Login
Nuix class actions to be combined, court orders
The Supreme Court of Victoria has ordered that two class actions against global tech company Nuix be consolidated into a single claim.
Lauren Croft
The Supreme Court of Victoria has handed down a decision in relation to the three competing and overlapping class action claims filed against Nuix. The proceeding commenced by Banton Group (which had sought to join a number of directors as co-defendants) has been permanently stayed, whilst the proceedings commenced by Shine Lawyers and Phi Finney McDonald will be consolidated.
“Shine Lawyers and Phi Finney McDonald are pleased with the court’s decision that it was in the interests of group members to consolidate the class actions filed by the two firms and ordered that Banton Group’s class action be permanently stayed,” they said.
“The Supreme Court also determined that Shine Lawyers should remain as solicitors on the record for the consolidated class action, with Phi Finney McDonald continuing to work on the class action under an agency arrangement. The court considered this to be a simpler arrangement than having both firms as joint solicitors on the record as proposed.”
In November last year, Nuix was hit with a class action from Shine Lawyers, followed by a second from Phi Finney McDonald in March this year.
Both allege that Nuix contravened provisions of the Corporations Act 2001, the Australian Securities and Investments Commission Act 2001 and the Australian Consumer Law.
Similarly, the Banton Group, representing Stella Stefana Bahtiyar and shareholders who acquired NXL shares in the period between 18 November 2020 and 31 May 2021, also launched a class action, alleging Nuix misled shareholders and provided investors with inadequate guidance on revenue.
After listing on the ASX at $5.31 in December 2020, NXL’s share price has dropped repeatedly over a short period of time, growing to a high of over $11 in January 2021 and then dropping to under $3 following the series of earnings downgrades up to 31 May 2021.
The tech company downgraded its revenue forecast for the financial year 2021 twice and, in June, announced that the employment of its chief financial officer had been terminated and that there would be a transition period to replace Nuix’s chief executive who retired.
“Nuix disputes the allegations contained in the claim and will be defending it. There is currently a process being undertaken before the Supreme Court to seek to deal with the competing and overlapping claims made in the two class actions which have been previously served,” the company stated at the time.
“Nuix anticipates that this claim will also be dealt with as part of that process.”
Shine Lawyers launched their class action in November last year after the tech company made a statement to the ASX noting that a search warrant was executed at the company’s Sydney office, “seeking documents in relation to an investigation into the affairs of an individual” as part of an ASIC investigation.
The news also follows Nuix’s confidence in August of last year that it had complied with accounting and disclosure obligations in the wake of the ASIC investigation, optimism following a “challenging year”, and also the company’s acquisition of Boston-headquartered software company Topos Labs in September 2021.
In February this year, ASIC stated that it had completed certain aspects of its investigation into the company — which asked Nuix to retain financial statements and a 2020 prospectus.
The investigation — including into the company’s now-former chief financial officer Stephen Doyle, who was terminated by Nuix in mid-June 2021 — surrounded suspected contraventions of the Corporations Act in relation to their FY 2018, 2019 and 2020 financial statements and the IPO prospectus lodged with ASIC and the ASX.
According to the Nuix market statement, Nuix disputes the allegations contained in the claim and will be defending it.
Lawyers Weekly reached out to Nuix for commentary but did not receive a response.
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
