Sacked EY partner’s bid to stop ATO from looking at emails falls short
A sacked EY partner accused of promoting three tax exploitation schemes was only partly successful in his bid to prevent the ATO from accessing his emails with colleagues.
Following a year-long battle to keep his name out of proceedings, Peter White was revealed to be the sacked Ernst & Young equity partner who allegedly pocketed $70,000 in secret commissions as he set up illegal tax schemes for seven of the firm’s wealthy clients.
Before the Federal Court matter could progress to a hearing, White made a bid to block the Commissioner of Taxation from accessing communications between himself and other partners that referenced or were connected to his August 2022 termination.
Two packets of documents were provided by EY earlier this year, with a note that its client did not claim privilege over any of them.
However, White claimed privilege over nine.
The documents included a file note prepared by EY regional chief operating officer of Oceania, Craig Robson, about a conversation he had with White in the context of an “ATO investigation”.
There was also a series of documents between White and regional general counsel of Oceania, Michelle Smyth, in which White was said to share his “recollection and understanding of a range of events”.
Although two of the documents referred to confidential legal advice White said he received from a senior counsel, Justice Geoffrey Kennett found White waived his privilege when he shared parts of the advice, or “selective disclosure … by the client, to third parties”.
White was successful in securing privilege over a series of emails provided by EY’s Christina Maatouk to his senior counsel.
In the same hearing, White also attempted to have parts of the Commissioner’s amended statement of claim struck out, having taken issue with 147 of the 218 paragraphs. However, most criticisms were focused on provisions in the original statement of claim.
The Commissioner said it was “somewhat surprising that this seemingly profound level of deficiency did not prompt any application by White until the proceeding had been on foot for almost a year”. During that time, White had at least started on his defence.
Justice Kennett said this raised “some doubts” as to how much White’s legal advisors were hampered by the state of the pleading, “in understanding the nature of the Commissioner’s case”.
Justice Kennett ordered that nine paragraphs should be struck out and granted the Commissioner leave to re-plead them.
One part of the amended statement of claim was found to be “embarrassing” in its present form, and another did not advance understanding of the commissioner’s case “very far at all”.
