The retired judge Tony Fitzgerald, QC, will supervise a court-ordered attempt to settle a $60 million shareholder class action against the wheat exporter AWB Ltd.
Yesterday the organisers of the suit, the plaintiff law firm Maurice Blackburn and litigation funder IMF (Australia) Ltd, told the Federal Court they had amended their claim to enhance the chances of the mediation succeeding.
A settlement would avoid a long and expensive trial covering much of the same ground as the 2006 federal inquiry which found AWB's covert payments to the regime of Saddam Hussein in Iraq rorted the oil-for-food program run by the United Nations.
The plaintiffs' barrister, Michael Lee, said yesterday that "from September last year it was apparent really for the first time" that AWB intended to challenge the findings of the commissioner, Terence Cole, QC, during the class action, which was launched in April 2007.
The AWB stance would force his clients to "prove things that the Cole inquiry found" and require them to tender more documents than were tendered to the inquiry, Mr Lee said.
The company's barrister, Charles Scerri, QC, responded in defence documents filed in court that AWB had "always contested" the key Cole findings and had "denied some and not admitted others".
Yesterday's amendment will open the case to AWB shareholders who had not signed a funding agreement with IMF.
Previously it was limited to the 454 shareholders who had signed by October 31, 2008.
Mr Lee said the change offered finality to AWB.
"It will increase the prospects of commercial resolution, AWB knowing that it will not be vexed by further proceedings," he said.
Mr Scerri said AWB did not oppose the class being broadened but wanted IMF to pay for a letter alerting all potential members.
The suit will now be open to all investors who bought AWB's B-class shares before March 11, 2002 and were still holding them when Mr Cole opened his inquiry on January 16, 2006.
"My instructions are that there are 20,000 names listed as shareholders and a substantial number of those are nominee companies so we don't know how many beneficial shareholders there are, but it must be at least 20,000," Mr Scerri said.
Justice Lindsay Foster agreed the plaintiffs could send a subpoena to the Australian Securities and Investments Commission seeking copies of transcripts of examinations and witness statements from the regulator's investigation, which began when Mr Cole reported his findings.
The judge said ASIC and people affected by its investigation would have an opportunity to object to the material being used in the class action before the plaintiffs were given access to it.
Mr Lee said there was no point in Mr Fitzgerald chairing the mediation until expert evidence had been filed on how each investor's alleged loss should be calculated.
The plaintiffs will file their expert reports in May, AWB will file its reply in June and the mediation will take place on July 2 and 3.
Email a friend