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

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.