Login
International BHP investors cleared for class action
BHP investors who are not residents of Australia will still be able to take part in a class action to recover losses, the High Court of Australia has determined.
Lauren Croft
On Wednesday (12 October), the High Court unanimously dismissed BHP’s attempt to block international BHP shareholders who experienced losses following an environmental disaster in Brazil from taking place in a class action against it.
Subsequently, a number of class actions were launched against BHP in 2018 by Phi Finney McDonald, Maurice Blackburn and Johnson Winter Slattery — which saw over 30,000 shareholders sign up between them.
The class action alleges that BHP breached its continuous disclosure obligations and engaged in misleading and deceptive conduct in its representations to the market, affecting anyone who bought shares in BHP from the period of 8 August 2012 to 9 November 2015.
In 2019, the Federal Court ruled that Phi Finney McDonald should be the one to lead the class action, after being the first one to file an action against BHP the previous year.
The High Court decision ends BHP’s multiple unsuccessful attempts over the last three years to exclude the claims of foreign residents who had invested in BHP Billiton Limited securities traded on the ASX, as well as investors in BHP Billiton Plc securities traded on the London and Johannesburg stock exchanges.
Cameron Myers, special counsel at Phi Finney McDonald, welcomed the High Court judgment.
“The High Court’s decision promotes access to justice and confirms Australia’s class action regime as one of the most flexible and efficient mechanisms for resolving common issues between claimants. It ensures that foreign group members can seek redress and vindicate their claims in Australian courts,” he said.
“This decision has positive ramifications for all manner of class actions with an international element, including environmental claims. It will also benefit defendants who wish to resolve their liabilities, instead of cynically seeking to disenfranchise claimants.”
Irina Lubomirska, special counsel at Maurice Blackburn, added that the decision would allow increased access to justice for international shareholders who may wish to join the action against the mining and gas giant.
“Despite the almost three-year delay occasioned by BHP’s appeals before the Full Federal Court and the High Court of Australia, we have steadfastly opposed BHP’s attempts to narrow the federal class action regime. By rejecting BHP’s appeal, today’s High Court judgment endorses Parliament’s deliberate choice of a broader representative procedure which enhances access to justice and aids the efficiency of court processes,” she said.
“This is a welcome result not just for BHP’s shareholders but for all prospective group members, wherever located, who may continue to seek redress through our federal class action regime.”
Within the judgment in BHP Group Limited v Impiombato & Anor (M12/2022) released on Wednesday, the court stated that “BHP’s construction of Pt IVA ignores the Constitution and the legislation passed by the Commonwealth Parliament vesting jurisdiction in the Federal Court, and rewrites the Federal Court of Australia Act”.
“Who makes the claim and where they live does (sic) not determine the jurisdiction of the Federal Court or the claims that may be brought in accordance with the procedures in Pt IVA,” the judgement stated.
“BHP’s construction would undermine the purpose of Pt IVA by not allowing non-residents to be group members in representative proceedings.”
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.
