Gadens Ordered to Pay Tax Client $4.7 Million
Sydney-based Gadens has been ordered to pay $4.7 millon to a former client.
Supreme Court of New South Wales Justice Robert Beech-Jones ruled in July that the law firm had provided negligent tax advice to John Symond, the founder of Australian mortgage lender Aussie Home Loans. In 2003, Symonds had sought advice from Gadens on a restructuring that would allow him to personally borrow money from his company while paying as little tax as possible on his loans.
A structure devised by former Gadens partner Ross Seller was deemed improper by the Australian Tax Office and, in 2007, Symond paid almost $6.5 million to settle with the government.
Gadens, which had argued at trial that Symond was a sophisticated businessman who understood the structure carried risks, said at the time of the July decision that it had no plans to appeal the judgment and was happy the matter had been finalized. The 550-lawyer firm noted that it continued to represent Aussie Home Loans and regarded it as a valued client.
In the hearing for damages, the law firm had questioned the interest rates used in calculating Symond's losses, but, in Oct. 31 decision, the judge ruled that the latter's methodology was more appropriate.
Gadens was represented on the issue by barristers Stuart Donaldson SC and Bradley Jones with instruction by DLA Piper. Baker & McKenzie instructed Anthony Payne SC and James Hmelnitsky in acting for Symond.
Symond had also sued Abbott Tout, the law firm to which Seller had moved in 2004. Abbott Tout, which merged with the firm now known as HWL Ebsworth in 2007, settled with Symond for around $1.7 million in February 2013.