Damian Clothier KC (with S Eggins) appeared for the defendants, instructed by Jones Day.
Michael May (with B O’Donnell KC) appeared for the plaintiffs, instructed by Cooper Grace Ward.
The Plaintiffs sued Ernst & Young and one of its partners for breach of contract and negligence over tax advice on the structure of a share sale. The Defendants applied for a temporary stay of the proceeding pending the final determination or resolution of proceedings in the Federal Court of Australia and the Administrative Appeals Tribunal (the Tax Appeals). The Plaintiffs resisted, arguing that the proceeding would not be ready for trial before the Tax Appeals were determined and that any stay would cause intolerable delay.
Applying Sterling Pharmaceuticals, Kelly J granted the stay. His Honour found that the Tax Appeals could materially affect liability, quantum and settlement prospects, that the issues were not yet precisely defined and that any prejudice from delay was outweighed.
The proceeding was stayed until 40 days after Thawley J delivered judgment in the Tax Appeals, with costs in the proceeding.
The judgment can be read by clicking here
