Source: https://download.asic.gov.au/media/tltlok0f/21-298mr-asic-v-getswift-limited-liability-hearing-2021-fca-1384.pdf
Factual Background
[Paragraph 965] On 30 August 2017, Ms Hardin sent an email to Mr Hunter and Mr Macdonald in which she stated:
I have discussed with the team next steps and we are very interested in getting access to an enterprise account that can be configured to our needs for a 6-12 month pilot test.Since this will be tested in a pilot environment, our volume will not be large. It will be contained to US deliveries with an estimated 50-100 deliveries per month being tested.Given this scenario, can you provide the best pricing option you have and any other implementation or reoccurring engineering fees?
[967] Ms Hardin did inform Mr Hunter and Mr Macdonald that the pilot would be low volume as Amazon refined and tested the customer experience of its new product and services; GetSwift’s services would have to comply with Amazon’s information security policies prior to commencing the pilot and GetSwift would have to enter into a Master Services Agreement (MSA), and agree the terms of a “Service Order” with Amazon before any pilot could commence. Ms Hardin stated that the results of the initial testing were satisfactory so as to make Amazon want to take that next step. Additionally, they discussed an adjustment of GetSwift’s pricing structure due to the low volume of deliveries within the pilot.
[991] As the evidence revealed, within a few days of entry into the THSA, Ms Hardin discussed with Mr Hunter, Mr Macdonald and Mr Ozovek the possibility of establishing an “enterprise account” for the purpose of “conducting a pilot test”,to assess any potential future use.Such a “pilot test” could not occur without GetSwift entering into an MSA and agreeing with Amazon to the terms of a Service Order. The purpose of the “pilot test” was communicated to Mr Hunter and Mr Macdonald by Ms Hardin in a phone call on 7 September 2017. This evidence was undisturbed in cross-examination. And as will become evident below, Ms Hardin explained that no Service Orders were executed by Amazon or its affiliates under the Amazon MSA. This suggests that the pilot never commenced.
[1000] At 10:02am, Ms Hardin sent an email to Mr Eagle (copied to Mr Hunter and Mr Macdonald) in which she stated:
Please do not release the announcement from GetSwift. As the MSA states in Section 5.2 Confidentiality Clause of “Supplier will not issue press releases or publicity relating to Amazon or this Agreement or reference Amazon or its Affiliates in any brochures, advertisements, client lists or promotional materials.”
This is very concerning to us given we were not notified of any press release for our pending agreement.
Can you please send the details of the compliance requirements that you referenced and justification for the need to issue an announcement and we can further discuss how to meet your obligations.
[1018] On 2 December 2017, at 3:18am, Ms Hardin sent an email to Mr Eagle, Mr Hunter and Mr Macdonald in which she stated:
We were surprised and disappointed by GetSwift’s unauthorised, unnecessary and misleading disclosure to ASX regarding the closing of the Master Hosted Services Agreement (“Agreement”). This disclosure expressly violates the terms of the Agreement, specifically Section 5.2, and contravenes our explicit requests concerning the proposed disclosure, all without explanation. Beyond breaching the Agreement, this was a breach of our trust. As such, we are reevaluating our relationship with GetSwift and are exploring all available options.
[1033] For those who have read this far, this might seem a compelling reason to enquire further. Nevertheless, the reasons for Amazon’s decision were not explored as they were accepted as irrelevant to the issues in the proceeding. A Service Order was never executed. No Service Orders had been executed by Amazon or its affiliates under the Amazon MSA.
Judgement
[1771] The problem with GetSwift’s second contention is that it selectively characterises Ms Hardin’s evidence. Ms Hardin’s evidence was that at the time of entry into the Amazon MSA, the Service Order “had not been fully negotiated” and that, on 19 December 2017, Ms Hardin and questioned why a disclosure would be required given that the Service Order had not been fully negotiated and the expected value of the Service Order was not material: see [984] and [1028]. Indeed, during cross-examination, she explained that issues concerning “components around pricing and timelines”, and “articulation of Amazon’s precise requirements in relation to its potential use” of the GetSwift Platform, needed to be addressed before Service Orders were executed and the pilot could commence: see [986]. Ms Hardin also gave evidence of other issues which existed, namely that GetSwift’s pricing model did not align with Amazon’s due to the low volume of deliveries to be made during the pilot, and that Amazon required customisation work to be completed: see [986]. Considering Ms Hardin’s evidence as a whole, which I accept, I am satisfied that information about the Service Order was contextual information, which qualified the true status of the Amazon MSA and was, therefore, material.
[1775] Having established the four necessary elements of a continuous disclosure claim in respect of the Amazon MSA Information (absent factual circumstance (a)), I am satisfied that GetSwift contravened s 674(2) of the Corporations Act by failing to disclose the Amazon MSA Information (absent factual circumstance (a)) during the period from 10:01am on 1 December 2017 until 6:15pm on 1 December 2017.
