Judge halts A2 Milk case until Australian case settled

A2 Milk has succeeded in halting a local class action over alleged misleading and deceptive conduct and breach of stock exchange rules on continuous disclosure.

The High Court has ruled the New Zealand hearing should be suspended until similar cases in Australia regarding the same statements have been settled.

Justice Edwards’s ruling has just been released in which she said the Australian court has jurisdiction to determine the dispute and was the more appropriate court to determine the matters in issue.

“The existence of a substantively similar proceeding in Australia tips the balance in favour of a stay,” the judgement said.

“The intrusion on access to justice interests is minimal given the alternatives open to shareholders. The savings in time, cost, and resources favour a temporary stay of the New Zealand proceeding pending determination or settlement of the Australian proceeding.”

However, she also ruled that an opt-in class action being fronted by A2 shareholder Kevin Whyte can be started.

A2 Milk faces two class actions in Victoria from disgruntled shareholders over a series of earnings downgrades in late 2020 and early 2021, which the company said were caused by a Covid-related slide in sales in its key market, China.

The company’s share price slumped by around 70 percent.

A2 Milk has denied any liability and said it would vigorously defend the proceeding.

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