Judgment summary
This is a default judgment given by Hespe J in the Federal Court of Australia, Northern Territory Registry, against the second respondent, Apat na Seasons Pilipinas Corporation, in proceedings brought by the Tax Practitioners Board (the Board). Orders were made on 26 June 2026 with reasons published on 21 July 2026 [1].
The Board alleged that the second respondent contravened s 50-5(1) of the Tax Agent Services Act 2009 (Cth) (TAS Act) on 14 occasions by providing tax agent services for a fee while not registered as a tax agent [2]. The interlocutory application for default judgment was filed on 22 June 2026 [3].
The Court found the second respondent in continuing default under r 5.22 of the Federal Court Rules 2011 (Cth) and, applying r 5.23(2)(c), entered judgment against it for the 14 pleaded contraventions [61]-[62]. The Court also granted a permanent injunction under s 70-5(1) of the TAS Act restraining the second respondent from providing tax agent services for a fee while unregistered [64]-[65]. Declaratory relief was not pursued or granted, and pecuniary penalties and costs were deferred for further submissions [63], [66].
Background
The proceeding was commenced by originating application on 14 October 2022 [14]. On 21 February 2023, the Court joined the second respondent as a party and ordered substituted service by email to four nominated addresses [15].
The Board's solicitors made repeated attempts over several years to serve documents and notify the second respondent of hearings via these email addresses, with intermittent bounceback notifications from only one address [16]-[29], [43]-[45].
On 25 July 2023, the Court made an interim injunction restraining the first and second respondents from preparing and lodging income tax returns for a fee while unregistered: Tax Practitioners Board v Buckland (Interim Injunction) [2023] FCA 836 [24].
On 12 September 2023, the Court granted leave to proceed against the second respondent and ordered it to file a defence by 16 November 2023, which it did not do [25], [56]. The second respondent briefly engaged a lawyer, Mr Jeff Thompson, from 19 June 2025, who foreshadowed an interlocutory application challenging jurisdiction, but no such application was ever filed, and Mr Thompson filed a notice of ceasing to act on 2 November 2025 [30]-[40].
Around April 2026, the Board received a letter purportedly from the second respondent referring to the proceedings, describing intended services, and stating that it did not accept the Board's jurisdiction over it or its services [41].
Core dispute
The issue was whether the Court should enter default judgment against the second respondent under r 5.23(2)(c) of the Federal Court Rules 2011 (Cth) for 14 alleged contraventions of s 50-5(1) of the TAS Act, given its continuing failure to file a defence, attend hearings, or otherwise engage with the proceeding [46]-[57].
A related question was whether the Board was entitled to the relief claimed, namely declarations, pecuniary penalties, and a permanent injunction, and whether the Court was satisfied it had jurisdiction over the second respondent and that service had been validly effected [49], [53]-[54].
Court findings
The Court was satisfied it had jurisdiction, given a clear jurisdictional nexus because the individuals for whom the second respondent provided income tax return preparation and lodgement services were Australian residents physically located in Australia [53].
The Court was satisfied the second respondent had been served in accordance with the substituted service orders and was aware of the proceeding, but had failed to file a notice of address for service as required by r 4.05(2) and had not proceeded by a lawyer as required by r 4.01(2) after Mr Thompson ceased to act [54]. The second respondent was found to be in default under rr 5.22(a)-(c) for failing to comply with orders, failing to attend case management hearings on 12 May 2023, 14 June 2023 and 21 November 2023, and failing to file a defence by 16 November 2023 [54]-[56].
The Court held that, by its failure to file a defence, the second respondent was taken to have admitted the facts pleaded in the statement of claim, including that it provided tax agent services on 14 occasions for a fee while unregistered, and that it knew or ought reasonably to have known the services bore the characteristics of tax agent services [61]. The Court found the Board had established the second respondent's contraventions [61].
The Court declined to grant declaratory relief, finding no utility given the second respondent was located outside Australia, had no public profile in Australia, and had not recognised the Court's authority, and that a declaration would have no meaningful deterrent effect [63]. The Court was satisfied the second respondent had contravened a civil penalty provision and considered it appropriate, given the repetitive conduct and indications of intended future services to Australian residents, to make the interim injunction permanent [64].
Outcome
Judgment was entered against the second respondent under r 5.23(2) of the Federal Court Rules 2011 (Cth) for 14 contraventions of s 50-5(1) of the TAS Act [Order 1].
Service of specified documents on the second respondent, effected in accordance with the 21 February 2023 orders, was declared effective nunc pro tunc [Order 2].
Pursuant to s 70-5(1) of the TAS Act, the second respondent was permanently restrained from providing tax agent services for a fee or other reward while not a registered tax agent [Order 3].
The Board was ordered to file and serve written submissions on the quantum of pecuniary penalties and costs by 4.00 pm on 10 July 2026 [Order 4]. The second respondent was ordered to pay the Board's costs of the interlocutory application, to be taxed if not agreed [Order 5]. The issue of pecuniary penalties and costs was to be dealt with on the papers [66].
Major issues / areas of contention
- Whether default judgment should be entered against the second respondent under r 5.23(2)(c) of the Federal Court Rules 2011 (Cth) for 14 contraventions of s 50-5(1) of the TAS Act.
- Whether the Court had jurisdiction over the second respondent, a foreign corporation, given the taxpayers served were Australian residents.
- Whether substituted service by email on the second respondent had been validly effected.
- Whether the second respondent's repeated failures to file a defence, attend hearings, or otherwise engage constituted default under r 5.22.
- Whether declaratory relief was appropriate against a foreign, non-appearing contravener with no Australian public profile.
- Whether a permanent injunction under s 70-5(1) of the TAS Act should replace the earlier interim injunction.
- Whether pecuniary penalties and costs should be determined separately following further submissions.