Article

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Ashley Black  
Partner
T +61 2 9296 2074

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Kathleen Harris  
Special Counsel

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This paper was delivered at the CCLSR Twilight Seminar 2006.

Developing trends in Australian corporate class actions

Product liability class actions have been familiar in Australia for a considerable time. However, corporate class actions are a relatively recent development. This development has been assisted by four features of the Australian landscape:

• First, Australia has a wide prohibition on misleading and deceptive conduct, which allows a defendant to be held liable for a misleading or deceptive statement, even if that statement was made without negligence and without wrongful intent. ¹
• Second, Australia has a statutory regime prohibiting misleading and deceptive conduct in respect of public offer documents and takeover documents, subject to a due diligence defence. ²
• Third, Australia has a statutory continuous disclosure regime, which underpins requirements for continuous disclosure under the Listing Rules of the Australian Stock Exchange (ASX).³ Broadly speaking, Listing Rule 3.1 of the ASX Listing Rules requires a listed entity immediately to notify ASX of any information concerning that entity of which it becomes aware, which a reasonable person would expect to have a material effect on the price or value of that entity’s securities. There are narrow exceptions to that rule, particularly in the case of incomplete proposals or negotiations. Any breach of that rule gives rise to criminal and civil penalty liability under the Corporations Act, and also to potential civil liability to third parties. In particular, an entity which has failed to comply with the continuous disclosure requirements can be held liable to shareholders who have traded in ignorance of information which ought to have been disclosed to the market at the relevant time.
• Fourth, by contrast with the US position, it is virtually impossible to strike out a proceeding in Australia prior to discovery.

By way of example, in August 1999, a class action was brought against GIO Insurance Limited, an independent valuer and GIO’s directors, which alleged that GIO had provided misleading information to its shareholders in opposing a hostile takeover. Approximately 23,000 shareholders remained in the relevant class by the time of settlement, and the Federal Court approved a settlement of $97 million plus costs in August 2003.

A class action was commenced against Aristocrat Leisure in late 2003 after it announced a profit downgrade which prompted a fall in its total market capitalisation of A$1.5 billion. The plaintiffs allege misleading and deceptive conduct and also a breach of the continuous disclosure requirements, contending that the company provided misleading earnings forecasts and failed to make appropriate disclosures to the market between September 2002 and May 2003. The action is proceeding, following a successful challenge to the definition of the class and an amendment of that definition by the plaintiffs. Class actions in relation to Sons of Gwalia and Concept Sports are also ongoing. In January, a shareholder class action was filed against Telstra in the Federal Court, alleging a failure to disclose the company’s true financial position in the period before August 2005 and September 2005.

In the absence of a contingency regime, a key issue in the future development of class action proceedings in Australia will be the funding of large-scale representative proceedings. As yet, such proceedings have been funded primarily through “no win-no fee” costs agreements with the representative party’s lawyers. Funding is a significant problem in representative proceedings, because of the large costs associated with advertising for potential plaintiffs and the difficulty, in Australia at least, of having to prove claims of reliance and loss on the part of all plaintiffs.

As a result, there has been a growing use of litigation funders in Australian class actions. This type of activity has traditionally been restricted by the prohibitions in English law of maintenance (the inciting of another person to bring an action) and champerty (entering into a financial arrangement with regard to the action with the maintenee). The extent to which litigation funders may finance wider commercial class actions may be clarified by the High Court’s pending decision in Fostif v Campbells Cash and Carry, although it is also possible that this case will be decided on its particular facts.

Systemic differences between the Australian and US systems

There are significant systemic differences between the US legal system, where class actions have a long history, and Australian approaches to shareholder class actions:

• First, civil matters are typically heard by a single Judge in Australia, while in the US the Seventh Amendment guarantees the right to a jury trial.
• Second, there are restrictions on fee arrangements between lawyers and their clients in Australia, so that lawyers are not permitted to charge a percentage of the client’s recovery as a fee. This contrasts strongly with the standard US contingency fee structure. Australian lawyers can, however take cases on a “no win no fee” basis and, if those cases succeed, may charge a time-based rate increased by a multiplication factor or an agreed additional amount. This limitation is diluted, to some extent, by the availability of litigation finance arrangements with commercial litigation providers who may contract for a share of a successful recovery, and by the fact that liquidators of insolvent companies can enter into litigation finance arrangements involving payment of a percentage fee.
• Third, an unsuccessful litigant in Australia is likely to be required to pay the costs of the successful party, while in the US it is more customary for the parties to pay their own costs. In the case of a class action, only the representative plaintiff and not other class members will be liable for the successful defendant’s legal costs of the defence of the proceedings. In theory, this should be a disincentive to class actions, because the representative plaintiff is potentially liable for the entire costs of the proceedings but would receive only a proportionate share of any damages. However, there is a trend toward the appointment of impecunious persons as representative plaintiffs, which the Australian Courts have not been prepared to disapprove. ⁴
• Fourth, the Australian class action procedure does not require judicial certification of appropriateness to proceed, as is necessary in the US, where the class plaintiff bears the onus of demonstrating that the formal requirements of a class action have been fulfilled before the case may continue.

Requirements for class actions

There are procedures for class actions in both the Federal Court of Australia and the Victorian Supreme Court. A class action may be brought in the Federal Court where (1) at least 7 persons have claims against the same person or persons; (2) the claims arise out of the same, similar or related circumstances; and (3) the claims of all those persons give rise to at least one substantial common issue of law or fact. ⁵ As to those requirements:

• The requirement that the plaintiffs have claims against the same person or persons requires, at the least, that all class members have claims against at least one defendant, though those claims need not be identical or likely ultimately to succeed. It was the generally-understood position after King v GIO⁶ that all group members must plead a claim against each and every respondent. However, in Bray v Hoffman LaRoche⁷, Finkelstein J suggested that the purpose of the class action procedures would be undermined if the subset of plaintiffs in a representative action which had related claims against a person other than the “same person” mentioned in s33C of the Federal Court Act did not have the right to join their proceedings to the main action. It is, in any case, sufficient to satisfy this requirement if one claim against all the respondents (for example, in the GIO class action, for a declaration that their conduct was misleading) is maintainable by all class members, even if other claims are not available to all class members.⁸
• The requirement that the class action arise out of the same, similar, or related circumstances requires that some relationship exists between the relevant circumstances, but not that they are identical. ⁹ In the shareholder litigation context, Mansfield J in the Harris Scarfe proceedings held that a class of 11,300 members, relying on alleged misrepresentations in over 77 documents produced over a five-year period, still had the necessary quality of “relatedness”. ¹⁰
• The requirement that the class action involve a “substantial common issue of law or fact” requires that the relevant issue be real or of substance, not that it be large or significant. ¹¹ In the GIO Case, the Court also held that a class action was available where there was a substantial common issue of fact and law as to whether conduct was misleading and deceptive, even though liability may ultimately require proof of reliance or damage.

Under US law, the plaintiff must prove that a class action is desirable in order to obtain certification of the class. It is not necessary for a plaintiff to establish that matter in order to maintain a class action in Australia. There is no similar threshold requirement in Australia. However, the Federal Court has power to order that a proceeding should not continue as a class action if (1) the cost of identifying the group members and distributing the award to them would be excessive having regard to the likely total of the relevant amounts; (2) the costs that would be incurred if the action continues as a class action is likely to exceed the costs if each class member conducted separate proceedings; (3) the class action procedure is not an efficient or effective means of dealing with the claims or group members; (4) the relief sought can be obtained by proceedings other than a class action; or (5) it is otherwise inappropriate that the claims be pursued by a class action. ¹² In determining whether proceedings would provide an efficient means of dealing with claims of past members, the Court will consider findings which may be made in the applicant’s case and the extent to which those findings are likely to resolve other claims. ¹³ The Court may strike out a class action on the basis that it is “otherwise inappropriate” by reason of the “unsatisfactory nature of the pleading”. ¹⁴

Lead plaintiff

The Private Securities Litigation Reform Act 1995 (US) authorised the Court to appoint the party with the largest financial interest in the relief sought by the class as “lead plaintiff”. There is no corresponding Australian provision.

Identification of class members

The application commencing a class action in the Federal Court or the Victorian Supreme Court must (1) describe or otherwise identify the group members; (2) specify the nature of the claims made on behalf of those members and the relief claimed; and (3) specify the questions of law or fact which are common to the claims of the group members. ¹⁵ An application commencing a class action may be struck out unless “the description is such as to enable a person, with the assistance of a legal adviser if necessary, to ascertain whether he or she is a member of the class”. ¹⁶ In the GIO class action, the Federal Court held that it was sufficient to properly identify the relevant class to describe it as those persons who had not accepted a particular takeover offer by reason of the conduct alleged against all or any of the respondents and who had suffered loss as a consequence.

Opt-out procedures

The procedure for class actions in the Federal Court of Australia allows an opt-out procedure for class members to indicate that they do not wish to be part of the proceedings. Notice must be given to class members of the right to opt-out, the date by which that right must be exercised and the consequences of not exercising that right. ¹⁷ However, that procedure does not provide for personal notification unless the Court determines it is reasonably practical and not unduly expensive. ¹⁸ A judgment given in class action proceedings must identify the class members affected and bind all such members unless they opt out of the proceedings. ¹⁹

An important issue raised in the Aristocrat proceedings was whether the definition of the relevant class in those proceedings, which limited the class to persons who had retained Maurice Blackburn Cashman, was inconsistent with the opt-out regime under s 33J of the Federal Court Act. Maurice Blackburn Cashman in turn only accepted instructions from persons who entered a standard retainer agreement, which required the client to enter a funding agreement with IMF. That funding agreement provided, in the event of successful proceedings, IMF as funder would retain between 20% - 40% of the judgment, depending on the number of the shareholder’s shares, or 45% if there was an appeal. The Federal Court held the requirement that group members opt into the proceedings by retaining Maurice Blackburn Cashman was inconsistent with the structure of Part IVA of the Federal Court Act; and that the definition of class could also not be used to confine a representative group to the clients of one firm of solicitors. ²⁰ A question of real practical interest is whether the inability to restrict a class to the persons instructing a particular firm of solicitors will reduce the commercial attractiveness of class actions to plaintiffs’ law firms. The recent commencement of a class action in the Telstra matter suggests that this development will not prevent such cases being brought.

In a subsequent decision in November 2005, the Supreme Court of Victoria had to consider the same issue in the Media World class action. In that case, the relevant class had been limited to clients of Maurice Blackburn Cashman by identifying the class as 127 persons who were clients of that firm. Hansen J considered the judgment in the Aristocrat class action, and held that there was no relevant distinction between what was sought to be done in the two proceedings. His Honour held that a group defined in that way did not satisfy the requirements of the Victorian Supreme Court Act for a class action.

Reliance: the “fraud on the market” theory

We understand that John Walker will be addressing this topic but we will first fire an opening shot. US courts have embraced the “fraud on the market” theory, which essentially does away with the need for members of a class to prove certain individual-specific issues, such as actual reliance on misleading representations. Prior to this theory emerging in the US, the situation was, as in Australia, that individual shareholders were required to show reliance on a specific misrepresentation. Claims thus regularly fell for lack of a substantial common question, as the individual causative relationships between the misrepresentations and the conduct of affected parties were often very different.

The “fraud on the market” theory replaced the need to prove reliance individually by creating a rebuttable presumption that the plaintiffs all relied on the allegedly fraudulent representations in dealing with their securities, even where they were not aware of the representations at the time of the transactions. The presumption is founded on the understanding that the price of shares in a fully open and efficient market adjusts to accommodate all publicly-available information about those shares, including any misrepresentations on the part of the company and its directors, and that further, shareholders rely on the integrity of that resultant share price in making investment decisions. The theory was established in the US in the 1988 Supreme Court decision in Basic v Levinson, ²¹ and has since become settled law.

Recent US case law has considered whether the “fraud on the market” theory can also establish a rebuttable presumption that the defendant’s misrepresentation caused the plaintiffs’ loss. The argument for this position, as successfully argued in Broudo v Dura Pharmaceuticals,²² is that the dissemination of fraudulent misinformation into the market leads to an artificial increase in the price of the shares, and therefore any loss resulting from the purchase of the stock stems from the fact of it being fraudulently overpriced at the point of purchase. However, the Ninth Circuit judgment in that case was unanimously overturned on appeal,²³ on the grounds that an inflated purchase price alone does not proximately cause economic loss, and thus it would seem that so-called “loss causation” cannot be satisfied by the mere fact of price inflation.

No Australian class action has so yet attempted to invoke the “fraud on the market” doctrine, although we understand it may be raised in the Sons of Gwalia litigation. It is not clear how receptive Australian courts would, or should, be to such an argument. It would be a truly extraordinary result if, at the same time as economists abandon the efficient market hypothesis for more sophisticated approaches such as behavioural finance²⁴, Australian Court were to adopt a legal theory which had its genesis in that hypothesis.

Claims by shareholders against companies in liquidation

The question whether shareholders may bring claims for damages against a company where they have not rescinded their acquisition of the shares has been the subject of substantial focus, and substantial confusion, in recent case law. This question has real practical importance in a liquidation or administration, where rescission is unlikely to be possible. In summary, the position seems to be that:

• The rule in Houldsworth v City of Glasgow Bank, that shareholders who have not rescinded the purchase of shares may not recover damages against the company, has no application to prevent claims by shareholders who purchased on market: Media World Communications Ltd (Administrator appointed) (Finkelstein J) ²⁵, to the contrary Johnston v McGrath (Gzell J).
• It is uncertain whether the rule in Houldsworth’s Case applies to prevent claims brought by subscribers who have not renounced their shares under the misleading and deceptive conduct provisions. Two Full Courts of the Federal Court have taken different views in Cadence Asset Management Pty Ltd v Concept Sports Ltd²⁶ (holding that the rule did not apply to prevent such a claim and the postponement of shareholder interests under s 563A of the Corporations Act sufficiently fulfilled the relevant purpose) and Sons of Gwalia Ltd v Margaretic (holding that the rule continued to apply to prevent such a claim). ²⁷
• Section 563A of the Corporations Act, which postpones a debt owed by a company to a person in his or her capacity as member to claims by other creditors, when the company is in liquidation, does not apply to claims brought by purchasers on market under the misleading and deceptive conduct provisions, since such a claim is not brought in their capacity as a member: Sons of Gwalia Ltd v Margaretic. ²⁸ That section does apply to postpone the claims of persons who subscribed for shares in the company: Cadence Asset Management Pty Ltd v Concept Sports Ltd, supra.

Settlement of class actions

A class action in the Federal Court or the Victorian Supreme Court may not be settled or discontinued without the approval of the Court. ²⁹ If the Court gives such approval, it may make orders in relation to the distribution of any money paid under the settlement. Unless the Court is satisfied that it is appropriate to do so, it must not determine an application for approval of a settlement unless notice of the settlement has been given to all group members. ³⁰

Australian Courts have drawn on the factors identified in US case law in relation to the settlement of class actions in determining whether to approve a settlement, which include:

• Whether a fair and reasonable amount is to be paid as part of the settlement;
• Whether particular segments of the class are treated significantly differently from others, including the amount of monetary relief that goes to the named plaintiffs as compared to other class members and whether the difference is disproportionately large;
• Whether major claims or types of relief sought in the complaint have been omitted from the settlement;
• How many class members object to the settlement and whether those objections are cogent;
• The amount and nature of discovery or evidence obtained;
• Any recommendations of neutral parties and Counsel, made in good faith and without collusion;
• The amount of lawyers’ fees payable; and
• The way in which notice was given and the extent of information provided to participants, including as to the proposed terms of settlement, remedy and predicted quantum.³¹

Prohibition under Australian law on misleading or deceptive conduct

Section 52 of the Trade Practices Act 1974 (Cth) provides that:

“A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.

Section 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) similarly prohibits a person from engaging in conduct in relation to financial services that is misleading or deceptive or likely to mislead or deceive. Section 1041H of the Corporations Act 2001 (Cth) prohibits a person from engaging on conduct in relation to a financial product (including securities) or a financial service that is misleading or deceptive or is likely to mislead or deceive.

The prohibition on misleading or deceptive conduct has a very wide ambit, applying to most circumstances of commercial activity. It is not limited to consumer protection and may be relied upon by any plaintiff, no matter how large or sophisticated.

Misleading or deceptive conduct most commonly consists of misrepresentations, whether express or by silence, but it is not limited to representational conduct. In the securities context, the prohibition would apply to representations in or conduct surrounding offering documents, market announcements, takeover documents, analyst reports and dealings between financial intermediaries and their clients.

Liability is unrelated to any fault on the part of the defendant. In particular, it is not necessary to establish any intention to mislead or deceive. A corporation which has acted honestly and reasonably and exercised due care may nevertheless be held liable if in fact its conduct was likely to mislead.

A plaintiff claiming damages for breach of the prohibition on misleading or deceptive conduct must establish that the claimed loss or damage was caused by the relevant conduct and, in that sense, will usually be required to establish that they relied on the misleading representation.

Predictions as to the future are not necessarily misleading or deceptive simply because they do not come true. The effect of section 51A of the Trade Practices Act (and sections 12BB of the ASIC Act and 769C of the Corporations Act) is that a representation as to a future matter be taken to be misleading if the maker of the representation did not have reasonable grounds for making the representation. A representation as to a future matter would also be misleading or deceptive if a person making the representation knew at the time that it was false or made it with reckless disregard for whether it was true or false.

Prohibition under Australian law on misleading or deceptive conduct in relation to public offer documents and takeover documents

The Corporations Act 2001 (Cth) contains specific provisions in relation to liability for misleading statements in, and omissions from, public offer documents and takeover documents and which provide for certain due diligence defences. These provisions apply to the exclusion of the general prohibition on misleading or deceptive conduct referred to above (to which no due diligence defence applies).

Section 728(1) of the Corporations Act 2001 (Cth) provides that a person must not offer securities under a disclosure document if there is a misleading or deceptive statement in the disclosure document. As with the general prohibition on misleading or deceptive conduct, a person is taken to make a misleading statement about a future matter (eg forecast) if they do not have reasonable grounds for making the statement: s728(2). Liability under section 728 is extended beyond the issuer to current and proposed directors of the issuer, underwriters, persons named in the disclosure document with their consent as having made a statement included in the disclosure document or on which a statement in the disclosure document is based (but only in relation to that statement) and any other person involved in the primary contravention: s729. A due diligence defence is available to a person prima facie liable under section 728 in respect of a misleading or deceptive statement in a prospectus, if the person proves that they made all enquiries that were reasonable in the circumstances and, having done so, believed on reasonable grounds that the statement was not misleading or deceptive: s731. A person is also not liable under s728 if the person proves that they placed reasonable reliance on information given to them by someone other than their employee or agent or, in the case of bodies corporate, a director of the body: s733.

Section 670A of the Corporations Act provides that a person must not issue a takeover document (essentially either a bidder’s statement, target’s statement or related documents) if there is a misleading or deceptive statement in the document. Section 670A(2) provides that a person is taken to make a misleading statement about a future matter if they do not have reasonable grounds for making the statement. Liability under section 670A is extended beyond the bidder and target to the directors of the bidder or target, any person named in the document with their consent as having made a statement included in the document or on which a statement in the document is based (but only in relation to that statement) and any other person involved in the primary contravention. A person is not liable under section 670A if a person proves that they did not know that the statement was misleading or deceptive. A person also is not liable under section 670A if they prove that they placed reasonable reliance on information given to them by someone other than their employee or agent.

Conduct that contravenes either section 728 or section 670A is expressly excluded from the general prohibition on misleading or deceptive conduct (to which no relevant defence is available).

Continuous disclosure regime

Australian listed companies are subject to a continuous disclosure regime under the Listing Rules of Australian Stock Exchange Limited (ASX). ASX Listing Rule 3.1 provides that:

“Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, that entity must immediately tell ASX that information.”

A limited exception to this requirement is set out in Listing Rule 3.1A, which provides that Listing Rule 3.1 does not apply to particular information while all of the following are satisfied:

a) A reasonable person would not expect the information to be disclosed;

b) The information is confidential and ASX has not formed the view that the information has ceased to be confidential; and

c) One or more of the following applies:

• it would be a breach of a law to disclose the information;
• the information concerns an incomplete proposal or negotiation;
• the information comprises matters of supposition or is insufficiently definite to warrant disclosure;
• the information is generated for the internal management purposes of the entity; or
• the information is a trade secret.

Section 674 of the Corporations Act 2001 (Cth) requires listed Australian entities to comply with the continuous disclosure obligation under Listing Rule 3.1. A listed entity commits an offence if it fails to comply with section 674. Section 674 is also a civil penalty provision: s1317E(1)(ja). As a result, any person who suffers damage in relation to a contravention of a listed entity’s continuous disclosure obligations may apply to the Court for an order requiring the listed entity to compensate the person for that loss.

Key provisions of the Federal Court of Australia Act 1976 (Cth) in relation to class action procedure

The provisions in the Act dealing with representative proceedings are found in Part IVA. The key provisions are as follows:

33C Commencement of proceeding

(1) Subject to this Part, where:

(2) A representative proceeding may be commenced:

33H Originating process

(1) An application commencing a representative proceeding, or a document filed in support of such an application, must, in addition to any other matters required to be included:

(2) In describing or otherwise identifying group members for the purposes of sub-section (1), it is not necessary to name, or specify the number of, the group members.

33J Right of group member to opt out

(1) The Court must fix a date before which a group member may opt out of a representative proceeding.

(2) A group member may opt out of the representative proceeding by written notice given under the Rules of Court before the date so fixed.

(3) The Court, on the application of a group member, the representative party or the respondent in the proceeding, may fix another date so as to extend the period during which a group member may opt out of the representative proceeding.

(4) Except with the leave of the Court, the hearing of a representative proceeding must not commence earlier than the date before which a group member may opt out of the proceeding.

33Q Determination of issues where not all issues are common

(1) If it appears to the Court that determination of the issue or issues common to all group members will not finally determine the claims of all group members, the Court may give directions in relation to the determination of the remaining issues.

(2) In the case of issues common to the claims of some only of the group members, the directions given by the Court may include directions establishing a sub-group consisting of those group members and appointing a person to be the sub-group representative party on behalf of the sub-group members.

(3) Where the Court appoints a person other than the representative party to be a sub-group representative party, that person, and not the representative party, is liable for costs associated with the determination of the issue or issues common to the sub-group members.

33V Settlement and discontinuance - representative proceeding

(1) A representative proceeding may not be settled or discontinued without the approval of the Court.

(2) If the Court gives such an approval, it may make such orders as are just with respect to the distribution of any money paid under a settlement or paid into the Court.

43 Costs

(1A) In a representative proceeding commenced under Part IVA or a proceeding of a representative character commenced under any other Act that authorises the commencement of the proceeding of that character, the Court or Judge may not award costs against a person on whose behalf the proceeding has been commenced (other than a party to the proceeding who is representing such a person) except as authorised by:

Footnotes

1. Trade Practices Act 1974 (Cth) s52, Australian Securities and Investments Commission Act s12DA, Corporations Act s1041H. An outline of these provisions appears in the Appendix to this paper.

2. An outline of these provisions appears in the Appendix to this paper.

3. An outline of the continuous disclosure regime appears in the Appendix to this paper.

4. Cook v Pasminco (No 2) [2000] FCA 1819 (12 December 2000).

5. Federal Court of Australia Act 1976 (Cth) s33C, Supreme Court Act 1986 (Vic) s33C. The key provisions of the Federal Court Act governing the conduct of class actions are set out in the Appendix to this paper.

6. King v GIO Australia Holdings Limited (2000) 174 ALR 715 at 725, 100 FCR 209 at 222-223, [2000] FCA 1543 at [7]; Johnstone v HIH Insurance Ltd [2004] FCA 190.

7. (2003) 130 FCR 317, [248].

8. King v GIO Australia Holdings Limited (2000) 174 ALR 715 at 725, 100 FCR 209 at 222-223, [2000] FCA 1543 at [7]; Johnstone v HIH Insurance Ltd [2004] FCA 190.

9. Zang v Minister for Immigration, Local Government and Ethnic Affairs (1993) 45 FCR 384 at 404.

10. Guglielmin v Trescowthick (No 2) [2005] FCA 138, [48]–[49].

11. Wong v Silkfield Pty Ltd (1999) 199 CLR 255 at 266.

12. Federal Court of Australia Act (Cth) s33N(1), Supreme Court Act (Vic) s33N.

13. Bright v Femcare Ltd (2002) 195 ALR 574.

14. Johnstone v HIH Limited [2004] FCA 190.

15. Federal Court of Australia Act (Cth) s33H, Supreme Court Act (Vic) s33H.

16. Petrusevski v Bull Dogs Rugby League Club Ltd [2003] FCA 61 at [23], [25]; Johnstone v HIH Insurance Ltd [2004] FCA 190.

17. Federal Court of Australia Act s33X, Supreme Court Act (Vic) s 33X, King v GIO Australia Holdings Ltd [2001] FCA 270 at [15-16]

18. Federal Court of Australia Act s33Y, Supreme Court Act (Vic) s 33X.

19. Federal Court of Australia Act s33ZB, Supreme Court Act (Vic) s 33ZB. .

20. Dorajay Pty Ltd v Aristocrat Leisure Ltd [2005] FCA 1483 (Stone J).

21. Basic Inc v Levinson, 485 US 224 (1988).

22. Broudo v Dura Pharmaceuticals Inc, 339 F3d 933 (2003).

23. See Dura Pharmaceuticals Inc v Broudo, 544 U.S. 336, 125 S.Ct. 1627, 161 L.Ed.2d 577, 73 USLW 4283, Blue Sky L. Rep. P 74,529, Fed. Sec. L. Rep. P 93,218, 05 Cal. Daily Op. Serv. 3273, 2005 Daily Journal D.A.R. 4419, 18 Fla. L. Weekly Fed. S 233.

24. D Langevoort, “Theories, Assumptions and Securities Regulation: Market Efficiency Revisited” (1992) 140 U Pa L Rev 851; RJ Shiller, Irrational Exuberance, 2000; Lynn A Stout “The Mechanisms of Market Inefficiency: An Introduction to the New Finance” (2003) J Corp Law 635.

25. (2005) 216 ALR 105 at [15], 42 ACSR 346, 23 ACLC 281, [2005] FCA 51.

26. [2005] FCAFC 265, (2005) 147 FCR 434, 56 ACSR 309, 24 ACLC 1.

27. [2006] FCASC 17 at [51], (2006) 56 ACSR 585.

28. [2006] FCASC 17 at [51] ], (2006) 56 ACSR 585.

29. Federal Court of Australia Act s33V, Supreme Court Act (Vic) s 33V.

30. Federal Court Act s33X(4), Supreme Court Act (Vic) s 33X(4).

31. Williams v FAI Home Security Pty Ltd (No 4) (2000) 180 ALR 159 at 465-466.