Court rules on Feltex class action process
The High Court will hear the entire case of plaintiff Eric Houghton over an alleged untrue and misleading Feltex prospectus before hearing a second stage of the class action.
Houghton is taking a ''representative case'' against the directors of the failed carpet maker and the sellers and promoters of the Feltex shares in mid 2004.
About 3000 former Feltex shareholders have joined his action since he filed it in February 2008.
Shareholders who bought Feltex shares at the public offering of shares in May 2004 lost their combined investment of just over $250 million.
Justice Christine French has ruled that there will be a stage one hearing at which Houghton's claim will be heard entirely.
Rulings on the 20 common issues between Houghton and other members of the class action will be binding on the members of the class action and the defendants.
Justice French declined the application of the plaintiff, Houghton, represented by senior counsel Austin Forbes, to include some additional issues at stage one.
The court has given the plaintiff leave to apply for directions over establishing a sub-group or subgroups within the class action. Any party may also apply to vary the scope of the stage one hearing, the judgment said.
The parties will have a conference call over a timetable for the stage one hearing.
But that will not happen until after the Court of Appeal had delivered its decision on another aspect of the class action.
The second stage will hear the individual aspects of the claims of other Feltex shareholders that were different from Houghton's.
Justice French said it is common ground between parties that the only effective way to process the litigation is in two stages.
The defendants include the seven directors of Feltex at the time: former chairman Tim Saunders, Sam Magill, John Feeney, Craig Horrocks, Peter Hunter, Peter Thomas and Joan Withers.
Other defendants include Credit Suisse First Boston Asian Merchant Partners, the sellers of the Feltex shares, First New Zealand Capital Securities and Forsyth Barr.
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