In a judgement handed down on December 21, the Federal Court ordered that Neville’s Bus Service (NBS), trading as Busabout, was entitled to $5,485,416 from Pitcher Partners Consulting as “damages for deceit”.
NBS, which employs about 200 people, alleged its one-time accounting firm had been fraudulent, negligent, breached its client contract and also broke Australian Consumer Law.
The company launched action against Pitcher Partners Consulting and its parent Pitcher Partners following a dispute relating to a tender with the NSW government over the provision of bus services.
An error made during the tender documentation stage, which Pitcher Partners Consulting was involved in drafting, was a contributing factor to “significantly understated” availability of government funds for NBS, according to the court.
Both Pitcher Partners Consulting and NBS acknowledged the error. However, the case focused on the subsequent conduct of the accounting firm, and in particular Ian Stewart, who at the time was an executive director at Pitcher Partners Consulting and a partner of Pitcher Partners.
Specifically, the conduct in question was whether Mr Stewart had acted dishonestly by concealing the error, and whether NBS was able to prove that the error and any dishonesty had directly caused financial losses.
NBS asserted that Mr Stewart knew of the error by early 2014, but failed to notify the company as his client, and furthermore had actively attempted to conceal it, by creating new documentation in August 2014 with the correct figures and claiming these had been used in the original tender.
The full amount to be paid by Pitcher Partners Consulting, including costs, will be determined at a separate hearing after 21 January 2019.
Pitcher Partners has been contacted for comment.
Full full coverage of the case, visit sister title MyBusiness.
For the full judgement from the Federal Court, click here.