Tax Practitioners Board v Munro

[2012] FCA 1338

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Tax Practitioners Board
vMunro

Court:

Judge: Collier J

Subject References:
Taxation
application for imposition of pecuniary penalties and related declaratory and injunctive relief
alleged contraventions of Tax Agent Services Act 2009 (Cth)
provision of tax agent services where respondent not registered tax agent
proceedings commenced by Tax Practitioners Board
respondent admits alleged contraventions
agreement between parties on penalty, declarations and injunctions
relevant principles
agreement on appropriate orders relevant but not decisive
agreed penalty appropriate in light of respondent's conduct and need for general and specific deterrence
possible inability of respondent to comply with orders previously consented to

Legislative References:
Crimes Act 1914 (Cth) - s 4AA(1)
Federal Court of Australia Act 1976 (Cth) - s 21
Income Tax Assessment Act 1936 (Cth) - s 251L
Tax Agent Services Act 2009 (Cth) - s 2-5; s 50-5(1); s 50-35(1); s 50-35(2); s 60-15; s 70-5; s 90-1

Case References:
Ainsworth v Criminal Justice Commission - (1992) 175 CLR 564
Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) - [2010] FCA 977
Australian Communications and Media Authority v Clarity1 Pty Ltd (No 2) - (2006) 155 FCR 377
Australian Competition and Consumer Commission v Chen - (2003) 132 FCR 309
Australian Competition and Consumer Commission v Goldy Motors Pty Ltd - [2000] FCA 1885
Australian Competition and Consumer Commission v MSY Technology Pty Ltd - (2012) 201 FCR 378
Australian Competition and Consumer Commission v Pacific Dunlop Ltd - [2001] FCA 740
Forster v Jododex Australia Pty Limited - (1972) 127 CLR 421
Gardner v Dairy Industry Authority of NSW - (1977) 18 ALR 55
Markarian v The Queen - (2005) 228 CLR 357
Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd - [2004] FCAFC 72
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission - (1996) 71 FCR 285
Ponzio v B & P Caelli Constructions Pty Ltd - (2007) 158 FCR 543
Russian Commercial and Industrial Bank v British Bank for Foreign Trade Ltd - [1921] 2 AC 438
Tax Practitioners Board v Hogan - [2012] FCA 642
Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) - (1993) 41 FCR 89
White v Construction, Forestry, Mining and Energy Union - [2011] FCA 192

Hearing date: 7 November 2012
Judgment date: 28 November 2012

Brisbane

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THE COURT DECLARES THAT:

1. On 14 separate occasions detailed in Schedule A to this Order, between about July 2010 and about August 2011 and in relation to the persons respectively described in Schedule A to this Order in respect of a particular occasion, the respondent by providing to that person a service:

1.1

that involved the respondent doing one or more of the following:

1.1.1

giving advice to the person in relation to the person's income tax return;

1.1.2

completing details of the person's income tax return in preparation for lodgement;

1.1.3

lodging the person's income tax return with the Commissioner of Taxation;

1.2

for which the respondent received a monetary payment for providing the said service;

1.3

with knowledge of the matters referred to in subparagraphs 1.1 and 1.2 above;

1.4

while the respondent was not a registered tax agent pursuant to the Tax Agent Services Act 2009 (Cth) ("the Act");

1.5

which was not a service relating to a business activity statement; and

1.6

which was not provided as a legal service,

in each case:

1.7

by reason of the matters referred to in subparagraphs 1.1 and 1.2 above, provided a service that the person could reasonably be expected to rely upon to satisfy liabilities or obligations, or claim entitlements, that arise, or could arise, under a taxation law; and

1.8

by reason of the matters referred to in subparagraphs 1.1 to 1.7 above, supplied a tax agent service in contravention of s 50-5(1) of the Act.

THE COURT ORDERS THAT:

2. For a period of three years from the date of this Order, the respondent be restrained, unless then registered as a tax agent pursuant to the Act, from requesting or accepting, whether directly or indirectly howsoever, a fee, benefit or reward of any kind for providing to another person or entity, whether directly or indirectly howsoever, a service relating to one or more of:

2.1

advising another person or entity in relation to their entitlements, liabilities or obligations in relation to an Australian taxation law;

2.2

completing for another person or entity a return or statement in relation to an Australian taxation law; or

2.3

lodging for another person or entity a return or statement in relation to a taxation law with the Australian Taxation Office.

3. For a period of three years from the date of this Order, if she is requested to provide to another person or entity a service relating to one or more of:

3.1

advising another person or entity in relation to their entitlements, liabilities or obligations in relation to an Australian taxation law;

3.2

completing for another person or entity a return or statement in relation to an Australian taxation law; or

3.3

lodging for another person or entity a return or statement in relation to a taxation law with the Australian Taxation Office,

the respondent must, before providing or agreeing to provide the said service, and unless then registered as a tax agent pursuant to the Act, inform the person or entity of the matters referred to in paragraphs 1 to 8 in Form A in Schedule B to this Order and, if the person or entity still requests the service be performed by the respondent:

3.4

have the person or entity complete and sign Form A in Schedule B to this Order;

3.5

send to the Tax Practitioners Board within 14 days of providing the service to the person:

3.5.1

a copy of the signed Form A; and

3.5.2

a statutory declaration:

(a)

stating the details of the services provided to the person and whether the respondent requested or accepted a fee, benefit or reward of any kind, and if so, the nature of it; and

(b)

witnessed by a person so authorised pursuant to the Statutory Declarations Regulations 1993 (Cth) as in force at the date of this Order; and

3.6

retain copies of each signed Form A and statutory declaration for a period of three years from the date of their execution.

4. In respect of the 14 separate contraventions of the Act, the respondent pay one pecuniary penalty in the amount of $40,000.

5. The respondent pay the pecuniary penalty to the Commissioner of Taxation on behalf of the Commonwealth of Australia, such penalty to be paid as follows:

5.1

$5,000.00 on or before 28 November 2013;

5.2

$5,000.00 on or before 28 November 2014;

5.3

$5,000.00 on or before 28 November 2015;

5.4

$5,000.00 on or before 28 November 2016;

5.5

$5,000.00 on or before 28 November 2017; and

5.6

the balance on or before 28 November 2018.

6. The respondent have liberty to apply in respect of the extension of any of the times provided for payment of the pecuniary penalty by Order 5 herein.

7. The respondent pay the costs of the applicant on a party and party basis to be taxed if not agreed.

SCHEDULE A TO THE ORDER

SCHEDULE B TO THE ORDER

FORM A

I, [ print full name ] ................................,

having requested Isabella Munro to provide a service (i) to me / (ii) to the entity named ............................[ delete whichever inapplicable ]

relating to one or more of the following:

(a)

giving advice concerning entitlements, liabilities or obligations that arise or could arise under a taxation law;

(b)

completing a return or statement in relation to a taxation law; or

(c)

lodging a return or statement in relation to a taxation law with the Australian Taxation Office,

and having been informed that:

1.

she is not a registered tax agent;

2.

she may not have the educational qualifications to be a registered tax agent and could only finally ascertain whether she is eligible in terms of those qualifications to be registered if she were to apply to the Tax Practitioners Board for registration as a tax agent;

3.

she may not have the relevant experience as required by the Tax Agent Services Regulations 2009 to become a registered tax agent;

4.

she may not be a fit and proper person to be a registered agent so as to be able to provide a service relating to one or more of items (a), (b) or (c) above for a fee or other reward;

5.

a person or entity should seek assistance from a registered tax agent for matters that relate to such services or for such services;

6.

she does not wish to receive, and will not accept, any fee, benefit or reward of any kind for providing such a service;

7.

she is likely to be contravening the Tax Agent Services Act 2009 if she receives a fee, benefit or reward for providing such a service; and

8.

she is required by order of the Federal Court of Australia to inform me of these matters;

still request her to provide the service.

SIGNED....................... DATE..........

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