Yesterday the Supreme Court of NSW (Black J), published judgment in the matter of Regional Express Holdings Ltd [2026] NSWSC 756. The case, brought by ASIC, concerned whether Rex Airlines and its directors contravened certain sections of the Corporations and ASIC acts. The court established some contraventions on the part of Rex and dismissed claims against the company’s directors.
The alleged contravening conduct was a February 2023 statement made by Rex to the ASX that it was “optimistic the group will have positive operating profits for the full FY23 barring any further external shocks.” In June 2023 Rex revised the forecast to “a Group Operational loss of $35 million.” Rex entered administration in 2024.
Black J held that the February 2023 ASX statement was not contravening conduct at the time it was made, observing: “I am not persuaded that [current operating losses] and the seasonality in Rex’s business are such as to establish that Rex did not have reasonable grounds for its optimism as to positive operating profits for FY23.”
However, Black J found that Rex engaged in contravening conduct when it did not revise the forecast in April 2023 when, based on the information now available to it, Rex no longer had reasonable grounds to forecast positive operating profits.
The case against the directors who contested liability was dismissed. The Court held that the evidence did not rise to the level of actual knowledge on the part of a director that Rex no longer had reasonable grounds to forecast positive operating profits for FY23.
David Sulan SC appeared for John Sharp, the Deputy Chair and Non Executive Director of Rex.