The partners of Phi Finney McDonald have achieved almost half a billion dollars in class action settlements. In 2017 and 2018, the firm was named by Doyle’s Guide as one of Victoria’s Leading Commercial Litigation and Dispute Resolution law firms.
CIMIC SHAREHOLDER CLASS ACTION
On 21 August 2020, a shareholder class action conducted by Phi Finney McDonald was commenced against CIMIC Group Limited (CIMIC) in the Federal Court of Australia on behalf of investors who acquired CIMIC shares during the period from 7 February 2018 to 22 January 2020 (inclusive) (Claim Period).
The action is being funded by Omni Bridgeway Limited. To register your interest in the class action, please visit the Omni Bridgeway registration page.
CIMIC was formerly known as Leighton Holdings Ltd. CIMIC is Australia’s largest listed construction, engineering, mining and services company, conducting its business through a series of subsidiaries such as Thiess, CPB Contractors and UGL.
Since September 2007, CIMIC’s Middle East operations were conducted by BIC Contracting (formerly known as the Habtoor Leighton Group LLC) (BICC) in a joint venture arrangement.
FY17 and FY18 Results Announcements
In its FY17 and FY18 results, CIMIC reported “very solid cash flow generation”, “strong cash generation” and positive EBITDA cash conversion results and a “strict focus on managing working capital and generating sustainable cash-backed profits”.
On and from its 1H18 results, CIMIC did not publish financial results for BICC as a separate business segment (as it had done previously), instead combining it into the broader Corporate segment. During the FY18 period, following the introduction of a new AASB (and a revision to a pre-existing AASB), CIMIC’s investment in BICC was reduced by $245.6 million to nil value, and non-current loan receivables from BICC reduced from $1,046.3 million (at December 2017) to $539.2 million at 1H18.
In its FY18 results, whilst CIMIC disclosed that it used factoring and reverse factoring for receivables and payables, it did not quantify its factor or reverse factor balances or disclose the impact of factoring on its cash results.
Factoring involves the sale of trade receivables of a company to a third party financier for an immediate payment of a significant portion of an outstanding invoice amount. Reverse factoring involves a company’s supplier paying a fee to a third party financier to receive an outstanding invoice in a shorter time period than that offered by the company itself.
1H19 Results and Disclosure of Factoring Balance Announcements
On or around 4 May 2019, Fairfax Media published a series of articles reporting on market analysis of CIMIC. These reports stated that CIMIC had inflated profit and operating cash flow figures with “aggressive” revenue recognition practices while hiding poor performance and earnings quality through “engineering” its accounts and the use of factoring arrangements.
On 6 May 2019, CIMIC issued a “Clarification Statement” in response to the Fairfax Media reports, which confirmed its FY18 and previous financial reporting and confirmed its compliance with its continuous disclosure obligations. CIMIC did not refute the use of factoring arrangements or its use of revenue recognition practices.
On 17 July 2019, after close of trade, CIMIC released its 1H19 results to the market, which updated the market to:
- the fact that its performance in several key metrics associated with cash flow had declined; and
- the extent and level of factoring across CIMIC, with such information including a comparison to the previous reporting period ($1,994.8m at 1H19 vs $1,953.0m at FY18).
Further, in the 1H19 results, CIMIC continued to report on BICC within the Corporate segment and stated that it continued to hold shareholder loans relating to, and guarantee loan facilities provided to BICC.
The CIMIC share price declined by about 22% after the release of the 1H19 results.
3Q19 and Middle East Divestment Announcements
On 23 October 2019, CIMIC released its 3Q19 results to the market. At this time, CIMIC re-affirmed guidance on NPAT of $790-840 million, but did not provide any comment on BICC (3Q19 Guidance). CIMIC also reiterated (as they had in previous market announcements) their focus on delivering returns to shareholders, including “strong dividends.”
On 23 January 2020, before the open of trade, CIMIC released an update to the market announcing the conclusion of a ‘strategic review’ of BICC (Market Update). It announced that CIMIC had decided to ‘exit’ the Middle East region by divesting its interest in BICC. It disclosed that it would recognise a one-off post-tax impact of approximately $1.8 billion, representing CIMIC’s entire exposure to BICC.
Within the Market Update, CIMIC revised down the 3Q19 Guidance and suspended the payment of a final dividend for 2019.
The CIMIC share price declined by about 19% after the release of the Market Update.
The class action alleges that during the Claim Period, CIMIC contravened its continuous disclosure obligations by failing to promptly inform the market of the:
- impact of factoring and reverse factoring, on CIMIC’s reported earnings, especially on cash related metrics;
- the impact of factoring and reverse factoring on the sustainability of CIMIC’s reported cash metrics; and
- extent of the financial deterioration of CIMIC’s Middle East operations.
and engaged in misleading or deceptive conduct by:
- representing that its cash generation was sustainable, when in fact, due to a large extent on its reliance on factoring and reverse factoring, that was not the case;
- representing that CIMIC would meet its 3Q19 Guidance; and
- representing that it would be able to pay a final dividend in FY19.
The class action alleges that the falls in share price value reflect the removal of “inflation” from CIMIC’s share price, and that investors who acquired CIMIC shares during the Claim Period are entitled to compensation for loss and damage they have suffered as a consequence of CIMIC’s misconduct.
Investors who acquired CIMIC during the Claim Period are invited to register their interest in the class action by visiting the Omni Bridgeway registration page.
Please do not hesitate to contact Phi Finney McDonald by email at firstname.lastname@example.org or by telephone on +61 3 9134 7100 should you have any questions in relation to this class action.
BORAL SHAREHOLDER CLASS ACTION
Phi Finney McDonald acts for the Representative Applicant in class action proceedings commenced against Boral Limited (Boral) in the Federal Court of Australia on behalf of investors who acquired Boral shares, American Depository Receipts (ADRs) or Equity Swaps during the period from 21 November 2016 to 10 February 2020 (inclusive) (Claim Period).
This action is being funded by Therium Litigation Finance AF IC. To register your interest and obtain more information about the class action, please email email@example.com.
On 21 November 2016, Boral announced its AU$3.5 billion acquisition of Headwaters Incorporated, a company based in the United States of America that manufactured building products and construction materials. Prior to this, in July 2016, Headwaters acquired a group of businesses which manufactured and sold premium windows (Windows).
On 26 August 2019, Boral announced its FY19 Results, which presented a positive picture in relation to Boral’s FY19 EBITDA, NPAT and Headwaters synergies. Notwithstanding this, Boral guided the market to expect NPAT in FY20 of between AUD$374m-AUD$418m (down by about 5-15% on previous year) (FY20 Guidance). In the three trading days following this announcement, Boral’s share price declined by 10.63%.
On 5 December 2019, Boral announced that it had identified certain financial irregularities involving misreporting in its Windows business, that an investigation was being conducted and that the estimated earnings impact was between US$20-US$30 million. In the three trading days following this announcement, Boral’s share price declined by 8.70%. On 6 December 2019, Boral revealed that by October 2017, an internal audit had identified that Windows’ internal systems were inadequate, and additional internal audits in 2018 and January 2019 also raised issues (collectively; Internal Audits).
On 10 February 2020, Boral announced that the investigation had concluded and that finance personnel within Windows had manipulated financial statements primarily to artificially inflate Windows’ overall profitability, during an approximately 20-month period prior to the end of October 2019. As a result, Boral restated its historic earnings by US$22.6 million, US$3.8 million of which related to FY18 and US$18.8 million related to FY19. In the three trading days following this announcement, Boral’s share price declined by 7.43%.
It is alleged that Boral contravened its continuous disclosure obligations, including by failing to promptly inform the market:
- that Boral did not conduct a detailed due diligence of Headwaters prior to acquisition; and would not be able to provide an accurate assessment of the financial position of Windows and Headwaters; and
- of the outcome of the Internal Audits and the financial irregularities referred to above.
It is also alleged that Boral engaged in misleading or deceptive conduct, including by representing to the market that Boral had conducted a rigorous due diligence of Headwaters prior to acquisition, and that the Headwaters acquisition would have a strong positive impact on Boral’s shareholder value; that Headwaters had delivered certain synergy results; and that Boral expected to achieve the FY20 Guidance.
The class action alleges that Boral’s share price was inflated by the above conduct, and that shareholders suffered loss and damage.
COVID-19 Victorian Quarantine Investigation
Phi Finney McDonald is investigating a potential class action against the Victorian State Government and private security contractors in relation to alleged failures in relation to hotel quarantine.
If you would like further information regarding this potential class action, please email firstname.lastname@example.org. Please provide your full name, telephone and email contact details, and a brief summary of any loss or damage that you have suffered.
Media enquiries should be directed to email@example.com
MAYNE CLASS ACTION
Phi Finney McDonald has investigated and is proposing to commence a class action against Mayne Pharma Group Limited (MYX; MAYNF; MYPHY) (Mayne) on behalf of investors who acquired shares in Mayne (traded on the Australian Securities Exchange), as well as American Depository Receipts traded on the New York Stock Exchange between 24 November 2014 and 15 December 2016 (inclusive) (claim period).
This class action follows the announcement on 15 December 2016 that the Attorney General of Connecticut had commenced anti-trust civil proceedings against a number of pharmaceutical companies, including Mayne Pharma (USA) Inc. It is alleged in that proceeding that Mayne, along with other defendants, participated in a conspiracy to restrain trade, inflate the price of generic pharmaceuticals, and reduce competition.
The market responded strongly to this information, with Mayne’s share price falling around 10% over the following trading days.
The proposed proceeding will allege that Mayne breached its continuous disclosure obligations, and engaged in misleading and deceptive conduct, by failing to inform investors:
- from late 2014 it had agreed to price-fixing and market-sharing arrangements with Heritage executives which were in violation of the Sherman Act (the Heritage Agreement); and
- upon receiving a subpoena from the US Department of Justice, and later a separate subpoena from the Attorney General for the State of Connecticut, that documents producible in response to those subpoenas contained information about or referred to the Heritage Agreement; and
- consequently, that Mayne was reasonably likely to face civil or criminal action in relation to the Heritage Agreement, with associated reputational damage.
The proposed class action will allege that Mayne’s share price was inflated by its disclosure failures, and that shareholders suffered loss and damage.
Class Action Registration
All current and former shareholders who acquired Mayne shares and/or American Depository Receipts traded on the New York Stock Exchange between 24 November 2014 and 15 December 2016 are invited to register their interest in the proposed class action by emailing firstname.lastname@example.org for more information.
Further information about funding and legal costs will be provided to those that register for the class action.
WESTPAC SHAREHOLDER CLASS ACTION
Phi Finney McDonald acts for the Representative Applicant in a class action commenced in the Federal Court of Australia against ASX-listed Westpac Banking Corporation (WBC.AX) (Westpac).
The claim is brought on behalf of investors who acquired shares on the Australian Securities Exchange and the New Zealand Stock Exchange, as well as American Depository Receipts traded on the New York Stock Exchange, between 16 December 2013 to 19 November 2019 (inclusive) (Claim Period). The class action is being funded by Woodsford Litigation Funding (Woodsford).
If you acquired Westpac securities between 16 December 2013 and 19 November 2019 (inclusive), please email email@example.com to register and obtain more information about the class action.
On 20 November 2019, it was announced that the Australian Transaction Reports and Analysis Centre (AUSTRAC) had commenced civil proceedings against Westpac in relation to a substantial number of serious contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (AML/CTF Act). This included failing to:
- conduct risk proscribed assessments of correspondent bank relationships to identify money laundering and crime financing (ML/TF) risk;
- report to AUSTRAC approximately 19.5 million international funds transfer instructions (IFTI) necessary for agencies to scrutinise and identify ML/TF conduct;
- pass on to other entities in funds transfer chains origin data for their own review purposes;
- adopt and maintain an appropriate program to address ML/TF risk;
- record for 7 years records of certain foreign transactions; and
- monitor customers (including those potentially engaging in child exploitation) and apply enhanced due diligence where warranted by ML/TF risk.
The market responded to this information. Between the close of trade on 19 November 2019 and the close of trade on 22 November 2019, Westpac’s share price on the ASX fell approximately 7%.
It is alleged that Westpac breached its continuous disclosure obligations by failing to inform investors that:
- Westpac had systemic faults and failures in identifying ML/TF risk and there was serious and systemic non-compliance with the AML/CTF Act;
- Westpac’s serious non-compliance with its ML/TF obligations included the failure to monitor certain customers transacting on accounts in a manner generally accepted to be indicative of child exploitation typologies; and
- Westpac was potentially exposed to enforcement action by AUSTRAC in respect of its serious and systemic non-compliance with the AML/CTF Act, which might result in Westpac being ordered to pay a substantial civil penalty.
It is also alleged that Westpac engaged in misleading and deceptive conduct by representing to the market that Westpac:
- had effective policies, procedures and systems in place for ensuring compliance with the ML/TF law, and that it was in fact in compliance with that law;
- to the extent it had identified improvements required for compliance with ML/TF law, this was not due to systemic flaws or deficiencies by Westpac, and it had publicly disclosed all matters relating to the IFTI failures relevant to any AUSTRAC action; and
- had policies, procedures and systems in place to ensure material matters were notified to the ASX and NZX, and that it had complied with its continuous disclosure obligations.
It is alleged that Westpac’s share price was artificially inflated because of the above conduct.
If you acquired Westpac securities between 16 December 2013 and 19 November 2019 (inclusive), please email firstname.lastname@example.org to register and obtain more information about the class action.
OC FOAM CLASS ACTION
Phi Finney McDonald and Flemington Kensington Community Legal Centre are investigating a potential class action against the Victorian State Government for Victoria Police’s use of pepper spray against protesters at the International Mining and Resources Conference (IMARC) in Melbourne between 29 and 31 October 2019.
Protestors demonstrated outside IMARC to oppose the violation of human rights, the dispossession of indigenous people, the exploitation of workers and to highlight climate justice.
The demonstration drew a significant number of protestors and a large police presence. The conduct of Victoria Police has drawn criticism, including in relation to the use of pepper spray against groups of people engaged in peaceful protest. Pepper spray, known as Oleoresin Capsicum foam (OC foam), contains an extremely high concentration of capsaicin, a chemical found in chilli peppers, which can cause significant injuries and potentially permanent disabilities. The use of OC foam may breach the law when used as a coercive tool, or where there is no immediate or proportionate threat to police officers or the public.
Proposed Class Action
Phi Finney McDonald and Flemington Kensington Community Legal Centre are investigating a class action in relation to the force used against the 2019 IMARC protestors.
A “class action” is a case that it is brought by a person or persons on behalf of a group of other people, called “group members”. Class actions can be an efficient way of allowing people to take related claims against the one defendant. A class action may be viable where an individual claim is not because of resources, cost or otherwise. Group members are not typically liable for the costs of the defendant if a class action is unsuccessful. Accordingly, class actions can level the playing field against well-resourced defendants.
If a class action is commenced following this investigation, group members will not be liable for the legal costs of running the class action unless there is a successful result. Any legal costs in relation to the class action will not be greater than amounts recovered on behalf of group members. In other words, group members will not be out of pocket for any legal expenses in the class action.
If you attended the 2019 IMARC protest and would like to register your interest, please contact us at email@example.com.
Registration is optional and without obligation. You will not have to pay to register and all information you provide will be kept strictly confidential by Phi Finney McDonald and Flemington Kensington Community Legal Centre.
Bupa Class Action
Phi Finney McDonald is investigating a potential class action against aged care provider Bupa on behalf of current and former residents of Bupa nursing homes across Australia.
Bupa, a UK-owned company, operates nursing homes across Australia. Bupa’s Australian homes are regulated under Australian statute, including the Aged Care Act 1997(Cth) and the Aged Care Quality and Safety Commission Act 2018 (Cth). The Aged Care Quality and Safety Commission (ACQSC) audits and accredits nursing homes in Australia. Multiple and concerning alleged failures by Bupa aged care facilities to provide basic standards of care to residents have been identified by ACQSC. Accreditation reports by ACQSC in relation to a number of Bupa aged care facilities indicate an alleged failure to:
- meet basic health and safety standards;
- demonstrate adequate risk management systems and practices;
- ensure staff are adequately trained and available to residents;
- monitor and mitigate risk to protect residents from aggressive behaviour; and
- ensure compliance with regulations for medication management.
Bupa operates 70 plus nursing homes in Australia. The accreditation reports by ACQSC raise serious concerns about a number of Bupa’s aged care facilities. By way of example, the ACQSC has made the following comments in relation to Bupa aged care facilities: In relation to Bupa Seaforth (ACQSC Review Audit Report, 29 April 2019 – 2 May 2019) “The service does not have a falls prevention program. Incidents are not reviewed and strategies are not developed to assist in preventing reoccurring falls.” “There have been ongoing issues in relating to fire safety at the service and timely action to address these issues was not taken.” “Incidents and aggressive behaviours have not been managed or monitored to mitigate risk or ensure care recipient safety.” In relation to Bupa Traralgon (ACQSC Review Audit Report, 4-5 April 2019) “Medication management practices are not consistently safe and in accordance with regulatory compliance obligations.” “The service management does not have systems to ensure adherence to regulatory compliance obligations in relation to food safety” and “the kitchen does not meet cleaning standards for safe food operation.” In relation to Bupa Eden (ACQSC Accreditation Decision and Report, 29 July 2019 – 2 August 2019) “The organisation does not demonstrate the effective management of high impact or high prevalence risks associated with the care of the consumers. Deficits in care were identified and risk has not been managed to mitigate and minimise incidents”.
Proposed Class Action
Phi Finney McDonald is investigating serious allegations that aged care provider Bupa failed to provide basic standards of care to residents at facilities it operates. Further investigation will indicate whether these problems are widespread and systemic.
Class Action Registration
Current and former residents of Bupa aged care facilities, and the families of any residents, are invited to obtain information about a prospective class action against Bupa by emailing us at firstname.lastname@example.org.
If you would like to find out more from Phi Finney McDonald about the proposed class action, or are interested in sharing your experiences with Bupa aged care facilities, including those of family members, please contact us at email@example.com.
ESTIA Class Action
Phi Finney McDonald acts for the Representative Applicants in class action proceedings commenced in the Federal Court of Australia against ASX-listed aged care facility operator Estia Health Limited (Estia), on behalf of investors that acquired shares in Estia during the period between 12 August 2015 to 9:52am on 6 October 2016 (inclusive) (claim period). The class action is being funded by Investor Claim Partner (ICP). For more information and to register for the class action, please visit ICP’s website.
Phi Finney McDonald, assisted by William Roberts Lawyers, act for the Representative Applicants in class action proceedings commenced in the Federal Court of Australia against ASX-listed aged care facility operator Estia Health Limited (Estia), on behalf of investors that acquired shares in Estia at some time during the period between 12 August 2015 to 9:52am on 6 October 2016 (inclusive) (claim period). The class action is being co-funded by Investor Claim Partner (ICP) and Litigation Lending Services (LLS). For more information and to register for the class action, please visit ICP’s website.
On 12 August 2015, Estia announced that its forecast net profit after tax (NPAT) growth for FY16 would exceed 20%. Also on that day, Estia represented that 95.7% of the non-concessional residents that had entered its aged care facilities during FY15 had opted to pay an accommodation payment which had a Refundable Accommodation Deposit (RAD) component and confirmed its commitment to its medium term growth strategy, being a strategy to operate 10,000 resident beds by the end of FY2020. On 7 December 2015, Estia announced the acquisition of Kennedy Health Care (Kennedy) which owned and operated a large group of residential aged care facilities. At this time Estia provided upgraded FY16 guidance premised on this acquisition, forecasting 25% growth in NPAT compared to FY15 (FY16 Guidance). Estia further claimed that the acquired Kennedy sites would be “immediately EPS accretive”. On 18 February 2016, Estia represented that 95.1% of the non-concessional residents that had entered Estia’s aged care facilities during HY16 had opted to pay an accommodation payment which had a RAD component and again affirmed its commitment to its medium term growth strategy. On 19 April 2016, Estia re-affirmed its FY16 Guidance, and advised the market that its integration of the recently acquired facilities was “on track”. On 29 August 2016, Estia:
- disclosed that its FY16 earnings were materially lower than the guidance it had confirmed only 4 months previously, with a 7.5% miss on underlying NPAT;
- guided the market to expect 13% growth in underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for FY17 (FY17 Guidance), which was ~15% below market consensus forecasts; and
- disclosed that it had completed its shift from a growth strategy underpinned by acquisitions of aged care facilities, to an organic-led growth strategy.
On 6 October 2016, approximately 5 weeks after giving the above FY17 Guidance, Estia disclosed that it expected that underlying EBITDA for FY17 would be between -7% to -3% lower than in FY16, blaming increased non-wage costs and lower projected growth in occupancy rates at its aged care facilities. On 12 December 2016, and 23 February 2017, Estia admitted that it had poorly handled the integration of its acquired Kennedy aged care facilities during FY16, which in turn had impacted negatively on its FY17 performance. Estia’s FY16 results and below-consensus FY17 Guidance in August 2016 led to a share price fall of ~29%. The company’s subsequent FY17 Guidance downgrade on 6 October 2016 led to a further price fall of ~15%.
The class action alleges that during the claim period Estia:
- contravened section 1041H(1) of the Corporations Act 2001 (Cth) (Corporations Act), section 12DA(1) of the Australian Securities and Investments Commission Act 2001 (Cth) and section 18 of the Australian Consumer Law (together, the misleading conduct provisions) by misrepresenting the proportion of incoming residents during FY15 and or HY16 that had opted to pay RADs, with such RAD payments being relied upon by Estia to fund its medium term growth strategy, being a strategy to operate 10,000 resident beds by the financial year ending 30 June 2020;
- contravened the misleading conduct provisions by providing and/or affirming guidance for FY16 and FY17, which guidance lacked reasonable grounds;
- contravened section 674(2) of the Corporations Act and ASX Listing Rule 3.1 by reason of its failure to inform the ASX of the following information:
- that Estia had changed its operating structure to a new and untested system and management structure which was a departure from the established regional model, and was motivated by cost-cutting and reduced localised responsibility and accountability (Untested Operating Structure); and
- due to the Untested Operating Structure, it was unable to reliably estimate its future financial performance, and the time and cost required to successfully integrate the 1,690 new operating places acquired in the first five months of FY16 including the acquisition of Kennedy.
- Estia’s conduct caused its share price to trade at a price substantially higher than the trading price that would have prevailed in a properly informed market (inflated price);
- persons who acquired Estia shares during the claim period have suffered a loss by acquiring the shares at an inflated price.
Class Action Participation
If you are a group member in the Estia Class Action and have an enquiry about how you are able to participate, or otherwise have any other question, please do not hesitate to contact us by email at firstname.lastname@example.org or by telephone on +61 3 9134 7100.
If you would like to find out more from Phi Finney McDonald about the class action, or have any queries, please contact us at email@example.com.
LendLease Class Action
Phi Finney McDonald acts for its clients in consolidated class action proceedings commenced in the Supreme Court of New South Wales against ASX-listed Lendlease Corporation Limited (Lendlease). The class action represents all persons who acquired shares in Lendlease between 17 October 2017 and 8 November 2018, including:
- Lendlease stapled securities purchased on the Australian Securities Exchange (LLC.AX); and
- Lendlease American Depositary Receipts (LLESY.PK).
Therium Litigation Finance (Therium) is funding Phi Finney McDonald’s clients in the class action. For more information and to register your interest for the class action, please contact us.
Lendlease is a global construction, property development and investment management company. Its engineering and services business, part of the construction segment, is responsible for the execution of several large Australian infrastructure contracts. On 9 November 2018, Lendlease announced to the market that it had identified significant underperformance in its engineering division relating to a number of projects. This shocking underperformance required a previously unannounced provision of $350m. Lendlease blamed lower productivity in post-tunnelling phases of the NorthConnex tunnel project (a tollway under construction in Sydney, Australia), as well as unforeseen remedial work and bad weather on the Gateway Upgrade North and Kingsford Smith Drive projects, for the underperformance. On receiving this news, there was a substantial market reaction which wiped $4.73 (approximately 27%) off the value of Lendlease shares over the following three trading days. Top tier market analysts expressed “surprise” and “disappointment” at the scope of the construction segment’s underperformance and the consequent impairment.
Class Action Registration
All current and former shareholders who acquired an interest in Lendlease stapled securities and American Depositary Receipts during the period from 17 October 2017 to 8 November 2018 are invited to register for the class action.
If you would like to register, or find out more from Phi Finney McDonald about the class action, please contact us at firstname.lastname@example.org.
Domino’s Class Action
Phi Finney McDonald is conducting a class action against Domino’s Pizza Enterprises Limited for widespread underpayment of delivery drivers and in-store workers employed at franchise stores. You may be able to claim unpaid wages from Domino’s if you:
- were employed as a Domino’s delivery driver or an in-store worker;
- worked at a franchise store; and
- were employed between 24 June 2013 and 24 January 2018.
The class action is being funded by Therium Litigation Finance. For more information about your rights, please visit www.dominosclassaction.com.
BHP Class Action
For more detailed information about this class action, and on how to participate, please visit https://www.bhpclassaction.com.
On 31 May 2018, Phi Finney McDonald filed Impiombato v BHP Billiton Limited (Impiombato Proceeding) in the Federal Court of Australia. On 19 July 2019, the Federal Court of Australia made orders for the consolidation of the Impiombato Proceeding with another proceeding. The consolidated proceeding will be known as Vince Impiombato and Klemweb Nominees Pty Ltd as trustee for Klemweb Superannuation Fund v BHP Group Ltd (Consolidated Proceeding). Phi Finney McDonald and the lawyers for Klemweb Nominees Pty Ltd will work together on behalf of all group members, but group members who have signed retainers with Phi Finney McDonald will continue to be represented by Phi Finney McDonald. As part of the consolidation, the claim period for the Consolidated Proceeding will be extended so that it will include from at least 8 August 2012 through 9 November 2015 for all investors who acquired an interest in:
- BHP Billiton Limited securities traded on the Australian Stock Exchange (ASX); and/or
- BHP Billiton Plc securities traded on the London Stock Exchange (LSE) and/or the Johannesburg Stock Exchange (JSE).
The class action seeks recovery of investor losses incurred up to 30 November 2015, caused by BHP Billiton Limited’s (BHP) violations of the Corporations Act in relation to the catastrophic collapse of the Fundão dam in Brazil. G&E KTMC Funding LLC will continue to fund the Consolidated Proceeding. Under the Court’s orders anyone who bought shares of BHP during the claim period will receive at least 85% of the value of any settlement or judgment in their favour. You do not need to take any action at this time in order to participate in the class action. However, if you wish to be kept informed and receive ongoing legal advice, you may register at https://www.bhpclassaction.com.
On 5 November 2015, the Fundão tailings dam at the Germano mine in Minas Gerais, Brazil collapsed, releasing approximately 60 million cubic meters of waste water in the largest tailings dam rupture ever recorded. The mudflow killed 19 people and has had a catastrophic and enduring impact on the surrounding communities and the environment. It is the worst environmental disaster in Brazil’s history. The disaster has also had a significant financial impact on BHP. The Germano mine is operated by Samarco Mineração SA (Samarco), a joint venture of BHP and Vale SA. Samarco’s mining operations have been shut down since the disaster and, over two years later the mine has not reopened. BHP is an Anglo-Australian owned multinational and the world’s largest diversified mining and mineral resources company. BHP has a dual-listed company structure, with two parent companies (BHP Ltd and BHP Billiton Plc) operating as a single economic entity with a unified board and management team. BHP Ltd is registered in Australia and listed on the ASX. BHP Billiton Plc is registered in the United Kingdom and listed on the LSE, with a secondary listing on the JSE. In the period that followed the dam collapse, BHP’s stock price plunged across all markets, falling 22% in Sydney and 23% in London and Johannesburg between 5 November 2015 and 30 November 2015. The class action seeks to recover shareholder losses incurred throughout this period, during which BHP’s combined market capitalisation fell by more than $25 billion.
The class action alleges that:
- during the claim period, BHP breached its obligations of continuous disclosure of material information to the ASX, by failing to disclose its knowledge of the imminent risk of the collapse of the Fundão dam and knowledge that if the dam failed catastrophic human, environmental, and financial consequences would likely result
- during the claim period, BHP engaged in misleading or deceptive conduct in its representations to the market that it put safety first and held itself to the highest standards of environmental safety in its projects across the globe, despite its failure to ensure that basic safety precautions were in place;
- BHP’s conduct caused its share price to trade at a price substantially higher than the trading price that would have prevailed in a properly informed market (inflated price);
- persons who acquired BHP shares during the claim period have suffered a loss by acquiring shares at an inflated price.
A class action against BHP in the United States on behalf of investors that acquired New York Stock Exchange (NYSE) listed American Depository Shares settled on 9 August 2018. The US proceeding does not (and cannot) recover losses suffered in respect of shares traded on the ASX, LSE or JSE. Investors that participated in the US proceeding, who also acquired BHP shares on the ASX, LSE or JSE are not prevented from participating in this class action.
RFG Class Action
Phi Finney McDonald is preparing a class action against ASX-listed Retail Food Group Limited (RFG.AX) (RFG or the Company) on behalf of investors who acquired RFG securities between 18 April 2017 and 28 February 2018 (inclusive) (Claim Period). IMF Bentham (IMF) has agreed to fund the proposed class action. For more information and to sign up to obtain funding, please contact IMF at https://portal.omnibridgeway.com/cases/register/rfg-investor-class-action.
RFG operates franchise networks in Australia and 58 international markets. These include Donut King, Brumby’s Bakeries, Michel’s Patisserie, Gloria Jean’s Coffee, Crust Gourmet Pizza, Pizza Capers Gourmet Kitchen, The Coffee Guy and Café2U. RFG’s Domestic Franchise networks accounted for 49% of Group earnings before interest, tax, depreciation and amortisation (EBITDA) in FY16 and 43% in FY17. RFG enters domestic franchise agreements with its franchisees and, in so doing, generates revenue through royalties on sales, equipment/brand upgrades, store renewal and various other upfront and ongoing fees (the Franchise Model). These fees and royalties are payable to RFG regardless of the franchise’s profitability. A series of Fairfax Media articles and RFG announcements from December 2017 to February 2018 revealed that RFG’s franchise model was under stress, that there had been serious structural deterioration in the financial performance of several domestic franchise networks, and that the value split between franchisee and franchisor required a fundamental rebalancing. From 7 to 18 December 2017, various Fairfax media reports and RFG announcements disclosed to the market that:
- there was significant financial stress within several, if not all, of the RFG franchise networks; and
- such was the severity of the stress within the franchise networks that in June 2017, the Board had commissioned Deloitte Touche Tohmatsu to conduct a Business-Wide Review of the sustainability of the company’s franchise model and franchise network operations.
During the trading period 11 to 18 December 2017, RFG’s share price fell $1.75 (approximately 40%). On 19 December 2017, RFG disclosed to the market that its 2018 half year (1H18) net profit after tax (NPAT) would be materially lower than the prior corresponding period. In response, RFG’s share price fell a further $0.67 (approximately 25%). On 9 January 2018, RFG announced that 1H18 statutory NPAT would be less than the $22m previously forecasted on 19 December 2017. Following the announcement, the share price fell $0.15 (approximately 6%). On 2 March 2018, in its 2018 half year results, RFG disclosed a significant deterioration in the performance of its domestic franchise division, substantial asset impairments, and a proposal for 160-200 outlet closures by 2019 to address further financial deterioration for the Company. RFG was reinstated to quotation on 5 March 2018. The market reaction was immediate and visceral. By the close of trade, RFG’s share price had fallen a further $0.75 (approximately 36.5%).
Proposed Class Action
The proposed class action will allege that:
- from at least April 2017, RFG failed to disclose to the market the material financial risks associated with its franchise model and deteriorating franchise networks, and misled investors regarding the Company’s financial position and performance;
- from June 2017, RFG failed to disclose that it had appointed Deloitte Touche Tohmatsu to review the sustainability of its franchise model; and
- RFG’s August 2017 profit guidance for the 2018 financial year lacked reasonable grounds.
Class Action Registration
All current and former shareholders who acquired an interest in RFG securities during the period from 18 April 2017 to 28 February 2018 (inclusive) are invited to sign up to the proposed class action. Eligible investors may obtain an information pack by visiting https://www.imf.com.au/rfg.
If you would like to find out more from Phi Finney McDonald about the proposed class action, or have any queries, please contact us at email@example.com.
CBA Class Action
Phi Finney McDonald acts for its clients in a class action commenced in the Federal Court of Australia against the Commonwealth Bank of Australia (CBA). This case has been issued on behalf of investors who acquired CBA shares between 16 June 2014 and 3 August 2017 (inclusive) (claim period). The class action is being funded by Therium Australia Limited (Therium), and is being run in conjunction with another similar class action.
On 3 August 2017, Australia’s anti-money laundering authority, Austrac, announced that it had commenced proceedings against CBA. Austrac alleged in those proceedings widespread non-compliance by CBA with anti-money laundering and counter-terrorism financing (AML/CTF) requirements.
CBA was aware or should have been aware of its non-compliance with these requirements, from at least June 2014. Despite that, CBA did not disclose any AML/CTF concerns to investors until they were forced to do so by Austrac’s announcement on 3 August. CBA’s share price then fell markedly. A number of enquiries into CBA’s conduct were announced in the wake of the Austrac announcement, including by ASIC and APRA. CBA has since paid a penalty to Austrac of A$700m.
The class action alleges that CBA breached its continuous disclosure obligations, and engaged in misleading or deceptive conduct, by failing to inform investors that it had:
- failed to assess the AML/CTF risk posed by “intelligent” deposit machines (IDMs) when launched in May 2012 and for three years thereafter;
- failed to monitor customer transactions, including potential money laundering and terrorism financing activity, on over 700,000 accounts;
- not reported over 53,000 threshold transactions to Austrac on IDMs on time;
- failed to report a number of suspicious transactions to Austrac, including some transactions that related to the financing of terrorism;
- deficient systems for identifying and managing AML/CTF risks; and
- been contacted by Austrac and other agencies in respect of some of the above matters.
It is further alleged that CBA’s share price was artificially inflated because of CBA’s conduct as above.
Class Action Registration
Phi Finney McDonald was approached by significant institutional investors to represent them in the CBA class action, and to source competitive funding arrangements for investors. In April 2018, Phi Finney McDonald announced the proposed class action and invited eligible investors who wished to participate in the class action to register their claims.
Accordingly, on 29 June 2018, the class action was commenced on behalf of investors who acquired CBA shares during the claim period, and who had executed a litigation funding agreement by then.
This case is being run in conjunction with a parallel class action. On 10 July 2019, the Court ordered that the pleadings in the two cases be harmonised, and that the proceedings be case managed together and conducted according to a cooperation protocol.
If you would like to find out more about this class action, you may contact us at firstname.lastname@example.org.
Hastie Group Class Action
Phi Finney McDonald acts for the Representative Applicant in class action proceedings commenced in the Federal Court of Australia against Deloitte Touche Tohmatsu (DTT) and Deloitte Corporate Finance Pty Ltd (Deloitte Entities), on behalf of aggrieved investors in building services company Hastie Group Limited (Hastie). The class action is funded by litigation funder IMF Bentham Limited.
Until 2012, Hastie was an ASX-listed company providing technical services to the building and infrastructure sectors in Australia and overseas. DTT acted as Hastie’s auditor from 2005 to 2012. On 14 June 2011, Hastie lodged a ‘Pathfinder Prospectus’ with the ASX for a $160m capital raising by way of institutional placements and a renounceable entitlement offer. On 17 June 2011, Hastie lodged a largely identical formal Prospectus for the capital raising. The Pathfinder Prospectus and Prospectus each contained pro forma financial statements for the year ending 30 June 2011, and forecasts of Hastie’s likely future earnings. The financial statements and forecasts were reviewed by the Deloitte Entities, which issued reports included in the Prospectus documents in which the entities gave assurances as to the reasonableness of Hastie’s financial statements and forecasts. In the months following the successful completion of the capital raising, the company announced a series of asset impairments, substantially downgraded its full year earnings guidance, and announced an anticipated earnings loss of $146m for the half year ending 31 December 2011. In May 2012, Hastie declared that it had discovered ‘accounting irregularities’ in its services business dating back to 2009, resulting in the resignation of two non-executive directors. The company was placed into voluntary administration shortly thereafter. PPB was appointed as administrators, and later liquidators of Hastie. On 21 January 2013, PPB Advisory released its Administrators’ Report to Creditors of Hastie. The Report:
- confirmed that the Hastie Group was insolvent, and recommended that it be placed into liquidation;
- detailed the likely reasons for the collapse of the Group, including that Hastie’s net asset position and likely future earnings at the time of the capital raising each were much lower than the financial statements and forecasts contained in the Prospectus and Pathfinder Prospectus; and
- identified a number of potential breaches of statutory and general law duties by the company’s directors, auditor and professional advisors.
About the Class Action
On 13 June 2017, Sadie Ville Pty Ltd (as trustee for Sadie Ville Pty Ltd) issued representative proceedings in the Victorian Registry of the Federal Court of Australia against the Deloitte Entities, on behalf of persons who acquired an interest in shares in Hastie in the period from 14 June 2011 to 21 February 2012 (inclusive) and who entered into a litigation funding agreement with IMF Bentham Limited in relation to the proceedings on or before 9 June 2017 (group members). The proceedings allege that the Deloitte entities contravened sections of the Corporations Act, the ASIC Act, and the Australian Consumer Law in giving certain assurances contained in Hastie’s Pathfinder Prospectus and Prospectus issued in June 2011, relating to the reliability and accuracy of Hastie’s financial statements and earnings forecasts.
DTT has resisted providing discovery of the audit files, claiming that their disclosure would place the lead auditor, Reuben Saayman, at risk of self-incrimination. The Federal Court has ordered production of the audit files, and has found that Mr Saayman’s privilege against self-incrimination does not provide a valid basis for DTT to avoid production. DTT appealed those judgments, which was heard in May 2019 and we are awaiting judgment.
This class action is ‘closed’, meaning that only persons who entered into a funding agreement with IMF Bentham Limited by 9 June 2017 are able to participate. Phi Finney McDonald will provide regular written updates to all group members regarding the status and progress of the class action. If you are a group member in the class action and have an enquiry, or otherwise have any questions about this matter, please contact us at email@example.com.
Shareholder Class Actions
Phi Finney McDonald acted for one of the representative applicants in the carriage dispute in this shareholder class action. Phi Finney McDonald’s claim was funded by IMF Bentham Ltd, and it has now been stayed by the Court. If you entered into a funding agreement with IMF Bentham, or if you have an enquiry about this class action, you are welcome to contact us at firstname.lastname@example.org.
$18 million settlement: Phi Finney McDonald acted for investors in a shareholder class action against engineering company UGL Pty Limited. The proceeding was filed in December 2017. The class action alleged UGL engaged in misleading or deceptive conduct and failed to comply with its continuous disclosure obligations in relation the poor performance of a joint venture arrangement between UGL and CH2M Hill. The class action was funded by Omni Bridgeway (previously known as IMF Bentham Ltd). In December 2019, the Federal Court of Australia approved the settlement of the class action for $18 million.
$16.5 million settlement: Phi Finney McDonald acted for investors in a shareholder class action arising from the collapse of Forge Group Limited. The proceeding was filed in December 2014. A settlement of the class action was approved by the Federal Court in December 2019, for $16.5m. The class action was funded by IMF Bentham Ltd. The class action featured a contested application for leave to proceed against Forge’s D&O insurer under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW), which was successful. The settlement sum will be distributed to group members in early 2020.
Acted for investors in a claim against Vocation Limited from its commencement in 2014 until leaving Slater and Gordon in April 2017. Following Vocation’s collapse in 2015, in 2016 the proceeding was consolidated with a competing class action brought by Maurice Blackburn, and in 2017 auditing firm PricewaterhouseCoopers was joined as a co-defendant in the class action. Slater and Gordon’s class action is ongoing and is funded by IMF Bentham Limited. Click here for the two articles from AFR, AFR.
$45 million settlement: Acted for investors in a shareholder class action against Billabong International Limited, which settled in 2015 for $45m. The class action was funded by Comprehensive Legal Funding LLC. Click here for the article on News.com.au.
$36 million settlement: Acted for investors in a shareholder class action against Newcrest Mining Limited, which settled in 2016 for $36m. The class action was funded by Comprehensive Legal Funding LLC. In the course of the class action, Newcrest sought an order that the claims of two institutional investor group members be dealt with at the initial trial of common issues, arguing that institutional investors have different reasons for investing in listed companies than do retail investors and hence their claims need to be considered separately. Ordinarily, only the claim of the representative applicant (typically a retail investor, as in this case) would be determined at the initial trial. In successfully opposing the application, Ben gave affidavit evidence on which he was cross-examined in Court. The resulting judgment remains the leading authority on the subject of defendant applications for sample group member evidence, making it difficult for future defendants to attempt to force institutional investors to take in an active role in Australian shareholder class actions. Click here for the judgment.
$29.75 million settlement: Acted for investors in a (second) shareholder class action claim against Downer EDI Limited, which settled prior to the commencement of proceedings in early 2014 for $29.75m. Although the settlement was confidential, the size of the settlement later became public. The proposed class action was funded by IMF Bentham Limited. Click here for the article on News.com.au.
$75 million settlement: Acted for investors in a shareholder class action against GPT Group, which settled in 2013 for $75m. The class action was funded by Comprehensive Legal Funding LLC. The proceeding ran all the way to trial before Justice Gordon (then on the Federal Court), and settled shortly prior to judgment being handed down. Click here for the two articles from the Sydney Morning Herald on 24/10/2008 and 08/05/2013
$46.6 million settlement: Acted for investors in a shareholder class action against Nufarm Limited. In 2011, the class action was consolidated with a similar proceeding conducted by Maurice Blackburn, with both Slater and Gordon and Maurice Blackburn on record as lawyers for the applicants in the consolidated proceeding. Slater and Gordon’s proceeding was funded by Comprehensive Legal Funding LLC. In 2012 the consolidated proceeding settled for $46.6m. Click here for the article from the Sydney Morning Herald.
$57.5 million settlement: Acted for investors in a shareholder class action against Sigma Pharmaceuticals Limited. The class action was funded by Comprehensive Legal Funding LLC. In 2012 the proceeding settled for $57.5m. Click here for the two articles from the Sydney Morning Herald on 01/04/2010 and 02/07/2015 and here for The Australian Business Review.
$50 million settlement: Acted for investors in a shareholder class action against Centro Properties Limited, Centro Retail Limited and PricewaterhouseCoopers. The class action was funded by Comprehensive Legal Funding LLC. In 2008, the legal team successfully resisted a stay application brought by the Centro entities and supported by Maurice Blackburn, which had launched a competing class action. The judgment of Justice Finkelstein dismissing the Centro entities’ stay application remains a key authority on the issue of multiplicity of class action proceedings in respect of the same subject matter. The proceeding settled for $50m in 2012, in the middle of the trial before Justice Middleton. Click here for the article from News.com.au and here for the judgment.
$20 million settlement: Acted for investors in a shareholder class action claim against Downer EDI Limited, which settled prior to the commencement of proceedings in 2008 for $20m. Although the settlement was confidential, the size of the settlement later became public. The proposed class action was funded by IMF Bentham Limited.
Individual proceeding: Represented the plaintiff in successful first instance proceedings against Jubilee Mines NL (Kim Riley in his capacity as trustee of the KER Trust v Jubiless Mines  WASC 199), for breach of its continuous disclosure obligations which existed at the time under the Corporations Law (now the Corporations Act 2001). The plaintiff successfully established that Jubilee Mines had failed to disclose material information to the market, which in turn had caused it to sell shares at undervalue and suffer a loss. The plaintiff was awarded $1.86 million. Although the decision was overturned on appeal, it remains significant as the first Australian case in which a Court awarded a shareholder damages for breach by a company of its continuous disclosure requirements. Click here for the judgment.
Insolvency Claims and Proofs of Debt
$9.4 million settlement: Acted for shareholder-creditors in lodging proof of debt claims in the administration of ION Limited. The $9.4m settlement figure represents the aggregate amount of administration distributions paid to Slater and Gordon clients in respect of their claims, each of which was determined individually. The proof of debt process was funded by IMF Bentham Limited. As part of this process, we obtained and lodged individual reliance evidence from claimants including institutional investors.
Institutional Abuse Class Actions
$25 million settlement: Acted for persons who had been victims of physical and sexual abuse as children at Fairbridge Farm, a home established for UK child migrants. In 2015 the case settled for $24m (together with a formal apology), in the largest compensation payment for survivors of institutional child abuse in Australian legal history. The class action was conducted on a No Win No Fee basis. Click here for the two articles from the Sydney Morning Herald on 29/06/2015 and 29/06/2015 and the article from ABC.
Acted for asylum seekers taken from Australia to the Republic of Nauru after 3 August 2013 in a class action against the Commonwealth of Australia and current and former Ministers and Secretaries of the immigration department.
The class action alleged the respondents acted with reckless indifference as to whether their actions were unlawful when making Nauruan visa applications, and requesting extensions, without asylum seekers’ knowledge or consent. The class action was dismissed on the grounds that the applicants did not have sufficient evidence to demonstrate that the respondents acted with reckless indifference.
Debenture Trustee Class Actions
Acted for thousands of investors (including many retirees) in the collapsed unlisted mortgage fund Provident Capital, in a class action claim against trustee company Australian Executor Trustees, from its commencement in 2014 until their departure from Slater and Gordon April 2017. The class action is ongoing and is conducted on a No Win No Fee basis. Click here for the article from Money Management and The Australian.
$25 million settlement: Acted for investors (mainly retiree investors) in the collapsed unlisted mortgage fund Australian Capital Reserve, in a class action claim against trustee company Trust Company Nominees. In 2015 the proceeding settled for $25m. The class action was conducted on a No Win No Fee basis. Click here for the article on the Sydney Morning Herald.
$29 million settlement: Acted for investors (mainly retiree investors) in the collapsed unlisted mortgage fund Fincorp, in a class action claim against trustee company Sandhurst Trustees. In 2010 the proceeding settled for $29m. The class action was conducted on a No Win No Fee basis. Click here for the two articles from the Sydney Morning Herald on 05/12/2008 and 11/05/2011.
Acted for the Herridge Plaintiffs, until leaving Slater and Gordon in July 2017, in the multi-plaintiff action in the Supreme Court of Western Australia against Western Power, its contractor Thiess, and a private landowner on behalf of residents, business and property owners affected by the January 2014 bushfire in the Perth hills. The case is ongoing and is set down for trial in the first quarter of 2018.
Successful defendant: Acted for the seventh named defendant, a firm of environmental consultants, in a complex multi-party proceeding seeking damages for loss connected with land contaminated by dry-cleaning chemicals. While the first-named defendant (for whom we did not act) was, in part, unsuccessful, our client successfully defended all claims made against it in the proceeding. Click here for the judgment.
Financial Advice / Improper Lending Claims
Confidential group settlement: Acted for a group of invested who were advised by Bell Potter to buy shares in biotech company Progen Pharmaceuticals and suffered loss. The proceeding was initially issued as a class action, was declassed in 2012, and an application to reconstitute the claim as a class action was rejected by the Court in 2013. Our team subsequently took over the case and achieved a confidential settlement of the highly complex case.
Multiple individual settlements: Acted for bank customers and investors in respect of an alternate dispute resolution scheme with the Commonwealth Bank, relating to the loss of funds lent in connection with collapsed financial advice and investments management company Storm Financial, and associated claims against the banks for improper lending practices. Click here for the article from ABC.
Confidential individual settlements: Represented over a thousand retail investors (mainly retirees) who had lost their life savings following the collapse of the Westpoint Group. Westpoint had raised mezzanine finance for property developments by issuing unregulated promissory notes to retail investors through financial planning firms (often paying commissions of 10% or more). Ben developed the systems and processes through which instructions were taken, cases were assessed and triaged, and common issues were identified among individual financial mis-selling claims. The result was a multitude of individual claims, group litigation via test cases and under case management orders, as well as a number of representative proceedings. One individual proceeding, Dartberg v Wealthcare Financial Planning, generated what remains a founding judgment in the development of the law on the application of proportionate liability regimes in Australia. Click here for the article from InvestorDaily and click here for the judgment.
Royal Commissions / Special Commissions
Represented the ACTU and asbestos victim support groups in the New South Wales Government’s inquiry into James Hardie. The company, a former asbestos manufacturer, had undertaken a substantial corporate restructure under which its assets were transferred to the Netherlands, while its asbestos liabilities (and AU$293m) remained in an Australian based research and compensation trust. The inquiry established that the trust was grossly-underfunded and resulted in James Hardie agreeing to make additional and on-going payments into the trust in respect of its future asbestos liabilities.
Represented United Kingdom thalidomide survivors who had never been compensated after suffering life-changing and severe physical abnormalities. Thalidomide damaged unborn children when taken in early pregnancy. Legal proceedings were issued against Grünenthal, the German inventor and manufacturer of thalidomide, and the UK Distillers companies which distributed the drug in the United Kingdom.