Phi Finney McDonald commenced a class action on behalf of shareholders who acquired Nuix shares in the period from 18 November 2020 to 29 June 2021 (inclusive) (the Batchelor Proceeding).
On 23 August 2022, the Supreme Cout of Victoria ordered that the Batchelor Proceeding be consolidated with the class action filed by Shine Lawyers against Nuix Limited.
The consolidated proceeding is now known as William Lay & Daniel Joseph Batchelor v Nuix Limited & Ors (S ECI 2021 04360) (the Nuix Class Action).
Opt out and Registration
On 2 December 2024 the Supreme Court of Victoria ordered that the parties attend a mediation to be conducted by 4 July 2025, and that notice be given to group members of their right to opt out of or register their claim for mediation.
The deadline for class members to opt out or register their claim is 4:00pm (AEDT) on Friday 28 February 2025 (Deadline).
If you have not registered your claim, please visit the Shine Lawyers website at this link and complete the online registration form.
If you do not register by the Deadline, you will not be entitled to obtain any benefit arising from any settlement reached by the parties at any point up to two months after the first day of mediation.
Background to class action
Nuix is a company listed on the Australian Securities Exchange (ASX) that provides investigative analytics and intelligence software. It is headquartered in Sydney, Australia and maintains offices in a number of countries including in North America and the Asia Pacific region.
On 4 December 2020, Nuix listed on the ASX pursuant to its prospectus dated 18 November 2020 (the Prospectus) at an IPO price of $5.31. Its Prospectus contained extensive information about Nuix’s products, prospects, and historical and forecast financial performance, including earnings guidance for FY21.
On 26 February 2021, Nuix announced its HY21 results which included $85.3 million in statutory revenue, representing a 4% decrease from the previous year. However, Nuix insisted it was still on track to meet its full-year Prospectus earnings forecasts. The market responded strongly to the announcement and the company’s share price fell by approximately 32% by the close of trade.
On 21 April 2021, Nuix announced it had revised its forecast for FY21 and would not meet its Prospectus guidance. The company downgraded its forecasts as follows:
- pro forma revenue to $180-185 million (compared to $193.5 million forecast in the Prospectus); and
- annualised contract value (ACV) of $168-177 million (compared to $199.6 million forecast in the Prospectus).
Following the FY21 earnings downgrade, the company’s share price fell by approximately 15% by the close of trade.
On 17 May 2021, Nine newspapers revealed serious allegations about Nuix’s governance, ongoing underperformance issues before the IPO and the reliability of its financial reporting prior to listing on the ASX. The company’s share price fell by approximately 9.5% by the close of trade.
On 31 May 2021, Nuix disclosed that it would underperform even the revised revenue and ACV guidance it had provided on 21 April 2021, amounting to cumulative 8.3% and 15.6% shortfalls relative to the original FY21 guidance in its Prospectus. By the close of trade, the share price had fallen approximately 18%.
On the evening of 29 June 2021, Nine newspapers revealed that Nuix’s former Chief Financial Officer (CFO), along with his brother and father, were the subject of an ASIC criminal investigation into insider trading during the period 22 January 2021 to 12 February 2021, during which time the CFO is alleged to have passed on confidential information about Nuix’s poor performance to his brother. On the morning of 30 June 2021, Nuix issued an announcement confirming the investigation. By the close of trade that day, the share price had fallen approximately 13%.
Consolidation
In addition to the proceeding filed by Phi Finney McDonald, two other law firms filed class actions against Nuix on the same or similar ground:
- On 19 November 2021, a proceeding against Nuix was brought in the Supreme Court of Victoria by Shine Lawyers on behalf of lead plaintiff William Lay and group members (Lay proceeding); and
- On 9 March 2022, a proceeding against Nuix and associated parties was brought in the Supreme Court of Victoria by Banton Group lawyers on behalf of lead plaintiff Stella Stefana Bahtiyar and group members (Bahtiyar proceeding).
On 23 August 2022, the Supreme Court of Victoria ordered that the class actions filed by Phi Finney McDonald and Shine Lawyers be consolidated and the class action filed by Banton Group be permanently stayed.
The Supreme Court also allowed Phi Finney McDonald and Shine Lawyers’ proposal that the firms continue to work together in the conduct of the consolidated class action. To this end, Shine Lawyers are the solicitors on the record and Phi Finney McDonald are engaged to work on the matter under an agency arrangement. The Court considered this to be a simpler arrangement than having both firms as joint solicitors on the record.
The defendants in the consolidated proceeding are Nuix, Macquarie Capital (Australia) Limited, and Daniel Phillips (a former director of Nuix).
The consolidated proceeding is funded by Woodsford Litigation Funding and Litigation Lending Services.