Forge Group Ltd (in Liq) (Receivers and Managers Appointed) v Clough Ltd [No 2] - [2024] WASC 192

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   FORGE GROUP LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED) -v- CLOUGH LTD [No 2] [2024] WASC 192
CORAM:   HOWARD J
HEARD:   20 FEBRUARY & 15 MAY 2024
DELIVERED          :   22 MAY 2024
PUBLISHED           :   22 MAY 2024
FILE NO/S:   COR 52 of 2019
BETWEEN:   FORGE GROUP LTD (IN LIQ) (RECEIVERS AND MANAGERS APPOINTED)
Plaintiff
AND
CLOUGH LTD
First Defendant
CLOUGH OPERATIONS PTY LTD
Second Defendant
KEVIN THOMAS GALLAGHER
Third Defendant
NEIL SIFORD
Fourth Defendant

Catchwords:

Practice and Procedure - Claim of insider trading - Appropriate case management directions - Expert evidence schedules - Whether Jubilee Mines NL v Riley line of case re materiality in continuous disclosure applies by analogy to the inside trading provisions

Legislation:

Corporations Act 2001 (WA)
Rules of the Supreme Court 1971 (WA)

Result:

Case management directions made

Category: B

Representation:

Counsel:

Plaintiff	:	Ms P E Cahill SC & Mr M J Sims SC (on 20 February 2024) & Ms C E McKay (on 15 May 2024)
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	Dr R C A Higgins SC (on 20 February 2024) & Mr A C Willinge
Fourth Defendant	:	Dr R C A Higgins SC (on 20 February 2024) & Mr A C Willinge

Solicitors:

Plaintiff	:	Chew & Matthews
First Defendant	:	No appearance
Second Defendant	:	No appearance
Third Defendant	:	Ashurst Australia
Fourth Defendant	:	Ashurst Australia

Case(s) referred to in decision(s):

Clough Ltd v Forge Group Ltd (in liq) (Receivers and Managers Appointed) [2022] WASCA 179
Forge Group Ltd (in liq) (Receivers and Managers Appointed) v Clough Ltd [2021] WASC 136
Grant-Taylor v Babcock & Brown Ltd [2015] FCA 149; (2015) 322 ALR 723
Jubilee Mines NL v Riley [2009] WASCA 62; (2009) 40 WAR 299

HOWARD J:

Some background to the present application may be found in Forge Group Ltd (in liq) (Receivers and Managers Appointed) v Clough Ltd [2021] WASC 136 (Le Miere J) and in Clough Ltd v Forge Group Ltd (in liq) (Receivers and Managers Appointed) [2022] WASCA 179.
The matter has been provisionally listed for trial for a number of weeks commencing 1 May 2025.

Approach to be adopted to expert schedules

These reasons concern disputes between the parties as to certain items in a proposed expert evidence schedule.
The schedule was ordered to be prepared by Le Miere J on 20 August 2020 and those Orders were varied by Vandongen J (as he then was) on 29 November 2022.
To seek to explain the approach I have taken to resolving the disputed matters, it is useful to consider the purpose and utility of such a schedule.
Early in these proceedings (at the first strategic conference), Le Miere J said:
… in anything but the simplest cases, it will be desirable that the questions be determined before an expert is briefed, so that the experts are addressing the same questions and issues. Secondly, that the facts or assumptions on which their asked to make - give their opinion, are similarly settled, so that there is then a proper base for the experts to engage, rather than what we have all seen so often - expert evidence which they say, pass like ships in the night.[1]
[1] Transcript 28 November 2019 ts 12.
A practice has developed comparatively recently in this Court of requiring the parties to confer, and hopefully agree, not only as to the areas and issues on which expert evidence may be adduced at trial, but also the specific questions, assumptions and documents to go to prospective experts.
Further, the practice has included the judge managing the proceeding considering any agreed schedule independently, or resolving disputes as to such a schedule. That is in the context where parties in this Court do not have a right to adduce expert evidence.[2]
[2] Rules of the Supreme Court 1971 (WA) O 36A r 1.
The production of such a schedule to brief an expert may be thought to have, at least, the advantages identified by Le Miere J as quoted above. Further, such a schedule gives the Court control (to some degree), and oversight, of the process of expert evidence which notoriously has been known to derail the efficient hearing of trials.

Further, especially in large commercial litigation, the adducing of expert evidence can be, and usually is, a very significant cost to a party in that litigation.
The hope is that the process of preparing such a schedule considerably reduces the chances of a party's expert evidence being held to be inadmissible or otherwise irrelevant.
The downsides of such an approach might be thought to include:
1.a bringing forward of the cost of arguing about expert evidence to an earlier point in the proceeding; and
2.particularly in this case, that the Court may be required to express views on questions of statutory construction, which are in issue between the parties.
To completely avoid the posited downsides in this case, the Court could simply allow the parties to put to their experts - after the core, common schedule of questions, assumptions and materials - individual or separate questions etc. To do so, however, would obviate, to some significant degree in my view, the upsides set out above.
In approaching the contests on the schedule, I have sought to bear in mind the advantages which might be thought to accrue from the exercise while seeking to avoid the most obvious of the downsides.
Fundamentally, however, these are case management decisions which are being made seeking to balance all of the factors which are conveniently set out in O 1 r 4A and r 4B.
The Consolidated Practice Directions now state:
[4.5.2]Expert Evidence
…
7.Directions given in relation to expert evidence orders should be consistent with the overriding objectives contained in O 1 r 4A and 4B. The Court's objective is to make timely, efficient, fair and effective use of expert evidence. It will make directions on a case-by-by case basis, taking into account the nature, scope and complexity of the issues in the case and whether the costs are proportionate to the matter in dispute and financial position of the parties.
8.In all cases, expert evidence orders should promote the following purposes:
(a)to encourage the early identification of issues in dispute that will be the subject of expert evidence;
(b) to improve the utility of expert evidence by ensuring that it is focused on the issues genuinely in dispute; and
(c)to make use of the existing pre-trial processes at the earliest practicable opportunity.
10.Innovative approaches to expert evidence are encouraged, including the nomination of a single expert or the parties conferring with a view to agreeing some or all of the facts upon which the expert opinions are to be based and the questions to be addressed by the experts.
In approaching the contested questions of statutory interpretation, I have sought to avoid expressing a view upon any really contestable (in my view) reading.

This Schedule and the disputes

There was a hearing on 20 February 2024 on a proposed schedule not agreed between the parties which was dated 19 May 2023 (and the result of the Orders recited in par [4] above).
At the conclusion of that hearing, the defendants[3] indicated that they wished to consider further amending their defence; and the parties, more generally, wished to confer further on the areas of disagreement.
[3] Throughout I will refer to the third and fourth defendants as 'defendants'.
Following that hearing:
1.the plaintiff filed an affidavit of their solicitor made and filed 28 March 2024;
2.the defendants filed a Third Amended Defence on 28 March 2024 (Defence);
3.the parties filed an Amended Minute of Proposed Expert Evidence Schedule (Schedule) dated 15 April 2024, which remained not fully agreed; and
4.the parties each filed further written submissions on 8 May 2024.
The remaining disputes in the Schedule are as to:
1.questions 14 and 26 proposed by the defendants;
2.questions 15 and 27 proposed by the defendants (and assumption 1(k)(i) and Annexure F);
3.question 25 proposed by the defendants;
4.the end date to be given to the experts by assumptions 1(b) and 1(f) proposed by the plaintiff;
5.the terms of the definition of 'information' in the Interpretation section; and
6.whether the terms 'risk management program' and 'risk register' require definitions in the Interpretation section as proposed by the defendants.
I have attached, as Attachment A hereto, the disputed parts of the Schedule as they were shortly before the start of the second hearing. (I have not included the whole of the disputed Annexure F to the Schedule). I have also included other parts of the Schedule which may assist in reading these reasons.
Less than an hour before the second hearing started, the defendants proposed to the Court:
1.further formulations of questions 15 and 27;
2.further amendments to the definition of 'information'; and
3.a new assumption 1(g).
These are dealt with below.

Questions 14 and 26

Questions 14 and 26 are proposed by the defendants and are in the same terms. Question 14 relates to questions 9 - 13; whereas question 26 relates to questions 16 - 25. For ease, I will consider question 14.
Questions 9 - 13 refer to the information in Annexure A to the Schedule. Annexure A sets out in five paragraphs the information pleaded in [78] - [82] of the statement of claim.[4] For example, without setting it out, par 1 of Annexure A to the Schedule replicates SOC [78].
[4] I will use statement of claim or SOC from here to refer to the second further amended statement of claim dated 19 December 2022.
The information (in SOC [78] - [82]) is pleaded, as at 25 March 2013 (and previously):
1.to have not been generally available within the meaning of s 1042C of the Corporations Act 2001 (Cth):[5] SOC [83]; and
2.if it was generally available, a reasonable person would have expected it to have a material effect on the price or value of the listed shares in the plaintiff: SOC [84].
[5] Unless otherwise indicated all statutory references from here are to this Act.
The defendants say that questions 14 and 26 arise from their Defence at [84(b)(ii)(C)]; [84(c)(ii)(C)]; [84(d)(ii)(C)]; [84(e)(ii)(C)]; [84(f)(ii)(C)]; [84(f)(iii)(C)]; and [96(b)].
The defendants say that the words 'been made known in a manner' in s 1042C(1)(b)(i) mean their proposed questions 14 and 26 should be put as going to the matters pleaded in the identified paragraphs of the Defence.
Section 1042C(1)(b)(i), it is said by the defendants, directs attention to the manner and timing by which the information would have been made generally available.[6] That provision is, relevantly:
For the purposes of this Division, information is generally available if:
…
(b)both of the following subparagraphs apply:
(i)it has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in Division three financial products of a kind whose price might be affected by the information ….
[6] Defendants' outline of submissions dated 5 February 2024 [14].
The first of the Defence paragraphs relied upon, Defence [84(b)(ii)(c)], responds,[7] relevantly, to SOC [78], [84]. It pleads, relevantly:
[7] This is not the only response which the defendants make.
[84]As to paragraph 84 of the Statement of Claim, the defendants:
…
(b)in respect of the information pleaded at paragraph 78:
…
(ii)say that, if the information pleaded at paragraph 78 of the Statement of Claim, to which the Defendants repeat paragraphs 78 above, was generally available as at and prior to 25 March 2013, whether a reasonable person would expect that information to have a material effect on the price or value of the listed shares in Forge would depend upon a consideration of that information in context, rather than in isolation, including by reference to:
…
(C)the manner, form and time at which the information would have become available.
In short, the plaintiff objects to questions 14 and 26 on two bases, being:
1.the answers to them could not be relevant; and
2.as framed, the questions are impossible to answer.[8]
[8] Plaintiff's outline of submissions dated 22 January 2024 [24].
With respect, in my view, 'manner' in s 1042C(1)(b)(i) is plainly directed to when a matter might be relevantly 'made known' and so be generally available - that is, the statutory question is whether its 'manner' of dissemination would 'bring it to the attention of persons', or be likely to do so.
I do not read 'manner' in the section as linking how the information is communicated on the one hand with its price sensitivity (as per the definition of 'inside information' in s 1042A) on the other. Rather, in my view, how the information is communicated (manner) is linked in s 1042C(1) to whether it has, or would be likely to, come to the attention of the relevant persons.
In my view, the relevant question is not the form, terms or timing (as contended for in questions 14 and 26) but rather, whether the manner or mode or means of communication 'would, or would be likely to, bring it to the attention of persons' in the period/s pleaded by the plaintiff.
That is, s 1042C is not concerned with, for example, the mode of communication save that the mode or manner would, or would be likely to, bring it to the attention of persons.
That the particular information has, for the purposes of questions 9 - 13, already (theoretically on the plaintiff's case) come to the attention of such persons is implicit in the use of 'generally available' in the questions as framed.
Consistently with the approach to resolving disputes on the Schedule I articulated above, I have come to a clear enough view on the competing constructions of these provisions.
In my view, questions 14 and 26 as proposed by the defendants add nothing which may be relevant and, indeed, may make the preparation of the expert evidence more difficult.
Further, and as a matter by itself, I think there is, with respect, considerable force in the submission made by the plaintiff that questions 14 and 26 would be 'practically impossible to answer'. That is in the context where the defendants do not plead any particular manner, or seek to put any particular manner to the expert/s.
With respect, the defendants' response to that submission (that 'whether that is so is a matter for the experts') is unhelpful and unpersuasive, in my view.
For those reasons, independently, I would not add questions 14 and 26 proposed by the defendants to the Schedule.

Questions 15 and 27; assumption 1(k)(i) and Annexure F to the Schedule

Questions 15 and 27 are in similar terms. The 'additional documents and/or information in Annexure F' are some 18 pages of 'facts' which in places refer to particular documents. I have not set out those items from the defendants' proposed Annexure F to the Schedule in Attachment A hereto.
Each of the 'facts' in Annexure F to the Schedule correlates to a paragraph pleaded by the defendants, and which the defendants will seek to prove is true at the trial.
Further, as noted above, the defendants less than an hour before the second hearing proposed an alternative formulation of questions 15 and 27 which are considered below.
Suffice it to say for present purposes, the alternative formulation proposed does not raise markedly different legal questions between the parties from those which were already joined in the formulation in the Schedule of questions 15 and 27.
Question 15 is directed to questions 9 to 14.
Question 27 is directed to question 16 to 26.
With the exception of a matter dealt with below, the parties dealt with questions 15 and 27 as raising the same issues.
As noted above, after the first hearing the defendants amended their defence and, relevantly for this discussion, introduced in a number of places[9] the following plea. I quote, relevantly, from the Defence [84(b)(ii)(B)(2) and (3)] which now pleads:
[9] The defendants' further submissions dated 8 May 2024 [11] which identify amendments to the Defence at
As to paragraph 84 of the Statement of Claim, the defendants:
…
(b)in respect of the information pleaded at paragraph 78:
…
(ii)say that, if the information pleaded at paragraph 78 of the Statement of Claim … was generally available as at and prior to 25 May 2013, whether a reasonable person would expect that information to have a material effect on the price or value of the listed shares in Forge would depend upon a consideration of that information in context, rather than in isolation, including by reference to:
…
(B)the totality of any and all other relevant information that existed and that was possessed by the Defendants at the time that the information pleaded at paragraph 78 of the Statement of Claim was generally available, including:
…
(2)the information referred to in paragraphs 12A, 12B, 12C, 12D, 12E, 25(f), 42A, 52(ab), 52(ad), 52(a)(i), 52(a)(iii), 53(a), 53(b), 53(d), 53(e)(iii), 59(b), 65A, 66(b), 66(e), 68(b)(iii), 80(c)(ii), 80(c)(iii), 93B, 93D and 93D of this Defence, irrespective of whether that information would have been generally available at the time …
(3)alternatively to sub-paragraph (2) above, the substance of the information referred to in paragraphs 12A, 12B, 12C, 12D, 12E, 25(f), 42A, 52(ab), 52(ad), 52(a)(i), 52(a)(iii), 53(a), 53(b), 53(d), 53(e)(iii), 59(b), 65A, 66(b), 66(e), 68B(b)(iii), 80(c)(ii), 80(c)(iii), 93B, 93C and 93D of this Defence, which would have been or become generally available;
The defendants say that the additional information in Annexure F comprises matters now pleaded in the Defence: particularly as pleaded in (2) and (3) quoted immediately above and their new analogues.
The defendants contend that:
1.the plaintiff has extracted and atomised information in a selective way that plainly results in it being considered a‑contextually;[10]
2.the authorities support the necessity of considering the plaintiff's pleaded information in its 'broader context';[11] and
3.in assessing information in context, regard may be had to information that is not generally available.[12]
[10] Defendants' outline of submissions dated 5 February 2024 [23].
[11] Defendants' outline of submissions dated 5 February 2024 [25].
[12] Defendants' outline of submissions dated 5 February 2024 [26].
The plaintiff contends (on an interpretation of the statute) that for additional information to be relevant contextually it must have been generally available.[13]
[13] Plaintiff's outline of submissions dated 22 January 2024 [32].
The plaintiff says that 'some (but not most)' of Annexure F was generally available,[14] and that the 'additional information' in Annexure F consists of various documents and events concerning the internal operations of Forge.[15] For present purposes, this summary may be adopted.
[14] Plaintiff's outline of submissions dated 22 January 2024 [11].
[15] Plaintiff's outline of submissions dated 22 January 2024 [34].
While the plaintiff accepts that the Annexure F information and documents are now pleaded, it notes that there is no plea in Defence at [84(b)(ii)(B)(2)], and its analogues, by the defendants that any of the Annexure F information and documents were, or would become, generally available.[16]
[16] Plaintiff's outline of submissions dated 22 January 2024 [34].
The propositions which the defendants rely on are:
1.by the line of cases commencing with Jubilee Mines NL v Riley [2009] WASCA 62; (2009) 40 WAR 299, courts in the context of the continuous disclosure regime, have held that the totality of relevant information must be taken into account rather than simply the information which is alleged should have been released to the market;
2.there is a direct enough analogy between the statutory regimes of continuous disclosure and the insider trading provisions that arguably, at the least, the Jubilee line of cases are relevant to the materiality of the alleged inside information in this case; and
3.questions 15 and 27 (with Annexure F) are directed to the totality of the information which must be considered in accessing the materiality of the alleged inside information.

In Jubilee, a company was sued for breaching its continuous disclosure obligations in the Corporations Act - those sections now appear, relevantly, in Chapter 6CA of the Corporations Act.
The company had received certain drilling results.[17]
[17] (2009) 40 WAR 299 [76] (Martin CJ).
The company was found in the first instance to have breached its continuous disclosure obligations and the plaintiff was awarded damages for loss suffered by reason of the company's contravention.[18]
[18] (2009) 40 WAR 299 [37] - [40] (Martin CJ).
At trial, and on appeal, the company contended that if it had disclosed the drilling results it would also have been obliged to disclose, and would have disclosed, other matters which were identified as:
(a)in the opinion of its geologist, the intersected mineralisation, which was found in only one hole of six drilled, was too deep, too low a grade and too small to be of any interest; and
(b)that it had no current intention of carrying out any exploratory drilling on the tenement in the foreseeable future because of:
(i)the view of its geologist and managing director as to the lack of significance in the drilling results;
(ii)its preoccupation with gold exploration; and
(iii)its lack of funds.[19]
[19] (2009) 40 WAR 299 [85] (Martin CJ).
The company said that:
… when regard is paid to the additional material which Jubilee would have disclosed together with the WMC drilling data, the information as a whole was not information which was likely to have influenced persons who commonly invest in securities in deciding whether or not to buy or sell shares in Jubilee, with the result that the master erred in concluding that Jubilee had contravened either the listing rule or the statute.[20]
[20] (2009) 40 WAR 299 [86] (Martin CJ).
It may be seen, the case turned on what are now s 675(2) and s 677(1) as to whether the disclosure of the information would have, or would have been likely to, influence persons and so have a material effect on the price or value of the shares.
The Court of Appeal concluded that the answer to that question, as Martin CJ said:
… turns upon the question of whether disclosure of all relevant information would have influenced, or was likely to influence, persons who commonly invest in securities in deciding whether or not to buy or sell Jubilee's shares.[21]
[21] (2009) 40 WAR 299 [115] (Martin CJ).
The appeal succeeded because when all relevant information was taken into account, Jubilee was under no obligation to disclose the drill results 'at least and until it altered its position and decided to undertake exploratory drilling work'.[22]
[22] (2009) 40 WAR 299 [125] (Martin CJ).
Martin CJ said:
… that the evident purpose of each of the listing rule and the relevant statutory provisions is to ensure and inform market in listed securities …It would be entirely contrary to that evident purpose to construe either the listing rule or the statutory provisions as countenancing the disclosure of incomplete or misleading information.[23]
[23] (2009) 40 WAR 299 [87] (Martin CJ).
McLure JA, as she then was, said:
The respondent would narrowly confine the 'information' by taking it out of its broader factual and commercial/corporate context then gauge whether that information has the deemed material effect on the price of the companies' securities by reference to the common investor who assesses the information in the context of publicly available information. That in my view is inconsistent with the purpose of the disclosure regime which is a fully informed market. Where share price sensitivity depends upon the company having an expert assessment of core information and business decisions are made based on that expert assessment, the disclosure of only the core information (conveying an imputation that it is, in the company's assessment, likely to have a material effect on the share price) may be misleading. The disclosure regime does not countenance disclosure of incomplete information just because that information alone would influence persons who commonly invest to buy or sell shares.[24]
[24] (2009) 40 WAR 299 [162] (McLure JA).
McLure JA further stated:
It was also open on the evidence to conclude that an announcement of the type contemplated by the Master (one which was silent on the issue of further drilling) would impliedly convey the imputation that the appellant regarded the WMC information as significant and warranted further exploration drilling. In circumstances where the appellant had a positive intention not to drill, such an announcement would be misleading. Prima facie, its drilling intentions would be part of the mix of relevant information on which to assess whether it was share price sensitive. It was also open on the evidence to conclude that an intention not to undertake further exploration drilling would deprive the information of any price sensitive effect.[25]
[25] (2009) 40 WAR 299 [191].
As it reads, and as it has been subsequently read by other courts, the Court of Appeal in Jubilee was to the effect that when considering whether information may have a material effect (within the now s 677(1)) information known to the company (but outside of that identified as that which is obligated to be disclosed) is relevant to the consideration of materiality.
Factually, the Court in Jubilee gave effect to that principle by:
1.proceeding to consider the non‑disclosed information on the basis that complete disclosure would also have disclosed other information at the time - the approach which appears to have been taken by the Chief Justice[26] (with whom Le Miere AJA agreed); and
2.being part of the relevant mix in deciding whether the information was share price sensitive, and so not relevantly material, which appears to have been the approach of McLure JA.[27]
[26] (2009) 40 WAR 299 [115].
[27] (2009) 40 WAR 299 [191].
Perram J in Grant‑Taylor v Babcock & Brown Ltd[28] said of Jubilee, that the Court:
… concluded that the information which was to be considered was not, as the plaintiff alleged, the results of the tests. Rather, it was the results of the tests together with the fact the company had no present intention of exploiting the tenement. When this information was assessed for the effect its disclosure would have had on the market, the answer, the court concluded … was that it would have had no effect.[29]
[28] [2015] FCA 149; (2015) 322 ALR 723.
[29] [2015] FCA 149; (2015) 322 ALR 723 [73].
I do not read the Court of Appeal in Jubilee as having held that because of the additional information available to the company, that it was not obliged to disclose the drilling results: indeed, the contrary was held: see Martin CJ [66]; [115] (with whom Le Miere AJA agreed). This seems, however, to be the interpretation put forward by the defendants so that Annexure F to the Schedule should be considered whether or not the information would have become generally available.
It seems to me arguable that the approach taken by the Jubilee line of cases may have the effect that it will be relevant for the Court to consider not only the information alleged not to be generally available, but other information which the defendants say, on their Defence was, or would have become generally available.
As the defence was pleaded at the first hearing, I had some difficulty in understanding how the defendants contended that the Jubilee line of cases arose on the pleadings. The defendants continue to maintain that it did on the previous iteration of the defence, but submitted that the amendments now made to the Defence 'put the matter beyond doubt'.[30] The defendants further submitted:
In any event, the defendants have now explicitly pleaded in the alternative that the substance of the matters in Annexure F to the Schedule would have been or become generally available (even though that is not, in their respectful submissions, a requirement under the Jubilee Mines line of authority ….)[31]
[30] Defendants' further submissions dated 8 May 2024 [11].
[31] Defendants' further submissions dated 8 May 2024 [14].
The plaintiff contends that although there are some common concepts between the continuous disclosure regime and the insider trading provisions, nonetheless the regimes differ in material ways which mean that the Jubilee line of authority is not applicable, by analogy, to the insider trading provisions. This will no doubt be a matter returned to at greater length at trial and so I do no more than express the view that I consider, at this stage, that the Jubilee line of cases may have application to the insider trading provisions. And, further, that I consider the possibility to be sufficient that a version of questions 15 and 27 which reflect, as I understand the Jubilee line of cases, should be left to the experts.
The defendants, however, contend that the information contained in Annexure F to the Schedule should be taken into account by the expert also on the premise that it was known to the director defendants whether or not it was generally available or would have become generally available.
That proposition is, I was told, the intention behind the pleading which now appears at Defence [84(b)(ii)(B)(2)] - presumably by the words 'irrespective of whether that information would have been generally available at the time'.
In my view, that information known to the insider but was not generally available or would not have become generally available (if the inside information was generally available) is not sufficiently arguably relevant to the enquiry as to the materiality of the insider information.
In my view, the position put by the defendants is beyond the Jubilee line of cases which, is noted, in any event occur in the continuance disclosure regime and not in the inside trading regime.
The alternative formulation for questions 15 and 27 proposed just before the second hearing is:
Would your answers to each of the question 9 - 14 [or 16 - 26] above be different if:
(a) the relevant information in Annexure A for the respective questions is considered in the context of the additional documents and/or information in Annexure F; or
(b)the substance of the additional documents and/or information in Annexure F was generally available?
While the plaintiff does not accept, as said, the applicability of the Jubilee line of cases to the insider trading regime, I understood it to accept that, with an amendment, the question in (b) of the further formulation of question 15 and 27 captured the Jubilee line of cases (if it was analogously relevant). The amendment proposed in argument by the plaintiff was to the following effect:
(b)the substance of the additional documents and/or information in Annexure F would have been or become generally available ~~was~~ also generally available [amendments marked up].
That, I agree, would bring (b) of the alternative formulation of questions 15 and 27 into line with the defendants' further written submissions.[32]
[32] Defendants' further written submissions dated 8 May 2024 [14].
It would also be, in my opinion, consistent with Defence [84(b)(ii)(B)(3)] as quoted above.
In all of those circumstances, I would permit the inclusion into the Schedule of a version of questions 15 and 27 which follows (b) of the alternative formulation as amended, so that it would read to the effect:
Would your answers to each of the questions 9 - 14 [or 16 - 26] above be different if the substance of the additional documents and/or information in Annexure F would have been or become generally available?

Separate issue re question 27

The plaintiff separately objects to the inclusion of question 27, in any form.
The plaintiff pleads at SOC [96] that if all or some of the information pleaded in SOC [78] to [82] been generally available, the shares in Forge would likely to have been sold for 'substantially less' than $6.05 per share.
The defendants deny those allegations (Defence [96](a)]), and repeat [78] to [84] of the Defence: Defence [96](b)].
The plaintiff's additional objection to question 27 is that SOC [96] has been simply denied by the Defence and, so the plaintiff says, there is no pleaded basis for question 27 and it should be disallowed on that basis.
The defendants say that by repeating paragraph [78] to [84] of the Defence they have not made a bare denial.
The defence is convoluted by reason of pleas often including matters in multiple other paragraphs of the Defence; so much may be seen from the amendments to [84] of the defence quoted above.
It is not plain to me, on the pleading at Defence [96(b)] that the defendants will be shut out at trial from putting a case which may rely on evidence adduced by the formulation of question 27 I would be prepared to allow.
In any event, I continue to have a concern that without a version of question 27 that the Court may, on some permutation of some factual findings, be left with a gap in the evidence which would complicate, or at worst prevent, a proper calculation of compensation pursuant to s 1043L(5)(b) if the plaintiff were successful.
Consistently with the approach I have adopted to the resolution of disputes in the Schedule, notwithstanding the plaintiff's objections to any formulation of question 27 (because of the state of the pleadings), I will allow the question as formulated in paragraph [82] above.
It appears that the defendants do not advance different arguments for assumption 1(k)(i) than they advance for questions 15 and 27. I would allow a version of the assumption which is consistent with these reasons.

Question 25 (and Annexure G to the Schedule)

The statement of claim pleads that on about 25 March 2013, the relevant Forge shares were sold to Purchasers which are particularised in Annexure A to the statement of claim: SOC [93.2]. A total of 34 individual Purchasers are listed at SOC Annexure A.
The plaintiff pleads that the Purchasers did not possess the information pleaded in [78] - [82] of the SOC: SOC [94].
The plaintiff pleads that had some or all of the information pleaded in SOC [78] - [82] been generally available at the time, then the price at which the Forge shares would have been likely to have been sold would have been substantially less than the then purchased price: SOC [96].
What the defendants propose to do, to support their proposed question 25, is to include at Annexure G of the Schedule the list of Purchasers which appears at Annexure A to the SOC.
The defendants contend that question 25 as proposed is relevant on a proper construction of s 1043L(5)(b)(ii).
Relevantly, s 1043L(5)(b)(i) and (ii) provide:
… the issuer of the financial product may, in the case of an acquisition or disposal of … the financial products by the insider … recover, as compensation for damage suffered by the issue of:
…
(b)in the case of a disposal … the amount (if any) by which the price described in the first of the following subparagraphs was greater than the price described in the second of those subparagraphs:
(i)the price at which the financial products were disposed of, or agreed to be disposed of, by the insider or other person to the acquirer;
(ii)the price at which they would have been likely to have been disposed of at the time of the first mentioned disposal … if the information had been generally available.
The defendants contend that, in the case of an actual disposal of shares, the identity of the acquirer is a relevant matter to the assessment of the likely price under s 1043L(5)(ii).[33]
[33] Defendants' outline of submissions dated 5 February 2024 [35], [39].
The plaintiff opposes question 25 on the basis that the defendants do not plead, nor intend to prove, that the same Purchasers would have been the actual acquirers of the Forge shares if the information had been generally available.[34]
[34] Plaintiff's outline of submissions dated 22 January 2024 [37].
I accept the plaintiff's submissions that s 1043L(5)(b)(ii) is positing a hypothetical disposal and posits such disposal:
1.at the time of the actual disposal in this case; and
2.on the basis that the information had been generally available.
The hypothetical disposal does not, on the face of the provision, include or refers to the identity of the putative acquirer.
I accept there may be situations where a defendant may seek to establish that the compensation which may be recovered under s 1043L(5) should be reduced, or may be affected, either because the actual acquirer (under s 1043L(50(b)(i)) or the hypothetical acquirer (under s 1043(l)(5)(b)(ii)) would have been a 'strategic investor willing to acquire shares at a premium whether or not the alleged inside information was generally available'.[35]
[35] Defendants' outline of submissions dated 5 February 2024 [40].
However, in my view, that would require the defendants to make that case; which here they do not seek to do so.
For those reasons, I would not add question 25 to the Schedule.

The end date: assumptions 1(b) and (f)

For this discussion, I note that:
1.25 March 2013 is the date on which the Forge shares were disposed of and the date in the pleadings at which it was asserted that the relevant information was not generally available; and
2.11 February 2014 is the date that Forge went into voluntary administration.
The plaintiff contended, on the previous schedule dated 19 May 2023, that the relevant cut-off date should be 11 February 2014.
The plaintiff said that the experts ought to be able to consider whether anything in later ASX announcements and share price data (up to its external administration) was relevant to expressing their opinions (as to the materiality of the information and any price on disposal).[36]
[36] Plaintiff's outline of submissions dated 22 January 2024 [38], [40].
The defendants submitted that:
1.by the later cut-off date, the plaintiff sought to change its case in a fundamental way;[37] and
2.the 'Relevant Period' for discovery purposes was defined by the Orders of Le Miere J on 20 August 2020 as 1 July 2011 to 25 March 2013;[38]
3.whether a reasonable person would expect information not generally available to have a material effect on the price of securities is to be assessed on an ex ante basis;[39] and
4.if evidence after 25 March 2013 is relevant, then there may need to be amendments to the pleadings and discovery would have to be supplemented.[40]
[37] Defendants' outline of submissions dated 5 February 2024 [44].
[38] Defendants' outline of submissions dated 5 February 2024 [46].
[39] Defendants' outline of submissions dated 5 February 2024 [48].
[40] Defendants' outline of submissions dated 5 February 2024 [49].
At the hearing on 20 February 2024, I expressed the view that without some apparent relationship between the pleaded information and the later (after the disposal) ASX announcements, for example, that I did not see the relevance of later ASX announcements.
After that hearing, as noted above, the plaintiff filed Mr Matthews' affidavit. He sought, really more by way of submission than evidence,[41] to establish there was a sufficient relationship between the information pleaded in SOC [80.2] and [80.4] and what was announced to the ASX on 28 November 2013 and annexed as 'IMO-7'[42] (November 2013 Announcement).
[41] Mr Matthews' affidavit made 28 March 2024 [15].
[42] Mr Matthews' affidavit made 28 March 2024, page 17.
As a result of Mr Matthews' affidavit, and the November 2013 Announcement, the plaintiff now contends that the relevant end-date in assumptions (1)(b) and (f) should be 28 November 2013; whereas the defendants maintain their position that 25 March 2013 is the relevant cut-off date.
In opposition to the plaintiff's proposed date of 28 November 2013, the defendants:
1.submit that the nature, content and scope of the information contained in the November 2013 Announcement is very different from the information concerning the DPS and the WAPS projects pleaded in [80.2] and [80.4] of the SOC;[43]
2.maintain their opposition on the basis that further discovery will be necessary;[44] and
3.state there may be significant consequential impact on the case timetable.[45]
[43] Defendants' further submissions dated 8 May 2024 [29], [32].
[44] Defendants' further submissions dated 8 May 2024 [41].
[45] Defendants' further submissions dated 8 May 2024 [44].

I accept the defendants' submissions that the November 2013 Announcement was not limited to difficulties with the DPS and WAPS projects. Further, I accept that there is not an exact correlation between the matters pleaded and those disclosed in the November 2013 Announcement.
Nonetheless, the DPS and WAPS projects were central to each of the matters announced by the November 2013 Announcement.
It may be that an expert considers that the November 2013 Announcement, and the contemporaneous movement in Forge's share price, to be of no assistance to the questions they are asked. However, I do not consider that I can make that assessment now. It is not sufficiently clear to me that the November 2013 Announcement would be of no assistance or relevance to the expert.
I do not accept, in that context, the defendants' submission that the cut-of date the plaintiff proposes is, in truth an expansion to its pleaded case which centres on whether the information pleaded in SOC [78] - [82] would have had a material effect (within the meaning of s 1041D) at the time of the sale of the Forge shares.
As to the prospect of further significant discovery and the potential of losing the trial dates: I understood from the plaintiff's counsel (at the first hearing) that the person who has fulfilled the role of 'librarian' would interrogate various databases of publicly available information and provide the additional documents either by an updated discovery list or an updated witness outline.[46]
[46] Hearing 20 February 2024, ts 295 - 296.
At the second hearing I was told that it was expected that the task could be completed within three or four weeks, but that timing was dependent upon the availability of the librarian.
Of course I may be proved wrong on this matter,[47] but on the material before me, it appears as though the additional information which the plaintiff accepts would need to be identified by the librarian can be done in a manner and within a time which does not unduly imperil the trial dates. With respect, it does seem to me that there is something of a in terrorem submission in the defendants' position on this point.
[47] In saying that I do not mean to suggest that this is the only matter on which I may be wrong.
In any event, as the defendants correctly submit, if the trial dates or programming orders are, after proper testing and analysis, impacted upon, that will be a matter for the plaintiff to deal with in the circumstances where it has sought the cut-off date it has.

Disputed definitions

The plaintiff pleads, relevantly, by way of examples:
1.that at a meeting held on 15 February 2012 attended by the defendants:
…directors of Forge recognised the need for the Forge Group to adopt and implement a comprehensive, Forge group-wide risk register and risk management program for the management of its material business risks arising from its contracting operations, …;[48] and
2.the directors of Forge approved and caused to be published various financial statements and documents:
… in the absence of a comprehensive Forge group-wide risk register and risk management program for the management of CTEC's material business risks.[49]
[48] SOC [78.1].
[49] SOC [80.1].
The expressions of 'risk register' or 'risk management program' appear in Annexure A to the Schedule [1] - [3].
The defendants contend that the expressions 'risk management program' and 'risk register' ought to be defined by the plaintiff in the Interpretation section of the Schedule.
The defendants also refer to other terms which have been non-controversially defined in the Interpretation section of the Schedule such as 'substantiated estimate'.
The plaintiff says that the terms (which the defendants wish it to define) were not defined in the minutes of the relevant directors' meetings pleaded, nor defined in the statement of claim or Defence. The plaintiff's submission is that the words bear their ordinary meaning and should do so in the Schedule.[50]
[50] Plaintiff's outline of submissions dated 22 January 2024 [49] - [50].
There is some attraction to the defendants' submissions that 'experts should not be left to guess or speculate about what is intended' by 'risk register' and 'risk management program'.[51]
[51] Defendants' outline of submissions dated 5 February 2024 [76].
It seems to me, however, that in circumstances where the case sought to be made is that resolutions were made and minuted without definitions, and the plea is that no such exercise was subsequently undertaken, the provision of definitions will inevitably (continue to) leave some room for any expert to reach their own view as to what would have satisfied the description.
I am not persuaded that the 'vice' identified by the defendant (and quoted above) will necessarily be avoided by the provision of definitions.
That is, I am unpersuaded that there is any real utility or advantage to be gained in requiring the inclusion of definitions where, as said, the directors (presumably as 'ordinary' business-people) made resolutions which were minuted without such definitions.

Definition of 'information' and proposed new assumption (1)(g)

Prior to the defendants' proposed reformulation of the definition, the parties had agreed on the following:
Information, when used in the section 'The specific questions in which the experts will be asked to opine' above and in the definition of 'Material Information' below, has the meaning given to it in s 1043A(2)[52] of the Act and so can comprise of or include information that is, in whole or in part, true or false.
[52] The addition of "(2)" was suggested, and not resisted, at the second hearing.
By its reformulation just before the second hearing the defendants contend for the following:
Information, when used in the section 'the specific questions in which the experts will be asked to opine' above and in the definition of 'Material Information' below in reference to information in Annexure A, has the meaning given to it in s 1043A(2) of the Act and so can comprise of or include information that is, in whole or in part, true or false. So it has the meaning to it in s 1042A of the Act and so can comprise of or include information that is, in whole or part, or true or false. For the avoidance of doubt, this means, in effect, that the information describing Annexure A may be true or false in whole or in part. (differences in italics)
The plaintiff says that it is no part of its case that the information pleaded at SOC [78] - [82] was true or false - simply, rather, it was inside information.
The defendants submitted[53] that:
48.The defendants do not accept that all the matters contained in the 'information' set out in Annexure A are true. Annexure A reproduces 2FASOC [78] - [82] and contains a combination of matters some of which are not disputed, but others of which are seriously contested.
49.This makes the 'truth/false assumption' issue one of fundamental importance.
…
52.The defendants press for the inclusion of the contested section of text so that it is made abundantly clear to the experts that when they consider and assess the information in Annexure A, they need to do so on the assumption that the information may be (in whole or part) true or false.
53.Unless the position is clearly stated, the obvious risk is that the experts will proceed on the erroneous basis that the information is true - when that is not the Plaintiff's case. The experts should be under no such illusion.
[53] Defendants' further submissions dated 8 May 2024: footnotes omitted.
On balance, it seems to me that there is no particular reason to emphasise that the information in Annexure A may or may not be true over and above anything else that the expert has to consider as proposed by the defendants. I am not persuaded that there is a real risk that the experts will proceed on an erroneous basis.
The defendants also proposed just before the second hearing a new assumption 1(g):
In answering questions 15 and 27, assume that the information in Annexure F is true.
Further, at the second hearing, in support of their proposed new assumption 1(g), the defendants submitted that they intended to prove that the information in Annexure F was true and that they were entitled, in effect, to put their case at trial with the benefit of expert evidence.
On balance, it seems to me that there is force in the defendants' submissions that as they will seek to establish at trial that the information in Annexure F is true, they are entitled to lead evidence from the expert which considers the case they put.
Leaving aside the contest between the parties, I continue to hold a reservation as to whether the agreed parts of the definition of 'information' will, in any event, cause an expert difficulty when they come to look at certain specific parts of Annexure A to the Schedule.
I consider that an expert may experience difficulty in trying to use the non-controversial (or controversial) definition of 'information'. For example, Annexure A to the Schedule in [(2)] says 'Forge made false public statements in mandatory reports …'. I have a concern that, if it mattered to the opinion being expressed, the expert may be unclear as to how to proceed with the definition of 'information'.
However, an expert may well not have any such difficulty. In any event, if the definition of 'information' does present an expert with a problem, then experience suggests that they will seek further guidance or clarification. I am content to leave it on that basis.
I would allow the definition of 'information' in para [131] above, without the defendants' proposed amendments.
I will allow the insertion of a new assumption 1(g) as proposed by the defendants.
I will leave it to the parties to confer further as to whether that text should stay as new assumption 1(g) or should be incorporated into the form of words I have allowed for questions 15 and 27.

Disposition

I direct the parties to bring in a Minute with a schedule attached which reflects these reasons.
I will hear the parties separately on costs if they are not agreed.

Attachment A

(EXTRACTS FROM) [54]
PARTIES' AMENDED MINUTE OF PROPOSED EXPERT EVIDENCE SCHEDULE
(AREAS OF DISAGREEMENT SHADED) DATED 15 APRIL 2024

[54] I have only extracted those parts of the Schedule which may be of assistance in reading the reasons.

Nature of the proposed expert evidence

The parties propose to call expert evidence from experts in the following fields of specialised knowledge:

(a)Investment analysis and trading dynamics in respect of Australian listed securities, including company and asset evaluation and valuation, corporate and asset benchmarking, new informational price/value impact and scenario/sensitivity analysis, investment processes, trading decision making criteria, investment advice and trading strategy.

The specific questions on which the experts will be asked to opine

…

Had the information in paragraph 1 of Annexure A been generally available in the Relevant Period, would a reasonable person have expected that the information would, or would have been likely to, have influenced Relevant Investors in deciding whether or not to acquire or dispose of listed shares in Forge?
Had the information in paragraph 2 of Annexure A been generally available in the Relevant Period, would a reasonable person have expected that the information would, or would have been likely to, have influenced Relevant Investors in deciding whether or not to acquire or dispose of listed shares in Forge?
Had the information in paragraph 3 of Annexure A been generally available in the Relevant Period, would a reasonable person have expected that the information would, or would have been likely to, have influenced Relevant Investors in deciding whether or not to acquire or dispose of listed shares in Forge?
Had the information in paragraph 4 of Annexure A been generally available in the Relevant Period, would a reasonable person have expected that the information would, or would have been likely to, have influenced Relevant Investors in deciding whether or not to acquire or dispose of listed shares in Forge?
Had the information in paragraph 5 of Annexure A been generally available in the Relevant Period, would a reasonable person have expected that the information would, or would have been likely to, have influenced Relevant Investors in deciding whether or not to acquire or dispose of listed shares in Forge?
Would your answer to any of questions 9 to 13 be different depending on the:
(a)form;
(b)terms (including diction, language and tone employed);
(c)timing (including, for example, whether the information is made available at the same time or separately with other generally available information and, if separately, the sequence and order in which the information is made available as compared to the other generally available information); and
(d)manner,
in which the substance of the information in Annexure A referred to in any of questions 9 to 13 was made generally available?
If so, please explain how and why.
Would your answers to each of questions 9 to 14 above be different if the relevant information in Annexure A for the respective question is assessed or considered in the context of the additional documents and/or information in Annexure F?]

[Questions 1‑15 are directed to the issue raised by paragraphs 84 and 85 of the plaintiff's statement of claim, i.e. whether the information pleaded in each of paragraphs 78 to 82 of the plaintiff's statement of claim was inside information, within the meaning of ss 1042A, 1043A and 1043L of the Act.]

At what price would each of the Parcels of Relevant Forge Shares have been likely to have been disposed of if the information in paragraph 1 of Annexure A had been generally available on 25 March 2013?
At what price would each of the Parcels of Relevant Forge Shares have been likely to have been disposed of if the information in paragraph 2 of Annexure A had been generally available on 25 March 2013?
At what price would each of the Parcels of Relevant Forge Shares have been likely to have been disposed of if the information in paragraph 3 of Annexure A had been generally available on 25 March 2013?
At what price would each of the Parcels of Relevant Forge Shares have been likely to have been disposed of if the information in paragraph 4 of Annexure A had been generally available on 25 March 2013?
At what price would each of the Parcels of Relevant Forge Shares have been likely to have been disposed of if the information in paragraph 5 of Annexure A had been generally available on 25 March 2013?
At what price would each of the Parcels of Relevant Forge Shares have been likely to have been disposed of if the information in paragraphs 1 and 2 of Annexure A had been generally available on 25 March 2013?
At what price would each of the Parcels of Relevant Forge Shares have been likely to have been disposed of if the information in paragraphs 1, 2 and 4 of Annexure A had been generally available on 25 March 2013?
At what price would each of the Parcels of Relevant Forge Shares have been likely to have been disposed of if the information in paragraphs 1, 2, 4 and 5 of Annexure A had been generally available on 25 March 2013?
At what price would each of the Parcels of Relevant Forge Shares have been likely to have been disposed of if all of the information in paragraphs 1-5 of Annexure A had been generally available on 25 March 2013?
Would your answer to any of questions 16 to 24 be different if you are instructed to assume that each of the Parcels of Relevant Forge Shares would have been disposed to the same person as the respective Purchaser in Annexure G?
Would your answer to any of questions 16 to 25 be different depending on:
(a)the form;
(b)terms (including diction, language and tone employed);
(c)timing (including, for example, whether each element or part of the Information is made available at the same time or separately and, if separately, the sequence and order in which each element or part is made available, and whether that element or part is made available at the same time as other generally available information); and
(d)manner,
in which the substance of the information in Annexure A was made generally available?
If so, please explain how and why.
Would your answers to each of questions 16 to 26 above be different if the relevant information in Annexure A for the respective question is assessed or considered in the context of the additional documents and/or information in Annexure F?]

[Questions 16-27 are directed to the issue raised by paragraphs 96 and 97 of the plaintiff's statement of claim, i.e. the quantum of compensation, if any, Forge is entitled to recover from the defendants pursuant to s 1043L(5) of the Act.]

Assumptions & Further Matters

The experts will be instructed to:
…
(b)assume that in the period 25 June 2007 to [28 November 2013 / 25 March 2013], Forge did not lodge any other document with the ASX other than as listed in Annexure B;
(c)assume that searches using the search terms listed in Annexure C have been conducted for the period 1 July 2011 to 28 November 2013 using the business information and news research engines listed in Annexure C and that those searches produced no results other than those listed in Annexure D;
…
(f)assume that the table of ASX time series data for Forge recording opening, high, low and closing prices together with market volume weighted average prices in the period 25 June 2007 to [28 November 2013 / 25 March 2013] with which they have been briefed is accurate;
…
(k)answer the specific questions they have been asked having regard to:
(i) the background, affairs and circumstances of Forge during the Relevant Period;
(ii) the circumstances of the market during the Relevant Period; and
(iii) all generally available information during the Relevant Period.

Interpretation

In this schedule:

…

information, when used in the section "The specific questions on which the experts will be asked to opine" above (including in relation to Annexure A) and in the definition of "Material Information" below, has the meaning given to it in s 1042A of the Act and so can comprise of or include information that is, in whole or in part, true or false.

Material Information means information a reasonable person would expect to have a material effect on the price or value of particular Division 3 financial products.

…

Relevant Period means 19 March 2013 to 25 March 2013 (inclusive).

…

risk management program means [plaintiff to insert the proposed definition of what it contends this term as used in Annexure A means].

risk register means [plaintiff to insert the proposed definition of what it contends this term as used in Annexure A means].

…

substantiated estimate means a written estimate of the costs of completion that was based on, and supported by, a detailed estimate or measurement of quantities by reference to engineering design, a correspondingly detailed cost estimate or firm subcontract price/s and a system for the identification, assessment and management of project risks.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JC
Associate to the Honourable Justice Howard
22 MAY 2024

see [84(b)(ii)(B)], [84(c)(ii)(B)], [84(d)(ii)(B)], [84(e)(ii)(B)], [84(f)(ii)(B)], [84(f)(iii)(B)], [84(l)] and [87(ca)].