPB(I) 34/2018 Code of Professional Conduct - complying with taxation laws in the conduct of your personal affairs.

[14] TASA, ss 60-125(3)(b), 60-125(4), 60-125(5).

[18] TASA, s 70-10(e) and (h) respectively.

[19] Drake v Minister for Immigration and Ethnic Affairs (1979) 24 ALR 577, 589.

[21] Scott and Australian Securities and Investments Commission [2009] AATA 798, [4].

[22] Poidevin and Australian Securities and Investments Commission [2018] AATA 124, [39], [40]

[23] Le'Sam Accounting Pty Ltd and Tax Practitioners Board [2020] AATA 890, [13]

[24] (1982) 62 FLR 154

[25] (1982) 62 FLR 154, 157.

[26] (1982) 62 FLR 154, 157

[27] (1982) 62 FLR 154, 157.

[28] [2020] AATA 640.

[29] [2020] AATA 640, [17].

[30] [2020] AATA 640, [17], footnote 3.

[31] Le'Sam Accounting Pty Ltd and Tax Practitioners Board [2020] AATA 890.

[32] (1982) 62 FLR 154, 157.

[33] Collector of Customs (NSW) v Brian Lawlor Automotive Pty Ltd [1979] FCA 21; (1979) 24 ALR 307; Secretary, Department of Social Security v Alvaro [1994] FCA 1124; (1994) 50 FCR 213 per von Doussa J, 219-20.

[34] [2013] FCA 719.

[35] [2013] FCA 719, [34].

[36] Kender and Australian Securities and Investments Commission [2018] AATA 4445, [6]; Williams and Members of the Companies Auditors and Liquidators Disciplinary Board [2019] AATA 504, [25].

[37] Williams and Members of the Companies Auditors and Liquidators Disciplinary Board [2019] AATA 504, [25].

[38] Affidavit of Nicholas Birdseye, 17 April 2020, Annexure NGB-2, p 14.

[39] ATO ICP Statement of Account Extract, Supplementary T documents, p 55.

[40] ATO ICP Statement of Account Extract, Supplementary T documents, p 82.

[41] Payment Plan dated 31 March 2020 - Affidavit of Nicholas Birdseye, 17 April 2020, Annexure NGB-2, pp 19-22.

[42] Payment Plan dated 31 March 2020 - Affidavit of Nicholas Birdseye, 17 April 2020, Annexure NGB-2, p 19.

[43] Supplementary T documents, p 57; Affidavit of Nicholas Birdseye, 17 April 2020, Annexure NGB-2, p 15.

[44] According to the ATO printout annexed to Mr Birdseye's affidavit of 17 April 2020, this return was due on 31 October 2019. Mr Birdseye did not suggest otherwise.

[45] Supplementary T documents, p 57; Affidavit of Nicholas Birdseye, 17 April 2020, Annexure NGB-2, p 11-12.

[47] T documents in application 2020/1830, T4, p 184 and following.

[48] Mr Birdseye sought from the Board a recording of an earlier telephone conversation said to provide context for this email but it appears this had not been provided.

[49] Kioa v West [1985] HCA 81; (1985) 159 CLR 550, [32]-[33].

[50] This conclusion makes it unnecessary to separately consider whether the Applicants have reasonable prospects of persuading the Tribunal that termination under s 30-30 for breaching the Code by failing to comply with taxation laws in the conduct of the Applicants' personal affairs is not the correct and preferable decision. In that regard, I note that it has been held that non-compliance with a tax agent's own tax obligations and those of companies related to the tax agent is relevant to whether the tax agent is a fit and proper person: Delis v Tax Practitioners' Board [2016] FCA 570.

[51] Whether that would lead to the Company being wound up, as Mr Birdseye asserts, is not clear on the evidence before me, but I accept that is a possibility.

[52] (1982) 62 FLR 154, 157.

[53] The Board pointed out that the Applicants by the time of the stay hearing had still not complied with the Board's requirement in its letter of 4 February 2020 that they notify the Board in writing pursuant to subsection 30-10(14) of the Code whether they admit or contest the allegations. That too does not inspire confidence that the Applicants would be compliant in the future, although I give limited weight to this as it may be that any focus on that requirement was overshadowed by the termination decisions and, perhaps, although there is no relevant evidence of this, regarded as no longer relevant following those decisions. On the other hand, the fact that, as the Board's reasons for the termination decisions indicate, the Applicants were previously sanctioned by the Board in 2013 adds to the apprehension that I cannot have a reasonable level of assurance that the Applicants would be compliant if the termination decisions were stayed.