Tax specialist Anthony Watson renews claims against Greenwoods & Freehills over Lendlease spat

A former Greenwoods & Herbert Smith Freehills tax lawyer is pushing ahead with legal action against his old firm after raising concerns over the tax treatments of client Lendlease.

Anthony Watson claims he was forced out of the firm after repeatedly warning Lendlease it was claiming a near $300m financial benefit by double-counting tax benefits from a number of projects. Picture: NCA NewsWire / Andrew Henshaw

A former senior Greenwoods & Herbert Smith Freehills tax lawyer alleges he was instructed to write an apology to Lendlease’s head of tax after repeatedly attempting to raise concerns over the construction company’s tax treatments, before being dumped from the account and seeing his pay slashed.

Anthony Watson, a tax specialist at GHSF and a member of the firm’s management committee from 2007, has filed a new set of claims against his former employer after losing an attempt to claim new whistleblower protections in the High Court. Documents lodged with the Federal Court reveal Mr Watson has walked away from a number of claims made for whistleblower protections, including repeated post-termination disclosures he sought to make.

The former GHSF partner, who first lobbed court claims at his former firm in April 2022, has seen his case crawl through the courts after pushing to claim whistleblower protections.

Mr Watson is now seeking to make several new claims against GHSF, including alleging the professional services firm refused to pay sick leave.

The former tax partner is also maintaining several of his other claims against GHSF, including that the firm’s aggressive approach to maintaining its relationship with Lendlease saw it sign off “materially incorrect” accounts.

Mr Watson, once among the top earners at GHSF – a specialist tax adviser which was related to Herberth Smith Freehills before it was sold to PwC Australia, now the firm’s tax services business – claims he was forced out of the firm after repeatedly warning Lendlease it was claiming a near $300m financial benefit by double-counting tax benefits from a number of projects.

This includes Lendlease’s $192m takeover of the Primelife retirement group, the Jem project in Singapore and the development of the Sydney International Convention precinct.

Mr Watson has previously claimed senior figures at Lendlease warned he should “not rock the boat” and stop raising concerns about its tax treatment, before moving to force him off their accounts resulting in GHSF removing from the firm.

Former Herbert Smith Freehills partner Anthony Watson.

He has amended his claims to allege Freehills senior partner Geoff McClellan told him Lendlease head of tax Paul Hooper “disliked any ‘exposure’ which would be created if the board of Lendlease were informed of the substance of any or all of” Mr Watson’s concerns.

Mr Watson also alleges GHSF managing director Tony Frost, in late 2013, told him to produce a paper addressed to Mr Hooper, “acknowledging service shortcomings and promising improvement” including warnings if he failed to do so “Mr Frost would instigate the termination of GHSF employees who worked on Lendlease”. Mr Watson claims he was removed from the Lendlease account in May 2014, which saw his pay slashed by 16.7 per cent

The former partner claims in September 2015 he was told his pay would be slashed by a further 53.3 per cent, several months before he was removed entirely from the firm.

Lendlease is now facing the outcome of an audit by the Australian Taxation Office over the company’s tax treatment of several assets, with the company adding a contingent liability for the outcome of the assessment in February connected to a $260m tax scheme that PwC Australia gave advice on.

Lendlease has warned the outcome of the ATO’s probe is “not possible to determine at this time”.

“We’re confident our tax treatment is consistent with the law and with the ATO’s 2002 tax ruling on the retirement living industry,” Lendlease said. “We lodged our 2018 tax return on that basis and intend to vigorously defend our position, should the ATO not accept it.”

Originally published as Tax specialist Anthony Watson renews claims against Greenwoods & Freehills over Lendlease spat