Court ruling set to reshape CBA shareholder case

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This judgment of the Full Court (Murphy, Moshinsky and Button JJ) addressed consequential orders following the Court's earlier judgment in May 2025 concerning alleged contraventions by the respondent (CBA) of continuous disclosure obligations (Zonia Holdings Pty Ltd v Commonwealth Bank of Australia Ltd (2025) 174 ACSR 337; [2025] FCAFC 63). The proceedings arose from CBA's failure to lodge threshold transaction reports (TTRs) for cash transactions of $10,000 or more processed through Intelligent Deposit Machines (IDMs) following their introduction, and CBA's failure to conduct account-level monitoring—failures which occurred due to a systems error from around November 2012. The proceedings at first instance were heard by the primary judge, who made orders dismissing the originating application in each proceeding on 28 May 2024. In its first judgment, the Full Court found that the applicants had succeeded in establishing that CBA had committed certain contraventions of its continuous disclosure obligations (albeit more limited than those contended for by the applicants), but that the applicants had not established that any inflation in the CBA share price resulted from the contraventions.

• The remaining issues between the parties included:
• whether declarations of contravention should be made;
• whether there should be a remittal of any part of the proceeding; and
• the appropriate orders as to costs.

The Court held that it was appropriate to make declarations that CBA contravened ASX Listing Rule 3.1 and section 674 of the Corporations Act 2001 (Cth) in the terms found by the Court, namely, by failing to disclose on or about 24 April 2017 that: (a) from around November 2012 to 8 September 2015, CBA had failed to give threshold transaction reports on time for approximately 53,506 cash transactions totalling approximately $624.7 million (representing between approximately 80% and 95% of threshold transactions through IDMs during that period), and these late TTRs had not been lodged, at least in part, because of a systems error which occurred in or around November 2012; and (b) from around 8 September 2015, CBA was aware that from at least 20 October 2012 to 8 September 2015 it had failed to conduct account level monitoring with respect to 778,370 accounts.

CBA had submitted that declarations were unnecessary and inappropriate in circumstances where the appellants had failed to establish that they suffered any loss by reason of the contraventions. However, the Court rejected this submission, stating that it is “no small thing that Australia's largest bank contravened the continuous disclosure provisions of the Corporations Act”. The Court considered that making declarations was appropriate: it would vindicate the applicants’ case on an important point, serve the purpose of promoting compliance with the continuous disclosure regime, and provide foundation for any ‘no transaction’ claims that group members might pursue. The Court emphasised that the class action regime not only facilitates access to justice to those who suffer loss by reason of conduct that contravenes statutory norms, but also assists in the enforcement of the substantive law, including by deterring contravening conduct.

The balance of the proceedings was remitted to a single judge for case management, hearing and determination (subject to any orders that may be made under sections 33N, 33Q, 33R or 33S of the Federal Court of Australia Act 1976 (Cth)), to address whether any ‘no transaction’ claims would be pursued. CBA had contended that if any group members wished to bring a ‘no transaction’ claim, they could do so in separate proceedings, noting that the limitation period had been suspended during the course of the class action proceedings pursuant to section 33ZE. The appellants opposed this course and pointed to the fragmentation that would occur if separate proceedings were commenced in different courts about the same subject matter. The Court considered the preferable course was remittal, as the issue of whether further claims should be brought within the current proceedings or in new proceedings should be determined by a single judge after hearing from the parties.

Regarding costs, the Court determined that each party achieved a significant measure of success on the appeals and ordered that each party bear its own costs of the appeals and cross-appeals. For the proceedings at first instance, the appellants were ordered to pay 80% of CBA’s costs. This reflected that whilst CBA was largely successful overall, some allowance was made for the appellants’ success in establishing some contraventions.

[Postscript: Following this judgment, the applicants applied for special leave to appeal to the High Court in relation to the Full Court’s dismissal of their claims on the basis that they had not established that any inflation in the CBA share price resulted from the established contraventions. On 13 February 2026 the High Court granted special leave to appeal, with the result that the key issue of proof of causation and loss in shareholder class actions will now be considered and determined by the High Court. The full High Court judgment is available here.]

Zonia Holdings Pty Ltd v Commonwealth Bank of Australia Ltd (No 2) [2025] FCAFC 123

Federal Court of Australia, Murphy | Moshinsky and Button JJ | 4 September 2025
Applicants’ Solicitors: Maurice Blackburn & Phi Finney McDonald
Respondents’ Solicitors: Herbert Smith Freehills
Applicants’ Funder: N/A

Federal Court of Australia: Available here.

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