In a defence and cross-claim filed July 20, PwC alleges JWS engaged in misleading and deceptive conduct by advising Vocation that it was not required to disclose to investors problems related to its contract with the Victorian Department of Education and Early Childhood Development, which accounted for a significant portion of its revenues.

PwC was named as a respondent in the shareholder class action in March for in relation to its 2014 audits of Vocation.

The Big Four accounting firm denied any responsibility for the alleged losses suffered by the applicants, saying that “an audit could only provide reasonable and not absolute assurance”.

But in its “apportionment defence”, it says that if it’s found liable for the applicants’ alleged losses then “concurrent wrongdoer” JWS should also be held liable.

PwC claims that on 12 occasions between August 11 and October 27, 2014, JWS advised Vocation it was not required to alert the market to issues with its contract with the Victorian Department of Education, including the Department’s audit of Vocation subsidiaries Aspin and BAWM Pty Ltd’s compliance with the contract; the Department’s decision to withhold from Aspin and BAWM funds due; and the Department’s decision to suspend enrollment in BAWM and Aspin courses.

On August 21, 2014, JWS advised Vocation it was not required to disclose the issues with the contract to the market, even though it knew the Department had filed a complaint with ASX regarding Vocation’s disclosures earlier that day, PwC claims.

The accounting firm also says JWS failed to exercise care in advice given to Vocation regarding five different ASX announcements related to the Department contract.

JWS was retained by PwC in November 2013 to advise on its initial public offering and the preparation of a prospectus issued November 18, 2013 and a replacement prospectus issued November 27, 2013. PwC claims JWS failed to exercise reasonable care and skill in the preparation of the prospectus by not advising Vocation that prospectus violated the Corporations Act.

A representative from JWS did not respond to a request seeking comment for this story.

PwC also brought cross-claims against six former Vocation directors for their conduct in relation to the company’s alleged breaches of its continuous disclosure obligations, saying they should be held liable in the event that PwC is found liable.

The shareholder class action alleges Vocation failed to make adequate market disclosures regarding its contracts with the Victorian Department of Education. In August 2012, Vocation publicly acknowledged some of its business contracts were under review, but told the market the outcomes would not be material.

On October 27, 2014, it announced a settlement with the Department, under which it agreed to forfeit almost $20 million in expected payments. The following day, the company’s share price dropped nearly 60 percent, with the company suffering a $350 million decline in market capitalisation over the next 10 days, according to the class action.

Maurice Blackburn and Slater and Gordon each filed class actions against Vocation, which were consolidated by Justice John Middleton on March 17, 2017, with the firms serving as joint legal representatives.

PricewaterhouseCoopers is represented by Damian Grave with Herbert Smith Freehills. Vocation is represented by Colleen Platford of Gilbert + Tobin.

The case is Cheryl Whittenbury v Vocation Ltd & Anor.