Federal Court of Australia

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

File number:

VID 146 of 2019

Judgment of:

LEE J

Date of judgment:

10 November 2021

Catchwords:

CORPORATIONS – the GetSwift saga – story of the rise and fall of a nascent ‘tech start up’ listed on the ASX – market offering ‘software as a service’ – purported ‘exclusive multi-year’ agreements with 13 Enterprise Clients – underlying facts reveal agreements far less than certain –focus on influencing market perceptions through ‘price sensitive’ ASX announcements ‘do or die’ approach to success – “[b]it by bit until we get to a $7.50 share price :)” – company re-domiciled to Canada during currency of regulatory proceeding

PRACTICE AND PROCEDURE – pleadings in continuous disclosure cases – leave sought to rely on a fifth further amended statement of claim – whether the Australian Securities and Investments Commission ran an ‘all or nothing’ case – whether one sub-element of an omitted category of information can undermine the combined total – not an ‘all or nothing case’ – rejection of amended pleading – same case as was always run – no prejudice to GetSwift

CORPORATIONSelephantine continuous disclosure case – consideration of continuous disclosure obligationss 674 of the Corporations Act 2001 (Cth)ASX Listing Rule 3.1 where listed public company announced to market that it had entered into ‘exclusive multi-year’ agreements whether information about trial periods, termination and other qualifying aspects material need to wade through factual narrative of each of the 13 Enterprise Clients –prodigious documentary case – all contraventions made out

CORPORATIONSmateriality of omitted information ex ante analysis – influence of expert and lay evidence –identity of relevant investors – consideration of how relevant investors determine whether to acquire or dispose of securities – consideration of what influences investors in deciding whether to acquire or dispose of securities – consideration of share price in ex ante analysis – consideration of subjective views of directors to objective question of materiality consideration of whether omitted of information was material

CORPORATIONSwhether directors of company contravened s 674(2A) of the Corporations Actwhether directors knowingly concerned in contravention by company of s 674(2)consideration of state of knowledge that must be established before a person is knowingly concerned in a contravention for the purpose of s 674(2A)whether actual knowledge required – directors found to have been knowingly involved in some contraventions

CORPORATIONSmisleading and deceptive conduct claim was it necessary? – s 1041H of the Corporations Act 2001 (Cth) and s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) – consideration of a substantial number of representations – majority misleading or likely to mislead – consideration of continuing and future representations – representations made by an officer – whether two of the directors should be personally liable for GetSwift’s misleading and deceptive conduct – circumstances in which they were the directing mind of the company – where they drafted and/or authorised the transmission of ‘price sensitive’ announcements to the ASX

CORPORATIONS directors’ duties – whether directors of company contravened s 180(1) of the Corporations Act by failing to exercise care and diligence in causing or permitting company to contravene the relevant statutory norms – consideration of the interaction between different contraventions – objective inquiry – directors found to have breached s 180(1) of the Corporations Act

EVIDENCEdrawing of inferences in absence of direct evidencewhere defendant directors did not give evidenceconsideration of the relevant principles – application of rule in Jones v Dunkel in civil penalty proceedings

Legislation:

Australian Securities and Investments Commission Act 2001 (Cth) ss 12BA, 12BAA, 12BAB, 12BB, 12DA, 12DB, 19

Competition and Consumer Law Act 2010 (Cth) Sch 2 s 4

Corporations Act 2001 (Cth) ss 9, 79, 180(1), 206C(1), 206E(1), 674(2), 674(2A), 675, 676, 677, 708A(5)(e), 761A, 764A(1)(a), 1001A, 1002B(2)(a), 1041H, 1042C(1), 1317G(1A), 1317R

Evidence Act 1995 (Cth) ss 55, 56, 128, 136, 140

Federal Court of Australia Act 1976 (Cth) Pt VB

Trade Practices Act 1974 (Cth) s 51A

Trade Practices Amendment (Australian Consumer Law) Bill (No 2) 2010 (Cth) Sch 3, item 6

Cases cited:

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Briginshaw v Briginshaw (1938) 60 CLR 336

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Commonwealth Bank of Australia v Kojic [2016] FCAFC 186; (2016) 249 FCR 421

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

CSG Limited v Fuji Xerox Australia Pty Ltd [2011] NSWCA 335

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Fair Work Ombudsman v Devine Marine Group Pty Ltd [2014] FCA 1365

Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 247 CLR 486

Fubilan Catering Services Ltd v Compass Group (Australia) Pty Ltd [2007] FCA 1205

GetSwift Limited, in the matter of GetSwift Limited (No 2) [2020] FCA 1733

Girlock (Sales) Pty Ltd v Hurrell (1982) 149 CLR 155

Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82

Google Inc v Australian Competition and Consumer Commission (ACCC) [2013] HCA 1; (2013) 249 CLR 435

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Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre Ltd (1978) 140 CLR 216

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Howell v Macquarie University [2008] NSWCA 26

Insurance Commissioner v Joyce (1948) 77 CLR 39

James Hardie Industries NV v Australian Securities and Investments Commission (ASIC) [2010] NSWCA 332; (2010) 274 ALR 85

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King v Australian Securities and Investments Commission (ASIC) [2018] QCA 352; (2018) 134 ACSR 105

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Division:

General Division

Registry:

New South Wales

National Practice Area:

Commercial and Corporations

Sub-area:

Regulator and Consumer Protection

Number of paragraphs:

2618

Date of last submissions:

12 October 2020

Date of hearing:

15 18, 22 25 and 29 – 30 June 2020; 1 2, 7, 9, 13 and 15 July 2020; 14 August 2020; 30 September 2020 ; 12 October 2020

Counsel for the Plaintiff:

Mr J Halley SC with Mr Y Shariff SC, Ms N Moncrief and Ms G Westgarth

Solicitor for the Plaintiff:

Johnson Winter & Slattery

Counsel for the First Defendant:

Mr M Darke SC with Mr P Flynn SC, Mr A Shearer, Ms A Munro and Mr R Jedrzejczyk

Counsel for the Second Defendant:

Mr S Finch SC with Mr S Lawrence

Counsel for the Third Defendant:

Dr R Higgins SC with Mr N Bender

Solicitor for the First, Second and Third Defendants:

Quinn Emanuel Urquhart & Sullivan

Counsel for the Fourth Defendant:

Mr J Potts SC with Ms B Ng

Solicitor for the Fourth Defendant:

Baker McKenzie

ORDERS

VID 146 of 2019

BETWEEN:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

Plaintiff

AND:

GETSWIFT LIMITED (ACN 604 611 556)

First Defendant

BANE HUNTER

Second Defendant

JOEL RICHARD STUART MACDONALD

Third Defendant

BRETT EAGLE

Fourth Defendant

order made by:

LEE J

DATE OF ORDER:

10 NOVEMBER 2021

THE COURT ORDERS THAT:

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

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

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

REASONS FOR JUDGMENT

CONTENTS:

A    INTRODUCTION

[1]

A.1    Overview of case

[3]

A.2    The GetSwift platform and business model

[20]

A.3    Statements regarding continuous disclosure

[29]

A.4    GetSwift announcements

[35]

A.5    Summary of claims

[38]

B    PRINCIPAL CONCLUSIONS

[44]

C    THE DEFENDANTS, THE BOARD AND OTHER KEY PLAYERS

[49]

C.1    The defendants

[49]

C.2    Operations of the board of GetSwift

[53]

C.3    Other personnel at GetSwift

[57]

D    THE EVIDENCE GENERALLY

[59]

D.1    ASIC’s evidence

[61]

D.2    The position of the Defendants

[70]

E    A DISPUTE ABOUT ASIC’S PLEADED CONTINUOUS DICLOSURE CASE

[71]

E.1    The iterations of ASIC’s pleaded case

[72]

E.2    The application to amend

[79]

E.3    Relevant principles

[83]

E.4    Pleadings and continuous disclosure cases

[86]

E.5    Consideration

[94]

F    APPROACH TO FACT FINDING

[102]

F.1    The nature of the contest at trial

[103]

F.2    The principled approach to fact finding

[107]

F.2.1    Affidavits and the documentary case

[108]

F.2.2    The oral evidence generally

[113]

F.2.3    Burden and standard of proof

[116]

F.3    Jones v Dunkel and Civil Penalties

[123]

G    FACTUAL BACKGROUND IN RESPECT OF GETSWIFT’S CLIENTS AND SHARE PLACEMENTS

[141]

G.1    The Enterprise Clients

[145]

G.1.1    Fruit Box

[145]

The development of the Fruit Box Agreement

[146]

The Fruit Box Announcement

[161]

Fruit Box’s’ Trial of the GetSwift Platform

[176]

Ms Gordon’s involvement in the Fruit Box trial

[180]

Termination of the Fruit Box Agreement

[184]

Conversation between Ms Gordon and Ms Mikac on 22 March 2017

[193]

GetSwift Board Meeting on 27 March 2017

[195]

Draft of Fruit Box termination announcement

[198]

End of GetSwift engagement with Fruit Box

[200]

G.1.2    Commonwealth Bank of Australia

[203]

The CBA Agreement

[204]

The First and Second Meeting: 8 December 2016 and 20 January 2017

[206]

Non Disclosure Agreement and initial draft terms of the CBA Agreement

[209]

The Third Meeting: 13 February 2017

[215]

Drafting of the CBA Announcement and CBA Agreement

[222]

Provision of draft media announcement to CBA and negotiation of the CBA Agreement

[231]

Initial CBA response to the draft media release

[235]

Draft of the media release prepared by Mr Polites

[243]

CBA handover from Mr Armstrong to Ms Kitchen

[252]

CBA proposed amendments to the CBA Agreement and further discussions

[256]

GetSwift reaction to the CBA revised draft of the media release

[266]

Further negotiation of the CBA Agreement

[268]

Mr Hunter reinserts the 55,000 figure into the draft media release and ASX announcement

[273]

GetSwift provides CBA with the revised media release with the 55,000 figure reinserted

[276]

Mr Budzevski and Ms Kitchen query whether GetSwift figures in media release are global

[281]

Mr Hunter responds to CBA query about global figures

[289]

Further consideration by Mr Budzevski and Ms Kitchen of the 55,000 figure

[296]

Ms Kitchen again queries the 55,000 figure with Mr Polites and Mr Budzevski

[302]

Mr Budzevski’s further consideration of the 55,000 retail merchant figure

[317]

Further exchange of drafts of the CBA Agreement

[326]

Execution of the CBA Agreement

[340]

Final arrangements for the CBA Announcement

[343]

Development of the GetSwift App for CBA

[365]

Conduct of CBA after the CBA Announcement

[370]

GetSwift responses to the projections queries in the ASX aware letters

[374]

Mr Begbie’s email

[381]

G.1.3    Pizza Pan Group Pty Ltd

[383]

GPS Delivery Tracking Project and the Pizza Hut Test Store Site

[386]

Pizza Pan’s entry into an agreement with GetSwift

[389]

The Pizza Hut Announcement

[413]

Pizza Pan is not part of Pizza Hut International

[433]

Pilot postponed

[437]

Recommencement of the trial and decision not to continue

[441]

G.1.4    All Purpose Transport

[448]

Preparation of the APT Agreement

[450]

Entry into the APT Agreement

[455]

The APT Announcement

[457]

Variation of the APT agreement with GetSwift and issues with the csv. file

[462]

APT’s demonstration of the GetSwift Platform to Mr Nguyen of Fantastic Furniture

[477]

Mr Macdonald learns of the current circumstances

[482]

GetSwift’s Weekly Transaction Reports record zero deliveries for APT

[492]

G.1.5    CITO Transport Pty Ltd

[498]

Negotiations between CITO, PMI and GetSwift

[502]

FRF Couriers is selected to provide the delivery services

[524]

Entry into the CITO Agreement

[525]

GetSwift’s engagement of FRF Couriers

[529]

The CITO Announcement

[532]

CITO participation limited to provision of warehousing services

[536]

Interview with Australasian Transport News

[538]

The alleged training

[542]

The alleged trial of the PMI online store giving CITO access to the GetSwift Platform

[559]

G.1.6    Hungry Harvest LLC

[560]

Negotiation of the Hungry Harvest Agreement

[561]

Preparation of the Hungry Harvest Announcement

[568]

G.1.7    The First Placement

[573]

Trading Halt

[573]

Tranche 1 Placement

[578]

Tranche 2 Placement

[587]

G.1.8    Fantastic Furniture

[595]

Initial dealings and negotiation of the Fantastic Furniture Agreement

[596]

Clarification of termination prior to the end of the trial period

[608]

Preparation and release of the Fantastic Furniture and Betta Homes Announcement

[611]

The initial trial of the GetSwift Platform by Fantastic Furniture

[628]

Termination of the Fantastic Furniture Agreement

[632]

G.1.9    Betta Homes

[642]

Initial dealings and negotiation of the Betta Homes Agreement

[644]

The Fantastic Furniture & Betta Homes Announcement

[669]

Implementation of the Betta Homes Agreement

[672]

G.1.10        Bareburger Group LLC

[685]

Negotiation of the Bareburger Agreement

[686]

Preparation and release of the Bareburger Announcement

[696]

Integration with Toast

[709]

G.1.11        NA Williams

[714]

GetSwift’s approach to Genuine Parts Company

[719]

First contact between NA Williams and GetSwift

[722]

27 July 2017 meeting

[724]

Feedback from NA Williams following the meeting

[739]

Negotiation of the NAW Agreement

[741]

Circulation of drafts of the First NAW Announcement

[749]

Consideration of the “1.15 billion” transactions figure

[763]

GetSwift’s knowledge of size of addressable market and competitors’ pricing

[769]

Further GetSwift internal circulation of a draft of the First NAW Announcement

[772]

GetSwift dealings with Advance and O’Reilly Auto Parts

[777]

GetSwift releases the First NAW Announcement

[778]

Hunter’s concern that the First NAW Announcement was not marked as price sensitive

[779]

Insertion of revenue figure in the Second NAW Announcement

[783]

The Third NAW Announcement

[796]

Subsequent events

[801]

G.1.12        Johnny Rockets

[802]

Preparation of the Johnny Rockets Agreement

[803]

Entry into the Johnny Rockets Agreement

[814]

Preparation and release of the Johnny Rockets Announcement

[816]

Subsequent communications

[826]

Deferral of limited roll out

[829]

Mr Roman’s email

[831]

G.1.13        Yum Restaurant Services Group, LLC

[833]

Initial contact between GetSwift and Yum

[834]

Negotiations between Pizza Hut International and GetSwift in relation to a Pilot

[840]

Initial Proposal by GetSwift

[844]

Pizza Hut International unable to secure two test markets for the Pilot

[861]

Non disclosure Agreement

[868]

Revised Proposal by GetSwift

[869]

Negotiations of the MSA

[880]

Yum MSA

[893]

Preparation and Release of the Yum Announcement

[896]

Pizza Hut International’s reaction to the Yum Announcement

[913]

Complaint to ASX about Yum Announcement

[925]

Negotiation of the SOW and pilot in the Kuwait market

[933]

G.1.14        Amazon Corporate LLC

[956]

Initial contact between GetSwift and Amazon

[957]

Trial Hosted Services Agreement

[960]

Pilot and Negotiation of the Amazon MSA

[964]

Completion of a trial?

[989]

Preparation and release of the First Amazon Announcement

[992]

ASX reaction to the First Amazon Announcement

[999]

Updated draft of proposed Service Order provided to Amazon

[1007]

Preparation and release of the Second Amazon Announcement

[1008]

Amazon’s reaction to the Second Amazon Announcement

[1018]

Amazon aware, or agreed to, the making of a regulatory announcement

[1023]

Continued preparation of Service Order and Service Order never entered into

[1029]

G.1.15        The Second Placement

[1034]

Trading Halt

[1034]

Second Placement Completion Announcement

[1041]

Second Placement Cleansing Notice

[1050]

G.1.16        2018 ASX Market Update Announcements

[1054]

H    CONTINUOUS DISCLOSURE CLAIMS

[1060]

H.1    The Relevant law

[1065]

H.1.1    Background and rationale

[1065]

H.1.2    The relevant provisions

[1072]

H.1.3    Information

[1075]

H.1.4    Awareness of information

[1077]

H.1.5    General availability of information

[1086]

H.1.6    Materiality

[1091]

H.2    Overarching Findings

[1105]

H.2.1    Existence and awareness

[1109]

H.2.2    General availability of information

[1116]

Agreement Information

[1117]

    GetSwift Prospectus

[1118]

    Perpetually on Trial and Terminable at Will Contention

[1121]

    ASIC’s contentions

[1126]

    Consideration

[1131]

Further omitted information

[1142]

H.2.3    Materiality

[1144]

ASIC’s case theory

[1147]

Information relevant to investors

[1148]

The evidence of Mr Molony

[1152]

Investor witnesses

[1168]

GetSwift’s materiality contentions

[1196]

The Absence of Quantifiable Benefits Contention

[1198]

The Continuing Periods Contention

[1212]

The Share Price Contention

[1230]

The Subjective Views Contention

[1257]

Conclusions on the proper approach to materiality in this case

[1259]

H.3    The Enterprise Clients

[1265]

H.3.1    Fruit Box

[1268]

Fruit Box Agreement

[1269]

Fruit Box Announcement

[1270]

Fruit Box Agreement Information

[1277]

Existence

[1277]

Awareness

[1278]

General availability

[1280]

Materiality

[1283]

Conclusion

[1292]

Fruit Box Projection Information

[1293]

Fruit Box Termination Information

[1302]

Existence

[1302]

Awareness

[1306]

General availability

[1311]

Materiality

[1312]

Conclusion

[1315]

H.3.2    Commonwealth Bank of Australia

[1316]

CBA Agreement

[1317]

CBA Announcement

[1318]

CBA Projection Information

[1321]

Existence

[1321]

Awareness

[1350]

General availability

[1356]

Materiality

[1357]

H.3.3    Pizza Pan Group Pty Ltd

[1365]

Pizza Pan Agreement

[1366]

Pizza Hut Announcement

[1367]

Pizza Pan Agreement Information

[1370]

Existence

[1370]

Awareness

[1379]

General availability

[1382]

Materiality

[1394]

Conclusion

[1403]

H.3.4    All Purpose Transport

[1404]

APT Agreement

[1405]

APT Announcement

[1406]

APT Agreement Information

[1407]

Existence

[1407]

Awareness

[1408]

General availability

[1409]

Materiality

[1410]

Conclusion

[1418]

APT No Financial Benefit Information

[1419]

Existence

[1419]

Awareness

[1434]

General availability

[1442]

Materiality

[1443]

Conclusion

[1450]

H.3.5    CITO Transport Pty Ltd

[1451]

CITO Agreement

[1452]

CITO Announcement

[1453]

CITO Agreement Information

[1454]

Existence

[1454]

Awareness

[1458]

General availability

[1459]

Materiality

[1460]

Conclusion

[1470]

CITO No Financial Benefit Information

[1471]

Existence

[1471]

Awareness

[1480]

General availability

[1484]

Materiality

[1485]

Conclusion

[1488]

H.3.6    Hungry Harvest LLC

[1489]

Hungry Harvest Agreement

[1490]

Hungry Harvest Announcement

[1491]

Hungry Harvest Agreement Information

[1493]

Existence

[1493]

Awareness

[1495]

General availability

[1496]

Materiality

[1497]

Conclusion

[1499]

H.3.7    The First Placement

[1500]

Tranche 1 Cleansing Notice

[1501]

First Placement Information

[1502]

Tranche 2 Cleansing Notice

[1504]

H.3.8    Fantastic Furniture

[1505]

Fantastic Furniture Agreement

[1506]

Fantastic Furniture & Betta Homes Announcement

[1507]

Fantastic Furniture Agreement Information

[1509]

Existence

[1509]

Awareness

[1510]

General availability

[1512]

Materiality

[1513]

Conclusion

[1517]

Fantastic Furniture Termination Information

[1518]

Existence

[1518]

Awareness

[1529]

General availability

[1530]

Materiality

[1531]

Conclusion

[1539]

H.3.9    Betta Homes

[1540]

Betta Homes Agreement

[1541]

Fantastic Furniture & Betta Homes Announcement

[1542]

Betta Homes Agreement Information

[1547]

Existence

[1547]

Awareness

[1548]

General availability

[1551]

Materiality

[1552]

Conclusion

[1558]

Betta Homes No Financial Benefit Information

[1559]

Existence

[1559]

Awareness

[1560]

General availability

[1564]

Materiality

[1565]

Conclusion

[1569]

H.3.10    Bareburger Group LLC

[1570]

Bareburger Agreement

[1571]

Bareburger Announcement

[1573]

Bareburger Agreement Information

[1575]

Existence

[1575]

Awareness

[1576]

General availability

[1577]

Materiality

[1578]

Conclusion

[1581]

H.3.11        NA Williams

[1582]

NAW Agreement and NAW Agreement Execution Information

[1583]

Existence

[1583]

Awareness

[1585]

General availability

[1589]

Materiality

[1590]

Conclusion

[1593]

First NAW Announcement

[1594]

Second NAW Announcement

[1597]

NAW Projection Information

[1602]

Existence

[1602]

Awareness

[1621]

General availability

[1643]

Materiality

[1652]

Conclusion

[1656]

Third NAW Announcement

[1657]

H.3.12        Johnny Rockets

[1661]

Johnny Rockets Agreement

[1662]

Johnny Rockets Announcement

[1663]

Johnny Rockets Agreement Information

[1665]

Existence

[1665]

Awareness

[1666]

General availability

[1667]

Materiality

[1668]

Conclusion

[1671]

Johnny Rockets Termination Information

[1672]

Existence

[1672]

Awareness

[1678]

General availability

[1681]

Materiality

[1682]

Conclusion

[1684]

H.3.13        Yum Restaurant Services Group, LLC

[1685]

Yum MSA

[1686]

Yum Announcement

[1688]

Yum MSA Information

[1690]

Existence

[1690]

Awareness

[1696]

General availability

[1701]

Materiality

[1706]

Conclusion

[1710]

Yum Projection Information

[1711]

Existence

[1711]

Awareness

[1720]

General availability

[1731]

Materiality

[1742]

Conclusion

[1746]

H.3.14        Amazon Corporate LLC

[1747]

Amazon MSA

[1748]

First Amazon Announcement

[1749]

Second Amazon Announcement

[1751]

Amazon MSA Information

[1754]

Existence

[1754]

Awareness

[1755]

General availability

[1756]

Materiality

[1765]

Conclusion

[1775]

H.2.15        Second Placement

[1776]

Second Placement Trading Halt / Completion Announcement

[1776]

Second Placement Cleansing Notice

[1778]

Second Placement Information

[1780]

Existence

[1781]

Awareness

[1782]

General availability

[1783]

Materiality

[1784]

Conclusion

[1786]

H.3.16        Overall conclusion for s 674(2) contraventions

[1787]

H.4    Accessorial liability

[1788]

H.4.1    The principles

[1790]

General principles

[1791]

The “quality” of knowledge required

[1796]

H.4.2     The directors and their approach to ASX announcements

[1808]

Approach to the Fruit Box and CBA Announcements

[1809]

Delivery volumes and revenue important to investor expectations

[1831]

Positioning of the Pizza Hut Announcement

[1835]

Strategic timing of announcements to maximise impact on share price

[1842]

Marking ASX announcements as price sensitive

[1852]

Delaying announcements and using news coverage

[1869]

H.4.3    Overarching observations

[1895]

Inferential reasoning

[1896]

The directors knowledge at a broad level

[1901]

Giving particularity to the role and knowledge of each director

[1914]

Mr Hunter and Mr Macdonald

[1915]

Distinguishing Mr Macdonald from Mr Hunter?

[1923]

Mr Eagle

[1940]

A pleading point

[1958]

Principles applicable to inferential reasoning continued

[1963]

Jones v Dunkel and the current proceeding

[1970]

H.4.4    The contraventions alleged

[1976]

Mr Hunter

[1977]

Hunter Agreement Information

[1979]

Hunter Projection Information

[1998]

Hunter No Financial Benefit Information and Termination Information

[2007]

NAW Agreement Execution Information

[2017]

Conclusion

[2021]

Mr Macdonald

[2023]

Macdonald Agreement Information

[2025]

Macdonald Projection Information

[2049]

Macdonald No Financial Benefit and Termination Information

[2057]

NAW Agreement Execution Information

[2068]

Conclusion and the PwC Report

[2071]

Mr Eagle

[2075]

Eagle Agreement Information

[2077]

Eagle Projection Information

[2093]

Fruit Box Termination Information

[2097]

NAW Agreement Execution Information

[2100]

Conclusion

[2102]

I    MISLEADING AND DECEPTIVE CONDUCT CLAIMS

[2103]

I.1    Statutory scheme and applicable principles

[2106]

I.1.1    General principles

[2106]

I.1.2    Continuing representations

[2117]

I.1.3    Representations made by an officer

[2119]

I.1.4     Section 12DA of the ASIC Act

[2130]

I.1.5    Future representations

[2143]

I.2    Overarching findings

[2164]

I.3    General representations

[2175]

I.3.1    First Agreement After Trial Representation

[2176]

I.3.2    First Quantifiable Announcements Representation

[2182]

I.3.3    Second Agreement After Trial Representation

[2190]

I.3.4    Second Quantifiable Announcements Representation

[2196]

Was the representation misleading or deceptive?

[2201]

I.3.5    Third Quantifiable Announcements Representation

[2206]

Was the representation misleading or deceptive?

[2210]

I.4    Specific representations

[2213]

I.4.1    GetSwift’s threshold contentions

[2214]

I.4.2    Messrs Hunter and Macdonald

[2222]

I.4.3    Fruit Box

[2225]

Fruit Box Agreement Representations

[2226]

Do the representations arise?

[2227]

Were the representations misleading or deceptive?

[2237]

Fruit Box No Termination Representations

[2240]

Fruit Box Conclusions

[2244]

I.4.4    CBA

[2245]

CBA Agreement Representations

[2246]

Do the representations arise?

[2247]

Were the representations misleading or deceptive?

[2261]

CBA Price Sensitivity Representation

[2266]

CBA Conclusions

[2269]

I.4.5    Pizza Hut

[2270]

Pizza Pan Agreement Representations

[2271]

Do the representations arise?

[2272]

Were the representations misleading or deceptive?

[2282]

Pizza Pan Quantifiable Benefit Representations

[2285]

Pizza Hut Conclusions

[2287]

I.4.6    APT

[2288]

APT Agreement Representations

[2289]

Do the representations arise?

[2290]

Were the representations misleading or deceptive?

[2300]

APT Quantifiable Benefit Representation

[2303]

APT Financial Benefit Representations

[2305]

Do the representations arise?

[2306]

Were the representation misleading or deceptive?

[2313]

APT Conclusions

[2317]

I.4.7    CITO

[2318]

CITO Agreement Representations

[2319]

Do the representations arise?

[2320]

Were the representations misleading or deceptive?

[2327]

CITO Quantifiable Benefit Representation

[2330]

CITO Financial Benefit Representations

[2332]

Do the representations arise?

[2333]

Were the representations misleading or deceptive?

[2343]

CITO Conclusions

[2349]

I.4.8    Hungry Harvest

[2350]

Hungry Harvest Agreement Representations

[2351]

Do the representations arise?

[2352]

Were the representations misleading or deceptive?

[2356]

Hungry Harvest Quantifiable Benefit Representation

[2358]

Conclusion

[2360]

I.4.9    First Placement

[2361]

Tranche 1 Cleansing Notice Representation

[2362]

Tranche 2 Cleansing Notice Representation

[2366]

Conclusion

[2368]

I.4.10    Fantastic Furniture

[2369]

Fantastic Furniture Agreement Representations

[2370]

Do the representations arise?

[2371]

Were the representations misleading or deceptive?

[2374]

Fantastic Furniture Quantifiable Benefit Representation

[2376]

Fantastic Furniture No Termination Representation

[2378]

Second Fantastic Furniture No Termination Representation

[2383]

Conclusion

[2386]

I.4.11    Betta Homes

[2387]

Betta Homes Agreement Representations

[2388]

Do the representations arise?

[2389]

Were the representations misleading or deceptive?

[2392]

Betta Homes Quantifiable Benefit Representation

[2394]

Betta Homes Financial Benefit Representation

[2396]

Do the representations arise?

[2401]

Were the representations misleading or deceptive?

[2404]

Conclusion

[2408]

I.4.12    Bareburger

[2409]

Bareburger Agreement Representations

[2410]

Do the representations arise?

[2411]

Were the representations misleading or deceptive?

[2414]

Bareburger Price Sensitivity Representation

[2416]

Bareburger Quantifiable Benefit Representation

[2418]

Conclusion

[2421]

I.4.13    NA Williams

[2422]

First NAW Agreement Representations

[2423]

Do the representations arise?

[2424]

Were the representations misleading or deceptive?

[2438]

NAW Quantifiable Benefit Representation

[2449]

Second NAW Agreement Representations

[2452]

How the representations arise

[2453]

Were the representations misleading or deceptive?

[2456]

Conclusion

[2458]

I.4.14    Johnny Rockets

[2459]

Johnny Rockets Agreement Representations

[2460]

Do the representations arise

[2463]

Were the representations misleading or deceptive?

[2469]

Johnny Rockets Price Sensitivity Representation

[2472]

Johnny Rockets Quantifiable Benefit Representation

[2475]

Johnny Rockets No Termination Representations

[2478]

Conclusion

[2482]

I.4.15    Yum

[2483]

Yum MSA Representations

[2484]

Do the representations arise?

[2488]

Were the representations misleading or deceptive?

[2498]

Yum Price Sensitivity Representations

[2502]

Yum Quantifiable Benefit Representation

[2506]

Conclusion

[2508]

I.4.16    Amazon

[2509]

Amazon MSA Representations

[2510]

Amazon Quantifiable Benefit Representation

[2514]

Amazon conclusions

[2516]

I.4.17    Second Placement

[2517]

Second Placement Cleansing Notice Representation

[2518]

Conclusion

[2522]

J    DIRECTORS’ DUTIES CLAIMS

[2523]

J.1    Statutory scheme and applicable principles

[2525]

J.1.1    General principles

[2525]

J.1.2    The interaction between each of the contraventions

[2536]

The relationship between ss 674(2) and 180(1) contraventions

[2537]

The relationship between ss 674(2A), 1041H, 12DA and 180(1)

[2540]

J.2    Overview of the director’s duties contraventions

[2545]

J.2.1    Revisiting some basal facts and the position of each director

[2546]

The circumstances of GetSwift

[2547]

The position of each director

[2548]

J.2.2    The degree of care and diligence to be exercised generally

[2553]

J.3    The Directors

[2562]

J.3.1    Mr Hunter

[2563]

Did Mr Hunter breach s 180(1)?

[2566]

Mr Hunter unique contraventions

[2573]

Mr Hunter s 180(1) conclusions

[2577]

J.3.2    Mr Macdonald

[2578]

Did Mr Macdonald breach s 180(1)?

[2581]

Mr Macdonald unique contraventions

[2585]

The PwC Report

[2589]

Mr Macdonald s 180(1) conclusions

[2590]

J.3.3    Mr Eagle

[2591]

Did Mr Eagle breach s 180(1)?

[2593]

Mr Eagle s 180(1) conclusions

[2614]

K    CONCLUSION AND ORDERS

[2615]

LEE J:

A    INTRODUCTION

1    This is a long judgment. I am tempted to say too long, but as will become evident to anyone who has the misfortune of being required to read it, the case advanced by the Australian Securities Investment Commissions (ASIC) was vast in scope, involving the need to wade doggedly through a prodigious documentary case and make innumerable findings along the way. After finally emerging from the Daedalian maze, one suspects that without detracting from the ultimate regulatory outcome, ASIC’s case could have been refined significantly. But alas, this litigious battle was fought on a broad front.

2    In an attempt to make the judgment less unreadable, I have divided it into what can be seen from the index to be manageable chunks, broadly mirroring the hydra-headed case mounted. Additionally, at [1064] and [2105] below, I have included ready-reckoners for the continuous disclosure and misleading and deceptive conduct claims, providing details of my conclusions, and providing a roadmap to where important findings are made. Referencing matters in the body of the text would, in a judgment this size, be overwhelming, and so I have adopted the expedient of using footnotes (although, because of a desire to avoid repetition, a footnote or cross reference is often illustrative, rather than the exclusive source of the relevant reference).

A.1    Overview of case

3    The case concerns GetSwift Limited (GetSwift), a former market darling listed on the Australian Securities Exchange (ASX). As it happens, it is no longer listed on the ASX. In an unusual development during the pendency of regulatory proceedings, at around the same time the evidence concluded in the liability phase of this case before me, GetSwift entered into an implementation deed in relation to a proposed scheme of arrangement, the intended purpose of which was to re-domicile GetSwift to Canada (being a scheme ultimately approved, but over the opposition of ASIC): see GetSwift Limited, in the matter of GetSwift Limited (No 2) [2020] FCA 1733 (at [12], [52], [81], [138], and orders 17 December 2020 per Farrell J).

4    In any event, returning to the period relevant to this liability hearing, this case comes against the background of GetSwift experiencing a dramatic ascension in the value of its shares from an issue price of 20 cents upon listing in December 2016 to over $4, prior to a trading halt announcement in December 2017, in advance of its second placement, by which GetSwift successfully raised $75 million from investors. One year later, on 7 December 2018 the share price dropped to $0.52 – a percentage decrease of almost 90% from its all-time high of $4.30, as recorded on 4 December 2017.1

5    It is notable that GetSwift, which might aptly be described as an early stage “tech” company, was able to generate such significant momentum and interest in its share price at a time when the company had “incurred historic operating losses to date”.2 This is especially so in circumstances where potential investors would have likely faced some difficulties in assessing the true value of GetSwift shares due to the absence of any successful track record and its “limited operating history”.3

6    Put broadly, the case concerns whether GetSwift failed to disclose material information in a series of announcements to the ASX, including by not revealing the status of its actual engagements with regard to its various customers. It also examines whether GetSwift engaged in misleading or deceptive statements regarding the nature and scale of the financial benefit that GetSwift stood to obtain from each agreement.

7    This proceeding also relevantly focusses on the conduct of three directors of GetSwift, namely:

(1)    Mr Bane Hunter, the second defendant, who was the executive chairman and chief executive officer of GetSwift;

(2)    Mr Joel Macdonald, the third defendant, who was the managing director of GetSwift; and

(3)    Mr Brett Eagle, the fourth defendant, a solicitor, who was a non-executive director and GetSwift’s general counsel.

8    Despite the skilful submissions made on behalf of the defendants, a close review of the contemporaneous record reveals with clarity to any sentient person what went on at GetSwift. At the risk of over-generalisation, what follows reveals what might be described as a public-relations-driven approach to corporate disclosure on behalf of those wielding power within the company, motivated by a desire to make regular announcements of successful entry into agreements with a number of national and multinational enterprise clients.

9    There is a plethora of documentary evidence in the form of emails exchanged between some of the directors revealing efforts directed at the strategic timing of ASX announcements, making sure that announcements were marked as “price sensitive”, orchestrating simultaneous media coverage, and evincing an appreciation that the failure to release announcements of new client agreements would or could have a negative impact on investor expectations.

10    As will appear in more detail below, numerous emails from Mr Hunter are most telling as to GetSwift’s approach to communicating with the market, and the level of control he sought to assert. Among many examples is an email to a fellow director, Ms Jamila Gordon (who is not a defendant) sent on 24 February 2017 in the wake of the release of one ASX announcement, in which he stated: “Bit by bit until we get to a $7.50 share price :)”.4 He then followed this email up with the following missive to his fellow directors:

I wanted to take a quick moment and just put some things into context – today’s strategic account contract capture [sic] information and the timing of the release added approx. $3.8m to the companies [sic] market cap. That’s making all our shareholders much happier.

To date since IPO listing price I am pleased to inform you that the company [sic] share price is up 140% - the strongest performer on the ASX. That means that I have driven the market value of the company up by more than $36m in 3 months. We are now worth more than $63M and heading towards $200m in very short order. These results are not accidental.

Therefore please keep that in mind when I insist on certain structural and orderly processes that there are much more complex requirements that are at play.

It is also important to stress that it is imperative that non commercial [sic] structures and resources we have in place are fully supporting the revenue and market cap based portions of the company. These have absolute priority over anything else. Without those as our primary focus not much progress will be made.

We have a tremendous year ahead of us and the timely planning and delivery of key commercial accounts is paramount. … Failure to do so will prompt an [sic] revised management structure.

In May we will be under the spotlight again with another significant investment round planned leading up to a much larger and final round in Oct or thereabouts. So as you can imagine I will not wait until May to course correct this organization staffing [if] we are not tracing as planned or better than planned.

Folks I am serious about this , please do not that there was no fair notice given of the expectations needed. Please do not confuse my friendly attitude for tolerance or forgiveness when it comes to achieving the deliverables set in front of us. There is too much at stake to allow for any lack of control. If you are unable or unwilling to operate as such please let me know.

This company if we achieve or our objectives in 2 years [sic] be valued well above the $800M + market cap, and no excuse will stand in our way to reach that goal. The rewards will be fantastic and amazing especially when you consider the timeline, so let’s stay focussed now more than ever.5

11    Mr Hunter had a habit of writing in evocative terms. This is reflected in many communications including an email sent by Mr Hunter on 6 October 2017 to Mr Macdonald making reference to an apparent long-term aim discussed between them: “no rest till we are north of 1$b and I know you are taken care of for the future - I made you a promise - do or die on my part”.6

12    Not only did Mr Hunter demonstrate a high level of concern over the content of the ASX announcements, it is evident that he sought to exercise close control over the release of such announcements. This is vividly illustrated by Mr Hunter’s emails in late August 2017, including one sent to Ms Susan Cox (of GetSwift) on 25 August 2017 in which he stated: “You know that any market release have [sic] to be vetted by us” (“us” being a reference to both himself and Mr Macdonald).7 In the same email chain, Mr Hunter also said the following to Ms Cox:

You have made an incredible misjudgment [sic] and overstepped your bounds. I am flabbergasted that you thought it was ok to release anything on the ASX without Joel and my approval…Let me make this crystal clear - we have NEVER released anything EVER without Joel or mine [sic] approval or review first.8

13    The intense focus that Mr Hunter and Mr Macdonald placed on the ASX announcements forms an important aspect of this case, to which I will return in detail below (at Part H.4.2). However, at a broad level, these illustrative emails are reflective of another aspect of the evidence; that is, the nature of the relationship between Mr Hunter and his colleagues. As will be seen from the numerous communications (liberally sprinkled with capitalised words) reproduced below, Mr Hunter displayed a management style that owed little to the influence of the late Dale Carnegie. He was demanding, forceful and regularly brusque to the point of rudeness.

14    The evidence does not disclose whether Ms Gordon was conscious of Mr Hunter displaying his self-described “friendly attitude” towards her at any time: c.f. [10] above. What is evident is that their relationship does not appear to have been a congenial one after March 2017, when Ms Gordon started to raise concerns in relation to the processes employed by Messrs Hunter and Macdonald as to announcements GetSwift made to the ASX.9 On one occasion, Mr Hunter told Ms Gordon that he had more experience in corporate governance than her, and suggested that the questions she was asking were naïve.10 But her concerns were not those of an ingénue and it is worth noting that, as at 9 December 2016, Ms Gordon was the only director on the board with any corporate governance training.11

15    On another occasion, at a September 2017 board meeting in which she was participating remotely, Ms Gordon was told by Mr Hunter she was on the “hot spot” in relation to her questions as to the materiality of an ASX announcement.12 Mr Eagle then spoke uninterrupted for about 12 minutes, apparently from a document, upbraiding her for “governance issues”, including causing delays in making announcements. Ms Gordon (who was born in Somalia and escaped that country before civil war broke out in 1991 and studied English at a TAFE college before university)13 was trying to write down what was being said, could not keep up, and asked for a copy of the document that Mr Eagle was reading from so she could counter the criticism properly. Mr Hunter responded by saying words to the effect, “Let me put it to you in English you can understand” and then repeated the details of her perceived deficiencies at similar length. She eventually responded:

[A]s a director I’m accountable having these announcements released without my total understanding and having a board meeting where… my objections, if I have objections, are minuted, therefore I have huge exposure and responsibility and that’s why I’m raising these issues.14

16    To this Mr Hunter responded: “that’s why you have director’s insurance.”15

17    By 24 October 2017, Mr Hunter was writing to his fellow director as follows:

[D]o NOT reach out to our customers where you do not own the relationship without prior approval -you were explicitly told you are not to get involved with commercial discussions . You only own the CBA relationship that’s it. You are NOT authorized to negotiate on behalf of the company with any other entity. This is an instant termination for cause if you do.16

18    Ms Gordon was removed from GetSwift shortly thereafter.

19    I will return below to the importance and clarity of Ms Gordon’s evidence, the way the board of GetSwift operated, the relevance of the relationship between the directors, and their respective roles and power within the entity.

A.2    The GetSwift platform and business model

20    Before progressing further, it is useful to provide a brief summary of the GetSwift platform and its business model.

21    GetSwift’s business and fee structure model was described in a prospectus that GetSwift lodged with ASIC in late 2016 with regard to an initial public offering (Prospectus).17 GetSwift was in the business of providing clients with a “software as a service” (SaaS) platform (GetSwift Platform) for the management of “last-mile delivery” services globally. “Last mile delivery”, as might be expected, describes the carriage of goods from a transportation hub to its final destination. The GetSwift Platform could be used to effect delivery services either through a client’s own driver network or with a contracted service.

22    GetSwift described itself as offering a “white label” solution, enabling technology to companies for a low, “pay as you use” transaction-based fee.18 Its revenue was generated on a “per delivery basis”, which involved charging a $0.29 transaction fee per delivery.19 Discounts were applied to larger clients through a tiered fee structure based on the client’s monthly transactional volume and the length of contract commitment. There were no fixed maintenance or upfront fees. A client could incur additional fixed subscription fees for fleet management and smart routing and SMS charges were “on-charged” as status updates.20

23    The Prospectus highlighted that GetSwift intended to “expand” by capturing market share and scaling its existing footprint.21 Its key strength was its “high growth” and the number of so-called “client industry verticals” it serviced.22 However, there were also risks, including that “[e]ven once clients are successfully attracted to the GetSwift platform and related services, clients may terminate their relationship with the Company at any time”.23 As GetSwift explained, this meant that if clients terminated their relationship, this could adversely impact GetSwift’s business, financial position, results of operations, cash flows and prospects.24 Further, as an “early stage technology company”, the Prospectus stated that GetSwift had accumulated a loss of approximately $946,402 as at 30 June 2016.25

24    GetSwift focussed on two main client segments: larger organisations with multi-site requirements and the capability for 10,000 or more deliveries per month (Enterprise Clients); and small and medium businesses (Self-serve Clients).26

25    In addition to making the general statement that clients may terminate their relationship with GetSwift at any time (see [23]), GetSwift made three important statements in the Prospectus as to its Enterprise Clients: first, GetSwift typically granted a 90-day proof of concept trial (POC) before the client moved to a standard contract; secondly, contracts for Enterprise Clients were initially for two years in length; and thirdly, those Enterprise Clients who had entered into a POC had a 100% sign up rate to contracts as at the date of the Prospectus.27

26    By making each of these statements in its Prospectus, ASIC alleges that GetSwift represented to investors that:

(1)    a POC (or trial phase) would be completed before GetSwift entered into an agreement with an Enterprise Client for the supply of GetSwift’s services for a reward;

(2)    any agreement entered into by GetSwift with Enterprise Clients for the supply of GetSwift’s services were not conditional upon completion of concept or trial; and

(3)    Enterprise Clients would only enter into an agreement after the proof of concept or trial phase had been successfully completed.

(collectively, the First Agreement After Trial Representation)

27    In addition to the statements made in the Prospectus, on 9 May 2017, GetSwift created a PowerPoint presentation for investors, which was submitted to the ASX.28 This presentation stated that Enterprise Clients were multi-regional businesses, typically with over 10,000 transactions per month. Further, it specified that Enterprise Clients have a “POC 60-90 day trial” and that these clients received contracted services for typically two to three years (Second Agreement After Trial Representation).29

28    I will return to whether each of these representations was conveyed below (at Part I.3), where findings are made as to whether the conduct of GetSwift, Mr Hunter and Mr Macdonald was misleading or deceptive, or likely to mislead or deceive.

A.3    Statements regarding continuous disclosure

29    As noted above, the focus of much of this case concerns the alleged continuous disclosure contraventions. GetSwift’s own continuous disclosure policy was referred to in the Prospectus (Continuous Disclosure Policy).30 As is typical, this policy set out certain procedures and measures that were designed to ensure that GetSwift complied with the continuous disclosure requirements of the ASX Listing Rules (Listing Rules) and the applicable sections of the Corporations Act 2001 (Cth) (Corporations Act).31 It also provided protocols related to the review and release of ASX announcements and media releases. Further, the Prospectus relevantly and correctly stated that GetSwift would be required to disclose to the ASX any information concerning the company that was not generally available and that a reasonable person would expect to have a material effect on the price or value of its shares.32 I will return to the significance of the Prospectus and Continuous Disclosure Policy below.

30    By publishing the Continuous Disclosure Policy to the ASX, it is said that GetSwift’s executive directors represented that they would conduct themselves consistently with the policy. In addition, during 2017, GetSwift made three important public statements concerning GetSwift’s approach to continuous disclosure.

31    First, in its Appendix 4C and Quarterly Review submitted to and released by the ASX on 28 April 2017 (April Appendix 4C), GetSwift stated (First Quantifiable Announcements Representation):

[T]he company is starting to begin harvesting the markets it has prepared the groundwork over the last 18 months. Transformative and game changing partnerships are expected and will be announced only when they are secure, quantifiable and measurable. The company will not report on MOUs only on executed contracts. Even though this may represent a challenge for some clients that may wish in [some] cases not [sic] publicize the awarded contract, fundamentally the company will stand behind this policy of quantifiable non hype driven announcements even if it results in negative short term perceptions.33

32    Secondly, in its Appendix 4C and Quarterly Review submitted to and released by the ASX on 31 October 2017 (October Appendix 4C), GetSwift stated (Second Quantifiable Announcements Representation):

Please Note: The Company will only report executed commercial agreements. Unlike some other groups it will not publicly report on Memorandum of Understandings (MOU) or Letters of Intent (LOI), which are not commercially binding and do not have a valid assurance of future commercial outcomes.34

33    Thirdly, in its announcement submitted to and released by the ASX on 14 November 2017 and entitled “GetSwift Executes on Key Integration Partnerships”,35 GetSwift stated (Third Quantifiable Announcements Representation):

The Company is taking a measured approach in ensuring that only quantifiable and impactful announcements are delivered to the market. With that in mind it has chosen to announce 9 of these integrations once they all have been completed rather than individually.

The company in addition expects to announce key commercial agreements shortly and is pleased that the overall strategy of becoming a global leader and not just a regional leader is being manifested.36

34    It is alleged that the making of the latter two representations amounted to contravening conduct. Similarly, I will return to whether these representations were conveyed and whether they amounted to contraventions below (at Part I.3).

A.4    GetSwift announcements

35    Another component of this case involves analysing the commercial background, content and implications that emanated from the announcements that GetSwift made to the ASX. These announcements, made between 24 February 2018 and 1 December 2017, stem from agreements that GetSwift entered into with respect to 13 individual Enterprise Clients.

36    As noted above, during the period leading up to the second placement, GetSwift announced to the ASX that it had entered into agreements with a number of Enterprise Clients. GetSwift made these announcements, notwithstanding that some of the agreements had allegedly not progressed beyond a “trial period”, and before the potential benefits under the agreements were secure, quantifiable or measurable. In this context, a question arising is whether the release of regular price sensitive announcements to the ASX of GetSwift’s entry into agreements with major Enterprise Clients had the effect of reinforcing and engendering investor expectations that the GetSwift platform was being adopted by a growing number of major Enterprise Clients. These expectations are alleged to have been fashioned by the GetSwift Prospectus, investor presentations and its quarterly Appendix 4C reports (as described above).

37    It is further alleged that, in the same period, GetSwift failed to inform the market of information that materially qualified the ASX announcements. This included, among others, the termination of a number of agreements that had been the subject of an announcement, and decisions by clients that GetSwift’s services would no longer be utilised beyond the expiry of trial periods. In circumstances where GetSwift had a limited operating history and had incurred historic net losses, and where publicly available information about recent operations and performance was lacking, an important issue is whether GetSwift’s failure to disclose such information would have had a significant influence on whether an investor would acquire or dispose of GetSwift Shares. This must be considered in the light of all relevant circumstances, including the share placement which was to take place.

A.5    Summary of claims

38    As noted above, the claims made by ASIC are complex and multifarious, but can be placed broadly into four categories by reference to each of the defendants.

39    First, ASIC alleges that GetSwift engaged in 22 contraventions of s 674(2) of the Corporations Act. In respect of these contraventions, ASIC seeks an order under s 1317G(1A) of the Corporations Act that GetSwift pay a pecuniary penalty in respect of the alleged continuous disclosure contraventions. Further, ASIC alleges that GetSwift engaged in misleading or deceptive conduct in contravention of s 1041H of the Corporations Act and/or s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act). It also seeks declaratory relief in respect of each of the alleged contraventions.

40    Secondly, ASIC alleges that Mr Hunter was directly, or indirectly, knowingly concerned, within the meaning of s 79 of the Corporations Act, in the continuous disclosure contraventions by GetSwift of s 674(2) of the Corporations Act, and was knowingly involved in 19 of the 22 contraventions alleged against GetSwift. By reason of this conduct, Mr Hunter contravened s 674(2A) of the Corporations Act. Further, ASIC alleges that Mr Hunter contravened s 1041H of the Corporations Act, and further or alternatively, s 12DA of the ASIC Act. Finally, ASIC alleges that Mr Hunter failed to exercise his powers and discharge his duties as a director and executive chairman of GetSwift with the degree of care and diligence; thus contravening s 180(1) of the Corporations Act.

41    Thirdly, ASIC alleges that Mr Macdonald was directly, or indirectly, knowingly concerned, within the meaning of s 79 of the Corporations Act, in the continuous disclosure contraventions by GetSwift of s 674(2) of the Corporations Act, and was knowingly involved in all 22 of the contraventions alleged against GetSwift. By reason of this conduct, Mr Macdonald contravened s 674(2A) of the Corporations Act. Further, ASIC alleges that Mr Macdonald contravened s 1041H of the Corporations Act, and further or alternatively, s 12DA of the ASIC Act. Finally, ASIC alleges that Mr Macdonald failed to exercise his powers and discharge his duties as a director and managing director of GetSwift with the degree of care and diligence; thus contravening s 180(1) of the Corporations Act.

42    Fourthly, ASIC alleges that Mr Eagle was directly, or indirectly, knowingly concerned, within the meaning of s 79 of the Corporations Act, in the continuous disclosure contraventions by GetSwift of s 674(2) of the Corporations Act, and was knowingly involved in nine of the 22 contraventions alleged against GetSwift. By reason of this conduct, Mr Eagle contravened s 674(2A) of the Corporations Act. Further, ASIC alleges that Mr Eagle failed to exercise his powers and discharge his duties as a director of GetSwift with the degree of care and diligence; thus contravening s 180(1) of the Corporations Act.

43    In respect of each of the contraventions of ss 674(2A) and 180(1) of the Corporations Act by each of the directors, ASIC seeks pecuniary penalties. Further, ASIC seeks disqualification orders pursuant to s 206C(1) and/or s 206E(1) of the Corporations Act. Importantly, with the consent of the parties, the hearing conducted in 2020 was an initial hearing directed to issues of liability and the entitlement of ASIC to declaratory relief. Therefore, any issues of penal orders are to be determined separately and at a later date.

B    PRINCIPAL CONCLUSIONS

44    Given the length of what follows, it is useful to set out a summary of the principal conclusions that I have reached in relation to each claim.

45    First, GetSwift engaged in:

(1)    22 contraventions of s 674(2) of the Corporations Act; and

(2)    40 contraventions of s 1041H of the Corporations Act and s 12DA of the ASIC Act.

46    Secondly, Mr Hunter:

(1)    was knowingly involved in 16 of the 22 contraventions of GetSwift and thereby contravened s 674(2A) of the Corporations Act

(2)    engaged in 29 contraventions of s 1041H of the Corporations Act and s 12DA of the ASIC Act; and

(3)    failed to exercise his powers and discharge his duties as a director with the degree of care and diligence required and thereby contravened s 180(1) of the Corporations Act.

47    Thirdly, Mr Macdonald:

(1)    was knowingly involved in 20 of GetSwift’s 22 contraventions and thereby contravened s 674(2A) of the Corporations Act;

(2)    engaged in 33 contraventions of s 1041H of the Corporations Act and s 12DA of the ASIC Act; and

(3)    failed to exercise his powers and discharge his duties as a director with the degree of care and diligence required and thereby contravened s 180(1) of the Corporations Act.

48    Fourthly, Mr Eagle:

(1)    was knowingly involved in three of GetSwift’s 22 contraventions and thereby contravened s 674(2A) of the Corporations Act; and

(2)    failed to exercise his powers and discharge his duties as a director with the degree of care and diligence required and thereby contravened s 180(1) of the Corporations Act.

C    THE DEFENDANTS, THE BOARD AND OTHER KEY PLAYERS

C.1    The defendants

49    GetSwift was incorporated on 6 March 2015 and from 7 December 2016, was a public company registered under the provisions of the Corporations Act. Relevantly, GetSwift was a listed disclosing entity and was subject to the continuous disclosure requirements of s 674 of the Corporations Act; and was subject to and bound by the Listing Rules.37

50    Mr Hunter has been a director of GetSwift since 26 October 2016, is the chief executive officer of GetSwift, and was the executive chairman of GetSwift between 26 October 2016 and 25 April 2018.38 Mr Macdonald has been a director of GetSwift since 26 October 2016, is the so-called “President” of GetSwift, and was the managing director of GetSwift between 26 October 2016 and 25 April 2018.39

51    Mr Eagle was a non-executive director of GetSwift between 26 October 2016 and 29 November 2018, between August 2017 and 21 August 2018, held the position of “General Counsel & Corporate Affairs” at GetSwift pursuant to a retainer between Eagle Corporate Advisers Pty Ltd (Eagle Corporate Advisers) and GetSwift, and between 26 October 2016 and 29 November 2018, was a solicitor admitted in New South Wales and the principal and sole director of Eagle Corporate Advisers.40

52    Beyond the facts as agreed between ASIC and GetSwift, there is additional evidence, as raised by Mr Hunter (and implied by Mr Macdonald) in their submissions, that Mr Eagle carried out the role of general counsel of GetSwift beginning no later than early February 2017 (rather than August 2017).41 Three aspects of the evidence are drawn upon to support this conclusion: first, in an email dated 8 February 2017, it was requested that a GetSwift business card be made for Mr Eagle with the title “General Counsel & Corporate Affairs”;42 secondly, in an email dated 17 March 2017, Mr Eagle stated “I am a director of GetSwift Ltd and also general counsel”;43 and thirdly, in an email dated 24 April 2017, Mr Eagle stated “I am general counsel at GetSwift”.44 In the absence of any explanation by Mr Eagle himself, the evidence supports a conclusion that Mr Eagle was the General Counsel of GetSwift (or at least the de facto General Counsel of the company) from at least 8 February 2017.45 Therefore, between February and August 2017, it would appear that things at GetSwift were simply being done in a relatively informal way concerning Mr Eagle’s position. Although, as will become evident below, this finding is immaterial to the disposition of any aspect of the case.

C.2    Operations of the board of GetSwift

53    During 2017, Messrs Hunter and Macdonald were based in New York,46 Mr Eagle was based in Sydney,47 and Ms Gordon worked in Melbourne from December 2016 to June 2017, and thereafter from Sydney until the conclusion of her engagement in November 2017.48

54    The evidence reveals that board meetings were conducted intermittently when Mr Hunter determined they should be called by the circulation of an invitation from him.49 The formality of the invitation and documentation differed depending on what was required.50 The directors received reports for quarterly, half yearly and annual reporting, but nothing else.51 There were otherwise no “board packs” or equivalent sets of documents circulated before board meetings.52 The board meetings were usually conducted via video conference.53

55    Mr Scott Mison, the company secretary for a large part of 2017, held an essentially administrative role.54 He was not responsible for preparing the agenda for board meetings and he otherwise prepared certain formal documents relating to the issue of shares.55 Shortly after he was appointed as company secretary and sometime in early 2017, Mr Hunter (somewhat unusually for a public company) instructed Mr Mison not to attend board meetings.56 To Mr Mison’s recollection, he only attended a board meeting in December 2016 and in January 2017 by telephone.57

56    Apart from board meetings, most communication between directors was by email, as is revealed by the deluge of emails admitted into evidence.58

C.3    Other personnel at GetSwift

57    GetSwift had few employees or staff. As at September 2016, the non-director employees included Mr Keith Urquhart (software developer and client services) based in Melbourne, Mr Joash Chong (software developer) based in Melbourne, Ms Stephanie Noot (accounts, payroll and finance) based in Sydney, Ms Susan Cox (administration and human resources) based in Perth, and the abovementioned Mr Mison (who was later replaced in August 2017) and was based in Perth.59 Other key employees of GetSwift included Mr Jonathan Ozovek, Mr Daniel Lawrence, Mr Brian Aiken and Mr Kurt Clothier.

58    GetSwift was assisted by Mr Harrison Polites and Ms Elise Hughan (from Media and Capital Partners) (M+C Partners). M+C Partners was responsible for managing GetSwift’s media, including the generation of media, journalist enquiries and the preparation of media releases for the press.60 GetSwift was also assisted by Mr Zane Banson (from The CFO Solution). The CFO Solution was managed by Mr Phillip Hains.61 It provided bookkeeping, accounting, preparation of board papers and company secretarial work.62 In July 2017, The CFO Solution was approached by GetSwift to provide it with accounting services.63 Following the resignation of Mr Mison, Mr Hains and The CFO Solution commenced performing secretarial work for GetSwift in late August 2017.64 While Mr Hains was the company secretary, Mr Banson had primary responsibility for assisting GetSwift (if that is the right word) with the lodgement of ASX announcements.65

D    THE EVIDENCE GENERALLY

59    As indicated above, this case was primarily run on the basis of documentary evidence, supplemented by affidavit and expert evidence.

60    It is useful to make a few observations about the evidence generally.

D.1    ASIC’s evidence

61    As I noted in Webb v GetSwift Limited (No 6) [2020] FCA 1292 (at [9]):

ASIC relied upon [39] witnesses from customers of GetSwift: four witnesses who were former associates of GetSwift; 10 witnesses from ASIC, the Australian Securities Exchange and Chi-X Australia (a securities and derivatives exchange); and four witnesses from organisations who were large investors in GetSwift. It also relied on opinion evidence from Mr Molony as a “professional investor”. Senior Counsel for GetSwift accepted on this application that none of the witnesses called by ASIC were challenged on their credit.

62    Out of this total of 39 witnesses, ASIC called four witnesses who were GetSwift employees and associate witnesses: Jamila Gordon (GetSwift); Scott Mison (GetSwift); Zane Banson (CFO Solution); and Harrison Polites (MC Partners).

63    The 19 customer witnesses of GetSwift were: Martin Halphen (Fruit Box); Veronika Mikac (Fruit Box); Ciara Dooley (Fruit Box); Allan Madoc (CBA); Bruce Begbie (CBA); Edward Chambers (CBA); David Budzevski (CBA)c; Natalie Kitchen (CBA); Patrick Branley (Pizza Pan); Alex White (APT); Paul Calleja (CITO); Mark Jenkinson (CITO); Devesh Sinha (Yum); Simon Nguyen (Fantastic Furniture); Abdulah Jaafar (Fantastic Furniture); Mariza Hardin (Amazon); Amelia Smith (Betta); Adrian Mitchell (Betta); and Roger McCollum (NAW).

64    The four investor witnesses were: Anthony Vogel; Timothy Hall; Maroun Younes; and Katherine Howitt.

65    The ten witnesses from ASIC, the ASX and Chi-X Australia (a securities and derivatives exchange) were: Kristina Czajkowskyj (ASX); Andrew Black (ASX); Andrew Kabega (ASX); Stuart Dent (ASIC): Benjamin Jackson (ASX); Jamie Halstead (ASX); Stephanie Yu-Ching So (ASX); Michael Somes (Chi-X); Martin Wood (ASIC); and Michael Hassett (ASIC). ASIC also relied on expert opinion evidence from Andrew Molony as a “professional investor”.

66    Out of these witnesses, 25 were cross-examined: Scott Mison; Jamila Gordon; Martin Halphen; Veronika Mikac; Ciara Dooley; Allan Madoc; Edward Chambers; David Budzevski; Natalie Kitchen; Harrison Polites; Patrick Branley; Alex White: Paul Calleja; Mark Jenkinson; Simon Nguyen; Abdulah Jaafar; Amelia Smith; Devesh Sinha; Mariza Hardin; Maroun Younes; Katherine Howitt; Timothy Hall; Anthony Vogul; Roger McCollum; and Andrew Molony.

67    Despite the cross-examination which took place, the evidence of the witnesses was not the subject of any real challenges as to credit: see Webb v GetSwift Limited (No 6) (at [9]). Accordingly, although some findings made below are necessarily based, at least to some extent, on my assessment of the credit of a witness, I have found it unnecessary to make general credit findings for the purposes of determining the relevant facts. Notwithstanding this, I do wish to make one general credit finding in relation to the evidence of one director of GetSwift: Ms Gordon was a highly impressive witness, was both careful and sober in her presentation, made appropriate concessions, and was clearly a witness of truth. I accept her evidence in its entirety.

68    Ms Gordon became a director of GetSwift on 20 March 2016. She was the Global Chief Information Officer (CIO) from 2 February 2017 until 13 June 2017. Ms Gordon undertook a variety of roles at GetSwift. When she was first engaged by GetSwift, Ms Gordon’s role included reviewing the Prospectus, understanding GetSwift’s governance arrangements, on-boarding” clients once they had been “won”, as well as opening the Melbourne office. As CIO, she expanded GetSwift’s product offering by making it scalable, ensured that the right developers and testers worked on the GetSwift Platform, “on-boarded” clients, and made sure specific customisations were made to the GetSwift Platform. On 13 June 2017, Ms Gordon ceased working as CIO and her responsibilities were significantly reduced. In addition to working as a director, Ms Gordon engaged in a so-called “functional IT” role and managed the relationship with the CBA. As touched on above, her employment was terminated by GetSwift at a board meeting held on 7 November 2017. She ceased to be a director of GetSwift on 15 November 2017.66

69    As a director of GetSwift, Ms Gordon’s evidence sheds an important light on many of the internal happenings at GetSwift. In particular, she explained communications and discussions that she had with her fellow directors, particularly in respect to the timing, nature, and content of the ASX announcements. More specifically, she explained the GetSwift Platform, governance procedures and processes which were adhered to by the directors and employees of GetSwift, details from the 13 June 2017 and 7 September 2017 board meetings, the relationship between GetSwift and Fruit Box, CBA, Genuine Parts Company, and All Purpose Transport and finally, circumstances relating to her termination.67

D.2    The position of the Defendants

70    It is important to make a general observation about the way in which the defendants ran their case. The individual defendants did not go into the witness box, nor did they call any witnesses. Cross-examination of ASIC’s witnesses was primarily conducted on behalf of GetSwift, not by counsel for the directors. Furthermore, although the defendants each had separate counsel teams, they were represented by the same solicitors (except for Mr Eagle, who was represented separately). The individual defendants maintained their privilege against exposure to a penalty.

E    A DISPUTE ABOUT ASIC’S PLEADED CONTINUOUS DICLOSURE CASE

71    Before making factual findings, it is necessary at the outset to address one overarching and contested issue which arose at different stages throughout the proceeding, including during the trial. The issue concerned the way in which ASIC’s continuous disclosure case was pleaded and run.

E.1    The iterations of ASIC’s pleaded case

72    Even though ASIC took plenty of time prior to commencing its case, various iterations of the pleaded case have been served throughout this proceeding. This has resulted in unnecessary disputation and controversy as to whether ASIC has gone beyond its pleaded case. More particularly, the dispute concerns the substance of ASIC’s pleaded case in relation to the categories of information relied upon for the purposes of the alleged continuous disclosure contraventions.

73    GetSwift argues that ASIC has pleaded a case that requires it to prove that each individual element of the pleaded categories of information in itself was not generally available and was material. In this way, GetSwift’s contention is that ASIC has pleaded an “all or nothing” case: that is, it must prove that each individual element was both not generally available and material. If but one element or component cannot be proven, the entire relevant continuous disclosure case fails.

74    On the other hand, ASIC maintains that its case does not necessarily fail, even if an element of the pleaded categories of information are not made out. Put somewhat simplistically, ASIC argues that its pleaded case simply requires it to prove that the information as a whole, being the combination of the elements of the pleaded information it proved existed, was not generally available and was material.

75    In determining the substance of ASIC’s pleaded case, it is important to emphasise, as I did during the course of oral submissions on this issue, that ASIC has attempted to run a consistent case from the beginning of the proceeding. This view holds, notwithstanding that the various iterations advanced by ASIC make it appear as though ASIC might have changed its pleaded case, or even resuscitated or revived a previous case. Regrettably, it is necessary to descend into the brume of the various pleadings to explain this further.

76    In its original statement of claim and all subsequent iterations of it up to and including the further amended statement of claim filed on 24 December 2019 (FASOC) – ASIC adopted the formulation of “individually, collectively or in any combination” in respect of the various defined sets of information alleged for the purposes of the continuous disclosure contraventions. One example suffices. In the FASOC (at [29]), ASIC defined a set of information as: (individually, collectively, or in any combination, the Fruit Box Agreement Information) (emphasis altered).

77    In the second further amended statement of claim filed on 14 April 2020 (2FASOC), ASIC deleted the words “individually, collectively or in any combination” and replaced those words with the word “together” in respect of the various defined sets of information. This new formulation prevailed in a third further amended statement of claim filed on 18 June 2020 (3FASOC). In the 3FASOC (at [29]), for example, ASIC states: (together, the Fruit Box Agreement Information) (emphasis altered).

78    When it became apparent to ASIC that GetSwift was contending that this change represented a fundamental case shift, ASIC then sought to undo and reverse the amendments made in the 2FASOC in a proposed fourth further amended statement of claim (4FASOC) (which was circulated in June 2020), by reintroducing the deleted words “individually, collectively or in any combination”. The application for leave to amend to make this change was heard during the trial, which I refused.

E.2    The application to amend

79    ASIC contended that it had sought to revert to the formulation adopted up to and including the FASOC in the proposed 4FASOC in response to submissions that had been made by GetSwift by way of opening. Relevantly, it was proposed to meet an argument that the word “together” in the 2FASOC had the consequence that ASIC had “to prove each individual element in itself was not generally available and more particularly was material”.68 Since this was not ASIC’s case, and was said to have “never been the case”,69 ASIC explained that it had simply reinserted the previous formulation in the proposed 4FASOC to avoid ambiguity and make it clear that “there is a single contravention, but it may comprise any one or more of those elements”.70

80    Put in another way, ASIC contended that its case, as it had always been, was that it had to prove that “the information as a whole was not generally available and the information as a whole was material”.71

81    As one might expect, GetSwift disagreed with ASIC’s characterisation of the pleading. Its primary contention was that by attempting to reintroduce the deleted words in the proposed 4FASOC, ASIC was essentially resuscitating a case it had “abandoned” when it had filed the 2FASOC.72 GetSwift asserts that leave to amend should be refused and that GetSwift should relevantly be held to the pleaded case as submitted in the 2FASOC and 3FASOC.

82    For example, GetSwift argued it would be unjust for ASIC to “reverse [a] deliberate forensic decision” previously taken absent adequate explanation; that GetSwift would suffer forensic prejudice; and that the amendment, went against the evidence of ASIC’s own expert, Mr Molony.73 GetSwift further contended ASIC had been afforded plenty of opportunities to amend and the delay in seeking the amendment after the commencement of the trial was particularly problematic.74 Finally, GetSwift asserted that granting leave to amend could cause potential loss of public confidence in the legal system; and (less unrealistically) that such a course did not align with the parties’ obligation to act in accordance with the overarching purpose referred to in Pt VB of the Federal Court of Australia Act 1976 (Cth).

E.3    Relevant principles

83    Unsurprisingly, there was no dispute between the parties as to the applicable legal principles which do not require excursus, save for two propositions that deserve particular emphasis.

84    First, an abundance of authority confirms the need for precision in pleadings, particularly in cases involving allegations of misleading and deceptive conduct, or which involve the contravention of a civil penalty provision. Indeed, it is of the “utmost importance” that such cases be “finally and precisely pleaded”: Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Ltd (1998) 42 IPR 1 (at 4 per Foster J). Insisting on precise pleading in cases concerning allegations of misleading or deceptive conduct is not mere pedantry. A fair trial of allegations of contravention of law requires “the party making those allegations … to identify the case which it seeks to make and to do that clearly and distinctly”: Forrest v Australian Securities and Investments Commission [2012] HCA 39; (2012) 247 CLR 486 (at 502 [25] per French CJ, Gummow, Hayne and Kiefel JJ).

85    Secondly, notwithstanding that the authorities make it clear that pleadings must be drafted with precision, this does not mean that one should lose sight of the fact that the fundamental purpose of pleadings is procedural fairness and ensuring that an opposing party is aware of the case that it is required to meet. Pleadings are a means to an end and not an end in themselves: see Banque Commerciale SA (En Liqn) v Akhil Holdings Ltd (1990) 169 CLR 279 (at 292–293 per Dawson J); Gould and Birbeck and Bacon v Mount Oxide Mines Ltd (in liq) (1916) 22 CLR 490 (at 517 per Isaacs and Rich JJ); Ethicon Sàrl v Gill [2021] FCAFC 29 (at [687]–[689] per Jagot, Murphy and Lee JJ). The overarching consideration is always whether the opposing party knows the nature of the case they have to meet.

E.4    Pleadings and continuous disclosure cases

86    The real substance of the dispute is adapting and applying these general principles to the particular circumstances of this case.

87    Continuous disclosure cases often present challenges to a pleader. An important challenge, not present here, but present in class actions, is the deficiency in understanding at the outset of litigation the precise nature of the information within the knowledge of a disclosing entity at the time it is alleged that certain information should have been disclosed. This asymmetry of information is cured in ordinary civil cases by discovery or interrogation, which leads to frequent amendment in cases of this type. But that does not apply to the present case. Prior to commencement, the regulator had the means to procure the necessary information to allow it then to make wholly informed decisions as to how the information alleged to be material was to be identified and then pleaded.

88    However, another common challenge was present. It arises because, as explained below, the whole obligation to make continuous disclosure focuses upon the concept of “information”. It is information that is not generally available; and that a reasonable person would expect, if it were generally available, to have a material effect on the price or value of the relevant securities that must be notified. Several questions arise, the underlying thrust of which is the need to understand the content of the information said to enliven the obligation to disclose. Most obviously, there is a need to examine:

(1)    When can it be said that an entity has the information?

(2)    When is the information generally available?

(3)    When would a reasonable person expect that information to have a material effect on the price or value of the relevant securities?

89    Identifying the relevant information, proving it existed, and also proving it was not generally available and material is fundamental. What is also evident is that in cases of any complexity, there are aspects of the information that are integral and other aspects that might be described as peripheral or supplementary and may not, in and of themselves, be material. An illustration of this can be seen by reference to the James Hardie litigation, in which the question considered here arose in a different context; that is, whether it is each individual element or the information as a whole that must be found to have not been generally available.

90    In Australian Securities and Investments Commission (ASIC) v Macdonald (No 12) [2009] NSWSC 714; (2009) 259 ALR 116, it was held that a James Hardie entity, JHINV, had failed to notify the ASX of the relevant information (defined as the ABN 60 Information) in an identified period. In doing so, it had contravened s 674 of the Corporations Act. The ABN 60 Information was defined as consisting of a number of distinct elements, including (at [201] per Gzell J):

(1)    the execution of a deed of covenant, indemnity and access (DOCIA) by JHINV and another James Hardie entity, JHIL;

(2)    the issue of 1000 shares by JHIL to the ABN 60 Foundation; and

(3)    the cancellation by JHIL of its one fully paid share owned by JHINV for no consideration.

91    In the Court of Appeal of New South Wales, a dispute arose as to whether some aspects of the ABN 60 Information had, in fact, been generally available: James Hardie Industries NV v Australian Securities and Investments Commission (ASIC) [2010] NSWCA 332; (2010) 274 ALR 85. JHINV contended that it had made available all of the information in a public report, absent the first element (i.e. the indemnity in the DOCIA). It therefore argued that the information required to be disclosed had been “readily available” within the meaning of s 676(2) of the Corporations Act. In this way, JHINV’s case was that, with the exception of one element, the information had been disclosed and was thus “generally available”.

92    This case was rejected by the Court (at 198 [545]) on the basis that the DOCIA was such an integral part of the ABN 60 Information that its absence from the public report meant that there had been no relevant disclosure of the ABN Information. The fact that an integral part of the defined information was not generally available was sufficient to find that there had been no disclosure of the pleaded information as a whole, notwithstanding that other elements of the information were generally available.

93    Here, absent an overly-technical literal reading, any common sense review of the pleading reveals that the material information has been pleaded in such a way as to make it sufficiently evident that some aspects or individual components of the information could not of themselves be material (although they were of significance contextually), whereas some aspects are integral in assessing whether the information not generally available, as a whole, was material.

E.5    Consideration

94    Informed by the above principles and the reality that omitted “information”, if it is of any complexity, will almost always have different components with different degrees of importance, I am unpersuaded by GetSwift’s contention that ASIC has pleaded a case that requires it to prove that each individual element of the pleaded categories of information, however marginal, was not generally available and was material.

95    ASIC’s pleaded case has been substantively consistent throughout the proceeding and was well understood by GetSwift. It is notable that no evidence was adduced indicating directly that those advising GetSwift were labouring under any misapprehension as to the nature of ASIC’s case and made any specific forensic decision based upon such a misapprehension. The reason why there was no such direct evidence is tolerably clear – there was no real misunderstanding and I expect no solicitor could conscientiously swear to the contrary.

96    GetSwift says it made it “expressly clear in its opening submissions that it was holding ASIC strictly to its pleaded case and that it did not acquiesce in the conduct of any trial beyond the pleaded case”,75 and it otherwise made that position clear in the course of the trial. So much may be true, but that is beside the point. GetSwift knew the case it had to meet. To the extent that any of the various iterations of ASIC’s written pleadings were vague or unclear, by way of opening, on 18 June 2020, Mr Halley SC, senior counsel for ASIC, who was not in the case when it was originally pleaded, explained that Mr Darke SC, who appeared for GetSwift:

wishes to advance a case that, if your Honour is not satisfied that every single element is not generally available and every single element, in themselves, is not material, then we fail. And we reject that, understandably, out of hand.

[T]hat’s why we moved away from the individually or collectively or in any combination pleading, because that’s not our case. Our case is that the information as a whole was not generally available and the information as a whole was material.76

97    The substance of ASIC’s pleaded case was again articulated and clarified when ASIC applied to the Court for leave to amend its pleadings on 22 June 2020. I asked the following question of Mr Halley:

[D]o you contend … that ASIC’s case is that the contraventions of section 674(2) will be established if the individual elements of the information, as pleaded, taken together, were not generally available and were material in the requisite sense that ASIC intends to convey and continues to maintain that ASICs case will not fail if ASIC is not able to establish in that, in isolation, any individual element of the defined information was generally available or any individual element of the defined information was not material in the requisite sense?77

98    He responded with a definitive “yes”.

99    If this still was not clear, or questions remained as to whether ASIC had maintained a consistent pleaded case throughout these proceedings, Mr Halley further explained on 14 August 2020 that:

But what the defendants have done, it seems, is to seek to pick off individual elements or sub-elements or sub-sub-elements and say, “Well, you failed on that. You haven’t proved that in isolation is material. Therefore, your case must fail with respect to that allegations of contravention of 674(2).” We say that’s not the case that ASIC has advanced, not the case that ASIC has pleaded and not the case that ASIC has otherwise opened, closed and conducted the case on.78

100    Although ASIC took a reactive step to ensure that its case did not ultimately fail on the basis of a technical point, the proposed 4FASOC was consistent with the case it had run from the outset. Of the reasons why I denied leave to amend is that the proposed amendment identified a case that ASIC did not wish to run, and one which would have produced an absurdity if it was read literally (as GetSwift was determined to do). As GetSwift correctly pointed out, the introduction of the words “in any combination” in the proposed amendments had the effect, again if read literally, of vastly multiplying the number of cases on materiality which it would be required to meet. Indeed, GetSwift engaged in a mathematical exercise to work out the number of permutations that a case of this nature would encompass.79 For example, in respect of the NAW Projection Information, there were 18 separate items of information. Thus, the number of possible different combinations which could comprise the defined piece of information would be 262,143. Of course, this was all a bit silly because this was never ASIC’s case. That is why, in the circumstances, I disallowed the amendments and refused leave for ASIC to amend its pleadings during the trial. In my view, there was no need for ASIC to amend its pleadings in the circumstances or to clarify further its case by reformulating its pleadings once again. Despite the various iterations of its pleadings, ASIC maintained at trial the same case that it had maintained from the beginning: if the elements of the information it identified were proved at trial to be not generally available and material, and those elements (taken as a whole) were proved not to have been disclosed, then contravening conduct took place.

101    Contrary to GetSwift’s submissions, ASIC did not make any deliberate forensic decision to abandon an earlier aspect of its case. ASIC’s initial pleading may have been somewhat maladroit and its approach to this issue by serial amendment and proposed amendment may have been less than ideal, but I reject any notion that there has been any want of procedural fairness provided to the defendants in this regard. They all knew the case they needed to meet and proceeded to conduct their defence accordingly. In all the circumstances, it is quite understandable why this pleading point would be taken by the defendants, but in the absence of any proven prejudice, it is devoid of substantive merit.

F    APPROACH TO FACT FINDING

102    Before making factual findings, it is appropriate to address a number of preliminary issues as to the correct approach that I should adopt.

F.1    The nature of the contest at trial

103    In Webb v GetSwift Limited (No 5) [2019] FCA 1533, I noted the following about the process of fact finding (at [17]–[18]):

17.    As those experienced in commercial litigation in general, and in securities class actions in particular, would readily appreciate, what matters most in the determination of the issues in cases such as this is the analysis of such contemporaneous notes and documents as may exist and the probabilities that can be derived from these documents and any other objective facts. Take the example of the dealings between GetSwift and the customers: there is likely to be a documentary record both within the business records of GetSwift and their contractual counterparty which records dealings between them which go beyond the agreement itself. Additionally, experience suggests that it is also likely that there will be informal email exchanges, both between GetSwift and the customers, and within the relevant organisations.

18.    As Leggatt J said in Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) at [15]–[23], there are a number of difficulties with oral evidence based on recollection of events given the unreliability of human memory. Moreover, considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. As his Lordship noted, a witness is asked to make a statement, often when considerable time has already elapsed since the relevant events. The statement is usually drafted by a solicitor who is inevitably conscious of the significance for the case of what the witness does or does not say. The statement is often made after the memory of the witness has been “refreshed” by reading documents. The documents considered can often include argumentative material as well as documents that the witness did not see at the time and which came into existence after the events which the witness is being asked to recall. It may go through several iterations before it is finished. As Lord Buckmaster famously said, the truth “may sometimes leak out from an affidavit, like water from the bottom of a well”. This may be overly cynical, but the surest guide for deciding the case will be as identified by Leggatt J at [22]:

… the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on the witnesses’ recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts.

(Emphasis added).

104    As the Full Court recently observed in Liberty Mutual Insurance Company Australian Branch trading as Liberty Specialty Markets v Icon Co (NSW) Pty Ltd [2021] FCAFC 126 (at [239] per Allsop CJ, Besanko and Middleton JJ), this approach might be best seen as a helpful working hypothesis rather than something to be enshrined in any rule or general practice of placing little reliance on recollections of conversations.

105    In the present case, the helpful working hypothesis of paying close regard to the contemporaneous documents is of importance. However, the factual issues are not in substantial contest between the parties; what is in contest are the inferences and conclusions (both factual and legal) that are to be drawn from contemporaneous communications.

106    In accordance with this view, the factual findings that I will make are made upon a mixture of the agreed facts between the parties, material drawn from contemporaneous documents, witness and affidavit evidence (which, as I noted earlier, has largely not been challenged in a significant way), as well as inferences drawn from any documents or statements.

F.2    The principled approach to fact finding

107    Leaving aside the significance of the choice of GetSwift and the directors not to call witnesses, which I will deal with separately, both ASIC and GetSwift and the directors made a number of general submissions relating to the approach that the Court should take in respect of fact finding, to which it is appropriate to make a general response.

F.2.1    Affidavits and the documentary case

108    ASIC noted that the evidence contained in the affidavits of its witnesses had remained in large part uncontested. As a consequence, it argued that in making conclusions of fact and drawing relevant inferences, I should rely on the totality of the unchallenged affidavit evidence adduced before this Court.

109    In some cases, including regulatory cases, affidavits need to be approached with some caution as they are often less the authentic account of the lay witness, but rather an elaborate construct, being the result of legal drafting (Lord Woolf MR, Access to Justice Report, Final Report (HMSO), 1996 (at Ch 5, [55])). However, I accept that as a general proposition unchallenged evidence that is not inherently incredible ought to be accepted by the tribunal of fact: Precision Plastics Pty Limited v Demir (1975) 132 CLR 362 (at 370–371 per Gibbs J, Stephen J agreeing, Murphy J generally agreeing); Ashby v Slipper [2014] FCAFC 15; (2014) 219 FCR 322 (at 347 [77] per Mansfield and Gilmour JJ).

110    Although, of course, unchallenged evidence can be rejected if it is contradicted by facts otherwise established by the evidence or particular circumstances point to its rejection, the affidavits, speaking generally, were consistent with the documentary case of ASIC.

111    As to the documentary case, ASIC placed reliance upon the well-known principle that “all evidence is to be weighted according to the proof which it was in the power of one side to have produced, and in the power of the other to have contradicted”: Blatch v Archer (1774) 1 Cowp 63 (at 65 per Lord Mansfield), cited with approval in Weissensteiner v The Queen (1993) 178 CLR 217 (at 225 per Mason CJ, Deane and Dawson JJ).

112    Why this is of importance in the present case is a little unclear to me. Although GetSwift had the power to adduce what documents it wished to rely upon to qualify or contradict the conclusions ASIC contends should be drawn from the documentary evidence, ASIC is not an ordinary litigant. It is in the privileged position of having compulsory production powers and can, in this sense, marshall the material it contends is relevant to its case. There was no suggestion that GetSwift had not given full and complete discovery of all documentary evidence following the extensive compulsory document production to ASIC.

F.2.2    The oral evidence generally

113    In addition to stressing, correctly, that the documentary record remains the best foundation for the finding of facts in this case, ASIC asserted that the Court should be cautious about a number of answers in cross-examination where the cross-examiner pressed the witness on accepting the “possibility” that something may have occurred or been said or the “possibility” that some matter could not be ruled out (being an event or comment that was inconsistent with ASIC’s account).

114    A witness’ refusal to rule out a “possibility”, including a hypothetical one, about whether a particular event or conversation occurred was a feature of the evidence. There is a risk of over generalisation in submissions of this type. However, to the extent it is useful in speaking in generalities, confronting a witness with the possibility that an event may have occurred and the witness accepting it as a possibility, is not in itself proof that the fact did exist. It may rationally bear upon whether all the evidence pointing to the existence of the fact should be accepted (or whether ASIC has proved a different state of affairs existed); but these are distinct points.

115    As I will explain, a key difficulty for the defendants in challenging ASIC’s case theory based on the documentary record (and the affidavits in relation to each Enterprise Client), is not only the general lack of challenge to the affidavit material, but the lack of any rational counter-narrative. The evidence as a whole in relation to each Enterprise Client suggests a course of events consistent with ASIC’s allegations and this has been left essentially uncontradicted. This makes the picture emerging from the contemporaneous business records quite compelling. This comment does not amount, of course, to an inversion of onus, for reasons I will now explain.

F.2.3    Burden and standard of proof

116    Although they are foundational matters, it is worth setting out some basic principles as to proof and onus, which I have previously addressed in Patrick Stevedores Holdings Pty Limited v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCA 451; (2019) 286 IR 52 (at 59–61 [14]–[18]).

117    Much was made in ASIC’s submissions about the defendants not calling witnesses and the limited (or lack of) substantial documentary tender, separate from those documents that formed part of ASIC’s case.

118    None of these submissions can detract from the necessity for ASIC to prove its case on this liability hearing to the civil standard having regard to the degree of satisfaction required by 140 of the Evidence Act 1995 (Cth) (EA). This section requires the Court, in a civil proceeding, to find the case of a party proved if it is satisfied that the case has been proved on the balance of probabilities. In deciding, in a civil case, whether it is satisfied that the case has been proved, the Court is to take into account: (a) the nature of the cause of action or defence; (b) the nature of the subject-matter of the proceeding; and (c) the gravity of the matters alleged. Although the standard of proof remains the balance of probabilities, the degree of satisfaction varies according to the seriousness of the allegations made and the gravity of the consequences (if the allegations are found to be correct).

119    It is necessary to bear in mind that the factual allegations made by ASIC are not only foundations for the nature of the relief dealt with at this liability hearing (that is, declarations of contraventions), but are also the foundations for the deferred relief sought, that is, the imposition of pecuniary penalties and disqualification orders.

120    It was common ground, but nevertheless is worth stressing, that it is well-established that s 140 reflects the common law as explained seminally by Dixon J in Briginshaw v Briginshaw (1938) 60 CLR 336. As the Full Court noted in 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 480 [30][32] per Weinberg, Bennett and Rares JJ):

30.    The mandatory considerations which s 140(2) specifies reflect a legislative intention that a court must be mindful of the forensic context in forming an opinion as to its satisfaction about matters in evidence. Ordinarily, the more serious the consequences of what is contested in the litigation, the more a court will have regard to the strength and weakness of evidence before it in coming to a conclusion.

31.    Even though he spoke of the common law position, Dixon J’s classic discussion in Briginshaw ... at 361-363 of how the civil standard of proof operates appositely expresses the considerations which s 140(2) of the [EA] now requires a court to take into account. Dixon J emphasised that when the law requires proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. He pointed out that a mere mechanical comparison of probabilities independent of any belief in its reality, cannot justify the finding of a fact. But he recognised that (Briginshaw 60 CLR at 361-262):

‘No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters reasonable satisfaction should not be produced by inexact proofs, indefinite testimony, or indirect inferences. ...

32.    Dixon J also pointed out that the standard of persuasion, whether one is applying the relevant standard of proof on the balance of probabilities or beyond reasonable doubt, is always whether the affirmative of the allegation has been made out to the reasonable satisfaction of the tribunal. He said that the nature of the issue necessarily affected the process by which reasonable satisfaction was attained. And, so, he concluded that in a civil proceeding, when a question arose whether a crime had been committed, the standard of persuasion was the same as upon other civil issues. But he added, weight must be given to the presumption of innocence and exactness of proof must be expected (Briginshaw 60 CLR at 362-363).

121    As the defendants rightly stress, there is no doubt that the so-called “Briginshaw principles” apply to civil penalty proceedings (which is a particular example of the application of s 140(1) of the EA): see Adler v Australian Securities and Investments Commission (ASIC) [2003] NSWCA 131; (2003) 179 FLR 1 (at 2930 [142]–[148] per Giles JA); Whitlam v Australian Securities and Investments Commission [2003] NSWCA 183; (2003) 57 NSWLR 559 (at 592 [117]–[119] per Hodgson, Ipp and Tobias JJA).

122    It follows that, for ASIC to succeed, I am required to reach a state of satisfaction or an actual persuasion that it has proved its allegations of contravention, while taking into account the seriousness of the allegations and the gravity of the consequences that could follow if the allegations were to be accepted. Having said this, although the fact that this is a civil penalty proceeding is of real importance, when one comes to considering the “gravity of the matters alleged”, the focus is upon the particular factual allegations in the case, not an examination of the cause of action or issues at a level of abstraction. This makes sense when one considers that the focus on the gravity of the finding is linked to the notion that the Court takes into account the inherent unlikelihood of the alleged conduct, and common law principles concerning weighing evidence: see Qantas Airways Limited v Gama [2008] FCAFC 69; (2008) 167 FCR 537 (at 576 [137]–[138] per Branson J); Briginshaw (at 361–362 per Dixon J).

F.3    Jones v Dunkel and Civil Penalties

123    Having stressed the nature of the burden that rests always on ASIC in relation to its allegations, I now turn to how, as the trier of fact, I am to deal with the election of GetSwift and the directors not to go into evidence (leaving aside the tender of a few miscellaneous documents). More specifically, it is necessary to deal with the question as to how this absence of evidence is to be assessed, if at all, in the determination as to whether I have reached the required standard of reasonable satisfaction or actual persuasion required to sustain ASIC’s case.

124    As is perhaps predictable, ASIC submits that I should infer that the evidence of the absent witnesses would not have assisted the defendants’ respective cases, and that I may draw any adverse inference unfavourable to the defendants with greater confidence in the light of their absence.

125    There is no need for me to rehearse the relevant principles in any great detail. They were explained by French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ in Australian Securities and Investments Commission (ASIC) v Hellicar [2012] HCA 17; (2012) 247 CLR 345 (at 412–413 [165]–[167]). As Heydon, Crennan and Bell JJ succinctly observed a year earlier in Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; (2011) 243 CLR 361 (at 384–385 [63]–[64]):

63.    The rule in Jones v Dunkel is that the unexplained failure by a party to call a witness may in appropriate circumstances support an inference that the uncalled evidence would not have assisted the party’s case. That is particularly so where it is the party which is the uncalled witness. The failure to call a witness may also permit the court to draw, with greater confidence, any inference unfavourable to the party that failed to call the witness, if that uncalled witness appears to be in a position to cast light on whether the inference should be drawn. …

64.    The rule in Jones v Dunkel permits an inference, not that evidence not called by a party would have been adverse to the party, but that it would not have assisted the party.

(Citations omitted).

126    As I also noted in Patrick (at 61 [21]), the availability of such inferences in the context of civil penalty proceedings has been the subject of some discussion. Ultimately, however, authority supports the proposition that inferential Jones v Dunkel reasoning is applicable to proceedings (such as the present) that involve a claim for the imposition of a civil penalty and a reliance on the privilege against civil penalties: see Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia (at 490–491 [76] per Weinberg, Bennett and Rares JJ); Adams v Director of the Fair Work Building Industry Inspectorate [2017] FCAFC 228; (2017) 258 FCR 257 (at 302 [147] per North, Dowsett and Rares JJ). The reason why this is so was explained by Giles JA (Mason P and Beazley JA agreeing) in Adler v ASIC. After noting (at 147 [659]) that proceedings brought under the civil penalty provisions in the Corporations Act “are not to be equated with provisions for criminal offences”, his Honour observed as follows (at 147 [660]–[661]):

660.    When civil procedures have been adapted in civil penalty cases, it has not been because of equation with a criminal trial. It has been because of the privilege against exposure to penalties. As was pointed out in [Daniels Corporation International Pty Ltd v Australian Competition and Consumer Commission [2002] HCA 49; (2002) 213 CLR 543] at [13], the privilege against exposure to penalties has its origin in the rules of equity relating to discovery, although it has become a principle of the common law. While it was said at [31] that the privilege against exposure to penalties today “serves the purpose of ensuring that those who allege criminality or other illegal conduct should prove it”, from the context and citation of Trade Practices Commission v Abbco Iceworks Pty Ltd (1994) 52 FCR 96 at 129 regarding the privilege as a reflection of the privilege against self-incrimination, that fell well short of equating proceedings for civil penalties with criminal proceedings.

661.    In the end the argument must be that it would not be consistent with this stance against self-incrimination for an inference adverse to the person from whom a civil penalty is claimed to be drawn because of the failure of the person to give evidence. That reasoning did not find favour in RPS v The Queen, in which the “right to silence” was not thought to be a useful basis for reasoning (at [22]). To say that a person cannot be forced to give evidence against himself, by providing discovery or answering interrogatories or, in a criminal context, making a statement to the police, says little when it comes to the giving of evidence in the person’s own case. In ordinary civil proceedings the defendant cannot be forced to give evidence in his own case. Civil penalty proceedings are no different in that respect. In my opinion, it was open for Jones v Dunkel inferences to be drawn against Mr Adler, Adler Corporation and Mr Williams in these proceedings.

127    See also a detailed discussion of the relevant authorities in Chong & Neale v CC Containers Pty Ltd [2015] VSCA 137; (2015) 49 VR 402 (at 465–470 [213]–[229] per Redlich, Santamaria and Kyrou JJA) referred to by the Full Court in Adams (at 302 [147]), and which I summarised in Patricks (at 61–63 [22]–[24]).

128    The issue of principal controversy in this case is that GetSwift submits that I am not entitled to draw any Jones v Dunkel inference against it for a failure to call its directors, given that they are parties and have the benefit of the penalty privilege. It was said that in such circumstances, GetSwift could not have compelled its directors to give evidence and it is “up to them to make their own decision for their own reasons as to whether to give evidence or not”.80 The submission was developed as follows.

129    It was said, correctly, that the potential application of the principle depends upon a number of threshold matters. One of these is that one party would be reasonably expected to call the missing witness where the missing witness is in the party’s “camp”: see RPS v Queen [2000] HCA 3; (2000) 199 CLR 620 (at 632 [26] per Gaudron A-CJ, Gummow, Kirby and Hayne JJ). Although implicitly accepting, as it must, that this threshold matter is met in the case of its directors, GetSwift submits that such a matter “has no application” to it in circumstances where Mr Macdonald, Mr Hunter and Mr Eagle each was entitled to the privileges they invoked against exposure to civil penalties.81 As it was put in GetSwift’s closing written submissions, the existence of the privileges, and the individuals’ unwillingness to give them up, provide an explanation for GetSwift not calling those witnesses and, in these circumstances, no Jones v Dunkel inferences can be drawn against GetSwift.82

130    Despite GetSwift’s contention that this submission is “so obvious that it probably goes without saying”,83 this issue has caused me some pause. One of the reasons for that pause is the unusual circumstances of the representation in this case. During the course of oral submissions on this issue, I sought clarification as to the position in regard to the instructions given to GetSwift. As I have noted above, at the trial, each defendant was represented by separate teams of counsel. This was, with respect, entirely appropriate given the way the cases of the separate defendants were run. However, this arrangement was not consistent throughout the proceeding. Initially, from when the proceeding was commenced on 22 February 2019, up until April 2020, some two months out from the trial, GetSwift, Mr Hunter and Mr Macdonald were are all represented by the same team of counsel. Moreover, throughout the entire life of the proceeding, each of those defendants has instructed the same firm of solicitors.

131    In this regard, senior counsel for ASIC, Mr Halley, brought my attention to the following two oral submissions of Mr Darke for GetSwift. The first submission occurred during the course of argument on an application moved on by the defendants on 9 April 2020 seeking an adjournment of the trial:

[T]here has been no answer, nor there could be, in fairness to my friends, to the difficulty that Mr Macdonald and Mr Hunter can’t come to Australia for this trial in the current circumstances. And, as a result, they can’t properly give real time instructions to GetSwift, on behalf of GetSwift.84

132    The second submission occurred on 17 June 2020, on the third day of the trial. During discussions about procedural matters as to the calling of witnesses, Mr Darke said the following:

I should make it clear that I will be suffering from the same difficulties as Mr Finch, in the sense that Mr Hunter is my chairman and a director, and I would be cross examining about conversations involving Mr Hunter of which Ms Gordon is now going to be giving evidence orally, and because it is midnight in New York as Ms Gordon will be giving her evidence-in-chief, by leave tomorrow, I just won’t be able to get Mr Hunter’s instructions.85

133    In further supplementary written submissions filed on 6 October 2020 after the hearing, pursuant to leave granted by me on the last day of the trial,86 GetSwift provided the following clarification as to the instructions it says were given to it, and the roles played by Messrs Hunter and Macdonald in the giving of those instructions (at [2]–[4]):

2.    Since March 2020, GetSwift, Mr Hunter and Mr Macdonald have been represented by different counsel. Since that time, the position as to the giving of instructions on behalf of GetSwift has been as follows:

a.    Instructions as regards the conduct of the proceedings have been given by the Company Chair, Stan Pierre-Louis (a US qualified attorney and former Associate General Counsel of Viacom).

b.    Mr Hunter and Mr Macdonald have provided instructions in relation to factual matters, as two people involved in the relevant events.

c.    Mr Hunter and Mr Macdonald have had no individual authority to control the conduct of the Company’s defence or, for instance, to resolve the proceedings on behalf of the Company.

3.    Consistently with the above, the statements made by Mr Darke, referred to at T1224.22-25 and T1226.5-11, concerned Mr Hunter and Mr Macdonald giving instructions as to factual matters in which they were involved, not as to the conduct of the proceedings on behalf of GetSwift.

4.    As to the fact that Quinn Emanuel (QE) have remained solicitors on the record in respect of all three defendants, it is not unusual for a common firm of solicitors to engage different counsel to represent the distinct and potentially conflicting interests of different clients. That is what has occurred in this case. It is something that may occur, despite the clients having divergent interests, in a range of circumstances, including where there is informed consent.

(emphasis in original).

134    ASIC contends that I ought to reject the above submission and conclude that Mr Hunter and Mr Macdonald relevantly provided instructions to GetSwift that were not limited to “factual matters”. It was contended that the above submission is difficult to reconcile with what was said by Mr Darke as set out above, particularly Mr Darke’s reference to Mr Hunter being “my chairman and a director” and the absence of any reference to Mr Pierre-Louis in the course of the “extensive” submissions made by Mr Darke on those occasions.

135    Although there is some real force in ASIC’s submissions, ultimately the issue is not one I have to determine. That is because, in any event, the question of whether a Jones v Dunkel inference is available to be drawn is not answered by the precise nature of the instructions given by Mr Hunter and Mr Macdonald.

136    Where the circumstances support Jones v Dunkel inferences being available against a party claiming the privilege, it might be thought that such inferences should be available against a company whose directors have claimed the privilege. In this sense, as ASIC emphasised, Messrs Hunter and Macdonald are the directing mind and will of the company and as such their intentions are to be attributed to the company under orthodox principles of agency: see Lennard’s Carrying Company Ltd v Asiatic Petroleum Company Ltd [1915] AC 705 (at 713 per Viscount Haldane); HL Bolton (Engineering) Company Ltd v TJ Graham & Sons Ltd [1957] 1 QB 159 (at 172 per Denning LJ); Tesco Supermarkets Ltd v Nattrass [1972] AC 153 (at 171 per Lord Reid, at 180 per Lord Morris, at 187 per Viscount Dilhorne, and at 190 per Lord Pearson); Commonwealth Bank of Australia v Kojic [2016] FCAFC 186; (2016) 249 FCR 421 (at 445 [95] per Edelman J, Allsop CJ and Besanko J agreeing).

137    In such circumstances, it may appear that the rationale for the proposition that directors are themselves subject to an available Jones v Dunkel inference, should support the conclusion that the company should be so subject. Surprisingly, the parties were unable to assist me with reference to any authority on this point. I do note, however, the judgment of Giles JA (with whom Mason P and Beazley JA agreed) in Adler v ASIC. In that case, ASIC had instituted civil penalty proceedings against three former directors of HIH Insurance Ltd, and a fourth defendant, Adler Corp Pty Ltd, a company of which Mr Adler was the sole director and he and his wife the only shareholders. Pecuniary penalty orders were sought, and, although appearing not to have expressly claimed penalty privilege, as Austin J noted in Australian Securities and Investments Commission v Rich (ASIC) [2009] NSWSC 1229; (2009) 236 FLR 1 (at 99 [460]) the defendants were protected by that privilege, even before the High Court held in Rich v Australian Securities and Investments Commission [2004] HCA 42; (2004) 220 CLR 129 that the privilege extended to civil penalty proceedings seeking disqualification orders.

138    I have referred above to Giles JA’s judgment in Adler v ASIC being authority for the proposition that Jones v Dunkel inferences are available to be drawn in civil penalty proceedings. During the course of considering, and dispatching, a submission put on appeal to the contrary, his Honour observed (at 147 [661]) that in his opinion “it was open for Jones v Dunkel inferences to be drawn against Mr Adler, Adler Corporation and Mr Williams in these proceedings” (emphasis added). With respect to his Honour, it is not entirely clear to me that such inferences were in fact drawn by the primary judge against Adler Corporation in that case. In this regard, I am not sure I agree with Giles JA (at 146 [653]), when his Honour observed that: “it is clear enough that the trial judge drew Jones v Dunkel inferences against Mr Adler (and Adler Corporation) and Mr Williams” (although his Honour was, with respect, undoubtedly correct to note that “it is not always clear whether the inferences were of importance or were no more than supportive of conclusions to which the trial judge came in any event”). On this basis, it is somewhat of an overstatement to contend that Adler v ASIC unqualifiedly supports the submission of ASIC that such inferences are available to be drawn against GetSwift.

139    Given the closeness of the relationship and the central importance of the evidence of Mr Hunter and Mr Macdonald (the two absent potential witnesses the subject of ASIC’s contention), the real focus must be on whether GetSwift has identified a reasonable excuse for not calling them. I am sceptical of the notion that a reasonable excuse has been demonstrated. It is reasonable to infer that those acting for GetSwift knew exactly the evidence that, if called, Mr Hunter and Mr Macdonald would give. It is artificial in evaluating the question of reasonable excuse in this case as if one were dealing with persons who were not the controlling minds of the entity which could have called them. Significance attaches in favour of the drawing of such inferences to the fact that the witnesses here were the company party’s directors were closely engaged in the transactions in question: see Dilosa v Latec Finance Pty Ltd (No 2) [1966] 1 NSWR 259; (1966) 84 WN (Pt 1) (NSW) 557 (at 582 per Street J). Moreover, if one was to accept that if those acting for GetSwift wanted Mr Hunter and Mr Macdonald to give evidence but that they were reluctant or unwilling to do so absent compulsion (again a highly questionable premise in the absence of evidence), it was open to GetSwift to subpoena them – it cannot be suggested that they would be calling them “cold”. Of course, they could have taken objections to giving particular evidence, but the Court would have then been required to determine whether or not there were reasonable grounds for the objection and might have required the giving of particular evidence in conformity with s 128 of the EA.

140    In any event, all of this is merely an interesting diversion. It does not matter to the substance of this case. As will become evident below, the facts emerging from the contemporaneous business records that form part of the documentary case against GetSwift are sufficiently compelling as not to require resort to the drawing of inferences based upon the absence of evidence being adduced by GetSwift from Mr Hunter and Mr Macdonald. When making findings as to ASIC’s case against GetSwift, I will not draw upon Jones v Dunkel inferential reasoning. This is consistent with the notion that even if such reasoning were available – contrary to GetSwift’s submissions – there is no compulsion on the trial judge to draw any Jones v Dunkel inferences: Manly Council v Byrne [2004] NSWCA 123 (at [52] per Campbell J, Beazley JA and Pearlman AJA agreeing); Howell v Macquarie University [2008] NSWCA 26 (at [97]–[98] per Campbell JA, Spigelman CJ and Bell JA agreeing); CSG Limited v Fuji Xerox Australia Pty Ltd [2011] NSWCA 335 (at [82] per Sackville AJA, Bathurst CJ and Campbell JA agreeing).

G    FACTUAL BACKGROUND IN RESPECT OF GETSWIFT’S CLIENTS AND SHARE PLACEMENTS

141    I now turn to the relevant factual background. Given the scope of ASIC’s case, the number of Enterprise Clients involved, the period of contravention and the reliance on the documentary record, this section of the reasons is almost interminable and reading it will no doubt almost be as wearisome as writing it. Regrettably, given the need as a trial judge to make all relevant findings of fact, the task needs to be undertaken.

142    To trudge through the material, I will deal with the chronology of each Enterprise Client individually. In doing so, I attempt to paint the objective picture of what occurred in respect of GetSwift’s dealings with each Enterprise Client. In this process, I am making findings as to the occurrence and content of the communications and oral evidence given. This means that when I refer to evidence given by a witness or refer to a denial made by a witness, I am making a finding of fact that I accept the relevant evidence of the witness and I accept the accuracy of the denial. As noted above, this is not a case where third party witnesses were challenged on their credit in any extensive way, but that is not to say that the quality of their recollection was not explored and sometimes doubted. Needless to say, when making the findings I have made, I have taken into account my assessment of the whole of the evidence, including challenges to their recollection (such as they were) during cross-examination.

143    Of course, this process of fact finding is sometimes complicated by the amount of disputation between the parties, and where appropriate, I have resolved issues of dispute. For the most part, however, I have prefaced the key points of controversy which form part of the alleged contraventions, and will make findings in respect of these points of controversy in the relevant sections which follow.

144    Finally, I should note by way of introduction to this section that I have, where necessary for context and sequence, included the times at which emails have been sent. Those times are in AEST or AEDT (as relevant) and are not necessarily the time that appears on the original email, given a large number were sourced from servers in the United States.

G.1    The Enterprise Clients

G.1.1    Fruit Box

145    Fruit Box Group Pty Ltd (Fruit Box) is a delivery company distributing fresh fruit, milk and vegetables to workplaces in capital cities around Australia and major regional cities.87

The development of the Fruit Box Agreement

146    On 9 November 2016, Ms Veronika Mikac, Head of Information, Communication and Technology (ICT) at Fruit Box, executed a term sheet between Fruit Box (then known as Box Corporate) and GetSwift.88 From around that time, GetSwift worked to customise its platform to meet Fruit Box’s requirements.89

147    On 9 February 2017, Mr Martin Halphen, CEO of Fruit Box, Ms Mikac, and Mrs Ciara Dooley (also known as Ciara Maslak), National Logistics Manager at Fruit Box, met with Mr Macdonald and Mr Hunter.90 The purpose of the meeting was for Mr Halphen to observe a demonstration of the GetSwift Platform and also to discuss the proposed term sheet between Fruit Box and GetSwift, which Mr Halphen had reviewed prior to the meeting.91 At the meeting, Mr Macdonald gave Mr Halphen a demonstration of the GetSwift Platform,92 and Mr Halphen told Mr Hunter and Mr Macdonald that Fruit Box would trial the product but that any contract would be subject to the outcome of the trial.93 There was also some discussion as to the number of deliveries performed by Fruit Box.94 Mr Halphen could not recall a discussion about Fruit Box’s rate of growth, but accepted that it was likely discussed.95 He also deposed that he did not give anyone at GetSwift “any specific estimate of Fruit Box’s annual delivery growth”.96 Ms Mikac stated that she could not recall whether there was a discussion about Fruit Box’s rate of growth;97 and Ms Dooley similarly could not recall anything about the meeting other than Mr Hunter and Mr Macdonald providing a demonstration of the GetSwift Platform.98 Moreover, during the meeting, Mr Hunter discussed making an announcement to the ASX at the time of signing the contract, but Mr Halphen told Mr Hunter that this was not appropriate as the arrangement was to trial the product and he did not want any disclosure to occur.99 He informed Mr Hunter and Mr Macdonald that he did not want any “PR” in relation to any agreement between GetSwift and Fruit Box and would review his position if Fruit Box’s trial with GetSwift was successful.100

148    Following the meeting, Ms Mikac sent Mr Macdonald and Mr Hunter an email in which she: requested further details about what would happen after the proposed contract expired; indicated that Fruit Box and GetSwift would need to enter into a new term sheet (because the previous had expired on 31 January 2017); and stated that any promotion or marketing could be made after the product launch was successful and would be dealt with by Fruit Box’s marketing manager.101 She made clear that “Martin wants something more solid of [sic] what will happen after the contract expires”.102

149    On 9 February 2017, after receiving the email from Ms Mikac, but before responding, Mr Hunter instructed Mr Scott Mison (GetSwift’s company secretary) to draft an announcement concerning GetSwift’s entry into an agreement with Fruit Box.103 Mr Hunter stated: “It’s a large contract – 3 year exclusive w 100+ k a month deliveries. We will decide on the timing for [Fruit] Box after the 1m notice”.104 The next morning, on 10 February 2017 at 6:07am, Mr Macdonald sent an email to Mr Mison (copied to Mr Hunter) in which he also asked Mr Mison to draft the announcement concerning GetSwift’s entry into an agreement with Fruit Box and stated that the agreement “represents more than 1.5 million deliveries that will be transacted on the getswift [sic] platform per year”.105

150    On 10 February 2017, Mr Macdonald sent an email to Ms Mikac (copied to Mr Hunter) in which he identified negotiating points for the agreement including that the “Limited Roll Out period” would expire on 1 March 2017 and the agreement would have an “Opt out clause” whereby the Fruit Box Group had until 8 March 2017 to opt out of the agreement.106 Further, Mr Macdonald stated that there would be an “[o]ption to renew terms after agreement expires in 3 years for Martin’s piece of mind [sic]” and that he was “happy to agree on pricing for the follow on 3 years”.107 Mr Halphen agreed in cross-examination that he wanted some certainty as to pricing after the term of the proposed term sheet between Fruit Box and GetSwift had expired.108

151    Between 10 February and 15 February 2017, Mr Macdonald negotiated the agreement with Ms Mikac (with Mr Hunter copied on the emails).109 During the negotiations, Mr Macdonald proposed the trial period end on 1 March 2017 and Ms Mikac requested that the trial period end at a later date, on 1 April 2017.110 Mr Macdonald accepted Ms Mikac’s proposal.111

152    On 16 February 2017, Mr Mison sent an initial draft of the proposed Fruit Box announcement to Mr Hunter (copied to Mr Macdonald).112 This draft contradicted itself insofar as it stated that Fruit Box conducted 30,000 deliveries of fruit boxes and 25,000 deliveries of milk both per month and per week.113

153    Also on 16 February 2017, Ms Mikac emailed Mr Macdonald (copied to Mr Hunter) about the maximum price that would be charged towards the end of the contract term if Fruit Box’s deliveries increased.114 In that email Ms Mikac stated:As we already deliver 120K per month which is your max tier, if by the end of the contract we are up at 200k deliveries we wouldn’t go more than that we are paying”.115

154    Mr Halphen agreed in cross-examination that Ms Mikac had discussed her email to Mr Macdonald with him prior to sending it,116 and that he did not want Fruit Box to be exposed to a price increase if it exercised the option to renew in the proposed term sheet with GetSwift.117

155    Mr Macdonald responded to Ms Mikac stating:

Yes the term sheet includes that you have the option to renew. It is not automatic and if at the end of the term you are doing 200,000 deliveries per month original price will be honored [sic] without any increase. The price we gave you is the best and highest tier which is over 100K deliveries per month.118

156    The next day, Ms Mikac responded stating:

The only issue Martin has is with the 3rd point in the term. The 200k delivery was only an example I gave you. He wants to see what happens if we reach 150k, 200k, 250k etc… within the 36 month contract as well as thereafter.119

157    This figure is not insignificant. Deliveries of 120,000 per month correspond to deliveries of 1.44 million per year or 4.32 million over three years. Deliveries of 200,000 per month correspond to 2.4 million per year or 7.2 million over a three-year period. Assuming linear growth from 120,000 per month to 200,000 per month over the course of a three-year contract would yield slightly under 6 million deliveries.120

158    In cross-examination, Mr Halphen described the “200k deliveries” as a “hurdle amount”,121 and stated, on multiple occasions, that it was a number he hoped Fruit Box would achieve.122 However, he denied that the figure of 200,000 deliveries per month was a growth forecast, and stated that it was a figure selected by Ms Mikac in order to discuss, during the negotiations, the issue of whether Fruit Box could pay less per delivery if they did increase the number of the deliveries over time.123 He also denied telling Mr Macdonald and Mr Hunter in a meeting that Fruit Box would increase their deliveries by 66% in three years;124 that Fruit Box was not growing at a rate of 20% per annum in 2017;125 and (as noted above) denied that he told Mr Hunter or Mr Macdonald in a meeting held in February 2017 that it was possible for Fruit Box’s rate of deliveries to grow well in excess of 20% per annum using the GetSwift Platform.126

159    Similarly, in cross-examination Ms Mikac stated that when negotiating the Fruit Box agreement, she discussed with Mr Macdonald the number of deliveries that Fruit Box made each year but (as also noted above) she had no recollection of any discussion with Mr Macdonald about Fruit Box’s growth rate.127 Ms Mikac did not have knowledge of Fruit Box’s internal historic or projected growth numbers, and did not provide any historic or projected growth numbers to GetSwift.128 I should note here that later (in March 2017), GetSwift’s Profit & Loss and Metrics spreadsheet was updated to include Fruit Box in the “onboarding tab”.129 The spreadsheet showed expected revenue to be 120,000 deliveries per month (which would amount to 1,440,000 deliveries per year).

160    On 20 February 2017, Mr Macdonald sent Mr Hunter a copy of the draft Fruit Box agreement for a “[f]inal look over” shortly before its execution.130 Then, at 4:03pm, Mr Macdonald sent Ms Mikac a signed counterpart of the draft Fruit Box agreement.131 On 21 February 2017, Mr Halphen signed the draft Fruit Box agreement: a one page document entitled “term sheet” (Fruit Box Agreement).132 The parties thereby entered into an agreement, by which Fruit Box agreed, among other things, to use GetSwift’s services for an initial trial period (referred to as a “limited roll out”), expiring on 1 April 2017. Following the “limited roll out” period, an “Initial Term” of 36 months would commence unless Fruit Box gave notice, at least seven days prior to the expiration of the “limited roll out” period that it did not wish to continue the agreement.133

The Fruit Box Announcement

161    At 5:19pm on 20 February 2017, Mr Hunter sent an email to Mr Macdonald in which he stated that they should “sort out box contract today if possible and I will finish the announcement”.134 At 7:16pm, Mr Hunter sent Mr Macdonald a revised draft of the Fruit Box announcement.135 This draft did not refer to a limited roll out period or trial period, nor did it refer to the agreement (as yet unexecuted) being terminable within such a trial period. However, the draft attached to Mr Hunter’s email differed substantially from the draft attached to Mr Mison’s email of 16 February 2017, in that it included a projection of deliveries and reference to “significant growth projections” on the part of Fruit Box. On the evidence, it is the only draft of the Fruit Box announcement prepared by Mr Hunter.

162    On 22 February 2017, Mr Macdonald sent an email to Ms Mikac stating that:Now, as part of regulatory company compliance, the ASX requires us to submit a few dot points about any material term sheets that we GetSwift enters into.”136 Ms Mikac forwarded Mr Macdonald’s email to Mr Halphen and stated: “[w]e’ll chat tomorrow about it in more detail of how you want to handle it”.137 Mr Halphen replied:No material contract until we confirm to go ahead after trial. Premature discussion until then. You can pass that on and if a problem, happy to discuss with Joel directly”.138

163    Ms Mikac subsequently responded to Mr Macdonald’s email, stating:Happy to discuss the Marketing and PR that will benefit both businesses…after a successful trial .139

164    On 23 February 2017, Mr Macdonald sent an email to Mr Hunter and Mr Mison attaching the draft Fruit Box announcement, stating:Please find attached announcement to go out first thing with market opening tomorrow 24th Feb”.140 Relevantly, this revised draft contained numerous amendments, of which was the statement that the Fruit Box Agreement was an “[e]xclusive contract projected at more than 7,000,000+ total aggregate deliveries”.141 Mr Mison confirmed he would send the proposed Fruit Box announcement to ASX for release the following day.142 Mr Hunter responded, demanding: Make sure it’s marked as earnings/commercially pertinent (red !)”.143

165    Mr Mison then forwarded the draft Fruit Box announcement to Ms Gordon and Mr Eagle for their comment (Mr Macdonald and Mr Hunter were not included in this email).144 At 8:32pm, Mr Eagle responded to Mr Mison’s email with the following comments:

All, generally reads ok. Bit confusing saying its 7mill+ deliveries for the 3 year contract an then saying 1.5m deliveries a year. Can we fix the maths.

Also ‘a exclusive 3 year contract’ should be ‘an exclusive’.145

166    Notably, this is the first evidence of any involvement of Mr Eagle with Fruit Box.

167    Subsequently, Mr Macdonald sent an email to Mr Mison (copied to Mr Hunter) directing Mr Mison to release the Fruit Box announcement to the ASX the following day.146

168    In the early hours of 24 February 2017, Mr Mison responded to Mr Eagle’s proposed amendments to the draft Fruit Box announcement, stating:

Thanks Brett, will change the ‘an’.

In regards with the delivers, the 1.5m is what is being delivered [now], but the projection is to increase to over 7m. Thi sis [sic] showing the potential growth.147

169    Mr Macdonald also sent an email to Mr Mison and Mr Hunter at 5:50am stating: “Obviously need to tag as price sensitive as well”.148

170    On 24 February 2017, GetSwift submitted, and the ASX released, an announcement concerning the Fruit Box Agreement entitled “GetSwift signs The Fruit Box Group (Box Corporate) to a 3 year, 7M+ deliveries contract” (Fruit Box Announcement).149 The announcement was only GetSwift’s second announcement specifically concerning agreements it had executed since listing (the first concerned GetSwift “partnering” with Little Caesar’s launch of pizza delivery services in Australia). The ASX released the announcement as “price sensitive” on the same day.150

171    At 9:33am on 24 February 2017, Mr Mison forwarded confirmation of the ASX release to Mr Hunter, Mr Macdonald, Mr Eagle and Ms Gordon.151

172    Between 24 February and 28 February 2017, Mr Halphen and Ms Mikac became aware of the Fruit Box Announcement. After speaking with Mr Halphen, Ms Mikac sent Mr Macdonald an email on 28 February 2017 stating:

Can you please explain the public announcement after giving cler [sic]instructions from Martin and myself that this was not to take plae [sic] until trial successful?152

173    On 28 February 2017, Mr Macdonald responded (copied to Mr Hunter), stating:

Sorry if there was any confusion. As per my email last wek [sic], this is not marketing or PR, it is a regulatory requirement as GetSwift being a publicly listed company and the requirement to release any material documents that are signed. We had to comply with this. We will of course coordinate and sponsor any marketing or PR push with you. We are fully committed to make you and your company a huge success.153

174    Later that day, Ms Mikac forwarded Mr Macdonald’s response to Mr Halphen.154 Mr Halphen was upset by the fact that GetSwift had made the Fruit Box Announcement and conveyed his concerns to Mr Macdonald in a discussion on or about 28 February 2017.155

175    At 5:39pm on 28 February 2017, notwithstanding his dissatisfaction with the Fruit Box Announcement, Mr Halphen instructed Ms Mikac to “[p]lease proceed to trial as planned. I will further discuss this with you on my return and once we see how the trial is going”.156 Ms Mikac responded to Mr Macdonald’s email stating, “[w]e shall see how we all go with a trial period!”157 A reply was sent (copied to Mr Halphen and Mr Hunter): “Of course! We are aiming for Monday 6th March to start with the 10 drivers?”158

Fruit Box’s’ Trial of the GetSwift Platform

176    In around late-February 2017, Fruit Box trialled the GetSwift Platform for its deliveries.159 Ms Mikac and Ms Dooley were responsible for setting up the trial of the GetSwift software.160

177    During March 2017, the limited trial runs were not reaching Fruit Box’s expectations. In mid-March, Fruit Box was conducting trial runs in Victoria and South Australia during which a number of bungles occurred, including: the proof of delivery setting was difficult to use;161 errors occurred when drivers uploaded files;162 problems occurred with sending the files to Ms Gordon;163 a Victorian driver was not able to go online;164 a South Australian driver had a problem with the details displayed in the archived orders folder;165 the manifest appeared in alphabetical order instead of the correct sequence which was described as a “major issue” by Ms Mikac;166 and some drivers had difficulty logging on or were unable to go online at all.167

178    Ms Mikac explained that in mid-March 2017, Fruit Box still had ongoing issues when using the GetSwift Platform,168 and these “consistent issues with the platform” made her “hesitant” with “what [GetSwift] could deliver” and she was “starting to have [her] doubts”.169 Ms Mikac stated: “there were consistent issues every single day with the platform” and “it wasn’t a smooth run at all”,170 the GetSwift application did not work properly, and there were technical issues that continued throughout late February and mid-March.171

179    Ms Dooley noted that the kinds of issues that arose during the trials in March 2017 were not issues that she would have expected in a logistics platform; for instance, she would not have expected there to be an issue with the manifests being in alphabetical order as opposed to in the sequence of delivery.172 Ms Dooley did not recall any successful use of the GetSwift platform during the trials in March 2017: “There were always slight hiccups somewhere”.173 She also stated that the GetSwift Platform required further modifications before it could be used by Fruit Box outside a trial and she did not know whether further modifications could be addressed by GetSwift, but she assumed they could have been.174 Although Ms Dooley expected teething issues175 and to some extent accepted that GetSwift were assisting in resolving issues as they arose,176 she formed the view during the trial that the GetSwift Platform was not ready to be used by Fruit Box and required significant further modifications. She reported these concerns to Ms Mikac.177 It should be noted that there was a successful completion of runs of the GetSwift Platform on 20 March 2017,178 and Ms Mikac reported to Mr Halphen that it was worthwhile continuing with the process of trial runs of the GetSwift platform; although she “was starting to have [her] doubts”.179

Ms Gordon’s involvement in the Fruit Box trial

180    It is necessary to say something about Ms Gordon involvement in the Fruit Box Trial. Ms Gordon only worked for Fruit Box after the Fruit Box Announcement was released.180 The work she undertook involved ensuring the .csv files were uploaded correctly from Oracle database (which was the database that Fruit Box were using) so the files could be used on the GetSwift Platform.181 In mid-March, each day she received a .csv file at around 4pm which included information about all Fruit Box drivers and deliveries for the following day and she then put that .csv file into the GetSwift Platform and it pushed the information to the drivers’ mobile telephone at 4pm the following day.182 For context, “csv” stands for “comma-separated values”. Apparently, a .csv file is a text file that uses a comma to separate values within it and is commonly produced when data from a database is exported in order to be shared with another user.

181    Ms Gordon understood that if and when the “proof of concept” stage was successfully completed with Fruit Box, she would no longer be involved in the day-to-day process and Fruit Box would use the GetSwift Platform independently. However, the “proof of concept” stage was never completed.183

182    The purpose of the tests in March 2017 was to ensure that the GetSwift Platform suited Fruit Box’s needs and, if so, whether further improvements were required.184 Ms Gordon explained that some clients decide the gap is “too huge and they leave, for whatever the reason”.185 Ms Gordon was involved in assisting Fruit Box conduct test delivery runs (that is, facilitating personnel sitting in an office with the client and simulating the client’s data); however, she did not do a “live run”, meaning that she had not climbed into the truck with the driver and drove with them.186

183    Ms Gordon did not accept that a lot of work had been done by GetSwift to customise its platform for Fruit Box.187 Ms Gordon accepted work on the solution for Fruit Box had begun in November 2016, but noted that only one developer, Mr Urquhart, was working on a solution for Fruit Box and he had many customers to work on so he had limited time.188 Ms Gordon understood that Fruit Box was operating in a manner similar to any customer whereby Ms Mikac, as an IT Manager, was testing the platform before making it generally available to others to ensure that it was right for Fruit Box.189

Termination of the Fruit Box Agreement

184    On 17 March 2017, Mr Halphen sent an email to Mr Macdonald with the subject line “The Fruit Box Group & Get Swift: Misleading Public Announcement & Promotion”.190 In that email, Mr Halphen stated:

Unfortunately I am not contacting you under good circumstances. I am extremely upset with the way Get Swift have conducted themselves using our business brand for its own benefit. The areas that make this so incitable is firstly I made it clear in our meeting that nothing was to take place until we had a successful trial. Yes you said that you were following ASX protocol to justify investment made in our potential business but at the very least, courtesy and proactive communication in the form of consent should have been made given our position (but instead it felt that it was pretty underhanded). Second, your announcement states a 3 year deal and not qualifying that there is a conditional trial taking place.

We are now fielding approaches of people asking us for references and I have personally had 5 different conversations about our involvement with Get Swift. Essentially we have been misrepresented in the marketplace. We have spent years in this business trying to build a brand that we are proud of. In your self-serving interests (and please do not insult us any further and pass it off as ours), you have trivialized our position. Reputation is everything to me Joel, so please take this email very seriously and come back with a considered (and prompt) response of how you are going to turn this around.191

185    In a subsequent email on 19 March 2017, Mr Halphen wrote to Mr Macdonald:

Joel. Further to our conversation just before, I confirm our instruction for your WRITTEN response by 5pm March 21st (Eastern Standard Time). Should we not receive it or should your response not be satisfactory, our trial with Get Swift will be immediately cancelled and we will be briefing our solicitors of how we can correct our standing in the marketplace promptly.192

186    In his response on the same day, Mr Macdonald stated the following:

1. We did in fact inform your staff and company that we would be required to make an ASX announcement. Not only did we do it verbally we also did it in writing. So we DID disclose it that this would be part of the process. We did not get anything from your company saying this would be a problem. Again our apologies for any gaps in understanding. We actually had people ask for comments/PR and we turned them down as per our agreement. Please see enclosed email dated February 22nd (NYC time)

2. We did NOT indulge in any PR, marketing or publicity - we filed one ASX announcement as required and that was it. We categorically deny any misrepresentation.

3. All we did was state the material facts as required and as we understood them to the best of our knowledge and interpretation.

Therefore with all due respect I am not sure where you are getting the information that we have or are misrepresenting something. Some of the facts you have are not being relayed to properly.

Furthermore I have to wonder just who is responsible for feeding you this information and what their intent is. This may very well be doing harm to our company as a result and just like you are concerned and want to take action, so do we and will if need be.

One thing that you are seriously wrong is thinking there are any underhanded or ulterior motives, if anything we should both be asking why allow anything to create a negative position for both our companies? If you are getting any queries, well please refer them back to us, we will deal with them if you prefer - anything to make it easier on you.

Look we have to date, are and will invest a significant amount of capital to make this software solution work for you. We have not charged you a single dollar for the work we have done - and that is not something anybody does unless they are fully committed to make this work long term. I think that by itself is proof that we value you and wish you to think the same of us.

I hope we can move forward in the right direction. And when it comes to actual marketing or PR, I am more than willing to make it work the way you envision it needs to work and only with your pre approval in writing. If you would like to be included in a national campaign outreach we can do that. If you would like us to highlight you to any large corporates we do business with, we can do that. Bottom line you are a valuable client to us and we dont want you to think any differently.193

187    On 20 March 2017, Mr Halphen responded as follows:

Joel. You still need to address your misleading statement and how you are going to rectify it. No contract for 3 years has been entered into as it is conditional on a trial. That is a material omission. Also, please provide proof and details of exactly what the ASX requires in terms of compliance.194

188    Mr Macdonald forwarded the email chain to Mr Eagle.195 Mr Macdonald also forwarded the Fruit Box Agreement to Mr Eagle.196 On the evidence, this appears to be the first time Mr Eagle was provided with a copy of the Fruit Box Agreement.

189    On the same date, Mr Halphen sent an email to the leadership team of Fruit Box informing them that GetSwift had released an announcement to the ASX despite the fact Fruit Box were “in trial only with them” and stated:

This release was made to the market 24/2. The share price went up 25 percent as a result (from 40 to 50 cents) which can be directly attributed to the release. As from March 1, the share price has continued its momentum {from 50 to 60 cents) without any announcements other than quarterly results. Directly or indirectly, this is somewhere between $10 to $20 million.

The good news is that we must have a strong brand among the public which Get Swift have ridden to coat tails on.

However, the bad news is that we are indirectly involved with misleading behaviour. Whilst there is a deadline of 5pm for GetSwift to respond tomorrow, there is no way we will be continuing with them. The best they can do is to make an altering public announcement and if they do, we will refrain from legal action.197

190    Ms Mikac responded to Mr Halphen’s email and asked “shall I formally send an email that the trial was unsuccessful or shall I wait till end of tomorrow”,198 to which Mr Halphen responded “Leave it with me.199

191    On 20 March 2017, Fruit Box terminated the Fruit Box Agreement, by email, before the expiry of the trial period under the Fruit Box Agreement.200 In the email from Mr Halphen to Mr Macdonald, Mr Halphen stated: “… this email is notice that we are terminating the agreement and will not be continuing the agreement for the Initial Term at the end of the limited roll out/trial period”.201

192    On 22 March 2017, Ms Mikac sent an email to Ms Gordon, stating: “Can the ASX announcement please be removed off the GetSwift website, as the contract is now Null and Void”.202

Conversation between Ms Gordon and Ms Mikac on 22 March 2017

193    On 22 March 2017, Ms Gordon telephoned Ms Mikac to enquire why she had not received the usual file from Fruit Box at 4pm that day.203 Ms Mikac informed her that Fruit Box had cancelled the contract,204 Mr Halphen had made up his mind and the contract would not be reinstated,205 GetSwift announcement had caused problems with Fruit Box’s drivers and their supervisors,206 and Mr Halphen had wanted the opportunity to see if the proof of concept worked before speaking to their delivery drivers about the GetSwift Platform.207 Ms Gordon asked Ms Mikac if the relationship between Fruit Box and GetSwift could be salvaged and Ms Mikac said words to the effect “It’s too late. The damage is done”.208

194    Ms Mikac could not recall precisely the date that she had the conversation with Ms Gordon, but agreed that she had a conversation with Ms Gordon in which she had said that Mr Halphen had decided to terminate the GetSwift contract,209 and that “they would no longer be pursuing with GetSwift”.210 Ms Gordon asked if they could work it out and Ms Mikac told her “no”.211 Ms Mikac stated that Mr Halphen was adamant that he would not continue with the agreement with GetSwift by late March,212 and that the only time she spoke to Mr Macdonald about terminating the contract was at the time the Fruit Box Announcement was made.213

GetSwift Board Meeting on 27 March 2017

195    On 27 March 2017, a GetSwift board meeting was held. Ms Gordon gave a detailed account of what was said at the meeting in the course of her oral evidence in chief. Ms Gordon recalls that she was asked by Mr Macdonald to “please tell the directors what you told me regarding Fruit Box and the conversation you had with Ms Mikac”.214 Ms Gordon responded that she had had a conversation with Ms Mikac in which Ms Mikac had said words to the effect:

The contract is cancelled because the business didn’t want the contract to be announced to the ASX, and that the … users were getting calls from competitors’ users [sic] asking them questions, “how is the system going”, when, in fact, they haven’t even seen the system yet. … she also said that “we requested retraction but nothing happened”.215

196    Ms Gordon recalled that Mr Hunter had then said to Ms Gordon: “[t]his is madness. It’s small people mentalityWhy are they talking to you, Jamila? You are not commercial. They are probably angling for more discount”.216 Ms Gordon, with commendable restraint, responded to this rudeness by saying that she thought that GetSwift should retract the announcement and Mr Hunter said:Okay. We will retract it. I own the retraction, but we all agree the message is we’re retracting this contract is cancelled because they didn’t want us to announce it to the ASX”.217 Ms Gordon recalled that everyone present at the board meeting, including Mr Macdonald, Mr Eagle and Ms Gordon, agreed with Mr Hunter, in words to the effect of “Yes that’s the right message”.218 Mr Hunter then said words to the effect ofI will draft the announcement and circulate it and then I will send it. But before I send it, Joel can you contact them for last chance. If they still say no, I will send the announcement to the ASX.219

197    In cross-examination, Ms Gordon clarified that when she said “retract”, she meant “to tell the ASX the contract had been cancelled”.220 Ms Gordon was tested closely as to whether Ms Mikac did indeed tell her that the contract was cancelled, to which Ms Gordon responded, in my view compellingly, “Ms Mikac was very clear, very, very clear, crystal clear that the contract has gone, too late”.221

Draft of Fruit Box termination announcement

198    On 27 March 2017, Mr Hunter sent the board of GetSwift an email attaching a draft ASX announcement entitled “Fruit Box declines to proceed with GetSwift”.222 The draft announcement referred to Fruit Box “decid[ing] to terminate the agreement”.223 This announcement was never submitted to the ASX. In his email, Mr Hunter stated:

Just in case Box is actually serious about terminating the contract and not trying to get better commercial terms we need to send out the notification to the ASX as part of the continuous disclosure rules. The fact that they keep reaching out to you Jamila makes me wonder what their actual agenda is since its pretty amazing that the only reason they would terminate the contract as per what they said in that we disclosed it to the ASX.

Either way here is the proposed text and we should put out forthright [sic] if its confirmed.224

199    Although senior counsel for ASIC submitted in his oral opening that “[t]hey never released [the Fruit Box termination announcement]”, Ms Gordon assumed that “perhaps they might have, but didn’t really know”.225

End of GetSwift engagement with Fruit Box

200    On 23 March 2017, the Profit & Loss and Metrics spreadsheet still showed Fruit Box as a customer on the “onboarding” tab.226 The spreadsheet also showed that no deliveries were made in November 2016, only 3 deliveries were made in December 2016, no deliveries were made in January 2017 and 166 deliveries were made during the trial in February 2017. However, the Profit & Loss and Metrics spreadsheet dated 5 April 2017 showed that Fruit Box had been removed as a client of GetSwift on the onboarding tab.227

201    On 7 June 2017, Mr Hunter instructed Ms Hughan to remove the reference to “Fruit Box” as a client of GetSwift in a media release that she was drafting for GetSwift regarding its achievements in its first six months since listing on the ASX.228

202    On 22 January 2018, Ms Stephanie So (of the ASX) sent an email to Mr Eagle and Mr Banson (copied to Mr Andrew Black, Manager of Admissions within ASX Listings Compliance at the ASX) attaching a letter dated 22 January 2018.229 In that letter, the ASX asked: “Has the contract with The Fruit Box Group been terminated?”230 A response was sent to the ASX on 24 January 2018, which said “Yes. On or about 20 March 2017, Fruit Box Group sought a release from the contract”.231 The letter made plain that “GetSwift confirms that the GetSwift responses have been authorised and approved for release to ASX by the board of directors of GetSwift”.232 Mr Eagle signed the letter on behalf of GetSwift in his then capacity as General Counsel.

G.1.2    Commonwealth Bank of Australia

203    The second of the Enterprise Clients is the Commonwealth Bank of Australia (CBA).

The CBA Agreement

204    On 30 March 2017, GetSwift and CBA entered into an agreement described as a “Strategic Partnership Agreement” (CBA Agreement).233 Pursuant to the CBA Agreement, CBA and GetSwift agreed, relevantly, to work in partnership with the aim of providing an application (GetSwift App) with which customers would be able to optimise, dispatch, route, and keep track of their deliveries to end customers on any Albert device. Albert devices are portable, iPad-like, payment terminals which CBA issued to its merchant customers for use by them to receive payment for goods and services.234 Unlike traditional payment terminals where the merchant has a physical PIN pad, an Albert terminal is an interactive touch screen that allows the merchant to be able to use applications on the device similar to a smart phone.235 During 2017, “CBA merchants” were business customers who had successfully applied to CBA to receive merchant services from the bank. Some CBA merchants, but not all, were provided with one or more Albert terminals.236

205    The CBA agreement provided that it would commence on the “Commencement Date” and would “end on the date being the earlier of: (a) the termination by either party in accordance with this Agreement; and (b) two years from the Commencement Date”.237 It also provided, “The Exclusivity Period may be extended for an additional period of 24 months, with the same terms in this clause applying, by the written consent of both parties (which may be by an exchange of emails between suitably authorised representatives)”.238 I will return to the significance of the CBA Agreement, and its development, in the chronology that follows.

The First and Second Meeting: 8 December 2016 and 20 January 2017

206    The first in-person “meet and greet” between GetSwift and CBA was held on 8 December 2016 between Mr Alan Madoc (Director of Telecommunications, Media, Entertainment, Technology and Retail at CBA), Ms Gordon, Mr Hunter and Mr Macdonald.239 Mr Bruce Begbie (Executive Director of CBA) does not recall whether he attended this meeting.240 Following the meeting, Mr Madoc emailed Ms Gordon, Mr Hunter and Mr Macdonald (copied to Mr Begbie) noting it was a “Pleasure to meet you today” and seeking to arrange a further meeting to be held at the CBA’s Innovation Lab.241

207    A second meeting was held between Mr Madoc, Ms Gordon, Mr Hunter and Mr Macdonald on 20 January 2017.242 It is unclear where this meeting was held, though it was scheduled to be held at the CBA’s Innovation Lab. Mr Begbie says that he did not attend this meeting.243 Mr Edward Chambers, a Senior Manager in CBA’s industry marketing team, and Mr David Budzevski, CBA’s Senior Product Manager of Smart Terminals and Applications, both depose that they have never attended the Innovation Lab with any representative of GetSwift.244 Mr Madoc agreed, in cross-examination, that Mr Budzevski was not at the meeting on 20 January 2017.245 After that meeting, at 3:47pm, Mr Madoc circulated an email in which he sought to arrange a meeting between GetSwift and Mr Budzevski.246

208    During the first two meetings between GetSwift and CBA, it became apparent to Mr Madoc that there was the potential for GetSwift to develop an app that could be used by CBA merchants on its Albert device and he sought to facilitate that occurring.247

Non Disclosure Agreement and initial draft terms of the CBA Agreement

209    On 23 January 2017, Mr Madoc sent a non-disclosure agreement (NDA) to Mr Hunter (copied to Mr Macdonald and Ms Gordon), which Ms Noot for GetSwift sent back to CBA by email on 24 January 2017 in a form executed by both Mr Hunter and Mr Macdonald.248 Mr Madoc returned the countersigned version of the NDA by email the same day.249 Subject to the usual exceptions, the NDA required GetSwift to keep confidential certain information, including the terms of the CBA Agreement (cl 1.1(c)), the fact that the parties were discussing the “Purpose” (which was defined as “Transaction banking/partnership opportunities”), and the substance of those discussions (cl 1.1(b)).

210    On 31 January 2017, Mr Budzevski sent an email to Mr Hunter, Mr Macdonald and Ms Gordon, (copied to Mr Madoc and others), attaching a document containing draft terms entitled “Developer Terms for PI Programme”.250 Clause 14 of those terms provided that GetSwift would collect all payments directly from merchants who used the GetSwift App through the AppBank and further that “CommBank will receive a 15% commission on all monthly merchant fees collected by GetSwift”. By this time, it was apparent that the revenue that both GetSwift and CBA would make from the GetSwift App on the Albert device would depend on the number of merchants who used the app,251 and that it was important for the parties in determining the joint commercial value of the deal to have some understanding of the likely number of transactions that would be put through the joint platform.252

211    On 2 February 2017, Mr Hunter sent an email to Ms Gordon, Mr Macdonald and Mr Eagle in relation to the draft terms received from CBA, stating:

As discussed, here are my points that we should resolve/structure with CBA:

5. Product reach - Australia is a given, let’s discuss/agree how we can help CBA reach a broader audience that does business in the 55+ countries we are in if desired. For us a global footprint is part of our strategy.253

212    On 4 February 2017, Ms Gordon sent an email to Mr Budzevski (copied to Mr Hunter, Mr Macdonald and Mr Madoc), providing a number of comments in relation the draft terms received.254 The content of this email is not relevant, although it reveals Mr Hunter’s and Mr Macdonald’s knowledge and involvement in the negotiation of the key terms of the CBA Agreement. Mr Hunter replied to Ms Gordon’s email to Mr Budzevski (copied to Mr Macdonald and Mr Eagle), stating:

It’s not quite what I had in mind when communicating what [our] expectations are. We really need to tighten our travel and expenses, so any preliminary negotiations should be formed to maximise our time in Sydney and achieve results. I will follow up your email to David so we can get some traction.255

213    On 4 February 2017, Mr Hunter sent an email to Mr Budzevski, copied to Ms Gordon, Mr Macdonald and Mr Madoc, in which he stated:

Just to follow up on Jamilas [sic] email so that we can achieve some traction when we meet next week. Here are the high level commercial perspectives we have and what we should be working towards:

1. Structures commercial agreement for partnership between CBA and GetSwift to provide a best in class software logistics platform delivered by GetSwift and incorporate it into the CBA payment solutions and Albert devices to the CBA network of 50,000+ businesses and [GetSwift] network across 55 + countries. …256

214    Nobody responded to this email from Mr Hunter. Mr Budzevski accepted in cross-examination that he understood from this email that one of the things Mr Hunter wanted to achieve at the meeting being arranged for 13 February 2017 was to “assign a value to the expected metrics we expect to put through the joint platform”.257

The Third Meeting: 13 February 2017

215    A further meeting was held on 13 February 2017. Mr Madoc and Mr Chambers each say they attended this meeting.258 Mr Madoc says Mr Budzevski also attended this meeting,259 though Mr Budzevski could not recall whether he attended the meeting.260 Mr Begbie was also present.261

216    Immediately following the 13 February 2017 meeting, Mr Hunter sent an email dated 13 February 2017 to Mr Chambers (copied to Mr Macdonald, Ms Gordon, Ms Cox and two representatives of M+C Partners, Mr Polites and Ms Hughan), in which he stated, relevantly:

It was a pleasure speaking with you all today… I have included our PR/Marketing team in the chain (Harry and Elise) as well as Sue.

We should start drafting the PR /Marketing announcements based on the following high level phased strategy:

1. Planned in March: Market announcement indicating CBA -GetSwift partnership. Emphasis on market potential, nimble joint team dynamic integration including tech, product, sales and marketing; delivery of product solutions to a [sic] 55k+ SME clients, 57+ countries, 400+ cities etc; timing and methodology to deploying into market starting with select clients, and then making it available to all by X date in 2017 etc.262

217    Mr Hunter’s 13 February 2017 email is the earliest reference to a figure of “55,000” in the documentary evidence before the Court in this proceeding.

218    Mr Madoc gave evidence during his private examination required pursuant to s 19 of the ASIC Act,263 and again during cross-examination, that it was his recollection that someone from CBA, possibly Mr Budzevski, had said at one of his initial meetings with GetSwift, likely the meeting on 13 February 2017, that CBA had 55,000 retail merchants.264 This was consistent with Mr Madoc’s recollection that “55,000 retail merchants was the sort of number that had been mentioned in [his] initial discussions with GetSwift”.265 Mr Madoc agreed that, in his private examination, he likely conflated the meetings of 19 January 2017 (this should be 20 January 2017) and 13 February 2017, the latter being the one which Mr Budzevski did attend.266

219    Mr Budzevski deposed that the first time he saw the number of 55,000 retail merchants was in the draft media release sent to him by Ms Gordon on 21 February 2017, and that:

As best as I can recall, I had not told anyone at GetSwift that the CBA had 55,000 retail merchants and I thought (based on my knowledge of the number of CBA merchants and Albert merchants at the time) that the number was incorrect.267

220    Mr Budzevski’s evidence in this respect was not challenged in cross-examination.

221    Moreover, Mr Madoc stated in his evidence the relevant figures lay within Mr Budzevski’s area of expertise and not that of Mr Madoc. He gave evidence in his private examination (in a passage on the same page he was cross-examined about, but to which he was not taken but which was placed in evidence without limitation) in relation to the number of retail merchants and Albert terminals, that “I don’t keep track, again, it’s not really my area of expertise. And, to be honest, it’s not really my interest268 Indeed, he deposed that he recalled there being some discussions about Albert terminals at the 13 February 2017 meeting but he did “not recall any discussion about the number of Albert terminals in circulation, the number of CBA merchants who had an Albert terminal or the volume of transactions involving Albert terminals”.269 Mr Madoc further said:

I do not recall that we had any discussion about specific numbers (whether number of deliveries or transaction values). I recall that Mr Budzevski was pretty general in what he spoke about, given the commercial sensitivities (especially around the Albert device).270

Drafting of the CBA Announcement and CBA Agreement

222    On 13 February 2017, Ms Elise Hughan (Public Relations Advisor at Media & Capital Partners) replied to the recipients of Mr Hunter’s email dated 13 February 2017, stating “Happy to work on both a draft of this announcement as well as have a call to discuss how we can work future news flow together…”271At 2:28pm on 14 February 2017, Mr Hunter replied to Ms Hughan, stating “Great email. Why don’t you start on the draft anyways [sic] and then fling it our way anyways [sic]? This way I can start advocating it internally with CBA for their tweaks”.272

223    On 15 February 2017, Mr Hunter sent an email to Mr Eagle in which he stated, “Can you get back to me re the CBA paperwork? I want to tie them down this week plus there is more from them to come. We plan on announcing March 27th.273 That afternoon, Ms Hughan replied to Mr Hunter stating that she had not “heard back from the CBA team yet and am cautious about what approach we take to make sure we aren’t stepping on any toes.” She further noted:

Rather than draft an announcement, I think it would be more beneficial if we work on some draft points as to what we think should be included on GetSwift’s end, as well as some of the wording around specific details. This way we’re playing in with our company notes, rather than theirs.

Happy to work on that this week and send through so you guys can have a look.

Then once we’ve had a call with the CBA team introducing ourselves properly…we can send through those points as suggestions to them.274

224    On 19 February 2017, Mr Budzevski sent Ms Gordon a draft of the proposed CBA Agreement.275

225    On 21 February 2017, Mr Hunter sent an email to Mr Macdonald and Ms Gordon attaching a draft media release.276 In this email Mr Hunter stated:

Please review and comment. We need to get a highly visible CBA exec to be quoted, but this needs to go out in the press on Monday. We will also be announcing it on the ASX before then.

Jamila after our internal review can you please get Ed and his team to look at and provide their inputs today277

226    The first draft of the media release prepared by Mr Hunter contained the following statements:

CBA and GetSwift sign exclusive 5 year partnership agreement

Highlights

    CBA and GetSwift have signed an [sic] game changing exclusive 5 year partnership agreement to deliver GetSwift’s last-mile delivery services solution on the CBA Albert device and other platforms to optimise deliveries across Australia.

    CBA and GetSwift will leverage their joint market reach to provide more than 55,000 existing businesses in their joint networks the capability to seamlessly integrate payments, deliveries and other service needs.

    This market represents more than 257,400,000 deliveries per year with an estimated transaction goods value of more [sic] 9 billion dollars with significant growth projections over the next 5 years in place.278

227    When Ms Gordon first saw the 55,000 “existing businesses” figure was when she received the draft media release from Mr Hunter on 21 February 2017; she did not know how this estimate was calculated.279

228    At 12:50pm, Mr Hunter sent an email to Mr Macdonald, Ms Gordon and Mr Eagle, attaching a further draft of the proposed media release, in which he stated: “Waiting for CBA input but other than that ready to go. I still want the maximum impact with this release”.280 The reference to maximum impact, I find, was a reference to maximum impact on the price of GetSwift shares. The figures referred to in Mr Hunter’s original draft of the media release remained unchanged.

229    At 1:42pm, Mr Eagle sent an email to Mr Hunter, Mr Macdonald and Ms Gordon attaching a draft of the CBA Agreement and stating: “Please see revisions to the CBA contract for your review and comment. Can we have a quick call today to tie up any further changes?281 At 1:44pm, Mr Hunter sent an email to Mr Macdonald, Ms Gordon and Mr Eagle with a subject line “Last version for CBA”, in which he stated:

Please review and comment. Jamila can you please get the high level exec that can be quoted from CBA for this as well as where they aim to push this and when? We need to lodge this with the ASX just prior to the media push on Monday!

Brett we need those commercial terms.282

230    The figures referred to in Mr Hunter’s original draft of the media release remained unchanged.

Provision of draft media announcement to CBA and negotiation of the CBA Agreement

231    At 1:48pm on 21 February 2017, Mr Hunter sent an email to Mr Chambers, copied to Mr Macdonald and Ms Gordon, stating: “We are just about ready on our end with the announcement document – I will have Jamila send it out shortly”.283 Simultaneously, Ms Gordon sent an email to Mr Budzevski, copied to Mr Hunter, attaching a draft of the CBA Agreement.284 At 3:11pm, Ms Gordon sent an email to Mr Budzevski attaching a copy of the draft media release.285 The figures referred to in Mr Hunter’s original draft of the media release remained unchanged. Ms Gordon forwarded this email minutes later to Mr Macdonald and Mr Hunter and stated: “FYI – I just sent the draft doc to David [Budzevski] and Allan [Madoc]. Waiting for their feedback before I share it with Ed [Chambers]”.286

232    Mr Budzevski accepted that the statement in the final paragraph (as emphasised at [226]) was “one of the matters that was commercially important to the parties, that is, how many transactions might go through the joint platform”.287 Mr Budzevski did not reply to Ms Gordon to inform her that the draft media release was in any respect incorrect.

233    At 3:58pm, Mr Macdonald sent an email to Mr Eagle, copied to Ms Gordon and Mr Hunter, attaching a Word version of the draft media release.288 The figures referred to in Mr Hunter’s original draft of the media release remained unchanged. At 4:08pm, Mr Macdonald sent an email in reply to Ms Gordon’s email, copied to Mr Hunter and Mr Eagle, attaching another draft of the media release.289 In the email, Mr Macdonald stated: “Whoops that was the wrong one – Please provide this one right away. Just tell them you sent the wrong version”.290 The figures in the revised draft remained unchanged from the version that Mr Hunter had originally circulated. Ms Gordon does not appear to have forwarded the further version of the draft media release received from Mr Macdonald to CBA.

234    At 5:37pm, Mr Hunter sent an email to Mr Edward, copied to Mr Macdonald, Ms Gordon, Mr Polites, Ms Hughan and others at CBA, stating: “Hi team, We should have the first version circulating for you tomorrow”.291 It appears that Mr Hunter was unaware that Ms Gordon had already sent the draft media release to Mr Budzevski earlier that day. At 10:18pm, Mr Budzevski forwarded the draft media release he had received from Ms Gordon to Mr Chambers and others internally at CBA.292

Initial CBA response to the draft media release

235    At 8:23am on 22 February 2017, Mr Chambers replied to Mr Budzevski’s latest email, attaching an amended draft media release and stated “My comments attached.293 He amended the wording slightly, such that it said “With their combined networks, CBA and GetSwift will be able to provide more than 55,000 existing businesses the capability…”. He did not indicate that he thought that the figure of 55,000 was incorrect.294

236    At 9:28am, Mr Hunter sent an unfortunately worded email to Ms Gordon with subject line “Re Draft CBA/GetSwift PR” stating:

I always believe that fate [sic] accompli solves many “hurdles”. … If the wording gets changed or diluted (especially when we had Ed agree to rubber stamp it -check his email if you don’t believe me) then this will be a failure and will directly impact not only our share price , but our capital raise . And that’s why I am not pleased.295

237    At 9:45am, following a request by Mr Hunter, Mr Macdonald forwarded an email to Ms Hughan, copied to Mr Polites, attaching a copy of the draft media release which Mr Hunter had drafted and circulated the previous day.296 The figures referred to in Mr Hunter’s original draft of the media release remained unchanged. At 9:49am, Mr Eagle sent an email to Mr Hunter and Mr Macdonald, providing comments on the draft media release.297

238    At 10:26am, Mr Polites sent an email to Mr Hunter and Mr Macdonald in which he noted:

There’s actually another major announcement coming out from CBA next week.

They were worried about rushing this press push because you needed to disclose this on the ASX. I suspect this isnt the case, and its a bit of confusion from the email chain.

If we can sit on this for a fortnight or three weeks, it will get a better result and give us time to finesse the media…298

239    At 10:54am, Mr Hunter replied to Mr Eagle’s comments on the draft media release in a way that reflected his apparent preoccupation:

Ps look at our stock price right now and tell me my strategy is wrong. We are almost at 50c. That’s an outperform [sic] of anything on the exchange.299

240    One minute later, Mr Hunter sent another email to Mr Eagle in which he stated: “You just made 130% returns in 3 months on our shares”.300

241    At 11:01am, Mr Jason Armstrong (Public Affairs and Communications Adviser at CBA) sent an email to Mr Polites, stating: “I’m looking at the media release and will come back shortly”.301 At 12:23pm, Mr Budzevski sent an email internally to Mr Jason Armstrong of CBA and others, in which he stated:

GetSwift are pushing to get an ASX announcement out next week which I am not supportive of

I agree we need to hold any announcement until we go through our internal process and agree on the executive sponsor.

Also note that GetSwift are an emerging tech provider and any announcement will likely have a positive impact on their stock position.302

242    In cross-examination, Mr Budzevski agreed that the relevant executive sponsor was Kelly Bayer Rosmarin and that the idea was that, before any announcement to the ASX went out, he wanted the executive sponsor to have an opportunity to approve the announcement.303

Draft of the media release prepared by Mr Polites

243    At 8:35am on Friday, 24 February 2017, Mr Polites sent an email to Mr Hunter and Mr Macdonald, stating:

Hi guys,

FYI.

Core goal here: We want CBA to use all that juicy data about the effectiveness of your delivery system as if they reaffirm it, it becomes more of a fact.

I also want them to fill in the blank regarding exact use case.

Ive used your quotes from the ASX release Bane, however depending on the tone of the release they may ask for them to be changed.

Ping me back any feedback ASAP. This is just a first draft.304

244    The text of his draft media release appeared in the body of Mr Polites’ email and referred to 55,000 “merchants” (instead of “existing businesses”), and that “GetSwift estimates the deal will result in over 257,400,000 deliveries on its platform over the next five years, with an estimated transaction value of $9 billion”.305 The reference to GetSwift estimating the projections was a new addition introduced into the draft media release by Mr Polites, and one which neither Mr Hunter, Mr Macdonald, Mr Eagle nor Ms Gordon sought to alter subsequently.

245    At 8:56am, Mr Macdonald replied to Mr Polites’ email, stating: “Couple of suggestions on my end” and marked his amendments to the draft media release in red font in the body of the email.306 Mr Macdonald’s amendments did not concern the 55,000 merchants, 257,400,000 deliveries or the $9 billion transaction value. At 9:44am, Mr Hunter replied to Mr Polites’ email explaining:

the estimated transaction volume is per year when fully spun up not across 5 years! It’s 55,000 merchants doing and average of 4680 deliveries per year which is conservative. We have individual clients we just signed up for example that do more than 100k per month.307

246    At 10:01am, Mr Polites replied to Mr Hunter, noting:

Fair enough -- but for the sake of not confusing press we should stick to figures and only publish one set of them. Even if they are conservative, they still sound really good!

So: GetSwift estimates the deal will result in over [257,400,000] deliveries on its platform over the next five years, with an estimated transaction value of $9 billion per year.

How’s that?308

247    When asked in cross-examination about the use of the phrase “their figures”, Mr Polites initially said that “I can’t recall in this period of time whether my understanding of whose figures belong to who was clear”, though Mr Polites later agreed that at the time of the email he was referring to information from CBA.309

248    At 10:29am, Mr Hunter replied to Mr Polites email, stating:

Err I think there is a miscommunication here: it’s big [sic] difference - it’s per year so it’s more than a billion deliveries aggregate for 5 years.

So: GetSwift estimates the deal will result in over [257,400,000] deliveries on its platform per year once fully spun up, with an estimated transaction value of $9 billion per annum.310

249    At 12:05pm, Mr Polites sent an email to Mr Armstrong, attaching a draft media release and stating:

As promised, here’s a rough draft from our end to help expedite things.

Weve given it a basic framework, and added in quotes and relevant info. It’s a strawman at best, but it should help regardless.311

250    The draft media release from Mr Polites referred to 55,000 merchants, and stated that “GetSwift estimates the deal will result in over 257,400,000 deliveries on its platform over the next 5 years, with an estimated transaction value of $9 billion per year.”312

251    Notably, Mr Polites deposed that the 55,000 merchants figure was GetSwift’s own estimate based on its data.313

CBA handover from Mr Armstrong to Ms Kitchen

252    On 27 February 2017, Mr Armstrong sent an email to Ms Natalie Kitchen, who was a senior communications consultant at CBA at the time, to handover the PR work for the GetSwift project effectively to Ms Kitchen.314 As part of this handover, Mr Armstrong forwarded two emails to Ms Kitchen.315 The first being the email from Mr Chambers to Mr Budzevski dated 22 February 2017, attaching the document entitled “media release”316 and the draft media release referring to 55,000 existing businesses, which stated that “[t]he market represents 257,400,000 deliveries per year with an estimated transactional goods value of more than AU $9 billion along with significant growth projected over the next 5 years”.317 The second being the email from Mr Polites to Mr Armstrong dated 24 February 2017 with the subject line “Draft GetSwift media release” attaching a different version of the draft media release.318 The second draft media release referred to 55,000 merchants, and that “GetSwift estimates the deal will result in over 257,400,000 deliveries on its platform over the next five years, with an estimated transaction value of $9 billion per year”.319

253    It was put to Ms Kitchen in cross-examination that the covering email from Mr Armstrong (which stated “[a]ttached is the ASX announcement from GetSwift – they want CBA approval and quote from spokesperson”)320 suggested that he was attaching an ASX announcement, in respect of which GetSwift had sought CBA’s approval.321 Ms Kitchen understood the “they” in the email to mean GetSwift,322 and that GetSwift were seeking CBA approval of the ASX announcement.323 It should be noted that both documents attached to Mr Armstrong’s email were, on their face, draft media releases. Even the document to which Ms Kitchen was taken to during cross-examination324 was not an ASX announcement, but a document headed “media release”.325 Nor was the other document attached to Mr Armstrong’s email (headed “Draft CBA/GetSwift release”) an ASX announcement.326

254    At 11:32am on 27 February 2017, Mr Armstrong sent an email to Mr Polites (copied to Ms Hughan and Ms Kitchen), with subject line “Draft GetSwift Media Release’ informing Mr Polites that there had been a “change of resourcing for this internally” and that “[m]y colleague, Natalie Kitchen, will take over this activity”.327

255    Ms Kitchen deposed that she did not recall seeing or hearing the 55,000 merchants figure before reading the draft media releases attached to Mr Armstrong’s email dated 27 February 2017.328

CBA proposed amendments to the CBA Agreement and further discussions

256    At 9:19am on 1 March 2017, Ms Gordon forwarded to Mr Eagle, copied to Mr Hunter and Mr Macdonald, a copy of the CBA Agreement with CBA’s amendments.329 Mr Eagle replied at 11:22am (comments redacted) and Mr Hunter replied shortly after “Once we land let’s have a conf [sic] call to go over this…”330 At 10:06am, Ms Gordon forwarded to Mr Hunter a copy of the CBA Agreement with CBA’s amendments.331

257    Also on the morning of 1 March 2017, Ms Kitchen sent an email to Mr Budzevski informing him that:

The media release needs to be written – which I would like to do today if possible, at least a draft. I have some of the comments from GetSwift, so that is a good start but need your expertise please!332

258    That afternoon, Ms Kitchen sent another email to Mr Budzevski attaching a draft media release, stating:

Ahead of catching up tomorrow, I thought I would pull together some of my questions to help pull this media release together. I don’t expect you to write it down but just a heads up of what I am thinking we will need to chat about tomorrow! It’s very rough and also includes the ‘straw man’ media release that GetSwift’s media contact sent me.333

259    Although Ms Kitchen added the CBA logo to the draft media release and removed GetSwift’s logo (in order to conform to CBA’s internal policy), the media release was otherwise based on the draft media release she had received from Mr Polites.334 The media release referred to the 55,000 merchants, the 257,400,000 deliveries, and the transaction value of $9 billion per year.

260    The following morning, on 2 March 2017, Ms Kitchen met Mr Budzevski to discuss the draft media release.335 Following the meeting, Ms Kitchen sent an email to Mr Budzevski stating:

Thanks for your time this morning. Attached is a very rough draft of a media release. I am still not sure I get all the benefits – but hopefully you will be able to plug in more info or edit as required.

261    I have a call with Harrison who the PR rep for GS tomorrow at 9:30am. If you have a chance to review before then that would be great, otherwise I will come back to you with an update from that meeting.336

262    Significantly, the draft media release which Ms Kitchen prepared and sent to Mr Budzevski following their meeting had removed the reference to “55,000 merchants” and had inserted the following emphasised text:

GetSwift estimates the deal will result in over 257,400,000 deliveries on its platform over the next five years, with an estimated transaction value of $9 billion. (this was provided by GetSwift PR rep).337

263    This sequence of emails was not put to Mr Budzevski during cross-examination.

264    At 10:24am on 3 March 2017, Ms Kitchen sent an email to Mr Budzevski, asking him to cast his eyes over the draft media release “for your expertise as I am conscious that I am not so familiar with the content”.338 At 2:35pm, Mr Budzevski sent an email to Ms Kitchen advising:

Have reviewed the release and I think it is a great start.

We probably need to put some more meat on the bone to clearly articulate the value of the partnership and what the solutions actually does.

Did Harrison share any detail on this?339

265    Ms Kitchen replied “I didn’t get anything back from GetSwift in terms of the value of the partnership, but will send back this afternoon. …I can ask them for assistance and to help with the Q&A too”.340

GetSwift reaction to the CBA revised draft of the media release

266    At 4pm on 3 March 2017, Ms Kitchen sent an email to Mr Polites stating “attached is the very rough draft media release that I pulled together but I dare say that it needs a bit of clarity of what the partnership will actually be and what the outcome will be for customers”.341 The attached draft media release had no reference to the 55,000 merchants and included “(this was provided by GetSwift PR rep)” beside the figures of 257,400,000 and the estimated transaction value of $9 billion.342 At 4:09pm, Mr Polites forwarded Ms Kitchen’s email to Mr Hunter and Mr Macdonald, stating:

Bad news regarding timing. …

The good news, is that they are doing a media release on this, with their brand attached!

Initial draft below. It’s vague, and theyve edited out some of our content. Take a look and we can discuss with you next week.343

267    At 8:18pm, Mr Hunter sent an email to Mr Polites, copied to Mr Macdonald, in which he stated “I need the number of merchants on the Albert platform stated and the mutual exclusivity clearer put. … Let’s discuss.”344

Further negotiation of the CBA Agreement

268    On 3 March 2017, Mr Budzevski sent an email to Ms Gordon attaching a revised version of the draft CBA Agreement that included a new clause 3.1(d) in these terms:

For clarity, CommBank will only load the GetSwift App onto Albert devices with the new merchant category code agreed by the parties in the Project Plan.345

269    The rationale for including this clause [3.1(d)] was that CBA had not agreed (and never did agree) that the GetSwift App would be rolled out to all Albert merchants. CBA’s position was that, rather than a blanket rollout, the GetSwift App was only to be rolled out to those Albert merchants who fell within the specific merchant code categories that CBA identified as being likely to benefit from the GetSwift App”.346

270    Mr Budzevski explained that a “CBA merchant” was a business customer who had successfully applied to CBA to receive merchant services from the bank, and an “Albert merchant” was a CBA merchant that had been provided with one or more Albert terminals.347 He also deposed that the number of Albert merchants as at March 2017 was only 20,000 to 25,000 and that this was a number that he would have known at the time as it was relevant to his role in the product group.348

271    Late in the evening of 3 March 2017, Ms Gordon sent an email to Mr Hunter, Mr Macdonald and Mr Eagle, forwarding a revised draft of the CBA Agreement.349 In the early hours of 4 March 2017, Mr Hunter sent an email providing his comments in relation to some of the terms of the CBA Agreement, and wrote, “Lets [sic] chat tonite NYC time/your morning” and provided comments in relation to the proposed commercial terms.350 Mr Eagle subsequently forwarded Mr Hunter’s email to Ms Gordon.351

272    On 6 March 2017, Mr Hunter, Mr Eagle and Ms Gordon participated in an email exchange in relation how best to proceed with negotiations in relation to the CBA Agreement.352 By this point, the contemporaneous documents reveal that the term of the draft CBA Agreement had been the subject of negotiation by CBA, which was considering a term of two to three years, rather than the five years referred to in the drafts of the media release that had been circulated.353

Mr Hunter reinserts the 55,000 figure into the draft media release and ASX announcement

273    On 7 March 2017, Mr Polites sent an email to Mr Hunter and Mr Macdonald, attaching a draft media release in which he stated: “Hi guys, Please approve ASAP, then I’ll pass to them”.354 The draft media release attached to Mr Polites email did not refer to the 55,000 merchants but did refer to the 257,400,000 deliveries “over the next five years” and the estimated transaction value of $9 billion.

274    At 4:34am on 8 March 2017, Mr Hunter tellingly replied to Mr Polites, stating:Ahead of the chat with CBA team, please find the revised release. It has minor but VERY important additions/changes.”355 Fifteen minutes later Mr Hunter sent another email, with two attachments, stating: “Sorry – sent you a [sic] earlier version. Here is both the CBA media push and our ASX announcement”.356 Both the media release and the announcement attached to Mr Hunter’s email had reinserted the “55,000 retail merchants” that had been deleted in Ms Kitchen’s draft (and retained the references to the projected number of deliveries and estimated transaction value). This was consistent with Mr Hunter’s 3 March 2017 email in which he had stated “I need the number of merchants on the Albert platform stated”.357

275    On 8 March 2017, Mr Macdonald provided further minor comments in relation to the draft media release and ASX announcement.358 He stated: “Couple of errors in the CBA draft 247,000,00 & Ms yams [sic] spelling of GetSwift in bottom quote.”359 Mr Macdonald’s email itself contains an error, in that the figure of 247,000,000 was plainly intended to correct the missing zero in “257,400,00” in both documents attached to Mr Hunter’s email. There is no reference to “247,000,000” deliveries in any of the prior or subsequent drafts. The second amendment proposed by Mr Macdonald related to an immaterial misspelling of GetSwift in the quote attributed to Ms Yam in both documents.360

GetSwift provides CBA with the revised media release with the 55,000 figure reinserted

276    On 9 March 2017, Ms Gordon sent an email to Mr Budzevski, copied to Mr Madoc, attaching a draft media release and stating:

Here is the draft media release that our PR teams have been working on together…Also note, this is the latest iteration of the draft, and I don’t think the CBA folks have seen it yet. Please take from it what you need.361

277    The draft media release stated, relevantly:

Commonwealth Bank of Australia has partnered with GetSwift to offer its more than 55,000 retail merchants the ability to compete with their global counterparts when it comes to deliveries and logistics…

GetSwift estimates the deal will result in over 257,400,000 deliveries on its platform over the next five years, with an estimated transaction value of $9 billion.362

278    What is notable about this exchange is that, since 24 February 2017, Mr Polites had been liaising directly with CBA’s PR team, namely Ms Kitchen, in relation to the draft media release. However, following receipt of the draft media release from Ms Kitchen with the 55,000 retail merchants deleted, and following the re-insertion of the 55,000 by Mr Hunter, GetSwift appears to have chosen to circumvent Ms Kitchen by returning the media release to Mr Budzevski and Mr Madoc via Ms Gordon (without copying Ms Kitchen), rather than using the conventional channel of sending to Ms Kitchen via Mr Polites.

279    In cross-examination, Mr Budzevski agreed that he read the reference to the “55,000 retail merchants” to be a reference to CBA’s retail merchants,363 and that he did not recall any correspondence in which he informed Ms Gordon that CBA did not have 55,000 retail merchants.364 Similarly, Mr Budzevski gave the following answers to questions that I asked of him:

Well, when you read it, 55,000 retail merchants, you knew that there wasn’t 55,000 retail merchants, didn’t you? --- Yes.

Well, didn’t you assume that the figures in the third last paragraph were somehow connected to the fact that it was saying there was 55,000 retail merchants? --- Yes.

Right. You knew that was wrong, didn’t you? --- I did know it was wrong, correct.

Then why didn’t you do anything about it?” --- I would have advised our internal PR team.365

280    As the documents reveal, Mr Budzevski did inform CBA’s internal PR that the figure was wrong. During his cross-examination, Mr Budzevski was not shown the emails in which Ms Kitchen and Mr Budzevski had previously attempted to correct the draft media release by deleting the 55,000 retail merchant figure on 2 March 2017 and had sent a corrected version of the media release without the 55,000 reference to GetSwift on 3 March 2017, only to have the 55,000 retail merchants reinserted by Mr Hunter on the morning of 7 March 2017.

Mr Budzevski and Ms Kitchen query whether GetSwift figures in media release are global

281    At 7:26am on 9 March 2017, Ms Gordon sent an email to Mr Budzevski attaching a draft media release.366 At 7:28am, Mr Budzevski replied to Ms Gordon, asking: “Would you have an estimate of how many drivers are using the GetSwift platform in Australia?”367 Ms Gordon replied, stating:

The specific number of drivers we have in geographies is a competitively sensitive information for us. What I can share is that we have tens of thousands of drivers across the global platform.368

282    Ms Gordon deposed that her reply to Mr Budzevski had been given to her by Mr Hunter on 9 March 2017 for the purposes of responding to Mr Budzevski.369

283    At 7:29am, Mr Budzevski sent an email attaching the draft media release that he had received from Ms Gordon to Ms Kitchen, copied to Ms Bronwyn Yam (who, at the time, was CBA’s proposed spokesperson for the media release).370 Mr Budzevski stated, “Latest PR release from GetSwift providing a lot more clarity on the partnership”.371 The media release stated, “Commonwealth Bank of Australia has partnered with GetSwift to offer its more than 55,000 retail merchants … GetSwift estimates the deal will result in over 257,400,000 deliveries on its platform over the next five years, with an estimated transaction value of $9 billion”. In cross-examination, Mr Budzevski agreed that he did not tell Ms Kitchen or Ms Yam (at that time) that the 55,000 merchant figure, the 257,400,000, or the $9 billion were wrong, despite knowing that the figures were wrong.372 However, as explained below (at [285]), by 3:22pm on the same day, the contemporaneous documents make clear that Mr Budzevski had informed them that the numbers appeared to be “a global reference” and that “[GetSwift] should not provide global numbers”.373

284    At 10:48am, Ms Kitchen sent an email to Mr Budzevski providing an updated version of the draft media release.374 Ms Kitchen wrote that she had “just made some minor edits”.375 The release contained the figure of 55,000 retail merchants, had rounded up the number of deliveries to 250 million and retained the estimated transaction value of $9 billion. Again, Mr Budzevski did not immediately respond to Ms Kitchen to inform her that those figures were wrong.376

285    At 3:22pm, Mr Budzevski sent an email to Ms Kitchen, copied to Ms Yam, stating:

The number of GetSwift merchants referenced seems to be a global reference.

We need to pull this back to Australia as CBA only offers the product domestically The volume of deliver[ies] quoted ‘250m’ over 5 years needs to be positioned in the context of Australia. They should not provide global numbers similar to the point above.377

286    In cross-examination in relation to this email, Mr Budzevski said, in relation to the 250 million deliveries or transactions that “GetSwift provided that number, so they’ve crafted the number of transactions”.378 He also agreed that he thought that the number of merchants was global and, therefore, the number of transactions was global.379 In his affidavit, Mr Budzevski also explained he inferred that the number of 257,400,000 and $9 billion were global numbers” because, as far as he was aware (including from both his early discussions with Mr Hunter and Ms Gordon about the start-up nature of GetSwift’s business) and from his own knowledge of the size of the market), “GetSwift’s business footprint at that time could not have generated such numbers through transactions in Australia alone”.380

287    At 4:10pm, Ms Kitchen sent an email to Mr Polites (attaching a draft media release) asking:

The figures in the release appear to be global and we need to use Australian numbers as we only offer the product domestically. I assume this will relate to the merchants and 250 million deliveries/$9 billion. Are you able to adjust these figures?381

288    The draft attached to Ms Kitchen’s email did not, unlike the draft provided by her on 3 March 2017, remove the reference to “55,000 merchants”. It also decreased the projected deliveries from 257,400,000 to 250,000,000.382

Mr Hunter responds to CBA query about global figures

289    At 11:21am on 10 March 2017, Mr Polites forwarded Ms Kitchen’s email to Mr Hunter and Mr Macdonald, stating: “[t]his was forwarded internally to their media team, by their corporate team. CBA is one entity. Let’s assume from now on that anything sent to one division is sent to them all.”383 This email appears to be a reaction by Mr Polites to the failed attempt on the part of GetSwift to circumvent Ms Kitchen in order to get another division of CBA to agree to the draft media release containing numbers previously deleted by Ms Kitchen.

290    At 4:13pm, Mr Hunter replied to Mr Polites, stating:

Re transactions: 247M transactions divided by 5 years is 49.5m transactions a year. 55,000 merchants is an average of 900 transactions a year, which is 75 a month. Considering we have single merchants that are doing l00k+ a month its [sic] a direct Australian market potential (we are about to sign up a single customer that will give us 13M transactions over 5 years for example). The aggregate sum of 9$b is the value of goods the transactions are projected to achieve when spun up.384

291    At 4:16pm, Mr Polites passed on this rationale to Ms Kitchen and stated “[a]gain, apologies for the delay here on our end. I had to nail down a time to get the guys to spell out the value of the integration.385 Ms Kitchen agreed in cross-examination that she understood from this email that the “55,000 figure was the basis for the projected number of transactions, the 247 million” and “also for the aggregate transaction value which is the billion figure referred to in the last sentence”.386 Indeed, she understood that the figures were “intimately connected”.387

292    At 4:33pm, Mr Polites sent an email to Ms Kitchen in which he stated that he believed the figures in the draft media release were for Australia.388 Mr Polites deposed: I assumed that the figures were for Australia. I did not speak to Hunter or Macdonald about whether or not the figures were for Australia”.389

293    At 1:57pm on 14 March 2017, Ms Kitchen sent an email to Ms Yam (copied to Mr Budzevski), attaching a draft media release. In this email Ms Kitchen stated:

GetSwift have confirmed that these are Australian figures. Below is the message from Harrison with the rationale from Bane Hunter.

‘Re transactions: 247M transactions divided by 5 years is 49.5m transactions a year. 55,000 merchants is an average of 900 transactions a year, which is 75 a month. Considering we have single merchants that are doing 100k+ a month its a direct Australian market potential (we are about to sign up a single customer that will give us 13M transactions over 5 years for example) . The aggregate sum of 9$b is the value of goods the transactions are projected to achieve when spun up.’390

294    The draft media release attached to Ms Kitchen’s email referred to 55,000 retail merchants, 250 million deliveries over the next five years, with an estimated transaction value of $9 billion.391

295    When reading the email from Ms Kitchen, Mr Budzevski understood that the number of transactions was tied intimately to the number of retail merchants; in particular, the value of the goods in the transactions depended upon the number of transactions, and the number of transactions depended upon the number of retail merchants.392

Further consideration by Mr Budzevski and Ms Kitchen of the 55,000 figure

296    Between 5:24pm and 10:56pm on 14 March 2017, Ms Kitchen and Mr Budzevski settled a draft ‘question and answer’ document (Q&A Document).393 The purpose of the Q&A document was to assist CBA’s spokesperson to respond to any media queries.394

297    At 11:01am on 15 March 2017, Ms Kitchen sent an email to Mr Polites attaching the Q&A Document and stating: “Attached is a very rough draft of a Q&A I have started to pull together. We will need some GetSwift expertise for some of these …”395 The Q&A document attached to her email stated, relevantly:

55,000 retail merchants – CBA’s retail merchants? Is this all the retailers that have Albert?

Does that mean that all the retailers have Albert? No, not all retailers have Albert.396

298    At 11:07am, Mr Polites forwarded Ms Kitchen’s email to Mr Hunter, copied to Ms Hughan.397

299    Later that afternoon, Ms Kitchen and Mr Budzevski had the following email exchange:

Ms Kitchen:    Just with the figure of 55,000 retail merchants – do all these retailers have Albert? Do we know the split of the types of retailers in this figure?

Mr Budzevski:    The 55,000 retail merchants is a number that GetSwift supplied. I imagine this is their total retail network around the globe which would be of no value in the announcement. Unless Getswift have an Australian target that they can confirm, I would be comfortable with simply saying that ‘Getswift would be made available on the Pi platform for merchants to download as required.’

Ms Kitchen:     Do we know how many of our CBA retail merchants will be able to access this?

Mr Budzevski:     All CBA Albert retail merchants can access the app through App bank. I will need to get some stats on the exact number of [merchants] in the general retail category.398

300    At 2:23pm on Thursday, 16 March 2017, Mr Hunter replied to Mr Harrison’s email attaching the Q&A document, stating: “See attachment with our notes”.399 The attached Q&A contained the following additional text inserted by Mr Hunter or Mr Macdonald:

Does that mean that all the retailers have Albert? No, not all retailers have Albert, but our joint network will reach more than 55k merchants.400

301    At 3:39pm, Mr Polites forwarded the amended Q&A document he had received from Mr Hunter to Ms Kitchen.401

Ms Kitchen again queries the 55,000 figure with Mr Polites and Mr Budzevski

302    On 17 March 2017, at 3:55pm, Ms Kitchen emailed Mr Polites statingThe 55,000 merchants …are they GetSwift’s merchants, or CBA’s or the reach combined?”402 Mr Polites respondedI believe that’s only CBA merchants. I think Jace gave us that fact”.403 The reference to ‘Jace’ was a reference to Jason Armstrong of CBA. At 4:01pm, Ms Kitchen sent an email to Mr Budzevski in which she stated:

Can I confirm with you the number of merchants that this will be made available to? This figure of 55,000 retail merchants seems high and it appears that Jace might have provided Harrison this stat – but I want to make sure we have double checked it...404

303    Mr Budzevski gave evidence during cross-examination that he knew from this email that Ms Kitchen was saying that Mr Armstrong (“Jace”) “might have provided Mr Polites on behalf of GetSwift the figure of 55,000 retail merchants”.405 Mr Budzevski stated that he relied on Ms Kitchen to point out to GetSwift any correction that needed to be made in the draft media releases”.406

304    At 4:19pm on 17 March 2017, Ms Kitchen returned to her email thread with Mr Polites and stated: “Oh dear.... Jace says it’s not from him. I am on the hunt to confirm this fact now!407 At 4:33pm, Mr Polites forwarded to Ms Kitchen an email from Mr Hunter to Mr Chambers dated 13 February 2017 and stated: “It came from Edward on the Albert team. Hope that helps”.408 At 4:34pm, Mr Polites replied to Ms Kitchen’s 4:19pm email by stating: “Sent you my first reference of it. Came from Edward. Paper trails can be a godsend!409

305    However, the email Mr Polites forwarded to Ms Kitchen at 4:33pm is an email in which the figure 55k+ SMEs is mentioned; however, it is an email from Mr Hunter to Mr Chambers, not an email from Mr Chambers to Mr Hunter. Mr Polites explained in his affidavit that he believed the reference to “Edward” in his emails to Ms Kitchen on 17 March 2017 was a mistake and that the emails should instead have referred to Mr Hunter, who was the author of the “55k+ SME clients” in the email he had forwarded to Ms Kitchen.410 Mr Polites’ explanation for his error was not challenged in cross-examination.

306    At 4:39pm, Ms Kitchen sent an email to Mr Chambers (copied to Mr Budzevski), in which she stated:

I hope you are well. Attached is the most final draft of the media release for the announcement with GetSwift. I understand that you provided the 55,000 retail merchants figure and I am just trying to double check this and verify it. Always good to check and then double check figures in a media release!411

307    Mr Budzevski did not respond to this email and did not take any steps to inform Mr Chambers that the number of retail merchants was wrong.412

308    Mr Chambers deposed that he was not in the office when Ms Kitchen sent her email on 17 March 2017,413 and that he did not respond to Ms Kitchen about the 55,000 figure after the 17 March 2017 email because:

by the time I had returned to the office, the information I received at that time was that CBA had postponed any joint media release (which was the subject of Kitchen’s email) until after an app had been completed.414

309    In cross-examination, Mr Chambers was taken to the following further exchange that occurred in his private examination:

Q:     Now, Ed, did you give that number to Natalie or anyone else at CBA?

A:     From the email from Natalie on 17 March it suggested that I did give that 55,000 retail merchant figure.

Q:     Who did you give it to, to a person at CBA or did you give it to someone at GetSwift?

A:     I don’t recall who I gave it to in that period of time.415

310    Mr Chambers was asked by the cross-examiner: “what you were saying to ASIC was, first, that you thought you were the source of the 55,000 retail merchants figure in the draft release, correct?” to which Mr Chambers replied “correct”.416 However, he could not actually recall whether he had given that figure to CBA or GetSwift.417 Mr Chambers also said that it was “clear” that if GetSwift got the number of 55,000 retail merchants, it must have got the number from someone at CBA.418 That person, he accepted, could have been Mr Madoc, but it equally could have been him.419 Further, he accepted that not only would it have been his role to know the figure of 55,000 retail merchants,420 but he believed the figure of 55,000 retail merchants was an “official figure of the bank” and was “accurate as at March 2017”.421

311    The passage of the private examination transcript to which Mr Chambers was taken in his cross-examination shows that in Mr Chambers’ first answer, he was speculating, on the basis that it had been suggested to him that he was the source of the 55,000 number in Ms Kitchen’s email. This is consistent with the answer he gave to the question in cross-examination; namely, that he thought he was the source of the 55,000 (based on the suggestion in Ms Kitchen’s email), not that he independently knew he was the source of the 55,000 figure. Mr Chambers was not asked, in cross-examination, the basis for him thinking he was the source of the 55,000, other than by reference to Ms Kitchen’s email.

312    Indeed, as Mr Chambers deposed in his affidavit, “[t]he email from Kitchen suggested that I was the source of the 55,000 figure. Howeveras best as I can recall, I did not give any representative of GetSwift that figure.”422

313    Next, it was put to Mr Chambers in cross-examination that:

[T]he second thing you were saying to ASIC was that you couldn’t recall whether you had given that figure to a person at CBA or to a person at GetSwift. That’s really what you were saying at line 12, isn’t it? --- Correct”.423

314    Mr Chambers’ answer to this question in his private examination, and equally in cross-examination, does not relevantly advance the matter. Neither ASIC, nor the cross-examiner, established that Mr Chambers was the source of the 55,000, or that he had in fact, given anyone the 55,000 number, as opposed to Mr Chambers agreeing that Ms Kitchen’s email suggested he was the source.

315    This conclusion is fortified by other references in the private examination transcript, in which Mr Chambers gave evidence he could not recall “imparting [the 55,000] numberin any of the meetings or calls”,424 nor “a particular conversation with Joel Macdonald about the number of retail merchants at CBA.425 Further, Mr Chambers deposed in his affidavit, to which no objection was taken and upon which he was not cross-examined, that:

I do not know where the figures of 55k+ SMEs contained in Hunter’s email came from. As best as I can recall, I did not give any representative of GetSwift those figures.426

316    In context, I accept that Mr Chambers’ could not recall any conversation with Mr Hunter or Mr Macdonald in which he gave either of them the number of 55,000 retail merchants and Mr Polites had mistakenly identified Mr Chambers as the source of the figure because he inadvertently mistook Mr Chambers as the author, not the recipient, of the email he forwarded to Ms Kitchen.

Mr Budzevski’s further consideration of the 55,000 retail merchant figure

317    At 7:21pm on 17 March 2017 (to which Mr Budzevski erroneously refers in his affidavit as being sent at 4:41pm), Mr Budzevski replied to Ms Kitchen’s earlier email explaining:

I don’t have the total count, as this is being collated by our analytics. Not sure where the 55K came from but it does not represent CBA merchants.427

318    Mr Budzevski agreed, in cross-examination, that he relied on Ms Kitchen to point out to GetSwift any correction that needed to be made in the draft media releases,428 but also said that he drew the 55,000 figure to Ms Kitchen’s attention, as she was engaging on the PR release as CBA’s PR lead.429 Mr Budzevski agreed, in cross-examination, that by his 7:21pm email, he was saying that the whole basis of the media release, and the basis for all the figures in that media release, was wrong.430 This was the first time Ms Kitchen had been told that 55K did not represent CBA merchants and, at that time, she “wasn’t sure either way” whether the figure of 55,000 merchants was wrong.431

319    At 10:28am on Monday, 20 March 2017, Ms Kitchen sent an email to Mr Budzevski (copied to Ms Yam), in which she stated:

As mentioned, as I questioned the merchant figure, I would like to get this as soon as we can because it impacts the other figures in the release. Apparently it came from Ed Chalmers [sic] but I have not heard back from him as yet to whether this is correct and if we did provide it to Bane Hunter, how we calculated it.432

320    By the time of these emails, Ms Kitchen agreed that she was still unsure at this time whether the figure of 55,000 merchants was correct and whether it had been provided to Mr Hunter.433 In cross-examination, Mr Budzevski agreed that this “was a bit of a serious issue … because it looked like the Commonwealth Bank had two different numbers internally”.434 Mr Budzevski also agreed that there were two candidates for who in the Commonwealth Bank might have supplied the number: Mr Armstrong and Mr Chambers,435 and that either of those candidates would be inconsistent with GetSwift having provided the figure, which was his previous understanding.436

321    At 11:47am, Mr Budzevski sent an email to Ms Kitchen and Ms Yam stating:

The premise of the partnership is to build an app on Albert and make the GetSwift solution available for merchants using Albert.

The analytics team are extracting the data on our retail merchants which I will share asap.

Note, we should not quote the 55,000 as this is not a true reflection of our device/merchant position.437

322    At 10:59pm, Mr Budzevski sent an email to Ms Kitchen advising her:

I have looked into the number of devices within the ‘retail’ portfolio and they seem quite underwhelming.

From our analysis, there only seems to be 3000 devices active in this portfolio.

I think we should avoid quoting merchant or terminal numbers and focus the opportunity for merchants.438

323    Asked in cross-examination why the word “retail’ was in quotes, Mr Budzevski replied that he was “[n]oting that we specifically provided a designation of the retail merchant category code”.439 When it was put to Mr Budzevski that he “knew that there were more devices than that, that could properly be characterised as a device used by a retailer”, Mr Budzevski replied, “[u]nder our designation, retailer fell – the number of devices within that retail category code is the 3000 active devices.”440 Indeed, Mr Budzevski disagreed with the proposition “that the categorisation does not provide an accurate estimate of the number of devices actually being used by retailers, reaffirming it was right that there were only 3000 devices actually being used by retailers at this point.441 Mr Budzevski’s answers in cross-examination are consistent with the explanation he provided about CBA’s application of merchant category codes in his affidavit.442 Although every new CBA merchant was assigned an industry sector specific merchant category code as part of its CBA customer profile, there was also a grouping (or “designation”) available through MasterCard which grouped specific category codes into the category “retail”, namely:

There was a retail categorisation under what we call the merchant category code – the merchant category code designation as per the Mastercard MCC Under the designation that [CBA] apply from Mastercard, retailers who qualify for that [retail] category code do have it correctly applied.443

324    The cross-examination of Mr Budzevski evidences that the number of Albert devices actually being used by CBA retail merchants as at 20 March 2017 was 3000. This was made clear in response to the following questions I posed to Mr Budzevski:

You had reached the view by 20 March that there were only 3000 devices active with retailers? --- Yes.

Of any description? --- Yes.444

325    There is however no evidence that anybody from CBA informed GetSwift that this was the number of Albert devices actually being used by CBA retail merchants as at 20 March 2017.

Further exchange of drafts of the CBA Agreement

326    At 3:40pm on 20 March 2017, Mr Budzevski sent an email to Mr Hunter, Mr Macdonald and Ms Gordon, attaching “the final” draft of the CBA Agreement “with changes incorporated”.445 The term of this draft agreement remained five years. On the evening of 20 March 2017, Mr Budzevski, Mr Hunter, Mr Macdonald, Ms Gordon and Mr Eagle exchanged emails about the draft CBA Agreement.446

327    At 1:53pm on 21 March 2017, Ms Kitchen replied to Mr Budzevski’s email from the previous night about the 3000 active devices, stating:

Is this something GetSwift know? I have attached the updated media release with the numbers taken out. In terms of our broader retail customers, I assume it is more than 3000? I will send this back to GetSwift.447

328    In the attached media release,448 Ms Kitchen had removed the references to 55,000 retail merchants and the 257,400,000 deliveries and $9 billion transaction value.449

329    In cross-examination, Ms Kitchen agreed that she had removed the 55,000 figure because Mr Budzevski had suggested to her that the release should avoid quoting merchant or terminal numbers,450 and removed the other figures because she understood those figures were based on the number of retail merchants.451 However, Ms Kitchen stated that she was still “unsure as to what the number of retail merchants was”, given she had been told that Mr Chambers had provided that number to GetSwift and she had sought to verify those numbers with him, but had not heard from him.452 This is perhaps not surprising, considering even Mr Budzevski was unsure what the precise number of relevant retail merchants was, though by this time he had ascertained, and informed Ms Kitchen, that 55,000 was incorrect and that the number of devices active in the retail portfolio was only 3,000 (as described above). Mr Budzevski agreed in cross-examination that he knew “at that point that there was an issue that it had been suggested that someone at the Commonwealth Bank had said to GetSwift that there were 55,000 retail merchants”.453

330    At 6:36pm on 21 March 2017, Mr Budzevski replied to the email from Ms Kitchen in which she had asked “In terms of our broader retail customers, I assume it is more than 3000”, stating “we do not provide that level of detail on merchant footprint. Broader rollout could be in excess of 50,000 terminals or 25,000 merchants. Note, we do not reference merchant numbers.454

331    On 22 March 2017, Ms Kitchen sent an email to Mr Budzevski in which she stated, “Great. I have taken out the merchant numbers.”455 By this time, a decision had also been made by CBA not to issue a joint media release with GetSwift, at least not until an app had been deployed.456 This is evidenced by the following email exchange between Ms Yam and Mr Budzevski (copied to Ms Kitchen) that afternoon:

Ms Yam at 12:10pm: The sentiment I’m getting from Kelly [Rosmarin] and Michael is that we should not announce anything until we actually have the app What would be the repercussions with GetSwift if we don’t go ahead?

Mr Budzevski at 12:15pm: I don’t believe there will be any significant fallout. GetSwift are still able to make their own announcement and publish to the ASX. We would simply stay silent.

Ms Yam at 1:06pm: Let’s do that

Mr Budzevski at 3:46pm: This has been all sorted guys. GetSwift understand our position and are happy to delay until the app is deployed.457

332    At 5:31pm, Mr Budzevski sent an email to Ms Kitchen stating, “GetSwift have agreed to hold on any announcement. Can you please ensure we do not approve any GetSwift announcement without CBA approval given our position? I would not want GetSwift to go out with messaging that may not align to our position”.458 In cross-examination, Mr Budzevski confirmed that he wanted to make sure that CBA approved the announcement that GetSwift was intending to make to ensure that it aligned with the CBA’s position.459 He also confirmed that Ms Kitchen would have the primary role for obtaining the necessary approvals, but that he had a responsibility to point out any inaccuracies the extent that any draft release was passed by him.460

333    In the afternoon of 22 March 2017, Mr Hunter, Mr Macdonald and Ms Gordon exchanged emails about the terms of the CBA Agreement.461 Mr Eagle provided comments, although these are redacted.462 At 10:15pm, Ms Gordon forwarded Mr Eagle’s comments on the CBA Agreement to Mr Budzevski, stating: “Please find below the note from our legal and the updated attached contract.463

334    On 23 March 2017, Mr Chambers replied to Ms Kitchen’s 17 March 2017 email, stating: “Am just back in today and understand that this has now been all pushed back out from an announcement perspective?”464

335    On 24 March 2017, Mr Hunter sent an email to Ms Gordon, copied to Mr Macdonald and Mr Eagle, in which he stated:

As you may have noticed due to the delay in our overall PR (because we put it all on hold for CBA expecting to put out our release) our stock price has taken a hit from 64c to low 50s – which is exactly like I feared. So this has had a [sic] impact of roughly $12million in our market cap We will NOT entertain any negative impacts to our core business. In May I have commitments from multiple investors for millions of$ of capital - and I will not ruin my relationship, reputation or trust with them, or put this company in a holding pattern as a result.465

336    On 27 March 2017, Mr Budzevski sent an email to Ms Kitchen, attaching a draft of the CBA Agreement.466 Mr Budzevski deposed that:

The term of the agreement in that version of the document was changed to 2 years (in previous drafts the term was either 3 or 5 years). My recollection is that this change was made because CBA did not typically agree to long term agreements in relation to new or emerging forms of technology especially where that agreement required exclusivity.467

337    Mr Budzevski agreed the reason for this was CBA “wanted to wait and see how successful the new technology was” and “if it was successful, CBA wanted to have the option to continue with it”.468 Further, Mr Budzevski agreed that the two-year term was subject to the extension period in cl 6(c) in the agreement.469 It was also put to Mr Budzevski that “although the term was reduced to two years, it was with an option to renew for another two years”.470

338    Regardless of Mr Budzevski’s subjective musings as to these questions, these are matters of contractual construction, to be assessed objectively. An extension of the exclusivity period pursuant to cl 6(c) is distinct from and not equivalent to an option to extend the term of the CBA Agreement. On its face, cl 6(c) of the CBA Agreement did not provide “an option to renew” the CBA Agreement for “another two years”. Rather, it only provided that “[t]he Exclusivity Period may be extended for an additional period of 24 months, with the same terms in this clause applying, by the written consent of both parties.471

339    Also on 27 March 2017, Mr Hunter sent an email to Mr Polites, providing him with two versions of a draft ASX announcement.472 Both versions contained the following statements: (a) “Commonwealth Bank of Australia has partnered with GetSwift to offer its more than 55,000 retail merchants the ability to compete with their global counterparts when it comes to deliveries and logistics”; and (b) “GetSwift estimates the deal will result in over 257,400,000 deliveries on its platform over the next five years, with an estimated aggregate transaction value of $9 billion”.

Execution of the CBA Agreement

340    On 20 March 2017,473 22 March 2017,474 and 27 March 2017,475 Mr Eagle provided further comments in relation to the draft CBA Agreement. At 9:21am on 28 March 2017, Mr Budzevski sent an email to Ms Gordon indicating that the execution version of the CBA Agreement would be sent to GetSwift once Mr Budzevski obtained “internal sign-offs”.476

341    At 11:37am, Mr Budzevski sent an email to Ms Gordon providing a copy of the “final executable version of the agreement for GetSwift to execute”.477 Ms Gordon forwarded the agreement to Mr Hunter, Mr Macdonald and Mr Eagle, and at 8:26pm, Mr Macdonald sent an email to Ms Gordon attaching the CBA Agreement executed on behalf of GetSwift.478At 8:36pm, Mr Hunter sent an email to Ms Gordon requesting her to “send this right away to CBA so we can get a counter signature. Once that is done I will ping them w the ASX announcement PR stuff - not before!”479 At 8:41pm, Ms Gordon sent an email to Mr Budzevski attaching a copy of the CBA Agreement executed on behalf of GetSwift.480

342    On 31 March 2017, Mr Budzevski sent an email to Mr Hunter, Mr Macdonald and Ms Gordon attaching a copy of the CBA Agreement countersigned on behalf of CBA.481 At 12:01pm, Mr Hunter forwarded this to Mr Eagle, stating: “Had to call them myself yesterday to get this. At least we are there!”482

Final arrangements for the CBA Announcement

343    At 9:10am on 3 April 2017, Mr Hunter sent an email to a number of recipients, including Mr Budzevski, Ms Kitchen, and Mr Madoc of CBA, attaching two different ASX announcements. In this email, Mr Hunter stated:

In addition to this as with any successful national product launch creating a level of demand and registering interest is critical as part of our ability to prioritize, but probably more important than that is securing the first mover advantage from our competition (ANZ, WetsPac etc).

Therefore the last item I just wanted to follow up quickly with is both a minor procedural issue, but one that is rather important. We need to release this information to the ASX this week as part of our regulatory compliance requirements - I firmly believe that we should leverage this announcement with a standard PR release as originally proposed (and one which we have jointly collaborated on). I am including two versions of the ASX release - one which does not attribute any commentary by CBA and one which does as originally agreed to. We would prefer to release the joint one, but as agreed we will always consult with you first before taking any moves in that direction.483

344    Both drafts of the ASX announcement included the reference to the 55,000 retail merchants, as well as the 257,400,000 deliveries and $9 billion transaction value.

345    Mr Budzevski did not respond to the email from Mr Hunter.484 It was put to Mr Budzevski in cross-examination that “at that point you could have, couldn’t you, replied all to this email?” and “you could have said to Mr Hunter whichever version you go with, you better take out the 55,000 retail merchants and the 257 million deliveries’ because at that stage you thought they were wrong”.485 Mr Budzevski said that he “could have, yes” but he did not recall if he did so.486 These questions, however, while forceful, fail to take into account Mr Budzevski’s affidavit evidence, in which he deposed: “I do not recall whether I read these documents at the time or whether I noticed that these figures were referred to in the versions of draft ASX announcement.”487

346    At 9:20am, Mr Hunter sent Mr Mison, Mr Macdonald, Mr Eagle and Ms Gordon an email with the subject line “HIGHLY CONFIDENTIAL”, which stated:

Scott – HIGHLY CONFIDENTIAL

This is to be released preciously [sic] at a few minutes before 8am, Sydney Time, on Tuesday April 3rd. Mark it as PRICE SENSITIVE (needless to say it will be a huge thing) …

Joel – please confirm this is ok. Brett/Jamila – any comments or questions? Please note this was provided and screened by CBA so changes if any are going to be restricted.488

347    At 9:24am, Ms Kitchen forwarded Mr Hunter’s email to Mr Budzevski and asked “My understanding was that when you spoke with GetSwift we had agreed to hold off on a press release until the app was available?”489 At 9:30am, Mr Budzevski replied to Ms Kitchen stating:That is correct. GetSwift are welcome to announce to the ASX but it will not include comment from CBA”.490 Ms Kitchen responded at 9:50am, “Are you happy for me to confirm this with Bane?”491 In cross-examination, Ms Kitchen agreed that she was seeking confirmation from Mr Budzevski that “he was happy for the ASX announcement to be made on behalf of GetSwift in the terms provided by Mr Hunter that did not include the comment from CBA”.492

348    At 9:51am, Mr Polites followed up Mr Hunter’s email with Ms Kitchen, to which Ms Kitchen responded at 10:00am on both the request for joint media and on the terms of the ASX announcement:

In terms of a joint release, the business does not want to announce this until the app is ready. Lets [sic] work towards a time-frame for release according to this adjusted approach.

The ASX announcement refers to 55,000 merchants which is incorrect. The actual retail merchant number isn’t available. I would also suggest that Bronwyn Yam isn’t quoted in the ASX announcement.

I appreciate that GetSwift are keen to announce this partnership, however we just need to work to a different timeframe.

Happy to have a chat and also happy to convey this back to Bane to ensure consistency of message.493

349    On the former, Ms Kitchen stated: “the business does not want to announce this until the app is ready.” On the latter, Ms Kitchen stated: “The ASX Announcement refers to 55,000 merchants which is incorrect. The actual retail merchant number isn’t available”.494 Ms Kitchen agreed in cross-examination that in her response to Mr Polites, she intended to convey that she “had no other objection to the ASX announcement beyond those two matters identified in the paragraph”.495

350    Further, Ms Kitchen agreed in cross-examination that she responded to Mr Polites: (a) before she had received a response from Mr Budzevski to her email of 9:50am; (b) without a response from Mr Chambers as to whether he was the source of the 55,000; and (c) when she did not know whether the number of 55,000 was correct either way.496 Ms Kitchen also agreed that because she wasn’t sure about the number of merchants, she did not suggest that the number of deliveries be removed from the announcement or that the aggregate transaction value be removed.497

351    It is important to foreshadow that there is some dispute as to whether this email was unclear, contradictory or ambiguous. I will resolve this dispute when I return to this issue below in respect of the existence of the factual circumstances alleged by ASIC.498

352    At 10:04am, Mr Budzevski replied to Ms Kitchen’s email of 9:50am, “Sure thing”.499 Notably, he made no mention of the figure of 55,000 or that the CBA Agreement would result in over 257,400,000 deliveries on its platform or an aggregated transaction value of over $9 billion over the next five years. At 10:11am, Mr Polites forwarded Ms Kitchen’s email to Mr Hunter and Mr Macdonald advising:

No chance of joint media. You may want to correct that fact in the ASX announcement, otherwise CBA will issue a correction announcement -- which isn’t a good look. I’ll see if I can get it out of Natalie [Kitchen]…

From here, we can plant an exclusive and circulate the ASX announcement on the day. I can pitch the exclusive as soon as today and work with a reporter with timing. My only bit of hesitation is CBA may turn hostile here from media perspective and refuse to offer a comment if approached by a journalist. They are already retracting their spokespersons [sic] quote.500

353    At 10:14am, Mr Hunter replied to Mr Polites “Ok what changes do we need to make? Lets [sic] keep it in sync with their needs.”501 Mr Hunter sent a further email at 10:17am proposing “a quick call now”.502 There is no evidence that the call in fact occurred and Mr Polites makes no mention of it having occurred in his affidavit, despite having referred to the email.503 It is unlikely that there was time to arrange and conduct a call prior to Mr Hunter proceeding to amend and twice circulate the draft CBA announcement within the next nine minutes.

354    Indeed, at 10:21am, Mr Hunter sent an email to Mr Polites (copied to Mr Macdonald and Ms Hughan) attaching a further draft of the CBA announcement which excluded the reference to “55,000 retail merchants” but included the projections.504

355    At 10:26am, Mr Hunter sent an email to a number of recipients, including Mr Macdonald, Mr Budzevski, Ms Kitchen, and Mr Madoc, stating:

Quick feedback from Harry and Natalie – in order to make sure we are all in sync and at the same time in compliance with ASX regulatory requirements we will go with the version that omits any quotes from CBA. We will do a joint PR push when the product has been deployed. We have also removed any reference to the number of merchants in our joint network.505

356    The reference to 55,000 retail merchants had been removed in the draft ASX announcement attached to Mr Hunter’s email, but the figures for 257,400,000 deliveries and $9 billion transaction value had been retained, which, according to Mr Hunter’s own rationale, were based on the 55,000 retail merchants: see above at [245][248] and [290]–[291]. No explanation has been proffered as to why the 257,400,000 deliveries and $9 billion transaction value figures were retained in the CBA announcement after CBA had told GetSwift that the 55,000 figure was incorrect.

357    Mr Budzevski accepted in cross-examination that in the 10:26am email, Mr Hunter was effectively saying that “we are going to release this on the ASX and if anyone has any difficulty you need to tell me”.506 Mr Budzevski also accepted that by 11:15am, knowing that the GetSwift ASX release was to come out on 4 April 2017, he would have read the draft ASX announcement attached to that email.507 Despite this, Mr Budzevski did not respond to Mr Hunter’s email taking issue with the delivery or value figures in the draft ASX release; his explanation being that those figures were GetSwift’s numbers.508 In cross-examination, Mr Budzevski conceded that it was imprudent for him to take that position.509

358    It was put to Ms Kitchen in cross-examination that it was her role to obtain approval from CBA for an announcement to the ASX made by GetSwift if it mentioned CBA, to which Ms Kitchen replied “[n]o, I don’t think I recall whether it was my responsibility to obtain approval for an external ASX announcement that wasn’t CBAs.”510 This is consistent with Ms Kitchen’s affidavit evidence, about which she was not cross-examined, that (having noticed that the 55,000 retail merchant figure had been removed from GetSwift’s ASX announcement following her request, and that the references to 257,400,000 deliveries and $9 billion remained), “[u]ltimately, because the document was not being released by CBA, I did not consider it appropriate for me to fact check another organisation’s ASX announcement and so I did not raise this issue any further.511

359    At 10:42am, Mr Polites replied to Ms Kitchen’s 10am email, stating, “[t]he latest version of the ASX announcement – sent by Bane – has quotes and the figure removed.512 At 1:38pm, Ms Kitchen replied to Mr Polites, stating:

Just passing on some feedback that the business is a little uncomfortable with the naming of other organisations in the release – especially in the context of the pricing mentioned. I have highlighted that this is your announcement and wordsbut just thought I would pass this on and see if there was anything you might be able to do with this paragraph. However, I do fully respect that it is a GetSwift announcement and appreciate that I am possibly stretching our expectations here.”513

360    At 2:23pm, Mr Polites replied to Ms Kitchen, stating: Given the time zones at play, the announcement may already be with the company secretary. But let me ask.” At 2:23pm, Mr Polites forwarded this email to Mr Hunter and Mr Macdonald, stating: “One last request from CBA. Again -- I’ve given you an out if you want it. Natalie’s right, it is a bit of over-reach on their part.514

361    At 5:27pm, Mr Mison replied to Mr Hunter’s previous email at 9:20am, stating “All, please find attached final PDF to be lodged tomorrow (Tuesday 4th April)”.515 Mr Eagle responded to that email with “No comments here”.516

362    On the following day, the final version of the CBA announcement, was submitted by GetSwift, and was released by the ASX at 8:26am on 4 April 2017, entitled “Commonwealth Bank and GetSwift sign exclusive partnership (CBA Announcement).517 It was marked as “price sensitive”, following Mr Hunter’s specific request (copied to Mr Macdonald) that it be marked as such.518 The CBA Announcement included the following statement:GetSwift estimates the deal will result in over 257,400,000 deliveries on its platform over the next five years, with an estimated aggregate transaction value of $9 billion.

363    Mr Mison forwarded an email from Ms Kristina Czajkowskyj (Senior Markets Announcement Officer at the ASX) to Mr Hunter and Mr Macdonald that confirmed the CBA Announcement had been submitted. Further, in the original email, Ms Czajkowskyj stated: “Please be reminded we take into account client wishes regarding sensitivity but we retain the final decision on whether or not any announcement is price sensitive”.519

364    Finally, as to the figures that were included in the final announcement, it is important to set out the relevant affidavit evidence in respect of these figures. Mr Madoc stated that he did not know the source of the 257,400,000 and $9 billion figure and had no recollection of discussing these figures with GetSwift. In any event, he noted that these were not matters that he would have knowledge about in the usual course.520 Similarly, Mr Chambers, Mr Budzevski and Ms Kitchen stated that they did not know the source of the 257,400,000 and $9 billion figure, nor could they recall providing these figures to GetSwift.521 Ms Gordon also did not know how these figures were calculated, and first heard of them when she received the draft media release from Mr Hunter on 21 February 2017.522

Development of the GetSwift App for CBA

365    GetSwift admits that, as at 4 April 2017, an application had not yet been developed, alternatively customised, by GetSwift for deployment on Albert devices.523 Further, Ms Gordon deposed that “[a]t the time the agreement between GetSwift and the CBA was being negotiated, no testing had been undertaken by the CBA to see whether the GetSwift application would work on the Albert device”.524

366    Following the release of the CBA Announcement to the ASX, GetSwift (principally via Ms Gordon) worked with representatives of the CBA to develop an application for deployment on Albert devices. The detail of the development work is set out in emails exchanged between Ms Gordon and representatives of CBA during July to November 2017.525

367    By 11 October 2017, GetSwift had successfully installed and tested the GetSwift applications on the Albert device,526 and on or about 16 October 2017, GetSwift submitted the applications based on the new operating system, known as “Lollipop OS” at CBA.527 On 24 October 2017, CBA informed Ms Gordon that the Lollipop OS was still under review by CBA, with the final version yet to be approved, and once approved, CBA could commence “security/technical checks and business reviews” of the GetSwift applications which could take “up to min. 6 weeks”.528 In late October and early November 2017, CBA commenced a technical review of the GetSwift applications. During that review, CBA identified various technical issues that needed to be addressed.529

368    On 15 November 2017, Ms Gordon sent an email to Mr Hunter, which stated, “the CBA partnership is running smoothly and in line with the bank’s standard processes”.530 Ms Gordon confirmed in cross-examination that was the position in relation to CBA partnership at the time she resigned from GetSwift on 15 November 2017.531

369    In mid-November, CBA confirmed that the payment application had passed the technical review,532 and on 24 November 2017, that the payment application had been approved by the security team and would be uploaded to the appbank the following week.533 A few weeks later, on 22 December 2017, CBA emailed GetSwift and confirmed that a “successful technical and security review of GetSwift Dispatcher App v.1.0.4 has now been completed, and the app is in a hidden state on Pi App Bank. Once Lollipop is live in the market we can deploy the app as required”.534

Conduct of CBA after the CBA Announcement

370    On 6 December 2017, Mr Chambers sent an email to Mr Hunter and Mr Macdonald in the following terms:

… great to see you both and looking forward to continuing our partnership into 2018.

On consistently managing our partnership in the media prior to the security testing on the apps being cleared, we would recommend keeping close to the ASX announcement that you put out in April 2017 (attached).

Paragraphs 2 and 3 are solid phrases that reiterate our partnership and further down there is mention of the Albert platform itself.

Once we are ready to launch in market, the relevant marketing teams will be ready to support the messaging directly to our c90k Albert clients. It is a fantastic solution to a known concern of our business clients around meeting rising customer expectations.535

371    The reference by Mr Chambers to the “c90k Albert clients” was consistent with his evidence from his ASIC examination (as described above) and with the evidence of Mr Budzevski that the number of Albert terminals were steadily increasing from about 2015 onwards.536

372    Mr Budzevski, in response to questions from the Court, considered that it would be vital for figures in a document going to the ASX relating to a partnership with CBA to be correct, and agreed that he became aware that at or around the time of the announcement the figures contained in the release were published to the market, but could not recall what action was taken.537 There is no evidence that any corrective action was ever taken by CBA from the ASX announcement being made on 4 April 2017.

373    On 18 December 2017, GetSwift submitted to the ASX and the ASX released an announcement entitled “CBA and GetSwift Update”,538 which provided the market with an update on the partnership, including that:

    CBA will begin deploying the GetSwift platform as part of the new Albert operating system rollout. Although a deployment under the old CBA Albert operating systems was considered to speed up market deployment by a few months, strategically the bundling of the GetSwift service with the new Albert operating system was the preferred choice and agreed by both organisations.

    Approximately 90,000 merchants will receive the new operating system with the GetSwift platform with go to market live rollouts planned from Feb 2018 onwards.

    The company expects to see revenues from the market utilization to start manifesting in mid-2018.

GetSwift responses to the projections queries in the ASX aware letters

374    On 22 January 2018, GetSwift received an Aware Query from ASX (First Aware Query) in relation to a number of announcements.539 As to CBA, the ASX asked GetSwift to respond to the following questions:

(1)    Does GetSwift consider the information in the CBA Announcement to be information that a reasonable person would expect to have a material effect on the price or value of its securities and the basis for that view?

(2)    Was the contract with CBA subject to any initial development period and/or pilot testing trial period; how long is the period and when did it or will it commence, and why was this information was not disclosed in the CBA Announcement?

(3)    Has CBA agreed to adopt the GetSwift Application?

(4)    Explain the basis GetSwift expects to see revenues from the market utilisation to start manifesting in mid-2018, and that the CBA deal is estimated to result in over 257,400,000 deliveries on its platform over the next five years, with an estimated aggregate transaction value of $9 billion.540

375    On 26 January 2018, Mr Macdonald sent an email to Mr Samer Kiki and Mr Hunter, attaching a draft response to the First Aware Query and advising that the draft had “[n]ot reviewed by lawyers yetPlease assemble crisis team … Let’s go after fairfax.541 The attached document provides the following proposed explanation to the ASX as to how the 257,400,000 and $9 billion figures were calculated:

257m over 5 years = divided by 5

divided by the amount of devices 88,000 devices

= 584 deliveries per year per device

= 48 per month

= 1.6 deliveries per day

Our experience is that is a conservative market estimate.542

376    The draft response prepared by Mr Macdonald is significant in at least three respects. First, there is no suggestion in the draft response to the First Aware Query (or the response to the Second Aware Query below) that the figures were provided by or approved by CBA.

377    Secondly, the explanation is inconsistent with the “rationale” which Mr Hunter had provided to Mr Polites on 24 February 2017 (as described above at [245][248]),543 and which Mr Hunter had provided, via Mr Polites, to CBA on 10 March 2017 (also described above at [290][291]).544 This is because the explanation seeks to reverse engineer the projections by reference to a purported number of Albert devices (88,000 devices), rather than the number of “retail merchants” (55,000 retail merchants).

378    Thirdly, there is no evidence that Mr Hunter or Mr Macdonald had, at any time before making the 4 April 2017 announcement, inquired or ascertained the number of Albert devices in circulation.

379    On 6 February 2018, GetSwift received a further aware query from the ASX (Second Aware Query). The Second Aware Query asked a series of questions including, among others, that GetSwift “explain the basis for the statement in the CBA Announcement that it expected the CBA deal to result in over 257,400,000 deliveries on its platform over the next five years, with an estimate aggregate transaction value of $9 billion, and why that statement was not subject to a qualification that CBA had not yet agreed to adopt the [GetSwift] platform”.545

380    GetSwift’s response to the Second Aware Query is dated 9 February 2018, and included the following statement in relation to CBA:The estimated volumes were based on number of total devices and expected average transaction per device.”546 This response is again inconsistent with the “rationale” which Mr Hunter had shared on 24 February 2017 and 10 March 2017 by referring to the total number of devices rather than the number of retail merchants.

Mr Begbie’s email

381    On 1 February 2018, Mr Begbie sent an email to numerous recipients, including Mr Hunter, Mr Macdonald, and employees of PwC Australia, which stated:

We can confirm CBA is agreeable to the following statement: CBA did not give permission to GetSwift to release to the market the ASX update made on 18 December 2017. Only the initial announcement on made on [sic] 4th April 2017 was approved by CBA. 547

382    It is important to note however that GetSwift did not require Mr Begbie for cross-examination and did not ask him about this email. Mr Begbie stated in his affidavit that he had no involvement in the CBA Agreement and did not see the CBA Announcement before it was released to the ASX.548

G.1.3    Pizza Pan Group Pty Ltd

383    As at early 2017, Pizza Pan Group Pty Ltd (Pizza Pan) was the master franchisee for approximately 300 Pizza Hut franchise stores in Australia.549 In 2017, Pizza Pan Equity Group Pty Ltd (Pizza Pan Equity) owned and operated approximately eight Pizza Hut franchise stores (or restaurants) in Australia (Equity Stores).550 Out of the Box Group Pty Ltd is the parent company of Pizza Pan, Pizza Pan Equity, Pizza Pan FCD Pty Ltd (Pizza Pan FCD) and Out of The Box Technology Pty Ltd (Out of the Box Technology) (together, Out of the Box Group).551 None of the Out the Box Group companies are subsidiaries of Yum! Brands, Inc (which is another Enterprise Client, dealt with below).552 The companies in the Out of the Box Group did not own or operate any Pizza Hut franchise stores or delivery units outside of Australia.553

384    Pizza Hut franchisees all operate the same “point of sale” system (Point of Sale System). Only companies licensed through Oracle are permitted to modify the Point of Sale System. As at early 2017, the Out of the Box Group used an Oracle-licensed company called “CodeVision” to modify its Point of Sale System in Australia.554

385    Mr Patrick Branley, the Head of Technology Enablement at Pizza Pan, commenced his role on 10 April 2017,555 and during 2017, reported to Mr Ollie Coupe, Director of Technology at Pizza Pan.

GPS Delivery Tracking Project and the Pizza Hut Test Store Site

386    Between about 10 April 2017 and about May 2018, Mr Branley was responsible for overseeing the delivery of all technology projects across the Out of the Box Group pursuant to the Program of Works (a term which appears to mean a work stream or something of the like). This included managing the delivery of each of the projects within the Program of Works and managing the individual project managers who had day-to-day responsibilities for the delivery of each of their respective projects. One of the IT projects within the Program of Works was a GPS Delivery Tracking project. As part of the GPS Delivery Tracking project, Pizza Pan sought to identify a supplier of delivery tracking and management software solutions.556

387    Since late 2016, Pizza Pan had used the Equity Store located in Bonnyrigg, New South Wales, as a test store to trial proposed new IT systems, software solutions and processes as part of the Program of Works (Pizza Hut Test Store). Pursuant to the Program of Works, if the trial of any proposed new IT system, software solution or process was successful, it may then be rolled out to the other Equity Stores, and then offered to Pizza Hut franchisees across Australia, as an option to take up or use in their stores.557

388    In or around mid-March to early April 2017, Mr Branley was told by Mr Coupe that Pizza Pan had sought a supplier of delivery tracking and management software solutions, initially to support its Equity Stores and then to offer the solution to its franchisees.558

Pizza Pan’s entry into an agreement with GetSwift

389    In November 2016, GetSwift and Pizza Pan were negotiating an agreement whereby GetSwift would provide Pizza Pan with a software platform with logistics management, tracking, dispatch, route and reporting of delivery operations, including provision of SMS alerts, related reports and system data dumps.559

390    In about December 2016, Pizza Pan conducted a “proof of concept” trial involving GetSwift, Delivery Command, and Drive Yellow, each of which offered GPS delivery tracking software solutions at Pizza Pan’s Test Store (December 2016 Proof of Concept Trial).560 To facilitate the December 2016 Proof of Concept Trial, Pizza Pan engaged CodeVision to prepare a basic integration of the GetSwift software into the Point of Sale System operated by the Pizza Hut Test Store.561

391    The minutes of the board of directors of GetSwift on 9 December 2016, attended by Mr Hunter, Mr Macdonald, Ms Gordon and Mr Eagle, state that:

1.1 Two announcements are expected in addition to what we have now:

- Phillip Morris

- Pizza Hut […]562

392    The minutes do not record any further discussion of Pizza Hut.

393    On 6 February 2017, Pizza Pan invited proposals for the supply of the GPS tracking and management to Pizza Pan and its franchisees (Request for Proposal).563 The Request for Proposal was headed “PIZZA HUT Request for Proposal” and stated “Pizza Hut Australia is seeking a supplier of delivery tracking and management services to support the business through system roll out for a minimum period of one year.564 This is consistent with the fact that Pizza Pan employees, from time to time, referred to Pizza Pan as Pizza Hut.565 As at 2017, the Pizza Hut Australia webpage, for which Mr Branley was responsible, displayed the Pizza Hut logo.566

394    On 14 February 2017, Mr Macdonald sent an email to Mr Taylor of Pizza Pan and others submitting GetSwift’s response to Pizza Pan’s Request for Proposal.567 Mr Macdonald signed GetSwift’s response on behalf of GetSwift.568 One of the documents attached to Mr Macdonald’s email, entitled “GetSwift Pizza Hut Australia On-Boarding”, referred to Pizza Hut and bore the Pizza Hut logo.569

395    Pizza Pan had received another two tender responses from other suppliers of delivery tracking and management570 and, after identified three companies to progress to a trial, being GetSwift, Delivery Command and Drive Yellow.571

396    In around March 2017, Mr Coupe asked Mr Branley to participate in a Google hang-out teleconference with Mr Hunter and Mr Macdonald. In the teleconference, Mr Hunter and Mr Macdonald gave an overview of the GetSwift delivery tracking software system and explained what the product was about.572

397    On 24 March 2017, Mr Branley sent an email to Mr Macdonald requesting information about GetSwift’s technical documentation on their product and “anything related to the [Proof of Concept]”.573 On the same date, Mr Macdonald sent an email to Mr Branley (copied to Mr Tim Howard of Allegro Funds), containing a link to GetSwift’s technical documentation.574 In this email, Mr Macdonald stated:

Regarding POC info, could you please quantify what exactly you would like to see as we have sent out a bunch of info already so want to make sure we don’t data dump you.575

398    On 28 March 2017, Mr Macdonald sent an email to Mr Coupe attaching a document entitled “Term Sheet” that Mr Macdonald noted had previously been sent to Mr Howard.576 At this time, the proposed agreement between GetSwift and Pizza Pan contemplated that GetSwift would provide services to Pizza Pan “within Australia”.577

399    On 31 March 2017, Mr Macdonald sent an email to Mr Coupe (copied to Mr Howard and Mr Branley), attaching the proposed high level implementation plan for the engagement between GetSwift and Pizza Pan.578 Mr Macdonald noted that the timelines proposed in the implementation plan were reliant on an agreement being executed in the following week.579

400    At some point in March or early April 2017, Mr Branley recommended to Mr Coupe that Pizza Pan should proceed to trial with GetSwift, and Mr Coupe accepted his recommendation.580 Mr Branley’s view was that in order for Pizza Pan to be able to test the functionality of GetSwift system software with the Pizza Pan software, what was first required was the technical integration of GetSwift’s systems into Pizza Pan’s Point of Sale. Further, Mr Branley and Mr Coupe shared the view that fair testing was contingent on the two systems being integrated.581 Therefore, Mr Coupe agreed that Pizza Pan would pay the costs associated with integration.582

401    While there are references in this context to progressing to “trial”, it is clear that this was not a trial in the usual sense. As noted above, GetSwift had already participated in and been subject to the December 2016 Proof of Concept Trial. This was a trial as the first stage of a broader roll-out. In this regard, Mr Branley agreed to the following in cross-examination:

[S]hortly after you first heard of this project you were involved in making certain recommendations as to who of the people who had responded to the RFP should be selected to support Pizza Hut Australia through a system rollout for a minimum period of one year; is that right? --- Yes.

And at that point you made a recommendation to Mr Coupe in a conversation with him that Pizza Pan should progress to a trial with GetSwift. Do you see that? --- Yes, I do.

And the trial was to be, wasn’t it, to support the business through system rollout for a minimum period of one year, do you agree? --- Would I agree with that, yes.

And so when you say that you recommended they progress to a trial, it was quite a different kind of trial, wasn’t it, than the proof of concept trial which had already been gone through? --- Yes. Yes, it would be different.

And so the anticipation was that once someone had been selected then there would be an execution of an agreement and that agreement would be for a minimum period of one year, do you agree? --- Yes.583

402    On 2 April 2017, Mr Coupe sent an email to Mr Branley, Mr Macdonald, Mr Adam Pretorius of Pizza Pan, and Mr Nathan Tillett of Pizza Pan in relation to the GPS Delivery Tracking Project.584 Mr Coupe requested Mr Tillett contact Mr Macdonald directly to discuss the Key Performance Indicators (KPIs), the location of the equity stores, and other details relating to the pilot.585

403    On 4 April 2017, Mr Macdonald sent an email to Mr Coupe following up the execution of an agreement, and resent Mr Coupe the term sheet that he sent on 28 March 2017.586 In an exchange of emails on the same day, Mr Coupe requested GetSwift’s customary terms and conditions, which Mr Macdonald then provided to him.587

404    On 18 April 2017, Mr Coupe sent an email to Mr Macdonald, copied to Mr Branley, Ms Wong and Ms Sue Fairbairn (both employees of Pizza Pan), attaching a marked up version of the draft term sheet.588 On the same date, Mr Macdonald sent an email to Mr Eagle and Mr Hunter forwarding Mr Coupe’s email attaching the marked up version of the draft term sheet.589 In this email, Mr Macdonald stated:

Gents,

Great news. After much perseverance, we have been able to pull this one off and PizzaHut want to sign on as a client!!!

Passing the term sheet pdf on. Here are their comments in black (mine in red) they have raised [in relation to the term sheet].590

405    In that email, Mr Macdonald also instructed Mr Eagle to consider certain comments and contractual issues as specifically identified by Mr Macdonald.591 There was then a subsequent exchange of correspondence between Mr Eagle and Mr Macdonald (copied to Mr Hunter), which has been redacted and is subject to a claim for legal professional privilege.592

406    On 19 April 2017, Mr Eagle made amendments to the draft term sheet in mark up.593 Mr Macdonald subsequently sent an email to Mr Coupe (copied to Mr Branley, Ms Wong, Ms Fairbairn, Mr Hunter and Mr Eagle), attaching a further draft of the term sheet with GetSwift’s changes appearing in mark up.594 Mr Macdonald provided the comments of the GetSwift “team” in the body of the email.595

407    On 20 April 2017, Mr Macdonald sent an email to Mr Coupe (copied to Mr Eagle, Mr Hunter, Mr Branley, Ms Wong and Ms Fairbairn), attaching an executed copy of the “Term Sheet”.596 The term sheet was signed by Mr Macdonald on behalf of GetSwift.

408    On 21 April 2017, Mr Coupe sent an email to Mr Macdonald (copied to Mr Hunter and Mr Eagle), attaching an executed counterpart of the “signature page” of the term sheet (Pizza Pan Agreement).597 The Pizza Pan Agreement was signed by Lisa Ranson, “CEO/Director” of the Pizza Pan Group.

409    As to the services to be provided, the Pizza Pan Agreement provided in item 3:

Client exclusively engages GetSwift to provide the following services (the “Services”) and GetSwift accepts such engagement:

    Use of GetSwift’s proprietary software platform to provide Client with logistics management, tracking, dispatch, route and reporting of delivery operations, including provision of SMS alerts, related reports and system data dumps; and

    Consultancy advice and product development in relation to the Services in a reasonable number of meetings and working sessions mutually agreed upon

GetSwift will use commercially reasonable efforts to provide the Services within Australia. Upon reasonable request, Client must provide GetSwift with such information, documentation, materials, content, and access to personnel GetSwift deems necessary for GetSwift’s provision of the Services.598

410    As to the term, the Pizza Pan Agreement provided in item 4:

12 months + option to renew at same terms 12 months + 12 months (comprised of a limited roll out plus the initial term), as follows:

    Joint Product & Production roadmap implementation: To start on or about May 2nd 2017

    Proposed Limited Initial Roll Out - One city - Phase 1: 15-25 stores; Phase 2: Single State with Multiple stores Phase 3: Multi State & Multi Stores; Phase 4: Commencement of full national rollout.

    Initial Term – 12 months pricing guarantee (following the limited roll out and no charge for platform use during initial 3 month time period). Platform use fee rates to start no later than August 1st 2017 and valid until August 1st 2019. Platform use from August 2017 will be charged at the below rates.

    Client has option to renew for an additional 12 months plus another +12 months after initial and each 12 month term expires. Original price as per tier below plus AUDS0.02 per delivery to be applied. If client does more than 300,000 deliveries per month, then no fee increase will apply for the contract extension.599

411    Otherwise, the Pizza Pan Agreement incorporated the standard terms in Schedule 1, which as to the term provided (in cl 1):

Trial Period and Initial Term. From the date of signing of the Term Sheet to which this Schedule 1 is attached (“Agreement”), GetSwift will provide the Client with a Trial Period set out in Item 4 of the term sheet. Upon expiration of the Trial Period, this Agreement will automatically renew for the Initial Term set out Item 4 of the term sheet.

Renewal Terms. Upon expiration of the Initial Term, this Agreement will automatically renew for successive twelve (12) month periods (each, a “Renewal Term”) unless either notifies the other party in writing of its intent not to renew this Agreement at least ninety (90) days prior to the expiration of the Initial Term or then-current Renewal Term, as applicable. Any such Renewal Term will be on the terms and conditions of this Agreement unless otherwise agreed in writing.600

412    Mr Branley understood during the first three months there would be no charge during the initial limited rollout, but that the agreement would continue in any event for 12 month, and so far as he understood it, Pizza Pan did not have any option whether to proceed for the full 12-month period.601

The Pizza Hut Announcement

413    On 21 April 2017, Mr Hunter sent an email to Ms Hughan and Mr Polites (copied to Mr Macdonald), in which he stated:

We just landed an exclusive contract for Pizza Hut and Eagle Boys in Australia. We will release this info to the market at the end of the month along with the 4C. Another clear example of what is the emerging dominance of GetSwift in the market.602

414    On 22 April 2017, Mr Macdonald sent an email to Mr Coupe, copied to Mr Branley, Ms Wong, Ms Fairbairn, Mr Hunter, Mr Eagle and Ms Gordon, in which he stated:

We are very pleased to be officially working with PPG on this initiative Please note that as part of our regular compliance requirements we will have to notify the ASX that we have signed our agreement and are proceeding jointly towards implementation. At a later date if you wish to leverage any PR (like QSRH & Red Rooster have done so effectively with us), we are more than happy to facilitate that and make it part of our market messaging dialogue.603

415    On the same date, Mr Coupe responded, copied to Mr Hunter, Mr Eagle and Mr Branley and others, in the following terms:

I think we’ll keep the PR for when we’re through the trial and getting set up with the customer facing side of the application. We’ll probably start adding messaging into our standard marketing and at that time we can be confident of the value to the business – will be more than happy to get a joint press release going at that time.604

416    On the same date, Mr Hunter sent an email to Mr Macdonald attaching a draft announcement concerning GetSwift’s entry into the Pizza Pan Agreement.605 In his covering email, Mr Hunter wrote “take a look and let me know”.606

417    On 23 April 2017, Mr Hunter sent an email to Mr Macdonald attaching a draft of the Appendix 4C, which stated, among other things:

Additional global client onboarding taking place concurrently to utilise GetSwift’s SaaS solution to optimise delivery logistics – United States, Canada, Spain, the UK are markets where the company is poised to increase operational deliveries now that integrations and client testing is being finalized. A fraction of first strategic seeds are Pizza Hut, CrossTown Doughnuts, Mobi2Go, and LoneStar to just [sic] name a few.607

418    On the same date, Mr Macdonald sent an email to Mr Hunter, Mr Eagle and Ms Gordon attaching a draft of the Pizza Hut Announcement, in which he stated, “for your review”.608

419    On 24 April 2017, responding to Mr Macdonald’s email, Mr Eagle sent an email to Mr Hunter, Mr Macdonald, and Ms Gordon, stating: Only comment my side – we should take out ‘multiyear’”, and amend a typographical error in paragraph 4 of the proposed announcement.609

420    Later that day, Mr Polites sent an email to Mr Hunter (copied to Ms Hughan and Mr Macdonald), regarding the announcement concerning GetSwift’s entry into the Pizza Pan Agreement.610 In this email, Mr Polites stated:

Quick one regarding your ASX announcement later this week on Pizza Hut and Eagle Boys. Are you doing this as a separate announcement? Or as part of your 4C? If it’s a separate announcement, can we see a draft beforehand?611

421    Mr Hunter replied suggesting that GetSwift will release the Pizza Hut Announcement separately from the Appendix 4C later that week, but that the Appendix 4C will also refer to the Pizza Hut Announcement.612

422    On 25 April 2017, Ms Hughan replied to Mr Hunter’s email and stated:

Given the traction you have had with the other ASX announcements on your deals and the resulting bump you have seen in share price, it is likely that your news may be picked up by the investor press.613

423    Also on 25 April 2017, Mr Hunter sent an email to Mr Eagle, Mr Macdonald and Ms Gordon in which he stated that he wanted the Appendix 4C, the Pizza Hut Announcement and the ESOP grants announced that week, with the Pizza Hut Announcement to go out at the same time as the Appendix 4C. Mr Hunter stated in his email that the company will have more announcements, “probably one every week or 10 days for the next 60 days”.614

424    Later that day, Mr Hunter responded to Ms Hughan’s email of 25 April 2017, stating “just being sensitive to the client who doesn’t want to do a PR push now, but a more coordinated one later”.615 Ms Hughan responded that she would “keep an eye out for share price news across the day but won’t proactively pitch anything”.616

425    On 27 April 2017, Mr Macdonald sent an email to Mr Hunter in which he requested that he merge Mr Eagle’s comments that he agreed with into the “live 4C doc”.617 Mr Eagle’s comments on the proposed Appendix 4C are redacted and subject to a claim for legal professional privilege by GetSwift.

426    On the morning of 28 April 2017, Mr Hunter sent an email to Mr Macdonald and Mr Eagle attaching the draft announcement concerning GetSwift’s entry into the Pizza Pan Agreement.618 In this email, Mr Hunter stated, “Together with 4c . Lets [sic] make sure that Scott puts in in [sic] at the same time and in the right template”.619 At 12:44pm, Mr Hunter sent an email to Mr Eagle and Mr Macdonald attaching three documents described as “ASX-GSW- PizzaHut.docx”, “GSW_4C_QuarterlyReview_Draft_20 April 2017 (1).docx”, “ASX- GSW –ESOP.docx”. In the email, Mr Hunter asked Mr Eagle and Mr Macdonald, “You ok to release this now?620 At 12:57pm, Mr Hunter sent a further email, this one with the subject line “[f]or release”, to Mr Eagle and Mr Macdonald attached the draft announcement concerning GetSwift’s entry into the Pizza Pan Agreement, the draft Appendix 4C and the draft ESOP Announcement.621 At 1:06 pm, Mr Macdonald sent an email to Mr Mison (copied to Mr Eagle, Mr Hunter and Ms Gordon), in which he requested that Mr Mison release the attached documents to the ASX “asap” and further requested that Mr Mison keep the Pizza Hut announcement separate from the Appendix 4C and the ESOP announcement.622 His email did not instruct Mr Mison to ask the ASX to mark the Pizza Hut Announcement as price sensitive.

427    At 1:21pm, GetSwift submitted, and at 1:26pm the ASX released, GetSwift’s Appendix 4C and Quarterly Review, in which it stated that:

Transformative and game changing partnerships are expected and will be announced only when they are secure, quantifiable and measurable

...

The company will not report on MOUs only on executed contracts.

Even though this may represent a challenge for some clients that may wish in some cases not publicize [sic] the awarded contract, fundamentally the company will stand behind this policy of quantifiable non hype driven announcements even if it results in negative short term perceptions.623

428    The form of announcement attached to Mr Macdonald’s email did not make the correction requested by Mr Eagle (removal of “multiyear”).624 That fact was, presumably, not picked up by Mr Hunter, Mr Eagle or Ms Gordon, all of whom were copied to Mr Macdonald’s email directing release of the announcement.

429    At 1:25pm, GetSwift submitted, and at 1:28pm the ASX released, the announcement concerning GetSwift’s entry into the Pizza Pan Agreement, entitled “Pizza Hut and GetSwift sign exclusive partnership” (Pizza Hut Announcement).625 The Pizza Hut Announcement was marked “price sensitive” upon release to the market by the ASX.626 Pausing briefly here, I should say that I have defined this announcement a little differently to the other announcements in this narrative. The announcement in respect of Pizza Pan is defined as the Pizza Hut Announcement. It is not the Pizza Pan Announcement, which was sometimes referred to (somewhat inconsistently) by GetSwift, Mr Macdonald and Mr Eagle in their closing submissions, despite these defendants having adopted the term Pizza Hut Announcement too. The reason why I refer to this particular announcement as the Pizza Hut Announcement will become evident below (at Part H).

430    At 1:51pm, Mr Mison sent an email to Mr Eagle, Mr Hunter, Mr Macdonald and Ms Gordon confirming that the Pizza Hut Announcement had been released to the ASX at 1:28pm.627

431    The Pizza Hut Announcement stated:

GetSwift Limited (ASX: GSW) (‘GetSwift’ or the ‘Company’), the SaaS solution company that optimises delivery logistics world-wide, is pleased to announce that it has signed an exclusive multiyear partnership with Pizza Hut. Pizza Hut is the largest pizza chain in the world with more than 12,000 Pizza Hut Restaurants and Delivery Units operating worldwide.

Pizza Hut is an American restaurant chain and international franchise. The company has over 15,000 locations worldwide as of 2015, and is a subsidiary of Yum! Brands, Inc., one of the worlds largest restaurant companies.

Yum! Brands, Inc., or Yum! and formerly Tricon Global Restaurants, Inc., is a Fortune 500 corporation, Yum operates the brands Taco Bell, KFC, Pizza Hut, and WingStreet worldwide.

It is one of the worlds largest fast food restaurant companies in terms of system units— with 42,692 restaurants (including 8,927 that are company-owned, 796 that are unconsolidated affiliates, 30,930 that are franchised, and 2,039 that are licensed) around the world in over 130 countries

Home delivery is a fast growing segment of the pizza market worldwide, and Pizza Hut delivery has been at the forefront of this segment since 1985. In order to compete aggressively in this market Pizza Hut has partnered with GetSwift to offer its retail stores in Australia the ability to compete with their global counterparts when it comes to deliveries and logistics. Approximately 270 Pizza Hutt and another 50 Eagle Boys stores are located in Australia.

The exclusive partnership will allow Pizza Hut the ability to use the best in class logistics platform in order to continue improving the customer experience, reduce operational inefficiencies and expand market share.

“We are extremely pleased to be partnering with one of what is indisputably a global icon. With a clear vision, plan and ability to execute there is no doubt of the impact that will be created” Executive Chairman of GetSwift, Bane Hunter said.628

432    It is important to foreshadow that the bolded emphasised parts above form part of a dispute between the parties as to what was generally available to the market. I will return to this issue below: see [1382]–[1391].

Pizza Pan is not part of Pizza Hut International

433    On 28 April 2017, Mr Nobel Kuppusamy of Pizza Hut International sent an email to “info@getswift” and “james@getswift.co” in which Mr Kuppusamy stated:

I am with Pizza Hut International that is part of Yum! Brands Inc. I would like to understand your capabilities, and see how you can help us address our specific use cases. Can someone from your sales team reach out to me please? Thanks Nobel.629

434    On 29 April 2017, Ms Cox replied to Mr Kuppusamy’s email stating:

How can we help you? Which specific use case would you like to address? What capabilities do you want and need? Where are you based pls? Could you please advise us of your phone number? Whats you role at Pizza Hut International pls?

435    Ms Cox forwarded Mr Kuppusamy’s email to (it appears) Mr Macdonald, and stated, “OK, why is this guy from ‘Pizza Hut International’ wanting to know about GetSwift when you’ve signed a deal with them? Is this normal? or Weird?”630 On the same date, Mr Macdonald responded to Ms Cox, copied to Mr Hunter, stating:

We signed with Pizza Hut in Australia. This guy is from yum brands the global company which owns the Pizza Hut brand, Taco Bell and KFC. When he replies please then make the intro to Bane and myself and we will take it from there.631

436    On 4 May 2017, Mr Macdonald sent an email to Mr Eagle (copied to Mr Hunter), forwarding a chain of emails passing between Mr Macdonald and representatives of Pizza Hut International (as opposed to Pizza Pan), in which, among other things, Mr Kuppusamy stated “I am with Pizza Hut International that is part of Yum! Brands Inc.”632

Pilot postponed

437    As alluded to above, as part of the “Joint Product & Production roadmap implementation”, GetSwift’s software had to be integrated into Pizza Pan’s Point of Sale System. This had not occurred at the time of the Pizza Hut Announcement because Pizza Pan had not yet engaged CodeVision to carry out that work.633

438    Between 24 and 28 July 2017, Mr Hunter, Mr Coupe, Ms Wong and Ms Gordon exchanged a number of emails regarding the proposed trial of the GetSwift Platform.634 This included negotiations in relation to the scope of the proposed trial and costs associated with providing the drivers with mobile devices and the impact of ongoing projects being undertaken by Pizza Pan.

439    On 31 July 2017, Mr Coupe (on Mr Branley’s recommendation) sent an email to Mr Hunter in which he stated that he had made the call to pause all programmes other than the website upgrade until further notice.635 He stated that it is likely that the GPS tracking pilot roll-out will re-start in August or early September.636 Mr Branley recommended Mr Coupe place the GetSwift GPS pilot roll-out on hold pending completion of Pizza Pan’s website project for Pizza Hut Australia.637 Mr Hunter responded to Mr Coupe’s email on 1 August 2017, copied to Ms Wong, Ms Gordon, Mr Clothier, Mr Branley, Mr Nick Stevens and Ms Cox, stating, “if I may suggest we revisit this as you indicated in two weeks to see if we should make the initial batch of phones ready for you”.638 Mr Coupe responded in the email chain and agreed to keep the communication lines open between Mr Hunter and himself.639 An internal GetSwift status email sent to Mr Hunter and Mr Macdonald reveals that as at 4 August 2017, the relevant work was done in relation to the project from GetSwift’s end, but there were client delays.640

440    On 18 August 2017, Mr Hunter sent an email to Mr Coupe, Ms Wong, Mr Macdonald and other personnel from GetSwift in which he stated that there had been a recent executive decision made between Mr Coupe and Mr Hunter concerning the pilot.641 Mr Hunter stated that GetSwift would provide free of charge phones and data plans sufficient for five stores and three months of data usage, and if the pilot proceeds beyond the initial five stores and into operational rollouts, Pizza Hut will be able to retain the phones free of charge and will take over any data plans if they chose to do so. Mr Hunter said “[i]f by some outside chance there is no further operational roll-out beyond the 5 stores these devices will be returned to GetSwift after 3 months”.642

Recommencement of the trial and decision not to continue

441    In about September 2017, the website project concluded and the GetSwift project was reinstated. At about this time, system integration between GetSwift and Pizza Pan’s Point of Sale System was completed to a point where Mr Branley was satisfied that three Equity Stores located at Cambridge Gardens, Glenwood and St Marys could commence phase one of the initial roll-out pilot. It was around this time that a representative of GetSwift supplied around 30 mobile phones for the drivers to use during the trial.643

442    Between October and November 2017, to test the system integration, the initial roll-out pilot occurred in the three Equity Stores in Cambridge Gardens, Glenwood and St Marys.644

443    In December 2017, Mr Branley and Ms Wong prepared a report which covered the progress of GetSwift integration and identified what needed to be done for a full roll-out.645 It recognised that the “primary effort” for the next stage (dispatch automation) rested with Pizza Pan “Tech”, and not GetSwift. On page three, under the heading “GPS 12 Week Trial Summary (Sept – Nov 2017) it stated:

-    30 mobile devices supplied to support the GPS trial at Cambridge Gardens, Glenwood Park and St Marys

-    Identified issues relating to handling multiple deliveries which has been resolved, but yet to be tested.

-    Deliveries captured approx.. 70% with the trial stores, issues with the rest

-    Enabling the process was more challenging than expected. Initial onboarding process and workflow was positive however required a [sic] 6- 7 weeks to stabilise usage

GETSWIFT PLATFORM

-    Drivers not able to log in

-    Jobs noT closing consistently via geofencing

-    Unable to reliably handle multiple deliveries

-    Delivery time in reporting have unusual calculations

-    Network connectivity causing deliveries to be tracked halfway or not completing

444    The report also showed that the project had eight stages and that the project was currently in stage one (being the trial stage), listed remaining tasks to be undertaken for stage one, and showed that it was estimated that stage one and two would take a further six months to complete. The report also posed a number of questions including “do we continue the trial at three stores until we achieve stage 2 (automated dispatch)?”646

445    Mr Branley provided the report to Pizza Pan’s new CEO in early 2018 for a decision to be made about the next steps.647 The findings of the report were also shared with Mr Timi Cheng, Pizza Pan’s acting Chief Operating Officer.648

446    In about early February 2018, Mr Branley told Ms Wong to inform Mr Hunter and Mr Macdonald that Pizza Pan had decided not to continue with the GetSwift product at that time.649 In February 2018, the mobile phones that had been supplied by GetSwift to test the integration were returned to GetSwift.650 Mr Branley never received an invoice from GetSwift for payment in relation to services provided.651

447    As to how things progressed after this point in time, this is not sufficiently addressed in the evidence. Mr Branley recalled, however, the Pizza Pan Agreement required any notice of non-renewal to be given in writing, and that no such notice was annexed to his affidavit.652

G.1.4    All Purpose Transport

448    All Purpose Enterprises Pty Ltd trading as All Purpose Transport Group (APT) operates a transport business, based in Berrinba, Queensland. During the relevant period, APT principally arranged deliveries between businesses but also delivered goods to consumers on behalf of businesses such as IKEA and King Furniture.653

449    APT’s Finance Manager, Mr Alexander White, first heard about GetSwift and its software as a service platform through one of APT’s customers, Lion Dairy and Drinks (a division of Lion Pty Limited) (Lion). APT had been providing milk delivery services to Lion for a number of years.654

Preparation of the APT Agreement

450    On 21 March 2017, Mr Macdonald provided an online introductory presentation about GetSwift for APT’s management team including Mr White.655 After the presentation, APT’s management team held a meeting, at which they decided that APT should progress to a trial agreement with GetSwift.656 Mr White was given responsibility for negotiating with GetSwift in relation to any agreement with GetSwift.657 The agreement was negotiated by emails and (occasional telephone calls) between Mr Macdonald and Mr White between 23 March 2017 and 2 May 2017.658

451    On or around 23 March 2017, Mr White reviewed a document entitled “Term Sheet”, which was to constitute the agreement between GetSwift and APT. The proposed term sheet specified a term of 37 months, comprising a “free trial period” of 1 month, followed by an “initial term” of 36 months. In relation to fees for use of the GetSwift Platform, the term sheet specified set rates per delivery, which varied depending on the volume of deliveries submitted in a month.659

452    Mr Macdonald arranged to provide a demonstration of the GetSwift Platform to Mr White in April 2017. This meeting was re-scheduled several times to various dates in April.660

453    On 26 April 2017, Mr White sent an email to Mr Macdonald raising a number of queries in relation to the proposed term sheet. In this email, Mr White stated:

I tried to call but just got your messagebank, I would like to speak to you and run through the following questions.

    If we go ahead with the trial and it is successful and we roll into the initial term are there any minimum charges / minimum deliveries per month that apply?

o    I ask as we will be using Getswift for specific customers and if a customer were to leave it may result in a significant drop in the monthly deliveries

    As discussed can you clarify how route optimisation is charged?

o    Per optimisation run or on actual allocation of the selected route optimisation run

    Can you clarify the pricing per delivery.

o    The current Term Sheet seems to indicate that the charge would be $0.38 per delivery until we get over 20,000 deliveries per month. If this is correct it would be an issue. Can you please review.

    As a transport company our model will require ability for multiple configurations for different customers as each customer will have slightly different data files, freight profiles etc.. While in the initial set up I am OK to work with the Getswift on each customer set up ideally an interface that enabled us to set up new customer configurations and that had more ability to configure around drivers etc.. would be necessary. Is this likely to be part of your product development.661

454    On 27 April 2017, Mr Macdonald and Mr White exchanged emails in relation to the queries raised by Mr White in his email dated 26 April 2017.662

Entry into the APT Agreement

455    On 2 May 2017, Mr White, on behalf of APT, signed a one-page agreement entitled “Term Sheet” with GetSwift, and the parties thereby entered into an agreement by which APT agreed, among other things, to use GetSwift’s services for an initial period expiring on 1 June 2017 (referred to as a “Free Trial Period”) (APT Agreement).663 Following the “Free Trial Period”, an “Initial Term” of 36 months would commence unless APT gave notice, at least seven days prior to the expiration of the free trial period, that it did not wish to continue with the agreement.664 Accordingly, 23 May 2017 was the date by which APT was required to give written notice of any decision not to continue with the agreement, otherwise the initial term would commence on 1 June 2017. Mr White understood this when he signed the APT Term Sheet.665 Mr White sent an email to Mr Macdonald attaching the signed APT Agreement.666 In this email, Mr White stated:

We look forward to using Get Swift to provide add on capability to our core Transport Management system. We would like to make the most of the 1 month trial phase so if you could send through detail of all of the information you require to get the implementation started ASAP it would be appreciated.667

456    On 3 May 2017, Mr Macdonald sent an email to Mr White attaching the countersigned APT Agreement.668

The APT Announcement

457    At 8:43am on 8 May 2017, Mr Macdonald sent an email to Mr Mison (copied to Mr Hunter, Mr Eagle and Ms Gordon) in which he stated: “Please release this announcement to ASX right now and let me know once done”.669 The first draft of the APT Announcement appears to have been prepared by Mr Hunter on 29 April 2017.670 Mr Macdonald did not instruct Mr Mison to mark the APT Announcement as price sensitive.

458    At 11:04am on 8 May 2017 – before the expiry of the free trial periodGetSwift submitted an announcement concerning the APT Agreement to the ASX entitled “All Purpose Transport sign commercial agreement” (APT Announcement).671 At 11:08am, the ASX released the APT Announcement as “price sensitive”.672 The APT Announcement stated that GetSwift had signed an “exclusive commercial multi-year agreement with [APT]”. Mr White did not have any communication with GetSwift in relation to the APT Announcement before its release and had not seen a copy until one was produced to him by an officer of ASIC.673

459    At 11:09am, Mr Mison sent an email to Mr Hunter, Mr Macdonald, Mr Eagle, and Ms Gordon, forwarding an email from the ASX attaching the APT Announcement. In this email, Mr Mison stated: “ASX release confirmation”.674

460    Later on 8 May 2017, Mr Macdonald sent an email to Mr Wakeham, APT’s IT Manager (copied to Mr White), in which he stated, “Hi Tim! Introducing you to Jamila Gordon our group CIO and Stephanie Noot your account contact who will be able to assist in getting you all set up.”675

461    On the same day, Mr Macdonald sent an email to Ms Gordon and Ms Noot, in which he stated:

Just an FYI:

These guys will want to use routing.

This will take some time to set up routing for them on their account. So we need to warn them to get the basics going first without routing and then he needs to tell us what routing rules they use so we can configure his account.

This will buy us time to implement routing.676

Variation of the APT agreement with GetSwift and issues with the csv. file

462    During early May 2017, APT experienced difficulties with the GetSwift Platform. Although APT had access to the GetSwift “Portal” and were able to enter basic information, they were not able to enter or route jobs (delivery orders) satisfactorily on the GetSwift Platform.677 Due to the ongoing problems with the GetSwift Platform, Mr White informed Mr Macdonald via a series of emails that APT required the trial period under the APT Agreement to be extended until such time as APT could enter and route jobs.678

463    At 10:20am on 18 May 2017, Mr White sent an email to Mr Macdonald, in which he stated:

This email is to notify GetSwift that due to a lack of any progress in setting up our account we require our trial period to be extended until such time that we are able to import and route jobs. If an extension is not agreed to we will need to cancel our agreement with GetSwift.679

464    Mr White went on to explain that “[c]urrently we have not been able to use GetSwift as we have been unable to import any live jobs due to limitations with the standard importer”. Mr White then set out three “key issues we need to resolve”. The three matters comprised the following: first, the “ability to import all necessary data for each job”, including cubic volume, weight and other data; secondly, the “ability to set up specifications of a vehicle”, including carrying capacity and special characteristics; and thirdly, the “ability to be able to create routes” based on the job and vehicle specifications.680

465    At 3:36pm, Mr Macdonald replied to Mr White in the following terms:

happy to extend the trial. By way of setting expectations, the three points below you have mentioned are not flick of switch type features and will take some time to get going/ configured on your account. The csv is a customization development we would need to do on our end as we have standard column headers that we accept as part of a successful csv template upload. The driver capacity in the way you want it is also a configuration that requires development of code into your account, as is the routing rules you require specifically as laid below.

What I would suggest is way agree to a phase 1, 2, 3 milestone approach and to start with: the low hanging fruit would be to get the .csv file going for you so you can commence trial with GetSwift (whilst continuing to use your own routing software until we look to commence configuring your account with the right routing options)

Would this be a reasonable approach for you?681

466    At 4:11pm, Mr White sent an email to Mr Macdonald in response to his email of 3:36pm, stating:

I am OK with the three stage approach though I would like to get a realistic time frame for each step. If we are talking a couple of weeks at most for each step that might be workable, however, if it is likely to be substantially longer I would need to understand the timeframe before committing to go further.

So long as the time frames are workable starting with the csv file would be good.

If you can get back to me regarding with realistic timeframes for implementation it would be appreciated.682

467    Between 4:11pm on 18 May and 30 May 2017, Mr White and Mr Macdonald exchanged further emails in relation to the specific requirements for the csv file, including requirements relating to routing.683

468    On 25 May 2017, Mr Macdonald advised Mr White that he had asked Ms Gordon and Ms Noot to organise a call with Mr White to “take care of anything further to get you up and running”.684

469    On the morning of 31 May 2017, Ms Gordon, Ms Noot, Mr White and Mr Wakeham had a conference call during which Ms Gordon asked Mr Wakeham to send her a sample .csv file’.685 Ms Gordon understood that her role regarding APT included assisting APT in resolving the technical problems it was experiencing with uploading and importing jobs into the GetSwift platform.686 At 11:40am, Mr Wakeham sent to Ms Gordon the .csv file that he had attempted to import into the GetSwift platform.687 Ms Gordon responded the following day, stating: “I have uploaded the csv file you sent to me and it works now, but I had to change the date in the file to today’s date. Please test it and let me know how you go.”688

470    Ms Gordon accepted that by mid-morning on 1 June 2017, having received the .csv file from Mr Wakeham, she had fixed the problem and the file had been imported onto the GetSwift platform.689

471    On 4 June 2017, Mr White sent an email to Mr Macdonald in the following terms:

As per the email below there was an agreement to extend the [t]rial period due to our inability to start using the product. Jamila got back to Tim on Friday to let him know that it should be Ok to start importing, however, on the week[end] the trial was cancelled and we cannot use the system as it says we have not [sic] credit. Can you please get this fixed urgently so we can start to use the system and start the trial period from now.690

472    On 5 June 2017 at 9:26am, Mr Macdonald emailed Mr White, stating that the login problem was “[p]robably just the robot doing the auto cancel after 14 days” and that Mr Macdonald had “added more credit” to APT’s account.691

473    On 5 June 2017 at 7:39am, Mr Wakeham also alerted Ms Gordon to the problem with logging into the GetSwift platform, advised Ms Gordon by email that he had not been able to “login over the weekend to have a look at the jobs you imported”, and inquired whether she could “re-enable the trial so that I can take a look today”.692 A short time later at 10:11am, Ms Gordon sent an email to Mr Wakeham, stating: “This is now fixed, let me know how you go”. Ms Gordon accepted that by her email, she was informing Mr Wakeham that he could now log on to the GetSwift platform.693

474    In cross-examination, Mr White was taken to the email he sent to Mr Macdonald dated 4 June 2017. Mr White said he was uncertain as to whether the difficulty of running out of credit had been rectified by Mr Macdonald. Mr White did not accept that this was because he had not spoken to Mr Wakeham regarding the issue.694

475    On 7 June 2017, Mr Wakeham sent an email to Ms Gordon with subject line “Sample import file”, asking her for technical assistance in relation to the csv file, and whether she could “please send me the file you imported so I can see what difference there is between it and what I’m importing?”695 Ms Gordon did not reply to this email.

476    On 13 June 2017, Mr Macdonald sent an email to Ms Gordon, Ms Noot and Ms Cox, in which he inquired whether APT had been taken care of and were using the platform yet, noting that he was aware “they had a number of support questions in previous threads as well were waiting on a .csv file to be created by our team?”696 Ms Gordon replied “They are all good. The csv file is working. I’ve spoken with Tim last week and he said he will call me if he has any issues”.697 Ms Gordon agreed that she had meant to convey to Mr Macdonald that the .csv file “was working for [APT] and Tim confirmed”.698 Indeed, so far as Ms Gordon was aware, APT was able to use the GetSwift platform.699

APT’s demonstration of the GetSwift Platform to Mr Nguyen of Fantastic Furniture

477    One factual circumstance that has remained in dispute between the parties concerns APT’s alleged demonstration of the GetSwift Platform to Mr Simon Nguyen from Fantastic Furniture.

478    On 9 June 2017, Mr Paul Kahlert, who was the General Manager for APT, sent an email to Mr Macdonald copying Mr Nguyen. In that email, Mr Kahlert wrote:

One of our great customers Fantastic Furniture asked me to demonstrate your product with the view to using this for their home delivery services.

I was able to show them the Dairy Farmers (Lion) screens to show them high-level how the system works.

I have included Simon Nguyen on this email – He is the primary contact. Pass this over to you.700

479    In cross-examination, Mr Nguyen gave the following answers when confronted with that email:

And Mr Kahlert told you, did he, in early June 2017, that APTs delivery drivers were using the GetSwift software for deliveries performed by the APT drivers for one of their customers? --- Yes.

And did you understand that the APT delivery drivers for that customer were actually using the GetSwift software in early June 2017? --- Yes.

Did Mr Kahlert given you a demonstration of the GetSwift software? --- Yes.

And what had he showed you? What did you see when he gave you that demonstration? --- He showed me how the trucks were travelling around Queensland.

So you saw the trucks being GPS tracked in real-time: is that right? --- Yes.701

480    As I will explain below, GetSwift draws upon this communication to highlight that any problems with the .csv file and otherwise, which had prevented APT’s drivers from using the platform, had been rectified. To the contrary, ASIC contends that Mr Nguyen was mistaken about what it was that he had seen,702 and places reliance on Mr White’s unchallenged affidavit evidence in respect of this fact:

8.     I first heard about GetSwift Limited (GetSwift) and its software as a service platform through one of All Purpose’s customers, Lion Dairy and Drinks (a division of Lion Pty Limited) (Lion). All Purpose has provided milk delivery services to Lion for a number of years.

9.    In 2016, in the course of All Purpose providing Lion with milk delivery services, I became aware that Lion was using the GetSwift platform to monitor deliveries of its products to merchants. Lion provided about 15 of All Purpose’s delivery subcontractors with devices that had the GetSwift application installed. In 2016, an employee of All Purpose, whose name I cannot now recall, explained to me that the delivery subcontractors received delivery instructions via the app, and that Lion was able to monitor and manage the deliveries through the GetSwift platform. Staff from Lion provided All Purpose’s staff with login details, so that we could also log in to the GetSwift portal and monitor these deliveries. This provided me with some understanding as to how the GetSwift platform or portal operated … All Purpose did not, however, have any direct dealings with GetSwift in relation to the arrangement with Lion.703

481    Mr Kahlert’s email, and the cross-examination which ensued, is an issue to which I will return below (at [1429]).

Mr Macdonald learns of the current circumstances

482    On 8 July 2017, Mr Macdonald sent an email to Mr Kurt Clothier (GetSwift’s Customer Success Manager) and Ms Stephanie Noot (copied to Ms Gordon) in which he stated:

How is all purpose transport going with their account? Their trial will need to be stopped once they have had 30 days use. Any issues that we need to address with them?704

483    Ms Noot replied stating:

I have removed all the credit we added for them to use during the trial. Their trial ended on 5 July 2017.

Their job fee is currently: $0.00 and their SMS fee is $0.20 – should I change this to $0.00 also?

Please note [they] have not uploaded a job since 7 June 2017”.705

484    The reference to the job uploaded on 7 June 2017 appears to be the sample import .csv file which either Ms Gordon or Mr Wakeham uploaded.

485    On 9 July 2017, Mr Macdonald sent a further email to Ms Noot in which he stated:

Steph I left that over to yourself and Jamila to manage Fid [sic] you not reach out to them each week to see how they were going?

They have not used GetSwift for a month which tells me they have dropped off because we dropped the ball and didnt make sure everything was OK. Guys this is not good at all.

I am handing this account to Kurt to manage from now on.706

486    On 10 July 2017, Mr Hunter sent an email to Mr Macdonald in which he stated: “Please start the process of transitioning Steph out as discussed by end of this month after the 4c”.707 Mr Hunter then sent a further email to Mr Macdonald in which he stated:

Zero Follow up. We can’t be done thing up [sic] clients just to have our back office lose them . The whole back office starting w tech and finance is full of excuses for something - where is the accountability and responsibility when things go wrong? Once ok, but if it’s a consistent series of issues it’s a systematic problem.708

487    Later that day, Mr Macdonald replied, stating:

They did have credit but never used it. Steph and Jamila were responsible with on-boarding them and there was zero follow up and zero care for making sure they were ok.709

488    Mr Hunter replied to this email, stating: “Im [sic] done with those two. Steph goes at months [sic] end.”710

489    Following these emails from Mr Macdonald, Mr Clothier emailed Mr White, asking “I see there are a few users and would like to know if you are happy with the trial?711 Mr White deposed, in relation to that email, that:

36.    Given GetSwift’s inability to provide [ATP] the basic functionality of importing data to even start the trial and their lack of communication, I did not respond to Kurt Clothier’s email and did not contact anyone at GetSwift after the date of that email.

37.    I was not satisfied with the level of customer service [ATP] had received from GetSwift. By the date of Kurt Clothier’s 10 July email, it had been more than two months since the signing of the term sheet. In that period Wakeham had reported to me on a regular basis, including as set out above, that he had not been able to upload, enter or route any jobs on the GetSwift platform, and therefore [ATP] could not commence any trial of the GetSwift platform.712

490    Mr White did not respond to Mr Clothier’s email nor contact anyone at GetSwift after 10 July 2017.713 He is not aware of anyone else at APT having contacted GetSwift after the date of Mr Clothier’s email.714 Mr White further explained that as at the date of his affidavit, he had not, and was not aware of anyone at APT having, uploaded, entered or routed any jobs on the GetSwift platform and that APT had not made a single delivery using the GetSwift platform.715

491    On 17 July 2017, Mr Macdonald sent an email to Mr Clothier in which he stated: “Any word back from [APT] and what they needed to get their trial underway?” to which Mr Clothier replied: “I called and emailed Tim as well as Alex but no response yet”.716 On 21 July 2017, Mr Clothier informed Mr Macdonald that Mr White was on holiday and would be back the following week.717 There is no evidence that Mr Macdonald was thereafter updated on APT’s attitude towards using the GetSwift platform. On 8 August 2017, Mr Ozovek sent an email to, among others, Mr Hunter, Mr Macdonald and Ms Gordon, with subject line “Minutes/Actions from 7-8 August Program All Hands Meeting” which included as an item under the heading “Key Decisions”: “Deprioritize All Purpose Transport until routing algorithm is in place”.718

GetSwift’s Weekly Transaction Reports record zero deliveries for APT

492    During 2017, GetSwift prepared weekly spreadsheet reports entitled “Profit & Loss and Metrics”, which were typically circulated by Mr Ozovek of GetSwift to Mr Hunter and Mr Macdonald under cover of an email entitled “Weekly Metrics for Week Commencing [date]” (Weekly Transaction Reports).719 Each Weekly Transaction Report had a number of tabs, including one called “Onboarding”. The Onboarding tab had a list of GetSwift customers and, relevantly, columns for each month headed “Actual transaction figures”. For certain customers, these columns were populated with the number of transactions (or deliveries) made in that month. APT was first listed in the Onboarding tab of the Weekly Transaction Report for March 2017.720 The “Actual transaction figure” recorded for APT was a dash (that is, zero deliveries). Each subsequent Weekly Transaction Reports dated between 1 April 2017 and 5 August 2017 records a dash for APT.721

493    On 3 August 2017, Mr Macdonald sent an email to Mr Ozovek. Mr Macdonald stated, relevantly: “APT need update from Kurt now Alex is back – we have routing engine coming out for them shortly”.722

494    On 26 November 2017, Mr Ozovek sent an email to Mr Hunter, Mr Macdonald, and Ms Cox attaching the Weekly Transaction Report for 18 November 2017. The report recorded a dash (zero deliveries) for APT for every month up to and including October 2017.723

495    On 22 January 2018, Mr Macdonald sent an email to Mr Ozovek regarding a draft email Mr Ozovek had prepared to send to certain customers in response to an article published by the AFR in relation to the nature, and status, of a number of agreements GetSwift had announced to the ASX.724 In the email, Mr Macdonald stated:

Hi Jon,

Couple of changes:

Hello –

As you are a valued partner of GetSwift, we wanted to provide you an important update. There has been some rather inaccurate press stemming out of Australia which the company is addressing. As part of an ASX notification of our partnership, you may get contacted unexpectedly by various parties asking about the nature of our agreement.

As a response, please let us know if you are contacted. Additionally, we recommend you either ignore the request or simply state that we have an agreement in place and are unable to comment further due to the sensitive nature of each other’s businesses.

Only needed for clients we have announced on ASX, clients we promote on website and in our case studies.725

496    Mr Ozovek replied to Mr Macdonald’s email, stating:Understood and will distribute. Do we have any contacts for some of them? I can find generic emails, but nothing concrete for some of them.”726 Mr Macdonald sent a further email to Mr Ozovek in which he stated:Let me know who you are missing and I will help you fill in gaps. We should speak to cito and APT as well as I think they have both paused using?”727 Mr Ozovek replied, “Yes. Cito, APT, Johnny Rockets Kuwait are some main ones. Asap, fresh flowers, lion etc. All those on our case study page.”728

497    At 3:51pm that afternoon, Mr Hunter sent an email to Mr Macdonald and Mr Ozovek in which he stated:OK these are paused only right? That’s what I am understanding right? APT is the only one that I am aware that terminated but the impact is immaterial.729 Mr Ozovek responded: Yes sir. They were paused”.730 It is notable that Mr Hunter characterised APT as having terminated and not merely “paused”.

G.1.5    CITO Transport Pty Ltd

498    During 2017, CITO Transport Pty Ltd (CITO) operated a Melbourne-based transport business providing delivery and warehousing services to wholesale customers within the freight forwarding and logistics industry.731

499    In March 2017, CITO’s founder and director, Mr Paul Calleja, was contacted by Mr Simon Borg, who was a director of CITO and who was also a director of a freight forwarding and logistics company known as Navia Logistics Pty Ltd (Navia).732 Mr Borg informed Mr Calleja that Navia had been approached by GetSwift as part of a trial that Philip Morris International (PMI) was conducting of the GetSwift platform. Mr Borg indicated to Mr Calleja that Navia did not intend to participate in the trial, but that he thought CITO might be interested.733 Mr Calleja told Mr Borg that he was keen to learn more about the proposal.734

500    On 28 March 2017, Mr Borg sent an email to David Velasquez of PMI and Mr Calleja, copying, among others, Mr Kosta Metaxiotis, a representative of PMI. In that email, Mr Borg provided Mr Calleja’s mobile telephone number and suggested that PMI arrange a telephone conference with Mr Calleja.735

501    Mr Calleja was subsequently approached by Mr Metaxiotis, who enquired whether CITO might be interested in providing storage and delivery services to PMI.736 The proposed arrangement with PMI concerned an online sales service that PMI was launching, whereby customers could place orders for PMI products online and receive and track delivery of those goods.737 PMI needed storage and delivery services to be provided as part of the project.738 Following his conversation with Mr Metaxiotis, Mr Calleja decided that CITO should participate in the trial, as it would provide Mr Calleja with an opportunity to “see GetSwift’s software in action” and consider the possibility of using the GetSwift Platform for CITO’s own operations.739

Negotiations between CITO, PMI and GetSwift

502    On 29 March 2017, Mr Macdonald sent an email to Simon Navia of Navia Transport, attaching a document entitled “Term Sheet”. In this email, Mr Macdonald stated:

How’s it all going with PMI?

They said CITO is now handling the fulfillment [sic] to kick off shortly which is great? I think PMI are itching to kick things off and already talking about broader scope outside of Melbourne.

Do you have any partners in Sydney and Brisbane who would be interested in handling similar operation for PMI as CITO will be doing in Melbourne?

For Melbourne: I want to make sure CITO have similar pricing discounts as they grow with this partnership. Same terms as Navia.

Can you please have them sign and return attached term sheet so we can get this moving for them and PMI next week?740

503    Between early April and 15 May 2017, Mr Calleja exchanged emails with both Mr Metaxiotis and Mr Macdonald in relation to a proposed commercial arrangement involving PMI, CITO and GetSwift.741

504    One of Mr Calleja’s early concerns about the proposed arrangement was that he was expected to bill GetSwift for the cartage services CITO provided to PMI.742 On 30 March 2017, Mr Calleja sent an email to Mr Metaxiotis in which he stated CITO’s position was that it would not be prepared to bill GetSwift for cartage and that CITO would need to bill PMI.743

505    On 3 April 2017, Mr Macdonald sent an email to Mr Calleja attaching an updated draft term sheet. In this email, Mr Macdonald stated:

Just wanted to follow up here as we are approaching a trial launch date with Philip Morris and to get our ducks in order. You will be required to invoice GetSwift for your services and GetSwift will be paying you. I sent Simon from Navia a term sheet to outline the pricing arrangement we have all agreed to with this engagement. If you could send us your invoicing & pricing terms so we can approve them and then execute the below proposed term sheet to finalise this engagement.744

506    On 4 April 2017, Mr Metaxiotis sent an email to Mr Calleja, in which he described GetSwift as “a key component of this venture [and] our business partner who we need on board to execute our requirements”.745 Mr Metaxiotis asked Mr Calleja to confirm his “willingness to sign [on] to [GetSwift’s] platform” so that the trial with PMI could commence.746 Mr Calleja responded by email later that day, stating that “in an attempt to create exciting new business”, he was “willing to deal with GetSwift for the transport component”.747 Mr Calleja asked Mr Metaxiotis to “confirm payment terms” and stated that he would “need GetSwift to supply training and if possible a physical presentation” on how the proposed arrangement was going to work.748 Mr Metaxiotis forwarded Mr Calleja’s email to Mr Macdonald and others at GetSwift a short time later, stating, “[c]an you follow through to ensure they are OK with your system”.749

507    On 4 April 2017, Mr Macdonald sent an email to Mr Hunter attaching a copy of the draft term sheet, in which he stated, “can you please edit this term sheet for CITO so it covers off GetSwift invoicing PMI and paying CITO?”750

508    On 5 April 2017 at 7:34am, Mr Macdonald wrote to Mr Calleja, noting that he had sent a draft agreement to an employee of CITO the previous day and asking whether Mr Calleja had looked at that agreement.751 Mr Calleja replied to Mr Macdonald’s email, stating: “We are excited about this new business and looking forward to getting a better understanding on how this is all going to work. I will be more than happy to [enter] an agreement with [GetSwift] just need it sent to me”.752 At 12:26pm, Mr Macdonald sent Mr Calleja a draft term sheet dated 4 April 2017.753 Clause 4 of the term sheet stated that the term of the agreement would be 36 months.

509    Clause 5 of the draft term sheet provided, relevantly:

Any fees that CITO may charge other parties that are either clients of GetSwift or are on the GetSwift platform will need to be processed and managed through [the] GetSwift platform and services. GetSwift will pay received amounts that are payable to CITO within 3 business days of receipt of such fees from the responsible parties. GetSwift will not guarantee payments or their timeliness, it will only process and pass through any that may be received.754

510    Following receipt of the term sheet, Mr Calleja raised with Mr Macdonald a number of commercial concerns with the arrangement proposed, namely, that CITO could not make any minimum volume commitment as it concerned PMI’s deliveries, and that (in relation to clause 5) CITO required GetSwift to guarantee payment of all moneys owing to CITO for its delivery services.755 Mr Calleja also had concerns that the term was for 36 months.756

511    On 7 April 2017, Mr Macdonald sent an email to Mr Calleja attaching a revised “Term Sheet”.757 Mr Macdonald stated that the delivery volume guarantee had been removed from the draft agreement. In relation to Mr Calleja’s concerns regarding payments to be made to CITO, Mr Macdonald stated:

GetSwift is the marketplace, not the customer. We are facilitating a transaction between two parties (CITO & PMI). We can only pass on monies that have been paid by PMI. If PMI don’t pay then we don’t have any money to pay you. Being such a blue chip company as PMI, I don’t see this ever being an issue.758

512    Later that day, Mr Macdonald sent an email to Mr Hunter forwarding the email he sent to Mr Calleja.759

513    Mr Calleja was not satisfied with Mr Macdonald’s response as set out in the email and did not want to engage with PMI and GetSwift on the basis set out in the term sheet and decided that CITO would not to take part in the cartage side of the project.”760 On about 10 April 2017, Mr Calleja sent an email to Mr Metaxiotis (copied to Mr Macdonald), in which he said the following:

I feel that we may not be the option for the cartage side to this project but am willing to handle the warehousing side. We have a credit application that needs to be successfully completed before we do any business. The unique set up you have with GetSwift will pose issues through this signing up process.

I do not have anything against [GetSwift], in actual fact I believe they are on to something big. Kosta please understand after 15 years of running my own company I have established a set of rules I will not break for anyone/company.761

514    In cross-examination, Mr Calleja agreed that, based on what he knew about the GetSwift platform on 10 April 2017, he believed that the software had the potential to become very successful and be useful to a lot of businesses, including CITO.762

515    On 11 April 2017, Mr Calleja sent an email to Mr Macdonald (copied Mr Metaxiotis and others), in which Mr Calleja stated: “I have decided we will not be taking part in the cartage side of this project … we are willing to host the cabinets and handle the warehousing side”.763