Watson v Greenwoods & Herbert Smith Freehills Pty Ltd

The case of Watson v Greenwoods & Herbert Smith Freehills Pty Ltd involves a claim by Mr Watson, a former partner of Greenwoods & Herbert Smith Freehills Pty Ltd (GHSF), who provided taxation advisory services to Lendlease Corporation Ltd. Mr Watson alleges that he disclosed concerns about the correctness of Lendlease’s financial statements and their compliance with Australian taxation law, and that he suffered detriments as a result of these disclosures. The primary issues before the court were whether the sections 1317AD and 1317AE of the Corporations Act apply to detrimental conduct engaged in prior to the amendments under the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019, and whether Item 16 of Pt 2 of Sch 1 to the Amendment Act extends the application of sections 14ZZZ and 14ZZZA of the Taxation Administration Act to detrimental conduct that was engaged in prior to the Amendment Act.

The court held that both questions should be answered in the negative. It found that the transitional provisions in the relevant statutes do not extend the protections to conduct that occurred before the amendments came into effect on 1 July 2019. The reasoning of the court focused on the precise wording of the transitional provisions and the legislative intent behind them, concluding that they do not apply to conduct that predates the effective date of the amendments.

The court further directed that there be no order as to costs unless a party wishes to make submissions regarding costs, in which case they must adhere to a specified timetable. The parties were also ordered to file consent or competing short minutes of consequential orders to give effect to the court's reasons. The court's decision will result in certain paragraphs of Mr Watson's amended originating application and amended statement of claim being struck out, pending further submissions from the parties regarding the specific consequential orders.