Myer class action: another good news, bad news story?

Articles Written by John Keeves (Partner), Damian Reichel (Partner)

The Myer continuous disclosure class action decision[1] is a landmark: the first judgment in a securities class action in Australia, and the first case explicitly accepting “market-based causation” as a basis for a damages claim.

Despite that, the applicant failed to prove loss on the basis of market-based causation and so-called “inflation” of the share price.

The case underscores the difficulty of running securities class actions based on a failure to correct earnings guidance, and the vagaries of actually proving loss.

This note will focus on the learnings for “front end” decisions on when disclosure should be made under ASX Listing Rule 3.1 and s674 and s677 of the Corporations Act.

 


 

[1] 1 TPT Patrol Pty Ltd v Myer Holdings Limited [2019] FCA 1747

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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