Crowley v Worley Limited

Crowley, the appellant, filed an action against Worley Limited, the respondent, in the Federal Court of Australia. Crowley alleged that Worley had engaged in misleading and deceptive conduct by publishing and maintaining a statement on 14 August 2013 that it expected its geographic and sector diversification to deliver increased earnings in FY2014. Crowley further claimed that Worley contravened its continuous disclosure obligations by not disclosing that it did not have a reasonable basis for making the August 2013 earnings guidance statement and that its FY14 earnings were likely to fall materially short of the consensus expectation of professional analysts covering the ASX and WOR securities.

The primary judge dismissed Crowley’s claims, and Crowley appealed to the Full Court. The Full Court had to decide whether the primary judge erred in not finding that Worley engaged in misleading and deceptive conduct and contravened its continuous disclosure obligations. The Full Court had to determine whether the relevant representor was the corporation and not the board of the corporation and whether knowledge of the board was determinative. The Full Court also had to consider the inferences from the facts as found and the failure to call officers and employees.

The Full Court held that the primary judge erred in not finding that Worley engaged in misleading and deceptive conduct and contravened its continuous disclosure obligations. The Full Court held that the relevant representor was the corporation and not the board of the corporation and that knowledge of the board was not determinative. The Full Court held that the inferences from the facts as found established that Worley engaged in misleading and deceptive conduct and contravened its continuous disclosure obligations. The Full Court held that the failure to call officers and employees did not affect the outcome of the case.

The Full Court allowed the appeal and set aside the orders made by the primary judge. The Full Court remitted the matter to a single judge for further hearing as that judge decides and for determination. The Full Court ordered that the respondent pay the appellant’s costs of the appeal as agreed or taxed and that the costs of the hearing below be remitted to the single judge for such further hearing as that judge decides and for determination.