FEDERAL COURT OF AUSTRALIA

Kishore v Tax Practitioners Board [2016] FCA 1328

ORDERS

THE COURT ORDERS THAT:

1.    The appeal filed on 28 October 2016 from the decision of the Administrative Appeals Tribunal dated 30 September 2016 is dismissed as incompetent.

2.    The appellant pay the respondent’s costs, as agreed or taxed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

ROBERTSON J:

Introduction

1    These reasons consider and determine an objection by the respondent to the competency of an appeal purportedly brought under s 44 of the Administrative Appeals Tribunal Act 1975 (Cth). The jurisdiction of the Court under the Administrative Decisions (Judicial Review) Act 1977 (Cth) or under s 39B of the Judiciary Act 1903 (Cth) was not invoked.

2    On 30 September 2016, the Administrative Appeals Tribunal answered what it described as certain threshold questions and listed the matter for directions “at the earliest opportunity”.

3    The decision under review by it was described by the Tribunal at [3]-[4] as follows:

By letter dated 10 October 2014 the Tax Practitioners Board (the Board) notified Mr Kishore that it had decided to terminate his registration as a tax agent, with effect from 14 November 2014. The Board’s decision was based upon its becoming satisfied that Mr Kishore had breached s 30-10(1) of the Tax Agent Services Act 2009 (the Act) by not acting honestly and with integrity towards Charltons around the time he left that firm, in the circumstances described by Pembroke J in the Supreme Court of New South Wales in Charltons CJC Pty Ltd v Fitzgerald [2013] NSWSC 350.

Mr Kishore has applied to the Tribunal for review of the Board’s decision to terminate his registration as a tax agent.

4    On 28 October 2016, a notice of appeal under s 44 of the Administrative Appeals Tribunal Act was filed in this Court stating as follows, as amended by leave given in the course of the hearing:

The Applicant appeals from the decision of the Administrative Appeals Tribunal in the Taxation and Commercial Division, as contained in paragraphs 24 and/or 26 of the Administrative Appeals Tribunal’s judgment published 30 September 2016 (“the Judgment”).

The underlining indicates the amendment.

5    The Tribunal described, at [6], the background and the questions as follows:

It was agreed, after hearing preliminary oral submissions, that a convenient way of approaching the resolution of the dispute between the parties was for the Tribunal to address a series of ‘threshold questions’ formulated by the parties and accepted by the Tribunal as central to the dispute. Those questions are:

1.    What is the conduct relied upon by the Respondent to uphold the decision under review (the Conduct)?

1A.    Is the Conduct a tax agent service (as defined)?

2.    Whether the Conduct is capable of breaching section 30-10(1) of the Act?

3.    Whether the Respondent (or its authorised delegate) has failed to comply with subsection 60-125(3) of the Act, by failing to make a decision under subsection 60-125(2) within the prescribed timeframe?

4.    Whether the Respondent did properly delegate its power to commence an investigation so as to permit the instant investigation?

5.    Whether the decision to terminate the Applicant’s registration as a tax agent contravenes the Act because it was purportedly made by a committee of the Board acting without appropriate delegation?

6.    Whether the decision to terminate the Applicant’s registration as a tax agent contravenes the Act because it was purportedly made by the Board, the Board having delegated that power to a committee?

6    As referred to in the amended notice of appeal, [24] of the Tribunal’s reasons was as follows:

In noting that the Code ‘regulates your personal and professional conduct as a registered tax agent …’ (emphasis added), the Guide clarifies that the purpose or object underlying s 30-10(1) in particular, but more broadly the entire Code, is to uphold standards in all aspects of a person’s conduct as a registered tax agent, whether that conduct is personal conduct as a registered tax agent, or professional conduct as a registered tax agent. It follows that the reach of s 30-10(1) is not confined in the way contended for by Mr Kishore. If it were so confined – so as to require honesty and integrity only in relation to the provision of tax agent services – then one would expect the remaining subsections of s 30-10 to be similarly confined. That would have the effect of depriving subsection (2), at least, of any meaning at all.

(Original italics.)

7    As also referred to in the amended notice of appeal, [26] of the Tribunal’s reasons was as follows:

I conclude that the Conduct is capable of breaching s 30-10(1) of the Act. The answer to question 2 is ‘yes’.

The Act referred to was the Tax Agent Services Act 2009 (Cth). Section 30-10 of that Act set out the Code of Professional Conduct. As set out at [5] above, the “Conduct” was stated at [6] of the Tribunal’s reasons to be the conduct relied upon by the respondent to uphold the decision under review.

8    By notice filed on 4 November 2016 the respondent objected to the competency of the appeal on the ground that the decision referred to in [26] of the reasons of the Tribunal did not constitute the effective decision or determination of the application for review that was before the Tribunal and, therefore, no appeal lay from that decision under s 44 of the Administrative Appeals Tribunal Act. In light of the late amendment to the notice of appeal, I read the objection to competency as including the decision referred to in [24] of the reasons of the Tribunal.

9    Section 44 of the Administrative Appeals Tribunal Act provides relevantly as follows:

44    Appeals to Federal Court of Australia from decisions of the Tribunal

Appeal on question of law

(1)    A party to a proceeding before the Tribunal may appeal to the Federal Court of Australia, on a question of law, from any decision of the Tribunal in that proceeding.

…

Appeal about standing

(2)    Where a person has applied to the Tribunal for a review of a decision, or has applied to be made a party to a proceeding before the Tribunal for a review of a decision, and the Tribunal decides that the interests of the person are not affected by the decision, the person may appeal to the Federal Court of Australia from the decision of the Tribunal.

…

Jurisdiction

(3)    The Federal Court of Australia has jurisdiction to hear and determine appeals instituted in that Court in accordance with subsections (1) and (2) …

10    The basis of the notice of objection to competency was the decision of the Full Court in Director-General of Social Services v Chaney [1980] FCA 87; 47 FLR 80 (Chaney). The question in that case was whether an appeal lay under s 44 from a ruling by the President of the Tribunal that the Tribunal had jurisdiction to review the decision of the Director-General of Social Services that Mrs Chaney was not entitled to a widow’s pension. Deane J said at 103:

The conclusion which I have reached is that, subject to the qualifications mentioned below, an appeal under s 44(1) of the Act lies only from a decision of the Tribunal which constitutes the effective decision or determination of the application for review. Ordinarily, such a decision will be the final decision formulated in accordance with the provisions of s 43 of the Act. The qualifications referred to are an appeal pursuant to s 44(2) from a decision that the interests of a person are not affected by a particular decision and the case where the proceeding before the Tribunal can properly be divided into two or more separate parts in respect of which independent “decisions” may properly be given.

Justice Fisher agreed and added, at 107:

Under the Act the statutory process is complete when the Tribunal either decides to refuse to review the decision of the administrator or makes a decision in writing affirming, varying or setting aside the decision (s 43(1)). In my opinion, it is such a decision as aforementioned which the legislature has in mind in conferring on this Court by s 44(1) a right to hear an appeal on a question of law “from any decision of the Tribunal in that proceeding”.

It was ordered that the appeal to the Federal Court from the ruling of the President of the Tribunal be dismissed as incompetent.

11    Both parties were content to have the issue of the competence of the appeal argued at the first case management hearing. Short outlines of submissions were filed.

The submissions of the parties

12    The appellant submitted that the Tribunal construed the Tax Agent Services Act and signified its decision as to the construction and reach of s 30-10(1) of that Act. Counsel for the appellant described it as the decision to construe s 30-10(1) and referred to it as the “construction decision”. The appellant submitted that the decision in Chaney was arguably distinguishable as, in the present case, the Tribunal’s decision was a decision that finally determined for the purposes of the proceedings before the Tribunal the construction and reach of the Tax Agent Services Act. The appellant submitted that [24] and [25] of the reasons of the Tribunal amounted to a determination of the substance of the threshold questions the Tribunal determined to dispose of which on their face amounted to the final decision. In [6] of its reasons, set out at [5] above, the Tribunal referred to the “resolution” of the dispute between the parties, which suggested that the Tribunal embarked on making a decision on a substantive basis. The appellant submitted that the Tribunal’s decision disposed of the “threshold question” and the proceedings had been properly divided into two or more separate parts in respect of which independent “decisions” may properly be given: referring to Chaney at 103.

13    The appellant referred to Australian Broadcasting Tribunal v Bond [1990] HCA 33; 170 CLR 321 (Bond) at [32] and following, and to Lucas v Commissioner of Taxation [2015] FCA 598; 66 AAR 381 (Lucas).

14    As to Bond, the appellant submitted that the questions posed in the appeal entailed a decision which was final or operative and determinative, at least in a practical sense, of the issue falling for consideration.

15    As to Lucas, the appellant submitted that it was distinguishable on the basis that that case involved a “preliminary” question as opposed to the decision in the present case being a “threshold” decision which had the effect of being a final decision. Also, the appellant submitted, in the present case the parties did confine the dispute to “ … a convenient way of approaching the resolution of the dispute between the parties … ”: see [6] of the reasons of the Tribunal, reproduced at [5] above.

16    The appellant also submitted that the appeal posed a question of law, being a contest as to the proper construction of the relevant provisions of the Tax Agents Services Act. This was not in issue before me.

17    Counsel for the appellant accepted that the Tribunal had yet to consider, at least, the question of penalty.

18    The respondent submitted that having answered ‘yes’ to the question of whether the Conduct was capable of breaching s 30-10(1) of the Tax Agent Services Act, the Tribunal had next to determine whether the Conduct did breach that section. Accordingly, the Tribunal proceeding from which this “appeal” purported to be brought remained ongoing. There had been no hearing by the Tribunal of the merits of the substantive application before it. The decision referred to did not constitute “the effective decision or determination of the application for review” that was before the Tribunal and, therefore, no appeal lay from that decision.

Consideration

19    In my opinion, the point of the decision in Chaney is to avoid judicial review by way of an appeal to this Court instanter and as of right from non-determinative steps, determinations or decisions of the Tribunal. This reflects the undesirability of fragmenting proceedings in the Tribunal by the making of applications to the Federal Court seeking to challenge intermediate directions, determinations or decisions of the Tribunal: see the judgment of the Full Court in Geographical Indications Committee v The Honourable Justice O’Connor [2000] FCA 1877; 64 ALD 325 at [26]-[28].

20    In the present case, it is plain that the Tribunal has not yet completed its review of the decision of the Tax Practitioners Board to terminate the appellant’s registration as a tax agent: see [17] and [18] above. The Tribunal has not affirmed, varied or set aside the decision under review: see s 43 of the Administrative Appeals Tribunal Act. Applying the decision of the Full Court in Chaney, an appeal under s 44 of the Administrative Appeals Tribunal Act is incompetent.

21    The decision in Chaney has been approved or applied by many Full Courts including: Geographical Indications Committee v The Honourable Justice O’Connor [2000] FCA 1877; 64 ALD 325; Australian Postal Corporation v Forgie [2003] FCAFC 223; 130 FCR 279; Australian Securities and Investments Commission v PTLZ [2008] FCAFC 164; 48 AAR 559; Irwin v Military Rehabilitation & Compensation Commission [2009] FCAFC 33; 174 FCR 574; Kowalski v Repatriation Commission [2009] FCAFC 107; 259 ALR 444; Rana v Repatriation Commission [2011] FCAFC 123; 196 FCR 137; Australian Postal Corporation v Sinnaiah [2013] FCAFC 98; 213 FCR 449; Commissioner of Taxation v Cancer and Bowel Research Association [2013] FCAFC 140; 305 ALR 534 and Luck v Chief Executive Officer of Centrelink (No 2) [2015] FCAFC 112; 67 AAR 399.

22    The decision in Chaney has been recently applied by a single judge of this Court in Lucas.

23    The decision in Bond, relied on by the appellant, concerned the Administrative Decisions (Judicial Review) Act and not the quite different context of s 44 of the Administrative Appeals Tribunal Act. In any event, in my opinion, Bond does not support the appellant’s contention that the Tribunal’s answer to a threshold question is such a decision.

24    The decision in Lucas, also referred to by the appellant, does not support the competence of his present appeal. In that case it was said, at [1]:

The applicants, Mr and Mrs Lucas, seek judicial review of answers given by the Administrative Appeals Tribunal on 19 December 2014 to preliminary questions. The answers were given in a proceeding commenced in the Tribunal by Mr and Mrs Lucas under Pt IVC (“the Pt IVC proceeding“) of the Taxation Administration Act 1953 (Cth) (“the Administration Act”). The application by Mr and Mrs Lucas to this Court for judicial review of the Tribunal’s answers to the preliminary questions is not brought as an appeal under s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (“the AAT Act”) because the Pt IVC proceedings are not yet concluded. The Tribunal’s preliminary answers can be the subject of challenge under s 44 of the AAT Act once the Pt IVC proceedings are concluded in the Tribunal, …

Further, in my opinion, the distinction sought to be drawn by the present appellant between answers to preliminary questions in that case and answers to threshold questions in this case is not one of substance but is one of nomenclature only.

25    As to the appellant’s submission that the decision in Chaney involved a preliminary ruling, the ruling was that the Tribunal had jurisdiction. Counsel for the respondent submitted that in Chaney the Tribunal decided that it had jurisdiction and this was held not to be within s 44 of the Administrative Appeals Tribunal Act, whereas here the separate question was less fundamental. This submission seems to me to be correct. Further, the principle which has been applied based on the decision in Chaney has not been so limited.

26    In Irwin v Military Rehabilitation & Compensation Commission, with the agreement of the parties the Tribunal had considered, as a preliminary question, whether it would be competent to assess compensation if it decided that the Commission should accept liability. The Tribunal decided that it would not. The Full Court held, at [8], that the determination of the matter before the Court would not dispose of the proceedings or any separate part of the proceedings but would merely be a determination of what jurisdiction the Tribunal had and how it must go about determining the matter before it. The Full Court said it did not think that the appeal under s 44 was competent.

27    In Commissioner of Taxation v Cancer and Bowel Research Association, the Tribunal was of the view that it could make no decision on the evidence. It did form a view about a question of law upon which its final decision upon the review of the objection decision depended and in consequence of its construction of the section considered that the application of the section to the trustee required further evidence before a final decision could be made upon the objection decision under review. The Tribunal chose not to determine the application for review by making a decision under s 43 of the Administrative Appeals Tribunal Act but, instead, chose to remit the objection decision to the Commissioner under s 42D of the Administrative Appeals Tribunal Act for further consideration. The Full Court said, at [10], that a decision by the Tribunal to reconvene at a later date to receive the further evidence itself would not have been an appellable decision (in the sense considered in Chaney). The Full Court said that the Tribunal’s decision to remit the further consideration of the trustee’s entitlement to endorsement was similarly not a decision in the sense explained in Chaney because no part of the proceeding before the Tribunal was decided or determined. The Commissioner’s appeal under s 44 was held to be incompetent and was dismissed.

28    As to the appellant’s submission that the Tribunal referred to “resolution” of the dispute, in my opinion the use of that word does not take the matter further. Also I would construe that word in context as referring to resolution in the future on the completion of the review.

29    As to the submission that the Tribunal’s decision disposed of the “threshold question” posed in the appeal, see [5] above, so much may be true but it does not answer the proposition that what the Tribunal has so far done does not constitute the effective decision or determination of the application for review. It does not follow from describing what the Tribunal has done as expressing a final view as to the meaning of s 30-10 that that “decision” is a decision within the meaning of s 44 of the Administrative Appeals Tribunal Act.

30    As to the appellant’s submission that what has happened so far is a division of the proceeding into two or more separate parts in respect of which independent “decisions” may properly be given, in my opinion, it is clear that the answer to preliminary or threshold questions does not meet that characterisation or description. The answers to the questions asked are steps along the way rather than discrete determinations: see Commissioner of Taxation v Cancer and Bowel Research Association at [8]-[9]. As in that case, the disposition by the Tribunal cannot be seen as deciding finally some aspect of a party’s entitlements and the Tribunal in this case did not purport to decide a separate part of the proceeding before it.

31    It follows that an appeal under s 44(1) of the Administrative Appeals Tribunal Act does not presently lie to this Court. Once the Tribunal has completed its review of the decision under review and affirmed, varied or set aside that decision then an appeal may be brought under s 44 on a question of law by a party to the proceeding before the Tribunal and that appeal may include such questions of law as remain material.

Conclusion and orders

32    For these reasons, I order that the appeal be dismissed as incompetent. The appellant should pay the respondent’s cost, as agreed or taxed.

Associate:

Dated:    10 November 2016