FEDERAL COURT OF AUSTRALIA
Impiombato v BHP Billiton Limited (No 2) [2018] FCA 2045
File numbers: VID 649 of 2018
VID 1077 of 2018
VID 1218 of 2018Judge: MOSHINSKY J Date of judgment: 18 December 2018 Catchwords: REPRESENTATIVE PROCEEDINGS – permanent stay of proceedings – three overlapping open securities class actions against the same respondent – substantially the same claim and substantially the same causes of action – applicable principles – whether one or more of the proceedings should be stayed Legislation: Australian Securities and Investments Commission Act 2001 (Cth), ss 12DA, 12DB
Competition and Consumer Act 2010 (Cth), Sch 2, Australian Consumer Law, ss 18, 29
Corporations Act 2001 (Cth), ss 111AP, 674, 1041H
Federal Court of Australia Act 1976 (Cth), ss 33N
Legal Profession Uniform Law Application Act 2014 (Vic), Sch 1, Legal Profession Uniform Law, s 183
Cases cited: McKay Super Solutions Pty Ltd (Trustee) v Bellamy’s Australia Ltd [2017] FCA 947
Money Max Int Pty Ltd v QBE Insurance Group Ltd (2016) 245 FCR 191
Date of hearing: 29 October 2018 Date of last submissions: 5 December 2018 Registry: Victoria Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 160 Counsel for the Applicant in VID 649 of 2018: Mr PW Collinson QC with Mr AD Pound and Mr EL Olivier Solicitor for the Applicant in VID 649 of 2018: Phi Finney McDonald Counsel for the Applicant in VID 1077 of 2018: Mr BF Quinn QC with Ms E Levine Solicitor for the Applicant in VID 1077 of 2018: Maurice Blackburn Lawyers Counsel for the Applicant in VID 1218 of 2018: Mr CM Caleo QC and Mr LWL Armstrong QC with Mr RG Craig Solicitor for the Applicant in VID 1218 of 2018: Johnson Winter & Slattery Counsel for the Respondent in VID 649 of 2018, VID 1077 of 2018 and VID 1218 of 2018: Ms WA Harris QC with Mr KA Loxley Solicitor for the Respondent in VID 649 of 2018, VID 1077 of 2018 and VID 1218 of 2018: Herbert Smith Freehills ORDERS
VID 649 of 2018 BETWEEN: VINCE IMPIOMBATO
Applicant
AND: BHP BILLITON LIMITED (ACN 004 028 077)
Respondent
JUDGE:
MOSHINSKY J
DATE OF ORDER:
18 DECEMBER 2018
THE COURT ORDERS THAT:
1.The matter be listed for a case management hearing on a date to be fixed.
2.The costs of and incidental to the Multiplicity Question be reserved.
3.There be liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
VID 1077 of 2018 BETWEEN: KLEMWEB NOMINEES PTY LTD (AS TRUSTEE FOR THE KLEMWEB SUPERANNUATION FUND)
Applicant
AND: BHP BILLITON LIMITED (ACN 004 028 077)
Respondent
JUDGE:
MOSHINSKY J
DATE OF ORDER:
18 DECEMBER 2018
THE COURT ORDERS THAT:
1.The proceeding be permanently stayed.
2.Subject to paragraph 3, there be no order as to…
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Details
- Case
- [2018] FCA 2045
- Decision Date
CaseChat Overview and Summary
In the case of Impiombato v BHP Billiton Ltd (No 2), the Federal Court was tasked with deciding the issue of a permanent stay of proceedings in three overlapping securities class actions against BHP Billiton Ltd. The respondents in the proceedings were Impiombato, Klemweb and LACERA, all of whom were seeking to represent groups of shareholders in separate class actions against the same respondent, BHP Billiton Ltd. The Court was required to determine whether one or more of the proceedings should be permanently stayed, given that they were substantially the same in terms of claims and causes of action. The Court considered the principles applicable to determining whether proceedings should be stayed, including the need to avoid duplication of effort, the potential for unfairness to the respondent, and the importance of ensuring that the proceedings are managed efficiently and effectively.
The Court ultimately decided that the proceeding brought by Klemweb should be permanently stayed, while the proceeding brought by LACERA should be temporarily stayed until 1 September 2019. The Court found that the proceeding brought by Impiombato should continue, but that the Court would retain jurisdiction to revisit the issue of staying the proceeding if necessary. The Court noted that the proceeding brought by Klemweb had been initiated after the proceeding brought by Impiombato, and that the claims in the two proceedings were substantially the same. The Court also found that the proceeding brought by LACERA was substantially the same as the proceeding brought by Impiombato, but that there was a possibility that the proceeding brought by LACERA contained additional claims that were not covered by the proceeding brought by Impiombato. The Court therefore decided to stay the proceeding brought by LACERA temporarily, to allow the applicant in the proceeding brought by Impiombato to investigate and consider any potential claims based on the additional period.
The Court's decision provides guidance to practitioners on the principles to be applied when determining whether to stay multiple proceedings in similar cases. The Court emphasised the importance of avoiding duplication of effort and ensuring that the proceedings are managed efficiently and effectively. The Court also noted the potential for unfairness to the respondent if multiple proceedings are allowed to continue, particularly where the claims and causes of action are substantially the same. The decision highlights the need for careful consideration of the issues in each case, and the importance of ensuring that the proceedings are managed in a way that is fair to all parties.
The Court ultimately decided that the proceeding brought by Klemweb should be permanently stayed, while the proceeding brought by LACERA should be temporarily stayed until 1 September 2019. The Court found that the proceeding brought by Impiombato should continue, but that the Court would retain jurisdiction to revisit the issue of staying the proceeding if necessary. The Court noted that the proceeding brought by Klemweb had been initiated after the proceeding brought by Impiombato, and that the claims in the two proceedings were substantially the same. The Court also found that the proceeding brought by LACERA was substantially the same as the proceeding brought by Impiombato, but that there was a possibility that the proceeding brought by LACERA contained additional claims that were not covered by the proceeding brought by Impiombato. The Court therefore decided to stay the proceeding brought by LACERA temporarily, to allow the applicant in the proceeding brought by Impiombato to investigate and consider any potential claims based on the additional period.
The Court's decision provides guidance to practitioners on the principles to be applied when determining whether to stay multiple proceedings in similar cases. The Court emphasised the importance of avoiding duplication of effort and ensuring that the proceedings are managed efficiently and effectively. The Court also noted the potential for unfairness to the respondent if multiple proceedings are allowed to continue, particularly where the claims and causes of action are substantially the same. The decision highlights the need for careful consideration of the issues in each case, and the importance of ensuring that the proceedings are managed in a way that is fair to all parties.
Orders
Orders of the court
1. Subject to further order, the proceeding be stayed until 1 September 2019.
2. The costs of and incidental to the Multiplicity Question be reserved.
3. There be liberty to apply.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
The parties rely on the following affidavits in connection with the Multiplicity Question:(a)Mr Impiombato:(i)affidavit of Timothy Finney dated 13 July 2018; and(ii)affidavits of Benjamin Phi dated 16 October 2018 and 25 October 2018.(b)Klemweb: affidavits of Brooke Dellavedova sworn 2 August 2018, 16 October 2018, 25 October 2018 (this has the date 16 October 2018 on the first page) and 29 October 2018.(c)LACERA:(i)affidavit of Paul Buitendag dated 16 October 2018;(ii)expert report of Elizabeth Harris dated 16 October 2018;(iii)expert report of Alex Bell dated 16 October 2018; and(iv)expert report of Mariano Rossetto dated 26 October 2018.(d)BHP Limited:(i)affidavit of Jason Betts dated 24 October 2018; and(ii)affidavit of Brendan Cullen dated 17 September 2018.Although the expert reports were not annexed to affidavits, no objection was taken to the reports being received into evidence. There was no cross-examination.Background facts Before setting out the facts in more detail, the following table sets out some relevant matters pertaining to each proceeding. The “relevant period” in the table below refers to the period covered by the claims in the statement of claim in the proceeding. The Impiombato proceeding was commenced on 31 May 2018 with the filing of an originating application and statement of claim. The applicant pleads, in [3] of the statement of claim, that the applicant and the persons he represents (defined as “Group Members”) are persons who (subject to certain exceptions that can be put to one side for present purposes):(a)during the period from 21 October 2013 until the close of trade on 9 November 2015 acquired an interest in:(i)fully paid ordinary shares in BHP Limited on the Australian Securities Exchange (ASX); and/or(ii)fully paid ordinary shares in BHP Billiton Plc (BHP Plc), a company registered in England and Wales, on the London Stock Exchange (LSE); and/or(iii)fully paid ordinary shares in BHP Plc on the Johannesburg Stock Exchange (JSE); and(b)are alleged to have suffered loss and damage by or resulting from the conduct of BHP Limited as alleged in the statement of claim. In section B of the statement of claim, relevant aspects of Rules 3.1 and 19.12 of the ASX Listing Rules (which relate to continuous disclosure) are summarised. It is also alleged that at all material times s 674(2) of the Corporations Act 2001 (Cth) applied to BHP Limited. In section C of the statement of claim, the dual listed company structure of BHP Limited and BHP Plc is set out. It is alleged that at all material times BHP Limited acted as if it were, in combination with BHP Plc, a single economic entity (BHP). It is also alleged that at all material times: BHP Billiton Brasil Ltda (BHP Brasil) was a wholly owned subsidiary of BHP; BHP’s iron ore business comprised two assets, one of which was BHP’s 50% interest (through BHP Brasil) in Samarco Mineração SA (Samarco), a Brazilian mining and mineral resource company; and BHP’s interest in Samarco represented a significant investment by BHP and was a material asset of BHP. Further, it is alleged that during the relevant period, BHP’s interest in Samarco generated a material component of BHP’s total revenue and earnings. Section D of the statement of claim sets out further matters relating to Samarco and its board of directors.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
As indicated above, I consider it appropriate to temporarily stay the LACERA proceeding for a period of time to enable the applicant in the Impiombato proceeding to investigate and consider potential claims based on the additional period. I propose to order that, subject to further order, the LACERA proceeding be stayed until 1 September 2019. This date can be revisited in due course if appropriate. I note that it would be inconsistent with the thrust of these reasons (as well as the approach adopted to date by LACERA) for LACERA (or its lawyers or funders) to undertake a book building exercise while the proceeding is stayed.Conclusion For the reasons set out above, I will make orders to the following effect:(a)In the Impiombato proceeding:(i)The matter be listed for a case management hearing on a date to be fixed.(ii)The costs of and incidental to the Multiplicity Question be reserved.(iii)There be liberty to apply.(b)In the Klemweb proceeding:(i)The proceeding be permanently stayed.(ii)Subject to paragraph (iii), there be no order as to costs of the proceeding (including the costs of and incidental to the Multiplicity Question).(iii)If any party seeks a variation of the costs order in paragraph (ii), the party may give written notice to the Court and the other party by 31 January 2019.(iv)There be liberty to apply.(c)In the LACERA proceeding:(i)Subject to further order, the proceeding be stayed until 1 September 2019.(ii)The costs of and incidental to the Multiplicity Question be reserved.(iii)There be liberty to apply.
Ratio Decidendi
Legal Principle Established
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