Ex-Big Four partner wins fresh suppression order, temporarily

A former Ernst and Young tax partner has won a court fight to keep his name suppressed as he faces allegations of profiting $700,000 off a tax exploitation scheme.

A former EY partner has won a fight in court to keep his name suppressed for the time being. Picture: Simon Dawson

A sacked EY partner, accused of profiting $700,000 off a tax exploitation scheme, has won another court fight to keep his name secret for now.

Federal Court judge Stewart Anderson granted the man an interim non-publication order for two weeks, preventing media outlets from publishing his name while he weighs up an appeal application of Justice Anderson’s judgement.

Justice Anderson’s judgement, which he ordered be released by the end of the week with redactions, will rule on the former Ernst and Young partner’s leave for appeal application against Justice Geoffrey Kennet’s refusal to grant him a suppression order to conceal his name and those of his clients.

Appearing for Nine media, Larina Alick argued against the suppression order.

Ernst & Young building in the Sydney CBD. Picture: James Gourley

“(The) orders leave open a 14 day period for the applicant to make up his mind. They have had your Honour’s draft judgement for a … significant period of time that should have been sufficient to decide,” she said.

Appearing for the Australian Taxation Office, barrister Mark Hosking also objected to the suppression order, after the ex-EY partner’s attempt to introduce new evidence in a bid to keep his name secret was refused as an “abuse of process”.

“There is a strong jurisdiction for not granting further application of suppression,” he said.

Justice Anderson said if the former partner does not make an application to appeal his judgement within 14 days, the suppression order will lift.

It comes after Ernst and Young outed itself in November last year as the big four firm where the ex-partner — who was sacked in August 2022 — worked when he allegedly cooked up a tax exploitation scheme for some of his former clients.

EY Oceania chief executive David Larocca previously said the ex-partner’s alleged conduct was “absolutely unacceptable”.

“EY is very clear that the behaviour alleged against the former partner are the isolated actions of a rogue operator, and are in no way reflective of the way we do business,” he said.

“We fell short in this instance and I regret that we didn’t identify and stop this behaviour earlier.”

The Australian Commissioner of Tax launched a federal court case against the man in August last year, claiming he had received more than $700,000 in allegedly “unauthorised” financial benefits from the tax scheme.

He was terminated from the firm after he allegedly disclosed this to EY.

According to a redacted statement of claim released by the Federal Court, one aspect of the scheme involved minimising the tax payable on profits from a sale of units.

The alleged scheme involved establishing two trusts. The “beneficial interest” in a site was transferred at significantly less than market value, and tax losses were applied against the distribution of income.

The partner allegedly drew his plans for the scheme on a whiteboard.

The ATO has accused the man of promoting tax schemes to different clients between November 2016 and April 2021. EY was first notified about the ATO’s investigation in June 2021.

In November last year, the ATO said in a statement it had lodged an application in the Federal Court seeking orders of a civil penalty under the promoter penalty legislation.

“The Commissioner will allege a former Ernst & Young (EY) tax partner, promoted a tax exploitation scheme,” the statement read.