"251JA. (1) The Board shall register the applicant as

a tax agent if the applicant satisfies the Board that:

(a) if the applicant is a natural person:

(i) the applicant is a fit and proper

person to prepare income tax returns and

transact business on behalf of taxpayers in

income tax matters; and

(ii) the applicant is not an undischarged bankrupt;

. . . . .

251BC. (1) Without limiting the generality of

an expression used in this Part, but subject to this

section, a person is not a fit and proper person to prepare

income tax returns and transact business on behalf of

taxpayers in income tax matters, as at a particular time, if:

. . . . .

(b) both of the following conditions are satisfied:

. . . . .

(ii) the person does not hold such

qualifications (whether academic, by way of

experience or otherwise) as are prescribed;"

"156. (1) For the purposes of subparagraph

251BC(1)(b)(ii) of the Act, the following qualifications

are prescribed:

. . . . .

(b) the person:

(i) shall have completed the academic

requirements for admission as a barrister or

solicitor of the High Court or of the Supreme

Court of a State or Territory;

(ii) shall have:

(A) been engaged in relevant employment on

a full time basis for not less than a total

of 12 months in the preceding 5 years;

(B) otherwise been engaged in relevant

employment to an extent that the Board

regards as equivalent to that referred to

in sub-subparagraph (A); or

(C) been engaged in such other employment

and for such time as the Board regards as

equivalent to being engaged in relevant

employment as referred to in sub-subparagraph (A);

(iii) shall have, by written examination or

examinations set by a college of technical and

further education (or an examination or

examinations of an equivalent or higher

standard), successfully completed a course of

study in basic accounting principles; and

(iv) shall have, by written examination,

successfully completed a course of study in

Australian income tax law acceptable to the Board;

. . . . .

(2) In this regulation 'relevant employment' means

employment by a person or a partnership or as a member of a

partnership in the course of which there has been

substantial involvement in income tax matters including:

(a) the preparation or examination of a broad range

of income tax returns;

(b) the preparation or examination of objections to

assessments issued in respect of such returns; and

(c) the provision of advice in relation to income tax

returns, assessments and objections."

3. In his application for registration as a tax agent the applicant stated that he was not an undischarged bankrupt. The respondent did not suggest that that statement was untrue. What is in issue in these proceedings is whether the applicant is a fit and proper person to prepare income tax returns and transact business on behalf of taxpayers in income tax matters. Regulation 156 prescribes the qualifications which section 251BC(1)(b)(ii) requires a person to hold in order to be a fit and proper person to do those things.

4. The applicant is a barrister and solicitor of the Supreme Court of Victoria in practice as a solicitor in Morwell, a country town in Victoria. In 1989 or 1990 he successfully completed a course of study at the Gippsland Institute of Advanced Education, called Accounting I. In 1975 he successfully completed a course of study in Australian Income Tax Law as part of his course of studies for the degree of Bachelor of Laws at Monash University. The respondent accepted that the applicant met the criteria set by sub-sub-paragraphs (i), (iii) and (iv) of regulation 156(1)(b). In our view it was correct to do so. However, it decided that he did not meet any of the criteria set by sub-sub-paragraph (ii) of regulation 156(1)(b).

5. The applicant has practised as a solicitor in Morwell since 1977. Initially, he practised as an employee solicitor, employed by a firm of solicitors, Littleton, Hackford and Malkin ("the first firm"). From 1982 to 1988 he was a partner of that firm. In 1988 he ceased to be a partner of that firm and became an employee solicitor employed by another firm of solicitors, Slater and Gordon ("the second firm"). The documentary evidence before the Tribunal and the oral evidence given by the applicant establishes that during the period when he was a partner of the first firm and since he has been an employee solicitor with the second firm the type of work which he has done in his practice as a solicitor has been substantially the same. It is, therefore, unnecessary for us to consider whether the reference to "the preceding 5 years" in regulation 156(1)(b)(ii) is to the period preceding the application to the respondent for registration as a tax agent or preceding the date of the hearing, a question in respect of which different views have been expressed by the Tribunal in Re Ellis and Tax Agents' Board of Queensland 92 ATC 2001, Re Egulian and Tax Agents' Board of New South Wales 91 ATC 2060 and Re Webb and Tax Agents' Board of Queensland 92 ATC 2101.

6. The documentary evidence provided to the respondent over a period of three years progressively disclosed details of what the applicant and others considered to have been his "substantial involvement in income tax matters". In April 1989, when application for registration was first made (before the applicant had undertaken the accounting course at Gippsland Institute of Advanced Education), the second firm stated that in the previous 5 years as a partner in the first firm the applicant had assisted in the preparation of approximately 200-300 tax returns per annum and had also had to give advice on taxation matters and "in the preparation of objections, etc.". In July 1989 a former partner of the first firm wrote that the applicant "did have experience in relation to the preparation of taxation returns of all types". In August 1989 the applicant informed the respondent that he had "assisted in" the preparation of taxation returns for approximately 7 years and that he had "compiled the full extent of taxation returns including company returns, partnership returns, trust returns, business returns and salary returns". The application was rejected because the applicant did not meet the criterion set by regulation 156(1)(b)(iii) at that time.

7. After he had successfully completed the accounting course he made a second application for registration. It is the refusal of registration consequent upon that application which is under review in these proceedings. In a covering letter which the applicant sent to the respondent with his application he stated that he had "again assisted in the completion of some 200 Taxation returns for the 1990/1991 financial year" and had "had an ongoing role in providing Taxation advise (sic) to clients". On 10 December 1991 the second firm wrote to the respondent stating that during the course of the applicant's employment with that firm he had "assisted in the preparation of approximately 150 to 200 Taxation Returns per annum" and that the returns were "mainly individual Returns and Partnership/Business Returns". It was stated that the applicant's employment also required him to provide taxation and financial planning advice to clients. On 16 December 1991 the first firm wrote to the respondent stating that, while the applicant had been a solicitor with that firm, he had "assisted in the preparation of approximately 100 to 150 Taxation Returns per annum" and that they had been mainly individual returns and partnership/business returns. He had also been required to provide taxation and financial planning advice to clients.

8. In February 1992 the second firm provided the respondent with what it described as a statement of relevant employment of the applicant. It wrote that the "total average time per week" which the applicant "spent on Taxation matters including provisions (sic) of advise (sic), perusal of assessments, preparation of returns and objections and associated matters" would be not less than 10% of his working time, 4-5 hours per week. It set out the numbers of returns, by type and year, prepared by the applicant while in its employment. The details were as follows:-

" 1988 1989 1990

Individual 25 100 125

Partnership 1 10 10

Trusts Nil Nil Nil

Super Funds Nil Nil Nil

Companies Nil Nil Nil"

9. In the same month the first firm gave similar details for the last five years when the applicant had been a solicitor with that firm. It stated that the applicant had spent up to 10% of his "office time" which "would not be less than 40 hours per week", working on "matters relating to Taxation including interviews, examinations of returns, objections and assessments and providing advise (sic)". It stated that between 1984 and 1988 the applicant had been "involved in the preparation" of the following numbers of returns, by type and year:-

" 1984 1985 1986 1987 1988

Individual 100 110 110 120 120

Partnership 10 10 12 12 12

Trusts Nil 1 1 1 1

Super Funds Nil Nil Nil Nil Nil

Companies Nil Nil Nil Nil Nil

TOTALS 110 121 123 133 133"

10. In March 1992 the second firm sent the respondent a letter in which it sought to amplify the information which it had given previously. It did so in the following terms:-

"Although Mr. D'Alessandro has not actually prepared a

Taxation return for a Company or a Superannuation Fund

during his employment in our firm, he has nonetheless

perused and given extensive advice in all matters

pertaining to Companies, Family Trusts, General Trusts and

Superannuation Schemes and in the course of such advice he

has perused a number of Company, Trust and Superannuation

Fund Taxation returns.

There has not been a need for him to prepare or assist in

the preparation of such Taxation returns, but we feel

confident that his general and extensive exposure to

Company and Trust matters give him a sound basis for

preparing such returns if required and if he were granted a

Tax Agents Certificate."

11. The document tendered in evidence by the applicant at the hearing was a memorandum written by him in July 1992 to another solicitor in the second firm. In it he stated that the first firm had had two resident registered tax agents and that "a good deal of the practice was involved in the preparation of Taxation Returns for clients". He had assisted in the preparation of those returns. His own practice had "become more closely involved with Family Law matters and Conveyancing and Commercial matters". He stated that:-

"During the peak times of the firm whilst two resident

Tax Agents were involved the firm was involved in the

preparation of literally hundreds of Taxation Returns

across the full spectrum of Tax Returns including Company

and Trust Returns."

He wrote that he was involved in advising clients in relation to the setting up of trust funds and the general administration of them. He had continued to assist in the preparation of taxation returns up to the present time but the returns had mainly been "individual returns with some smattering of trust returns and company taxation returns". He wrote that he had been exposed to taxation matters "in the conduct of his other legal practice", as those matters arose from time to time in commercial transactions and in family law matters.

12. He gave instances of files with which he was currently dealing. One of them concerned a client's entitlement as a unit holder in a unit trust and involved a company which had a superannuation fund for its members and employees. The applicant wrote that he had had to "peruse and comprehend a very great deal of complex taxation returns over the past five years dealing with all structures including the superannuation fund and the two companies as well as the individual returns". Another file related to a property settlement under the Family Law Act and involved the business carried on by a company of which the shareholders included the husband and wife. The applicant wrote that he had had to examine company returns and partnership returns as well as individual returns "in order to try and assess both the value of the business and the other assets in order to be able to advise his client as to what she may be entitled to". The last file to which he referred in his memorandum concerned "a very complicated multi venture organisation"; the applicant's client wished to dispose of his interest and the applicant had, he wrote, had to examine the financial records of the organisation including its taxation returns in order to establish a valuation for the client's interests. In the memorandum the applicant stated also that he had given tuition at a tertiary institution as a tutor in company law and that that included taxation aspects.

13. When the applicant gave oral evidence, it was essentially consistent with the contents of the two letters sent to the respondent in February 1992 and the memorandum about his experience of taxation matters and the preparation and perusal of income tax returns. The applicant admitted that he had not prepared company returns or superannuation fund returns and had had minimal experience of the preparation of trust returns. Over the years he had prepared tax returns as detailed in the two letters; most of them had been returns for individual PAYE taxpayers but there had been some partnership returns. The returns had been signed initially by a tax agent working in the Melbourne office of the second firm and latterly, because that had been inconvenient and caused delays, by a tax agent from outside the second firm. The applicant did not suggest that he had examined any returns prepared by others for the purpose of checking them before lodgement. He said that his involvement with tax returns of trusts and companies had been by way of examining them in order to derive from them information regarding the value of the interests of clients. In the course of his Family Law practice, he said, he had frequently had to advise his clients about property settlements and about the taxation implications of particular provisions which might be made in such settlements. He had also had to ascertain the value of matrimonial property to ensure that the settlement was fair; that was the main reason why he had had to examine income tax returns of partnerships, trusts and companies.

14. In answer to a question from Mr Lenczner, the applicant said that his Family Law work occupied 60-70% of his time and that the remaining part of his time was occupied with a variety of types of work, including probate, criminal law and taxation matters. Asked about his experience of unit trusts, he said that over the previous three years he had "gone through source materials exhaustively" for the purpose of restructuring unit trusts at the rate of about one a year. In five or six Family Law matters a year he had had to examine "source documents" in detail. He admitted that he had not "directly, totally" prepared company and trust returns, although he said that he had been involved in their preparation and in "perusing" them; he had examined them to ascertain clients' interests in property, to see whether they were getting the best return for their investment and so on.

15. Asked how many tax objections he had prepared, the applicant said that there had been three or four over the last three years. They had all related to the tax liability of individual taxpayers and had involved disputes about deductions. He had not made an application for review of any decision of the Commissioner on an objection. He said that he had dealt with five tax audit matters over the last four or five years; they had involved PAYE taxpayers but two had also been concerned with "outside ventures". The taxpayers had understated their income. He said that his involvement in dividend imputation matters had been "on a very narrow basis" and that his only involvement in the taxation affairs of a non-resident had been seven or eight years ago. He did not know how the Income Tax Assessment Act differentiated between private and public companies but said that, if he needed to ascertain that information for any purpose, he would find out by looking at the Act. He gave the same answer in respect of knowledge of the provisions of the Act relating to superannuation funds.

16. The applicant said that he had dealt with fringe benefit tax in the context of income tax returns of partnerships but not in the context of company income tax returns. He had not engaged Counsel in respect of any taxation matter over the past eight or nine years; the matters with which he had dealt had not been complicated, so far as he had been concerned. He said that the second firm's office in Morwell was the registered office for three companies. Two of them were companies in which a partner of the firm had an interest. The other company was his own client. It ran an engineering business and had 93 employees. Its accounting work was handled by a firm of accountants in Melbourne; that firm dealt with its taxation affairs also.

17. When Mr Pietka gave evidence, he drew attention to the introduction in recent years of the system of self-assessment by taxpayers. He said that that had made it imperative that tax agents have a thorough knowledge of income tax law and practice. He referred to an address given by the Second Commissioner, Mr B. Nolan, at a Taxation Institute of Australia seminar in June 1990 where Mr Nolan had described the role of tax agents under the new system as "helping taxpayers meet their obligations through a service rather than processing role". Mr Pietka said that the respondent ran courses for tax agents to assist them to understand what their responsibilities were now. They included giving advice to taxpayers not only on their taxation liability but on the records which they needed to keep for taxation purposes. Before November 1988 it had been comparatively easy to become a tax agent. Since then, however, the legislation now in force had set stringent standards. Those standards were necessitated by the change in the responsibilities of tax agents.

18. In Re Civiti and Tax Agents' Board of Victoria 90 ATC 2039 the Tribunal considered the meaning of "broad range of income tax returns" in regulation 156(2)(a). Deputy President Forrest pointed out that a person could have "substantial involvement in income tax matters" which did not include the preparation or examination of a broad range of income tax returns. Regulation 156(2) required both. Extensive experience within a category of returns was not sufficient; it was the scope of the returns which was the test which had to be applied. There had to be wide ranging experience across the categories of returns. With respect we accept that is a correct statement of the requirements of regulation 156(2).

19. Counsel did not address us on the meaning of "substantial" in regulation 156(2). That adjective, and its adverbial form "substantially", are capable of many gradations of meaning; what they mean in any particular statutory provision depends on the context (see Commissioner for Superannuation v Scott (1987) 71 ALR 408 and the cases discussed there). At one end of the scale "substantial" may mean more than trivial, minimal or nominal and at the other end it may mean great or very considerable. The word always imports some imprecision. In the context of regulation 156 (which must be construed having regard to sections 251BC(1) and section 251JA(1) of the Act and the circumstances in which those provisions were enacted), we are satisfied that the meaning of "substantial" in regulation 156((2) is well up on the scale.

20. Mr Russell submitted that, although the applicant had not prepared any company returns or superannuation returns and had prepared only one trust return, he had examined company returns and trust returns. However, it is clear from the documentary evidence and the applicant's own oral evidence that, although he undoubtedly has looked at company returns and trust returns in order to extract information from them, overall he has not had "substantial involvement" in tax matters. Accordingly, whether or not looking at returns in order to extract from them information of the type which the applicant was seeking, constitutes "examination" for the purposes of regulation 156(2), we are satisfied that he does not meet the criterion set by regulation 156(1)(b)(ii) and that for that reason the decision under review was correct.

21. However, we are also satisfied that for the purpose of regulation 156(2) "examination" does not extend to the types of activity in which the applicant has engaged. Mr Pietka gave evidence that the respondent regarded it as being confined to examination by tax agents of returns prepared by their employees in order to ensure their accuracy before lodgement of them. We think that that may be somewhat too narrow an interpretation of the word. It does, we consider, extend to the examination of returns by officers of the Australian Taxation Office for the purpose of assessing the income tax liability of the taxpayers making the returns and, following the introduction of a system of self-assessment, for the purpose of ensuring that self-assessment has been correctly carried out. But we agree with Mr Pietka that the examination must be for the purpose of checking them in relation to the taxpayers' liability to pay income tax and that it does not extend to examination for other purposes, such as to ascertain the value of property or interests in a context unconnected with the taxpayers' liability to pay income tax. For that reason also, therefore, we would have decided that the decision under review was correct.

22. Accordingly, we have affirmed the decision under review.