Crowley v Worley Limited [2026] FCAFC 78

This appeal came out of a long-running shareholder class action against Worley Limited, an ASX-listed company in the resources, energy and infrastructure services space. Larry Crowley sued on his own behalf and on behalf of investors who bought Worley shares during the period 14 August 2013 to 19 November 2013.

The commercial setting was straightforward. Worley told the market in August 2013 that, despite uncertainty in world markets, it expected its geographic and sector diversification to provide a solid foundation to deliver increased earnings in FY2014. That statement mattered because Worley’s FY13 NPAT had been $322 million, and the internal FY14 budget approved by the board on 13 August 2013 forecast NPAT of about $352 million.

The guidance did not stay confined to one announcement. The Court recorded that Worley affirmed or repeated the guidance on 9 October, 10 October and 15 October 2013. Then, on 20 November 2013, Worley revised its guidance and said it expected underlying FY2014 NPAT in the range of $260 million to $300 million, with a lower first-half result. The extract records that the share price fell by about 26% when that revised guidance was published.

Mr Crowley’s case was that the earlier guidance and related statements were not properly supported and that the market should have been told more, sooner. He alleged misleading or deceptive conduct and continuous disclosure contraventions. The case therefore became a dispute not only about what was said publicly, but about the quality of the internal budget process, the assumptions behind the numbers, and what people inside the company knew at the time.

The procedural sequence is important because the 2026 decision was not the first time the case had reached the Full Court.

First, in October 2020, the primary judge dismissed the originating application and the fourth further amended statement of claim.

Second, Mr Crowley appealed. In March 2022, a Full Court allowed that appeal and remitted the proceeding to a single judge for further hearing and determination. The earlier Full Court’s reasons became important because they explained where the first trial had gone wrong and what issues needed to be addressed on remitter.

Third, after the remitter hearing, the remitter judge made orders on 19 December 2023. Those answers effectively found that Worley had engaged in misleading or deceptive conduct in relation to the FY2014 guidance representation and guidance statement, and had contravened s 674(2) of the Corporations Act by not informing the ASX of the relevant guidance material information on 14 August 2013, 21 September 2013, 9 October 2013 or 15 October 2013. But the remitter judge also found that none of the contraventions caused the market price for Worley securities to be substantially greater than their true value or the price that would otherwise have prevailed.

Fourth, in March 2024, the remitter judge made costs orders dismissing the originating application and requiring Mr Crowley to pay Worley’s costs, including the costs of the original trial.

That led to the 2026 appeal and cross-appeal. Mr Crowley challenged the remitter judge’s findings on causation, loss and damage, and also appealed the later costs orders. Worley cross-appealed on liability and filed a notice of contention concerning causation. The Full Court therefore had to deal with both sides of the case: whether liability findings should stand, and whether the shareholder had proved some compensable loss.

A major feature of the case was the internal budgeting process behind the public guidance. The earlier Full Court summary reproduced in the 2026 reasons recorded that a 27 May 2013 draft budget produced a forecast NPAT of $252 million, or $284 million with foreign exchange increases up to August 2013. The extract then describes a series of management adjustments that increased the budgeted FY14 NPAT to $352.1 million.

The summary records that Messrs Bradie and Daly added operational EBIT, Mr Allen added acquisition stretch, further operational EBIT was added, CEOC resolved to include additional overhead savings, and a foreign exchange adjustment was also included. The foreign exchange adjustment was not the subject of complaint, but the other upward movements were central to the dispute.

The Court also referred to internal emails. On 31 May 2013, Mr Daly emailed Messrs Holt and Allen noting that the level of Blue Sky in ANZ North and West was very high. On 3 August 2013, Mr Bradie emailed regional managing directors saying the first and second half weighting was too second-half weighted and that they needed to see if more revenue could be moved into the first half. On 7 August 2013, Mr Daly emailed Mr Holt saying there remained a strong sense within the business that the FY14 targets, both full year and first half, were a stretch given current performance and reliance on timely realisation of cost saving targets.

Another important document was the Holt memorandum prepared after the November 2013 downgrade. The extract says the CEO asked the CFO, Simon Holt, to download the issues as people saw them about the budget process. Mr Holt interviewed managers and prepared notes and a detailed memorandum about Worley’s financial forecasting process and possible changes. The earlier Full Court considered that, even looked at in isolation, the memorandum suggested that senior management required location budgets to reflect year-on-year growth, that locations used Blue Sky revenue to meet those expectations, that the budgeting process assumed no downsides even though managers knew downsides would emerge, and that these dynamics were at play in the FY14 budget process.

The extract also repeatedly notes that Worley did not call Mr Holt, Mr Bradie, Mr Allen or Mr Daly to give evidence, even though they were directly involved in the budget amendments. That absence mattered because the earlier Full Court considered the significance of inference principles associated with Blatch v Archer and Jones v Dunkel when evaluating the whole of the evidence.

The pleaded issues engaged several legal regimes. The extract identifies alleged contraventions of s 674 of the Corporations Act and ASX Listing Rule 3.1, as well as alleged misleading or deceptive conduct under s 1041H of the Corporations Act, s 12DA of the ASIC Act and s 18 of the ACL. The appeal also concerned loss and damages under provisions including s 1041I of the Corporations Act, s 12GF of the ASIC Act and s 236 of the ACL.

At a practical level, the first question was what Worley’s public statements conveyed. Mr Crowley alleged that Worley represented that it expected to achieve NPAT in excess of $322 million in FY2014 and that it had reasonable grounds for that expectation. The next question was whether those reasonable grounds actually existed.

The extract shows that the earlier Full Court thought the first trial had gone wrong because the primary judge focused too much on whether the board acted reasonably on the information given to it, rather than on whether Worley itself had a reasonable basis for using the FY14 budget to support the market guidance. The earlier Full Court also said the primary judge had looked for too much line-by-line detail and had not sufficiently brought the evidence together, including the significance of missing witnesses and available inferences.

The extract summarises the matters said to support the conclusion that the FY14 budget was not a reasonable foundation for the guidance. These included Worley’s history of material budget underperformance, two downgrades in 2013, the proposition that the FY14 budget was not a P50 budget, the absence of a risk-adjusted approach to forecasting, flat or deteriorating markets, and the maintenance of a high level of Blue Sky revenue.

The second major issue was causation and loss. The catchwords show that the 2026 Full Court had to consider the availability of market-based or indirect causation, the level of generality needed to identify and prove a counterfactual, whether some loss had been proved on the evidence, and how damages should be quantified once some loss was established. That made the appeal important not only on liability, but also on the proof of shareholder loss in market disclosure litigation.

The final orders are clear. The Full Court allowed Mr Crowley’s appeal and dismissed Worley’s cross-appeal.

On the appeal, the Court varied the remitter judge’s answer to Question 13 so that the market price for Worley securities included share price inflation equal to 5.92%. It also varied the answer to Question 15 so that Mr Crowley had proved loss in the amount of $593 plus interest under s 51A(1)(a) of the Federal Court of Australia Act from 4 October 2013.

On the cross-appeal, the Court dismissed Worley’s challenge to the remitter judge’s liability findings. In practical terms, that means the liability findings made on remitter survived, and the shareholder also succeeded in overturning the no-loss conclusion.

The costs position was also reversed. The Full Court set aside the remitter judge’s March 2024 costs orders and instead ordered Worley to pay Mr Crowley’s costs of and incidental to the initial and remitted trials. Worley was also ordered to pay Mr Crowley’s costs of the appeal and cross-appeal, subject to a short timetable if either party wished to seek variation of the costs order.

So the commercial outcome was not merely symbolic. The shareholder succeeded on liability, established some inflation in the market price, proved some compensable loss, and obtained a favourable costs outcome.

For listed companies, the case is a reminder that earnings guidance is judged by substance as well as process. A board-approved budget does not automatically prove that the company had reasonable grounds for a public forecast. Courts may look closely at how the budget was built, whether assumptions were stretched, whether downside risks were ignored, whether management knew the targets were a stretch, and whether the company kept repeating the guidance after internal confidence had weakened.

The case also shows that repeated statements can matter just as much as the first statement. If a company reaffirms guidance at an AGM, in investor presentations or in slide decks lodged with the ASX, each repetition may be scrutinised against what the company then knew.

Another practical lesson is about evidence. Internal emails, draft budgets, management review documents and witness choices can all shape the outcome. If key people involved in major forecast adjustments are not called to explain what happened, that may affect how the evidence is evaluated.

For private businesses and SMEs, the continuous disclosure parts of the case may not apply in the same way, but the forecasting discipline still does. If you give revenue or profit forecasts to investors, lenders, franchisees, buyers or major counterparties, you should be able to identify the assumptions behind the numbers, the risks that could derail them, and the point at which the statement should be updated or withdrawn.

The causation and loss part of the appeal also matters. Even where a claimant establishes contraventions, loss still needs to be proved. But this case shows that a no-loss finding is not necessarily the end of the matter. Appellate courts may revisit whether the evidence supports some inflation and some quantifiable loss.

The judgment is a Full Court decision of the Federal Court of Australia delivered on 28 May 2026. It arose from the remitter decision in Crowley v Worley Limited (No 2) [2023] FCA 1613 and followed the earlier Full Court decision in Crowley v Worley Limited [2022] FCAFC 33; (2022) 293 FCR 438.

The appeal was heard from 19 to 21 March 2025, with the date of last submissions recorded as 20 June 2025. The proceeding itself was brought under Pt IVA of the Federal Court of Australia Act as a representative proceeding.

This page focuses on the commercial facts, the litigation sequence, the legal issues identified in the judgment, and the final orders made by the Full Court.