The Bendel Case: An Odyssey for Professional Integrity
The Goliath was eventually defeated, thanks to the A-team led by Mr. Andrew De Wijn SC, and most importantly, to Mr. Steven Bendel — whose spirited determination sustained the case, spanning more than 10 years.
Hall Chadwick was proud to have managed the objection and to have served as the instructing firm at the AAT, giving us a frontline vantage point as the facts and arguments evolved.
The scoreboard — 10:2 — speaks for itself, and tells us just how untenable the Commissioner’s position on this UPE issue had become. It is, however, perhaps more a reflection of an irrational and insensitive administrative process than anything else.
When the Commissioner abruptly changed longstanding practice in 2009, there was an outcry from the profession that the new position was strained and erroneous. Many publications highlighting this were circulated, which could easily have misled a non-specialist tax agent — such as Steven. Practitioners were either confused or genuinely believed the Commissioner’s view was wrong, based on their own assessment of the considerable body of commentary available at the time.
Of course, the Commissioner may legitimately take a preferred view on how the law should be interpreted — but that does not mean all other views are simply wrong.
Cases like Steven’s should surely find exoneration under section 109RB. Yet Steven was nonetheless assessed with a recklessness penalty, in addition to primary tax, and the Commissioner strenuously refused our offer to settle the case on the condition of merely removing the recklessness allegation — which, in our view, represented the minimal sensible path forward, one that could have spared both parties the cost and effort of the contested litigation that ensued.
Steven takes his role as a registered tax agent with the utmost seriousness, and regards a finding of recklessness as wholly incompatible with his professional standing. It was that conviction — the need to protect his name and integrity — that compelled him to undertake this unprofitable and mentally exhausting enterprise, even with no certainty he would win at the end.
The Bendel case will forever change the landscape of Australian taxation — it is also the story of one man’s quest to vindicate his convictions against all odds.