Dual-listed a2 not required to do battle on both sides of the ditch

15 February 2023

a2 Milk Company Limited has succeeded in winning a stay of a class action in New Zealand that concerned alleged market disclosure breaches already being litigated by shareholders in Australia. 

The Auckland High Court’s decision1 demonstrates the value of the Trans-Tasman Proceedings Act 2010 (TTPA) in protecting dual-listed companies from the costs of simultaneous litigation on both sides of the Tasman.

Key factors in the Court’s decision were the substantial similarity between the Australian and New Zealand cases, the burden on a2 in defending both, and the risks that the different courts may produce inconsistent decisions on essentially the same claims.

The context

a2 is facing multiple suits by shareholders over allegedly false, misleading or deceptive statements concerning its forecast revenue and earnings to the Australian Stock Exchange (ASX) and NZ Exchange Main Board (NZSX) between August 2020 and May 2021. The company is also alleged to have breached its continuous disclosure obligations.

Two “opt out” shareholder class actions filed against a2 in Victoria have been consolidated by court order and are set down to be heard by the Supreme Court of Victoria.

The issue before the Auckland High Court was a request by a New Zealand shareholder, Mr Whyte, for leave to commence a further class action in New Zealand in respect of the same statements. This application was opposed by a2, which also sought an order to stay the proceedings under section 24 of the TTPA. 

While the Australian proceedings allege breaches of both New Zealand and Australian law, the proposed Whyte action alleges breaches of New Zealand law only. To prevent overlap with the Australian claimants, it would be an “opt in” proceeding and those participating would give irrevocable instructions to opt out of the Australian claim.

Both applications were successful – that is, Mr Whyte was granted leave to commence proceedings, but they were then stayed.


The TTPA recognises the “special relationship” between New Zealand and Australia and seeks to “streamline the process for resolving civil proceedings with a trans-Tasman element in order to reduce costs and improve efficiency”. 

To that end, s 24 allows a New Zealand court to stay a proceeding if it is satisfied that an Australian court:

  • has jurisdiction to determine the matters in dispute between the parties, and
  • is the more appropriate court to determine those matters.

The High Court held that the first limb of the test was satisfied, relying on a recent ruling by the Supreme Court of Victoria that it had jurisdiction to determine the claims and grant relief on the New Zealand law claims (Thomas v the a2 Milk Company Limited [2022] VSC 725 – itself an interesting and important decision).

Section 24 sets out a range of factors to be considered in relation to the second limb. Working through these, the High Court made the following findings.

  • Location of the parties – that Mr Whyte and the shareholders he sought to represent were New Zealand residents, and that a2 was incorporated and had its manufacturing base in New Zealand, were factors of little weight as the disputed statements were made to, and the relevant shares were traded on, both the ASX and NZSX.
  • Location of the witnesses – likely witnesses in person at trial would be a2 executives who were mostly resident in Australia. Conversely, given the sheer number of shareholders, it was more likely that they would be giving evidence via alternative means such as AVL, if the proceeding even made it to that stage.
  • Most appropriate law to apply – Mr Whyte argued that the New Zealand proceedings should continue as the New Zealand regime was more plaintiff-friendly, due to a pandemic-era amendment to the Australian disclosure rules that had raised the threshold for finding a company had breached its continuous disclosure obligations. However, for reasons including the fact that New Zealand law was also pleaded in the Australian proceedings, the High Court found that neither country’s law was “more appropriate” than the other. 
  • Similarity of the proceedings – this was the factor that “tipped the balance” for the stay application. The proceedings were substantially very similar, raising concerns about duplication of costs for parties and court systems, and the potential for conflicting outcomes. The Court considered whether the New Zealand proceedings could be case managed in parallel with the Australian proceedings, for example with timetable orders mirroring those made in Australia and leading up to a joint trial. It concluded, however, that none of these measures would be as effective as case managing the proceedings within a single jurisdiction.
  • Financial circumstances of the parties – a2 was a large corporation with the resources to defend multiple class actions. But affidavit evidence showed that the burden on it would be significant in terms of time, resource, and money – weighing in favour of the Australian court.
  • Access to justice for the plaintiffs – interference with the plaintiffs’ access to justice would be “very low” were a stay to be granted, as they had alternative options: they could wait to advance the New Zealand proceedings until the Australian litigation was resolved, or they could discontinue in New Zealand and either file a fresh class action in Australia or not “opt out” of the Australian proceedings.

The upshot

In granting a2’s stay application, the High Court’s decision affirms the utility of s 24 of the TTPA for dual-listed companies facing parallel shareholder actions in New Zealand and Australia. The costs and resourcing pressures on defendants can be minimised if proceedings in one jurisdiction are stayed pending the result of proceedings in the other. 

Providing the Court with good evidence of the costs of defending the parallel proceedings is one aspect of successfully obtaining a stay.

[1] Whyte v the a2 Milk Company Limited [2023] NZHC 22

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