John Walker (pictured), IMF’s executive director, challenged S&P to prove the claim is frivolous.

“Either they have a reasonable basis for that representation or they don’t,” he told Lawyers Weekly. “If they do, they should follow it up by applying for the claim to be struck out or seeking summary judgment.”

Walker said that discrediting the claim without reasonable grounds could be misleading investors in S&P’s listed holding company, The McGraw-Hill Companies. He claimed that S&P has made the assertion without the benefit of the Federal Court pleading.

“[Statements by listed companies] need to have a reasonable basis or they could be found to be misleading ... and [S&P] hasn’t yet got the claim,” he said. “We’re still trying to find someone who’s prepared to accept service on their behalf in Australia.”

Walker explained that Clayton Utz, the firm that represented S&P in 2012 proceedings, hasn’t confirmed instructions to accept service.

The claim is the second class action launched in Australia alleging S&P granted misleading ratings of complex financial products in the lead up to the GFC. In November last year, the Federal Court ruled in favour of 12 NSW local councils that lost millions on failed investments assigned a AAA rating.

In the judgment, Justice Jayne Jagot slammed S&P for failing in its duty of care to investors by assigning the rating to “grotesquely complicated” and risky synthetic derivatives known as constant proportion debt obligations.

Within two hours of the 1459-page judgment being handed down, S&P said it would appeal the decision. The announcement was made without the benefit of legal counsel’s advice, claimed Walker.

“The judge spent a lot of time explaining why [S&P] lost and then [S&P] disregarded that judgment and came out with a statement that they’re going to appeal ... [the timeframe] shows they were going to appeal irrespective of the judgment,” he said.

Lawyers Weekly approached Piper Alderman for comment but did not receive a response prior to publication.