Crowley v Worley Limited (No 2)

In the case of Crowley v Worley Limited (No 2), the Federal Court was tasked with determining whether Worley Limited (WOR), a listed Australian company, had engaged in misleading or deceptive conduct in relation to its earnings expectations for the financial year 2014. The plaintiff, Mr Crowley, who is a shareholder and group member, brought representative proceedings on behalf of himself and other group members against WOR, alleging that the company's representations regarding its FY2014 earnings expectations constituted misleading or deceptive conduct under various statutory provisions. The legal issues that the court had to decide included whether WOR's representations constituted misleading or deceptive conduct, whether there was a reasonable basis for those representations, and if the company had breached its continuous disclosure obligations.

The court found that WOR's representations about its FY2014 earnings expectations were indeed misleading or deceptive and were made without a reasonable basis. WOR had failed to inform the Australian Securities Exchange (ASX) about the lack of reasonable basis for its earnings guidance, thereby contravening section 674(2) of the Corporations Act. However, the court determined that the alleged misleading or deceptive conduct did not cause the market price of WOR's securities to be substantially greater than their true value or the price that would have prevailed without the contraventions. Consequently, Mr Crowley failed to establish causation of loss and the quantification of any loss suffered by the group members. The court concluded that although WOR had contravened the statutory provisions, Mr Crowley could not prove the causation and quantification of any loss, leading to the failure of his claims for damages.

The court apologised for the significant delays in the proceedings, which had been ongoing since 2015. The court set a timetable for the parties to provide written submissions and affidavits in relation to the remaining issues, particularly the costs of the proceedings. The court anticipated deciding these remaining questions on the papers. The final orders addressed the questions of fact and law that were set out in the Joint List of Issues for Determination, binding the applicant and all group members (other than those who opted out) by the answers provided. The respondent was required to file and serve written submissions and any supporting affidavits in relation to the costs and final orders by a specified date.