Supreme Court of Victoria derails future of entrepreneurial class actions

The number of shareholder class actions in Australia continues to grow at an impressive rate.  However, a recent decision of the Supreme Court of Victoria has examined the limits of entrepreneurship by securities class action lawyers, and has reiterated concerns foreshadowed by the High Court regarding the funding of legal actions by lawyers.

Background

In Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No. 3) [2014] VSC 340, the lead plaintiff, Melbourne City Investments Pty Ltd (MCI) was controlled by solicitor, Mark Elliott, the company’s sole director and shareholder.  In 2013, MCI commenced separate securities class action proceedings against Treasury Wine Estates Limited (Treasury), WorleyParsons Limited (WorleyParsons) and Leighton Holdings Limited (Leighton), alleging misleading and deceptive conduct, and a failure by each company to satisfy its continuous disclosure obligations, contrary to various provisions of the Corporations Act 2001 (Cth).

Heads of Agreement – when are they binding?

A recent judgment in New South Wales has clarified that a Heads of Agreement is generally considered binding if, at the time of entering into the agreement, the parties intended to be immediately bound by it.  This holds true even if the parties intended, and the Heads of Agreement between the parties records, that additional matters are to be agreed and a formal contract executed at a later time.  Further, any dispute about the subject matter of a Heads of Agreement will not affect the binding nature of that agreement.

The case highlights that parties contracting on a preliminary basis should take great care when considering the use of a Heads of Agreement.

Protecting your business from damaging blog posts

The Federal Court of Australia has handed down a valuable decision for business owners concerned their business reputation is being damaged by a competitor’s misleading online blog posts.

The decision of Nextra Australia Pty Limited v Fletcher [2014] FCA 399 establishes that, in certain circumstances, the posting of a misleading online blog article regarding a business competitor can amount to conduct which is prohibited under the Australian Consumer Law. With recent reports indicating there are now more than 150 million blogs in existence, the decision is a timely reminder for those operating a blog for commercial reasons.