Slater & Gordon has launched a separate case in the long-running class action against Centro Properties Group.
In 2008, Slater & Gordon and Maurice Blackburn launched class actions on behalf of all those who purchased or acquired an interest in Centro Properties and/or Centro Retail securities during 2007 and 2008.
It was alleged that in the period between August 2007 to February 2008, Centro Properties and Centro Retail breached their obligations of continuous disclosure under the ASX Listing Rules and the Corporations Act; and that both companies engaged in misleading and deceptive conduct by failing to adequately disclose to their security holders and the ASX the full extent of their debt obligations and risk.
This latest action is limited to a group of investors who acquired shares in Centro after its former auditor, PricewaterhouseCoopers (PwC), began working for the group at the end of 2007.
The separate class action comes as a result of a Federal Court decision by Justice Ryan in October 2010. Applying the Full Court decision in Philip Morris v Nixon (2000), Justice Ryan held that it was necessary for every group member in the proceeding to have a claim against every respondent in the proceeding, and that those group members who had purchased Centro shares between April and July 2007 - before PwC's involvement - did not have a sufficient claim against PwC and therefore refused to allow PwC to be added to the proceedings.
"That was, in a sense, a technical decision," explained Slater & Gordon practice group leader Ken Fowlie.
"The decision of Nixon has not been a decision which has attracted universal approval. There have been some attempts in subsequent judgments to soften the effect of it and there's been some fairly direct criticism of the court's decision.
"But Ryan's view was that given it represented the authority of the Full Court, and absent another authority of equal or greater weight, he was obliged to follow that decision as a single judge acting in the Federal Court."
As a result, rather than appeal that decision, the separate class action was launched against PwC on behalf of the group members who acquired shares between August 2007 and 28 February 2008, during which PwC was involved with Centro.
A timeline has been set with a hearing expected in August 2011.
Slater & Gordon's class action is being funded by Comprehensive Legal Funding and Maurice Blackburn's action is being funded by IMF Australia.