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Top 5 court stories for accountants in 2025
From big-four partner sackings to landmark tax cases, here are some of the top court stories covered by Accounting Times in 2025.
In a landmark decision, the NSW Court of Appeal determined in August 2025 that Uber drivers were employed by the company under ‘relevant contracts,’ and amounts paid by Uber to its drivers were wages under the Payroll Tax Act 2007.
The judgment left Uber liable to pay a whopping $81 million in payroll taxes, plus interest.
Tax lawyer Lisa To called this case a “wake-up call for businesses,” especially for those that relied heavily on contract workers. The outcome would have sweeping implications for those operating in the gig economy, mortgage broking and medical sectors.
To advised affected firms to take stock of their affairs over the past five years, given that revenue authorities had the power to investigate payroll tax liabilities retrospectively. She also encouraged companies to ensure their contractual agreements reflected commercial reality and to be proactive with authorities if issues were identified.
In October, a former Ernst & Young (EY) taxation partner who was terminated over an altercation with a Sydney bar manager failed to convince a court that it was a breach of the partnership agreement.
Leonard Nicita contested his November 2023 termination for pushing and bumping his chest against the manager of Sydney bar, Dean & Nancy, during an argument over a missing jacket. Police attended and charged Nicita with common assault.
The judge found it was open for EY to terminate Nicita under the partnership agreement if it held a good-faith opinion that it was the best choice for the partnership. This opinion was supported by Nicita’s “track record” of misconduct, which included propositioning a married colleague at a Miami Vice-themed work Christmas party and a failure to inform the NSW Law Society he had been charged with common assault.
In February, the Full Federal Court ruled that a tax scheme involving the sale of Billabong shares from a family trust to a super fund had the dominant purpose of obtaining a tax benefit. The case involved certain tax schemes undertaken by Billabong founder Gordon Merchant, based on advice provided by EY.
The Commissioner believed that the Billabong scheme had been entered into or carried out for the dominant purpose of enabling the Merchant Family Trust to obtain a tax benefit, being the capital loss incurred by it on the Billabong share sale.
The Tax Office cancelled the benefit by determining that the entire capital loss was not incurred by the Merchant Family Trust, which then increased the taxable income of the Merchant Family Trust. The majority of the court upheld that the taxpayer’s schemes had the dominant purpose of obtaining a tax benefit.
In July, Grant Thornton auditor Simon Trivett was admonished by The Companies Auditors Disciplinary Board and ordered to pay $490,000 in costs for failing to adequately perform his duties as a review auditor.
The decision, handed down on 30 June, was made in relation to the audit of the financial statement of iSignthis Ltd for the financial year ended 30 June 2018 (FY18 audit).
During the audit, it was found that Trivett had failed to:
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Discuss the performance shares with the engagement partner as part of his evaluation of the significant judgments made by the audit engagement team and the conclusions reached in formulating the auditor’s report.
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Review the specified documentation in the FY18 audit file in relation to the significant judgements that the audit engagement team made and the conclusions it reached.
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Perform a review of the FY18 financial report before it was issued, and failed to adequately perform procedures required by Grant Thornton’s policies on engagement quality control review.
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Perform an evaluation of whether the proposed FY18 audit report was appropriate.
In a March update to the Bendel case, the Australian Taxation Office (ATO) revealed it would maintain its current position, treating unpaid present entitlements (UPEs) to corporate beneficiaries as loans under Division 7A.
In an Interim Decision Impact Statement (DIS) published by the ATO in March, the tax office noted it would continue to abide by its established view that a UPE to a company constitutes a Division 7A loan.
The Bendel case has been closely followed by many tax professionals due to its implications for Division 7A. The highly anticipated decision is likely to be released in the first half of 2026.
In an October op-ed for Accounting Times’ sister brand Accountants Daily, tax specialist Robyn Jacobson said the Bendel case continued to ignite fervent discussions amongst tax professionals.
“Whichever way the decision falls, taxpayers and the ATO will need time to process the decision and work through the implications for existing and future UPEs. Further, the possibility of legislative reform in response to the High Court’s decision should not be discounted.”
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