Australian Securities and Investments Commission v GetSwift Limited (Liability Hearing)

• Jurisdiction: Australia Federal only
• Judgment Date: 10 November 2021
• Neutral Citation: [2021] FCA 1384
• Court: Federal Court

Federal Court of Australia

Australian Securities and Investments Commission v GetSwift Limited (Liability Hearing) [2021] FCA 1384

ORDERS

VID 146 of 2019
BETWEEN:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Plaintiff
AND:	GETSWIFT LIMITED (ACN 604 611 556) First Defendant BANE HUNTER Second Defendant JOEL RICHARD STUART MACDONALD Third Defendant BRETT EAGLE Fourth Defendant

order made by:	LEE J
DATE OF ORDER:	10 NOVEMBER 2021

THE COURT ORDERS THAT:

1.The parties file by 5pm on 17 November 2021 an agreed minute or competing minutes of order to reflect these reasons.

2.The proceeding be adjourned for a case management hearing at 9:30am on 19 November 2021.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

CONTENTS:

AINTRODUCTION	[1]
A.1Overview of case	[3]
A.2The GetSwift platform and business model	[20]
A.3Statements regarding continuous disclosure	[29]
A.4GetSwift announcements	[35]
A.5Summary of claims	[38]
BPRINCIPAL CONCLUSIONS	[44]
CTHE DEFENDANTS, THE BOARD AND OTHER KEY PLAYERS	[49]
C.1The defendants	[49]
C.2Operations of the board of GetSwift	[53]
C.3Other personnel at GetSwift	[57]
DTHE EVIDENCE GENERALLY	[59]
D.1ASIC’s evidence	[61]
D.2The position of the Defendants	[70]
EA DISPUTE ABOUT ASIC’S PLEADED CONTINUOUS DICLOSURE CASE	[71]
E.1The iterations of ASIC’s pleaded case	[72]
E.2The application to amend	[79]
E.3Relevant principles	[83]
E.4Pleadings and continuous disclosure cases	[86]
E.5Consideration	[94]
FAPPROACH TO FACT FINDING	[102]
F.1The nature of the contest at trial	[103]
F.2The principled approach to fact finding	[107]
F.2.1Affidavits and the documentary case	[108]
F.2.2The oral evidence generally	[113]
F.2.3Burden and standard of proof	[116]
F.3Jones v Dunkel and Civil Penalties	[123]
GFACTUAL BACKGROUND IN RESPECT OF GETSWIFT’S CLIENTS AND SHARE PLACEMENTS	[141]
G.1The Enterprise Clients	[145]
G.1.1Fruit Box	[145]
The development of the Fruit Box Agreement	[146]
The Fruit Box Announcement	[161]
Fruit Box’s’ Trial of the GetSwift Platform	[176]
Ms Gordon’s involvement in the Fruit Box trial	[180]
Termination of the Fruit Box Agreement	[184]
Conversation between Ms Gordon andMs Mikac on 22 March 2017	[193]
GetSwift Board Meeting on 27 March 2017	[195]
Draft of Fruit Box termination announcement	[198]
End of GetSwift engagement with Fruit Box	[200]
G.1.2Commonwealth Bank of Australia	[203]
The CBA Agreement	[204]
The First and Second Meeting: 8 December 2016 and 20 January 2017	[206]
Non Disclosure Agreement and initial draft terms of the CBA Agreement	[209]
The Third Meeting: 13 February 2017	[215]
Drafting of the CBA Announcement and CBA Agreement	[222]
Provision of draft media announcement to CBA and negotiation of the CBA Agreement	[231]
Initial CBA response to the draft media release	[235]
Draft of the media release prepared by Mr Polites	[243]
CBA handover from Mr Armstrong to Ms Kitchen	[252]
CBA proposed amendments to the CBA Agreement and further discussions	[256]
GetSwift reaction to the CBA revised draft of the media release	[266]
Further negotiation of the CBA Agreement	[268]
Mr Hunter reinserts the 55,000 figure into the draft media release and ASX announcement	[273]
GetSwift provides CBA with the revised media release with the 55,000 figure reinserted	[276]
Mr Budzevski and Ms Kitchen query whether GetSwift figures in media release are global	[281]
Mr Hunter responds to CBA query about global figures	[289]
Further consideration by Mr Budzevski and Ms Kitchen of the 55,000 figure	[296]
Ms Kitchen again queries the 55,000 figure with Mr Polites and Mr Budzevski	[302]
Mr Budzevski’s further consideration of the 55,000 retail merchant figure	[317]
Further exchange of drafts of the CBA Agreement	[326]
Execution of the CBA Agreement	[340]
Final arrangements for the CBA Announcement	[343]
Development of the GetSwift App for CBA	[365]
Conduct of CBA after the CBA Announcement	[370]
GetSwift responses to the projections queries in the ASX aware letters	[374]
Mr Begbie’s email	[381]
G.1.3Pizza Pan Group Pty Ltd	[383]
GPS Delivery Tracking Project and the Pizza Hut Test Store Site	[386]
Pizza Pan’s entry into an agreement with GetSwift	[389]
The Pizza Hut Announcement	[413]
Pizza Pan is not part of Pizza Hut International	[433]
Pilot postponed	[437]
Recommencement of the trial and decision not to continue	[441]
G.1.4All Purpose Transport	[448]
Preparation of the APT Agreement	[450]
Entry into the APT Agreement	[455]
The APT Announcement	[457]
Variation of the APT agreement with GetSwift and issues with the csv. file	[462]
APT’s demonstration of the GetSwift Platform to Mr Nguyen of Fantastic Furniture	[477]
Mr Macdonald learns of the current circumstances	[482]
GetSwift’s Weekly Transaction Reports record zero deliveries for APT	[492]
G.1.5CITO Transport Pty Ltd	[498]
Negotiations between CITO, PMI and GetSwift	[502]
FRF Couriers is selected to provide the delivery services	[524]
Entry into the CITO Agreement	[525]
GetSwift’s engagement of FRF Couriers	[529]
The CITO Announcement	[532]
CITO participation limited to provision of warehousing services	[536]
Interview with Australasian Transport News	[538]
The alleged training	[542]
The alleged trial of the PMI online store giving CITO access to the GetSwift Platform	[559]
G.1.6Hungry Harvest LLC	[560]
Negotiation of the Hungry Harvest Agreement	[561]
Preparation of the Hungry Harvest Announcement	[568]
G.1.7The First Placement	[573]
Trading Halt	[573]
Tranche 1 Placement	[578]
Tranche 2 Placement	[587]
G.1.8Fantastic Furniture	[595]
Initial dealings and negotiation of the Fantastic Furniture Agreement	[596]
Clarification of termination prior to the end of the trial period	[608]
Preparation and release of the Fantastic Furniture and Betta Homes Announcement	[611]
The initial trial of the GetSwift Platform by Fantastic Furniture	[628]
Termination of the Fantastic Furniture Agreement	[632]
G.1.9Betta Homes	[642]
Initial dealings and negotiation of the Betta Homes Agreement	[644]
The Fantastic Furniture & Betta Homes Announcement	[669]
Implementation of the Betta Homes Agreement	[672]
G.1.10Bareburger Group LLC	[685]
Negotiation of the Bareburger Agreement	[686]
Preparation and release of the Bareburger Announcement	[696]
Integration with Toast	[709]
G.1.11NA Williams	[714]
GetSwift’s approach to Genuine Parts Company	[719]
First contact between NA Williams and GetSwift	[722]
27 July 2017 meeting	[724]
Feedback from NA Williams following the meeting	[739]
Negotiation of the NAW Agreement	[741]
Circulation of drafts of the First NAW Announcement	[749]
Consideration of the “1.15 billion” transactions figure	[763]
GetSwift’s knowledge of size of addressable market and competitors’ pricing	[769]
Further GetSwift internal circulation of a draft of the First NAW Announcement	[772]
GetSwift dealings with Advance and O’Reilly Auto Parts	[777]
GetSwift releases the First NAW Announcement	[778]
Hunter’s concern that the First NAW Announcement was not marked as price sensitive	[779]
Insertion of revenue figure in the Second NAW Announcement	[783]
The Third NAW Announcement	[796]
Subsequent events	[801]
G.1.12Johnny Rockets	[802]
Preparation of the Johnny Rockets Agreement	[803]
Entry into the Johnny Rockets Agreement	[814]
Preparation and release of the Johnny Rockets Announcement	[816]
Subsequent communications	[826]
Deferral of limited roll out	[829]
Mr Roman’s email	[831]
G.1.13Yum Restaurant Services Group, LLC	[833]
Initial contact between GetSwift and Yum	[834]
Negotiations between Pizza Hut International and GetSwift in relation to a Pilot	[840]
Initial Proposal by GetSwift	[844]
Pizza Hut International unable to secure two test markets for the Pilot	[861]
Nondisclosure Agreement	[868]
Revised Proposal by GetSwift	[869]
Negotiations of the MSA	[880]
Yum MSA	[893]
Preparation and Release of the Yum Announcement	[896]
Pizza Hut International’s reaction to the Yum Announcement	[913]
Complaint to ASX about Yum Announcement	[925]
Negotiation of the SOW and pilot in the Kuwait market	[933]
G.1.14Amazon Corporate LLC	[956]
Initial contact between GetSwift and Amazon	[957]
Trial Hosted Services Agreement	[960]
Pilot and Negotiation of the Amazon MSA	[964]
Completion of a trial?	[989]
Preparation and release of the First Amazon Announcement	[992]
ASX reaction to the First Amazon Announcement	[999]
Updated draft of proposed Service Order provided to Amazon	[1007]
Preparation and release of the Second Amazon Announcement	[1008]
Amazon’s reaction to the Second Amazon Announcement	[1018]
Amazon aware, or agreed to, the making of a regulatory announcement	[1023]
Continued preparation of Service Order and Service Order never entered into	[1029]
G.1.15The Second Placement	[1034]
Trading Halt	[1034]
Second Placement Completion Announcement	[1041]
Second Placement Cleansing Notice	[1050]
G.1.162018 ASX Market Update Announcements	[1054]
HCONTINUOUS DISCLOSURE CLAIMS	[1060]
H.1The Relevant law	[1065]
H.1.1Background and rationale	[1065]
H.1.2The relevant provisions	[1072]
H.1.3Information	[1075]
H.1.4Awareness of information	[1077]
H.1.5General availability of information	[1086]
H.1.6Materiality	[1091]
H.2Overarching Findings	[1105]
H.2.1Existence and awareness	[1109]
H.2.2General availability of information	[1116]
Agreement Information	[1117]
GetSwift Prospectus	[1118]
Perpetually on Trial and Terminable at Will Contention	[1121]
ASIC’s contentions	[1126]
Consideration	[1131]
Further omitted information	[1142]
H.2.3Materiality	[1144]
ASIC’s case theory	[1147]
Information relevant to investors	[1148]
The evidence of Mr Molony	[1152]
Investor witnesses	[1168]
GetSwift’s materiality contentions	[1196]
The Absence of Quantifiable Benefits Contention	[1198]
The Continuing Periods Contention	[1212]
The Share Price Contention	[1230]
The Subjective Views Contention	[1257]
Conclusions on the proper approach to materiality in this case	[1259]
H.3The Enterprise Clients	[1265]
H.3.1Fruit Box	[1268]
Fruit Box Agreement	[1269]
Fruit Box Announcement	[1270]
Fruit Box Agreement Information	[1277]
Existence	[1277]
Awareness	[1278]
General availability	[1280]
Materiality	[1283]
Conclusion	[1292]
Fruit Box Projection Information	[1293]
Fruit Box Termination Information	[1302]
Existence	[1302]
Awareness	[1306]
General availability	[1311]
Materiality	[1312]
Con...