Aussie Home Loans founder John Symond has been ordered to pay back $1.5 million in damages to a Sydney law firm after he sued them over advice that got him into tax trouble.
Mr Symond was awarded more than $4.9 million in October 2013 after the NSW Supreme Court found Gadens Lawyers Sydney was negligent and acted in breach of contract when it gave him advice on how to restructure his business.
While the law firm did not challenge the court’s findings in relation to liability, it did appeal the assessment of damages on a number of grounds.
Today, the Court of Appeal upheld the challenge in part. It found Justice Robert Beech-Jones had erred in awarding Mr Symond $1,291,178.50 together with pre-judgment interest of $290,710 for his loss due to the forfeiture of franking credits by AHL Holdings.
Franking credits can entitle a shareholder to a tax benefit on the dividends they receive from a company, as the company may have already paid a tax on the income.
Mr Symond, the court found, did not establish that he sustained any loss or detriment as a consequence of the forfeiture of those franking credits.
As the law firm had already paid Mr Symond the $4.9 million originally awarded to him, it was found to have overpaid the Aussie Home Loans founder $1,581,889.
Mr Symond launched legal action against the law firm after he was forced to pay a “substantial amount” of tax, penalties and interest to the Australian Taxation Office (ATO) following an audit of his affairs in 2007.
One part of the advice centred on how he could borrow funds from Aussie Home Loans to complete the construction of his multi-million dollar home in the exclusive eastern Sydney harbourside suburb, Point Piper.