Tax Practitioners Board v Hacker (No 2) [2020] FCA 1048

Tax Practitioners Board v Hacker (No 2) [2020] FCA 1048

Mr Hacker provided tax agent services to Mr Lore, Mr Park and Mr Shaikh and caused each to pay a $132 fee to OSGS. Because OSGS was owned by Naleview and Mr Hacker owned half the shares in Naleview, each payment increased the value of OSGS and inferentially the value of Naleview shares, giving Mr Hacker a financial reward. The services were tax agent services which Mr Hacker knew or ought to have known he was providing. The undertaking had to be read in the context of s 50–5(1), but the conduct contravened that provision and therefore breached the undertaking. The Court was satisfied beyond reasonable doubt that Mr Hacker committed each contempt alleged in paras 2(a)–(c) of the Amended...

Jurisdiction
Australia
Judgment Date
27 July 2020
Procedural Posture
Contempt of Court Application Arising From Alleged Breach of Undertaking Not to Provide Tax Agent Services for Fee or Reward / Reasons on First and Second Contempt Applications; Directions Made for Penalty Hearing
Outcome
The allegations in the First Contempt Application against OSGS and Mr Hacker were found proven. The allegations in the Second Contempt Application against Mr Hacker and OSGS were also found proven by admission. Directions were made for a hearing on penalties for contempt.
Legal Topics
['breach of Undertaking to the Court' 'unregistered Tax Agent Services' 'tax Agent Services Act 2009 (cth)' 'proof Beyond Reasonable Doubt' 'fee or Reward for Tax Agent Services']
['contempt of Court' 'taxation' 'regulatory and Consumer Protection'] ['breach of Undertaking to the Court' 'unregistered Tax Agent Services' 'tax Agent Services Act 2009 (cth)' 'proof Beyond Reasonable Doubt' 'fee or Reward for Tax Agent Services']

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Procedural Posture

Contempt of Court Application Arising From Alleged Breach of Undertaking Not to Provide Tax Agent Services for Fee or Reward / Reasons on First and Second Contempt Applications; Directions Made for Penalty Hearing

Legal Issues

  1. 1 ['Whether Mr Hacker breached the undertaking given on 1 March 2019 by providing tax agent services within the meaning of s 90–5 of the Tax Agent Services Act 2009 (Cth) for fee or reward to Palwinder Lore, Jeremy Park and Mohammed Rizwan Shaikh.' 'Whether receipt of an indirect financial benefit through increased share value could amount to a fee or other reward for providing tax agent services.' 'Whether the applicant proved the alleged contempts beyond reasonable doubt.' 'Whether it was necessary to determine accessorial liability allegations against Mr Hacker if direct liability was established.']

Ratio Decidendi

Mr Hacker provided tax agent services to Mr Lore, Mr Park and Mr Shaikh and caused each to pay a $132 fee to OSGS. Because OSGS was owned by Naleview and Mr Hacker owned half the shares in Naleview, each payment increased the value of OSGS and inferentially the value of Naleview shares, giving Mr Hacker a financial reward. The services were tax agent services which Mr Hacker knew or ought to have known he was providing. The undertaking had to be read in the context of s 50–5(1), but the conduct contravened that provision and therefore breached the undertaking. The Court was satisfied beyond reasonable doubt that Mr Hacker committed each contempt alleged in paras 2(a)–(c) of the Amended...

Court Disposition

The allegations in the First Contempt Application against OSGS and Mr Hacker were found proven. The allegations in the Second Contempt Application against Mr Hacker and OSGS were also found proven by admission. Directions were made for a hearing on penalties for contempt.

Orders

  • ['By 4.30 pm on 21 August 2020, the applicant file and serve written submissions (not exceeding 15 pages) and any affidavits concerning penalties for contempt of court in respect of the interlocutory applications filed on 17 June 2019, 19 November 2019, 26 March 2020 and 30 June 2020.' 'By 4.30 pm on 11 September...