Dispute Resolution Update - Jan 2018

Articles Written by Paul Reidy (Partner), Rena Solomonidis

The latest insights into our case developments, matters in the spotlight, and broader news in the dispute resolution space.

In the spotlight

Australian Securities & Investments Commission

We acted for the Australian Securities & Investments Commission (ASIC) in proceedings against two of Australia’s largest banks, the ANZ and Westpac bank, for alleged market manipulation and rigging of the bank bill swap rate (BBSW) for financial gain. The cases were similar to the UK Libor litigation as BBSW is a key benchmark rate used when setting the cost of financial products in various futures and derivative markets which also has a flow on effect for business loans. The proceedings involved complicated claims and required detailed understanding of the bank bill market and derivative and futures markets and related trading models. The ANZ claim settled prior to trial and the Westpac claim ran to hearing and is awaiting judgment.

Case developments

Lifeplan Australia Friendly Society Ltd

We continue to act for the lead applicants in a class action in the Federal Court against S&P Global Inc., for losses from investments made in complex structured financial products known as synthetic collateralised debt obligations rated by leading global ratings agency, Standard & Poor's, and sold through investment bank, Lehman Brothers’ Australian subsidiary. The allegations include claims that Standard & Poor’s incorrectly rated the products and lacked independence in assigning ratings.

Australian Property Custodian Holdings Ltd (In Liq)

We act for liquidators, PKF Melbourne, in the Supreme Court of Victoria in claims arising from the restructure and sale of the rights to manage 12 retirement villages, the claim being in excess of $60 million. JWS also acts against the company’s former auditors, Pitcher Partners, in a claim of approximately $150 million for alleged breaches of duties in relation to its audit report for the financial year ended 30 June 2007. Trial is set down for 16 weeks in February 2018 and is currently being mediated.

Gunns Ltd (In Liq)

We continue to act for the liquidators of Gunns Ltd (In Liq) and its group of companies in relation to three claims with a combined value of approximately $150 million that arise from the collapse of one of Australia’s largest timber and forestry management companies. Claims include:

  1. voidable preference claims in the Federal Court of Australia against numerous creditors;
  2. a claim against the former auditors, KPMG, in the Supreme Court of Tasmania, in relation to their conduct of the audit in the 2009 and 2010 financial years; and
  3. a claim against the directors in respect of misstatements in the 2010 annual report.

Linc Energy (In Liq)

JWS continues to act for the liquidators of Linc Energy in ground breaking proceedings against the Queensland Department of Environment and Heritage Protection concerning the interaction between insolvency and environmental laws with respect to an environmental clean-up liability arising from Linc Energy’s former underground coal gasification operations in Queensland.

Slater + Gordon

We act for the applicant in a shareholder class action against Pitcher Partners, the auditors of Slater + Gordon. This claim follows class action proceedings commenced against Slater + Gordon in June 2017, in which JWS acts. It is alleged that by publishing its independent audit and review reports from 2012 to 2015, Pitcher Partners made representations to the market which induced investors and potential investors to purchase shares in Slater + Gordon at inflated prices.

Dispute resolution news

Financial Services Royal Commission

On 30 November 2017, the Australian Government announced a royal commission to investigate misconduct in the nation’s banks and other financial services entities. Former High Court judge Kenneth Hayne has been appointed to lead the royal commission, to will begin early in 2018. According to the Government’s media release, it will consider the conduct of banks, insurers, financial services providers and superannuation funds and how equipped regulators are to identify and address misconduct. For more information, click here.

Litigation funding inquiry

An inquiry is being conducted into the increasing rate of class actions in Australia financed by litigation funders. The inquiry will be undertaken by the Australian Law Reform Commission to “ensure that litigants who are seeking to enforce their rights using the services of litigation funders and/or through group proceedings are not exposed to unfair risks or disproportionate cost burdens.” The Commission’s report is due by 31 March 2018. For more information and to review the Terms of Reference, click here.

New Attorney-General

On 20 December 2017, Christian Porter was sworn in as Attorney-General of Australia to replace George Brandis. Mr Brandis will be the next High Commissioner to the United Kingdom, replacing Alexander Downer. Mr Porter was previously Minister for Social Services and Parliamentary Secretary to the Prime Minister. For more information on the new Attorney-General, click here.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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