In only the second Australian shareholder class action in which a defendant has prevailed on liability, the Honourable Justice Jagot of the Federal Court of Australia has handed down her decision in Bonham v Iluka Resources Limited, dismissing all of the applicant’s and group members’ claims against Iluka.
The Court found that Iluka had reasonable grounds for making and maintaining its 2012 sales guidance throughout the claim period, and did not fail to disclose material information to the market. Justice Jagot also found that the process by which the 2012 sales guidance was developed was reasonable, contrary to the applicant’s contention.
Herbert Smith Freehills represented Iluka and the team was led by partners Jason Betts and Ante Golem. The Iluka judgment follows the successful defence by Herbert Smith Freehills of the shareholder class action against Worley in October 2020, which was the first time in Australia that a defendant had prevailed on liability in such a case.
Class actions partner Ante Golem said this was an important milestone in Australia’s class actions history.
“The Court’s decision represents only the second dismissal of a shareholder class action after a full trial, and we are proud to have represented Iluka.”
“This class action was first filed four years ago in April 2018, following an application for preliminary discovery which was brought in 2014. The trial itself was heard over four weeks in March, April and May 2021.”
“Jason and I are extremely proud of the work of Herbert Smith Freehills’ market leading class action team in Perth and Sydney, and are indebted to the lawyers, paralegals and support staff who assisted on this matter.”
Co-head of Herbert Smith Freehills class actions practice, Jason Betts, said it was a privilege to represent Iluka, noting the applicant brought the case on behalf of persons who acquired an interest in ordinary shares in Iluka during the period 12 April 2012 to 9 July 2012.
“We are pleased that the Court dismissed the allegations and favourably received Iluka’s defence. It is a great credit to Iluka that it pushed forward with the proceeding and defended the case to trial, particularly given the enormous efforts involved in bringing together the evidence of its former senior leaders. We thank Iluka for its leadership and strategic focus in defending this claim,” Mr Betts said.
Mr Betts said: “Following the first successful defence on liability of a shareholder class action for Worley in October 2020, Herbert Smith Freehills is proud to have been given opportunities by its clients to defend these actions to trial, and hope that Iluka’s success makes an important contribution to Australian continuous disclosure law.”
“Iluka is understandably pleased with the outcome after such a prolonged process and we congratulate them on this significant win,” Mr Golem said.
The case is Bonham as Trustee for the Aucham Super Fund v Iluka Resources Ltd  FCA 71.
 The decision of Justice Gleeson in Crowley v Worley Limited  FCA 1522 is currently the subject of an appeal.