Phillip Same Accountants Pty Ltd v Tax Practitioners Board

REASONS FOR JUDGMENT 1 On 31 January 2011 Middleton J dismissed an application by the applicant, Phillip Same Accountants Pty Ltd. The application was by way of appeal under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth) ("the AAT Act") from a decision of the Administrative Appeals Tribunal ("the Tribunal") given on 11 June 2010. By that decision, the Tribunal affirmed a decision of the respondent, the Tax Practitioners Board ("the Board"), formerly the Tax Agents Board, refusing to re-register the applicant as a tax agent pursuant to s 251JC(1)(c) of the Income Tax Assessment Act 1936 (Cth) ("the Income Tax Assessment Act"). 2 On 21 February 2011, the applicant filed a notice of appeal to a Full Court of this Court against the order of Middleton J of 31 January 2011. That appeal is presently in the list of cases to be fixed for hearing before a Full Court in August of this year. 3 By an amended notice of motion filed on 27 April 2011, the applicant seeks orders that: 1. paragraphs 2 and 3 of the orders of Middleton J dated 31 January 2011 be stayed pending the determination of this appeal or alternatively, 2. the respondent renew the applicant's registration as a tax agent on an interim basis, pending the hearing and determination of the appeal and, if the matter is remitted to the Administrative Appeals Tribunal, the grant of a further stay by the Administrative Appeals Tribunal. 4 Paragraphs 2 and 3 of Middleton J's orders were in these terms; 2. The appeal be dismissed. 3. The applicant pay the respondent's costs. 5 It has been explained by Mr Ure of Counsel for the applicant that the interim stay sought by paragraph 1 of the notice of motion is in the nature of a suspension of the dismissal of the application under s 44 of the AAT Act pending the hearing and determination of the appeal to a Full Court. The effect of such a suspension, it was contended, would be to revive an order made by the AAT on 7 December 2009, in these terms: IT IS ORDERED that until further Order the decision of the Tax Agents' Board of Victoria made on 8 October 2009 be stayed. Such an order has been held by the Tribunal in Re Nelson and The Tax Agents' Board of Queensland (1993) 26 ATR 1213, at [14]-[15], to have the effect of giving a tax agent the benefit of "a deemed registration pending the Board's decision on an application for re-registration where the registration would otherwise have expired." 6 Support for the availability of an order suspending the determination of a proceeding where that determination is the subject of a pending appeal was said to be derived from Re Marks and Federated Ironworkers Association; ex parte Australian Building Construction Employees and Builders' Labourers Federation (1981) 34 ALR 208 ("Re Marks") where Mason J discussed a submission that the High Court had inherent jurisdiction to grant a stay of an order of the Australian Conciliation and Arbitration Commission pending the hearing by a Full Court of the High Court of an application by the unsuccessful party in the Commission for a writ of prohibition. His Honour went on, at 211, to observe; … The statutory power to give a direction that an order nisi for prohibition operates as a stay of proceedings in O 55, r 10, has no application here, the Federation having failed to obtain an order nisi. It has been accepted that the court has inherent jurisdiction to grant a stay of proceedings to preserve the subject matter of litigation, though it is a jurisdiction which is seldom invoked and rarely exercised (Tait v R (1962) 108 CLR 620 at 623-4). There is no reason for thinking that in an appropriate case the court cannot exercise the jurisdiction so as to preserve the subject matter of the litigation when the litigation is an application for a writ of prohibition. There is, however, an aspect of the order now sought which is exceptional and gives to the application a unique quality. It is that the Federation seeks, not a stay of proceedings in the Commission under the orders made there, but a stay of the orders themselves. Mr Ryan QC frankly concedes that he has been unable to discover any case in which a court has in the exercise of inherent jurisdiction stayed an order as distinct from proceedings. He also concedes - and this may have consequences for the prohibition which he ultimately seeks from the Full Court - that there are indeed no proceedings in the Commission on which a stay of proceedings would operate. None the less he argues that where the order sought to be stayed is one which creates rights and does not merely declare rights, the jurisdiction extends to a stay of the order itself. Even so, the court will be more reluctant to stay an order which, though it creates rights, is otherwise declaratory in the sense that, unlike an injunction, it does not require a party to do or abstain from doing something. The distinction between a stay of proceedings and a stay of an order or judgment is perhaps not altogether clear. Contrast O 55, r 10 with O 70, r 12(2) and see the discussion in Allanson v Midland Credit Ltd (1977) 16 ALR 43; 30 FLR 108 at 112-3. Speaking generally, the distinction is between a stay of further proceedings in litigation and a suspension of a judgment or order. The fact that O 55, r 10 makes provision only for a stay of proceedings, and then on an order nisi, indicates that the stay of an order of the kind in question in the exercise of the inherent jurisdiction pending an application for prohibition is at best an exceptional undertaking. 7 Mason J in that case declined, in the exercise of his discretion, to make the order sought. Among the reasons which weighed with his Honour in coming to that conclusion was the fact that "the grant of a stay of an order in the exercise of the inherent jurisdiction is an exceptional course." Mr Ure also referred to Frumar v The Owners of Strata Plan 3695 [2010] NSWCA 172, where Handley AJA (with whom Macfarlan JA agreed) concluded that a permanent stay of a judgment of the New South Wales District Court deprived that judgment of all legal effect or operation. To similar effect, Handley JA, in R v P (No 2) [2003] NSWCA 360, in refusing a stay of an order by Barrett J, considered that the grant of such a stay would have revived certain interlocutory orders which had been made by Windeyer J but which had come to an end upon the making of Barrett J's final orders. Handley JA observed, at [7]-[9]; 8 The precise situation confronting the Court has not been explored in earlier authorities, but it seems to me that the stay of final orders, that is the suspension of them, must deprive them of continuing legal effect while the stay continues. In these circumstances it seems to me that the necessary result is that continuing interlocutory orders which ceased to have effect when the final orders were made will automatically revive. 9 The situation would be different, of course, if the final orders were set aside on appeal because, in that event, if nothing was said, continuing interlocutory orders would not be revived. 8 Counsel for the applicant also referred to s 43(5C) of the AAT Act, which provides: (5C) Despite subsections (5A) and (5B), if: (a) the Tribunal has made an order under subsection 41(2) staying the operation or implementation of the decision under review; and (b) the order was in force immediately before the decision given by the Tribunal on the review; then, unless the Tribunal, the Federal Court of Australia or the Federal Magistrates Court otherwise orders, the operation or implementation of the Tribunal's decision is stayed until: (c) subject to paragraph (d), the end of the period within which a party to the proceeding before the Tribunal may appeal from the decision to the Federal Court of Australia under subsection 44(1) (including any further time for bringing the appeal that is allowed by the Federal Court before the end of that period); or (d) if such an appeal is brought - the appeal is determined. 9 Mr Ure frankly conceded that the reference at the end of that subsection to the appeal being determined is to the "appeal" under the AAT Act which is heard in the original jurisdiction of this Court. Consequently, the stay effected by s 43(5C) came to an end in the present case when the "appeal" was determined by the order of 31 January. A stay or suspension of Middleton J's order would revive the stay effected by s 43(5C) of the AAT Act until a Full Court of this Court either upheld Middleton J's order or set it aside. 10 The applicant contended, in the alternative, that, if the Court were to find itself unable to stay Middleton J's order or suspend its operation, it should make an order that the applicant's registration as a tax agent be renewed until the hearing and determination of the appeal. It was acknowledged that it is rarely, if ever, that a mandatory interlocutory injunction has been granted against a statutory authority. However, it was urged that the applicant has a prima facie case in support of its appeal as of right and the balance of convenience strongly favours the continuation of the tax agent's practice which could well be destroyed if it could not be carried on until after a hearing of the appeal in August 2011 and the subsequent making of orders disposing of the appeal. 11 Section 251JC(4) of the Income Tax Assessment Act which was to be found in Pt VIIA of that Act was repealed on 1 March 2010 before the AAT determined on 11 June 2010 the application to review the decision of the Board. As a result of that repeal, the situation of the applicant attracted the application of Part 2 of the Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) ("the Transitional Act"), 12 Item 2 of Part 2 of the Transitional Act provided: (1) If an entity was, immediately before commencement, a registered tax agent within the meaning of the old law, the entity is taken to be a registered tax agent within the meaning of the new law for the period: (a) beginning on the day on which this Schedule commences; and (b) ending on the day on which: (i) the entity's registration would have expired under the old law but for its repeal by Schedule 1 to this Act; or (ii) if item 17 of this Schedule applies and the Board decides to cancel the entity's registration - the entity's registration is cancelled under the old law despite its repeal by Schedule 1 to this Act; or (iii) the entity's registration is terminated under Subdivision 30-B or 40-A of the new law; whichever occurs first. 13 It was contended by Mr Gray of Counsel for the Board, that the applicant's continuing registration, as deemed to be in existence in accordance with Re Nelson and the Tax Agents Board noted at [5] above, ended on the day on which the registration would have expired under the old law, i.e, s 251JC(4) of the Income Tax Assessment Act, as operated on by s 43(5C) of the AAT Act quoted at [8] above. That occurred as a matter of historical fact when the appeal was determined by the order of Middleton J on 31 January 2011 without any stay of that order having been granted.