Landmark Court Cases

The waterfront dispute

In 1998 Maurice Blackburn was retained by the Maritime Union of Australia (MUA) to pursue legal proceedings against Patrick Stevedores, the Commonwealth Government, Peter Reith and the National Farmers Federation. This huge industrial dispute was triggered by the decision to dismiss all employees on the waterfront throughout Australia, and shift assets to other entities.

Josh Bornstein led the team of Maurice Blackburn lawyers in their David and Goliath-style battle against the armies of barristers retained by major commercial law firms.

The team obtained a Federal Court Order to prevent the en masse sacking of the unionised workforce and its replacement by an alternative workforce. The litigation continued with further success for the MUA right up to and including the High Court of Australia's judgment on 4 May 1998.

In an address to the APLA State Conference of May 1999, Julian Burnside QC stated:

'The result was a very eclectic team of lawyers..each member of the team brought to bear on the case their somewhat different skills, knowledge and experience. None of us could have done the case alone, but together we felt invincible.

Litigation such as MUA v Patricks Stevedores does not happen often. Difficult circumstances call for daring responses, and no doubt this emboldened us. But the fact remains that there is scope for creativity and imagination in all litigation.'

The Esso class action

On Friday 25 September 1998 an explosion and fire at the Longford gas plant tragically killed two men and injured eight workers. The explosion also resulted in a two-week gas supply shutdown for much of Victoria causing massive losses for Victorian businesses, employees who were stood down and consumers. Many businesses were forced to do without their gas-fuelled equipment and machinery. Damage to the economy was estimated at more than $500 million.

Maurice Blackburn, together with other firms, successfully pursued a class action against multi-national oil and gas producer Esso. The class action was brought on behalf of Victorian businesses, workers and domestic users who suffered financial loss due to the Longford gas explosion in 1998.

The Supreme Court handed down its decision about the action in February 2003. Under the decision, businesses that suffered property damage or economic loss flowing from property damage were able to recover their losses.

The class action settled in December 2004 for $32.5million.

The GIO class action

Between August and November 1998 GIO, its directors and Grant Samuel & Associates made statements to GIO shareholders in the course of defending a hostile takeover led by AMP Limited.

The statements were made in a formal report called a 'Part B Statement', and also in various other public statements in newspapers. The shareholders were advised that the company was profitable in the first four months of that year and expected to make a profit of $250 million. The shareholders were unanimously advised to reject the takeover offer of $5.35 per share, and many did so.

Six months later the company suffered a loss of $750 million - which meant that the profit forecast had been wrong by as much as $1 billion. The share price collapsed accordingly and the shareholders received only $2.75 per share.

The GIO class action was commenced by Maurice Blackburn on 30 August 1999 against GIO Australia Holdings Limited (now AG Australia Holdings Limited), its former board of directors and Grant Samuel & Associates Pty Ltd. The shareholders' case was that the statements were misleading, deceptive and/or negligent.

The case was bitterly contested by the various respondents and the Federal Court made many important rulings regarding class action law during the case. For the size of the claim, the number of affected shareholders and the nature of the dispute, the case is recognised as a landmark by many shareholders, lawyers and legal writers.

On 26 August 2003, the Federal Court approved a $97 million settlement of the GIO class action for which monies were paid to 22,051 shareholders. The settlement was at the time, the largest class action settlement in Australian legal history. It also represents a turning point for improved accountability to small shareholders and better corporate governance in Australia.

The Aristocrat class action

On 28 August 2008 the Federal Court of Australia approved the $144.5M settlement of the Aristocrat class action, the largest class action settlement in Australian legal history.

The settlement followed the trial of the class action in October 2007.

Maurice Blackburn commenced the Aristocrat class action in November 2003.  The class action was on behalf of all shareholders who acquired an interest in shares in Aristocrat between 19 February 2002 and 26 May 2003 and who suffered loss as a result of Aristocrat's conduct alleged in the Statement of Claim.

The class action alleged that Aristocrat's reported profits for 2001 and the first half of 2002 were overstated because they were based on revenue from some large South American sales in breach of accounting standards.  The claim also alleged that, in breach of its continuous disclosure obligations, Aristocrat did not inform the market that it was unlikely to achieve its 2002 profit forecast. When the true state of Aristocrat's business was announced in February 2003 its share price dramatically plunged from $4.45 to $1.82.

The class action alleged that shareholders who purchased shares in the relevant period suffered losses by purchasing shares at inflated prices because the market was not properly informed of Aristocrat's true financial performance.

The Aristocrat Class Action trial ran for four weeks in October 2007.  In the course of the trial the Applicant sought to prove its case with approximately 900 documents.  The applicant and three expert witnesses gave evidence in support of the case.

Whilst awaiting the judgment, in May 2008 Aristocrat and the Applicant reached a conditional settlement.

Following a process of investigation and verification of claims a final settlement of $144.5 million was reached which was approved by the Court on 28 August 2008.

Aristocrat's current management and directors negotiated a responsible settlement of the class action for which they should be credited.  The case relates to events that occurred in 2001-2003 and the management in place at that time was removed by Aristocrat in 2003.