Racing, construction identity faces claims of $15m tax dodge
One of Queensland’s prominent racing and construction identities is defending allegations from companies associated with his sister that he deliberately shortchanged the Tax Office almost $15 million by setting up labour hire firms to take the fall.
Helga Bennett is a director of two labour hire firms suing her older brother, Gerhardt “Hoss” Heinrich, and Queensland’s largest formwork company, Heinrich Constructions, in the Supreme Court, alleging he secretly controlled the firms that engaged hundreds of his workers so as to avoid Pay As You Go and payroll taxes for his own company.
Mr Heinrich has denied the claims in a defence filed in court, arguing Ms Bennett was the sole director and he did not act as a director or officer of the companies.
Ms Bennett is facing director penalty notices (DPNs) for millions of dollars owed by labour hire firms Heiko and Highform.
Her lawyer, Jon Laws of Gold Coast firm Chancery Legal, said Ms Bennett, on behalf of Heiko and Highform, would take Mr Heinrich to trial this May unless the case was settled.
Heinrich Constructions, which has agreements with the Construction, Forestry, Maritime, Mining and Energy Union, has worked on major projects across Queensland, including Star Entertainment’s development at Queen’s Wharf and the billion-dollar Jewel apartment project on the Gold Coast.
Mr Heinrich also owns more than 60 racing horses through his construction company, as per data from Racing Queensland.
Gerhardt “Hoss” Heinrich and his wife, Gold Coast horse trainer Gillian. Supplied
But according to the statement of claim filed in the Supreme Court, Mr Heinrich used his alleged position as shadow director of the labour hire firms “to divert and/or conceal the proper and actual financial position of Heinrich”.
He also allegedly used his position “to incur liabilities in the name of [the firms], for which Heinrich were liable, knowing that Heinrich [Constructions] had no intention of fulfilling” the liabilities, the document said.
The statement of claim alleges Mr Heinrich set up Heiko and Highform in 2015 to effectively act as labour hire firms for his construction company from 2016 to 2018. Ms Bennett would be director, but the siblings allegedly agreed that Heinrich Constructions would pay all costs and expenses and “Hoss would at all times control and be responsible for the proper management and operation of all aspects of Highform and Heiko”.
Over a two-year period, the labour hire firms generated invoices to Heinrich Constructions totalling about $67 million.
But they were allegedly left owing more than $14.6 million in taxes and penalties.
The court case claims Mr Heinrich breached his fiduciary duties by using his alleged shadow director position to benefit himself, his company “and/or third parties”.
Ms Bennett has also personally launched legal action against James Conomos Lawyers and its principal James Nicholas Conomos over the tax dispute, accusing the firm in a separate action of having a conflict of interest when she asked it for advice on her $5 million in DPNs.
She alleged the firm failed to provide “any advice” to her, including how to recover the taxes from Heinrich Constructions, and that it had a conflict of interest because it also acted for Heinrich Constructions, including taking instructions from Mr Heinrich over the tax matter.
The law firm and Mr Conomos have denied the claims and say they advised her that directors are usually personally liable for the DPNs. They allege she responded that she did not want independent advice and would follow Mr Heinrich’s lead
According to their defence, Mr Heinrich advised the firm that he would not pay Ms Bennett’s DPNs and wanted to negotiate a repayment plan with the Tax Office.
Heinrich Constructions attracted attention last year in a court case that found it threatened to cut a worker’s pay if he did not join the CFMEU, in what the judge described as one of the worst examples of coercion.
The decision also revealed that despite Heinrich Construction’s workers being paid CFMEU wages, they were not actually covered by the company’s union agreement as their employer was the labour hire firms, which were not signed up.
Mr Heinrich and his horse trainer wife Gillian are well known in Queensland’s racing industry and the pair won the Gold Coast’s “Magic Millions” race in 2010.
The family has in recent years started selling some of its assets, including parts of its stud and spelling farm in Greenmount.
Mr Heinrich is represented by law firm Tucker & Cowen, which did not return requests for comment.