Citation : KIM RILEY IN HIS CAPACITY AS TRUSTEE OF THE KER TRUST -v- JUBILEE MINES NL [2006] WASC 199

Corporations law - Damages claim by a former shareholder - Failure to release information to ASX - Continuous disclosure obligations - History of continuous disclosure in Australia - Allegation of negligence in failure to release information - Claim of breach of ASX Listing Rules - Relationship between ASX Listing Rules and Corporations Law - Interpretation of 'material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly invest in securities' - Interpretation of 'information' - Content of information required to be released - Whether relevant circumstances must also be released - Turns on its own facts

Evidence - Effect of evidence being introduced without objection at trial

Australian Securities Commission Act 1989 (Cth)

Corporate Law Reform Act 1994 (Cth)

Corporations Law, s 995(2), s 1001A, s 1001D, s 1005

Evidence Act 1906 (WA), s 21

Securities Markets Act 1988 (NZ), s 19A, s 19B, s 19C, s 19D

Adelaide Petroleum NL v Poseidon Ltd (1990) 98 ALR 431

Flavel v Roget (1990) 1 ACSR 595

Insurance Commission of Western Australia v Container Handlers Pty Ltd [2004] HCA 24; (2004) 218 CLR 89

TSC Industries Inc v Northway Inc [1976] USSC 119; (1976) 426 US 438

Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491

1 MARTIN CJ: The appellant, Jubilee Mines NL (Jubilee) appeals from a decision of the master awarding the respondent, Kim Riley in his capacity as trustee of the KER Trust (the Trust), damages pursuant to s 1005 of the Corporations Law by reason of Jubilee's contravention of s 1001A of the Corporations Law in 1994. Section 1001A was the provision which, at that time, gave statutory force to the continuous disclosure regime imposed upon listed companies by r 3A of the Australian Stock Exchange (ASX) Listing Rules (Listing Rules). The master awarded Mr Riley $1,856,000 in damages, together with interest in the amount of $1,005,133.33 and ordered that Jubilee pay the respondent's costs of the trial.

2 The factual context of the issues fought on appeal is best provided by a summary of the findings made by the master.

3 Jubilee's shares were listed on the ASX in 1987. Mr Riley, who has held a number of different positions focusing on financial and administration work, was the secretary of Jubilee at the time of listing. In 1988, he took an executive role in the management of Jubilee. In 1989, he requested an allotment of shares from Jubilee as an incentive for his continuing employment. In response to that request, in 1991 the Trust was allotted a parcel of shares in Jubilee for no consideration.

4 In 1992 and 1993, Jubilee's focus was on exploration for gold, particularly at tenements which it had acquired in an area known as Kathleen Valley.

5 In 1993, Jubilee acquired a tenement known as McFarlanes Find. That tenement is in two parts, which are not contiguous. Running between those two parts is a prospect known as Spinifex Park which was held by Western Mining Corporation (WMC). McFarlanes Find is situated 12 km to the south of Mt Keith, which was a low grade nickel resource then being developed into a major mine by WMC. McFarlanes Find is also to the north of Yakabindie, which was held by Dominion Mining and was another low-grade nickel resource. The Yakabindi deposit was known, but not then (or now) developed into a mine. Although the McFarlanes Find tenement is located in a known nickel field, there is no suggestion that Jubilee acquired the tenement in order to prospect for nickel. Its focus at that time was exclusively upon exploration for gold.

6 Mr Riley resigned from his executive role with Jubilee, and as a director of the company, with effect from 31 December 1993. At the time of his resignation, the Trust owned 797,000 fully paid shares and 2,625,000 partly paid shares in Jubilee. The fully paid shares were sold progressively by the Trust between January 1994 and February 1995. The partly paid shares were sold mostly in March 1995, and the final tranche was sold in June 1995. Mr Riley, who was not employed over this period, used the proceeds of sale to maintain himself and his family.

7 By March 1994, day to day management of Jubilee was vested in Mr William Crossley, the managing director, and Mr John Cooke, a geologist. In May 1994, Jubilee commenced negotiations for the purchase of the Bellevue Gold Mine. However, Jubilee lacked the cash required to complete the purchase. The master found that during 1994, Jubilee was focused upon achieving the purchase of that gold mine.

8 Early in August 1994, Jubilee received a letter from WMC advising that it had inadvertently drilled on the eastern portion of Jubilee's McFarlanes Find tenement. This inadvertent drilling was as a result of a discrepancy, in relation to the boundaries of McFarlanes Find and Spinifex Park, between the plans held by the Department of Mines and Energy and the co-ordinates of the tenements, which resulted in the boundary of WMC's tenement being some 200 metres to the west of the boundary shown on the plans held by the department. The letter enclosed data relating to the drilling which had been done, and advised that the drill samples would be made available to Jubilee on request.

9 The letter also advised that analytical results for five drill holes were not available at the time the letter was written, but would be provided as soon as they became available. Mr Cooke stated that he had a meeting with Mr Crossley the day after he saw the first letter from WMC ([205] and (ts 933)).

10 The unavailable data referred to in the first letter was provided under cover of a letter from WMC to Jubilee dated 6 September 1994. Following receipt of that letter, Mr Cooke reviewed the information provided by WMC, and discussed it with Mr Crossley. Mr Cooke formed the view that considerable work would be required to interpret the data and that there would be considerable expense in undertaking such work [203]. Mr Cooke's review showed that in one of the six holes which WMC had inadvertently drilled on McFarlanes Find, nickel had been intersected over a length of approximately 42 metres (between 202 and 245 metres down the drill hole) at an average grade of 0.52%. His evidence was that he considered the grade of nickel to be low and comparable to Yakabindie, which had not been demonstrated to be economically viable. His evidence was that, by contrast to Yakabindie where the resource was at the surface, this mineralisation was at a substantial depth, a depth of approximately 200 metres. Mr Cooke also construed the data to suggest that the mineralisation was dipping steeply to the east, with the consequence that any mineralisation on Jubilee's tenement would be at an even greater depth. The evidence of Mr Cooke was also to the effect that he considered the ore width suggested by the data to be quite insufficient to sustain an economic mine, and that the prospect of ever proving an economic deposit of nickel within the McFarlanes Find tenement was remote.

11 Mr Cooke's evidence was that although he was of the view that the data did suggest future exploration for nickel on the tenement may be appropriate, given Jubilee's financial position (it had very limited cash resources and insufficient cash to sustain an appropriate exploration programme on McFarlanes Find) and its focus on gold (in particular on the acquisition of the Bellevue Gold Mine and prospecting for gold at Kathleen Valley), it was his view it would not be appropriate for Jubilee to undertake exploration of McFarlanes Find at that time.

12 As stated above, Mr Cooke discussed the matter with Mr Crossley, and advised Mr Crossley of his views. Mr Crossley decided that the information received from WMC was not of any interest or significance to Jubilee. In particular, he decided that, in the light of the advice given by Mr Cooke, there was no need to report the results to Mr Crossley's co-directors and there was no need to disclose receipt of the data to the ASX. As a matter of 'precaution and prudent management', in Mr Crossley's words, he did instruct Mr Cooke to have a look at the WMC holes and try to identify where the boundary between the two tenements fell to determine whether the WMC holes were in fact within McFarlanes Find. However, no other action was taken.

13 On 24 October 1994, representatives of Jubilee met with representatives of WMC in order to discuss an offer by WMC to swap tenements which it held for McFarlanes Find. The evidence suggests that Mr Cooke said, at that meeting, that Jubilee needed more time to assess the significance of the data provided by WMC and to explore McFarlanes Find. However, the evidence of Mr Cooke and Mr Crossley was each emphatically to the effect that Jubilee had no intention of exploring McFarlanes Find at that time, as its focus was exclusively upon gold exploration, and in any event, it lacked the financial resources to undertake such exploratory activities. The master found that Jubilee thought WMC's swap proposal to be of little interest, and took the matter no further.

14 Jubilee issued a prospectus seeking to raise the funds necessary to acquire the Bellevue Gold Mine on 31 October 1994. The issue was underwritten by brokers. The underwriting agreement allowed those brokers to withdraw from the agreement if the gold index fell below a certain point. By 22 November 1994, the gold index had fallen below that point, and the underwriters withdrew from the underwriting agreement on 5 December 1994. Thereafter, the prospectus failed to raise the funds necessary to acquire the Bellevue Gold Mine, and the purchase did not proceed.

15 The master found that '[b]y early 1995, the defendant was in dire straits. Its share price had slumped, it was running short of cash and it had no prospects of becoming a gold producer in the near future' [28]. In February 1995, Jubilee issued a further prospectus in order to raise funds. Two directors, Mr Harmanis and Mr Streeter, agreed to partially underwrite that prospectus and to subscribe for $800,000 worth of shares in Jubilee. As the master found, if those two directors had not put their own funds into the company, it would have been in a very difficult position indeed and, as it was, it faced an uncertain future.

16 In August 1995, the defendant entered into a joint venture with Anaconda Nickel NL. As part of that venture, shares in Jubilee were issued to Anaconda, raising funds for Jubilee. Those funds were spent by Jubilee on exploration, but not on exploring McFarlanes Find.

17 On 9 October 1995, Mr Crossley resigned as managing director of Jubilee. Mr Harmanis was appointed managing director and had day to day control of Jubilee's affairs.

18 Jubilee entered into an agreement with Forrestania Gold NL in February 1996 which involved Forrestania subscribing for a significant parcel of shares in Jubilee, and also lending Jubilee $1 million, unsecured, interest free and convertible into ordinary fully paid shares in Jubilee. Two directors of Forrestania, Mr Robinson and Mr Eldridge, joined the board of Jubilee. Both had significant experience in nickel exploration.

19 In May 1996, WMC initiated discussions with Jubilee in relation to the McFarlanes Find tenement. On 4 June 1996, WMC wrote to Jubilee providing its interpretation of the 1994 drill hole results and undertaking to provide cross-sections of those results. On 7 June 1996, a meeting took place between representatives of WMC and Jubilee. At that meeting, WMC provided the cross-sections which it had promised. This was the first time such cross-sections had been seen by Mr Harmanis and Mr Cooke who were both present at the meeting as representatives of Jubilee.

20 On the next business day following the meeting with WMC (11 June 1996), Jubilee provided an announcement to the ASX disclosing the inadvertent drilling of McFarlanes Find by WMC and stating that '[s]ignificant disseminated nickel mineralisation was encountered on Jubilee's ground'. The announcement asserted that this mineralisation (which was the southern extension of the Mt Keith sequence for mineralisation) dips eastward onto Jubilee ground, and that 'significant potential exists for both massive and disseminated nickel sulphides over a five kilometre strike length in the Jubilee tenement' (in this context 'massive' does not bear its usual meaning of large or enormous, but the geological meaning of 'continuous' or 'connected' as compared to 'disseminated'). The announcement further advised that Jubilee intended to undertake further drilling work to explore the mineralisation during the months of June and July 1996.

21 The weighted average share price of Jubilee over the 10 trading days preceding the media release was 22.5 cents, while the weighted average share price of Jubilee for the 10 business days following the media release was 24.5 cents (an increase of 9%) [149].

22 Jubilee undertook drilling work on the McFarlanes Find prospect during June and July 1996 specifically looking for nickel. On 25 July 1996, it made an announcement to the ASX in relation to the results of that drilling work. It advised that further nickel had been intersected at depths between 315 and 588 metres, with grades varying between 0.49% and 0.63% between 502 and 550 metres in depth. The announcement asserted that the results established that the Mt Keith sequence dipped eastward onto the Jubilee tenement and had 'enhanced the prospectivity of the Jubilee tenement'. It foreshadowed further exploration work, although no such work was ever undertaken. The announcement had no impact upon the price at which the shares of Jubilee traded. There does not appear to be any expert evidence dealing with the subject of this announcement, but it is to be noted that the grades encountered were relatively low and at great depth.

23 There were no further developments relating to the McFarlanes Find tenement. However, on 1 September 1997, Jubilee announced to the ASX that it had made a significant nickel discovery while drilling its wholly owned deposit at Cosmos. Cosmos is south of McFarlanes Find. In fact, Cosmos is south of Yakabindie, and is further from Yakabindie than McFarlanes Find is from either Mt Keith or Yakabindie. That announcement caused a dramatic increase in Jubilee's share price. In the years which followed, Jubilee's share price increased further, as it developed the Cosmos mine and became a significant nickel producer.

24 At a number of points in his reasons, the master observed that none of the witnesses suggested that the information provided by WMC to Jubilee indicated the presence of a commercially significant resource on McFarlanes Find, nor was Mr Riley's case conducted on that basis. Rather, his case was presented on the basis that the information indicated that there was potential for further exploration for nickel on McFarlanes Find. As the master observed, this was the consistent position of all witnesses for both parties [173], including Mr Cooke.

25 The master further observed, at a number of points in his reasons, that in the latter half of 1994 and at the commencement of 1995, Jubilee was 'strapped for cash', and exclusively focused on exploration for gold. However, by 1996, Jubilee's financial position had improved as a result of the transactions to which I have referred, and its directors included persons with experience and an interest in exploration for nickel. Further, whatever the reasons for the views formed by Mr Cooke and Mr Crossley in September/October 1994, it is clear that at that time Mr Cooke and Mr Crossley had no intention of undertaking exploratory activity on McFarlanes Find in the foreseeable future. I will refer to the evidence on that subject later in these reasons.

26 It is also appropriate to refer to some of the more detailed findings made by the master in relation to the reaction at the time, within Jubilee, to the receipt of the information provided by WMC in August and September 1994. Evidence on that topic was given by Mr Crossley, Mr Cooke and also by Mr Noel Sheppy.

27 Mr Sheppy was a geologist. Mr Sheppy had undertaken work for Jubilee on some of Jubilee's tenements, including McFarlanes Find, in 1995. It should be noted that at trial counsel for the defendant (appellant) objected to Mr Sheppy giving evidence and the master refused the plaintiff (respondent) leave to call him as a witness. However, after hearing counsel for the plaintiff in relation to s 21 of the Evidence Act 1906 (WA), the master concluded that he was 'obliged by the terms of the statute to give leave to the plaintiff to call Mr Sheppy for the limited purpose of establishing the prior inconsistent statement' of Mr Cooke [265]. Mr Sheppy's evidence related to discussions which he had with Mr Cooke in August 1995 during a visit to the McFarlanes Find tenement. That evidence cast some doubt upon the evidence given by Mr Cooke. The master's findings in relation to this evidence are contained in the following portion of his reasons:

1. In one sense, at least, it is not necessary to determine precisely what happened as between Mr Cooke and Mr Crossley when the WMC information was received by them on behalf of the defendant in August and September 1994. But it is worth highlighting some aspects of the evidence. First, it is clear that Mr Cooke never showed to Mr Crossley the two letters and their annexures in their entirety. At the most, he showed Mr Crossley some assay results or some parts of the annexures to one of the letters.
2. Second, at no time did Mr Crossley, in his capacity as managing director, read the letters in their entirety or call for a report from Mr Cooke or someone else (perhaps a consultant) as to the significance of the information. Rather, for some unexplained reason, he was left with the impression that the WMC information highlighted only very low grade nickel sulphides at depth. In this he was wrong and even the most cursory reading of the WMC information would have shown that he was wrong.
3. Thirdly, no steps were taken by the defendant to follow up the WMC information. If, as Mr Crossley says, he instructed Mr Cooke to arrange for a survey of the McFarlanes Find tenement to establish precisely where the boundary was, that survey was not carried out. Mr Cooke may have told Mr Crossley that the survey had been carried out, but Mr Crossley did not take any steps to establish what the survey showed and what significance it might have for the defendant.
4. Fourthly, both Mr Cooke and Mr Crossley must have known that WMC had an interest in the McFarlanes Find tenement. That was disclosed by the fact of the meeting with WMC in October 1994. There is a danger about reading too much into this meeting. But it is significant that WMC thought enough of the McFarlanes Find tenement to offer as part of a deal a tenement which they had earlier refused to part with.
5. As I have indicated above, I accept entirely the evidence of Mr Sheppy in relation to his discussions with Mr Cooke. That being so, I am satisfied that Mr Cooke did not appreciate the significance of the assay results contained in the WMC information. I also accept that Mr Cooke told Mr Sheppy that he did not appreciate that there had been a boundary shift in the McFarlanes Find tenement. Why Mr Cooke should have said that is difficult to explain. The first letter from WMC is essentially all about that boundary shift. No one who read that letter, let alone an experienced geologist, could fail to appreciate that the boundary had shifted. Perhaps Mr Cooke had a reason for saying to Mr Sheppy that he did not appreciate the boundary shift and he has now forgotten why he made such a statement. Or perhaps he did not read the WMC letter. In the end, it may not make any difference. In my view, the evidence clearly establishes that Mr Cooke did not appreciate the significance of the WMC information and nor did Mr Crossley.

28 The grounds of appeal do not challenge these findings.

29 The master enunciated the questions which he considered he had to resolve in the following terms:

(1) Would a reasonable person expect the material found in the WMC letters to have had a material effect on the defendant's share price as at September or perhaps October 1994?

(2) If the answer to the above question is yes, was the failure of the defendant to notify the ASX negligent?

(3) If the answer to that question is yes, has the plaintiff suffered any loss or damage and, if so, how much? [64]

30 The master addressed the first question he had identified by reference to s 1001D of the Corporations Law, which provided:

For the purposes of sections 1001A and 1001B, a reasonable person would be taken to expect information to have a material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell, the first-mentioned securities.

31 He first addressed that issue by identifying the persons who would commonly invest in Jubilee's securities. In that context, he relied upon the evidence given by Mr Allen, a stockbroker called by Jubilee. It was to the effect that persons who might be expected to invest in Jubilee's shares were traders who were investing for the purpose of making a capital gain in the short-term as a result of fluctuations in the price of Jubilee's shares. The master concluded that the assay results would influence such persons in deciding whether to buy Jubilee's shares. In arriving at this conclusion, the master relied on Dr Trench's evidence of the significance of the assay results ([107], [208] and ts 455). Dr Trench, who was an officer of WMC, stated that the results were 'fantastic' and that '[m]ost small exploration companies of the likes of Jubilee at the time and the likes that I'm involved with sometimes now would kill for results like this' (ts 455). The master expressed the view that Mr Trench 'was a very impressive witness' [111]. It will be necessary to refer in more detail to that evidence in the context of one of the grounds of appeal.

32 The master also relied upon the fact that Jubilee made an announcement of the data on 11 June 1996 to support his conclusion that the assay results would influence persons who commonly invest in Jubilee's securities in deciding whether to buy Jubilee's shares. In that context, he analysed the differences in the situation as at June 1996 compared to September 1994, and concluded that the circumstances were not so different as to preclude an inference being drawn from the fact that the 1996 announcement was made to the effect that such an announcement was required in 1994.

33 Further support for the master's conclusion in relation to assay results was drawn from two other sources. First, that Jubilee's share price increased following the announcement made in June 1996 and second, the evidence of the expert witnesses called by the plaintiff - Mr Le Page and Dr Rudenno - whose evidence the master preferred to that of the experts called by the defendant - namely, Dr Barnes and Mr Allen. The master also observed:

1. The further requirement of s 1001D is that the information should have a 'material' effect on the share price. Referring again to the defendant's written submissions, counsel referred to the US Supreme Court decision TSC Industries Inc v Northway Inc [1976] USSC 119; (1976) 426 US 438, a case which deals with 'materiality'. The Court said:

'There must be a substantial likelihood that the omitted fact would have been viewed by the reasonable investor as having significantly altered the total mix of information available.'

1. With respect, I would adopt that formulation. Applying that test, I am satisfied that a reasonable person would expect the information to have a material effect. This was good news. It provided a junior explorer with information about a tenement that was sufficient to interest a major mining house. Certainly, the defendant was focused on gold exploration but that was not to the exclusion of everything else. Again, by reference to the effect on the share price of the 11 June 1996 announcement, it can be seen that the expectations of the reasonable person were proved right.

34 Although, in the result, nothing appears to turn on this, these paragraphs reflect an erroneous approach to the construction of the Corporations Law. Section 1001D did not require that the information should have a 'material' effect on the share price. Rather, the effect of the section was to obviate the need to address the question of whether a reasonable person would be taken to expect a 'material' effect on price to be produced by deeming that question to be answered in the affirmative if the information would, or would be likely to, influence persons who commonly invest in the relevant securities in deciding whether or not to subscribe for, or buy or sell those securities. Further, the 'material effect' referred to in s 1001A and s 1001D is the effect on price, whereas the materiality referred to in the case cited by the master is the materiality of information (TSC Industries Inc v Northway Inc [1976] USSC 119; (1976) 426 US 438).

35 The master then addressed what has become a central issue in this appeal. Although not specifically pleaded, the line consistently taken by Jubilee in its own evidence (and submissions) and in the cross-examination of the plaintiff's witnesses (without objection) was to the effect that any announcement made by Jubilee in 1994 would have had to include, at the very least, a statement to the effect that Jubilee had no current intention of following up the drilling data with further exploration or evaluation work on McFarlanes Find. The master expressed his conclusions in relation to that submission in the following terms:

1. This leads on to the issue raised by the defendant as to the nature of the announcement that would have been made by the defendant. Based upon the evidence of Mr Crossley, it was submitted that if an announcement was made in 1994, it would have had to include a statement that the defendant did not intend to follow up these results with further exploration or evaluation work. I do not accept that evidence.
2. First, it is clear that in 1994 Mr Crossley did not appreciate the significance of the WMC information. In fact, he did not even know to any extent what the WMC information contained. Even as at the date of trial, he seemed uncertain as to the significance of the data. If he had become aware of its significance, then he may or may not have determined that no further drilling was warranted. But I am not satisfied that he is in a position now or that he was in a position in 1994, to say that no further exploration work would have been undertaken. Apart from anything else, if an announcement was made, presumably the board of the defendant would have had to consider what the next step might be. It is impossible to know what they might have decided. But I am not satisfied that they would have made an announcement containing negative sentiment.
3. I also do not accept that under the listing rules they would have been obliged to make such a statement. This was covered by Mr Le Page in his evidence. It would have been open to the defendant to make a statement in precisely the terms of the 1996 announcement leaving out the last sentence of the third paragraph. In other words, they could have announced the results in those terms and simply not have given any indication of what the next step might be. That would have been an appropriate course to adopt (assuming always that the bullish statement in 1996 was appropriate).
4. Thirdly, it is simply not the practice of junior explorers to include negative sentiments when announcing positive results. As I have indicated, when the suggestion was made to Mr Riley, Mr Le Page and Dr Rudenno that negative statements about future activity by the defendant would have been included in an announcement made in 1994, they were nonplussed. That is just not the way that junior explorers operate. They make the sort of announcement that the defendant made in 1996.

36 The master addressed the second question he had identified, namely, whether the contravention by Jubilee was negligent in the following succinct portion of his reasons:

1. Under s 1001A(2), the section is only contravened (in the circumstances of this case) if the defendant was negligent in failing to notify the ASX of the WMC information. Clearly, negligence in this context means something more than inadvertence or carelessness. In their written submissions, the defendant (at par 43) assumed that the civil standard applied. That is to say the defendant was obliged to take reasonable care to avoid foreseeable risk of injury to persons within the class prescribed by s 1001D. The crucial question, then, is what constitutes reasonable care in all the circumstances.
2. In this case, the circumstances again include all the background facts. They certainly require proper consideration of the WMC information. It is then not necessary to go any further. The fact is that the WMC information did not receive proper consideration. The person who had direct responsibility for announcements to the ASX was Mr Crossley. It was he who had to determine whether the WMC information should have formed the basis for an announcement. In making that decision, he had to bring to bear all of the background knowledge and his own experience. If he did not understand the WMC information, then he could have called for a detailed report from Mr Cooke or he could have engaged the services of an independent consultant.
3. The simple fact is that he did nothing. He did not even bother to read the two letters. In my view, there can be no doubt that he simply did not take sufficient care. It was always foreseeable that if the WMC information was such as to have an effect on the market, then it could lead to investors suffering loss. In my view, Mr Crossley and through him the defendant, were clearly negligent.

37 Mr Riley's claim for damages had two components - that relating to the sale of the fully paid shares, and that relating to the sale of the partly paid shares. His claim was based on the proposition that an announcement by Jubilee in September or October 1994 would have had no impact upon the time at which he sold the fully paid shares, but would have led him to not sell the partly paid shares until September 1997.

38 In relation to the claim based on the sale of the fully paid shares, the master concluded that those shares would have been sold for a price 3 cents higher than their actual sale price. The master came to this conclusion by applying the 9% increment in Jubilee's share price (which occurred in June 1996 following the announcement) to Jubilee's share price in early October 1994 (at which time the share price was approximately 30 cents), and rounding it up to 3 cents [299]. By September 1994, the Trust retained 521,000 fully paid shares, which were sold thereafter. An amount of 3 cents per share in respect of each of those shares produced a figure of $15,630, from which the master deducted a discount of 10% to allow for the contingencies that the shares might not have been sold at the price at which they traded in early October 1994 or that their sale could have depressed the market price. The master rounded out the damages awarded in respect of the fully paid shares at $14,000.

39 In relation to the partly paid shares, the master indicated that he accepted the evidence of Mr Riley, and concluded that Mr Riley would have retained the shares until September 1997. Whether Mr Riley's evidence was in fact to that effect will be considered in the context of one of the grounds of appeal. However, notwithstanding his finding that the partly paid shares would have been retained until September 1997, for reasons which are not at all clear, the master discounted the damages he would have awarded by 20%, relying upon the decision of French J in Adelaide Petroleum NL v Poseidon Ltd (1990) 98 ALR 431. That case is concerned with the assessment of damages for the loss of a chance of undertaking a profitable transaction. On the master's finding, on the balance of probabilities, that the partly paid shares would have been retained until September 1997, no chance was involved. However, Mr Riley does not cross-appeal from this aspect of the master's decision, and it is unnecessary to consider it further.

40 The master made a number of other deductions from the profit that would have been derived by sale of the partly paid shares in September 1997, to produce an assessment of $1,842,000 which, when added to the damages assessed in respect of the fully paid shares, produced a total award of $1,856,000. As I have observed, interest on those damages in an amount of just over $1 million was also awarded.

41 It is necessary to consider the grounds of appeal in the context of the essential elements of the statutory claim pursued by Mr Riley. Neither at trial, nor in the written submissions provided on appeal, was any great attention directed to the identification of the particular elements of the statutory cause of action or the proper interpretation and effect of the statutory regime under which the claim was brought. When these issues were raised by this court during the appeal hearing, oral argument on the subject was significantly hampered by the lack of a full set of the Listing Rules applicable at the time of the alleged contravention by Jubilee. As contravention of those rules is a pre-requisite to any contravention of the statute, it is appropriate to commence with a consideration of those rules.

42 At all times material to these proceedings, the relevant listing rule was r 3A(1) which was in the following terms:

A listed company shall immediately notify the Exchange of -

(1) any information concerning the company of which it is or becomes aware and which a reasonable person would expect to have a material effect on the price or value of securities of the company. This requirement does not apply if each of the following conditions is and remains satisfied:

(i) a reasonable person would not expect the information to be disclosed; and

(ii) the information is confidential; and

(iii) one or more of the following conditions apply:

1. it would be a breach of a law to disclose the information;
2. the information is, or is part of, an incomplete proposal or negotiation;

1. the information comprises matters of supposition or is insufficiently definite to warrant disclosure;

1. the information is generated for the internal management purposes of the company; or
2. the information is a trade secret.

For the purpose of this Listing Rule the company becomes aware of information where a director or executive officer has, or ought reasonably to have, come into possession of the information in the course of the performance of duties as a director or executive officer.

43 At the relevant time, the Listing Rules commenced with a section entitled 'Definitions'. That section commenced with the following:

In the application of these Listing Rules all words or expressions given a particular meaning in the Corporations Law shall have respectively the same meaning when used in these Listing Rules unless the context otherwise requires or the word or expression is defined hereunder.

The only word used in r 3A(1) which is specifically defined in the Definitions section of the Listing Rules is 'Exchange' - meaning, Australian Stock Exchange Limited. However, the term 'Executive Officer' was defined by s 9 of the Corporations Law to mean 'a person ... who is concerned, or takes part, in the management of the body or entity'. Plainly, each of Mr Cooke and Mr Crossley were executive officers of Jubilee. Mr Crossley was also a director. It follows that under the listing rule, Jubilee is to be taken to have become aware of all information which came, or ought reasonably to have come, into the possession of Mr Cooke or Mr Crossley in the course of the performance of their duties.

44 Jubilee having become aware of that information, its obligation to disclose it depended on whether it was information 'which a reasonable person would expect to have a material effect on the price or value of' its securities. That terminology is identical to the terminology used in the relevant statutory provisions, which it is appropriate to set out:

1001A

(1) This section applies to a listed disclosing entity if the provisions of the listing rules of a securities exchange:

(a) apply to the entity; and

(b) require the entity to notify the securities exchange of information about specified events or matters as they arise for the purpose of the securities exchange making that information available to a stock market conducted by the securities exchange.

(2) The disclosing entity must not contravene those provisions by intentionally, recklessly or negligently failing to notify the securities exchange of information:

(a) that is not generally available; and

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

(3) A contravention of subsection (2) is only an offence if the failure concerned is intentional or reckless.

(4) ...

1001D

For the purposes of sections 1001A and 1001B, a reasonable person would be taken to expect information to have a material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell, the first-mentioned securities.

1005

(1) Subject to the following sections of this Division, a person who suffers loss or damage by conduct of another person that was engaged in contravention of a provision of this Part or Part 7.12 may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention.

(2) ...

45 According to a report produced by the ASX in 2002 (Australian Stock Exchange, Continuous Disclosure: The Australian Experience, 20 February 2002), the impetus for the introduction of a legislative regime requiring continuous disclosure by listed entities came from a spate of Australian corporate collapses in the 1980s, which resulted in the significant withdrawal of capital (especially foreign capital) from the Australian market (see s 1 of the report).

46 In June 1991, the Attorney General of the Commonwealth, Mr Michael Duffy, requested the Companies and Securities Advisory Committee (CASAC) (established under the Australian Securities Commission Act 1989 (Cth)) to examine and report upon the need for a legislatively based continuous disclosure regime. CASAC's report was published in September 1991 (Companies and Securities Advisory Committee, Report on Enhanced Statutory Disclosure System, September 1991). It surveyed the existing Australian requirements relating to disclosure and provided some commentary on the requirements of comparable overseas jurisdictions. CASAC recommended the creation of a statutory obligation of continuous disclosure to be imposed upon 'disclosing entities' which would include all listed companies (see p 9 of the report). Under CASAC's recommendations, the obligation of continuous disclosure would extend to the disclosure of all 'material matters' which would include 'any matter that is likely to materially affect the price of the disclosing entity's debt or equity securities or is necessary to avoid the establishment or continuation of a false market in those securities' (see p 10 of the report). In that context, CASAC specifically referred to the then form of listing rule 3A(1) which required immediate notification of any information which was either necessary to avoid the establishment of a false market in its securities or likely to materially affect the price of those securities.

47 Following delivery of that report, the Corporate Law Reform Bill 1992 (Cth) was presented to the Commonwealth parliament. Under the provisions of that bill, 'disclosing entities' (as defined) would be obliged to make continuous disclosure of 'material information' as soon as practicable but, in any event, within three days, to the Australian Securities Commission (ASC). That obligation would have overlapped with the obligation imposed upon listed entities by the Listing Rules. In the second reading speech for that bill, the minister expressed the hope that 'the Stock Exchange Rules and the legislation can complement one another' (Commonwealth, Parliamentary Debates, Senate, 26 November 1992, 3580 (Mr N Bolkus, Minister for Administrative Services)).

48 That hope was achieved by the Corporate Law Reform Bill 1993 (Cth) which supplanted the 1992 bill. The 1993 bill responded to various criticisms which had been aimed at the 1992 bill, including the creation of overlapping obligations to report to both the ASC and the ASX.

49 The 1993 bill was enacted as the Corporate Law Reform Act 1994 (Cth) and took effect from 5 September 1994. The Corporate Law Reform Act added s 1001A and s 1001D to the Corporations Law. It will be noted that by the time the Corporate Law Reform Act had been enacted, the terminology used in listing rule r 3A(1) had been brought into line with the provisions introduced by that Act, including s 1001A - s 1001D.

50 In the second reading speech relating to the 1993 bill, the Attorney General, Mr Lavarch, observed:

One essential difference exists in the approach to disclosure in the bill now introduced from that of the 1992 bill. This bill builds on the existing framework for disclosure by listed entities to the Stock Exchange, rather than creating an overlapping system for disclosure of the same or similar information to the ASC. This approach has been adopted in light of the recommendations of the legal and constitutional affairs committee. It also takes into account some of the criticisms of the 1992 bill from business and professional advisers.

...

As previously mentioned, the continuous disclosure obligations for listed entities will be based on the Stock Exchange requirements. Civil and, in limited cases, criminal sanctions will apply where inadequate disclosure would reasonably be expected to materially affect the price or value of the relevant securities. This criterion, which needs to be satisfied in addition to showing that a breach of the listing rules has occurred, will ensure that only serious breaches of the disclosure requirements are subject to direct legislative sanctions.

51 The last passage is, with respect, difficult to comprehend, as the requirement that the material to be disclosed materially affect the price or value of the relevant securities was then present in both the listing rule and the 1993 bill. The sentiment expressed by the minister to the effect that only serious breaches would attract direct legislative sanction would, with respect, make more sense if he had referred to the provisions of s 1001A(2) of the Corporations Law to the effect that the statutory regime was only infringed if the Listing Rules were contravened 'intentionally, recklessly or negligently'. At all events, those requirements were removed from the legislative regime relating to continuous disclosure when it was substantially revised in 2001.

52 Perhaps surprisingly, neither the parties, nor the researches of the court have been able to identify any decisions dealing with s 1001A - s 1001D of the Corporations Law. Perhaps the closest one gets to judicial assistance on the topic is the decision in Flavel v Roget (1990) 1 ACSR 595, which concerned a charge brought under s 229 of the Companies (SA) Code, which in turn related to an alleged contravention of r 3A(1) of the Listing Rules in the form which that listing rule took in early 1987. However, because of the changes in both listing rule 3A(1) and the statutory regime since that case was decided, the decision is, with respect, of very limited assistance.

53 Nor is any assistance to be gained from decisions in comparable jurisdictions. The corporate disclosure regimes in each of the United Kingdom, Canada and the United States are materially different to the continuous disclosure regime created by the legislation to which I have referred. The most comparable jurisdiction to Australia is that of New Zealand. In New Zealand, the Securities Markets Act 1988 (NZ) statutorily enforces the provisions of the Listing Rules of a registered exchange (s 19A - s 19D). However, the relevant listing rule (listing rule 10) of the New Zealand stock exchange defines the information the subject of the continuous disclosure regime created by those rules in substantially different terms to the terms of listing rule 3A(1).

54 It is therefore necessary to approach the proper construction and effect of the relevant legislative provisions essentially by reference to the natural and ordinary meaning of the language used, construed in light of the evident purpose of the legislation, with such limited assistance as the extrinsic materials to which I have referred can provide.

The relationship between the Listing Rules and the statutory provisions

55 The first question appropriately addressed concerns the relationship between the Listing Rules and the statutory provisions. The basic nature of that relationship is easy to see, and was made evident by the change in the structure of the proposed legislation when the 1993 bill replaced the 1992 bill. Plainly, the legislative provisions build upon and reinforce the obligations imposed by the Listing Rules, save that the imposition of civil liability by reason of contravention of the Listing Rules is qualified (by the requirement that the contravention be intentional, reckless or negligent) and criminal liability even more qualified (by the requirement that the contravention be intentional or reckless).

56 A more specific issue arising from the interplay between the Listing Rules and the statutory provisions is raised by ground 7 of Jubilee's amended grounds of appeal (which was introduced during oral argument) and which complains that the master erred by applying s 1001D to the antecedent question of whether listing rule 3A(1) had been breached (appeal transcript ts 117).

57 As I have already observed, s 1001D is somewhat analogous to a deeming provision. It provides that the question of whether a reasonable person would be taken to expect information to have a material effect on the price or value of securities, is to be taken to be affirmatively answered if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell those securities. So, if the information has the characteristic referred to in s 1001D, it is to be taken to be information which falls within the scope of s 1001A(2)(b).

58 However, s 1001D does not provide that it is only information which has the defined characteristic that can fall within the scope of s 1001A(2)(b). If the legislature had intended that result, the word 'if' in s 1001D would no doubt have been followed by the words 'and only if'. It follows that information can fall within the scope of the legislative regime either if it has the characteristic referred to in 1001D or alternatively, if it is for some other reason information which a reasonable person would be taken to expect to have a material effect on the price or value of securities.

59 However, in practical terms, it is very difficult to envisage a circumstance in which a reasonable person would expect information to have a material effect on the price or value of securities if the information would not be likely to influence persons who commonly invest in those securities in deciding whether or not to subscribe for, or buy or sell them. The price of securities quoted on a stock exchange is essentially a function of the interplay of the forces of supply and demand. It is therefore difficult to see how a reasonable person could expect information to have a material effect on price, if it was not likely to influence either supply or demand. Rather, on the face of it, the scope of information which would, or would be likely, to influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell those securities is potentially wider than information which a reasonable person would expect to have a material effect on price or value, because there is no specific requirement of materiality in the former requirement.

60 The question posed by ground 7 is whether s 1001D applies to the ascertainment of a contravention of listing rule 3A, or whether, as Jubilee asserts, that listing rule 3A can only be contravened if a reasonable person would expect the information to have a material effect on the price or value of Jubilee's securities quite independently of the question posed by s 1001D. Jubilee advances that proposition on the unstated hypothesis that the effect of its acceptance would be that listing rule 3A(1) would have a narrower scope of operation than s 1001A(2) read with s 1001D. Based on the analysis in the preceding paragraph, that hypothesis would appear to be valid, if Jubilee's argument is accepted.

61 However, acceptance of Jubilee's proposition would create a significant inconsistency in the regime which was quite deliberately created in 1993 and 1994, and which was based upon the interplay of the Listing Rules and the statutory provisions. That is because the scope of the statutory regime, if this argument were accepted, would be potentially wider than the scope of the Listing Rules. But invocation of the statutory regime is dependent upon a contravention of the Listing Rules. Thus, the use of potentially broadening language in the statutory regime would be pointless.

62 As I have observed, the Listing Rules expressly provide that 'expressions given a particular meaning in ... the Corporations Law' are to have the same meaning when used in the Listing Rules. Further, as seen above, on strict analysis, s 1001D did not give the expression used in s 1001A a particular meaning. Rather, s 1001D provided that the requirement embodied in the expression is to be taken to be satisfied in particular circumstances. However, the clear sentiment more generally embodied in the definitions section of the Listing Rules, and quite specifically embodied in the structural relationship between the Listing Rules and s 1001A - s 1001D, is that of consistency between the two regimes. An unduly constrained and technical approach to the terminology used in the definition section in the Listing Rules would defeat that obvious purpose and create the evident inconsistency to which I have referred. For those reasons, such an approach should be rejected. The better view is that s 1001D applied to listing rule 3A with the consequence that if information had the characteristic defined in that section, it should be taken to be information falling within the scope of the listing rule. Accordingly, ground 7 should be dismissed.

63 Turning then to apply that conclusion to the identification of the elements of the statutory cause of action, the first element required is that there must be information concerning the company of which it is, or becomes, aware. As I have mentioned, listing rule 3A provides that a company becomes aware of information where designated personnel have, or ought reasonably to have, come into possession of that information. In the present case, the designated personnel include each of Mr Cooke and Mr Crossley.

64 The second element of the statutory cause of action is the requirement that a reasonable person would expect the information to have a material effect on the price or value of securities of the company. That requirement will be satisfied if the information has the characteristic specified in s 1001D, or if, independently of that characteristic, the information is such that a reasonable person would expect it to have the material effect specified (although as discussed above, it is difficult, in practical terms, to see how a reasonable person could have that view if the information did not have the characteristic specified by s 1001D).

65 The third element in the statutory cause of action requires a claimant to prove that none of the qualifications to the obligation of disclosure specified by listing rule 3A apply. Under those qualifications, the company is not obliged to make disclosure if:

(1) a reasonable person would not expect the information to be disclosed; and

(3) one or more of five specified conditions apply.

So, before a company was exempt from the obligation to make disclosure, each of those three requirements must have applied.

66 Jubilee pleaded a defence in which it asserted that the requirements of listing rule 3A do not apply if a reasonable person would not expect the relevant information to be disclosed, the information was confidential, and the information was insufficiently definite to warrant disclosure (the latter being one of the five specified conditions). The master did not specifically deal with that defence. However, the master drew attention to the argument that the information was 'insufficiently definite' [61]. He noted that this argument was 'not really pressed' and, if anything, 'was subsumed in the wider claim that the information was not of such significant that it should have been released' [61]. Regardless, the defence was without substance. As the master found, and Mr Cooke conceded in evidence, the drilling data suggested that McFarlanes Find had future exploration potential. Although there was room for differing views as to the significance of that potential, it could not be said to have been insufficiently definite to warrant disclosure.

67 Turning then from the listing rule to the statutory provisions, s 1001A(1) requires proof that the Listing Rules of a securities exchange apply to the entity and require the entity to notify the exchange of information. Plainly, that element was satisfied in the present case.

68 Section 1001A(2) provides that the disclosing entity must not contravene the relevant provisions by failing to notify the exchange of 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 listed securities of the entity. As the latter requirement coincides with the language of listing rule 3A(1) and s 1001D applies to both, it does not materially add to the elements of the statutory cause of action. In relation to the element that the information not be generally available, there is no doubt that the information in this case was, until disclosed, of that character.

69 Section 1001A(2) also requires that, before there is any contravention of the statute, the contravention of the Listing Rules must have been either intentional, reckless or negligent. In the present case, Mr Riley based his claim entirely upon the assertion that Jubilee was negligent in failing to notify the exchange. There might be questions concerning just what 'negligence' means in this context. The expression 'negligence' has a well-known legal meaning, in which it is applied to a departure from a duty of care imposed by the common law. Plainly, it cannot bear that meaning in this context, as a company is under no common law duty of disclosure.

70 It would be possible to apply the word in a modified sense of its legal meaning, by applying it to a breach of the contractual obligation of disclosure created by listing rule 3A(1). However, if it was applied to all breaches of the contractual obligation of disclosure, it would be otiose and meaningless. Its evident purpose, reinforced by the somewhat curious language used by the Attorney General on the occasion of the second reading speech (above [50]), is to qualify and restrict the circumstances in which breach of the obligation of continuous disclosure will give rise to civil liability.

71 In its context, it seems likely that the legislature intended that the requirement that the contravention be 'negligent' would require a claimant to establish not only that there was a contravention of the listing rule, but also that the contravention came about because the company failed to take reasonable care to avoid a contravention. If that is the proper view of the effect of the provision, the question of whether reasonable care had been taken would, no doubt, give rise to a number of subsidiary questions relating to the systems employed by the company to avoid contravention, the conduct of the individuals who dealt with the information, whether a view to the effect that the information did not need to be disclosed was within the range of views reasonably open and so on. If and when such questions arise, questions might also arise as to the extent to which they are to be addressed on a subjective or objective basis - or somewhere in between - perhaps by applying the standard of a reasonable company in the particular circumstances of the company in question.

72 For reasons which I will develop, it does not appear to me to be necessary or appropriate to resolve such questions in the circumstances of this case. Further, the element of negligence has been removed from the statutory cause of action since 2001. It therefore seems unlikely that there will be other cases in which these issues will require resolution and I do not propose to consider them further.

73 The final element in the statutory cause of action is that imposed by s 1005, which requires the claimant (for damages) to establish a causal connection between the loss or damage claimed and the statutory contravention.

74 Against that factual and legislative background, I turn to the specific grounds of appeal (other than ground 7, which has already been addressed).

75 Ground 1 complains that the master went beyond Mr Riley's pleaded case in two material respects, namely:

relying upon assay results of 1.33% and 1.153% nickel; and

attributing significance to the electromagnetic survey data supplied to Jubilee by WMC.

76 The information which Mr Riley pleaded should have been disclosed by Jubilee was contained in par 7 of the statement of claim. In that paragraph, the information is pleaded in terms of the average grades of nickel encountered over certain lengths of the relevant drill hole at grades varying between 0.47% and 0.67% nickel depending upon the particular intersect. Paragraph 9 of the statement of claim pleaded that the information had to be disclosed because it suggested that the Mt Keith mineralized nickel sequence extended onto McFarlanes Find and that there was potentially viable nickel mineralisation which warranted further exploratory drilling on McFarlanes Find.

77 The first aspect of the appellant's complaint under ground 1 derives from the following passages in the master's reasons:

1. The second letter had attached to it the assay results. Some of the results for MKTD-101 leap off the page. For instance, there is a 2 metre intersection which runs at 1.33 per cent nickel and another 2 metre intersection which runs at 1.153 per cent nickel. The Mt Keith deposit was at a grade of 0.5 per cent. These figures are not difficult to spot and, even to the untrained eye, they look significant. Quite how significant is the question at the heart of this case.

1. The importance of Mr Crossley properly understanding the WMC information can be demonstrated by the following exchange (transcript, page 994):

'THE MASTER: That is perhaps a convenient time. Just one question before we conclude for the day, Mr Crossley. If you go to page 764 - you might have it open there. It's the results that were contained I think in the second letter, which was contained with the second letter. Have you got those there? ---764, yes.

You can see down on the right-hand side there is a reference to a hole 101. It's a bit faint on my photocopy. See the hole number MKTD101, I think it is? --- Down the very bottom corner.

And then you have a look at those results for the nickel assays, parts per million, running down virtually the centre of the page. I think Mr Hancy drew your attention to them, 1.33 per cent. Do you see those? --- Yes, I see that.

1.33 per cent, down right at the bottom .7 per cent. If you had known that those results were contained in that information, would you have announced them to the stock exchange? ---They are certainly more fundamental and the answer is yes, if we could have known for sure that they were on our property. If they weren't on, then there was nothing to report.'

78 Further, the master referred implicitly to the higher assay results over very short intervals in his conclusions - see, for example [275] and [281]. Jubilee's grievance is exacerbated by the fact that the master suggested, for the guidance of the parties during trial, that the evidence of Dr Trench, who drew particular attention to the higher figures in the assay results, should not be taken as admissible expert evidence as it had not been identified as such prior to trial and had not been put to any of Jubilee's expert witnesses for their opinion. The master stated that an attempt to lead expert evidence for the first time at that point in the trial was improper and inappropriate. However, the master did not make such a ruling, instead leaving the matter to the parties who largely resolved the issues between themselves, meaning Mr Trench's evidence was heard.

79 There are a number of answers to Jubilee's complaints in this respect. The first is that the two results of 1.33% and 1.153% over very short intervals (of 2 metres each) do in fact make up part of the results which are pleaded in par 7 of the statement of claim by way of averages over lengths which include the intervals that contain these results, as well as intervals that contain significantly lower results. Further, the statement of claim clearly and explicitly pleads the provision of the information from WMC to Jubilee by the two specified letters. The results the subject of this ground of appeal were within that information. So, it is simply not correct to say that the grades found at those two intervals go beyond the pleaded case.

80 In any event, the evidence of which Jubilee now complains was introduced into the case, and addressed by Jubilee, without objection. If objection had been taken at the time, steps might have been taken to provide Jubilee with the opportunity to more directly address those issues. However, Jubilee never requested that opportunity. It is now too late for Jubilee to take that point (see Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491, 497).

81 Further, when the master's reasons are read as a whole, it is clear that the particular grades to which he refers are only one of the many steps along the road to his conclusion that the significance of the WMC information was that it revealed the potential for further exploration of McFarlanes Find - see [108], [174], [191], [212], [244] and [281]. Mr Riley specifically pleaded that the reason the information had to be disclosed was because it revealed the exploration potential of the tenement. As I have observed, none of the witnesses seriously caviled with the proposition that the data did reveal such potential. That is a proposition which is strongly reinforced by the fact that in June and July 1996, Jubilee spent money exploring McFarlanes Find by further drilling. Accordingly, the conclusion of the master to the effect that the significance of the information lay in its revelation of exploration potential was not dependent upon his observations relating to the particular grades over short intervals and would be upheld even if there was substance in Jubilee's complaint.

Attributing significance to electromagnetic data

82 The second aspect of Jubilee's complaint under this ground relates to the master's reference to the electromagnetic data supplied by WMC. In his reasons, the master records that there was argument during trial relating to the use which could be made of the electromagnetic data. When issue was taken, counsel for Mr Riley formulated an amended pleading which sought to place reliance upon the information contained within the electromagnetic survey data. Jubilee objected to the amendment and it was disallowed by the master on the basis that it raised a fresh issue about which expert testimony would have been necessary [72] - [75]. However, notwithstanding that ruling, the master held:

1. But that is not to say the electromagnetic data is to be ignored. It is the fact that it accompanied the first letter. As I have said, without making any attempt to understand the data or have it analysed, Mr Cooke and the defendant surely should have had some heightened awareness of its significance.

83 With respect, it is difficult to see how Mr Cooke or Jubilee could, or should, have had some heightened awareness of the significance of the electromagnetic survey data without making any attempt to understand it or have it analysed. The fact that the data was provided was, of itself, of no significance because, as the master observed, all the witnesses agreed that electromagnetic field work was nothing more or less than was to be expected when WMC undertook an exploration programme [72].

84 Accordingly, the master erred in attaching any significance to the provision of the electromagnetic survey data by WMC. However, as I have already indicated, his conclusion that the significance of the WMC data lay in its revelation of the potential for exploration of the tenement was by no means dependent upon that observation and is amply sustained by the other evidence upon which he relied. Accordingly, although there is substance in Jubilee's complaint on this aspect of ground 1, it does not lead to the conclusion that the findings of the master should be disturbed. Accordingly, ground 1 should be dismissed.

85 These grounds are conveniently considered together, as they involve essentially the same issue. Ground 2 alleges that if Jubilee had notified the ASX of the data received from WMC in September or October 1994, it would also have been obliged to notify the ASX that:

(a) in the opinion of its geologist, the intersected mineralisation, which was found in only one hole of six drilled, was too deep, too low a grade and too small to be of any interest; and

(b) Jubilee had no current intention of carrying out any exploratory drilling on the tenement in the foreseeable future because of:

(i) the view of its geologist and managing director as to the lack of significance in the drilling results;

86 Ground 3 asserts that when regard is paid to the additional material which Jubilee would have disclosed together with the WMC drilling data, the information as a whole was not information which was likely to have influenced persons who commonly invest in securities in deciding whether or not to buy or sell shares in Jubilee, with the result that the master erred in concluding that Jubilee had contravened either the listing rule or the statute.

87 There are a number of preliminary observations appropriately made in relation to these grounds. The first is that the evident purpose of each of the listing rule and the relevant statutory provisions is to ensure an informed market in listed securities. Put another way, the legislative objective is to ensure that all participants in the market for listed securities have equal access to all information which is relevant to, or more accurately, likely to, influence decisions to buy or sell those securities. It would be entirely contrary to that evident purpose to construe either the listing rule or the statutory provisions as countenancing the disclosure of incomplete or misleading information.

88 The next relevant general observation is that the ultimate determination of the ambit of the information appropriately disclosed, on the proper construction of the listing rule and the statutory provisions, was essentially a determination for the master drawing upon the facts established by the evidence. If the proper conclusion from the facts established by the evidence is that disclosure of the information gained from WMC without disclosure of the surrounding circumstances would have been incomplete or misleading, it would be wrong to award damages on the basis that Jubilee had failed to comply with its obligations in that way.

89 The final general observation appropriately made is that the obligations imposed by the Listing Rules and the relevant statutory provisions are limited to the disclosure of information. The obligations do not extend to include, for example, making business decisions which might or even should be made as a result of the receipt of the information. At points in the argument advanced on behalf of Mr Riley, and in the master's reasons, it seems to be supposed that if Jubilee should have attached greater significance to the drill hole data it received and should have immediately undertaken exploratory drilling (perhaps by raising funds to enable that to occur), it was somehow a breach of the continuous disclosure provisions for Jubilee not to announce and take that course. Plainly, the obligations of continuous disclosure do not go that far.

90 Jubilee can only have been obliged to disclose information which it had or ought to have had. The latter expression cannot be construed as extending to information arising from business decisions which Jubilee had not made - such as the decision to undertake exploratory drilling. Jubilee's obligations of disclosure must be assessed having regard to the totality of relevant information. It follows that if, for whatever reason (including flawed reasons), Jubilee had no current intention of undertaking exploratory drilling on the tenement, and that intention was relevant to the assessment of the extent to which provision of the drill hole data provided by WMC would be likely to influence those who commonly invest in securities in deciding whether or not to buy or sell Jubilee's shares, Jubilee's obligations of disclosure must be assessed in that light.

91 The master did not make a clear and unequivocal finding on the question of whether, as a matter of fact, Jubilee intended to undertake exploratory drilling work on McFarlanes Find following receipt of the information provided by WMC in 1994. That is because he appears to have responded to the submissions made by Jubilee on this subject by addressing two questions, namely:

(a) what would Jubilee have done if it had appreciated the significance of the data provided by WMC (at [292]); and

(b) whether it was likely that a junior explorer, like Jubilee, would have diminished the positive benefit to be derived from announcing the WMC data by including a negative statement to the effect that it did not propose to undertake exploratory drilling in the foreseeable future (at [294]).

92 For the reasons I have given, neither of these questions was relevant to the cause of action pursued by Mr Riley. None of the obligations created by the regime of continuous disclosure obliges Jubilee to make consequential business decisions following receipt of information which it may have to disclose. The cause of action, pursued by Mr Riley is to be assessed by reference to hypothetical compliance by Jubilee with any obligation to disclose, on the basis that all relevant information was disclosed.

93 To the extent that it is possible to infer from the master's reasons the view which he took in relation to the actual intention of Jubilee in 1994, it seems reasonable to infer that he concluded that Jubilee had no intention of undertaking exploratory drilling in the foreseeable future. That inference can be drawn from the numerous references in his reasons to Jubilee's constrained financial position in 1994, and to its primary focus being upon gold exploration, in particular the acquisition of the Bellevue Gold Mine and prospecting for gold on the Kathleen Valley tenements.

94 Perhaps most significant in this context, however, are the master's findings in relation to the treatment of the information received from WMC by Mr Cooke and Mr Crossley. I have set out the pertinent portions of his findings on that subject (above at [27]; also see [274] - [278] and [291] - [294] of the trial judgment). In short, the master found that neither Mr Cooke, nor Mr Crossley, appreciated the significance of the information provided by WMC. Mr Riley has not challenged that finding. However, it is a finding which leads inevitably to the conclusion that, as a matter of fact, Jubilee had no intention of undertaking exploratory drilling on the McFarlanes Find tenement in 1994.

95 Because of the significance which I attach to this issue, it is appropriate to go beyond the findings of the master and to assess the evidence given on the subject of Jubilee's intentions between 1994 and 1996.

96 The evidence-in-chief of Mr Cooke was given by his adoption of a witness statement. In that statement he asserted that in 1994 'Jubilee was totally focused on and exploring only for gold', and that 'I was always very conscious that I had a limited budget for exploration and that I had to continually be mindful of delivering value for money'.

97 Mr Cooke's evidence was that because of the view that he formed in relation to the data provided by WMC, he:

... ranked the Intercept near the very bottom of the list of possible exploration areas of interest that ... [he] would have recommended Jubilee spend its limited exploration budget on.

98 Mr Cooke's evidence was that when he discussed the matter with Mr Crossley, he expressed the view that the information provided by WMC 'was of no geological significance beyond that which I already knew the region to possess, and was of little or no economic significance to Jubilee'. However, Mr Cooke's evidence-in-chief was also that the 1994 data was of potential interest in terms of future exploration.

99 In cross-examination, Mr Cooke confirmed that his view of the information provided by WMC in 1994 was that it revealed a low-grade deposit, narrow in width, which was deep under the ground and likely dipping deeper on Jubilee's tenement. He stated that Jubilee's interest in McFarlanes Find was because it contained 'Jones Creek conglomerate' which was the host material for the gold being pursued at Kathleen Valley. He denied that Jubilee had any interest in prospecting for nickel in 1994. In written submissions filed on behalf of Mr Riley, attention is drawn to a report to Jubilee in January 1995 summarising the results of a surface geochemical sampling programme. Reference is made in that report to defining 'possible zones of gold and nickel anomalism'. However, the programme was undertaken at Kathleen Valley, not McFarlanes Find. Further, when the report is read as a whole, it is clear that the focus of the programme was upon exploration for gold. In this regard, it is apparent that the executive summary at the beginning of the report exclusively focuses on gold except for a small part on nickel and chromium.

100 Attention is also drawn in Mr Riley's submissions to an air magnetic survey undertaken in late 1994 (referred to in Jubilee's quarterly report). However, that survey was undertaken of the entire area from the Bellevue Gold Mine to McFarlanes Find - a distance of 30 km. Further, Mr Cooke's evidence was that the emphasis of the geological mapping of the area was upon the identification of the Jones Creek conglomerate (ts 942), which, as I have observed, was of interest because of its potential as a host for gold deposits. Reference is also made in submissions to Mr Cooke's evidence, submitting that in early 1995, he was aware of the potential for nickel on Jubilee's tenements. However, that evidence was given in relation to Mr Cooke's awareness of the potential for nickel in the north-east corner of the Kathleen Valley project (ts 808).

101 Reference is made to the fact that Mr Cooke told representatives of WMC, at a meeting held in October 1994, that Jubilee needed time to explore the McFarlanes Find tenement and assess its potential (ts 936). Further, reference is also made to Mr Crossley's instruction to Mr Cooke to attempt to locate the WMC drill holes on his next visit to the McFarlanes Find tenement (ts 936). Neither of those matters is, of itself, sufficient to displace the clear and unequivocal evidence given by Mr Cooke, and accepted by the master (see above [25] and [27]), to the effect that he did not think the data provided by WMC to be of sufficient significance to contemplate exploratory drilling on McFarlanes Find in the foreseeable future. That evidence is further confirmed by the fact that Jubilee did not undertake any such drilling until after a further meeting with WMC in June 1996.

102 Finally, there was also evidence that Mr Cooke had a discussion in March 1995 with Mr Peter Eaton, an ex exployee of WMC, in relation to the possibility of swapping McFarlanes Find for prospective gold tenements held by WMC (ts 943 - 945). It is clear that this does not, of itself, suggest that Jubilee then had any intention of undertaking exploratory drilling on McFarlanes Find.

103 Mr Crossley's evidence-in-chief took the form of the adoption of two witness statements. He is a mining engineer by training and experience. In his first statement, his evidence was to the effect that after he had discussed the information provided by WMC with Mr Cooke, he formed the view that it was of no commercial significance to Jubilee, for a number of reasons set out in his statement. Further, his evidence was to the effect that in the latter part of 1994, Jubilee's entire focus was upon gold exploration, and in particular, obtaining the funding necessary to complete the purchase of the Bellevue Gold Mine. In relation to this purchase, Mr Crossley's evidence was to the effect that the withdrawal of the underwriters of the share issue proposed by Jubilee to raise funds for that purchase had a devastating effect on Jubilee's share price. By January 1995, in Mr Crossley's words:

Jubilee had almost no money and was in dire financial circumstances. Jubilee certainly did not have the means to fund deep drilling at McFarlanes Find even if I had regarded the WMC data of being of great interest, which I did not.

104 In his second statement, Mr Crossley asserted that even if the information provided to Jubilee by WMC had been released to the market in September 1994, he would not have caused Jubilee to carry out drilling or investigative work on McFarlanes Find and would have made it clear in the announcement that Jubilee did not intend to do so.

105 Mr Crossley was cross-examined at length. The line taken in cross-examination was not to the effect that Mr Crossley had formed a view that the information provided by WMC was of sufficient significance to justify further exploration. Rather, the line taken in cross-examination was to the effect that if Mr Crossley had given proper and adequate consideration to the information provided by WMC, he would and should have formed that view. The line taken was presumably the source of the approach taken by the master in his reasons.

The master's findings as to content of the announcement

106 I have set out above at [35] the reasons given by the master (at [291] - [294]) for rejecting Jubilee's contention that any announcement to the market by Jubilee should and would have included a statement to the effect that Jubilee had no current intention of undertaking exploratory drilling work on the tenement. I will address those reasons in the order in which they are presented.

107 The master asserts (at [291]) that he rejects Mr Crossley's evidence as to the terms of the statement he would have provided if an announcement had been made. It is difficult to see any plausible basis upon which he could do so. When regard is had to the master's reasons, it seems that he arrived at his conclusion because of his view that Mr Crossley did not properly appreciate the significance of the data. However, as I have observed, no part of the continuous disclosure regime obliges companies to make consequential business decisions based upon a proper appreciation of the information in their possession. So, the significance of the master's unchallenged finding that neither Mr Cooke, nor Mr Crossley, appreciated the significance of the information provided by WMC, is that it leads inevitably to the conclusion that, as a matter of fact and for whatever reason, Jubilee had no current intention of undertaking exploratory drilling on McFarlanes Find.

108 The master states (at [292]) that he is not satisfied that Mr Crossley is in a position now, or that he was in a position in 1994, to say that no further exploration work would have been undertaken. However, as a matter of fact, on the advice of Mr Cooke, Jubilee had no intention of undertaking exploratory drilling on McFarlanes Find in the foreseeable future, because neither Mr Cooke, nor Mr Crossley, attributed significance to the information which had been provided, and the company lacked the funds to undertake such a programme. Even when further funds were realised during 1995, no exploration work was undertaken on the McFarlanes Find tenement. No decision to undertake exploratory drilling on McFarlanes Find was made until June 1996, when further funds had been realised and there had been a change in board composition introducing personnel with experience and an interest in nickel exploration, and following a further meeting with WMC.

109 The flaw in the master's reasoning is illustrated by his observation that if an announcement had been made, the board of the defendant would have had to consider what the next step might be (at [292]). This observation reinforces the conclusion that the master was assessing Jubilee's disclosure obligations by reference to business decisions that he considers that the company might or should have made based on a proper appreciation of the information it had received. However, the undeniable fact is that the company did not make such a business decision and its obligation of disclosure fell to be assessed by reference to its actual intentions, not its supposed intentions.

110 The master also appears to have been influenced in his conclusions by the evidence given by Mr Le Page. There are several observations appropriately made about his evidence. The first is that, as I have observed, the determination of the ambit of material relevantly disclosed in order to achieve the legislative objective of an informed market, was a matter for the master, not for any individual witness. The second is that in cross-examination, Mr Le Page agreed with the proposition that when releasing information, Jubilee was required to give any additional information that might be relevant to the decision of an investor to buy or sell shares in Jubilee (ts 642). Mr Le Page also accepted that release of the drilling hole data in isolation would be likely to have given rise to an expectation by investors that Jubilee considered the data to be significant and that Jubilee would follow it up with drilling and exploration (ts 642). It follows from that evidence that if, as was the fact, Jubilee had no intention of undertaking follow up drilling within the foreseeable future, release of the drill hole data without disclosure of that fact would be likely to mislead those who might decide to buy or sell shares in Jubilee.

111 The final observation appropriately made about Mr Le Page's evidence on this subject is that he appears to have been strongly influenced by his observation of market practice - particularly in the market sector occupied by junior explorers. It seems clear from his evidence (for example at ts 648 and ts 692) that he was strongly influenced by his observation that it would be extremely unusual for a junior explorer to announce a potentially positive statement and then pour cold water upon it by including information that would be viewed by the market as negative. It is clear from the master's reasons that he too was significantly influenced by this observation (see [292] and [294]). As the master observed: 'That is just not the way that junior explorers operate. They make the sort of announcement that the defendant made in 1996' [294].

112 With respect, the fact that junior explorers may adopt the practice of putting a positive slant upon information disclosed to the market is irrelevant to the question of the ambit of the information which should have properly been disclosed by Jubilee in order to comply with its obligations under the regime of continuous disclosure. In this case, by implying that it would be followed up with further exploratory drilling would have resulted in misleading the market.

113 As the master emphasised at many points in his reasons, the significance of the drill hole data provided by WMC lay in its revelation of the exploration potential of the tenement. As Mr Le Page conceded, obviously announcement of that data in isolation would give rise to an expectation, on the part of those who commonly invest in securities, that Jubilee would utilise that potential by undertaking further drilling work (ts 642). If, as was the fact, Jubilee had no current intention of undertaking such work, it would have been obliged to accompany the drill hole data with an announcement to that effect, in order to avoid misleading the market. That conclusion flows, with respect, as a matter of logic from the facts unequivocally established by the evidence, and cannot be avoided by reference to business decisions Jubilee might or should have made if it had taken a different view of the data, or to the customary practices of junior explorers in presenting only positive announcements to the market.

114 It follows therefore, that ground 2 should be upheld.

115 Ground 3 raises the question of whether Jubilee was obliged to disclose anything prior to its announcement in June 1996, given its lack of intention to undertake exploratory drilling work up to that time (and its financial incapacity to undertake such work for at least part of that time). The answer to that question turns upon the question of whether disclosure of all relevant information would have influenced, or was likely to influence, persons who commonly invest in securities in deciding whether or not to buy or sell Jubilee's shares. Because of the view taken by the master, he did not address that question. It is therefore necessary for this court to do so by reference to the evidence.

116 The master placed great reliance upon the evidence given by Mr Le Page. His evidence on this topic was clear and unequivocal. He stated:

If the company said it intended no further exploration, I would expect the market would either stay the same or fall. (ts 644)

117 At another point, Mr Le Page was asked for his view of the effect of a statement by Jubilee in the following terms:

We've found this. We are telling it for what it's worth, but we don't intend to do anything about it.

If that were said, I think it would send a negative statement. (ts 651)

118 The master also placed reliance upon the evidence of Dr Rudenno. The master set out his view of this aspect of Dr Rudenno's evidence in the following passage:

1. Also put to Dr Rudenno in cross-examination was the claim by the defendant that it would have been necessary in any announcement in September / October 1994 to say that no follow up work, either by way of drilling or otherwise, would be undertaken. It has to be acknowledged that Dr Rudenno indicated that if an announcement in the terms proposed by counsel had been made, then there was a real prospect that the announcement would have had no effect upon the shares. As I have indicated above, I do not accept that such an announcement would have been made and I have not taken this aspect of Dr Rudenno's evidence into account in reaching my decision.

119 With respect, this passage might slightly overstate the evidence given by Dr Rudenno. Like Mr Le Page, Dr Rudenno accepted that announcement of the WMC drill hole data would, on its own, give rise to an expectation that Jubilee intended to undertake exploratory drilling work on the tenement (ts 586). In that context, he agreed that if it was not Jubilee's intention to undertake such work in the foreseeable future, it would be desirable for Jubilee to inform the market of that intention (ts 587). When it was put to Dr Rudenno that an announcement in those circumstances would have reduced market interest to nil, he did not accept that proposition because:

There are always punters who will, you know, punt on anything. It would not be nil but it would be reduced. (ts 588)

120 Later in cross-examination, Dr Rudenno conceded that after disclosure of all relevant information, '[t]here may not have been an increase in the share price' (ts 594), but later again in cross-examination, he maintained his position that even with full disclosure, the market would probably have regarded the announcement as positive (ts 596). Later again in his cross-examination, the following interchange took place:

Would you agree if all the information I put to you this morning was released, including in particular the company's decision that it didn't propose to drill or explore and in these terms that it considered the results did not show a viable; that is, an economically viable mineralisation, what kind of figure increase, if any, do you think might result? 1 cent?---It's possible. It might have been more.

It might have been more. Are you able really to venture any opinion on that? If you are not, one could understand it?---It's difficult to know what the market might or might not have done. (ts 603)

121 The other evidence adduced at trial that is relevant to this issue is that given by Mr Riley. He was a person who commonly invested in securities of this kind, and, of course, who had an interest in shares in Jubilee. His evidence was to the effect that if Jubilee had announced the WMC drilling results in September 1994, accompanied by an announcement that it did not intend to undertake further investigation or drilling, he would most likely not have been influenced to retain the shares which he had otherwise decided to sell (ts 374, 376 - 378, 381).

122 The master took the view that the issue posed by s 1001D of the Corporations Law was to be addressed by reference to those who commonly invest in securities of the kind in question - that is, the shares of junior mining explorers. He concluded that those persons were traders looking to derive profit from an increase in the share price, rather than long-term investors seeking dividend terms [280]. Neither party has challenged that aspect of the master's decision in this appeal.

123 Looking at this issue from the perspective of such a trader, as the master found, the relevance of the WMC drill hole information lay in its revelation of the prospectivity of the tenement. Following the announcement of such data, the prospect of gain for such a trader would lie in the possibility that further exploratory work would prove up the preliminary data, resulting in an increase in the price of the shares, which could then be sold at a profit. On that hypothetical scenario, if the announcement of the drill hole data was accompanied by a statement to the effect that the company had no current intention of undertaking exploratory work, and lacked the financial capacity or the inclination to do so, the hypothetical scenario of gain would appear, to such a trader, to be most unlikely or improbable, at least in the foreseeable future. Accordingly, doing the best one can to stand in the shoes of the hypothetical investor nominated by s 1001D, and taking into account the evidence of Mr Le Page, Dr Rudenno and Mr Riley, I conclude that an announcement by Jubilee of all relevant information pertaining to the WMC drill hole data would not, or would not have been likely to, influence persons who commonly invest in securities in deciding whether or not to buy or sell its shares. It follows that s 1001D did not operate to require Jubilee to disclose any information relating to the data provided by WMC until June 1996, when it made such disclosure.

124 As I have observed above (at [58]), s 1001D is not, theoretically at least, the only means by which it can be concluded that a reasonable person would expect the information, if made available, to have a material effect on the price or value of Jubilee's shares. However, in the circumstances of the present case, once it is concluded that disclosure of all relevant information would not have influenced persons who commonly invest in securities in deciding whether to buy Jubilee's shares, it is impossible to see any other basis upon which it could be concluded that a reasonable person would expect disclosure of that information to have a material effect on the price of Jubilee's shares.

125 It follows that ground 3 should be upheld. The master should have concluded that, when all relevant information was taken into account, Jubilee was under no obligation to make disclosure following receipt of the information from WMC, at least and until it altered its position and decided to undertake exploratory drilling work, at which time disclosure was in fact made.

126 This conclusion is sufficient to dispose of the appeal in its entirety, but in case other views are held, I will address all other grounds which can be appropriately considered notwithstanding this conclusion.

127 This ground challenges the master's assessment of damages on a number of different scenarios. Of course, none of those scenarios is consistent with my conclusion that Jubilee was under no obligation to make any disclosure at all until 1996, by which time all of the Trust's shares in Jubilee had been sold.

128 Ground 4 put forward the hypothetical scenario that full and voluntary disclosure was made in September/October 1994 and considered the probable results. As I have already observed, Mr Riley's evidence, which was accepted unequivocally by the master (at [97] - [98]), was to the effect that if the announcement of the WMC drill results had been accompanied by an announcement to the effect that there was no intention to undertake exploratory activity, he would have recommended to the Trust that it continue to sell its shares in Jubilee as planned. On that alternative scenario, there would be equally no basis for asserting that the Trust had suffered any loss or damage by reason of a contravention of Jubilee's obligations of disclosure.

129 Ground 4 also challenges the master's conclusion that it was more likely than not that the Trust would have retained its partly paid shares until September 1997 if the WMC data alone had been disclosed in September/October 1994. It does so on the basis that Mr Riley's evidence was not in fact to that effect, and further, was to the effect that if there had not been any follow up exploration or drilling, he would have recommended to the Trust that it sell its shares. This scenario is inconsistent with my view as to Jubilee's obligations of disclosure, and is not appropriately addressed in detail in this judgment. However, my analysis of Mr Riley's evidence leads me to conclude that it is as Jubilee contends, so that, even if a different view is taken on the question of contravention of Jubilee's disclosure obligations, I would nevertheless have upheld Jubilee's challenge to the damages awarded by the master in relation to the partly paid shares, and restricted the damages awarded to those assessed in respect of the fully paid shares - namely, $14,000.

130 Ground 5 complains of the reliance placed by the master on the events surrounding Jubilee's announcement to the ASX in 1996 in two respects - first, as evidence that an announcement should have been made in September/October 1994, and secondly, that had such an announcement been made in September/October 1994, there would have been a similar increase in the price of shares in Jubilee.

131 These issues can be shortly addressed. The fact that Jubilee made an announcement in 1996 is not evidence of the fact that it was obliged to make an announcement in September/October 1994. That is because the fact of an announcement is not of itself an admission that there was a legal obligation to make such an announcement either then, or at any earlier time. Announcements can be either voluntary or compulsory under the continuous disclosure regime. The fact of an announcement does not therefore carry with it any implied admission against interest, to the effect that an announcement was compulsory, and the master was wrong to draw such an inference.

132 That is not to say that there was not any evidence of such an admission. To the contrary, there was evidence that Mr Harmanis, who appears to have had the relevant authority of the company to make such admissions, admitted in correspondence with the ASX that if Jubilee had appreciated the significance of the WMC data, it would have made disclosure earlier. That was properly admitted as evidence of an admission against interest by Jubilee. Yet admissions against interest are only evidence to be weighed in the mix with all other evidence. In this particular case, the statement made by Mr Harmanis has to be evaluated in the context in which it was made, which followed the 1996 announcement which, on any view, was 'bullish'. In that context, Mr Harmanis could hardly be expected to have diminished the significance of the data which he had just announced to the market in glowing terms. The admission made by Mr Harmanis is insufficient to displace the conclusions to which I have come in relation to the question of whether Jubilee contravened its obligation of disclosure.

133 Turning to the question of whether the master was able to draw an inference from the events which occurred in 1996 as to the likely effect which a similar announcement would have had upon the price of Jubilee shares in 1994, it follows from my conclusions that any announcement along the lines of that made in 1996 could not have properly been made in 1994, because Jubilee did not then have any intention of undertaking

exploratory work on the tenement. It would therefore follow that the consequences of the 1996 announcement would not provide any reliable guide to the consequences of a disclosure of all relevant information in 1994.

134 However, on the view taken by the master, the events of 1996 were relevant to his assessment of the likely effect of what he concluded Jubilee was obliged to do in 1994, albeit that the circumstances were not identical. The master weighed and assessed the differences in circumstances between 1994 and 1996 in evaluating the significance of that evidence. Accordingly, although ground 5 does not affect my general conclusions, in my view, Jubilee's complaint in respect of the use made by the master of the 1996 announcement as an admission against interest is valid, but, on the scenario adopted by the master, its complaint in respect of his use of the evidence of the consequence of the 1996 announcement is not sound.

135 Ground 6 complains of the master's conclusion that Jubilee was negligent in its contravention of the listing rule. I have concluded, however, that there was no contravention by Jubilee of the listing rule. It is therefore inappropriate for me to attempt to determine this ground on some hypothetical basis other than that which I have found

136 For these reasons, I have concluded that ground 3 should be upheld, with the consequence that Jubilee's appeal should be allowed, the judgment of the master set aside, and in its place, judgment entered in favour of Jubilee. I would also uphold grounds 2 and 4. Although I would also uphold parts of grounds 1 and 5, those conclusions would not, of themselves, have caused me to interfere with the judgment. I do not find it necessary or appropriate to address ground 6. Ground 7 should be dismissed.

137 McLURE JA: The background facts are set out in the reasons of the Chief Justice. It is sufficient for present purposes to note that at all material times in 1994 the appellant was a small listed gold exploration company that was seeking to transition to a gold producing company. That was to be achieved by the purchase of the Bellevue gold mine which would render the appellant's Kathleen Valley gold project on its tenements viable. In August and September 1994 the appellant received information from a neighbouring tenement holder, Western Mining Corporation Ltd

(WMC), about the results of drilling that WMC had mistakenly carried out on the appellant's tenement known as McFarlanes Find (the tenement).

138 The results showed nickel sulphide dissemination at great depths. The appellant made no disclosure to the market about those matters until June 1996. The respondent succeeded in a claim under s 1005 of the Corporations Law for loss and damage suffered by reason of a failure to immediately disclose the information in contravention of s 1001A of the Corporations Law. I start with regulatory framework.

139 The respondent had to establish a contravention of s 1001A(2) of the Corporations Law in order to have a right to damages under s 1005 of the Corporations Law. The loss or damage in question must be 'caused by' the contravention of s 1001A(2). In order for there to be a contravention of s 1001A(2) there must be a contravention of a listing rule of the Australian Stock Exchange (ASX) requiring disclosure of information.

140 The relevant listing rule at the time of the alleged contravention is r 3A. That rule relevantly provided:

A listed company shall immediately notify the Exchange of -

(1) any information concerning the company of which it is or becomes aware and which a reasonable person would expect to have a material effect on the price or value of securities of the company. This requirement does not apply if each of the following conditions is and remains satisfied:

(i) a reasonable person would not expect the information to be disclosed; and

(ii) the information is confidential; and

(iii) one or more of the following conditions apply:

(a) it would be a breach of a law to disclose the information;

(b) the information is, or is part of, an incomplete proposal or negotiation;

(c) the information comprises matters of supposition or is insufficiently definite to warrant disclosure;

(d) the information is generated for the internal management purposes of the company; or

(e) the information is a trade secret.

For the purposes of this Listing Rule the company becomes aware of information where a director or executive officer has, or ought reasonably to have, come into possession of the information in the course of the performance of duties as a director or executive officer.

141 The definitions section of the Listing Rules provided that all words or expressions given a particular meaning in the Corporations Law shall have respectively the same meaning when used in these listing rules unless the context otherwise requires or the word or expression is defined in the Listing Rules.

142 Section 1001A of the Corporations Law relevantly provides:

1001A(1) [Listing Rules require disclosure].

This section applies to a listed disclosing entity if provisions of the listing rules of a securities exchange:

(a) apply to the entity; and

(b) require the entity to notify the securities exchange of information about specified events or matters as they arise for the purpose of the securities exchange making that information available to the stock market conducted by the securities exchange.

1001A(2) [Contravention of disclosure rules]

The disclosing entity must not contravene those provisions by intentionally, recklessly or negligently failing to notify the securities exchange of information:

(a) that is not generally available; and

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

143 There is no suggestion the appellant intentionally or recklessly failed to notify the ASX of the information in question. The respondent relied on a claim of negligent failure. Section 1001D provides:

1001D [Sections 1001A and 1001B - Material Effect on Price or Value]

For the purposes of sections 1001A and 1001B, a reasonable person would be taken to expect information to have a material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell, the first-mentioned securities.

144 We were not referred to authorities on many of the construction issues that arise for determination in this case. The court's research efforts have not identified any additional relevant material.

145 It is useful to separately identify the elements of a contravention of r 3A and s 1001A(2) of the Corporations Law.

146 The parties accepted that s 1001D of the Corporations Law, described in the explanatory notes to the Corporate Law Reform Bill 1993 as an 'interpretative' provision, had the effect of supplanting s 1001A(2)(b) which would thus be taken to read:

(b) that would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell, the securities of the company in question.

147 An interpretation (definition) provision would have that effect: Insurance Commission of Western Australia v Container Handlers Pty Ltd [2004] HCA 24; (2004) 218 CLR 89 [30], [92]. Having regard to the concession in relation to s 1001D, the elements to establish a contravention of s 1001A(2) in this case are:

(1) a contravention of Listing Rule 3A;

(2) a failure to notify the exchange of information:

(i) that is not generally available; and

(ii) that would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell, the securities of the company in question.

148 Under r 3A, unless the requirements in subparagraphs (i) - (iii) are satisfied, a listed company is obliged to immediately notify the ASX of:

(1) any information concerning the company;

(2) of which it is or becomes aware; and

(3) which a reasonable person would expect to have a material effect on the price or value of securities of the company.

149 A contested issue is whether s 1001D also supplants the third element of r 3A so that the obligation in the Listing Rule is to notify the exchange of any information concerning the company of which it is or becomes aware that would, or would be likely to, influence persons who commonly invest in securities in deciding whether or not to subscribe for, or buy or sell, the securities of that company.

150 In my view, s 1001D does not apply to r 3A. Section 1001D is stated to apply for the purposes of s 1001A and s 1001B. Those sections only give rise to a contravention if the information is not generally available and posit what a reasonable person would expect from notification to the ASX (and thus the general availability of the information). The notification obligation in r 3A is not expressly or impliedly confined to information that is not generally available. Indeed, the express exception in r 3A is not consistent with a broad exclusion for generally available information. Thus the substantive differences between r 3A and s 1001A(2) have the contextual consequence that the interpretation provision of the Corporations Law (s 1001D) is not applicable to r 3A.

151 The following construction issues also arise: (1) the scope of the term 'information' in r 3A; (2) whether the 'reasonable person' in r 3A is a person in the position of the company with knowledge of its internal affairs or a reasonable person outside the company and if so with what, if any, knowledge apart from the information and (3) whether, and if so how, the reasonable person test in r 3A differs from the test in s 1001D.

152 There is surprisingly little authority on the proper construction of r 3A. An earlier version of r 3A was considered by O'Loughlin J in Flavel v Roget (1990) 1 ACSR 595. That version was in terms that a company was required to notify a Home Exchange immediately of any information relating to the company that would be necessary to avoid the establishment of a false market in the company securities or which would be likely to materially affect the price of those securities. The question in that case was whether the company should have informed the Exchange of the existence of a memorandum of confirmation and variation of a contract. The contract had been notified to the Exchange and attracted a great deal of negative reaction. The court was considering whether there was an intentional failure to inform the Exchange of the memorandum and thus a breach of the duty to act honestly. O'Loughlin J said:

[A] close examination must be made of the contents of the memorandum so that its significance or importance can be evaluated. This represents a two-fold task; first, the contents of the memorandum itself must be individually assessed, but, secondly, that assessment must then be made within the framework of the company and its affairs as they existed at the time of the execution of the memorandum. Sometimes this second test may not be necessary; sometimes the nature of the document might speak for itself. Its importance might be of such magnitude that, irrespective of the size of the company, irrespective of the general affairs of the company, irrespective of the state of the economy of the country, its importance achieves such prominence that immediate advice to the Home Exchange is the only course of action to adopt. But there can be many cases where the contents of the document are not susceptible to such an immediate and obvious evaluation. Much will depend upon the identity of the particular company; what one company should advise the Stock Exchange might not have to be advised by a second company; what should be advised by a company at one stage in its career might not have to be advised at another stage of its career because of changed circumstances (602 - 603).

153 What this case demonstrates is that it may be necessary to go beyond what can be described as the core information if the price effect of that information, if any, is not apparent from its contents.

154 The respondent contends that the relevant information for the purposes of r 3A and s 1001A(2) is that pleaded in par 7 of the statement of claim. The information in par 7 (referred to in these reasons as 'the pleaded information') was drawn from information provided by WMC in, and under cover of, letters dated 1 August 1994 and 6 September 1994 (the WMC information) which are referred to in pars 4 and 5 of the statement of claim. Paragraph 7 provides:

The information referred to in paragraphs 4 and 5 above included the following:

(a) WMC had, while conducting a drilling programme on its tenement E 53/24, inadvertently drilled a number of holes on [Jubilee's] E36/251;

(b) the two tenements share a common boundary;

(c) one of the drillholes (MKTC-101) was drilled to a downhole final depth of 245 metres and a vertical depth of about 229 metres;

(d) the bottom 68.2 metres of that hole assayed 0.47 per cent nickel, with nickel sulphide mineralisation disseminated throughout the final 57.85 metres;

(e) within the 68 metre length were incepts of 16.85 metres at 0.61 per cent and 19.0 metres at 0.6 per cent nickel, the latter of which was at the bottom of the drillhole, with the final 12.7 metres averaging 0.67 per cent nickel;

(f) the final 4.27 metres of the drillhole averaged 0.55 per cent nickel;

(g) none of the other drillholes reached or approached the 187 metre downhole depth and 170 metre vertical depth at which the disseminated sulphides were located in drillhole MKTC-101.

155 The pleaded information in (c) - (f) is not taken directly from the data in the WMC information. Someone other than WMC selected the quoted intervals and calculated the average nickel content.

156 In par 9 of the statement of claim the respondent claimed that the pleaded information was information which a reasonable person would expect to have a material effect on the price of ordinary shares in the appellant because (inter alia) the pleaded information 'suggested that there was potentially commercially viable nickel mineralisation, warranting further exploratory drilling', on the tenement. I will refer to what the pleaded information 'suggested' and what action was warranted as 'the evaluative matters'.

157 The respondent's case was that the evaluative matters were not part of the 'information' for the purposes of r 3A and s 1001A(2). That is, the duty of disclosure under the Listing Rule and under the Corporations Law leaves no scope for any assessment of the evaluative matters by the responsible corporate officers in the context of the affairs of the appellant as a whole because the evaluative matters are not part of 'the information'. According to the respondent, those matters (or some of them) are only relevant in determining whether the appellant had negligently failed to comply with its disclosure obligation. The respondent also contended that the person who commonly invests in securities only has access to publicly available information about the company and external factors affecting price when making the decision to buy or sell securities.

158 The appellant contends in effect that 'the information' in r 3A covers the pleaded information together with the assessment of the potential prospectivity of the tenement by its geologist, Mr Cooke, the nature of the appellant's then current interests and activities and its financial capacity.

159 There is no relevant definition of 'information' for the purposes of r 3A and s 1001A(2) of the Corporations Law. I take the term in s 1001A(2) to be a reference to information concerning the company of which it is or becomes aware under r 3A. A company becomes aware of information where a director or executive officer has, or ought reasonably to have, come into possession of the information in the course of the performance of duties as director or executive officer. Thus, a company is obliged to notify the ASX of information of which it is, or ought to be, aware that satisfies the objective material effect on price test.

160 The Master made the unchallenged finding that the significance of the WMC information, and the assay results in particular, was a matter for a qualified geologist with experience in the exploration for nickel sulphide mineralisation [154]. That is, the significance of the WMC information was a matter for expert opinion. Expert opinions held in good faith on reasonable grounds may differ. An expert opinion on the significance of the WMC information would in my view be a part of the 'information' concerning the appellant of which its executive officers (Mr Cooke and Mr Crossley) were aware or ought reasonably to have been aware. That is so because the common investor in s 1001D is not a relevant expert and neither is the hypothetical reasonable person in r 3A who in my view is an objective outsider.

161 The 'information' must also include all matters of fact, opinion and intention that are necessary in order to prevent the disclosing company otherwise engaging in conduct that is misleading or deceptive or is likely to mislead or deceive which was prohibited by s 995(2) of the Corporations Law.

162 The respondent would narrowly confine the 'information' by taking it out of its broader factual and commercial/corporate context then gauge whether that information has the deemed material effect on the price of the companies securities by reference to the common investor who assesses the information in the context of publicly available information. That in my view is inconsistent with the purpose of the disclosure regime which is a fully informed market. Where share price sensitivity depends upon the company having an expert assessment of core information and business decisions are made based on that expert assessment, the disclosure of only the core information (conveying an imputation that it is, in the company's assessment, likely to have a material effect on the share price) may be misleading. The disclosure regime does not countenance disclosure of incomplete information just because that information alone would influence persons who commonly invest to buy or sell shares.

163 The final issue is whether the common investor test in s 1001D differs in any material way from the objective material effect on price test in r 3A. The Master concluded that for the purposes of s 1001D, persons who commonly invest in shares in a junior mining exploration company such as the appellant are share traders, being people who invest to make a capital gain in the short term. That conclusion is not challenged in the appeal.

164 We are in this case concerned with drilling results which at their highest disclose a potential for further exploration. It is common cause that the WMC information did not indicate or suggest that there was, or might be, a commercially viable nickel mineralisation on the tenement. A person who commonly invests in shares in a company on the basis of drilling results that show potential for exploration, trades in those shares in the period of uncertainty pending the further exploration. The irony in the common position of the parties is that the statutory disclosure regime for ensuring a fully informed market can require the disclosure of information to enable share traders to make a decision on whether to speculate on the outcome of future exploration. However, it was not suggested that all drilling results showing any degree of potential for exploration had to be notified by a junior exploration company. As discussed, a significant limitation on the duty to disclose is the prohibition against engaging in conduct that is misleading or deceptive or is likely to mislead or deceive. So the practical test would be the likely conduct of a rational share trader who was privy to all relevant information.

165 Although there is no challenge to the Master's conclusion that persons who commonly invest in shares in a junior exploration company are share traders, the appellant contends in ground 7 that the Master erred in relying on the share trader category of investor in determining whether the information satisfied the material effect test in r 3A. There are some obvious terminological differences between the tests in s 1001D and r 3A. The test in s 1001D does not rely on a hypothetical reasonable person and does not require a material effect on the price of securities. However, it is unnecessary to determine whether the differences are capable of producing different outcomes. If, as the parties concede, the price of shares in companies such as the appellant are determined by the conduct and motivations of share traders, that would apply to both tests and the outcome would be the same on the facts of this case.

166 The appellant contends the Master erred in relying on WMC assay results of 1.33% and 1.153% nickel because that was not part of the respondent's pleaded case and because no expert witness attributed any significance to such results.

167 The Master himself regarded those assay results as significant. He said:

Some of the results for MKTD-101 leap off the page. For instance, there is a 2 metre intersection which runs at 1.33 per cent nickel and another 2 metre intersection which runs at 1.153 per cent nickel. The Mt Keith deposit was at a grade of 0.5 per cent. These figures are not difficult to spot and, even to the untrained eye, they look significant. Quite how significant is the question at the heart of this case [77].

168 That view was supported by Dr Trench who was called by the respondent as a witness of fact. However, Dr Trench had worked as a senior exploration geophysicist with WMC, has a doctorate in geophysics, an honours degree in geology and a masters degree in mineral economics.

169 It is clear from the pleading (which I have detailed above) and the expert evidence adduced by the respondent that the respondent's case was not based on the individual figures of 1.33% and/or 1.153%. His case was based on the averages over the specified intervals pleaded in par 7 of the statement of claim (although those individual figures are reflected in at least one of the averages pleaded in par 7).

170 However, counsel for the appellant in cross-examination took Dr Trench through the WMC assay results. He was asked 'In one hole, which was ... MKTD 101, there was a grade found of .55 I think, .55?' In the course of answering that question Dr Trench gave the following evidence which was underlined by the Master:

I think it was 1.33 per cent nickel sulfide assays in the data, so excuse me being an optimistic explorationist, they are fantastic; they are great results. They were good results, you know. WMC had lots and lots of this sort of stuff. Most small exploration companies of the likes of Jubilee at the time and the likes that I'm involved with sometimes now would kill for results like this [107].

171 Dr Trench was asked in re-examination why he thought 1.33% was a fantastic result and he said it may not be economic at that depth but it was a classic signal that there might be something big nearby [109].

172 The Master observed [108] that Dr Trench was clearly of the view that the results were 'highly significant' in exploration terms. He accepted they did not indicate an economic resource but showed that they were, in exploration terms, 'of real significance'. The Master concluded:

I was satisfied, based upon [Dr Trench's] evidence, that an experienced nickel geologist would regard the results contained in the WMC information as highly significant [111].

173 From its context, the Master's reference to the WMC information is a reference to the assay results enclosed with the second WMC letter.

174 Further, the significance of the figure of 1.33% nickel was put by the Master, without objection from the appellant, to Mr Crossley. The exchange is as follows:

1.33 per cent, down right at the bottom .7 per cent. If you had known that those results were contained in that information, would you have announced them to the stock exchange?---They are certainly more fundamental and the answer is yes, if we could have known for sure that they were on our property [235].

175 Dr Trench's evidence was elicited in cross-examination on behalf of the appellant. Dr Trench was re-examined on the issue and the Master pursued it with Mr Crossley without objection. Dr Trench is clearly qualified to give an expert opinion on the significance of the WMC information. As the issue was litigated at trial, the appellant cannot now complain that the Master's findings go outside the pleadings: Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491, 497.

176 The respondent also contended that the WMC information was significant because it revealed the potential for exploration on the appellant's tenement and that finding was amply supported by evidence from the respondent's experts on which the Master is also said to have relied. It is the case that all relevant experts, including Mr Cooke, accepted that the WMC information showed potential for exploration. However, as the Master himself identified ([77], [108], [111]), the real issue was the level or degree of significance which attached to the WMC information.

177 I have no hesitation in concluding that the Master relied on Dr Trench's evidence to conclude that the WMC information was highly significant and was likely to influence persons who commonly invest in shares in companies like the appellant. The Master identified the relevant segment of such common investors and how they would be influenced as follows:

It is traders, people who are investing to make a capital gain in the short term. They are dealing in stocks where trading volumes are limited and where no value can be ascribed to the stock based upon underlying net assets. In such a market rumour is important and announcements, which for a large corporation would be so insignificant as not to influence the share price, can make a difference.

I am satisfied that the WMC information was likely to influence persons who commonly invest in shares such as [the appellant's] ... It is the assay results and their significance that is, to my mind, important. Dr Trench really said it all in the passage that I have quoted. These were significant results. Of course, they did not establish that there was an economic deposit on the ... tenement. They did no more than provide a basis for further exploration work. But they certainly did that and, on that basis alone, they were results which should have been released to the market [280] - [281].

178 I agree with the Chief Justice for the reasons he gives that the Master erred in attaching any significance to the electromagnetic data provided by WMC under cover of its first letter but that the error had no effect on the findings. I would dismiss ground 1.

179 In ground 3 the appellant claims the Master should have found that the pleaded information did not require notification to the ASX under r 3A or s 1001A of the Corporations Law because:

(a) it was engaged only in gold exploration, not nickel, and did not intend to change its focus as a consequence of the pleaded information;

(b) the assessment of its very experienced geologist, Mr Cooke, was that the intersected mineralisation, which was found only in one hole of six, was too deep, at too low a grade, and too small to be of any interest;

(c) it had no intention of carrying out any follow up exploration drilling for nickel in the foreseeable future, as in the opinion of its managing director and its well-qualified and experienced geologist, the pleaded information revealed nothing of commercial significance, and did not warrant expenditure on further exploration drilling as the appellant's geologist ranked the intercept near the very bottom of the list of possible exploration areas of interest that he recommended the appellant spend its limited exploration budget on; and

(d) in any event, the appellant had no available funds to enable it to carry out such further exploration drilling.

180 The appellant referred to the matters in (a) - (d) collectively as the 'relevant circumstances'. The appellant claims in ground 2 that had the appellant notified the pleaded information to the ASX in September/October 1994 it would also have been obliged to notify the ASX of the relevant circumstances. I infer that is only relevant to the degree of any likely price movement and affects the quantum of damages.

181 I am not persuaded that the matters in pars (a) and (d) standing alone are relevant to whether the information is share price sensitive. They may be relevant as part of the factual matrix in which business decisions about exploration priorities are made.

182 Paragraphs (b) and (c) refer to two related matters being Mr Cooke's expert assessment of the significance of the WMC information and the appellant's exploration priorities, which together meant the appellant had no intention of carrying out follow up exploration drilling for nickel in the foreseeable future.

183 It is convenient at this juncture to refer to Mr Cooke's expertise and evidence. Mr Cooke had considerable experience in nickel exploration, including exposure to nickel sulphide found within ultramafics, and the type of mineralisation indicated in the WMC information. His evidence-in-chief included the following:

1. On my analysis in 1994 of the Intercept disclosed by the 1994 Data:

(a) I observed that the grade of nickel in the Intercept was low - comparable to Yakabindie; and

(b) I interpreted the depth to top of the mineralisation to be approximately 200m, whereas Yakabindie sat at the surface;

(c) I interpreted the true width of the Intercept to be ~15 metres which was very narrow relative to comparable material proposed for mining at Mt Keith;

(d) the mineralisation occurred very close to MacFarlanes Find's boundary and I interpreted the mineralisation to dip steeply to the east ...

1. In 1994, I assessed the significance (both to Jubilee and generally) of the 1994 Data, in the context of my knowledge at that time and Jubilee's position. I drew the following conclusions:

(a) anomalous nickel values were confined to one of six holes (suggesting that the body of mineralisation within McFarlanes Find was very thin relative to proposed operations with similar grades);

(b) for the mineralisation the subject of the Intercept to sustain an economic mine, an ore width of about 180m wide was necessary, as at Mt Keith;

(c) at 200m depth on Jubilee's side of the fence it was neither here nor there;

(d) the mineralisation was unlikely to ever prove up to be an economic deposit within McFarlanes Find;

(e) the width, grade and depth of the mineralisation would not encourage any contemplation of extraction. The depth of the mineralisation was an important matter because the cost and delay in stripping the waste material above the mineralised body would be very significant, and well beyond Jubilee's capacity to fund and, in any event, prohibitively expensive for any company to bear having regard to all the prevailing circumstances;

(f) to be able to dig a pit to get to the mineralisation, I believed it would be necessary for McFarlanes Find and the WMC Tenement to be the subject of a single operation if it was to have any prospect of being exploitable.

1. In the result, I ranked the Intercept near the very bottom of the list of possible exploration areas of interest that I would have recommended Jubilee spend its limited exploration budget on ...
2. In summary, my assessment of the 1994 Data (in 1994) was that the intersected mineralisation was very deep and going deeper. And given the proximity to the boundary and the fact that the other five holes did not contain nickel values there was no scope to find mineralisation nearer the surface - 200m was as shallow as it got on Jubilee's side of the border. It was just too deep, too low grade and too small to be of interest.
3. The 1994 Data did not cause me to think that I should advise Jubilee to change its focus from a gold explorer to a nickel explorer.
4. Geologically, the 1994 Data was of potential interest in terms of future exploration but that, in my opinion, was the sum total of its value. It was anomalous, it had potential relevance to future exploration but that was all I thought of it.
5. I took the view that all Jubilee could do was to sit and wait for WMC to approach Jubilee with a proposal for McFarlanes Find.

184 Mr Cooke confirmed in cross-examination that he saw the WMC information as no more than an indicator of potential for further exploration and the same was true for any tenement in the vicinity of WMC's tenement. The Master accepted that the assay results were highly significant for the reasons given by Dr Trench. The Master found that Mr Cooke 'did not appreciate the significance of the assay results contained in the WMC information' [278]. He accepted Mr Sheppy's evidence of an admission made by Mr Cooke to Mr Sheppy in those terms in August 1996. The Master did not discuss how or why that admission (made after discussions with Dr Trench in June 1996 and after the July 1996 ASX announcement) affected Mr Cooke's evidence of his opinion in 1994 which he continued to hold at trial.

185 I have concluded that an expert opinion on the significance of the WMC information was part of the information of which the appellant was, or ought to have been aware, in September/October 1994. The appellant's actual knowledge on that subject was the expert opinion of Mr Cooke. Mr Crossley was a mining engineer who relied on Mr Cooke's expert assessment of the significance of the WMC information. Mr Cooke's expert opinion was contrary to that of Dr Trench whose evidence the Master accepted. However, the fact that there are competing expert opinions on the level of significance of the WMC information does not justify a conclusion that the appellant ought to have been aware that the WMC information was highly significant. The Master did not consider or determine whether the appellant, through Mr Cooke, ought to have been aware that the WMC information was highly significant. No doubt if Mr Cooke's assessment was negligent (not based on reasonable grounds) there may be room for such a finding. However, I see no basis in the evidence for a finding that Mr Cooke's opinion was other than honestly held on reasonable grounds. Subsequent drilling results do not support a finding that Mr Cooke's 1994 assessment was unreasonable.

186 Further, the Master did not find (nor is such a finding open on the evidence) that the information of which the appellant was actually aware in 1994, based on Mr Cooke's evaluation, was relevantly price sensitive for the purposes of r 3A and s 1001D. On that basis, ground 3 must be upheld and ground 2 falls away.

187 I also propose to consider what the position would be if the appellant ought to have been aware in 1994 of the true significance of the WMC information. The issue then becomes what is the relevance of the appellant's intention not to conduct further exploration drilling at least in the foreseeable future.

188 The appellant's case at trial was that any notification to the ASX would have to include a statement to the effect that no further drilling or exploration work would be undertaken by the appellant on the tenement. The cross-examination of the respondent's expert witnesses was on that basis. The appellant qualified its position in the appeal to refer to no present intention to conduct further exploration drilling in the foreseeable future.

189 I am not persuaded the Master expressly or impliedly reasoned that the appellant was in breach of its disclosure obligation by failing to immediately undertake further exploratory drilling. It was in the context of addressing the appellant's contention as to what the ASX announcement should include that the Master focussed on what the appellant would, and could, have announced if it had understood the true significance of the WMC information. In that event, he was not satisfied the appellant would have announced that it did not intend to follow up with further exploration work or that the appellant would be obliged to make such an announcement, an acceptable option being to remain silent on that issue. The Master also relied on the fact that it was not the practice of junior explorers to include negative sentiments when announcing positive results. The latter is clearly an irrelevant consideration.

190 However, the important finding is not about the content of the announcement but what the appellant's position on further exploration would have been if it was aware of the true significance of the WMC information. The Master concluded, correctly in my view, that the finding as to the appellant's lack of awareness of the true significance of the WMC information undermined the appellant's evidence (which was not accepted) that it would not have conducted further exploration drilling on the tenement.

191 I accept that the evidence established that at no material time in 1994 or 1995 did the appellant have any intention of conducting further exploratory drilling on the tenement. It was also open on the evidence to conclude that an announcement of the type contemplated by the Master (one which was silent on the issue of further drilling) would impliedly convey the imputation that the appellant regarded the WMC information as significant and warranted further exploration drilling. In circumstances where the appellant had a positive intention not to drill, such an announcement would be misleading. Prima facie, its drilling intentions would be part of the mix of relevant information on which to assess whether it was share price sensitive. It was also open on the evidence to conclude that an intention not to undertake further exploration drilling would deprive the information of any price sensitive effect. However, it does not follow that there was no obligation to disclose the WMC information. It is not correct as a matter of principle to rely on a decision not to undertake further exploratory drilling which is caused or materially contributed to by the appellant's failure to take into account a matter of which it has constructive notice under r 3A. That is, the appellant cannot rely on its intention in relation to drilling which is based on a deficiency in its required knowledge base to prevent the disclosure obligation from arising. However, it may be relevant when considering whether the loss and damage suffered by the respondent was caused by the contravention.

192 The appellant claims the Master erred in finding that it was negligent in failing to notify the ASX of the WMC information in September/October 1994.

193 The Master concluded that reasonable care required proper consideration of the WMC information. He continued:

The fact is that the WMC information did not receive proper consideration. The person who had direct responsibility for announcements to the ASX was Mr Crossley. It was he who had to determine whether the WMC information should have formed the basis for an announcement. In making that decision, he had to bring to bear all of the background knowledge and his own experience. If he did not understand the WMC information, then he could have called for a detailed report from Mr Cooke or he could have engaged the services of an independent consultant.

The simple fact is that he did nothing. He did not even bother to read the two letters. In my view, there can be no doubt that he simply did not take sufficient care [297] - [298].

194 The Master found that Mr Crossley, a mining engineer, was not familiar with low grade disseminated nickel sulphides of the type disclosed by the WMC information. Further, Mr Crossley was under the erroneous impression that at its best, the WMC information showed mineralisation at 0.2% nickel and that the Mount Keith deposit graded 1.8% nickel when in fact it graded about 0.5% nickel. It was against this background that the Master discounted Mr Crossley's view that the WMC information was not of any significance. However, the Master said he formed a generally favourable impression of Mr Crossley but, as with Mr Cooke, it was apparent he had no detailed recollection of his discussions with Mr Cooke about the WMC information and did not make any real effort to find out what was in that information [237].

195 In determining negligence, the Master focused solely on Mr Crossley's conduct. He did so in circumstances where he had found that the significance of the WMC information was a matter for a qualified expert with experience in the exploration for nickel sulphide mineralisation [154]. Mr Crossley did not have such qualifications or experience. Moreover, there was evidence that Mr Crossley relied on Mr Cooke's assessment of the significance of the WMC information (exhibit 177 pars 9, 10 and 14; exhibit 177A par 2; ts 980 and ts 1015). He gave the following evidence in re-examination:

Did Mr Cooke say anything to you about whether or not it was commercially viable from his viewpoint?---I seem to recall he said it was not commercially viable

What degree of reliance did you place on Mr Cooke at that time?---Well, he was a competent geologist and he'd obviously had a look at this data and formed a view and passed that view on to me.

... when you were asked in cross examination whether you had the expertise to evaluate the significance of the WMC information and in relation to their prospectivity - you said no, but your staff did. Do you remember saying that?---Yes.

Which staff were you referring to there?---John Cooke.

Mr Cooke, all right. You said you formed the view, and Mr Cooke had told you it was his view, that it was not commercially viable at that grade and depth?---Correct (ts 1015).

196 The Master erred in focussing solely on the conduct and understanding of Mr Crossley in determining whether the appellant's failure to notify the ASX was negligent. Mr Crossley relied on Mr Cooke's evaluation of the WMC information. Mr Cooke's 1994 evaluation of the significance of the WMC information justified nondisclosure. Although the Master found that Mr Cooke failed to appreciate the significance of that information, he made no finding that Mr Cooke's opinion was not based on reasonable grounds or was otherwise negligent. Mr Cooke's admission to Mr Sheppy in August 1996 occurred after Mr Cooke had met with Dr Trench (an enthusiastic explorationist with knowledge of WMC's activities) who provided him with cross-sections of drill-hole results and after the appellant's July 1996 announcement to the ASX. Great care would be required before concluding that the events in 1996 supported a conclusion of negligence in 1994. In any event, the Master does not rely on the 1996 conduct for his finding of negligence nor is there a notice of contention seeking to uphold the finding on that basis. I would uphold ground 6.

197 In view of my conclusions on grounds 3 and 6, it is unnecessary to determine grounds 4 and 5. Ground 4 raises interesting issues of causation, the outcome of which may depend upon the precise basis for any finding of negligence. The appellant's causation submissions are based on the assumption that any breach of duty to disclose in 1994 had no relevant causal connection with its intention not to conduct any further exploratory drilling on the tenement.

198 I would uphold grounds of appeal 3 and 6 and, on that basis, allow the appeal, set aside the judgment of Master Sanderson and in lieu thereof dismiss the respondent's action. I would dismiss the remaining grounds of appeal.

199 LE MIERE AJA: I agree with the Hon Chief Justice.