The rub for eBay and its lawyers, Norton Rose Fulbright, is that the affidavits admitted into court for their case against Gaunt and Joab raise questions about its own tax affairs.
eBay is alleging breach of fiduciary duty by Gaunt, who was a sales manager with the company. But they can’t decide to whom he actually owes this purported fiduciary duty.
Gaunt, like his colleagues, was employed by eBay Australia and New Zealand. Indeed all his costs appear to have been borne by this company. Yet the fruits of his labour were all booked, like those of his colleagues, straight to the Swiss entity.
Attention Australian Tax Office: is it legal to stuff all your costs into an Australian company while siphoning all your profits from exactly the same sales activities offshore?
Most multinationals do it – that is, bulk up their costs here so they don’t make much of a profit, which can be taxed – but eBay is clumsily blatant.
In fact its overlords in Switzerland and the US must be wondering what those knucklehead Aussies are up to. They even account for GST in their pleadings when eBay doesn’t even collect GST.
Moreover, in a burst of legal schizophrenia, eBay listed three plaintiffs in its lawsuit: eBay Australia and New Zealand Ltd, eBay International AG and eBay International Advertising GmbH (added later).
According to European company searches though, the Swiss entity (GmbH) was dissolved on May 5 this year, shortly after the process for discovery of documents was initiated by Gaunt and Joab.
Apart from random emails, the only things they have handed over so far is Glen Gaunt’s scrambled hard drive. They are yet to stump up a single invoice from GmbH.
If you look at eBay’s local accounts you will find a company which last year paid just $381,641 in tax. It disclosed revenues of $39.7 million but the cash-flow statement shows $43 million in receipts from related parties. So some other eBay entity must be sending this downunder as the real revenue is booked overseas.
In 2012 and before eBay doesn’t list its cash receipts as related party which suggests they either booked some sales here or hid the related party stuff.
While its accounts and its statutory disclosures are a shambles, eBay has proven a champion performer when it comes to vexatious litigation.
eBay alleges Gaunt and Joab took sales commissions to which they were not entitled. Gaunt was a sales manager and Joab an external contractor with the online auction house. They say the claim is bogus and they are victims of a campaign of victimisation.
Project Claw appears to be eBay’s campaign to “claw” back money they allege is owed them. And to that end, they succeeded in having all Gaunt and Joab’s assets frozen.
Although Dana Joab was a life-long customer of Westpac and was locked in litigation with eBay, Westpac – in gross breach of her privacy – provided her court-room adversaries with a plethora of documents which were not covered by the subpoenas, at least 25 by our count.
Worse, Joab was just about to give birth to her third child when her assets were frozen and despite the fact that there was no stipulation in the orders as to how she could withdraw money, she was forced – against doctor’s orders – to drive to her local branch to get money out.
Her requests to withdraw money online, even to pay bills, were spurned by eBay and its lawyers and met with a legal threat from Westpac’s lawyers, Gadens. So it was that, with her new baby just days old and two other young children in tow, fresh out of hospital after a C-Section operation, she had to drive to the Westpac branch in Leichhardt in Sydney to get money. The refusal to even allow her telephone banking persists to this day.
Westpac has previously told Fairfax Media that although the court orders did not stipulate physical attendance at the bank branch, it had not acted in breach of the orders. Further, despite the myriad breaches of Joab’s privacy in providing information outside the scope of the subpoenas, it described its failure to comply as “inadvertent”. Westpac says it apologised to Joab and eBay’s solicitors destroyed the documents inadvertently produced at its request.
Ebay, Norton Rose and Westpac were unwilling to discuss Project Claw.
Westpac denies it has a relationship with eBay. It does concede however that it is banker to eBay’s sister company PayPal. EBay and PayPal are undergoing a split in the US but they share office space in Sydney at 1 York Street and the same legal director.
Is there a deeper relationship still? Westpac declined to respond to questions as to whether it had a relationship with other eBay entities such as eBay International Advertising GmbH.
Don’t pay so you can read it.
Pay so everyone can.
While rich countries like Australia are reaching 80% or more double vaccination rates, less than 5% of people in many low income countries have received COVID-19 vaccines. Millions are dying while new more infectious strains of the virus develop
Inspired by the Arab Spring, Manal al-Sharif used social media to start and lead movements. In the second of two articles, the Saudi-born cybersecurity expert and human rights activist examines how her home country uses social media to crush dissent. She explains how digital rights and human rights are inextricably intertwined, and how the absence of the former is the death knell of the latter.
Multinational prison contractors reap billion-dollar government contracts with soaring profits throughout the pandemic while inmates and their loved ones languish through uncertainty, lockdowns and COVID-19 outbreaks. An investigation by Stephanie Tran into Australia's privatised prisons.
With a small army of lawyers having already gouged hundreds of thousands of dollars in fees, Canberra law firm Meyer Vandenberg continues to stand over independent media with defamation threats, writes Michael West.
Former prime minister Paul Keating's speech last week on Australia-China relations has generated wide debate. Last Saturday his views were critiqued by Peter Hartcher in The Sydney Morning Herald and The Age. His reply to that article was rejected by those newspapers. This is an edited version of the rejected article.