Investors that purchased shares in Brambles Limited (BXB) in the period of 18 August 2016 to 17 February 2017 (inclusive) can sign up to retain Maurice Blackburn in a class action to recover losses alleged to have been suffered after Brambles’ share price slumped on the back of its announcements on 23 January and 20 February 2017 that it would not meet its sales and profits forecasts.
On 8 May 2019, the Federal Court of Australia ordered that the class action filed by Maurice Blackburn be consolidated with a separate class action filed against Brambles by Slater & Gordon. The consolidated proceeding is known as Holly Southernwood, and William Vincent Kidd & Mary Agnes Collum as Trustees for the Magness-Bennett Superannuation Fund v Brambles Limited (No VID 972/2018) (Brambles Class Action) and is being conducted jointly by Maurice Blackburn and Slater & Gordon on behalf of group members and the lead applicants. Litigation funding is being provided by both Harbour Funding III, L.P and Omni Bridgeway Limited, previously known as IMF Bentham Limited (the Funders).
As part of the consolidation, the Court also made what is known as a ‘common fund order’, which required each group member who receives compensation in the Brambles Class Action—regardless of whether that group member has entered into a funding agreement with the Funders—to pay to the Funders a percentage of any compensation to which the group member becomes entitled as commission for funding the proceeding. The percentage funding commission under the common fund order was not set, but was to be determined by the Federal Court following the conclusion of the Brambles Class Action in an amount the Court considers to be reasonable.
After the common fund order was made in the Brambles Class Action, the High Court of Australia handed down a decision in another class action, which held that Courts do not have power to make a common fund order at least at an early stage of a class action. Therefore, the common fund order originally made in the Brambles Class Action has now been vacated by the Federal Court.
At present, the High Court has not considered whether a common fund order could be made towards the end of a class action though present authorities suggest that the Federal Court does have this power at the conclusion of a class action. The Applicants therefore intend to ask the Court to make a similar order at that time. Until the making of any such order, Maurice Blackburn, Slater and Gordon, the applicants and the Funders have all expressed their intention to continue to conduct and fund the Brambles Class Action in the same manner as originally contemplated by the now-vacated common fund order.
Please note that group members will not have to pay any amount of money until and unless there is a successful outcome in the Brambles Class Action. Further, the amounts paid to the litigation funders and lawyers in the event of a successful outcome will not exceed the settlement or judgment sum.
Opt Out and Registration Notice
On 6 August 2021, the Court made orders for a registration and opt out process to occur in the Brambles Class Action. This includes orders for a notice to be sent to potential group members which provides important information about:
- the Brambles Class Action and who are group members in it, together with information about the basis on which it is being conducted;
- what you need to do if you do not wish to participate in the Brambles Class Action, and instead wish to remove yourself (‘opt out’) from being a group member in the Brambles Class Action; and
- the Applicants’ solicitors are encouraging interested group members to register before 4.00 pm AEDT on 14 October 2021. Registration is optional at the present time, however if you wish to register for the Brambles Class Action you can do so by clicking here.
A copy of the notice approved by the Federal Court of Australia is available for download here. It was also separately distributed to potential claimants via Brambles’ shareholder registry from around 17 August 2021.
Please note that the deadline for opting out of the Brambles Class Action is by 4:00pm AEDT on 14 October 2021. Group members who wish to opt-out of the class action may wish to seek independent legal advice prior to doing so.
If you have any questions in relation to the notice, please feel free to email us at firstname.lastname@example.org or call us at 1800 675 816.
What is the Brambles class action about?
On 18 August 2016, Brambles published its 2016 Annual Report and gave guidance for the 2017 financial year (FY17) regarding sales growth of 7% to 9% and profit growth of 9% to 11%.
Brambles repeated this guidance on 20 October 2016 when it published its trading update for the first quarter of FY17, and again on 16 November 2016 at its AGM.
On 23 January 2017 Brambles informed the market that it no longer expected to meet its earlier guidance, and it now expected sales growth of 5% and profit growth of 3% for the first half of FY17; and sales and profit growth for FY17 to be below the guidance previously provided.
On 20 February 2017 Brambles published its results for the first half of FY17, providing revised guidance of sales growth around 5% and profit growth of 0%.
The market reacted strongly, with price drops of almost 16% on 23 January 2017 (with a trading volume of 19.3 million) and 10% on 20 February 2017 (with a trading volume of 21.7 million, around five times greater than the average volume over the previous 12 months).
Companies are required to have a reasonable basis for their guidance and must notify the ASX as soon as they have or ought to have information which would cast doubt on prior guidance. Our investigations raise serious questions as to whether Brambles had a reasonable basis for its initial guidance and whether it should have notified the ASX sooner that it was likely to miss that guidance.
If Brambles lacked a reasonable basis for its guidance, investors may have paid an inflated price for Brambles shares, and they may be able to recover their losses through this class action.
Shareholders that purchased Brambles shares between 18 August 2016 and 17 February 2017 (inclusive) can sign up by clicking the Sign Up button.
Institutional investors can request a funding pack by emailing email@example.com.
Maurice Blackburn Lawyers Steven Foale and Ronald Koo are leading this class action.