Despite the Commonwealth Bank’s partial success on appeal, the Federal Court ordered that a shareholder class action relating to disclosure failures be remitted to a single judge.
Justices Bernard Murphy, Mark Moshinsky and Catherine Button ordered that proceedings brought by Zonia Holdings and Philip Anthony Baron against the Commonwealth Bank of Australia (CBA) be remitted to a single judge for hearing and determination.
However, the class action cannot relitigate claims relating to CBA share prices because of appeal findings handed down in May.
In that decision, the Federal Court was satisfied that CBA breached the ASX Listing Rules and the Corporations Act, but it was not enough to overturn Justice David Yates’ May 2024 decision to dismiss the shareholder class action proceedings, filed by Maurice Blackburn.
CBA argued that if group members wished to bring a claim, they could do so in separate proceedings, particularly given that the only issues that remain on a “no transaction” basis related to “individual issues”.
In reply, Zonia Holdings and Baron warned of fragmentation if separate proceedings were allowed on the same matter.
“In circumstances where there are no competing views as to whether any further claims should be brought within the current proceedings or in new proceedings, it is not appropriate for this issue to be determined by a Full Court; it is preferable that it be determined by a single judge,” Justices Murphy, Moshinsky and Button said.
The court noted that, given that the personal claims of Zonia Holdings and Baron were dismissed, it was likely that a new group member would be substituted should further claims be pursued.
The full bench also made a declaration that CBA was in contravention of the listing rules and the Corporations Act due to its disclosure failures, despite the bank’s submissions that there would be “no utility in it”.
CBA claimed the declaration was “unnecessary and inappropriate” because the class action failed to establish any loss, but Justices Murphy, Moshinsky and Button found the declaration could still have practical consequences for the “no transaction” group members.
They also noted it was “no small thing that Australia’s largest bank” was in contravention of the law, making the declaration appropriate.
“A declaration vindicates the appellants’ case on this important point and serves the purpose of promoting compliance with the continuous disclosure regime,” Justices Murphy, Moshinsky and Button said.
Given that both parties “achieved success on certain issues”, they were ordered to bear their own costs of the appeal and cross-appeal.
The case: Zonia Holdings Pty Ltd v Commonwealth Bank of Australia Limited (No 2) [2025] FCAFC 123.
Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly.
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