Federal Court dismisses continuous disclosure claim

The Federal Court recently dismissed Australia Securities and Investment Commission’s (ASIC) claim in Australian Securities and Investment Commission v Nuix Limited [2026] FCA 490 (ASIC v Nuix) that Nuix Limited breached its obligations under section 674 of the Corporations Act 2001 (Cth) (Corporations Act).  Nuix Limited (Nuix) successfully contested ASIC’s allegation that it had breached ASX Listing Rule 3.1A, which requires the continuous disclosure of information related to the financial performance of an entity.

Summary of continuous disclosure obligation

Continuous disclosure requires Australian listed public companies to publish information about matters that could materially affect their share price in a timely manner and in accordance with ASX Listing Rules and other relevant legislation.[1]

Section 674(2)(c)-(d) of the Corporations Actstates thatif:

• the information is not generally available; and
• a reasonable person would expect the information, if it were generally available, to have a material effect on the price or value of ED securities of the entity;

the entity must notify the market operator of that information“.[2]

Background to ASIC v Nuix

ASIC alleged that from 18 January to 15 February 2021, Nuix contravened section 674(2) of the Corporations Act by:

• failing to disclose the 2021 financial year annualised contract value (1HFY21 ACV) result to the ASX;
• where Nuix was aware of the result;
• the result was not generally available; and
• a reasonable person would expect the result to have a material effect on the price of Nuix’s shares.
• ASIC further claimed Nuix published misleading financial forecasts and that Nuix’s directors had breached their duties by letting the forecasts reach the public.[3] 

The two (2) key issues for determination by the Court were whether the information was disclosable, under ASX Listing Rule 3.1A and if so whether Nuix had contravened its continuous disclosure obligations under section 674(2) of the Corporations Act.  Secondly whether Nuix’s failure to disclose the 1HFY21 ACV and publication of financial forecasts breached the laws relating to misleading and deceptive conduct or directors’ duties.

Application of ASX listing rules

The continuous disclosure obligation for listed companies, Listing Rule 3.1applies:

“Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the entity’s securities, the entity must immediately tell ASX that information”.[4]

Listing Rule 3.1A provides an exception to this rule if:

• Disclosing the information would breach a law; or
• The information concerns and incomplete proposal or negotiation; or
• The information comprises matters of supposition, or is insufficiently definite to warrant disclosure; or
• The information is generated for internal management purposes; or
• The information is a trade secret; AND
• The information is confidential; AND
• A reasonable person would not expect the information to be disclosed.

Application in ASIC v Nuix

The Court dismissed ASIC’s claim of breach of continuous disclosure, as it was not persuaded that a reasonable person would have expected disclosure of the 1HFY21 ACV results.  Therefore, the exemption applied and Nuix could not be said to have contravened its continuous disclosure obligations.[5]

The Court also dismissed the misleading and deceptive conduct claims, finding that Nuix maintained reasonable grounds for its financial forecasts.  The directors’ duties contraventions were accordingly dismissed as these claims “fell away” after no primary contraventions were established.[6]

Key takeaways

Discussions surrounding section 674 of the Corporations Act and the ASX Listing Rules related to continuous disclosure, in the context of ASIC v Nuix, clarify their application.  It is important that directors of listed public companies, are aware of their continuous disclosure obligations including how to identify whether information is or is not required to be disclosed.

Links and further references

Legislation

Corporations Act 2001 (Cth)

Cases

Australian Securities and Investment Commission v Nuix Limited [2026] FCA 490

Further information

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Disclaimer

This article contains general commentary only.  You should not rely on the commentary as legal advice.  Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances

[1] ASIC, Handling Corporate Information.

[2] Corporations Act 2001 (Cth) s 674(2).

[3] Australian Securities and Investment Commission v Nuix Limited [2026] FCA 490 at [3]-[5].

[4] ASX Listing Rule 3.1, page 301.

[5] Australian Securities and Investment Commission v Nuix Limited [2026] FCA 490 Justice Goodman at 786 – 788.

[6] Australian Securities and Investment Commission v Nuix Limited [2026] FCA 490Justice Goodman At paragraphs 979-995.

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