Federal Court of Australia

Australian Securities and Investments Commission v Big Star Energy Limited (No 3) [2020] FCA 1442

ORDERS

THE COURT ORDERS THAT:

1.    By 23 October 2020 the plaintiff is to provide to the Court and serve a minute of the proposed form of relief that it seeks, including the form of any declaratory relief.

2.    By 6 November 2020 the parties are to confer and submit to the Court a minute of proposed procedural steps to program the matter for any further hearing on relief.

3.    The costs of and incidental to the proceeding are reserved.

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

Table of Contents

REASONS FOR JUDGMENT

BANKS-SMITH J:

PART A - General

Introduction

1    Over the course of a week in September 2015, the first defendant, a company listed on the Australian Stock Exchange (ASX) and then known as Antares Energy Limited (Antares), announced to the market that it had entered into two agreements to sell resources assets located in Texas, in the United States of America.

2    Trading in shares in Antares immediately following the announcements was elevated and the share price jumped, initially by some 250%.

3    The Australian Securities and Investment Commission (ASIC) alleges that Antares failed to disclose important information to the market at the time of the announcements in breach of its obligations of continuous disclosure. It alleges that Antares should have disclosed the name of the prospective purchaser. In the alternative, it alleges that Antares should have disclosed the following cumulative information:

(a)    the name of the prospective purchaser;

(b)    that Antares' Chairman and Chief Executive Officer, Mr James Cruickshank, had been told that the purchaser did not have financial approval in place for both relevant acquisitions; and

(c)    that Antares had not independently verified or otherwise determined the capacity of the purchaser to complete the acquisitions.

4    Some days after the initial announcements to the market about the sale agreements, trading in shares in Antares was halted at the request of Antares and ultimately suspended by the ASX.

5    ASIC has brought these proceedings seeking declarations and orders under the Corporations Act 2001 (Cth) as to Antares' alleged breaches of its continuous disclosure obligations. ASIC also seeks relief against Mr Cruickshank on the basis that he was involved in the contraventions by Antares and breached his duties as a director of the company.

6    The question of whether there have been any contraventions or any breach of duty is to be determined in these proceedings. The question of any relief is to be determined separately in a later hearing as required.

7    Antares is now known as Big Star Energy Limited. I will refer to it as Antares in these reasons as that was its name at the relevant time and in the evidence. At the time the proceedings commenced, Antares was in administration, but that is no longer the case. Antares has submitted to any order that the Court may make in these proceedings save as to costs, and subject to any further order was excused from taking part in the proceedings.

Antares and its officers

8    Antares was relevantly an oil and gas exploration and production company. Its shares were listed on the ASX.

9    Antares' principal assets at the relevant time were the oil, gas and other minerals contained in various contiguous properties in the Permian Basin of Texas known as Northern Star and Big Star. Those assets were held in the name of Antares US and are referred to respectively as the Northern Star Assets and the Big Star Assets.

10    Previously Antares held another resources asset known as 'Southern Star'. In announcements to the market Antares had frequently referred to Southern Star, Northern Star and Big Star as its 'three core projects'. Southern Star was sold to Breitburn Energy Partners LP (Breitburn) in October 2014 by a simultaneous entry into a purchase and sale agreement and settlement. As part of that sale Antares received a parcel of shares in Breitburn.

11    At the relevant time the directors of Antares were Mr Cruickshank (originally from Australia but at the relevant time based in the USA), Mr Gregory Shoemaker, Ms Vicky McAppion and Mr Mark Clohessy. According to its published financial reports, Mr Shoemaker was an executive director and Antares' chief scientist. Ms McAppion was an executive director and the finance and administration manager. Mr Clohessy was a non-executive director, based in Australia. Mr Clohessy was the only lay person who gave evidence on behalf of Mr Cruickshank.

12    The company secretary of Antares at all material times was Mr Graeme Smith, who was based in Perth.

The corporate group

13    Antares US is a company incorporated in the United States. Mr Cruickshank was at the relevant time the President of Antares US. Antares US is a wholly owned subsidiary of Santa Energy Pty Ltd.

14    Santa Energy Pty Ltd is a wholly owned subsidiary of Antares. It is an Australian proprietary limited company with its registered office in Western Australia. At all relevant times, its directors were Mr Cruickshank and Ms McAppion and its company secretary was Mr Smith.

Wade Energy Corporation

15    Wade Energy Corporation (Wade Energy) was a limited liability company incorporated in Texas which sought to acquire the Northern Star Assets and the Big Star Assets. That is, Wade Energy was the prospective purchaser whose identity was not disclosed to the market. Mr Barry Hanson was the Chief Executive Officer of Wade Energy.

Witnesses

16    ASIC relied on the evidence of four witnesses.

17    Mr Vincent Geneste was a member of the ASIC investigation team with respect to the alleged contraventions by the defendants. He compiled many of the documents that were included in the Court Book. His affidavit relates primarily to forensic and provenance aspects of the document production and he was not required for cross-examination.

18    Mr James Rowe was at the time of the hearing the State Manager for the Perth office of ASX Limited (which operates the financial market known as the ASX). Mr Rowe was responsible for the overall supervision of all entities whose securities are listed on the ASX with a connection to Western Australia such that Perth is regarded as their 'home branch'. Those entities included Antares. If a matter needed to be escalated above Mr Rowe, it was referred to the General Manager of Listings and Compliance or the Chief Compliance Officer, both based in Sydney. Mr Rowe gave evidence as to his dealings with Antares and was cross-examined for over a day.

19    Ms Anjuli Sinniah was at the time of the events a listings advisor in the Perth office of the ASX. Mr Rowe explained that the hierarchy of listing advisors was advisors, senior advisors and then principal advisors. At the time of the hearing Ms Sinniah was a senior advisor. In 2015 Ms Sinniah was responsible for monitoring announcements that were made by companies within a designated group; seeking to ensure those listed entities complied with the Listing Rules and continuous disclosure obligations under the Corporations Act; dealing with complaints as to holdings by unlisted entities; and monitoring compliance by listed entities with the requirements for significant transactions. Some of these matters are discussed further below. Relevantly, Ms Sinniah was responsible in 2015 for Antares (which then had the ASX ticker code 'AZZ'). Ms Sinniah and Mr Mauro Piccini were the ASX listings advisor and senior listings advisor respectively within Mr Rowe's larger team. Ms Sinniah was cross-examined.

20    Mr Lee Bowers provided an expert's report for the purpose of the proceedings. Mr Bowers is a boutique corporate adviser and equity market consultant. His experience includes advising corporate clients, predominantly mining and exploration companies, on likely investor reaction and share price movements in relation to new pieces of information (for example, potential acquisitions). His experience includes over 15 years of direct interaction with institutional and retail investors and advice to corporate clients and is expanded upon below. Mr Bowers was cross-examined extensively.

21    After pre-trial service of ASIC's affidavits, Mr Cruickshank filed an affidavit that he had sworn. At the conclusion of ASIC's case senior counsel for Mr Cruickshank informed the Court and ASIC that Mr Cruickshank would not give evidence.

22    Mr Cruickshank relies on the affidavit of Mr Clohessy. Mr Clohessy was not cross-examined. There were numerous objections to parts of Mr Clohessy's affidavit and I will return to those objections.

23    Mr Cruickshank also tendered an expert's report of Mr Donald Looper. Mr Looper is a lawyer in Texas with some 40 years' experience of practice relating to the oil industry. His report addressed whether there was a standard or common practice of maintaining confidentiality of the terms and information about transacting parties in the US oil and gas sector. The report was not the subject of sworn evidence. Mr Looper was not required for cross-examination.

Evidentiary matters

The standard and onus of proof

24    Section 140(1) of the Evidence Act 1995 (Cth) prescribes the standard of proof as to which the court must be satisfied in a civil proceeding as the balance of probabilities. Section 140(2) provides that the court is to take into account, in deciding whether it is so satisfied, the nature of the cause of action or defence, the nature of the subject matter of the proceeding and the gravity of the matters alleged.

25    Plainly ASIC bears the burden of proving its case. However, to the extent Mr Cruickshank raised what ASIC described as 'affirmative defences', ASIC does not bear that onus.

26    As explained by Perram J in Australian Competition and Consumer Commission v Air New Zealand Limited [2014] FCA 1157 at [488] (not disturbed on appeal), in some cases a defence will operate by denying factual matters which are necessary ingredients in the applicant's case. In those cases, the onus will lie upon that party to prove that matter and not on the defendant to disprove it. But where a defence consists of a matter of exculpation or excuse, then the onus will lie on the party asserting the exculpation or excuse to prove the facts said to justify it. This is consistent with the general principle enunciated by Walsh JA in Currie v Dempsey (1967) 69 SR (NSW) 116 at 125:

[T]he burden of proof [in the sense of establishing a case] lies on a plaintiff, if the fact alleged (whether affirmative or negative in form) is an essential element in his cause of action, e.g., if its existence is a condition precedent to his right to maintain the action. The onus is on the defendant, if the allegation is not a denial of an essential ingredient in the cause of action, but is one which, if established, will constitute a good defence, that is, an 'avoidance' of the claim which, prima facie, the plaintiff has.

27    In this case, Mr Cruickshank has advanced affirmative claims including that Antares was contractually bound by a confidentiality term or requirement and that Wade Energy 'would walk away' if its name were disclosed, that Mr Cruickshank took all reasonable steps to ensure Antares complied with its obligations and that he exercised his business judgement in good faith. These matters are advanced by Mr Cruickshank's Concise Response filed in the proceedings (see Part F below). No issue of penalty privilege was raised or agitated before me orally or in the written submissions.

The drawing of inferences

28    As noted above, Mr Cruickshank did not give evidence. Mr Cruickshank was the senior executive of Antares with direct knowledge of matters relating to its affairs.

29    A finding may be made in the absence of direct evidence. And here we are concerned with probabilities, not possibilities: Bradshaw v McEwans (1951) 217 ALR 1 at 5 (Dixon, Williams, Webb, Fullagar and Kitto JJ). As Beach J said in Australian Competition and Consumer Commission v Olex Australia Pty Ltd [2017] FCA 222:

[479]    A finding may be made in the absence of direct evidence. All that is necessary is that the more probable inference from the circumstances that sufficiently appear by evidence, left unexplained, justifies the conclusion. 'More probable' means no more than that upon the balance of probabilities, such an inference has a greater degree of likelihood. A party who relies on circumstantial evidence must show that the circumstances raise the more probable inference in favour of what is alleged. It is not sufficient that the circumstances give rise to conflicting inferences of an equal degree of probability or plausibility or that the choice between them can only be made by conjecture. I accept though that the process of inference may involve an intuitive element that is not susceptible to detailed support or explanation.

30    In the absence of direct evidence from Mr Cruickshank it will be necessary to draw inferences from the available evidence, including the body of documentary evidence. It is permissible to draw inferences from a combination of facts: Chamberlain v The Queen (No 2) (1984) 153 CLR 521 at 534-535.

31    ASIC bears the onus of establishing that the inferences for which it contends should be found to exist on the balance of probabilities: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Competition and Consumer Commission [2007] FCAFC 132; (2007) 162 FCR 466 at [38] (Weinberg, Bennett and Rares JJ). An endeavour by Mr Cruickshank to show that there is an alternative innocent hypothesis will only be useful if the hypothesis is 'more likely than not'. In that context, and unlike the criminal law, it will not suffice to point only to the fact of a reasonable hypothesis consistent with innocence: ACCC v Air New Zealand Ltd at [478]-[481].

Jones v Dunkel

32    ASIC submits that it is open to me to draw inferences in accordance with the rule in Jones v Dunkel, having regard to the unexplained absence of Mr Cruickshank: Jones v Dunkel (1959) 101 CLR 298 at 312 (Menzies J).

33    Two inferences are available under the rule in Jones v Dunkel. First, a court might infer that the evidence of the absent witness would not have assisted the party that failed to call that witness; second, a court might draw, with greater confidence, any inference unfavourable to the party that failed to call that witness, if that witness appears to be in a position to cast light on whether the inference should be drawn: Manly Council v Byrne [2004] NSWCA 123 at [51] (Campbell J, with whom Beazley JA and Pearlman AJA agreed); and Australian Securities and Investments Commission v Macdonald (No 11) [2009] NSWSC 287 at [1137] (Gzell J).

34    The rule was elucidated by Glass JA in Payne v Parker [1976] 1 NSWLR 191 at 201-202 in passages which have been widely accepted and adopted. His Honour said that whether Jones v Dunkel should be applied depends on establishing three conditions:

(a)    the missing witness would be expected to be called by one party rather than the other;

(b)    their evidence would elucidate a particular matter; and

(c)    their absence is unexplained.

35    His Honour continued:

According to Wigmore, par 285, the second condition is fulfilled where the party or his opponent claims that the facts would thereby be elucidated. Under other formulations, the condition is made out when the witness is presumably able to put a true complexion on the facts …, might have proved the contrary …; would have a close knowledge of the facts …, or where it appears that he had knowledge … I would think it in-sufficient to meet the requirements of principle that one party merely claims that the missing witness has knowledge, or that, upon the evidence, he may have knowledge. Unless, upon the evidence, the tribunal of fact is entitled to conclude that he probably would have knowledge, there would seem to be no basis for any adverse deduction from the failure to call him.

36    ASIC's case relies primarily, but not solely, on documentary evidence. Mr Cruickshank submits that inferences are to be drawn from documents before considering any question of Jones v Dunkel and that Jones v Dunkel is not to be used in determining what inferences should be drawn from documents. This argument, said to be based on Singh v Minister for Immigration and Multicultural Affairs [2001] FCA 389; (2001) 109 FCR 152, was made in and rejected by Gilmour J in Australian Securities and Investments Commission v Fortescue Metals Group Ltd (No 5) [2009] FCA 1586 (ASIC v Fortescue (TJ)). The argument was not considered relevant to the resolution of the appeal: Australian Securities and Investments Commission v Fortescue Metals Group Ltd [2011] FCAFC 19; (2011) 190 FCR 364 at [81] (Keane CJ) (ASIC v Fortescue (FC)).

37    The relevant paragraphs of Gilmour J's reasons provide:

[106]    Before stating my conclusion on whether I ought to make any Jones v Dunkel inferences, I will deal with the final authority cited by Forrest, Singh v Minister for Immigration (2001) 109 FCR 152, from which he submits the following propositions emerge: that inferences are to be drawn from the documents before considering any question of Jones v Dunkel; and that a Jones v Dunkel inference is not to be used in determining what inference ought to be drawn from the documents. In Singh, the applicant sought judicial review of a Ministerial decision to refuse to grant a spouse visa on character grounds. The Minister's reasons for decision were given in two documents: a decision record and a statement of reasons. The applicant argued that the Minister erred in making his decision by failing to have regard to the character references in support of the applicant which were annexed to a letter attached to the decision record. The Minister did not give evidence at trial, but Sackville J found that the statement of reasons provided affirmative evidence that the Minister gave consideration to the contents of the character references. The inferences that the applicant sought to draw by the Minister's failure to give evidence were contradicted by the Minister's statement of reasons.

[107]    In my view, what Sackville J said in Singh concerning the application of the Jones v Dunkel principle to the case before him is merely an application of the second condition given by Glass JA in Payne at p 201 as to whether the principle can or should be applied, namely whether the evidence of the missing witness would elucidate a particular matter. There was no occasion to draw an inference from the Minister's failure to give evidence because in his Honour's view, the question of whether he took into account the character references was adequately addressed by the statement of reasons.

38    Properly understood, nothing in Gilmour J's consideration of Singh or Jones v Dunkel suggests that a Jones v Dunkel inference cannot be drawn in determining the inferences that may be drawn from documents in general. Singh concerned a particular document (the Minister's statement of reasons) and turned on its facts. Neither Singh nor ASIC v Fortescue (TJ) stand for a broader proposition that a witness can never shed light on a document or the inferences that naturally arise from that document.

39    Finally, the authorities establish that the rule in Jones v Dunkel is available in civil penalty proceedings and is available against either party: Adler v Australian Securities and Investments Commission [2003] NSWSC 131 at [659]-[661] (Giles JA, with whom Mason P and Beazley JA agreed); Adams v Director of the Fair Work Building Industry Inspectorate [2017] FCAFC 228; (2017) 258 FCR 257 at [147] (North, Dowsett and Rares JJ); Communications, Electrical, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v ACCC at [28], [76]; and ASIC v Fortescue (TJ) at [85]-[100].

40    It will be necessary to deal in due course with the application of Jones v Dunkel to the circumstances of this case.

Business records and hearsay

41    In the present case, ASIC took the unexceptional course of tendering documents that included certain business records of Antares.

42    Regardless of the basis of the admission of the documents, the question remains as to what weight a court might properly place on the facts asserted in documents in the absence of any direct evidence of the existence of those asserted facts. As explained by Cooper J in Lardil, Kaiadilt, Yangkaal, Gangalidda Peoples v State of Queensland [2000] FCA 1548 at [26]:

For reasons given earlier, s 60 [of the Evidence Act] does not give to the hearsay evidence a weight or cogency which the circumstances do not warrant. The absence of an order under s 136 of the Act does not prevent the respondents from contending that in the circumstances of this case the hearsay statements should be given little or no weight and should not be relied upon. Relevantly, those circumstances include the fact that no attempt has been made to tender original evidence of the contents of the hearsay statements when the witnesses gave evidence, the failure to call some witnesses at all, and that fact that certain oral evidence is inconsistent with the previous hearsay statement.

See also Minister for Immigration and Citizenship v SZNVW [2010] FCAFC 41; (2010) 183 FCR 575 at [57] (Perram J).

43    A court is plainly able to evaluate the weight or cogency of the material contained in documents and draw relevant inferences. For example, it is open to take into account the absence of any cross-examination or testing of the evidence. It is open to take into account the atmosphere or context in which a document is prepared that might cause it to be self-serving: Vitali v Stachnik [2001] NSWSC 303 at [13] (Barrett J). Also relevant is the nature of the document and whether it is a 'canonical business record' to which s 69 of the Evidence Act is directed or something created with, for example the purpose of persuasion: Australian Competition and Consumer Commission v Air New Zealand Limited (No 7) [2013] FCA 83; (2013) 209 FCR 361 at [23] (Perram J). The mere fact of admissibility of hearsay evidence in a business record does not determine its weight.

Discovering knowledge of a company

44    As set out below, Listing Rule 19.12 is of particular relevance as to whether a company is aware of information that must be disclosed. It provides, in summary, that a company is so aware as soon as an officer of the entity has or ought to have come into possession of the relevant information in their capacity as an officer of the company.

45    More generally, to discover what a corporation knows it is necessary to ascertain what certain individuals within the corporation know: Lennard's Carrying Co Ltd v Asiatic Petroleum Co Ltd [1915] AC 705; and Hamilton v Whitehead [1988] HCA 65; (1988) 166 CLR 121 at 127. As described by Owen J in The Bell Group Ltd (In liq) v Westpac Banking Corporation [No 9] [2008] WASC 239; (2008) 39 WAR 1:

[907]    … To speak of a corporation having a state of mind is almost orphic in its conception. A corporation is a legal entity separate and apart from its directors and shareholders. It can only act through the intervention of the human condition.

46    The conventional approach of identifying the person who is the 'directing mind and will' is not always apt and its application will depend on matters such as the variable function of those holding office and the context in which knowledge of a company is to be considered: see generally the analysis of Beach J in Australian Securities and Investments Commission v Westpac Banking Corporation (No 2) [2018] FCA 751; (2018) 266 FCR 147 at [1658]-[1662]; and in Hurd v Zomojo Pty Ltd [2015] FCAFC 148 at [168] (Besanko, Gilmour and Beach JJ).

47    The circumstances in which knowledge of persons might be aggregated and attributed to a company were discussed in the context of unconscionable conduct and statutory terms by the Full Court in Commonwealth Bank of Australia v Kojic [2016] FCAFC 186; (2016) 249 FCR 421 at [62]-[66] (Allsop CJ), [73]-[83] (Besanko J), [106]-[118] (Edelman J). Put generally, the Full Court determined that the concept of aggregated corporate knowledge cannot be applied in order to reach a conclusion that a corporation has acted unconscionably (within the meaning of s 51AB or s 51AC of the Trade Practices Act 1974 (Cth)). In so determining, the Full Court disagreed with the analysis of Drummond AJA, with whom Lee AJA agreed, in Westpac Banking Corporation v The Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2012) 44 WAR 1: see especially Kojic at [65] (Allsop CJ), [73], [81] (Besanko J), [118], [146]-[149] (Edelman J).

48    The question of aggregated knowledge does not squarely arise in this case, where the evidence points strongly to Mr Cruickshank being the directing or guiding mind and will, the decision-maker and the person with direct knowledge of negotiations between Antares and Wade Energy. The evidence and available inferences support the view that neither Mr Smith nor Mr Clohessy had direct knowledge of such matters but were told things or instructed by Mr Cruickshank. I will return to the evidence below.

PART B - The obligation of continuous disclosure

The statutory and regulatory regime

49    By way of general summary, ASIC has responsibility for supervision of real-time trading on the ASX. It is responsible for enforcement of the laws against misconduct in Australia's financial markets. It supervises Australian financial services licence holders: see generally Part 7.2A of the Corporations Act. It publishes and maintains the ASIC Market Integrity Rules.

50    The main statutory purpose of the continuous disclosure regime is to achieve a well-informed market, leading to greater investor confidence. The object is to enhance the integrity and efficiency of capital markets by requiring timely disclosure of price or market sensitive information: James Hardie Industries NV v Australian Securities and Investments Commission [2010] NSWCA 332 at [353]-[355] (Spigelman CJ, Beazley and Giles JJA); and Grant-Taylor v Babcock & Brown Limited (in liq) [2016] FCAFC 60; (2016) 245 FCR 402 at [92] (Allsop CJ, Gilmour and Beach JJ) (Grant-Taylor v Babcock & Brown (FC)).

51    The ASX publishes and maintains Listing Rules. The Listing Rules apply to all entities admitted to the ASX Official List. The Listing Rules provide that an entity must comply with the rules as interpreted in accordance with their spirit, intention and purpose; by looking beyond form to substance; and in a way that best promotes the principles on which the Listing Rules are based (Rule 19.2 - reproduced below).

52    The disclosure requirements within the Listing Rules have statutory force by s 674 of the Corporations Act. It is not in issue that Antares was obliged to comply with the Listing Rules. It was at all times a listed disclosing entity: see generally Grant-Taylor v Babcock & Brown (FC) at [50].

53    The ASX also publishes a Guidance Note to assist listed entities to understand and comply with their disclosure obligations under Listing Rules 3.1, 3.1A and 3.1B. That Guidance Note is known as Guidance Note 8. Guidance Note 8 does not have statutory force but the ASX states in the note that it reflects the ASX's position as to how the law is intended to operate.

54    It is useful here to reproduce the relevant extracts from the legislation, Listing Rules and Guidance Note 8.

55    Section 674 of the Corporations Act provided at the relevant time:

Continuous disclosure - listed disclosing entity bound by a disclosure requirement in market listing rules

Obligation to disclose in accordance with listing rules

(1)    Subsection (2) applies to a listed disclosing entity if provisions of the listing rules of a listing market in relation to that entity require the entity to notify the market operator of information about specified events or matters as they arise for the purpose of the operator making that information available to participants in the market.

(2)    If:

(a)    this subsection applies to a listed disclosing entity; and

(b)    the entity has information that those provisions require the entity to notify to the market operator; and

(c)    that information:

(i)    is not generally available; and

(ii)    is information that a reasonable person would expect, if it were generally available, to have a material effect on the price or value of ED securities of the entity;

the entity must notify the market operator of that information in accordance with those provisions.

Note 1:    Failure to comply with this subsection is an offence (see subsection 1311(1)).

Note 2:    This subsection is also a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S.

Note 3:    An infringement notice may be issued for an alleged contravention of this subsection, see section 1317DAC.

(2A)    A person who is involved in a listed disclosing entity's contravention of subsection (2) contravenes this subsection.

Note 1:    This subsection is a civil penalty provision (see section 1317E). For relief from liability to a civil penalty relating to this subsection, see section 1317S.

Note 2:    Section 79 defines involved.

(2B)    A person does not contravene subsection (2A) if the person proves that they:

(a)    took all steps (if any) that were reasonable in the circumstances to ensure that the listed disclosing entity complied with its obligations under subsection (2); and

(b)    after doing so, believed on reasonable grounds that the listed disclosing entity was complying with its obligations under that subsection.

(3)    For the purposes of the application of subsection (2) to a listed disclosing entity that is an undertaking to which interests in a registered scheme relate, the obligation of the entity to notify the market operator of information is an obligation of the responsible entity.

(4)    Nothing in subsection (2) is intended to affect or limit the situations in which action can be taken (otherwise than by way of a prosecution for an offence based on subsection (2)) in respect of a failure to comply with provisions referred to in subsection (1).

…

56    Section 676 provides:

Sections 674 and 675 - when information is generally available

(1)    This section has effect for the purposes of sections 674 and 675.

(2)    Information is generally available if:

(a)    it consists of readily observable matter; or

(b)    without limiting the generality of paragraph (a), 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 securities of a kind whose price or value might be affected by the information; and

(ii)    since it was so made known, a reasonable period for it to be disseminated among such persons has elapsed.

(3)    Information is also generally available if it consists of deductions, conclusions or inferences made or drawn from either or both of the following:

(a)    information referred to in paragraph (2)(a);

(b)    information made known as mentioned in subparagraph (2)(b)(i).

57    Section 677 provides:

Sections 674 and 675 - material effect on price or value

For the purposes of sections 674 and 675, a reasonable person would be taken to expect information to have a material effect on the price or value of ED securities of a disclosing entity if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether to acquire or dispose of the ED securities.

58    The Listing Rules have been amended on a number of occasions. The version contained in the joint authorities bundle is the version said to have applied at the relevant time. At that time, Listing Rules 3.1 and 3.1A (including notes) provided:

Immediate notice of material information

General rule

3.1    Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity's securities, the entity must immediately tell ASX that information.

Introduced 01/07/96 Origin: Listing Rule 3A(1) Amended 01/07/00, 01/01/03, 01/05/13

Note: Section 677 of the Corporations Act defines material effect on price or value. As at 1 May 2013 it said for the purpose of sections 674 and 675 a reasonable person would be taken to expect information to have a material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell, the first mentioned securities.

'Information' may include information necessary to prevent or correct a false market, see Listing Rule 3.1B. It may also include matters of supposition and other matters that are insufficiently definite to warrant disclosure to the market, and matters relating to the intentions, or likely intentions, of a person (see Listing Rule 19.12).

A confidentiality agreement cannot prevent an entity from complying with its obligations under the Listing Rules and, in particular, its obligation to give ASX information for release to the market where required by the Listing Rules.

Examples: The following are non-exhaustive examples of the type of information that, depending on the circumstances, could require disclosure by an entity under this rule:

•    a transaction that will lead to a significant change in the nature or scale of the entity's activities (see also Listing Rule 11.1 and Guidance Note 12 Significant Changes to Activities);

•    a material mineral or hydro-carbon discovery;

•    a material acquisition or disposal;

•    the granting or withdrawal of a material licence;

•    the entry into, variation or termination of a material agreement;

•    becoming a plaintiff or defendant in a material law suit;

•    the fact that the entity's earnings will be materially different from market expectations;

•    the appointment of a liquidator, administrator or receiver;

•    the commission of an event of default under, or other event entitling a financier to terminate, a material financing facility;

•    under subscriptions or over subscriptions to an issue of securities (a proposed issue of securities is separately notifiable to ASX under listing rule 3.10.3);

•    giving or receiving a notice of intention to make a takeover; and

•    any rating applied by a rating agency to an entity or its securities and any change to such a rating.

Cross-reference: Listing Rules 3.1A, 3.1B, 5.18, 15.7, 18.7A, 19.2, Guidance Note 8 Continuous Disclosure: Listing Rules 3.1-3.1B.

Exception to rule 3.1

3.1A    Listing rule 3.1 does not apply to particular information while each of the following is satisfied in relation to the information:

3.1A.1    One or more of the following 5 situations applies:

•    It would be a breach of a law to disclose the information;

•    The information concerns an incomplete proposal or negotiation;

•    The information comprises matters of supposition or is insufficiently definite to warrant disclosure;

•    The information is generated for the internal management purposes of the entity; or

•    The information is a trade secret; and

3.1A.2    The information is confidential and ASX has not formed the view that the information has ceased to be confidential; and

3.1A.3    A reasonable person would not expect the information to be disclosed.

Introduced 01/01/03 Amended 01/05/13

Cross-reference: Listing Rules 3.1, 3.1B, 18.8A; Guidance Note 8 Continuous Disclosure: Listing Rules 3.1-3.1B.

59    Listing Rule 19 relates to matters of interpretation. Relevantly, r 19.1 and r 19.2 (including notes) provided at the relevant time:

Interpretation

Principles on which the listing rules are based

19.1    The listing rules are based on the principles set out in the Introduction.

Introduced 1/7/96.

Entity must comply with spirit, intention and purpose etc of rules

19.2    An entity must comply with the listing rules as interpreted:

•    in accordance with their spirit, intention and purpose;

•    by looking beyond form to substance; and

•    in a way that best promotes the principles on which the listing rules are based.

Introduced 1/7/96. Origin: Foreword.

Note: The principles on which the listing rules are based embody their intention and purpose. See the Introduction.

60    Listing Rule 19.12 (definitions) is also relevant. It relevantly provided at the material time that the expression 'aware' has the following meaning:

an entity becomes aware of information if, and as soon as, an officer of the entity (or, in the case of a trust, an officer of the responsible entity) has, or ought reasonably to have, come into possession of the information in the course of the performance of their duties as an officer of that entity.

61    Listing Rule 19.12 defined 'information' as follows:

for the purposes of Listing Rules 3.1 [and] 3.1B, information includes:

(a)    matters of supposition and other matters that are insufficiently definite to warrant disclosure to the market; and

  (b)    matters relating to the intentions, or likely intentions, of a person.

62    Guidance Note 8 is extensive. The parties referred in particular to cl 4.15 of Guidance Note 8 which states in part:

4.15    Guidelines on the contents of announcements under Listing Rule 3.1

Wherever possible, an announcement under Listing Rule 3.1 should contain sufficient detail for investors or their professional advisers to understand its ramifications and to assess its impact on the price or value of the entity's securities.

For example, depending on the circumstances, an announcement about the signing of a contract relating to a significant acquisition or disposal might include information about:

•    the parties to the contract;

•    the assets or businesses proposed to be acquired or disposed of;

•    any material conditions that need to be satisfied before the agreement becomes legally binding or proceeds to completion;

•    the likely effect of the transaction on the entity's total assets, total equity interests, annual revenue (or, in the case of a mining exploration entity or other entity that is not earning material revenue from operations, annual expenditure) and annual profit before tax and extraordinary items;

•    any issue of securities proposed as part of, or in conjunction with, the transaction, including its effect on the total issued capital of the entity and the purposes for which the funds raised will be used;

•    any changes to the board or senior management proposed as a consequence of the transaction; and

•    the timetable for implementing the transaction.

(footnotes omitted)

63    Other parts of Guidance Note 8 address matters such as the policy objectives of the continuous disclosure regime (cl 3); the need to comply with disclosure obligations even if it does not appear to be in the short term interests of the company to do so, for example, because it might jeopardise a transaction it is trying to conclude (cl 4.21); and the obligation on the company to disclose information even where it is a party to a confidentiality or non-disclosure agreement that might otherwise require it to keep information confidential (cl 4.22).

Elements that ASIC must demonstrate

64    To establish a contravention of s 674(2) in the present case ASIC must demonstrate that:

(a)    there was information about specified events or matters within the meaning of Listing Rule 3.1 and s 674(2)(b);

(b)    Antares had that information (s 674(2)(b)) and was aware of it (Listing Rule 3.1);

(c)    the information was not generally available (s 674(2)(c)(i)); and

(d)    a reasonable person would have expected that information to have had a material effect on the price or value of the shares in Antares, if it had been generally available (s 674(2)(c)(ii), Listing Rule 3.1).

65    Relevant to (d) above is the deeming provision in s 677: that is, whether persons who commonly invest in securities would be influenced in their investment decisions by such information.

66    Principles relevant to the construction of these provisions are discussed further in Part F below.

PART C - The events

67    Leaving aside the expert evidence, ASIC's case is primarily a documentary case, particularly as Mr Cruickshank did not give evidence. This section sets out the chronology of events, based largely on the documentary evidence. The oral evidence is dealt with more specifically in Part D. It has been necessary to record aspects of the evidence in considerable detail in part because of submissions made by Mr Cruickshank as to the role of the ASX.

A preliminary note - time zones

68    Various submissions were made on behalf of Mr Cruickshank to the effect that the Court needed to be cautious in accepting at face value time stamps on the face of the email exchanges, taking into account that Mr Cruickshank was (at times) receiving and sending emails from the United States and that emails sent and received in Australia may record either Australian Western Standard Time (AWST) or Australian Eastern Standard Time (AEST). I accept the need to be careful in what is not an uncommon scenario with email exchanges. For consistency I have referred to particular times by reference to AWST or AEST. In general, I accept ASIC's submission that the time stamps on emails can be understood as follows:

(a)    the time '08.00 am +1000' refers to AEST and records that the relevant email was sent at 8.00 am AEST;

(b)    the time '08.00 am +0800' refers to AWST and records that the relevant email was sent at 8.00 am AWST; and

(c)    the time '08.00 am' records that the relevant email was sent at 8.00 am local time, whatever that may be.

69    ASIC submits that at all material times during September 2015 AWST was two hours behind AEST. The time in Texas (American Central Daylight Time) was 15 hours behind AEST and 13 hours behind AWST. The time in London (British Summer Time) was nine hours behind AEST. Mr Cruickshank did not admit these matters. Taking into account s 71(b) and s 144 of the Evidence Act, my review of the sequence of the emails and common knowledge as to the time differences between regions, I accept that the time differences indicated by ASIC are accurate.

70    I have also taken into account that on particular dates during the period with which these proceedings are concerned, and based on his emails, Mr Cruickshank was in Perth, Texas or London.

71    In the circumstances of this case, the content, context and flow of the email exchanges was such that I am satisfied that the times that I have included and the order of events below are accurate and depict the chronology of events.

4 September 2015 - Antares' position on the eve of the agreements

72    On Friday 4 September 2015 the closing price for shares in Antares was $0.09. It had a market capitalisation of approximately $21.6 million. Its only material assets, apart from its investments or its ownership of Northern Star and Big Star, were cash and its investment in Breitburn, which had a value not in excess of approximately $23 million. It had minimal revenue: for the June quarter of 2015, it had achieved $200,000.

73    Against that, it had a potential liability with respect to unsecured convertible notes with a face value of approximately $47.5 million and with a reset date of 31 October 2015 (according to Antares' half-year financial report for the year ended 30 June 2015).

5 and 6 September 2015 - agreements entered into

74    On 5 September 2015 Antares, by its ultimate wholly owned subsidiary Antares US, entered into purchase and sale agreements with Wade Energy for the sale of the Northern Star Assets for US$148,788,560 and for the sale of the Big Star Assets for US$105,069,420. Those purchase and sale agreements are referred to as the Northern Star PSA and the Big Star PSA respectively, or collectively as the PSAs. Mr Cruickshank signed the PSAs on behalf of Antares.

75    The Northern Star PSA provided that the purchase price was US$148,788,560 with closing on or before 21 September 2015.

76    The Big Star PSA provided that the purchase price was US $105,069,420 with closing on or before 30 November 2015.

77    Otherwise, the terms of the PSAs were for all intents and purposes the same. Notably, there was no express term in either PSA requiring the terms of the agreements or the identity of the buyer to remain confidential. There was no requirement for a deposit to be paid. There was no provision for default penalties. There was no 'subject to finance' clause. There was a 'complete agreement' clause.

78    It appears that Mr Cruickshank was in Australia on the weekend of 5 and 6 September 2015. He signed the PSAs and forwarded signed copies to Mr Hanson in the early hours of Saturday morning (1.53 am AWST) under cover of an email that said:

… I will call you Saturday morning your Friday night to discuss our mutual progress towards closing both of these transactions on or before 30th November 2015.

79    On Sunday 6 September 2015 at 6.01 am AWST Mr Cruickshank received an email from Mr Hanson (and referred to by Mr Bowers in these proceedings as the Funding Email) that stated:

James,

I got approval on my secondary lender for Northern Star only.

I am working with another on Big Star.

If your Houston group is ready to move on Big Star, it is your call. I [won't] know anything on Big Star [u]ntil midweek.

I missed your call last night, but I will give you a call around 9 am your time.

Barry

80    Mr Cruickshank replied at 8.15 am AWST:

Barry,

Congratulations on your approval for Northern Star, I had no doubt you would achieve success.

Additionally, I have no doubt you will ultimately be successful on Big Star so we will be patient as we have exchanged executed Purchase and Sale Agreements and thus you have time on your side.

Well done and congratulations once again,

James

81    At 9.58 am AWST that day Mr Cruickshank emailed a copy of an ASX announcement to Mr Smith and asked that it be released to the ASX 'as soon as possible and definitely prior to the market opening'.

82    Mr Smith sent an updated version to the ASX later that day (4.21 pm AWST) and also circulated a copy to the directors. The 'update' was an inconsequential change to include reference to an 'effective date 1st September 2015'.

7 September 2015 - First and Second PSA Announcements

83    On Monday 7 September 2015 the following announcement was released to the market (First PSA Announcement):

ANTARES ENERGY EXECUTES PURCHASE AND SALE AGREEMENTS

NORTHERN STAR 148,788,560 USD

BIG STAR 105,069,420 USD

The Directors of Antares Energy Limited (ASX:AZZ) are pleased to advise of the execution of two independent Purchase and Sale Agreements with the same Private Equity purchaser for the sale of Northern Star in the amount of 148,788,560 USD and Big Star in the amount [of] 105,069,420 USD.

The closing of these two independent Purchase and Sale Agreements with the same Private Equity purchaser will be on or before the 30th November 2015 and is subject to usual commercial closing conditions and adjustments. The gross pretax proceeds from these transactions are expected to be approximately 250,000,000 USD which will be subject to customary closing adjustments, taxation and frictional costs.

James Cruickshank, Antares' CEO said, 'We are pleased to have executed two independent Purchase and Sale Agreements with the same Private Equity purchaser for both of our Permian Projects being Northern Star and Big Star. This represents another step forward in our Permian Portfolio Strategy of creating, developing, producing and realizing value from our project assets. We look forward to closing both of these transactions.'

A Summary Of The Key Highlights Of The Transaction Include:

-    Northern Star gross pretax sale proceeds 148,788,560 USD

-    Southern Star [sic] gross pretax sale proceeds 105,069,420 USD

-    Closing date on or before 30th November 2015

-    Private Equity purchaser - Effective date 1st September 2015

-    Shareholder meeting information to be announced in due course

84    The release to the market was at 6.27 am AWST/8.27 am AEST on 7 September 2015 by what Mr Rowe described as an automated release from the ASX's system known as its Market Announcement Platform, or 'MAP'.

85    Shortly afterwards (9.28 am AWST) Mr Smith emailed a revised copy of the announcement to Mr Cruickshank and Ms McAppion, correcting the reference in the summary bullet points from 'Southern Star' to 'Big Star'.

86    At 9.41 am AWST a second announcement with that error corrected was provided to the ASX and released by MAP at 9.44 am AWST (Second PSA Announcement). Nothing material arises out of the correction (the announcements are referred to collectively as the PSA Announcements).

87    On the same day (at 10.31 am AWST) Mr Cruickshank emailed Mr Smith and the other directors providing copies of the executed PSAs. There is no evidence Mr Smith had copies of the PSAs prior to that email.

9 September 2015 - concerns raised by ASIC and ASX

88    Ms Sinniah's evidence was that on 9 September 2015 Mr Piccini told her he had received a phone call from ASIC regarding Antares' announcement to the market and expressing a concern that the purchaser and material terms had not been disclosed. On the same day Ms Sinniah (together with Mr Piccini) called Mr Smith and raised a number of matters about the PSA Announcements. Ms Sinniah recorded details of the call in a file note.

89    According to Ms Sinniah, the conversation was to the following effect:

(1)    Mr Piccini said that ASIC had contacted him regarding the announcement;

(2)    Mr Piccini said that additional disclosure was required as to whether Antares would retain an interest in Big Star or Northern Star after the sale and whether there were any conditions precedent: he said words to the effect 'We need more information on the material terms. Specifically the cash payment, conditions precedent and you need to name the purchaser';

(3)    Mr Piccini asked about the identity of the purchaser and Mr Smith said that Antares did not propose to disclose that, and said that it was a cash deal and it required Antares 'to be confidential, otherwise the purchaser would not complete on the transaction';

(4)    Mr Smith said words to the effect that, 'We have entered into these sorts of agreements with parties in the US before. The nature of these contracts is that if you name the counterparty, the purchaser will walk away';

(5)    Mr Smith mentioned that there were a number of instances where Antares had put out announcements about sale and purchase agreements where the identity of the purchaser was not included, and said that it had not been an issue with the ASX;

(6)    Mr Piccini said that Guidance Note 8 states you do have to release the material terms and the name of the counterparty;

(7)    Mr Piccini raised the question of the sale being a disposal of Antares' main undertaking and Mr Smith said words to the effect that it was not a disposal of the main undertaking as they had other oil and gas assets at the time;

(8)    Mr Piccini requested a further announcement be made and that a draft be provided to him, and said that the announcement needed to go out as soon as possible and would deal with the matters that had been raised and were said not to be adequate or sufficient;

(9)    Mr Smith said a draft would need to go to the MD (the acronym used by senior counsel in cross-examination of Ms Sinniah and in context a reference to Mr Cruickshank); and

(10)    Mr Piccini raised the issue that if it were a disposal of the main undertaking Antares would have six months to find another asset or be suspended and may have to re-list.

90    After the phone call Mr Smith sent an email to Mr Cruickshank and the other directors, part of which read as follows:

I received a call from the ASX today advising they had received a call from ASIC in relation to our announcement on Monday.

They sought additional information to be released, being:

Would the Company retain any interest in BS or NS after the sale.

Any conditions precedent, and

What was the makeup of the purchase price - cash and/or shares.

They also asked about the identity of the purchaser and I advised we would not be disclosing this.

A draft announcement is attached for review.

ASX also asked about a shareholder meeting as this was a disposal of our main undertaking.

The issue with disposing of a main undertaking is that Listing Rule 11.2 requires Companies to obtain shareholder approval if it plans to dispose of its main undertakings

…

If we seek shareholder approval for the sale of Big Star, it may be difficult to argue that the sale of Northern Star shouldn't have shareholder approval as well as they are both Permian assets and the transactions were signed within close proximity of each other.

…

91    As the email indicated, a draft ASX clarification announcement was attached to the email to Mr Cruickshank and the other directors. It was in materially similar terms to that released to the market the next day (see immediately below).

10 September 2015 - PSA Clarification Announcement and continuing concerns

92    On Thursday 10 September 2015 (9.10 am AWST) Mr Smith sent a draft ASX clarification announcement to Mr Piccini. Later that day (1.34 pm AWST) Mr Piccini emailed Mr Smith stating:

Thanks Graeme, please release the announcement to the market.

93    The clarification announcement (PSA Clarification Announcement) was released to the market at 1.51 pm AWST, shortly before close of market. It read:

PURCHASE AND SALE AGREEMENTS

NORTHERN STAR & BIG STAR

CLARIFICATION OF TERMS

Antares Energy Limited (ASX:AZZ) is pleased to provide additional clarifying information in relation to the purchase and sale agreements signed for Northern Star & Big Star announced on 7 September 2015.

The gross pretax proceeds from these transactions are expected to be approximately 250,000,000 USD which will be subject to customary closing adjustments, taxation and frictional costs. This amount will be paid in cash.

There are no conditions precedent to be effected prior to settlement.

Antares will not hold any remaining interest in either the Northern Star or Big Star projects after the sale, but will still retain an interest in other Texas projects.

The sale of the Northern Star and Big Star projects is a continuation of Antares' main undertaking of developing for sale, and disposing of, oil and gas tenements, as in keeping with the divestment of the Southern Star project last year.

A Summary Of The Key Highlights Of The Transaction Include:

-    Northern Star gross pretax sale proceeds 148,788,560 USD - cash payment only

-    Big Star gross pretax sale proceeds 105,069,420 USD - cash payment only

-    No conditions precedent

-    Closing date on or before 30th November 2015

-    Private Equity purchaser

-    Effective date 1st September 2015

-    Shareholder meeting information to be announced in due course

94    As is apparent, the PSA Clarification Announcement states that the payment is 'cash payment only', and that there are 'no conditions precedent'. It does not disclose the name of the purchaser.

95    Shortly afterwards (1.53 pm AWST) Mr Smith emailed a copy of the PSA Clarification Announcement to Mr Cruickshank and the other directors under cover of an email that read:

As requested by ASIC and via ASX, attached is the latest ASX Announcement clarifying that no turtles were included in the sale price of Big Star or Northern Star and saying you sold something means you've sold it as opposed to saying you sold it but you get to keep a bit of it.

(I'm sure I [saw] an episode of Yes Minister that covered this!)

96    Shortly after the PSA Clarification Announcement was released via MAP, Ms Sinniah and Mr Piccini discussed it further with a senior ASX listing advisor. Ms Sinniah was unable to recall who that person was.

97    At some point the ASX appears to have asked Mr Smith by telephone for copies of the PSAs, as Mr Smith sent an email to Mr Cruickshank (sent at around 3.00 pm AWST) and Ms McAppion stating:

The ASX has requested a copy of the sale agreements.

They said they need to be sure the purchaser has the capacity to [complete] the purchase in light of previous incidents, (such as padbury mining I assume).

They advised this is something they are insisting on but they won't release details to the market.

98    There was then a further telephone conversation between Ms Sinniah, Mr Piccini and Mr Smith on 10 September 2015. Mr Smith recorded this in an email to Mr Cruickshank (3.08 pm AWST 10 September 2015) that said:

ASX rang again and advised the following:

ASIC has requested that the ASX obtain from Antares the following information for release to the market:

1.    Name of the purchaser.

2.    They noted the announcement said no conditions precedent and brought up the shareholder approval requirement under LR 11.2.

    I said that the agreement stated that corporate regulatory approvals will be required to be completed prior to the sale. They want this included in the announcement.

Separately the ASX wants to know the level of due diligence undertaken by the Company to ensure the purchaser has the capacity to complete the purchase and a copy of the Agreement.

We also have to go into a trading halt tomorrow morning until these matters are resolved or the ASX will suspend. Trading halts go for a maximum of 2 days.

99    Mr Smith's email is largely consistent with Ms Sinniah's file note of the conversation and oral evidence. Ms Sinniah gave the following evidence about the call with Mr Smith:

(1)    Mr Piccini said that ASIC had called again and raised two issues, being that the other party is to be named and that the announcement had referred to 'no conditions precedent' but shareholder approval would be a condition precedent;

(2)    there was an exchange about conditions precedent - Ms Sinniah did not recall any request as limited to the disclosure of a requirement of 'corporate regulatory approvals' but recalled that what was sought was an announcement of conditions precedent in the agreement and that Mr Piccini said that regulatory approvals still form a condition precedent;

(3)    there was a request for copies of the agreements;

(4)    Mr Piccini said the company needed to go into a trading halt if it could not name the purchaser and Mr Smith replied to the effect that Antares was not going to name the purchaser;

(5)    Mr Smith said that 'we've previously done the same thing with the ASX';

(6)    Mr Smith said it was a cash sale and did not involve shares in other companies, and that was a reason why he did not have to name the purchaser;

(7)    Mr Piccini said words to the effect that two matters that had to be addressed in a further announcement were the name of the party and the issue of regulatory approval;

(8)    Mr Piccini also said that the ASX wanted to know the level of due diligence undertaken by Antares to ensure the purchaser had the capacity to complete; and

(9)    it was understood at the end of the meeting that Antares would have to go into a trading halt.

100    Later that evening (8.16 pm AWST) Mr Smith sent the following email to Mr Cruickshank and Ms McAppion, together with a draft request to the ASX for a trading halt. The email read as follows:

James,

How is this?

I suspect the ASX may request the paragraph

The information has been requested by ASIC and the ASX, and Antares requires time to prepare and discuss aspects of their request with them as this information is commercially sensitive.

Be removed.

As per our discussion this afternoon, I propose requesting a face to face meeting with the ASX to discuss the purchaser.

As per your instructions I will advise ASX that we will not be releasing this information publicly for the following reasons:

1.    The purchaser will walk away from the deal if they are named;

2.    Disclosure of their name will result in any number of land holders, companies, brokers and middle men with land near Antares trying to persuade the purchaser to acquire their land rather than Antares land.

3.    If either of these occur it will result in the Antares deal falling over which would be to the detriment of Antares shareholders.

I will provide a copy of the PSA to the ASX to view the name of the purchaser on the strict condition that this not be released to any other party (including ASIC).

I will leave a redacted copy of the PSA for their review.

If the ASX is adamant that the purchaser be named I will advise that Antares will go into suspension until the deal is completed rather than disclose the name of the purchaser.

In relation to the information request re due diligence I will advise that Antares is of the belief that the purchaser has funding for the transaction, however Antares has only ever, as required by LR 3.1, disclosed to the market that it has received a signed PSA for the acquisition but has made no claims as to whether the purchaser will complete, we have only ever stated exactly what we have and whilst it is our belief that the transaction will be completed we are unable to categorically state that the deal will be completed.

Any other information you would like added?

101    The draft trading halt request read as follows:

REQUEST FOR TRADING HALT - ANTARES ENERGY LIMITED (AZZ)

In accordance with ASX Listing Rule 17.1, Antares Energy Limited requests an immediate trading halt pending the release of further information in relation to the purchase and sale agreements for the Northern Star and Big Star projects.

The information has been requested by ASIC and the ASX, and Antares requires time to prepare and discuss aspects of their request with them as this information is commercially sensitive.

The Company requests that the trading halt end on the earlier of the commencement of normal trading on Tuesday, 15 September 2015 or when the anticipated announcement referred to above is released to the market.

The Company is not aware of any reason why the trading halt should not be granted, nor of any other information necessary to inform the market about the trading halt.

102    A further draft request was sent by Mr Smith to Mr Cruickshank later that evening (9.00 pm AWST) and read as follows:

REQUEST FOR TRADING HALT - ANTARES ENERGY LIMITED (AZZ)

In accordance with ASX Listing Rule 17.1, Antares Energy Limited requests an immediate trading halt pending a request for further information from ASIC and the ASX in relation to the purchase and sale agreements for the Northern Star and Big Star projects.

The ASIC and ASX, have requested a copy of the purchase and sale agreement for review and Antares will provide this.

They have also requested that the Company disclose the identity of the purchaser to the market.

Antares wishes to discuss this request with them as this information is commercially sensitive and its disclosure would, in the Company's view, jeopardise completion of the sale.

The Company requests that the trading halt end on the earlier of the commencement of normal trading on Tuesday, 15 September 2015 or when the anticipated announcement referred to above is released to the market.

The Company is not aware of any reason why the trading halt should not be granted, nor of any other information necessary to inform the market about the trading halt.

11 September 2015 - the trading halt, meeting with ASX and the redacted PSAs

103    Before returning to the chronology of communications with the ASX, it is important to note that separately Mr Hanson and Mr Cruickshank were in communication. It is apparent that they spoke on Saturday 5 September 2015 based on the email below (bearing the date 8 September 2015) that Mr Hanson sent to Mr Cruickshank:

James when we were talking Saturday, what was the name of the Private Equity Firm [you] were telling me about that wants to get into the Permian Basin.

I would like to have a chat with them on Big Star.

104    At 1.04 am AEST on Friday 11 September 2015 (before the trading halt) Mr Cruickshank replied to Mr Hanson as follows:

Barry

I hope you are well and all is going as planned.

I have instructed our lawyers to be prepared for the closing of Northern Star on Monday 21st September 2015 in their offices in Houston in keeping with the executed Northern Star Purchase and Sale Agreement.

The below is the document from TPH which was referring to the Private Equity interest in the Permian as highlighted. When I am back in Texas I will speak with you further about the specific firms we have had contact with.

From: TPH Energy Research@[redacted]

Sent: Tuesday, 01 September, 2015 7:48 PM

Subject: Tudor Pickering Holt Energy Thoughts (9-1-15, Tuesday) ENI, GST, MEG-CN, RDC, OPEC, US oil production, Permian, Gasoline demand, PJM auction

PERMIAN E&P VISIT TAKEAWAYS

…

•    A&D market remains hot (E&P $462) - Recent deals by FANG, RSPP and WPX underscore the health of the basin's A&D market. Public E&Ps with premium currency could keep buying acreage with equity to extend core inventory. Meanwhile, billions of dollars' worth of private equity capital are targeting the Permian. Finally, conversations with producers indicate foreign money is re-entering the space and backing U.S. mgmt. teams to operate.

Yours from London

James

105    Returning to communications with ASX, before the commencement of trading the following morning (Friday 11 September 2015) Mr Smith sent the request in final form for a trading halt to Mr Piccini, under cover of an email that also requested a meeting the same day 'to discuss the information required by the ASX and the ASIC, including the [PSAs]'. The final form of the trading halt request was in the following terms:

REQUEST FOR TRADING HALT - ANTARES ENERGY LIMITED (AZZ)

In accordance with ASX Listing Rule 17.1, Antares Energy Limited requests an immediate trading halt following a request for further information from ASIC and ASX in relation to the purchase and sale agreements for the Northern Star and Big Star projects.

ASIC and ASX, have requested a copy of the purchase and sale agreement for review and Antares is pleased to provide this.

The Company requests that the trading halt end on the earlier of the commencement of normal trading on Tuesday, 15 September 2015 or when the anticipated announcement referred to above is released to the market.

The Company is not aware of any reason why the trading halt should not be granted, nor of any other information necessary to inform the market about the trading halt.

106    It is therefore apparent that amendments were made to the draft trading halt notices prepared by Mr Smith after they had been provided to Mr Cruickshank.

107    At 7.19 am AWST that day the ASX issued a market release (attaching the request for the trading halt) stating that the securities of Antares would be placed in a trading halt until the earlier of the commencement of normal trading on Tuesday 15 September 2015 or an announcement by the company to the market.

108    Mr Smith emailed Mr Cruickshank and the other directors at 8.57 am AWST and informed them that the trading halt was in place and that a meeting was planned at 11.00 am with ASX 'to discuss issues such as why we won't be disclosing the name of the buyer'.

109    Both Ms Sinniah and Mr Rowe gave evidence as to the meeting with Mr Smith of 11 September 2015. Ms Sinniah prepared a file note of the meeting.

110    Mr Rowe described what was said as follows:

(a)    Mr Rowe provided examples of where the ASX had considered naming a counterparty to a sale transaction was important ('Enviro Mission and Padbury');

(b)    Mr Smith said they didn't think they should be required to disclose the name of the purchaser because it was confidential; naming the purchaser would be detrimental; competitors would approach the purchaser and try and gazump Antares by trying to sell their assets at a lower price;

(c)    Mr Rowe said that both the ASX and ASIC were concerned; ASIC was concerned that the identity of the purchaser be disclosed; identity is important for investors to assess counterparty risk, completion risk and to undertake due diligence; it is a lot of money and investors need to know where it is coming from; that the ASX wanted copies of the PSAs; Mr Rowe wanted to see if there were conditions precedent;

(d)    Mr Smith said it was a cash deal and not scrip and so identity shouldn't matter;

(e)    Mr Rowe said it is not enough to assert the name of the purchaser is commercially sensitive and that in his view it was not commercially sensitive;

(f)    Mr Smith said he would like the opportunity to put a formal submission; that he had the PSAs with him and was happy to tell the ASX the name but would need an assurance it would not be released or passed on to ASIC because ASIC might 'leak it';

(g)    Mr Rowe mentioned Guidance Note 8;

(h)    Mr Rowe said the ASX would be obliged to pass the information on to ASIC;

(i)    Mr Smith said he would provide redacted copies to the ASX; and

(j)    Mr Rowe raised the issue of shareholder approval.

111    Ms Sinniah's evidence was to similar effect although she recalled that Mr Smith used language to the effect that disclosure would 'kill the deal' and that Mr Rowe said if Mr Smith wanted to rely on carve outs (which she understood to mean the exceptions) then he would need to explain why. Both Mr Rowe and Ms Sinniah were cross-examined extensively about the meeting and their evidence is referred to further below.

112    At 2.27 pm AWST that day, Mr Smith emailed Mr Cruickshank attaching a draft submission addressing why Antares should not have to disclose the identity of the purchaser. The attachment was described as v2 (which I infer to mean version 2). The covering email read:

Draft submission James Rowe at the ASX suggested we write.

He said ASIC was adamant the purchaser be named and his bosses at the ASX also insisted on it, but still suggested we make the submission to hopefully make them change their mind.

113    Later that day Mr Smith sent multiple emails to Ms Sinniah and Mr Rowe providing redacted copies of the PSAs. The name and description of the buyer were redacted in each.

11 September 2015 half yearly report - financial position

114    Also on 11 September 2015 Antares released to the ASX its half yearly report for the half year ended 30 June 2015. It was released to the market at 6.10 pm and Mr Cruickshank's signature was affixed. Relevantly, it contained the following statements:

Going Concern

The financial report has been prepared on the going concern basis, which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.

For the half-year ended 30 June 2015, the Group generated a consolidated loss of $18.333 million and incurred operating cash outflows of $3.601 million. As at 30 June 2015 the Group has cash and cash equivalents of $6.998 million, net current liabilities of $16.384 million and net liabilities of $13.065 million. Current liabilities includes convertible notes amounting to $47.188 million at 30 June 2015 with a reset date of 31 October 2015.

The Group cash balance at 31 August 2015 was $4.5 million and the market value of the available for sale financial asset was $17.2 million representing a reduction in the two current assets of $11.9 million from 30 June 2015.

Should the convertible noteholders elect to redeem their notes the Group does not currently have sufficient cash reserves to fund the redemption and continue as a going concern.

Notwithstanding the above the Directors consider it appropriate to prepare the financial statements on a going concern basis after having regard to the following pertinent matter.

It is the opinion of the directors that either:

1)    the notes will, once again, be rolled over and therefore the cash required to redeem the notes will not be required, or

2)    the announced sale of Northern Star and Big Star assets (refer note 10) will provide the cash required to redeem the notes via either the closure of one of these sales prior to 31 October 2015 or, alternatively, the Group being able to secure short term financing to repay the notes in advance of one of the announced asset sales settling.

Should the directors not be able to achieve the matters set out above, there is significant uncertainty as to whether the Group will be able to continue as a going concern unless alternative working capital to repay the convertible notes can be secured.

…

Notes to the financial statements

Available for sale financial assets

…

AFS financial assets comprise 4.3 million equity securities in Breitburn Energy Partners LP (NASDAQ:BBEP) received as part of the sale of the Company's Southern Star assets.

On acquisition the securities were valued at $90.645 million. On 31 December 2014 an impairment of $53.594 million was made to the value of the securities to reflect their fair value based on the current quoted market price of Breitburn securities. In June 2015, a further impairment of $12.472 million was made to the value of these securities. The impairment was made as the Group believes the decline in fair value of 72% was significant.

…

Events after balance sheet data

The share price of Breitburn Energy Partners LP has fallen approximately 40% from 30 June 2015 to 31 August 2015. In AUD this represents a reduction in its carrying value from 30 June 2015 of $26.651 million to $17.263 million.

On 7 September 2015, the Company announced the execution of two independent Purchase and Sale Agreements for the sale of Northern Star in the amount of US$148,788,560 and Big Star in the amount US$105,069,420.

The closing of the two independent Purchase and Sale Agreements with the same Private Equity purchaser will be on or before 30th November 2015 and is subject to the usual commercial closing conditions and adjustments.

115    The audit opinion provided by Ernst & Young in respect of the half yearly accounts contained an 'emphasis of matter paragraph' in the following terms:

Without qualifying our conclusion, we draw attention to Note 1 [Going concern] in the financial report. The matters set forth in Note 1 indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity's ability to continue as a going concern, and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business.

11-14 September 2015 - Antares' submission to ASX

116    Meanwhile work continued on the submission to the ASX. Another version of the submission (v4) was emailed by Mr Smith to Mr Cruickshank at 10.57 am AWST on 11 September 2015. Mr Cruickshank replied to Mr Smith on the morning of Sunday 13 September 2015 at 9.32 am AWST, stating:

1.    Has this submission been sent to the ASX?

2.    If not, I would welcome the opportunity to discuss it with you further.

3.    I sent you another email you can add as another addition if you wish.

117    Mr Smith replied at 10.05 am AWST that day:

No not yet, I was waiting to hear from you on Friday, assumed you would discuss this weekend.

I incorporated the latest email in this latest version

118    It appears that further versions of the submission were emailed by Mr Smith to Mr Cruickshank (and Mr Clohessy) that day, as the attachment to the emails was variously described as v5, v6, v7 and v8.

119    The final form submission was provided by Mr Smith to Mr Rowe at around 11.33 pm AWST on Sunday 13 September 2015. Mr Smith also emailed a copy of the final form submission to Mr Cruickshank and the other Antares directors.

120    The submission read:

ANTARES ENERGY LIMITED (AZZ) - SALE OF NORTHERN STAR & BIG STAR

Thank you for your time on Friday 11 September with Anjuli Sinniah and Mauro Piccini to discuss the disclosure requirements for the sale and purchase of Northern Star & Big Star.

Antares was advised on Thursday 10 September by Anjuli Sinniah and Mauro Piccini, and by you on Friday 11 September that ASIC has requested the identity of the Purchaser be announced to the market.

To disclose the identity of the Purchaser will be detrimental to Antares' shareholders, noteholders and other stakeholders for the following reasons:

1.    Disclosure of the Purchaser's identity will jeopardise completion of the agreement;

2.    As this transaction was worth, at the time of announcement, 15 times the market capitalisation of the Company (~USD 250,000,000) we do not consider it reasonable to jeopardise a transaction of this magnitude merely to advise the market of the name of the Purchaser for no additional benefit;

3.    Given the transaction is cash only, we believe the identity of the Purchaser is irrelevant;

4.    Disclosure of the Purchaser will enable other sellers and other intermediaries, to make contact with the Purchaser with a view to the Purchaser undertaking a transaction with them instead of Antares - this has the potential for the Antares deal to be adversely affected and / or terminated and dramatically changes the risk profile of the deal.

    Chairman James Cruickshank has already fielded >50 calls from other companies and intermediaries trying to find out the identity of the buyer so as to be part of the transaction or to pursue the purchaser to complete an alternative transaction (see Appendix 1 for examples);

5.    As the Purchaser is not a listed ASX Company, there are no restrictions on their disclosure to other parties on the status of the transaction. There is the possibility that shareholders, noteholders and stakeholders could contact the Purchaser directly, and gain access to information which has not been made available to the market. Information may then be made public (through websites such as Hot Copper), and not through the ASX. Antares has a long established history of information remaining confidential and the market being kept fully informed. If all participants in the market have access to the purchaser, Antares will no longer be able to ensure information is reported correctly or completely;

6.    As the development and disposal of oil and gas projects is the main undertaking of Antares, we would find it difficult to conduct similar transactions in the future if potential buyers were of the view that Antares could not keep details of a transaction confidential until it had been settled;

7.    Given that Antares operates in a market where private companies are a significant purchaser of these types of assets, our ability to require disclosure from them is severely limited as they do not have continuous disclosure requirements. Additionally, this places Antares at a significant disadvantage to our competitors who are not subject to the same continuous disclosure requirements as Antares.

Antares believes the information requested by ASIC is an exception to Listing Rule 3.1 under Listing Rule 3.1A as:

•    The transaction has not been finalised and therefore the information concerns an incomplete proposal;

•    The information is confidential; and

•    A reasonable person would not expect the information to be disclosed (for the reasons outlined above).

Guidance Note 8 supports this under section 3 - The policy objective of the continuous disclosure regime, which states:

Listing Rule 3.1A is the balancing factor here. It seeks to avoid the premature disclosure of information initially by excluding from the requirement for immediate disclosure in Listing Rule 3.1 confidential information that is not yet ripe for disclosure (eg, because it concerns an incomplete proposal or negotiation or is insufficiently definite to warrant disclosure) and then only requiring it to be disclosed if and when it has ripened to an appropriate degree (eg, because the relevant proposal or negotiation has been completed or the matter has become sufficiently definite to warrant disclosure) or it has ceased to be confidential (which it has not).

Additionally, Guidance Note 8 states - Listing Rules 3.1, 3.1A and 3.1B form an integrated set of rules intended to strike an appropriate balance between the interests of the market in receiving information that will affect the price or value of, or which is needed to correct or prevent a false market in, an entity's securities at the earliest reasonable time, and the interests of the entity in not having to disclose information prematurely or where it would clearly be inappropriate to do so.

Antares is of the very strong view that disclosure of the identity of the Purchaser would be inappropriate and jeopardise our ability to complete this transaction.

Antares believes it is the best interest of all our stakeholders not to take any action which will jeopardise the potential for these two transactions to be completed.

(original emphasis)

121    An appendix was attached to the submission that contained three references to contact from third parties: an email said to reflect an inquiry from 'Chollapetro' as to whether it could 'tag along on North Star'; a paragraph written about an inquiry from Royal Bank of Canada wanting to know the name of the purchaser to see if it might be interested in another proposal; and an email from Macquarie Capital (USA) Inc asking for the name of the private equity purchaser.

122    On Monday 14 September 2015 and after the ASX's receipt of the submission, Mr Smith participated in a telephone conversation with Ms Elizabeth Harris of the ASX (in Mr Rowe's absence due to ill-health), Ms Sinniah and Mr Piccini.

123    Mr Smith relayed the nature of the telephone call in an email to Mr Cruickshank (and the Board members) that read as follows and attached a draft release about suspension:

I received a phone call from the ASX at 3:15pm today.

ASX was represented by

Mauro Piccini

Anjuli Sinniah and

Elizabeth Harris

Anjuli advised me that the Company must disclose the name of the Purchaser pre-market tomorrow to lift the Trading Halt.

Failure to disclose the name of the Purchaser would result in suspension from trading and ASIC would be advised that we are not complying with the Listing Rules.

I asked why the ASX was adopting this approach and was told that it was a material transaction, being the disposal of our main undertaking, and the market needed to be informed in order to be able to make informed decisions about this.

Attached is a draft announcement which the Board may consider lodging. I do not know whether the ASX would allow this to be lodged though.

124    Ms Sinniah confirmed the ASX's position in an email to Mr Smith following the telephone call:

1.    We note AZZ was placed into a trading halt on Friday 11 September 2015 due to come out on Tuesday 15 September 2015.

2.    I refer to our telephone conversation with Elizabeth Harris and Mauro Piccini earlier this afternoon.

3.    If AZZ is unwilling to disclose the identity of the Purchaser by pre-market open tomorrow Tuesday 15 September 2015, ASX will impose a suspension pursuant to listing rule 17.3 which will continue until AZZ discloses the Purchaser's identity. Please note that AZZ is prevented from requesting a voluntary suspension of trading in this instance.

4.    Kindly confirm receipt of this email.

125    On Monday 14 September 2015 at 10.40 pm AWST Mr Smith sent an email to Mr Cruickshank and Mr Clohessy with the subject line 'Additional information for consideration'. Mr Smith referred to the requirement of shareholder approval and anticipated that the ASX would require the name of the purchaser to be published in any notice of meeting. He provided commentary on 'the guidance note on material transactions and shareholder approval'. He wrote:

In light of the stance taken by the ASX it would seem that they will require the name of the Purchaser to be included in the notice of meeting and not allow it to be sent to shareholders until it complies.

Failure to comply can lead to the ASX advising ASIC that the Company is in breach of the Listing Rules and ASIC can determine if it wishes to take criminal or other regulatory action in relation to the breach.

126    Subsequently, at about midnight AWST Mr Smith emailed to Mr Cruickshank and the other directors a revised ASX announcement about the suspension that he had just lodged with the ASX. The announcement largely repeated the matters set out in the submission Antares had provided to the ASX.

15 September 2015 - suspension of trading

127    On 15 September 2015 Mr Rowe informed Mr Smith that the ASX would suspend Antares securities from quotation subject to compliance with its disclosure obligations. The ASX then proceeded to implement the suspension (at about 11.58 am AEST) and issued a market release in the following form:

MARKET RELEASE

    15 September 2015

ANTARES ENERGY LIMITED

SUSPENSION FROM OFFICIAL QUOTATION

The securities of Antares Energy Limited (the 'Company') will be suspended from quotation immediately by ASX pursuant to listing rule 17.3 on the following basis:

1.    The Company has indicated that it is unwilling to comply with its continuous disclosure obligations under listing rule 3.1 by providing the market with the identity of the purchaser for the Northern Star and Big Star projects. The disposal is a material transaction being effected under an executed Purchase and Sale Agreement. Accordingly, none of the carve-outs from immediate disclosure in listing rule 3.1A apply and all material information concerning the disposal is required to be disclosed to the market immediately under listing rule 3.1.

2.    The failure by the Company to disclose the identity of the purchaser is contrary to ASX Guidance Note 8 Continuous Disclosure - Listing Rules 3.1 - 3.1A, section 4.15 of which provides guidelines on the contents of announcements of material contracts under listing rule 3.1, including naming the parties to the contract.

3.    In addition, the Company is required to obtain shareholder approval for the disposal of its main undertaking pursuant to listing rule 11.2, as a pre-condition to completion of the disposal. It is inconceivable to ASX that the notice of meeting seeking shareholder approval under listing rule 11.2 would not include the identity of the purchaser. Accordingly, that information will be released to the market in any event ahead of the completion of the disposal.

4.    In the circumstances, ASX cannot see any basis on which information about the identity of the purchaser for the Northern Star and Big Star projects should not be disclosed to the market immediately.

5.    ASX has confirmed with ASIC that the Company's securities should remain suspended until such time as the Company demonstrates compliance with the listing rules.

128    Some 10 minutes later the Antares ASX announcement about the suspension was released to the market.

Subsequent events

129    On 5 November 2015 Mr Smith emailed Ms Sinniah a draft notice of general meeting for Antares in which it was proposed to seek shareholder approval for the disposal of both or either of the Northern Star and Big Star Assets. Relevantly, the draft notice referred to Wade Energy, and so disclosed to the ASX the identity of the purchaser for the first time.

130    On 10 November 2015 Ms Sinniah emailed Mr Smith attaching a letter about the proposed notice of general meeting. Mr Rowe's evidence was that in contrast to the position with announcements, the ASX approves notices of general meetings for release. The letter was written by him in conjunction with Mr Kevin Lewis, the chief compliance officer. The ASX requested specific information be provided to shareholders, including not only the name of the purchaser but the identity of the owners, directors and senior management, the financial standing of Wade Energy, a description of due diligence inquiries that had been undertaken, and details of the calculation of the closing adjustments referred to in the notice and when the entity became aware of the calculations.

131    According to Mr Rowe, the notice of general meeting was not released.

132    On 1 December 2015 Antares released an announcement to the market disclosing that completion under the PSAs did not occur on 30 November 2015 and that Antares had received a request for an extension. The release included a statement that the Board of Directors was negotiating amendments.

133    On 4 December 2015 Mr Smith lodged an update announcement with the ASX and sent it by email to Ms Sinniah (December 2015 Update). It stated:

PURCHASE AND SALE AGREEMENTS

NORTHERN STAR & BIG STAR

UPDATE

Antares Energy Limited (ASX:AZZ) advises that further to its announcement of 1 December 2015, Antares has executed two independent Amended Purchase and Sale Agreements with Wade Energy Corp (Purchaser), a US based private equity purchaser, for the sale of its Northern Star project for USD 148,788,560 and its Big Star project for USD 105,069,420. The Amended Purchase and Sale Agreements replace the Purchase and Sale Agreements previously entered into between Antares and the Purchaser.

The closing date for the sale of the Northern Star and Big Star projects has been extended under the Amended Purchase and Sale Agreements to occur on or before 15 January 2016 (Closing Date).

The closing of the sale of the Northern Star and Big Star projects is subject to inherent risks and uncertainties, some of which are beyond Antares' control. These risks and uncertainties include contractual risks associated with the Purchaser defaulting on its obligations under the Amended Purchase and Sale Agreements and the credit risk associated with the Purchaser and its private equity financiers. As the Purchaser is a private equity purchaser, there is limited public information relating to the Purchaser, its finances and operations. Antares has been provided with limited information relating to the finances of the Purchaser and its private equity financiers but is continuing to engage with the Purchaser. Similar to other transactions of this nature, there can be no assurance or guarantee that closing will occur.

Under the Amended Purchase and Sale Agreements, Antares has the option to terminate the Amended Purchase and Sale Agreements at any time prior to the Closing Date by notice to the Purchaser. The Purchaser does not have any right to terminate the Amended Purchase and Sale Agreements and there are no conditions precedent to closing.

The aggregate gross pretax proceeds from the sale of the Northern Star and Big Star projects are expected to be USD 253,857,980. This amount is subject to closing adjustments, estimated taxation and frictional costs of approximately USD 70,000,000.

Antares will convene a shareholder meeting to seek shareholder approval for the sale of the Northern Star and Big Star projects in accordance with the ASX Listing Rules, to be announced in due course.

134    Mr Cruickshank's contact details appear at the bottom of the December 2015 Update.

135    Mr Rowe sent an email to Mr Smith shortly after, referring to the December 2015 Update and asking whether the announcement included all the material terms of the amended purchase and sale agreements. Ms Sinniah also sent an email to Mr Smith, copied to Mr Rowe, seeking copies of the agreements referred to in the December 2015 Update.

136    It can be inferred that Mr Smith then contacted Mr Cruickshank, because Mr Smith took a day to respond, a delay for which Mr Smith apologised in an email to Ms Sinniah and Mr Rowe, attributing it to the fact that 'the Chairman is in a different time zone'. Mr Smith provided by way of attachments to the email both amended agreements (signed by Mr Cruickshank) plus a revised version of the December 2015 Update. The revised version included certain (inconsequential) amendments. According to Mr Rowe, the revised December 2015 Update was not released to the market.

137    On 7 March 2016 Antares announced to the market a noteholder meeting. The purpose of the proposed meeting was to seek a resolution that the reset dates for the convertible notes be extended from a previously extended date of 31 March 2016 to 31 March 2017 as the sale of the Northern Star and Big Star Assets had not completed, and Antares was not in a position to satisfy redemption notices from cash reserves. This notice of noteholder meeting identified to the market for the first time that Wade Energy was the intended purchaser under the amended PSAs.

138     It was not in issue that the transactions by way of the PSAs with Wade Energy did not complete. Senior counsel for Mr Cruickshank stated as much during cross-examination.

Market movements before and after the announcements

139    The changes in share price and trading volume during the period between the release of the First PSA Announcement at about 8.27 am AEST on 7 September 2015 and prior to the opening of the market (at 10.00 am AEST that day) until the suspension of Antares from official quotation by the ASX at about 11.58 am AEST on 15 September 2015 were established by the production of 'course of sales' documents.

Movement in share price

140    Prior to the commencement of trading on Monday 7 September 2015 the market capitalisation of Antares was approximately $21.6 million. The closing share price for Antares on the previous trading day, Friday 4 September 2015, was $0.09.

141    The closing share price of Antares on 7 September 2015, being the day of the PSA Announcements, was $0.315.

142    The closing share price of Antares on 10 September 2015, being the day of the PSA Clarification Announcement, was $0.50.

143    It is clear that there was a significant increase in share price upon the release to the market of the First PSA Announcement and then again following the PSA Clarification Announcement.

Volume

144    In the week of 24 August 2015 to 28 August 2015 the total trading volume of Antares shares on the ASX was 513,127 with an average daily traded volume of 102,625.

145    In the week just prior to the First PSA Announcement, being 31 August 2015 to 4 September 2015, the total trading volume for the week was 302,900 with an average daily traded volume of 60,580.

146    On 7 September 2015 the day's trading volume was 15,654,227.

147    Accordingly it is also clear that there was a significant increase in trading volume following the PSA Announcements.

PART D - the evidence of the lay witnesses

ASIC's lay witnesses

148    Mr Cruickshank objected to the affidavit evidence of Mr Rowe and Ms Sinniah as a whole on the grounds of relevance. I have found their evidence to be relevant to the issues as they emerged during the trial, particularly having regard to submissions by Mr Cruickshank as to the ASX's view of disclosure obligations under Listing Rule 3.1. There was no serious challenge to the credibility of Mr Rowe or Ms Sinniah. Both gave evidence in a careful, responsive and objective manner. In Mr Rowe's case, he maintained that approach over the course of lengthy cross-examination. He appeared thoughtful, appeared to listen carefully and was not defensive in his approach or responses. Save for one matter that I identify below with respect to Ms Sinniah's evidence, I have accepted their evidence.

Mr Rowe

The role of MAP in releasing the First and Second PSA Announcements

149    Mr Rowe was cross-examined extensively as to whether the ASX endorses or approves an announcement to the market before it is released.

150    Mr Rowe said that up to 10,000 announcements are made to the market each month. There is a team of persons in MAP. The process for announcements is that they are lodged by the company. They are checked in MAP but the MAP check is cursory. MAP do not review announcements for substance. They review for errors such as 'draft' watermarks that have not been removed, whether the date of the release is correct and whether it refers to another listed company so that a cross-release is required. Subject to the MAP check, the announcement is released to the market. MAP produces an automated release acknowledgement by email to the company which confirms that the announcement has been released.

151    In the case of both PSA Announcements, an automated response email was sent by MAP.

152    Mr Rowe's evidence was that both PSA Announcements went straight through the MAP system. They were announced despite (on ASIC's case) non-compliance with ASX policy as to disclosure of the name of purchasing parties because MAP does not check the substance of announcements.

The role of ASX and the PSA Clarification Announcement

153    Mr Rowe did not recall being involved with Antares and the question of disclosure until from 9 September 2015. He understood that the 'ball started rolling' as a result of a call to the ASX from a person at ASIC who asserted that the purchaser was to be identified.

154    Mr Rowe was aware that there were discussions between Mr Smith, Mr Piccini and Ms Sinniah on 9 September 2015. He had seen prior to the hearing the email from Mr Piccini to Mr Smith that said 'Please release the announcement to the market'. Mr Rowe said such email did not comprise 'approval' by the ASX. It addressed one aspect of concern (conditions precedent) but not another (identification of the purchaser). It was put to Mr Rowe that the fact that Mr Piccini allowed the release to the market of an announcement that dealt only with the conditions precedent suggested there was some doubt in the view of the ASX as to whether it was necessary to name the purchaser. Mr Rowe did not accept that proposition. He rejected propositions to a similar effect on a number of occasions during the course of cross-examination.

The escalation to ASX Sydney on 11 September 2015 and Antares' submission

155    It was suggested to Mr Rowe that he must have had doubts as to the ASX's requirement that the identity of the purchaser be disclosed: it was contended that otherwise there was no need for Mr Rowe to 'escalate' the issue to Sydney after the meeting of 11 September 2015.

156    Mr Rowe denied that he had such doubts.

157    Mr Rowe explained that at the time of the meeting of 11 September 2015 he intended to refer the circumstances with Antares to the chief compliance officer, Mr Lewis, who was based in Sydney.

158    Mr Rowe explained that there was one compliance team across Australia and that he spoke to his equivalents in other states or the people to whom he reported sometimes many times a day. He explained that sometimes he raised matters for information purposes or where he was interested in an interpretation of ASX policy. Sometimes they were raised as matter of prudence to ascertain how issues were being dealt with elsewhere so that there might be consistency in the ASX's approach. Mr Rowe explained, however, that there were some circumstances where it was standard practice to escalate a matter to Sydney, and those included where the outcome of a decision in Perth was that there was going to be a suspension of trading; a show cause letter or a report to ASIC; or where based on the response to previous announcements it was anticipated that there might be a complaint from shareholders or other directors about a proposed announcement.

159    Mr Rowe's evidence was that he had no doubt that Antares was obliged to disclose the name of the purchaser under the PSAs to the market. He understood that to be the ASX's policy. He chose to escalate the matter to Sydney because the ASX was going to suspend trading in Antares shares. Suspension was one of the circumstances where he always referred a matter to Sydney.

160    Mr Rowe was then asked in cross-examination why he gave Mr Smith the opportunity to provide a submission to the ASX if there was no question that Mr Rowe's position as to disclosure of the purchaser's identity was correct. Mr Rowe explained that the ASX was about to suspend the company, and he considered Mr Smith was entitled to put his contrary view as to disclosure and was entitled to have that view considered. On that basis Mr Rowe considered it appropriate to put the submission to the chief compliance officer and offered to Mr Smith that he would do so.