Mendonca v Tax Practitioners Board

FARRELL J 1 These are reasons for the orders made in relation to an application for judicial review of decisions of the respondent, the Tax Practitioners Board. The first decision was made on 25 July 2017 and two further decisions were made on 15 January 2018. The applicant, Mr Mendonca, lodged an originating process on 12 February 2018 (and filed an amended application on 12 July 2018) which challenges these decisions under the Administrative Decisions (Judicial Review) Act 1977 (Cth) (ADJR Act) and s 39B of the Judiciary Act 1903 (Cth). 2 Mr Mendonca appeared as a litigant in person in these proceedings.

Background 3 From 2006, Mr Mendonca was an employee of Chan & Naylor Parramatta Pty Ltd, which was a company that provided accounting, tax and wealth advice services. Ms Lauren McGinty was an employee and Mr Clive Nelson was a non-executive director of Chan & Naylor. 4 Mr Mendonca filed proceedings in the District Court of New South Wales claiming that Chan & Naylor had failed to pay him performance bonuses for six of the years he was employed there. On 12 June 2014, Judge Balla handed down judgment in the matter. Her Honour found that Mr Mendonca's evidence was unreliable and that he had created a false document entitled "Bonus Policy" for the purpose of the District Court proceedings. 5 On 7 May 2017, Mr Mendonca lodged complaints with the Board against Mr Nelson and Ms McGinty in relation to the integrity of their evidence in the District Court proceeding. Mr Mendonca says that his purpose was to have Mr Nelson and Ms McGinty found to be not fit and proper persons and to have their registrations terminated under Subdiv 40A of the Tax Agent Services Act 2009 (Cth). 6 Mr Mendonca requested the Board, "as a measure of procedural fairness", to use its powers under s 60-100 (power to request production of a document or thing), s 60-105 (power to require witnesses to appear before the Board), s 60-110 (power to take evidence on oath or affirmation) and s 60-115 (not excused from self-incrimination) of the Tax Agent Services Act to require the production of certain emails, and to inspect the bonus calculator attached to an email dated 4 February 2008 from Mr Nelson in Mr Nelson's e-mail box and e-mail boxes of certain other current and former employees, including Mr Mendonca and Ms McGinty. 7 On 25 July 2017, the Board wrote to Mr Mendonca advising that it had decided to take no further action in relation to the complaint because the Board "found that the allegations do not constitute tax agent services and therefore are outside the jurisdiction of the Board". 8 On 20 August 2017, Mr Mendonca lodged an application for review of the Board's decision with the Administrative Appeals Tribunal and on 10 November 2017 the AAT found that it did not have jurisdiction to review the decision: see Mendonca and Tax Practitioners Board [2017] AATA 2177. 9 On 24 August 2017, Mr Mendonca sought internal review of the decision made on 25 July 2017. Mr Mendonca summarised the conduct he relied on as follows: 1. That Clive Nelson wilfully gave false and misleading sworn evidence to Judge Balla that the bonus calculator attachment to his e-mail of 4 February 2008 sent by him to client-managers was blank/incomplete without numbers and wilfully concealed the truth that that the bonus calculator attachment to his e-mail of 4 February 2008 sent by him to client-managers was complete with numbers. 2. That Clive Nelson wilfully gave false and misleading sworn evidence to Judge Balla that the 1st Bonus Policy and ONLY Bonus Policy was 11 July 2007 and wilfully concealed the truth that the 1st Bonus Policy was 19 November 2006. 3. That Clive Nelson wilfully gave false and misleading sworn evidence to Judge Balla that he held a client managers meeting in September 2007 to discuss/agree with all client-managers (Gerard Mendonca, Lauren McGinty, Elizabeth Pizzardi, Man Lai and Neetu Shankar) to adopt Bonus Policy of 11 July 2007 and wilfully concealed the truth the he scheduled by e-mail client managers meeting for 8 February 2008 that did NOT discuss about any bonus policy and Firm EBIT. 4. That Lauren McGinty corroborated wilfully false and misleading sworn evidence of Clive Nelson when Lauren McGinty wilfully gave false and misleading sworn evidence to Judge Balla that Clive Nelson held a client managers meeting in September 2007 to discuss/agree with all client-managers (Gerard Mendonca, Lauren McGinty, Elizabeth Pizzardi, Man Lai and Neetu Shankar) to adopt Bonus Policy of 11 July 2007 and wilfully concealed the truth that Clive Nelson scheduled by e-mail to client managers including herself meeting for 8 February 2008 that did NOT discuss about any bonus policy and Firm EBIT. 5. That Kota Keniry and Lauren McGinty did not corroborate the wilfully false and misleading sworn evidence of Clive Nelson that the bonus calculator attachment to his e-mail of 4 February 2008 sent by him to client-managers was blank/incomplete without numbers. 10 Given the nature of these allegations, it is important to note that in recording them, the Court makes no finding that they are correct and it is not the province of the Court on this application to consider that matter. 11 On 15 January 2018, the Secretary of the Board wrote to Mr Mendonca separately in respect of his complaints against Ms McGinty and Mr Nelson and advised that the decision made on 25 July 2017 stood. 12 On 6 February 2018, the Secretary of the Board wrote to Mr Mendonca finalising enquiries it made in relation to his standing as a tax agent. In concluding that it would take no action it noted, among other things, the following (as written): 1. In the District Court decision (referred to above), Justice Balla made adverse findings about your conduct, including that: a. you created a disputed 'Bonus Policy' document to use in a proceeding you brought against Chan & Naylor Parramatta Pty Ltd (Chan & Naylor) concerning an employment issue (the Bonus proceeding); and b. That finding significantly impacts on the reliability of not only your evidence in relation to that issue, but to all of your oral evidence in those proceedings. 2. in the same District Court proceeding, Justice McLoughlin however observed (on page 24 of his judgment dated 6 November 2015): 'However in relation to that bonus policy, without wishing to demur from her Honour's findings, it may be that the onus was on the defendant (Chan & Naylor (Parramatta) Pty Ltd atf Chan & Naylor (Parramatta) Trust) to call Mr Sefetli (the general manager of the defendant company) and it may be that the expert evidence on which her Honour based her findings merely went to the extent that the document was not created within the defendant's premises which does not exclude Mr Safetli from having been the author of it.' 3. the finding of Justice McLoughlin in the District Court judgment dated 6 November 2015 raises doubt as to whether you created the disputed 'Bonus Policy' document to use in the Bonus proceeding, and in turn whether you provided false or unreliable evidence in that proceeding. …

The application 13 By his amended originating application filed on 12 July 2018, Mr Mendonca sought to establish that the decisions made on 25 July 2017 and 15 January 2018 were made in error. The relief sought by Mr Mendoca was as follows: 1. An order that extension of time to review decision of 25 July 2017 of Tax Practitioners Board be GRANTED. 2. A declaration that decisions of 25 July 2017 and 15 January 2018 of Tax Practitioners Board are invalid. {s 16(1)(a) of ADJR Act 1977 and s 39B of the Judiciary Act 1903 (Cth)} 3. An order in the nature of certiorari quashing or setting aside decisions of 25 July 2017 and 15 January 2018 of Tax Practitioners Board and referring the matter to Tax Practitioners Board for further consideration. {s 16(1)(a) of the ADJR Act 1977 and s 39B of the Judiciary Act 1903 (Cth)} 4. An order in the nature of mandamus requiring Tax Practitioners Board to perform its duty {{s 16(1)(b) of ADJR Act 1977 and s 39B of the Judiciary Act 1903 (Cth)} 5. A declaration that Tax Practitioners Board have jurisdiction to initiate an investigation or independent review and inspect e-mails of 16 January 2008 including client manager lunch calendar booking from Clive Nelson to the client managers (Lauren McGinty, Elizabeth Pizzardi, Man Lai, Neetu Shankar and Gerard Mendonca), e-mail of 4 February 2008 with staff bonus calculator attachment at 1.45 pm, e-mail of 9 December 2011 with Bonus policy of 19 November 2006 attachment at 1.14 PM from gerardm@chan-naylor.com.au. {s 16(1)(c) of the ADJR Act 1977 and s 39B of the Judiciary Act 1903 (Cth)} 6. An order that each party pay the costs of the original and amended judicial review applications brought only in the interest of and protection of the public such as [the names of two people redacted]. 7. Any other orders the Court sees fit on its own motion as applicant is self-represented. 14 In accordance with timetabling orders made by the Court, affidavit evidence, a court book and written submissions by both parties have been filed. 15 In its submissions filed on 27 September 2018 in response to Mr Mendonca's submissions in chief, the Board conceded that the decision made on 25 July 2017 was affected by jurisdictional error because the Board concluded that it only had jurisdiction to consider conduct which constituted "tax agent services". This was because: (1) The Board has jurisdiction to review "any conduct that may breach this Act": see s 60-95(1)(b) of the Tax Agent Services Act; (2) This would include any conduct that was in breach of the Code. The "Code of Professional Conduct" applies to (among other persons) registered tax agents: see s 30-5. (3) The Code is not, in its terms, limited to conduct which amounts to tax agent services. Rather, the Code regulates 'personal and professional conduct as a registered tax agent': see s 30-1. At s 30-10 the Code relevantly provides: 30-10 The Code of Professional Conduct Honesty and integrity (1) You must act honestly and with integrity. 16 The Board concedes that this error was "jurisdictional" because it involved a misapprehension of the limits of the Board's power to investigate and it would be conduct which is covered by s 6(1)(b) of the ADJR Act. 17 The Board concedes the decisions made on 15 January 2018 were subject to error because they sought to uphold or affirm the decision made on 25 July 2017 which was, in effect, no decision at all. 18 The Board provided to Mr Mendonca and the Court short minutes of order under which the Court would quash those decisions pursuant to s 16(1)(a) of the ADJR Act and pay Mr Mendonca's costs as agreed or assessed. 19 However, the parties were unable to agree on the final form of relief which would be appropriate. The Board was prepared to offer an undertaking to the effect that it would consider whether or not to investigate Mr Mendonca's complaint and it was willing to include the undertaking as a notation to the final orders. However, Mr Mendonca sought to have an order, not just a notation, made to that effect. The Board contended that neither an order in the nature of mandamus referring the matter to the Board for further consideration nor an order that the Board should "perform its duty" was appropriate. 20 The Board submitted that mandamus will only issue in circumstances where there is a duty on a public official to consider whether to exercise a power. Relying on the High Court's decision in Ainsworth v Criminal Justice Commission (1992) 175 CLR 564, the Board submitted that where there is no relevant duty but rather a discretion whether to act or not, mandamus is not an appropriate remedy. The Board contended that there is no duty on the Board to consider whether to investigate a matter. 21 The Board and its powers are established under Pt 6 of the Tax Agent Services Act. In part, it is established to achieve the object of that Act to "ensure that tax agent services are provided to the public in accordance with appropriate standards of professional and ethical conduct": see s 2-5. 22 Section 60-95 provides as follows: 60-95 Investigations (1) The Board may investigate: (a) your application for registration; or (b) any conduct that may breach this Act; or (c) other matters prescribed by the regulations. (2) The Board must notify you in writing if the Board decides to investigate you. The notice must be given within 2 weeks after the decision is made. (3) An investigation is taken to commence on the date of the notice. (4) The Board: (a) has a discretion as to its procedure; and (b) is not bound by the rules of evidence. No matter has been prescribed for the purposes of s 60-95(1)(c). 23 The Board correctly submits that there is no formal mechanism for the treatment of complaints in the Tax Agent Services Act, but the legislative scheme envisages that there may (or may not) be a complainant involved in an investigation. A complainant must receive notification of certain decisions under s 60-125(8)(c)(ii). 24 Mr Mendonca referred to the Explanatory Memorandum to the Tax Agent Services Bill 2008 in his correspondence with the Court, noting that it says (at [5.87]) "When a complaint is made to the Board, the Board will determine whether the complaint is one of substance and whether an investigation is warranted" in support of a submission that there was a duty to decide whether to commence an investigation. 25 In submissions at the hearing, Mr Mendonca also noted that the time for renewal of registration of Mr Nelson and Ms McGinty under the Tax Agent Services Act was approaching in the next six months and the Board would have a duty to consider their fitness at that time. 26 Having regard to the scheme of the Tax Agent Services Act, I am persuaded by the Board's submissions. Further, recourse to the terms of the Explanatory Memorandum relied on by Mr Mendonca is not fruitful. This is first because the terms of the Tax Agents Services Act do not, in my view, give rise to sufficient ambiguity to require recourse to the Explanatory Memorandum. In any event, the words relied on by Mr Mendonca from the Explanatory Memorandum appear in a context which does not suggest a duty, but rather it is a plain language explanation of how an investigation will commonly be commenced. As to the matter of the renewal of registrations of Mr Nelson and Ms McGinty, the decision of the Board which has been impugned is its decision not to investigate on the basis of a misunderstanding of its jurisdiction. Mandamus does not lie to require the Board to exercise its discretion whether to investigate in any particular way. In any event, the Board's decision whether or not to renew registrations of Mr Nelson and Ms McGinty is not within the ambit of these proceedings and it has not yet fallen due to be made. 27 I am inclined to accept the Board's submission that mandamus does not lie for the reasons given in submissions but it is ultimately unnecessary for me to decide because, where the Board has given an undertaking to the Court to consider again whether it should commence an investigation in response to Mr Mendonca's complaint, as a matter of discretion, I do not think it is appropriate to make an order in the nature of mandamus and I decline to do so. 28 In relation to order five sought by Mr Mendonca (see [13] above), Mr Mendonca explained his concern was to avoid objections being taken by Chan & Naylor or Mr Nelson or Ms McGinty "when the matter continues before the Taxation Practitioners Board according to law". 29 It would not be appropriate to make a declaration contemplated by proposed order five. First, there is no dispute in these proceedings that, if the Board decides to conduct an investigation into the matters raised by Mr Mendonca's complaint, it has the power to request production of a document or thing under s 60-100, the power to require witnesses to appear before the Board s 60-105, the power to take evidence on oath or affirmation under s 60-110 and a person is not excused from responding by reason of self-incrimination under s 60-115. Second, it is asking the Court to deal with a hypothetical situation concerning the nature and extent of any investigation the Board may decide to undertake and the response of persons who are not party to the proceedings. Accordingly, I declined to make any declaration of that kind.

Conclusion 30 The Court determined that, having regard to the Board's undertaking and its concession (which was properly made) that its decisions dated 25 July 2017 and 15 January 2018 are affected by jurisdictional error and should be quashed, it was appropriate to extend time in relation to the decision dated 25 July 2017, to quash the decisions, to order that the respondent pay Mr Mendonca's costs and otherwise to dismiss the proceedings. 31 As Mr Mendonca is a litigant in person and he is not a legal practitioner, it may be useful to note that he is not entitled to claim costs of his time in making the application, but he would be entitled to recover incidental costs such as filing fees and costs of photocopying which he has paid. I certify that the preceding thirty-one (31) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Farrell.