NSW Registry, Federal Court of Australia (NSD1847/2010).
Nufarm is an Australian-based crop protection company with manufacturing and marketing operations in Australia, New Zealand, Indonesia, Europe, North America and South America.
Its business includes the production and supply of agricultural chemicals throughout the world, including the sale of glyphosate products which historically contributed to approximately one third of the company’s overall revenue.
On 12 August 2011, a representative proceeding against Nufarm Limited was filed in the Federal Court of Australia. This consolidated two separate class actions commenced by Maurice Blackburn and Slater and Gordon, seeking to recover losses suffered by shareholders as a result of alleged material non-disclosures and misleading conduct relating to Nufarm’s glyphosate business (the ‘Proceeding’).
The Proceeding was brought on behalf of Nufarm shareholders who acquired an interest in Nufarm securities between 28 September 2009 and 31 August 2010 (inclusive) (the ‘Claim Period’) and who suffered loss as a result of the alleged misconduct.
Nufarm is a listed disclosing entity within the meaning of the Corporations Act. As such, it is required to comply with the “continuous disclosure” regime under ASX Listing Rule 3.1 and section 674 of the Corporations Act. Under these provisions, Nufarm is required to advise shareholders and the market of all information that might materially affect its share price of which it was, or ought to have been aware. Information is likely to have a material effect on the share price if the information would be likely to influence people who commonly invest in shares in deciding whether to buy, sell or retain shares.
The claim alleged that during the Claim Period, Nufarm failed to disclose the true position to the market and was therefore in breach of its continuous disclosure obligations.
The claim also alleged that various statements made during the claim period were misleading and that the company did not have any reasonable basis to make such representations.
Following a Court-ordered mediation with Nufarm, a conditional settlement of the class action had been reached on 1 August 2012, which was subject to approval by the Court. Under the proposed settlement, Nufarm proposed to pay $43.5 million in compensation including the costs of conducting the claim.
On 27 November 2012, the settlement agreement was amended to cover an expanded number of claims, with Nufarm agreeing to pay a total of $46.6 million in compensation.
On 28 November 2012, the Court approved the proposed settlement of the Nufarm Shareholder Class Action. The Court further ordered that Slater and Gordon and Maurice Blackburn jointly administer the settlement in accordance with the Settlement Distribution Scheme.
The Court also approved the methodology by which each Participating Group Member’s loss (if any) was to be calculated, known as the ‘Loss Assessment Formula’.
Settlement Approval (28 November 2012).