This is a shareholder class action in relation to BHP Group Ltd’s (BHP Ltd) alleged failure to inform the market of the risk that a dam at its Germano mine joint venture in Brazil might collapse. The catastrophic collapse of the dam in November 2015 resulted in substantial property damage, several fatalities, the closure of the mining operation, and a significant fall in BHP Ltd’s share price.
This decision concerned an application for leave to appeal by BHP Ltd from the decision of Moshinsky J in Impiombato v BHP Group Ltd (No 2)  FCA 1720, in which his Honour refused BHP Ltd’s application for:
The Full Court dismissed BHP Ltd’s appeal on all three issues. While the Court granted leave to appeal in relation to Issue 1, it rejected BHP Ltd’s arguments for several reasons, including the following:
In relation to Issue 2, the Court refused leave to appeal. Although the Court acknowledged that the presence of non-resident class members gave rise to some risk of re-agitation of the same issues in subsequent foreign proceedings, it identified that there are other, less drastic, options available to deal with this potential prejudice than the exclusion of non-residents from the class definition. For example, the Court indicated that a class closure order may be made at a future stage of the proceeding. In relation to the power to make such an order, the Court acknowledged that recent decisions of the New South Wales Court of Appeal stand for the proposition that class closure orders that give rise to a contingent extinguishment of class members’ rights of action are beyond power (Haselhurst v Toyota Motor Corporation Australia Ltd (2020) 101 NSWLR 890;  NSWCA 66 and Wigmans v AMP Ltd (2020) 102 NSWLR 199;  NSWCA 104). However, the Court also drew attention to Beach J’s recent decision in Wetdal Pty Ltd as Trustee for the BlueCo Two Superannuation Fund v Estia Health Ltd  FCA 475, in which his Honour queried the correctness of those decisions, and said (at ):
Although there is, with respect, much to be said for Beach J’s observations in Wetdal (at –) as to Wigmans and Haselhurst, in our view, on any view of the law, an order could be fashioned if and when it did become necessary or appropriate to ensure that justice was done to ensure that BHP was not vexed with the prospect of non-resident group members, who do not take a step to prosecute their claim in this class action, having the ability to commence another proceeding in another jurisdiction.
Finally, the Court also refused leave to appeal in relation to Issue 3. It held that there was no arguable error in the primary judge’s finding that the question of whether s 674 (read together with ss 1317HA or 1325) of the Corporations Act 2001 (Cth) accommodates the claims of BHP Plc shareholders should be determined at trial.
The High Court has now granted BHP special leave to appeal and the appeal will be heard in June this year.
Full Court of the Federal Court of Australia, Middleton, McKerracher and Lee JJ,
3 June 2021
Appellant’s Solicitors: Herbert Smith Freehills;
Respondents’ Solicitors: Phi Finney McDonald and Maurice Blackburn Lawyers;
Respondents’ Funders: N/A (Maurice Blackburn)/KTMC Funding LLC (Phi Finney McDonald)
Austlii Link: Accessible here
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