Accounting giant sued for $140m over Twigg’s ‘fraudulent’ scheme

 Accounting giant sued for $140m over Twigg’s ‘fraudulent’ scheme

National accountancy firm Pitcher Partners has been accused of “knowingly assisting” former businessman Max Twigg to rip off his mother in a lawsuit that could leave the firm on the hook for $140 million in damages.

Diane Twigg is alleging Pitcher Partners breached its fiduciary duties to her and several family trusts several times from 2007 to 2019 as part of “a fraudulent and dishonest” scheme set up by Mr Twigg and allegedly “assisted” by the firm, in which Mr Twigg spent tens of millions of the family’s dollars on an “extravagant lifestyle”.

Mr Twigg sold the family waste business, Twigg Group, to Cleanaway for $155.8 million in 2007 and put the proceeds – bar $5 million for his mother and each of his two sisters – into a family trust account, which he then spent on luxury cars, houses and various properties, including the iconic Byron Bay Beach Hotel, without their knowledge.

Max Twigg pictured in December 2016. 

Ms Twigg and her daughters successfully suedhim over these unauthorised transactions in 2020, with the NSW Supreme Court slamming his conduct as “dishonest” and ordering him to repay his family. The decision was upheld by the NSW Court of Appeal.

But while the three women have received $30 million compensation from Mr Twigg’s assets, Ms Twigg is now seeking the balance of their alleged losses from Pitcher Partners, who acted as advisers to her, her son and several family trusts on tax, accounting, corporate governance and structuring, succession planning and trust distributions.

In a statement of claim filed in the NSW Supreme Court last week, she claimed that Pitcher Partners breached its fiduciary duties to her and three separate trusts of which she is a trustee by assisting Mr Twigg in his fraud.

“Pitcher Partners advised and assisted Max Twigg in [his] conduct,” Ms Twigg’s statement of claim read, claiming that he was “able to distribute” the proceeds of the Twigg Group sale to himself “as a consequence of [this] knowing assistance”.

“In so doing, the defendants breached their fiduciary duty of undivided loyalty to the plaintiffs and further knowingly assisted Max Twigg in a fraudulent and dishonest design.”

The claim alleges that Pitcher Partners “assisted Max Twigg in the execution of that fraudulent or dishonest design” regarding the purchase of a landfill site by, among other services, advising on its incorporation into a family trust and setting up governance structures that allegedly breached prior advice it had given the family.

The statement of claim said Pitcher Partners had “actual knowledge of the breaches” by Mr Twigg and “wilfully shut its eyes to those matters”.

It alleged that the accountancy “wilfully and recklessly failed to make inquiries that an honest and reasonable person would make” about whether Mr Twigg was breaching his own fiduciary duties to his mother and the three trusts and that “an honest or reasonable person” would have known his conduct was likely flouting these obligations.

She also alleged that Pitcher Partners “advised and assisted” Mr Twigg in shifting the proceeds of the Twigg Group sale to himself, despite its fiduciary duties to her and “knowing [he] was engaged in a dishonest or fraudulent design”.

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Ms Twigg alleged one such director’s resolution was prepared by Pitcher Partners without her signature and undated, despite this breaching the trust’s constitution.

Ms Twigg claimed Pitcher Partners owed her and the three trusts around $140 million in damages, including $30 million regarding the landfill acquisition and $97.9 million for the original family trust’s 2007 cash proceeds. It also claimed compensation for an unspecified amount for its 2008, 2009 and 2010 proceeds.

But the statement of claim said any damages could be reduced by the compensation already recovered from Mr Twigg, which included $7.4 million in cash, $11.4 million in shares, four Gold Coast properties worth a combined $7.1 million, and a caravan and three cars worth more than $1 million.

The case builds on a growing trend of investorsand individuals focusing their litigation efforts on the deep-pocketed advisers to wrongdoers or collapsed companies, such as their auditors or lawyers, in the hope of recovering more of their losses. Pitcher Partners is yet to file its defence.

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