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PRACTICE AND PROCEDURE - STAY APPLICATION - termination of tax agent registrations - where allegations of failing to comply with personal taxation obligations - where objection against tax assessments pending - where some allegations not particularised - conditional stays granted

Administrative Appeals Tribunal Act 1975 (Cth), ss 37, 41

A New Tax System (Australian Business Number) Act 1999 (Cth), ss 8, 14

Tax Agent Services Act 2009 (Cth), ss 2-5, 20-15, subdivisions 30-B, 40-A, ss 60-95, 60-100, 60-115, 60-125, 70-10

Taxation Administration Act 1953 (Cth), Schedule 1, s 350-10

Birdseye and Tax Practitioners Board [2020] AATA 1250

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 Commission [2009] AATA 798

Norman and Tax Practitioners Board [2020] AATA 640

1. The Tax Practitioners Board ("the Board") terminated the tax agent registrations of Filomina Kyriacou ("Ms Kyriacou") and Wentworth Williams Accounting Pty Ltd ("the Company") of which Ms Kyriacou is the sole director and the nominated supervising registered tax agent (collectively, "the Applicants"). The Board also decided that Ms Kyriacou would be prohibited from re-applying for registration for the maximum permissible prohibition period of five years.
2. Ms Kyriacou and the Company applied to the Tribunal for review of those decisions and also for stays of the decisions. The Tribunal ordered interim stays, subject to conditions, until the hearing and determination of the stay applications. The Board opposes the granting of stays.
3. These reasons relate to the stay applications.
4. In accordance with the authority cited below, it is ordinarily incumbent on an applicant seeking a stay to put forward evidence of the facts upon which the case for granting a stay is said to be established. In the hearing of these applications, the Applicants were represented by Mr Angelo Russo who is a tax agent and business partner of Ms Kyriacou, but not a lawyer. Submissions were filed on behalf of the Applicants but no witness statements or other direct evidence by Ms Kyriacou.
5. Rather, Mr Russo referred to various materials in the large quantity of documents filed by the Board in accordance with s 37 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act"). Mr Russo also made statements of a factual nature in the course of his oral submissions that were unsupported by direct evidence by Ms Kyriacou and to which, accordingly, I am generally able to give little weight (although such statements may be proved if there is evidentiary material from which a relevant inference might be drawn). In that regard, I am conscious that Mr Russo is not legally qualified and appeared to be under the misapprehension that he could in the course of oral submissions lead probative evidence by way of his own statements.
6. Of course, there is no reason why Mr Russo could not give relevant evidence. However, even treating Mr Russo's statements as evidence I would come to the same conclusion. I would give little weight to hearsay evidence of matters of which Ms Kyriacou would have personal knowledge, especially in the absence of any explanation for the absence of direct evidence by Ms Kyriacou. It is Ms Kyriacou who is best placed to assist the Tribunal in relation to her own case which is substantially concerned with her own taxation affairs.
7. The matter is complicated by the fact that a significant Board finding against Ms Kyriacou relates to large assessments of personal income tax and penalties, amounting in aggregate to around $2,400,000, and in relation to which a decision on a notice of objection is pending. The objection, which apparently had been prepared with the assistance of counsel[1] and set out in some considerable detail the various grounds of objection, had been lodged at the time of the hearing, but not determined.
8. There are also assessments raised against other companies associated with Ms Kyriacou. In at least some cases, the issues raised in the Applicants' submissions relating to these companies appear to be to some extent intertwined with Ms Kyriacou's personal income tax position because of contentions regarding the character of multiple payments between associated companies and Ms Kyriacou. For reasons that were not explained to me, most of these assessments were issued without the taxpayer entities being given the usual opportunity to respond to an ATO position paper before the final ATO position was determined and assessments issued. It may be that there is significant double counting involved but I cannot descend into or take into account speculation on such matters.
9. Upon review of the filed materials after the hearing, in respect of one of those associated entities I have a concern regarding the accuracy of the materials before the Board and reproduced in the Board's minutes, and the reasons provided to the Applicants and the Tribunal.
10. In addition to the Board's findings relating to the taxation affairs of Ms Kyriacou and her associated companies, the Board also points to advice from the ATO that 26 of the Applicants' clients were audited and found to have $18 million in liabilities. However, apart from information relating to the six associated companies, the ATO did not particularise those allegations for the Board, and so they are not particularised in the Board's reasons for its decisions.[2] This presents obvious difficulties for the Applicants in putting forward any relevant evidence regarding those allegations.
11. Additionally, there is evidence accepted by the Board that Ms Kyriacou is suffering from bone marrow cancer which it might be inferred has impacted upon her ability to respond in a timely and effective way to the ATO and the Board.
12. However, the allegations are of a serious nature and the Applicants' responses are in some respects quite unsatisfactory. This is particularly so in relation to the taxation affairs of some of the associated companies where it is not apparent whether the Applicants deny the allegations or simply assert that Ms Kyriacou ceased to be a director before the assessments issued and therefore was and is unable to cause objections to be lodged.
13. In this unusual combination of circumstances, I am concerned about the risk of injustice, especially if, taking into account the very substantial extant assessments raised against Ms Kyriacou, I refuse the stay applications, but those assessments are withdrawn or significantly amended when the objection is determined. The assessments are so substantial that their fate could conceivably tip the balance in favour of or against the granting of stays until the final determination of the reviews of the termination decisions. On the other hand, the Applicants have not on the evidence before me made out a case for staying the decisions until those final decisions. In the circumstances, I have decided to stay the termination decisions but only for the eight-week period sought by the Applicants, and subject to conditions for the protection of the public.
14. During the period of the stays, I expect Ms Kyriacou would promptly provide the ATO with any information it reasonably seeks and, perhaps with the support of the Board, encourage the ATO to determine the objection as soon as reasonably practicable. It is also desirable that the parties work to ensure that the applications for review are progressed to readiness for hearing as soon as possible. If that occurs and further clarity emerges regarding the factual context in the meantime, the parties may be able to agree upon whether further stays are desirable or even the appropriate fate of the reviews.
15. However, that is only conceivable if the Applicants prepare appropriate direct evidence by Ms Kyriacou. It is important for the Applicants to understand that upon the expiry of the eight-week period, unless the Tribunal orders otherwise the stays will be lifted without further action by the Tribunal and the termination decisions will take effect.
16. Before setting out further background and reasons for this decision, I emphasise that I have reached my decision only because of the unusual combination of circumstances with which I am confronted in this matter. It is not ordinarily satisfactory for the Tribunal to take a decision of this kind on a stay application, as it may prolong litigation and result in duplicated effort and costs. However, I consider it is appropriate in the particular circumstances of this matter.

1. The Applicants sought orders that the termination decisions be stayed for:

at least eight (8) weeks or alternative period as the Tribunal may see fit.

1. They accept that a condition that the Applicants do not undertake tax agent services for new clients during the period of the stays would be appropriate.

THE STATUTORY FRAMEWORK AND APPLICABLE PRINCIPLES

1. The regulatory regime for tax practitioners is found in the Tax Agent Services Act 2009 (Cth) ("the TASA"). The object of the Act is:

to ensure that tax agent services are provided to the public in accordance with appropriate standards of professional and ethical conduct.[3]

1. The object is achieved through a system of registration of tax agents administered by the Board. In addition to relevant qualifications, experience, professional indemnity insurance and, for renewals, continuing professional education, for an individual to be eligible to be a registered tax agent the Board must be satisfied that the individual is a "fit and proper person". For a company, the Board must be satisfied that each director is a fit and proper person.[4] Whether an individual is a fit and proper person requires the Board to have regard to specified criteria, particularly "whether the individual is of good fame, integrity and character".[5]
2. The system of registration of tax agents is supported by a Code of Conduct and disciplinary sanctions. The Code is found in subdivision 30-A of the TASA. Obligations under the Code include that a registered tax agent must:
   • (a) "act honestly and with integrity";[6]
   • (b) "comply with taxation laws in the conduct of your personal affairs".[7]
3. The expression "personal affairs" is not defined in the TASA, but it is accepted that it includes associated entities of the tax agent, such as companies, partnerships and trusts, that the tax agent has direct or indirect control over.[8]

1. On completion of an investigation, the Board must make a decision to take no further action or to impose a sanction under the TASA, subdivision 30-B, for breach of the Code of Conduct; terminate the entity's registration under subdivision 40-A; and/or apply to the Federal Court for an order for payment of a pecuniary penalty and/or an injunction.[9]
2. The range of sanctions under subdivision 30-B for failing to comply with the Code of Conduct include:
   • (a) a written caution;
   • (b) an order requiring completion of a course of education or training;
   • (c) an order limiting the tax agent services the tax agent is permitted to provide or requiring services to be provided under supervision;
   • (d) suspension of the tax agent's registration;
   • (e) termination of the tax agent's registration.
3. An individual tax agent's registration may be terminated under subdivision 40-A if, amongst other events, the individual ceases to meet one of the tax practitioner registration requirements which, it will be recalled, includes that the tax agent is a "fit and proper person". Similarly, if a director of a tax agent company ceases to be a fit and proper person the company's registration may be terminated.
4. Where the Board terminates a tax agent's registration following an investigation, the Board may also determine a period of not more than five years in which the tax agent may not re-apply for registration.[10]

1. A decision to terminate a tax agent's registration is reviewable by the Tribunal, as is a decision to impose a period during which the tax agent may not re-apply for registration.[11]
2. In accordance with the usual principles applicable to applications for review, the Tribunal's role is to stand in the shoes of the Board and make a fresh decision on the merits to determine the correct or preferable decision in relation to the decisions under review.[12]

1. The making of an application to the Tribunal to review a decision does not, in itself, affect the operation of a decision.[13]
2. However, a party to a proceeding before the Tribunal, subject to exceptions that do not arise in this case, may apply for a stay of a decision under s 41(2) of the AAT Act, which states:

(2) The Tribunal may, on request being made by a party to a proceeding before the Tribunal (in this section referred to as the relevant proceeding), if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review, make such order or orders staying or otherwise affecting the operation or implementation of the decision to which the relevant proceeding relates or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review.

(Emphases added.)

1. The considerations which it is appropriate for the Tribunal to consider in determining whether to make a stay are well established:
   • (a) The prospects of success of the application for review.
   • (b) The consequence for the applicant of refusing a stay.
   • (c) The public interest.
   • (d) The consequences for the respondent in carrying out its functions depending on whether a stay is granted or not.
   • (e) Whether the application for review would be rendered nugatory if a stay where not granted.
   • (f) Other relevant matters.[14]
2. The Tribunal's task in considering the prospects of success of the substantive review has been described in this way:

. . . Clearly, it is not the role of the Tribunal in an interlocutory application of this nature to conduct a review of the merits or strength of the arguments, even on a preliminary basis, because such an undertaking would not only be lengthy but it would be unlikely to take into account the possibility of further evidence and submissions that may be more appropriately advanced at the substantive hearing. . . .

The Tribunal is, however, at least obliged to determine whether there are facts or circumstances or points of law that may be argued at a substantive hearing which may lead to a different result . . . If the reviewable decision discloses findings and reasoning that an applicant cannot or does not challenge, this would be critical to the issue of prospects and would be a significant factor that would weigh against the granting of a stay. It is incumbent on the applicant for a stay to establish the existence of such facts and circumstances or the possibility of legal error that may lead to a different result, through new evidence or submissions that were not raised before the delegate or by contesting findings of fact or conclusions of law (or a combination of both) that are open to challenge.[15]

(Emphases added)

1. It is not appropriate for the Tribunal to conduct a "mini trial"[16] but it is incumbent on the Applicants to establish the existence of facts or the possibility of legal error that may lead to a different result.

1. In various respects, the Applicants in their applications for review submitted that the Board denied them natural justice, now more commonly known as procedural fairness.
2. However, while described as denial of natural justice, the substance of the Applicants' submissions is generally that the Board failed to properly consider the relevant circumstances, rather than that they were denied an opportunity to be heard. The Applicants were given an opportunity to be heard by way of draft submissions to the Board being provided for comment before submission to the Board.

1. A key finding of the Board is that Mrs Kyriacou has a very substantial outstanding debt owed to the ATO for unpaid personal income tax and penalties. In that context, Mr Arnold, who appeared for the Board, drew attention to item 2 in the table in s 350-10(1) of Schedule 1 to the Taxation Administration Act 1953 (Cth) ("the TAA").
2. Under this provision, "the production of . . . a notice of assessment under a taxation law . . . is conclusive evidence that:
   • (a) the assessment was properly made; and
   • (b) except in proceedings under Part IVC of this Act on a review or appeal relating to the assessment - the amounts and particulars of the assessment are correct."
3. Subsection 350-10(4) states:

(a) appears to be a copy of, or extract from, any document (the original document) made or given by or to an entity for the purposes of a *taxation law; and

(b) is signed by the Commissioner, a Second Commissioner, a Deputy Commissioner or a delegate of the Commissioner;

is evidence of the matters set out in the document to the same extent as the original document would have been evidence of those matters.

1. Neither the stay applications nor the substantive review applications fall under the exception for proceedings under Part IVC of the TAA. Hence, production of a notice of assessment or duly signed copy would be conclusive evidence in these proceedings.

1. The Board made various serious findings and other allegations against Ms Kyriacou as set out below.

(a) Ms Kyriacou's income tax payment obligations

1. The Board found:[17]
   • (a) 2017 income year - Ms Kyriacou returned taxable income of $38,247 whereas the amended taxable income assessed by the ATO was $1,607,501, resulting in a tax shortfall of $753,405.04;
   • (b) 2018 income year - Ms Kyriacou returned taxable income of $57,785 whereas the amended taxable income assessed by the ATO was $1,298,945, resulting in a tax shortfall of $572,994.60.
2. The notices of amended assessment for the 2017 and 2018 income years are both dated 17 May 2019.[18] Penalties were also assessed but notices of assessment of the penalties do not appear in the documents filed by the Board.
3. In written submissions and at the hearing Mr Arnold asserted, and Mr Russo accepted, that s 350-10 in Schedule 1 to the TAA applied, such that the notices of amended assessments of income tax would be conclusive evidence of the amounts of the assessments.
4. However, it is not clear to me whether that is correct. In particular, it is not clear that the original notices of assessment nor copies signed in accordance with s 350-10(4) have been produced. What I have before me on their face are said to be documents filed by the Board in accordance with s 37(1) of the AAT Act which relevantly requires filing of a "copy" of any document in the possession or under the control of the decision-maker.
5. If, as appears to be the case, the Board has not filed originals or copies of the notices of amended assessment signed in accordance with s 350-10, I have evidence (which is not contested and which I accept) that the income tax assessments were made, but I do not have conclusive evidence of the correctness of the amounts assessed. Duly signed copies of the notices may be produced in the substantive reviews if they remain at that time the current notices of assessment. If so, they would be conclusive evidence in the hearing of the reviews that the amounts of the assessments are correct.
6. I say "if" the notices remain current at the time of the hearing of the substantive reviews because, by notice dated 18 February 2020,[19] Ms Kyriacou objected against the 2017 and 2018 income tax and penalty assessments. As already noted, the objections had not been determined at the time of the hearing. I was advised that the ATO recently sought further information relating to the objections from Ms Kyriacou. Even if I am wrong and the notices of assessment are conclusive evidence of the correctness of the assessment, Mr Arnold seemed to accept that I may take into account as a relevant fact that an objection has been lodged and remains undetermined.[20]
7. The assessments were made because the ATO formed the view that numerous deposits to Ms Kyriacou's bank accounts and credit cards were unexplained and should be treated as income.[21]
8. It appears that the Board acted on the basis that Ms Kyriacou did not put in a submission responding to the ATO's position paper following the audit of the 2017 and 2018 income years.[22] That is correct but may not be the complete picture. Mr Russo indicated that the ATO denied a request for an extension of time to make such a submission. There was no direct evidence of this from Ms Kyriacou or the context in which the request was made.
9. Whatever the correct characterisation of the transactions at the time, they are not "unexplained" now. Ms Kyriacou's objection apparently offers an explanation of every one of over 3,000 transactions. Whether such explanations will be accepted by the ATO of course remains to be seen.
10. In written submissions, the Applicants stated:

If Ms Kyriacou were to be successful with her objection, the total debt owing to the ATO will reduce from $2,455,775.44 to approximately $33,000. Ms Kyriacou contends that the debt owed to the ATO is an amount she believes is owing across two financial years.

1. The Applicants also say the Board offered no rational explanation for its conclusion that the basis of the objections was not plausible. Mr Russo made various statements attacking the apparent basis of the assessments, but no relevant evidence was filed other than a copy of the notice of objection. On the evidence before me, I am not in a position to determine whether Ms Kyriacou's objection has significant prospects of being successful.
2. What I am left with is this:
   • (a) The ATO has made assessments of income tax and penalties for the 2017 and 2018 income tax years resulting in a debt approaching $2,500,000.
   • (b) The debt remains outstanding.
   • (c) No payments towards satisfaction of the debt, or even the amount Ms Kyriacou says would be properly payable if her objection is successful, have been made.[23]
   • (d) The assessments:
     • (i) were made on 12 March 2019;
     • (ii) were for extraordinary amounts;
     • (iii) it could be inferred put Ms Kyriacou in significant financial peril;
     • (iv) being unpaid, put Ms Kyriacou in breach of her obligations as a registered tax agent.
   • (e) Even though Ms Kyriacou was therefore in peril of losing her registration and livelihood, she did not lodge an objection until 18 February 2020.
   • (f) Looking at the notice of objection, with its apparent attempt to explain a large number of transactions, I infer that its preparation would have been time-consuming.
   • (g) Nevertheless, and against the serious background outlined above, it took over 11 months for Ms Kyriacou to lodge the objection, shortly before the Board met to determine the appropriate action to be taken in respect of Ms Kyriacou.
   • (h) On the best case based on the Applicants' submissions, if the objection were to be wholly successful Ms Kyriacou would still have an outstanding tax debt of $33,000, an unquantified proportion of which fell due for payment in 2018.
   • (i) Ms Kyriacou offers no explanation for why no payment towards her outstanding debt has been made.

(b) Ms Kyriacou's income tax lodgement obligations

1. In the submissions referred to the Board, and in the ATO position paper which preceded the issue of the assessments for the 2017 and 2018 income years,[24] the following income tax return lodgement history appears for Ms Kyriacou:

1. On this basis, the 2017 return was lodged over eight months late and the 2018 return was four months late. Curiously, although referred to in the submissions to the Board, these late lodgements are not referred to in the Board's reasons for its termination decisions or in the Board's written submissions on the stays.
2. There was no reference to or explanation of these late lodgements in the submissions made on behalf of the Applicants.

(c) Ms Kyriacou's activity statement lodgement/ABN obligations

1. Copies of ATO records produced by the Board indicated that at 21 April 2020 Ms Kyriacou had outstanding activity statements for the tax periods ending 30 June 2019, 30 September 2019 and 31 December 2019.[25]
2. Mr Russo offered the following explanation:

MR RUSSO: Mrs Kyriacou's BASs (sic) she has an ABN number and her BASs are always yearly. She doesn't trade as an ABN (indistinct) and they should be always just nil, they're always nil.[26]

1. I queried why Ms Kyriacou has an ABN (Australian Business Number) if she is not trading in the following exchange:

SENIOR MEMBER: Why does she have an ABN if she's not trading? Why does - - -

MR RUSSO: I think, Senior Member, when ABNs were being given out as a precaution everybody got an ABN and she got one and she just lodges it as nil because she never has ABN income that she needs to just mix [fix] that up and lodge them then and they'd be lodged as nil. We can do it tonight. They're all lodged as nil and she hasn't any ABN income.

SENIOR MEMBER: Sorry, are you saying she doesn't carry on an enterprise?

MR RUSSO: No, she doesn't. She doesn't. In her own right she doesn't.

SENIOR MEMBER: I think she shouldn't have an ABN at all in that case.

MR RUSSO: She shouldn't have an ABN.[27]

1. Mr Russo is, with respect, correct in his concession that Ms Kyriacou should not have an ABN if she is not carrying on an enterprise. Ms Kyriacou was required to notify the ATO within 28 days of ceasing to carry on an enterprise, if indeed she ever carried on an enterprise.[28]
2. I do not have direct evidence of these matters other than the ATO reports, only Mr Russo's advice during the hearing. It appears that at best Ms Kyriacou failed to comply with activity statement lodgement obligations and, if Mr Russo's advice is correct, either should not have had an ABN at all or failed to notify the ATO when she ceased to carry on an enterprise. In any case, Ms Kyriacou is in breach of her obligations under the relevant tax laws.

1. The submissions considered by the Board stated that as at 15 January 2020 the Company had a tax debt of $281,102.91, comprising:
   • (j) an Integrated Client Account debt of $275,776.67 comprising unmet income tax withholding and GST obligations; and
   • (k) a Superannuation Guarantee Charge debt of $8,326.24.[29]
2. There is no explanation of how this debt arose, whether it is contested or arrangements made for its payment in any evidence or submissions filed on behalf of the Applicants.

(e) the Company's activity statement lodgement obligations

1. The Company's activity statement for the tax period ended 31 December 2019 was also outstanding.[30] There is no explanation for this outstanding obligation in any evidence or submissions filed on behalf of the Applicants.

(f) taxation obligations of associated companies

1. On the basis of advice from the ATO, the Board found shortcomings in compliance with taxation obligations by other entities associated with Ms Kyriacou. The alleged non-compliance is summarised below:[31]

As sole director, responsible for the company claiming an R&D Tax Offset of $1,584,308.72 for the 2017 income year, which the ATO assessed as $45,980.14.

As sole director, responsible for the company claiming substantial input tax credits ("ITCs") for tax periods from 1 April 2016 to 31 December 2018, which the ATO determined the company was not entitled to as it was not carrying on an enterprise, resulting in liabilities including for shortfalls and penalties of $179,762.50 being assessed.

As sole director, responsible for the company understating taxable supplies and overstating ITCs, as follows:

(a) September 2018 tax period -

Taxable supplies returned: $0

assessed by ATO: $56,898

(b) December 2018 tax period -

Taxable supplies returned: $0

assessed by ATO: $35,388.

As one of the directors, responsible for the company failing to:

(a) register for GST as required from 1 April 2016;

(b) pay GST on taxable supplies in the period 1 April 2016 to 31 December 2018, for which the ATO assessed a net amount of $772,077 as payable;

(c) under-declaring assessable income in its income tax return for the 2016 income year, as follows:

Assessible income returned: $920;

Assessed by ATO: $1,216,252;

Assessment of tax shortfall: $346,369.60;

(d) lodge an income tax return for the 2017 income year, but with liabilities as follows:

Assessible income assessed by ATO: $3,910,932;

Assessment of tax shortfall: $1,075,506.30;

(e) lodge an income tax return for the 2017[32] income year, but with liabilities as follows:

Assessed by ATO: $2,099,959;

Assessment of tax shortfall: $577,488.70.

As sole director, responsible for the company failing to:

(a) pay a GST net amount assessed at $29,253;

(b) pay PAYG withholding amounts assessed at $28,937;

(c) declare taxable supplies as follows:

As sole director, responsible for the company failing to declare taxable supplies, as follows:

Verona Group Pty Ltd as trustee for Australia Global Investments Unit Trust

As a director, responsible for the company claiming ITCs it was not entitled to, in these tax periods:

1. It will be noted that the alleged values of taxable supplies for Payline Pty Ltd for the June 2018, September 2018 and December 2018 tax periods are precisely the same as the alleged value of undeclared taxable supplies for Permaform Pacific Pty Ltd for the December 2017, March 2018 and June 2018 tax periods respectively. The alleged values for undeclared taxable supplies by Payline Pty Ltd appear in submissions to the Board, the Board's minutes and the Board's written decisions issued to Ms Kyriacou and to the Company. However, they are inconsistent with the numbers appearing in the ATO's reasons for decision relating to Payline Pty Ltd.[33] This leaves me with a concern that the alleged facts put to and accepted by the Board, and given by the Board as part of its reasons for the termination decisions, may not be accurate.

1. In respect of each of these entities, other than Biocoal Group Pty Ltd, the Applicants submitted that:

Mrs Kyriacou is no longer a director of [name of company] following her resignation in November 2018 and as such has no legal standing to lodge an objection to the ATO's audit by stealth.

1. An issue arose during the hearing regarding the effective dates of the resignations and whether, notwithstanding the purported resignations of Ms Kyriacou as a director of each of these companies, she had subsequently signed income tax returns for two of the companies. As it became clear that I did not have relevant evidence of these matters, I gave the Board time to file copies of the relevant returns and ASIC reports and the Applicants to file materials in response.
2. The additional evidence filed by the Board includes copies of:
   • (a) An income tax return for Payline Trading Pty Ltd lodged on 23 November 2018, listing Ms Kyriacou as the public officer (even though Ms Kyriacou is said to have resigned as a director on 21 November 2018).
   • (b) An income tax return for VHM Asset Holding Pty Ltd lodged on 31 January 2019, listing Ms Kyriacou as the public officer (even though Ms Kyriacou is said to have resigned as a director on 21 November 2018).
   • (c) A "Change to company details form" for Vista Pty Ltd signed by Ms Kyriacou on 23 April 2019 (even though Ms Kyriacou is said to have resigned as director in November 2018).
   • (d) Change of company details forms for each of the five companies, each signed by Ms Kyriacou on 26 April 2019 but recording the "director cessation date" for Ms Kyriacou as 21 November 2018.
3. The additional evidence and submissions filed by the Applicants in response is as follows:
   • (a) Copies of a "Notice of appointment of public officer" for VHM Asset Holdings Pty Ltd and for Payline Trading Pty Ltd. Each form:
     • (i) is dated 21 November 2018
     • (ii) is blank in the part of the document where it is apparent the name of the public officer should appear;
     • (iii) contains a signature above the words "Specimen signature of Public Officer" and above the words "Signature of director", which appears to match the signature of Mr Psaroudis appearing on the statement referred to below.
   • (b) A signed statement, expressed to be sworn, by a Mr Bill Psaroudis stating that:
     • (i) At an unspecified time following discussions with Ms Kyriacou and Mr Russo, Mr Psaroudis became "the director and shareholder" of these five companies.
     • (ii) On 23 November 2018, Mr Psaroudis instructed the Company to lodge the 2017 income tax return for Payline Trading Pty Ltd.
     • (iii) On 24 January 2019, Mr Psaroudis instructed the Company to lodge the 2017 income tax return for VHM Asset Holding Pty Ltd.
     • (iv) On 23 April 2019, Mr Psaroudis instructed the Company to register a change of address with ASIC in relation to Vista Pty Ltd.
     • (v) Mr Psaroudis went on to say that it is his understanding that at that time he became aware that the change of director and shareholder "had not been processed".
     • (vi) On 26 April 2019, Mr Psaroudis instructed McEvoy Advisory to "process the original documents with ASIC".
   • (c) A letter signed by Mr Russo asserting that the listing of Ms Kyriacou as public officer in the returns lodged on 23 November 2018 and 31 January 2019 was an administrative error by the Company.
4. The Applicants' submissions reject any suggestion that the resignations were backdated, stating:

Mrs Kyriacou argues that the ATO findings pursuant to audits, which were conducted by stealth, prompted her resignation.

1. The expression "conducted by stealth" seems to refer to the fact that the audits were conducted without the usual advance notice and without an opportunity for the taxpayer to make submissions in response to an ATO position paper. It is not clear to me, nor was any explanation offered, why the audit findings (however the audits were conducted) would lead Ms Kyriacou to resign as a director. It is also not clear to me how those findings which were issued in April 2019 could have prompted Ms Kyriacou's resignation over four months earlier in November 2018.
2. Nevertheless, accepting for present purposes that the Applicants may persuade the Tribunal in the substantive reviews that Ms Kyriacou resigned as a director of the five companies on 21 November 2018, where would that leave matters? On the stated assumption, Ms Kyriacou was not as a director able to cause the companies to lodge objections against the various assessments which issued after 21 November 2018 and certainly she has been unable to do so since 26 April 2019 when the cessations of directorships were notified to ASIC.
3. However, even on that assumption there was, on the Board's findings, substantial non-compliance with taxation obligations in the periods in which Ms Kyriacou was a director or sole director of these companies:
   • (a) Biocoal Group Pty Ltd - the alleged overclaim of the R&D offset in the return for the 2017 income year which I assume, absent any contrary evidence or submission, was lodged before 21 November 2018;
   • (b) Vista (Aust) Pty Ltd - the allegation that ITCs were wrongly claimed covers tax periods from 1 April 2016 to 31 December 2018; again, absent contrary evidence or submissions, I assume all of the relevant activity statements, other than the activity statement for the December 2018 tax period, were lodged before 21 November 2018;
   • (c) VHM Asset Holding Pty Ltd - I assume in the absence of contrary evidence that the September 2018 activity statement was lodged before 21 November 2018, resulting in, according to the ATO, a net underpayment of over $60,000;
   • (d) Verona Group Pty Ltd:
     • (i) failing to register for GST from 1 April 2016;
     • (ii) failing to pay GST in the period 1 April 2016 to 31 December 2018 - in absence of contrary evidence, I assume all of these returns, other than the December 2018 activity statement, were lodged before 21 November 2018;
     • (iii) under-declaring assessable income in the company's income tax return for the 2016 income year and failing to lodge a return for the 2017 income year which would have been due for lodgement before 21 November 2018, with alleged shortfalls of $346,369.60 and $3,910,932 respectively;
   • (e) Payline Trading Pty Ltd:
     • (i) failing to pay GST net amounts and PAYG withholding amounts in the tax periods 1 April 2018 to 31 December 2018 - I assume in the absence of contrary evidence that the June and September 2018 tax period amounts fell due for payment before 21 November 2018;
     • (ii) failing to declare taxable supplies for the June and September 2018 tax periods;
   • (f) Permaform Pacific Pty Ltd - failing to declare taxable supplies for the December 2017, March 2018 and June 2018 tax periods;
   • (g) Verona Group Pty Ltd as trustee for Australia Global Investments Trust - wrongly claiming ITCs for the March to December 2017 tax periods.
4. The Applicants' submissions regarding these companies foreshadow that Ms Kyriacou:

"intends to argue that it was former senior employees of the Company who had carriage of matters for clients the subject of claims giving rise to the [termination decisions]."

1. Mr Russo's oral submissions included statements that upon becoming ill Ms Kyriacou engaged key staff to manage the practice who engaged in criminal and fraudulent behaviour and were subsequently dismissed. In respect of the Biocoal Pty Ltd R&D claim, the submissions claim that there was no direct involvement by Ms Kyriacou and that the relevant application was signed by a former director.
2. Again, the submissions are unsupported by any direct evidence by Ms Kyriacou.

(g) issues relating to tax returns prepared for clients

1. As noted earlier, the Board took into account advice from the ATO that 26 of the Applicants' clients were audited and found to have $18 million in liabilities but did not particularise those allegations other than in respect of the associated companies.

1. The Board filed evidence of email and other communications referring to unpaid rent on the premises previously occupied by the Company and boxes of materials including taxpayer records left at the premises.[34]
2. On the basis of this evidence, the Board submitted that:
   • (a) the Applicants may have breached s 30-35 of the TASA by failing to notify the Board of a change of business address;
   • (b) the failure to pay rent is not conduct consistent with being a fit and proper person to be a tax agent;
   • (c) "abandoning client records to the public domain", as the Board described it in written submissions, displayed reckless disregard for sensitive information that is unfit for an agent charged with providing a professional service to the community.
3. Mr Russo made statements in the course of submissions about these matters, including that the landlord changed the locks, but again there is no direct evidence from the Applicants.
4. It is apparent from the email correspondence that there is a dispute between the landlord and tenant and that the landlord has taken the view that the lease has been repudiated and has re-entered and take possession of the premises. In those circumstances, I am not prepared to infer that the records have been "abandoned to the public domain". The Applicants do not appear to deny that there was rent unpaid by an associated entity. From the email and other correspondence in evidence, I accept that the Applicants have failed to notify a change of business address. Mr Russo did not deny this.

Prospects of success of the applications for review

1. In relation to the prospects of success of the substantive reviews,[35] I find myself in a similar position to the Tribunal in Le'Sam Accounting Pty Ltd and Tax Practitioners Board.[36] I cannot say the Applicants have good prospects, but nor could I say that the Applicants' case is hopeless.
2. The Board's findings are of a serious nature and have not been met with responses that persuade me the Applicants have good prospects in the reviews. On the other hand, Ms Kyriacou has been in practice for an extended period without evidence of serious shortcomings in maintaining the standards expected of a tax agent in the period prior to the events particularised in the allegations. She is also suffering from cancer which the Tribunal may be persuaded provides a relevant context for the relatively recent issues that have arisen. In those circumstances, the Tribunal may be persuaded that the five-year prohibition is excessive and to substitute a different sanction or a shorter prohibition period.[37]
3. Overall, on the material before me I consider that the Applicants have sufficient prospects of some success in the substantive reviews for this to weigh in favour of staying the termination decisions.

Consequence for the Applicants of refusing the stays

1. Although there is little in the way of direct evidence, it is a matter of logic and I accept that the refusal of the stays would have substantial adverse financial effects on the Applicants. As Mr Russo submitted, Ms Kyriacou's mental health may also suffer if the stays are not granted. Although it may be inferred that refusal of the stays would be highly stressful, there is no evidence on which I could make a specific finding of the impact upon Ms Kyriacou's mental health.
2. Adverse financial affects and stress 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 weighs against granting the stays in circumstances where the Applicants have not fully addressed and denied serious allegations made against them. However, that risk may be mitigated to a degree by attaching conditions to a stay in appropriate circumstances and by the period of the stay.

Consequences for the Board in carrying out its functions

1. This factor is related to the public interest which the Board is charged with protecting. The mere fact that the Board has terminated the registrations sends a strong deterrent message to the tax agent community. However, 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 and finding what on their face appear to be serious and repeated instances of non-compliance, albeit over a relatively confined period. This factor weighs against granting the stays.

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 fully 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.
3. The difficulty here for the Applicants is that they have not presented evidence specifically denying some serious allegations. Against that background, to the extent that the Applicants have failed to comply with their taxation obligations, their own actions have put them in peril of termination of their registrations.

1. The closure of the Applicants' tax agent services practice, even if temporary, would have an adverse effect on employees who may lose their current employment in a time of high unemployment. 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. 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 allegations have been made and not fully denied or explained. This risk may be mitigated to an extent by attaching conditions to a stay and the period of the stay.
3. On balance, the interests of clients provide some, but limited, support for granting the stays.

1. I have carefully weighed up the considerations outlined above. I am satisfied that granting the stays would satisfy the threshold requirement of securing the effectiveness of the hearing. This follows from my conclusion that the Applicants have some prospects of success in the substantive applications for review and the adverse effects the terminations would have in the meantime. Having regard to all of the conclusions outlined above, for and against the granting of the stays, I am satisfied that it is appropriate to further stay the termination decisions.
2. However, on the material currently before me and for the reasons outlined earlier, I am not satisfied that it is appropriate at this point to stay the decisions until the final determination of the reviews. Rather, I will stay the decisions for the period of eight weeks sought by the Applicants, which I consider strikes a reasonable balance in the particular circumstances of this matter, mitigating the risk to clients and the integrity of the tax agent registration regime. During that period, some of the difficulties mentioned earlier - the undetermined objection, along with the interaction between issues raised in the objection and the tax affairs of associated companies; the apparent errors in the materials put to and considered by the Board and referred to in the Board's reasons for its decisions; and the unparticularised nature of the allegations regarding the tax affairs of the clients ‑- may be clarified.
3. The stays will be subject to conditions for the protection of the public interest. As noted earlier, the Applicants accept that a condition that they do not undertake tax agent services for new clients during the period of the stays would be appropriate. This provides protection for potential new clients but not for existing clients. I will impose a further condition that, before providing any new or continuing tax agent services to existing clients, the Applicants must advise the client in writing that: the Applicants' registrations have been terminated; the Applicants have applied to the Tribunal for review of the termination decisions; and the implementation of the terminations has been stayed by the Tribunal for a period of eight weeks from today.[38]

I certify that the preceding 97 (ninety-seven) paragraphs are a true copy of the reasons for the decision herein of Senior Member R J Olding

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

[1] Letter from McEvoy Legal to the Board dated 17 September 2019, section 37 T-documents, p 716.

[2] Submission to Tax Practitioners Board, section 37 T-documents, p 34 at [4].

[8] Birdseye and Tax Practitioners Board [2020] AATA 1250, [13]-[14] and following.

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

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

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

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

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

[17] Board's letters regarding outcome of investigations, section 37 T-documents, T12, T13.

[18] Section 37 T-documents, pp 227 - 234.

[20] Transcript, 1 May 2020, p 22, lines 7-11.

[21] ATO Reasons for Decision dated 14 May 2019, section 37 T-documents, T6, p 208ff.

[22] Submission to Tax Practitioners Board, section 37 T-documents, T6, p 35 at [7].

[23] ATO ICP Statement of Account Extract, Affidavit of Alan Coorey dated 22 April 2020, Exhibit AC-5.

[25] ATO Activity Statement report extracts, Affidavit of Alan Coorey dated 22 April 2020, Exhibit AC-3.

[26] Transcript, 1 May 2020, p 30, lines 26-28.

[27] Transcript, 1 May 2020, p 30, lines 30-46.

[28] A New Tax System (Australian Business Number) Act 1999 (Cth), ss 8, 14.

[29] Submission to Tax Practitioners Board, section 37 T-documents, T6, pp 73-74.

[30] ATO Activity Statement report extracts, Affidavit of Alan Coorey dated 22 April 2020, Exhibit AC-34.

[31] Board's letters regarding outcome of investigations, section 37 T-documents, T12, T13.