Tax Practitioners Board v Hacker

Federal Court of Australia|2021-08-10|Before: Ms J, Rangiah J, Abraham J

THE COURT NOTES THAT:

Pursuant to order 18 made by Rangiah J on 18 December 2020, the first respondent's admission to the contempts the subject of these proceedings has the consequence that he is to serve the balance of the sentence imposed on him that day.

In relation to the first respondent, I impose a sentence of four months' imprisonment for each contempt to be served concurrently, but cumulative on the balance of the sentence imposed by Rangiah J on 18 December 2021. After two months of the four month sentences have been served in custody, the balance of the sentences will be suspended from execution on the condition that if the first respondent contravenes orders 9 and 10 made by Rangiah J on 18 December 2020 within five years of the date of this order, he shall serve the balance of the sentences.
In relation to the second respondent, I impose a fine of $5000.
The respondents pay the costs of these proceedings on an indemnity basis, to be agreed or taxed.
The first respondent is to surrender himself to the authorities in accordance with the terms the warrant before 4 pm on 11 August 2021. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

ABRAHAM J: 1 On 18 December 2020, this Court permanently restrained the respondents from providing or offering to provide any tax agent services (as defined in the Tax Agent Services Act 2009 (Cth) (TAS Act)), for fee or reward, unless that respondent was, at the relevant time, registered to provide those services under the TAS Act: Tax Practitioners Board v Hacker (No 3) [2020] FCA 1814 (Hacker (No 3)). As admitted by the respondents, on 28 January 2021, the first and second respondents breached that injunction, and thereby engaged in conduct in contempt of court. On 19 April 2021, the Tax Practitioner Board (the Board) filed this application (and an accompanying statement of charge), bringing its sixth contempt application against the respondents before this Court. 2 On 29 April 2021, eight days after being served with the statement of charge, the respondents notified the applicant in writing that liability would not be contested. The admissions were formally made on the occasion the matter was listed for hearing. Accordingly, it falls to this Court to sentence the respondents. 3 For the reasons below I impose on the first respondent a sentence of four months' imprisonment for each of the contempts of court, to be served concurrently, but cumulative on the outstanding balance of the sentence imposed by Rangiah J on 18 December 2020. Of the sentences imposed, I order that after Mr Hacker has served two months of the sentences of imprisonment I have imposed, the balance will be suspended from execution on the conditions detailed at [63]. I impose on the second respondent a fine of $5000.

Factual background 4 On 18 December 2020, Rangiah J imposed penalty orders for breaches of the TAS Act on the respondents. Significantly, Rangiah J also found the respondents guilty of a number of offences of contempt. The history of the proceedings, and the contempts then in question, were summarised by Rangiah J in Hacker (No 3) at [109]-[123]. It is appropriate and sufficient at this stage to recite that summary: [109] On 12 February 2019, the applicant filed an Originating Application commencing the principal proceedings against the respondents for contraventions of s 50-5 of the TAS Act (the Contravention Proceedings). The Originating Application also sought interlocutory injunctions restraining the respondents from providing tax agent services or BAS services for fee or reward. [110] On 1 March 2019, I dismissed the application for interlocutory injunctions upon the giving of the following undertaking by the respondents: On a without admissions basis, until further order of the court or final disposition of this proceeding, each respondent (and in the case of the first respondent, either personally or on behalf of another entity) will not provide tax agent services within the meaning of s 90-5 of the Tax Agent Services Act 2009 (Cth) or BAS services within the meaning of s 90-10 of the Tax Agent Services Act 2009 (Cth) for fee or reward to any person or entity with the exception of those entities in respect of which the first respondent holds an officer position (being either director, company secretary and/or public officer), and, for the avoidance of any doubt, the undertaking does not prohibit the first respondent from receiving a fee or reward in respect of his officer role for those entities. (Emphasis added.) [111] On 17 June 2019, the applicant filed an interlocutory application and Statement of Charge (as was required under rr 42.11(1) and 42.12(a) of the Federal Court Rules 2011 (Cth)) alleging that Mr Hacker and OSGS had breached their undertaking, and seeking the imposition of penalties upon them for contempt of court. An Amended Statement of Charge filed on 27 September 2019 alleged that Mr Hacker and OSGS committed contempts of court on three occasions by breaching the undertaking of 1 March 2019 as follows: (a) on 6 March 2019, preparing a 2018 Income Tax Return (ITR) for Palwinder Lore for $132; (b) on 13 March 2019, preparing a 2018 ITR for Jeremy Park for $132; (c) on 18 March 2019, preparing a 2018 ITR for Mohammed Rizwan Shaikh for $132. [112] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved in the transactions. On 1 July 2019, OSGS admitted the allegations, but they were denied by Mr Hacker. In Tax Practitioners Board v Hacker (No 2), I found the allegations of contempt to be proven against both Mr Hacker and OSGS (the First Contempts). [113] By a further interlocutory application and Statement of Charge filed on 13 November 2019, the applicant alleged that Mr Hacker and OSGS committed contempts of court on five occasions by breaching the undertaking of 1 March 2019 as follows: (a) on 6 September 2019, preparing a 2019 ITR for Hyuna Kim for $132; (b) on 20 September 2019, preparing a 2019 ITR for Rosemary Amali Delwala for $132; (c) on 24 September 2019, preparing 2017, 2018 and 2019 ITRs for John Melvin Claveria for $396; (d) on 24 September 2019, preparing a 2019 ITR for Thi Cam Giang Pham for $132; (e) on 25 September 2019, preparing a 2019 ITR for Tri Huu Le for $180. [114] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved. On 10 February 2020, Mr Hacker and OSGS admitted the contempts. I formally made findings in Tax Practitioners Board v Hacker (No 2), that the contempts were proven against Mr Hacker and OSGS (the Second Contempts). [115] On 26 November 2019, upon the provision of an irrevocable authority by the respondents, I adjourned the hearing of the principal proceedings and the applicant's interlocutory application in respect of the First and Second Contempts. Mr Hacker, on behalf of himself and in his capacity as director of OSGS and Naleview, provided an irrevocable authority to authorise and direct his solicitors to hold $15,000 and transfer all or part of that sum to the Court or the applicant in accordance with any order or direction in these proceedings. The authority was intended to provide a security against further contraventions of the undertaking. [116] On 13 February 2020, I reserved judgment in respect of the allegations of contravention of s 50-5 of the TAS Act and the First and Second Contempts. After I had reserved judgment, three further proceedings for contempt were brought. [117] On 23 March 2020, the applicant filed an interlocutory application and Statement of Charge alleging that Mr Hacker and OSGS committed contempts of court on eight occasions by breaching the undertaking of 1 March 2019 as follows: (a) on 3 September 2019, preparing a 2019 ITR for Braulio Omanbac Bahan for $352; (b) on 3 September 2019, preparing a 2019 ITR for Carol Bahan for $352; (c) on 27 September 2019, preparing a 2019 ITR for Darrien Murphy for $132; (d) on 29 November 2019, preparing a 2019 ITR for Sarah Debesay Tagg for $132; (e) on 2 December 2019, preparing a 2019 ITR for Jared Michael Tagg for $132; (f) on 6 January 2020, preparing a 2019 ITR for Emily Louise Martin for $132; (g) on 26 February 2020, preparing a 2019 ITR for Dawni Jose for $132; (h) on 26 February 2020, preparing a 2019 ITR for Nisha George for $132. [118] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved. On 6 April 2020, Mr Hacker and OSGS admitted the contempts. I find those contempts to have been proven (the Third Contempts). [119] On 30 June 2020, the applicant filed a further interlocutory application and Statement of Charge alleging that Mr Hacker and OSGS committed contempts of court on three occasions by breaching the undertaking of 1 March 2019 as follows: (a) on 8 April 2020, preparing a 2019 ITR for Rose Jaguru for $132; (b) on 17 April 2020, preparing a 2019 ITR for Lissy Palliyan Anthony for $130; (c) on 22 April 2020, preparing a 2019 ITR for Ramandeep Singh Deol for $132. [120] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved. On 10 July 2020, Mr Hacker and OSGS admitted the contempts. I find those contempts to have been proven (the Fourth Contempts). [121] On 10 July 2020, I also ordered, by consent, that: Within 3 business days of the date of this order, and subject to the applicant providing the notices to the first respondent within 2 business days of the date of the order, the first respondent publishes or causes to be published notices in the form and terms of Annexure A to this order, by ensuring that: (a) a notice in A2 size is affixed in a prominent place to the front door of the office at Suite 6, Level 17, 141 Queen Street, Brisbane QLD 4000; and (b) a notice in A2 size is affixed in a prominent place to, or otherwise displayed in a prominent place on, the reception counter at the office at Suite 6, Level 17, 141 Queen Street, Brisbane. [122] On 19 August 2020, the applicant filed yet another interlocutory application and Statement of Charge. It was alleged that Mr Hacker failed to comply with the order made on 10 July 2020. It was also alleged that Mr Hacker and OSGS committed contempts of court on nine occasions by breaching the undertaking of 1 March 2019 as follows: (a) on 20 May 2019, preparing a 2018 ITR for Mohammad Rahimi for $132; (b) on 8 August 2019, preparing a 2019 ITR for Irish Dela Pena for $132; (c) on 13 July 2020, preparing a 2020 ITR for Bahaa Okbi for $187; (d) on 13 July 2020, preparing a 2020 ITR for Hamideh Gharekhanian for $132; (e) on 14 July 2020, preparing a 2019 ITR for Mohammad Rahimi for $220; (f) on 15 July 2020, preparing a 2019 ITR for Irish Dela Pena for $132; (g) on 17 July 2020, preparing a 2020 ITR for Catherine James for $132; (h) on 17 July 2020, preparing a 2020 ITR for Jeffrey Rice for $132; (i) on 20 July 2020 preparing a 2020 ITR for Stephen Magot for $132. [123] Each breach was alleged to be a separate contempt. The application was accompanied by affidavits of the taxpayers involved. On 1 September 2020, Mr Hacker and OSGS admitted the contempts. I find those contempts to have been proven (the Fifth Contempts). 5 Rangiah J did not impose a sentence in respect to the first contempt on the basis of double punishment, as that conduct was also the subject of the TAS Act contraventions. 6 A single fine of $15,000 was imposed for all other contempts committed by One Stop Global Staffing Pty Ltd (OSGS): at [148]. 7 In respect of the second to fifth contempts committed by Mr Hacker, Rangiah J concluded that the only appropriate penalties were terms of imprisonment, although those terms were lower than would otherwise have been imposed to take into account the fine of $15,000 imposed on OSGS: at [149]. 8 In respect of the second contempts, Mr Hacker was sentenced to 14 days' imprisonment for each contempt, to be served concurrently: at [150]. 9 In respect of the third contempts, Mr Hacker was sentenced to one months' imprisonment for each contempt, to be served concurrently with each other, but cumulatively upon the sentences for the second contempts: at [151]. 10 In respect of the fourth contempts, Mr Hacker was sentenced to two months' imprisonment for each contempt, to be served concurrently with each other, but cumulatively upon the sentences for the third contempts: at [152]. 11 In respect of the fifth contempts, Mr Hacker was sentenced to four months' imprisonment for each contempt, to be served concurrently with each other, but cumulatively upon the sentences for the fourth contempts. The sentences for the fifth contempts were suspended upon Mr Hacker serving one month imprisonment, but the remainder of the sentence was to be served in the event that he breached the injunction within a period of three years from his release from prison. 12 The effect of the orders was that Mr Hacker was sentenced to seven and a half months imprisonment, to serve four and a half months in prison, with the remaining three months suspended on the condition that he not contravene, within three years, the permanent injunction restraining him from providing tax agent services under the TAS Act. 13 Rangiah J ordered that the warrant issued for Mr Hacker's imprisonment not be executed for a period of 35 days from the date of the orders. 14 On 23 December 2021, the applicant notified the respondents' solicitors requesting that they inform the respondents that the Australian Taxation Office (ATO) will monitor any lodgements by Mr Hacker, and if there is a recurrence of the conduct they will file a further contempt application. The respondents' solicitor informed the applicant that they had raised the issue with Mr Hacker. 15 On 28 January 2021, before the warrant was executed, Mr Hacker and OSGS, the second respondent, committed the contempts the subject of this application.

Evidence relied on in this application 16 The applicant read the affidavits of Ms Jasvir Kaur affirmed on 9 April 2021, Ms Gina Bradley affirmed on 12 April 2021, Mr Kurt Bragg affirmed on 16 April 2021 and his further affidavit affirmed on 14 June 2021. 17 The respondents read the affidavits of Dr Joseph Hui sworn on 7 July 2021 and Mr Kent Scott Hacker sworn on 8 July 2021. 18 Each party provided written submissions in advance of the oral hearing.

Legal principles 19 The rationale of sentencing for contempt is the protection of the effective administration of justice. 20 As the Full Court explained in Kazal v Thunder Studios Inc (California) [2017] FCAFC 111; (2017) 256 FCR 90 at [97] (Besanko, Wigney and Bromwich JJ) (Kazal): The plurality in [Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375] observed at [41], endorsing the statement of principle by Hayne J in Re Colina; Ex parte Torney (1999) 200 CLR 386 at [12], that the 'cardinal feature of the power to punish for contempt' was as an exercise of judicial power to 'protect the due administration of justice'. Viewed in that way, contempt proceedings are essentially protective in nature as to the judicial function and the role of the courts, even if they also serve to vindicate private interests and rights. Contempt proceedings are therefore to be viewed as essential in facilitating courts being able to function properly. That includes being, and being seen to be, effectual in adjudicating upon and resolving disputes, and in particular making orders that will ordinarily be obeyed. This means that individual contempt cases have an importance transcending the instant case by supporting and enhancing the integrity of judicial proceedings, both in respect of orders made, and more generally. That view of contempt proceedings can be seen to permeate longstanding sentencing authority in this area. 21 Considerations relevant to determining an appropriate penalty for contempt of court have been identified, in a non-exhaustive manner, to include: the contemnor's personal circumstances; the nature and circumstances of the contempt; the effect of the contempt on the administration of justice; the contemnor's culpability; the need to deter the contemnor and others from repeating contempt; the absence or presence of a prior conviction for contempt; the contemnor's financial means; and whether the contemnor has exhibited general contrition and made a full and ample apology: Director of Fair Work Building Industry Inspectorate v Cartledge (No 2) [2015] FCA 851 at [6]; Louis Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83; (2006) 149 FCR 494 at [25]; Kazal at [101]-[103]; Matthews v ASIC [2009] NSWCA 155 at [129]. 22 Recognising there are number of authorities in this Court which refer to the relevant matters for consideration, the position was summarised in Kazal at [103]: … The focus remains on the core themes of the objective seriousness of the conduct and, in particular, its effect on the administration of justice, subjective factors such as the contemnor's culpability, antecedents and attitude, including in particular any apology or other palpable sign of contrition, the capacity to pay a fine, and imprisonment being a last resort. Deterrence remains a dominant theme, both specific and general. Even denunciation and punishment can be seen as bolstering deterrence. That is especially so when the conduct entails contemplation and the opportunity to reflect and desist. 23 The Court has a wide range of penalties available to it: Sydney Medical Service Co-operative Limited v Lakemba Medical Services Pty Ltd (No 2) [2016] FCA 1188 at [14]; Australian Competition and Consumer Commission v INFO4PC.com Pty Ltd [2002] FCA 949; (2002) 121 FCR 24 (INFO4PC.com Pty Ltd) at [138]. The Court has a discretion to impose a prison sentence, to fine, to make costs orders or to punish by any combination of such alternatives: Deputy Commissioner of Taxation v Hickey [1999] FCA 259; (1999) 42 ATR 229 at 242. The Court has the power to suspend on condition any sentence of imprisonment it might impose in respect of a contempt: INFO4PC.com Pty Ltd at [138]. A sentence of imprisonment may be partially suspended upon conditions: see, for example, Australian Competition and Consumer Commission v Halkalia Pty Ltd (No 3) [2017] FCA 522 (Halkalia Pty Ltd) at [174]. A sentences of imprisonment for contempt is a penalty of last resort: Vaysman v Deckers Outdoor Corporation Inc [2011] FCAFC 17; (2011) 276 ALR 596 (Vaysman) at [54].

Preliminary observations 24 The applicant submitted that for this sixth contempt application the Court should order the following punishment: (a) in respect of OSGS, impose a fine of $5,000; and (b) in respect of Mr Hacker: (i) by the terms of the orders of 18 December 2020 require Mr Hacker to serve the balance of the previous sentences; (ii) impose a sentence of an additional substantial period of imprisonment, to be served cumulatively upon the balance of the sentence previously imposed for the second, third, fourth and fifth contempt applications; and (iii) impose a fine of $5,000 (to demonstrate that any breaches will not be profitable). 25 The applicant initially advanced not just that imprisonment is the appropriate sentence, but a specific figure as to the length of the appropriate term of imprisonment which ought to be imposed. At the hearing the applicant properly withdrew that submission, based on Barbaro v The Queen [2014] HCA 2; (2014) 253 CLR 58 (Barbaro). 26 It is appropriate to make a submission that a sentence of imprisonment, indeed a lengthy one is, in the circumstances of this case, the appropriate sentence. However, given the nature of this proceeding, and the applicant's role being analogous to that of a prosecutor in criminal proceedings, it is rather inappropriate to go further. In Kazal at [159] it was observed: The respondents maintained the submission made below that the circumstances warranted a custodial sentence, but did not then, and did not on appeal, seek to make submissions as to the appropriate duration of the custodial term imposed. That approach was appropriate. It accorded with the respondents' role being relevantly analogous to a prosecutor in criminal proceedings, at least at the point of sentence, while noting the substantial differences between an opposing party in bringing contempt proceedings as compared to the executive arm of government doing so: Boral at 389 [44]. The quasi-prosecutorial role of the respondents imposes fundamental limits on going further on penalty than assisting a sentencing court to avoid error. That may include submissions as to the type of disposition that is appropriate, such as to whether a custodial sentence was called for and perhaps whether it should include actual incarceration. But it entails refraining from advocating for any particular duration or range of sentence to be imposed: Barbaro v The Queen [2014] HCA 2; 253 CLR 58 at 71-2 [29]- [33]. And see: Ferguson v Dallow (No 5) [2021] FCA 698 (Ferguson v Dallow) at [21]. 27 The applicant ought to provide assistance to the Court by way of submissions as to the relevant considerations and what are said to be comparative cases, which assist the Court in determining the appropriate penalty in all the circumstances. The applicant did that. It made submissions that in the circumstances of the case, a substantial period ought to be imposed, cumulatively on the sentence from Rangiah J which is enlivened by the admission of these contempts. 28 The applicant submitted that given that the previous punishments imposed on 18 December 2020 did not have the desired effect, a longer period of imprisonment is required. It submitted that there are no mitigating circumstances in favour of Mr Hacker or OSGS. 29 Mr Hacker accepted that he must serve the period of imprisonment imposed by Rangiah J, and that the sentence for these contempts would be served cumulatively on that period. In that context the respondents directed their submissions to advancing what they contended were mitigating factors, which affect the length of the period of imprisonment to be imposed, and the fact and amount of any fine or other penalty imposed.

Consideration 30 Before addressing those matters relied on by the respondents, it is necessary to consider the contempts admitted.

Circumstances of the contempts 31 The contempts committed by the respondents the subject of this application are factually indistinguishable from the gravamen of the first five groups of contempts (apart from one charge). Those five groups comprise 27 previous contempts. On 28 January 2021, Mr Hacker and OSGS provided a tax service for a fee. They prepared the returns for Ms Kaur and Mr Singh, and charged $308 for their services. This conduct was in breach of the recently made orders of Rangiah J. 32 When sentenced in Hacker (No 3), Rangiah J described the respondents' conduct at [139]-[140] as follows: [139] In my opinion, the conduct of Mr Hacker and OSGS demonstrates blatant indifference to the undertakings they offered to, and which were accepted by, the Court. Each contempt was committed in wilful and flagrant disregard of their undertaking. The breaches were contumacious, and are criminal contempts: cf Witham v Holloway (1995) 183 CLR 525 at 538-539. Apart from the assertion of frontotemporal lobe damage which I have rejected, no explanation or excuse has been offered. Each contempt can only be described as very serious. [140] The contempts generally followed a pattern. Mr Hacker and OSGS would be caught out by the applicant providing unregistered tax agent services for fee or reward in contravention of the undertaking; the applicant would commence proceedings for contempt; Mr Hacker and/or OSGS would admit the contempts; then they would promptly commit further breaches of the undertaking. The admissions acknowledged the contempts, but the contempts continued. In view of this pattern of conduct, I regard each contempt as progressively more serious. 33 These contempts were committed in the context of those findings having already been made. The wilful, deliberate and blatant disregard for the Court's orders means this conduct committed in the face of those findings, can only be characterised as contempts of the most serious kind. The breaches were contumacious, and are criminal contempts: cf Witham v Holloway [1995] HCA 3; (1995) 183 CLR 525 at 538-539. 34 The respondents' submission that the factual circumstances of the contempt charges relate only to one appointment involving a married couple, that the fee charged was relatively modest in the amount of $308, that there is no evidence that the respondents advertised or otherwise promoted tax agent services in the period following the making of the orders, and that the evidence indicates that no penalty was imposed on Ms Kaur or Mr Singh in respect of the lodgement of their 2020 tax return, attempts to minimise the seriousness of the conduct. 35 I note that these contempts were committed in such a way that it would not have been apparent to the ATO on the face of the tax returns that the respondents had been involved in the process of preparing or filing the tax returns. I note also that in each instance the tax return filed was audited, which resulted in reassessments. That no penalty was applied was fortuitous. The respondents appear to have committed the offences in furtherance of their business. 36 Although the contempts may have the features referred to by the respondents, the submission ignores that this conduct occurred in the face of a permanent injunction imposed by the Court. This is the significant feature of the offending conduct. That the conduct itself, in isolation, could have been committed in a more serious way, or could have more serious features, does not detract from the seriousness of these contempts. Although the underlying conduct may be relevant, the respondents are to be sentenced for contempts. They are to be sentenced for the deliberate breach of court orders. 37 The Court had sentenced Mr Hacker for his previous contempts, and the respondents could have been under no misapprehension as to the seriousness of breaching a court order in this manner. The respondents chose to commit the contempts nonetheless. 38 I do not accept the respondents' submission that the two contempts were part of the same transaction, with the one fee representing it as one transaction. It is not the same criminality, although it was part of a course of conduct. The respondents acted as a tax agent for two separate people, and prepared two separate tax returns. That the recipients of the services were husband and wife, or that a single fee was paid, does not alter that. The single fee no doubt represented the two transactions. The submission that there is no evidence that the fees constituted separate components for the work undertaken for Mr Singh on the one hand, and Ms Kaur on the other, is artificial and unrealistic. That said, that they occurred in the one session is plainly relevant to the sentencing discretion.

Deterrence 39 In his Honour's reasons of 18 December 2020, Rangiah J found at [141]: Substantial weight must be given to the objects of general and specific deterrence. Those who provide undertakings to the Court should be left in no doubt that non-compliance will have appropriate consequences. In this case, specific deterrence is particularly important given the number and pattern of contempts committed by Mr Hacker and OSGS. 40 I echo that sentiment. The issue of deterrence, particularly specific deterrence, given the circumstances, is all the more heightened in sentencing for these contempts. 41 Deterrence looms large in relation to both the aspect of the contempts dealing with defiance of the Court's orders and the aspect dealing with interference with the administration of justice. The conduct was deliberate, in a context where Mr Hacker had "ample opportunity for him to evaluate and to desist": see Kazal at [168]. Given the circumstances of these contempts, and the lack of remorse and contrition, specific deterrence is a significant factor.

Early admissions 42 I accept that the respondents indicated an intention to admit the contempts at the earliest reasonable opportunity. However, it was not suggested that the respondents are remorseful or contrite. Mr Hacker's affidavit does no more than acknowledge he committed the contempts. There was no apology to the Court. Nor do I accept the early admissions reflect a willingness to facilitate the course of justice. Rather it is a recognition of the inevitable. Nonetheless, I accept the admissions have a utilitarian effect, as it relieved the applicants from having to prove liability, with all that entails: Halkalia Pty Ltd at [166]. I accept, as the respondents submitted, there are other relevant aspects apart from the saving of court time, such as the fact the witnesses did not have to give evidence, which may be encapsulated within the concept of the utilitarian effect of the admission. That said, any hearing would not have been lengthy, indeed it would have been a short hearing and with few witnesses.

Personal Circumstances 43 When sentenced in December 2020 for the previous contempts, Rangiah J found at [142]-[143]: [142] Mr Hacker does not have specific health problems that would make a sentence of imprisonment particularly onerous. However, I accept that any man of his age is likely to be in a deteriorating physical condition, and that imprisonment will be more onerous for him than it would for a younger man. [143] Mr Hacker is the sole provider for his household. His wife of 38 years suffers from arthritis and does not work. Any custodial sentence will impact, not only upon Mr Hacker's own welfare, but that of his wife. 44 Mr Hacker is 72 years of age. As Rangiah J observed, it may be accepted that imprisonment may be more onerous on him because of his age. 45 In his affidavit, Mr Hacker says he has some heart related health concerns, that he is on blood-thinning medication and he has a history of cardiac issues in his family. However, the evidence presented in support is scant. The tests appear to have been ordered because of his age and family history. Although it may be accepted that Mr Hacker has undergone heart related medical tests in June 2021, and that he is on blood-thinning medication, no medical report was provided as to any condition, or the effect thereof. 46 In R v Smith (1987) 44 SASR 587 King CJ observed at 589: The state of health of an offender is always relevant to the consideration of the appropriate sentence for the offender. The Courts, however, must be cautious as to the influence which they allow this factor to have upon the sentencing process. Ill health cannot be allowed to become a licence to commit a crime, nor can offenders generally expect to escape punishment because of the condition of their health. It is the responsibility of the Correctional Services authorities to provide appropriate care and treatment for sick prisoners. Generally speaking ill health will be a factor tending to mitigate punishment only when it appears that imprisonment will be a greater burden on the offender by reason of his state of health or when there is a serious risk of imprisonment having a gravely adverse effect on the offender's health. R v Smith was cited with approval in Vaysman at [126]-[127]. See also Halkalia Pty Ltd at [154]; Lusty v CRA20 [2020] FCA 1737 at [49]; Thunder Studios Inc (California) v Kazal (No 2) [2017] FCA 202 at [22]; Matson v Attorney-General (Cth) [2021] FCA 161 at [196]. 47 In his Honour's reasons for judgment, Rangiah J refers to the principles guiding the relevance of ill health to the sentencing process. It is in that context in which Mr Hacker did not adduce any medical evidence detailing any heart condition, or any effect of any heart condition or any impact a sentence of imprisonment may have. In those circumstances, although Mr Hacker's health is a relevant factor, the weight to be attached is necessarily limited. 48 Mr Hacker is the sole provider of his household. His wife of 38 years suffers from arthritis and does not work. In the second week of Mr Hacker's incarceration (pursuant to the orders of 18 December 2020), his wife suffered a stroke and her health has deteriorated as a result. Medical evidence was provided in respect to her condition. There are unsatisfactory elements of the evidence relied on. For example, the author of the report is unaware of what assistance has been sought. Mr Hacker in his affidavit says what he does to assist his wife. There is no evidence as to what steps have been put in place to assist his wife, should he be imprisoned. 49 I accept that Mr Hacker is concerned for his wife's welfare while he is in custody and says that it weighs heavily on him. 50 However, in R v Wirth (1976) 14 SASR 291 (Wirth) at 296, Wells J observed: Hardship to spouse, family, and friends, is the tragic, but inevitable, consequence of almost every conviction and penalty recorded in a Criminal Court … It seems to me that courts would often do less than their clear duty - especially where the element of retribution, deterrence, or protection of society is the predominant consideration - if they allowed themselves to be much influenced by the hardship that prison sentences, which from all other points of view were justified, would be likely to cause to those near and dear to prisoners. But it has been often remarked that the strength of our law lies in the willingness of judges, when applying a principle, not to carry it past the point where a sense of mercy or of affronted common sense imperatively demands that they should draw back … hardship likely to be caused by a sentence of imprisonment under consideration ought to be taken into account where the circumstances are highly exceptional, where it would be, in effect, inhuman to refuse to do so … 51 This passage has repeatedly been cited with approval. See, for example, R v Edwards (1996) 90 A Crim R 510 at 516-517, Gleeson CJ (James and Ireland JJ agreeing) and, in particular, Ferguson v Dallow at [45]-[47] where this Court applied those principles in respect to sentencing for contempt offences. The exposition in Wirth reflects the common law position in respect to the relevance of hardship to a third party in the sentencing process. Unless such circumstances are established, hardship to third parties is not a consideration. 52 The respondent does not contend that he has established exceptional circumstances. Nor could he, on the evidence relied on.

Proportionality 53 The respondents submitted that the current contraventions must be assessed on their own terms, and any penalty imposed must be within the appropriate range and a proportionate response to the circumstances of the present contempt charges. In that context, the respondents accepted that the prior contempts were relevant but submitted that it should not overshadow the conduct underpinning the present contempts. 54 Although issues of proportionality are relevant, it is important to recall, as explained above, that what the respondents are being sentenced for are the contempts; the breaches of court orders which had been recently imposed. The context in which these contempts were committed is relevant, inter alia, to characterising their seriousness, and to assessing the weight to be attached to other relevant considerations, for example, deterrence. Given the penalty is to be imposed for more than one offence, and that it is to be cumulative on another sentence already imposed, the principles of totality are also a relevant consideration.

Other submissions in mitigation 55 In so far as the respondent submitted that he had paid the costs order imposed by Rangiah J as somehow being a matter in mitigation, that submission is irrelevant. Complying with a court order is not a matter in mitigation for contempts committed by deliberately breaching other orders.

Comparable cases 56 The respondent submitted that an important consideration in sentencing is consistency with sentences imposed in comparable cases, referring to two cases in particular, which he submitted was said to provide the outer limit of what penalty is within range. Those cases were Halkalia Pty Ltd and Australian Securities Investments Commission v Matthews [2009] NSWSC 285. The respondent submitted that those cases "represent an upper ceiling of more serious examples of contempt conduct and the sentences imposed there". The applicant responded pointing out relevant features of the decisions. The applicant in earlier submissions before Rangiah J, adopted for these proceedings, also referred to some cases in respect to where a penalty of imprisonment has been imposed. 57 Although comparable cases are of some assistance, as observed in Kazal at [118]: …sentences for contempt are much less prevalent than sentences for federal offences. Even less prevalent are the cases when a term of imprisonment is imposed. It is therefore difficult to discern any substantial pattern in the quantum of contempt sentencing to provide a meaningful yardstick by which measure the present sentences. Sentences imposed for unrelated and dissimilar offending cannot fill that gap. 58 Previous penalties are historical statements of what has happened in the past, and provide guidance but do not fix the boundaries within which future judges must, or even ought, to sentence: Hili v The Queen [2010] HCA 45; (2010) 242 CLR 520 (Hili) at [48]-[49]. Moreover, in so far as any comparison with other cases is undertaken, what is sought is not numerical consistency, but the consistent application of principle: Hili at [48]-[49], and see R v Pham [2015] HCA 39; (2015) 256 CLR 550 at [28]-[29]; McDonald v Australian Building and Construction Commissioner [2011] FCAFC 29; (2011) 202 IR 467 at [23]-[25]. 59 I have considered the comparable cases.

The balance of the sentence imposed by Rangiah J 60 As accepted by Mr Hacker, pursuant to order 18 made by Rangiah J on 18 December 2020, his admission to these contempts has the consequence that he is to serve the balance of the sentence imposed on him that day. On his admission of these contempts, the outstanding three months imprisonment is enlivened.

Penalty 61 Taking into account all relevant considerations, I impose the following penalties. 62 In respect to OSGS, I impose a fine of $5000. 63 In respect to Mr Hacker I impose sentences of four months' imprisonment on each of the contempts to be served concurrently, but cumulatively on the balance of the sentence imposed by Rangiah J. After Mr Hacker has served two months of the four months of imprisonment he will be released from custody and the balance will be suspended from execution subject to the condition that he will be imprisoned for at least the balance in the event he contravenes orders 9 and 10 made by Rangiah J on 18 December 2020, for a period of five years from the date of this order. 64 The warrant which will be issued for your committal to prison permits the first respondent to surrender in accordance with its terms, by 4 pm on 11 August 2021.

Costs 65 The applicant applies for costs of the charge of contempt on an indemnity basis. 66 In Hacker (No 3), faced with a similar application, Rangiah J summarised the relevant principles at [166]-[172], and concluded that indemnity costs ought not to be awarded, in respect to the contempt aspect of the proceedings. 67 It is sufficient to refer to the discussion in Kazal at [192]-[195]: [192] A common consequence of success by a person bringing contempt proceedings is an indemnity costs order. Katzmann J in Kazal v Thunder Studios Inc (California) [2017] FCA 238 at [90] helpfully referred to Connect TV Pty Ltd v All Rounder Investments Pty Ltd (No 4) [2013] FCA 393 at [43] per Tracey J, and Infa-Secure Pty Ltd v Crocker (No 2) [2016] FCA 202; 338 ALR 586 at 600 [44] per Reeves J. Her Honour observed that in Victoria and in Queensland it seems to be the "common or usual practice" to award indemnity costs in contempt cases, referring to Deputy Commissioner of Taxation v Gashi (No 3) [2011] VSC 448; 85 ATR 262 at 270-1 [20] per Dixon J and the abovementioned case of Infa-Secure. [193] Katzmann J also pointed out that in National Australia Bank Ltd v Juric (No 2) [2001] VSC 398 at [70] Gillard J explained: [I]t has been recognised for many, many years in contempt cases, that a litigant who must come to court in order to enforce an order which has been breached by contempt, or to have a person dealt with [for] contempt, should not be out of pocket. [194] Katzmann J pointed out that Moore J took a different view in Construction, Forestry, Mining and Energy Union v BHP Steel (AIS) Pty Ltd [2003] FCAFC 13; 196 ALR 350 at [6], based on a number of cases in this Court. Moore J observed (emphasis added by Katzmann J): There has been limited judicial consideration of what principles (if any) govern the ordering of indemnity costs in contempt cases. It is at least clear, following McIntyre v Perkes (1988) 15 NSWLR 417 (see Samuels JA at 424-8 and Rodgers AJA at 434-6) (which involved a comprehensive review of the authorities including some suggesting the existence of a rule), that there is no general principle or rule of law in contempt cases that a successful applicant or successful prosecutor is routinely awarded costs on an indemnity basis: see also to the same effect in this court, Adlam v Noack [1999] FCA 1606; BC9907694 per Mansfield J at [29], LED Builders Pty Ltd v Eagle Homes Pty Ltd [1999] FCA 1213; BC9905513 per Lindgren J at [64]-[65]. Indeed as is the conventional practice in most cases, costs are routinely awarded in contempt cases on a party and party basis. In McIntyre v Perkes (1988) 15 NSWLR 417 Samuels JA (at 424 and 428) relevantly said: The respondent, however, submitted that the judge had erred in failing to apply "the normal rule which in cases where an intentional contempt of Court is proved on an application by a private prosecutor is for costs to be ordered on a basis calculated substantially to indemnify the prosecutor". … In my opinion this survey, no doubt not exhaustive but reasonably extensive, of the textbooks and cases does not reveal any rule of law or any established practice binding upon the judge in this case and requiring him to make one of the orders for which the respondent contended. [195] There is no doubt that this Court has a discretion to award indemnity costs to a party bringing contempt proceedings. In many contempt cases there will be powerful discretionary considerations favouring the award of indemnity costs. If there is a variable practice in that regard, this is a case falling within the category for which an indemnity costs order would be entirely appropriate. No express reason was advanced in this case for departing from the at least common approach of awarding costs on an indemnity basis. That may be because the appellant is an undischarged bankrupt, rendering any enforcement of a costs order nugatory. 68 Rangiah J summarised the authorities as reflecting that: (1) while it is common for an order to be made that the contemnor pay costs on an indemnity basis, there is no general principle or rule of law in contempt cases to that effect; (2) it is relevant to take into account the burden of indemnity costs when considering the appropriate punishment for contempt; and (3) it is relevant to take into account the penalty imposed for contempt in determining the appropriate costs order. 69 In my view there is no reason why, in the circumstances of this case, the usual considerations which generally result in an indemnity cost order being made in contempt proceedings, would not apply. The applicant was obliged to bring these proceedings as a result of the respondents' deliberate conduct breaching court orders, against the background of previous contempts having been committed. Costs orders are not punitive but compensatory. Costs are to be paid on an indemnity basis to be agreed or taxed. I certify that the preceding sixty-nine (69) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Abraham.

Tax Agent Services Act 2009(Cth)ss 70-5, 90-5

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