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Whistleblower hits snag in $15m claim over alleged tax fraud

Regulation

Court strikes out part of damages case against Lendlease and PwC-owned advisory firm.

By Naomi Neilson 9 minute read

A former partner at a PwC-owned tax advisory firm who made sensational allegations about Lendlease’s financial statements has suffered a setback in his plan to sue both for over $15 million.

Anthony Watson claimed he suffered career and financial detriments while working at Greenwoods & Herbert Smith Freehills (GHSF) after alleging that Lendlease committed tax fraud.

He is now suing GHSF and Lendlease for $15.5 million in damages for allegedly breaching whistleblower protections.

However, parts of Mr Watson’s amended statement of claim were struck out or dismissed by the Federal Court yesterday following a decision reached in August about the proper construction of whistleblower protections under the Treasury Laws Amendment Act and the Taxation Administration Act.

In the August judgement, Justices Mark Moshinsky, Wendy Abraham and Elizabeth Raper considered whether detrimental conduct engaged in prior to both of the acts coming into effect on 1 July 2019 meant that detriment caused by the conduct continued on or after that date.

The court answered no to both and, as a result, ordered that related parts of Mr Watson’s statement be struck out.

Mr Watson has “foreshadowed an application for leave to amend” and the proceedings have now been listed before a case management hearing at a later date.

In prior court judgements, Mr Watson alleged he disclosed concerns about Lendlease’s financial statements and its compliance with taxation law to a senior Lendlease employee in or around February to August 2013, and then again in March 2014.

He also claimed to have disclosed these concerns to GHSF.

As a result, Mr Watson was allegedly subjected to detrimental conduct, including removal from the Lendlease account, denial of paid sick leave, reduction of his remuneration and a notice of termination.

Following his resignation, in which Mr Watson said he was “constructively dismissed”, he continued to disclose concerns about Lendlease’s alleged financial statements and its taxation position.

Mr Watson alleged to the Federal Court the detrimental conduct was ongoing “because he had not been re-employed, and nor had he been reinstated to the Lendlease account or given an apology”.

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