Claims

Registry

NSW Registry, Federal Court of Australia (NSD2244/2013).

Background

On 14 February 2011, Leighton had forecast a FYll full year net profit after tax (NPAT) of $480 million.

On Monday 11 April 2011. Leighton Holdings Limited (“Leighton”) announced a projected $427 million full year loss for the 2011 financial year (FYll) driven by more than $1.1 billion in write-downs relating to three major construction projects, the Brisbane Airport Link project (BAL Project), the Victorian Desalination Plant project (VDP Project), and a joint venture construction project in Dubai (Habtoor Leighton).

Therefore, the result announced on 11 April 2011 was $907 million less than had been forecast two months earlier. On the first trading day after the 11 April 2011 profit write-down Leighton’s share price fell by about 13.9%.

The Action

On 30 October 2013 Maurice Blackburn, funded by International Litigation Funding Pty Ltd, filed a class action in the Federal Court of Australia on behalf of shareholders of Leighton Holdings Limited (‘Leighton’) to recover losses suffered as a result of alleged non-disclosure and misleading or deceptive conduct by Leighton during the period 16 August 2010 and 11 April 2011.

The class action alleged that in the period 16 August 2010 to 11 April 2011, Leighton had:

  1. failed to disclose that there were material matters arising either individually or collectively from the BAL Project and VDP Project and likely impairments on the Habtoor Leighton investment which made it likely that Leighton would not achieve its profit forecasts for the 2011 financial year; and
  2. made statements that misled or deceived shareholders about the profit forecasts and performance for the 2011 financial year and performance.

The Applicant claimed that this conduct was in contravention of the continuous disclosure rules of the Australian Securities Exchange (ASX), the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth) and the Australian Consumer Law.

Group members were defined as those who acquired an interest in ordinary shares in Leighton between 16 August 2010 and 11 April 2011 and who suffered loss and damage by or resulting from the alleged conduct of Leighton.

Settlement

A conditional settlement was announced on 16 May 2014 on the basis that Leighton pay the class members $69.45 million. On 25 August 2014 the Federal Court of Australia made orders approving the proposed settlement.

Judgments

1. Opt Out (6 June 2014).

2. Settlement Approval (25 August 2014).