Three Federal Circuit judges last week reserved their decision about tax payed on interest earned whilst bushfire class action participants compensation payments were held in trust. A decision is not expected until late November.
Maurice Blackburn’s head of class actions Andrew Watson was put in charge of the fund following the 2015 settlement, and he took the Australian Taxation Office (ATO) to court in a bid ensure the firm’s fees could be deducted from interest earned.
Watson hoped to use the $8,355,722 interest earned in the 2015/16 financial year to fund Maurice Blackburn’s administrative costs, totalling $4,341,327.
That would have saved the survivors money because they would have only paid tax on $4 million worth of interest, not $8.3 million.
“We [Maurice Blackburn] are pursuing the fight with the [Australian Taxation Office] ATO on advice from taxation experts and on behalf of all group members, because challenging the ATO decision is the only chance at stopping the ATO from taking money that we think should be in the hands of bushfire survivors,” a spokesperson for Maurice Blackburn told Kinglake Ranges News.
The Murrindindi fire alone killed 40 people and nearly wiped out the town of Marysville in February 2009, with thousands of survivors later landing a $300 million class action settlement.
“The Full Federal Court heard the matter late last week – it was a hearing of discrete and technical taxation points – and although we don’t know when the Court will hand down its decision, group members will be updated once we know the outcome,” a Maurice Blackburn spokesperson said.
Maurice Blackburn explained that sending ou letters and communications came at a cost to the fund with over 10,000 people participating in the class action.
“We know many group members only want limited communication about the case once rulings have occurred, and we know that many group members also understand there is considerable cost involved in communicating with 10,000 people, so as always we try to strike a reasonable balance about what is best for the majority of the group.
“We of course remain hopeful we will succeed in the dispute with the ATO and be able to return to group members, money that would otherwise have been paid in tax,” a Maurice Blackburn spokesperson said.
The Federal Court judges reserved their decision on Maurice Blackburn’s appeal with a ruling on the matter not expected until late November or early December.
