In a landmark appeal on shareholder class actions, the Full Court of the Federal Court upheld an appeal brought by class members brought against Worley Ltd: [2026] FCAFC 78. The Full Court’s decision addresses important issues of market-based causation and proof of loss and damage in shareholder class actions.
Worley’s 2013 earnings growth forecast represented that it expected to achieve net profit after tax in FY2014 exceeding $322 million. Worley instead achieved net profit after tax of $263 million.
The Applicants contended that Worley engaged in misleading and deceptive conduct in respect of the guidance and contravened its continuous disclosure obligations by not notifying the ASX of the “Material Information.” The Material Information was that Worley did not have a reasonable basis for making the earnings guidance.
An initial trial dismissed the claims. A 2022 appeal overturned the initial trial judgment and remitted the proceeding to a single judge for determination of issues. In 2023, the remitter judge found that Worley had engaged in misleading or deceptive conduct but that none of the contraventions caused the market price for shares in Worley to be substantially greater than their true value but for the contraventions.
The Full Court, considering market-based causation, held that Mr Crowley “had sufficiently proved the facts necessary to support its existence or operation in this particular case.”
Turning to loss the Full Court observed that the remitter judge had framed the issue in terms of the impact of a hypothetical counterfactual disclosure, rather than engaging with the general proposition that “Mr Crowley had proven, on the balance of probabilities, that he had suffered some loss.” Applying an event study analysis, the Full Court concluded that the contraventions caused share price inflation equal to -5.92% resulting in $593 in damages suffered by My Crowley.
Jonathon Redwood SC, Naomi Oreb and Myles Pulsford of Banco Chambers appeared for Mr Worley.