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Retailer slammed for bid to hide skirmish with chief legal officer

Amid attempts to suppress the media interest in a highly public dispute with its former chief legal officer, a major retailer tried to have a law firm thrown out of proceedings and accused a Federal Court judge of unnecessarily expediting a “vanilla” case.

user iconNaomi Neilson 23 August 2024 Big Law
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A suppression order application by Super Retail Group (SRG) – the owner of Supercheap Auto, rebel, BCF and Macpac – was thrown out by Justice Michael Lee, who found the attempt to shield media from details was done “unnecessarily and hence wrongly”.

“The importance of open justice as a venerable and indispensable part of our justice system is oft remarked upon in almost lyrical terms.

“But despite these sorts of exhortations, it is an everyday occurrence to see practitioners, even highly experienced practitioners, seeking suppression and non-publication type orders of various types on an impermissibly broad and infirm basis,” Justice Lee said.

 
 

Although it originally played out behind closed doors, the tensions between SRG, its former chief legal officer, Rebecca Farrell, and general manager, group secretariat and corporate legal, Amelia Berczelly, came to media’s attention with an April ASX statement.

In the statement, which triggered a number of articles in major newspapers, SRG announced it expected “workplace litigation” by two then-unnamed employees who would “jointly claim loss and damage in the range of $30 million to $50 million”.

The statement even set out the allegations, starting with a concern its group managing director and chief executive, Anthony Heraghty, was in an undisclosed relationship with the chief human resources officer.

The employees also alleged there was inappropriate company travel, bullying, victimisation and adverse treatment, unreasonable workloads, and unsatisfactory company record management.

The release went on to say the board had investigation “and concluded that none of the allegations are substantiated”.

By this time, Farrell and Berczelly had retained Harmers Workplace Group, and SRG had turned to solicitors at Allens.

In response to the ASX statement, Harmers gave Allens a heads-up that it intended to make what it alleged was an “emergency disclosure” under the Corporations Act – and released a statement of its own that named both women and condemned SRG.

In the release, Harmers alleged the relationship between the two executives had gone on “long term” and a complaint about how this impacted on governance issues was “removed from the integrity office and the head of risk and given to HR management answering directly to [the chief human resources officer]”.

The firm also stated its clients had offered to confidentially settle the matter for less than a third of what the ASX statement set out.

Conversations then occurred between the firms concerning the dispute, but it escalated further when Allens told Harmers it would seek to prevent it from representing Farrell and Berczelly because of an alleged conflict arising out of its media release.

Following a brief mention before another judge, the matter eventually ended up in the hands of Justice Lee, who advised he was prepared to hear separate questions in dispute and expedite the matter.

In response, counsel for SRG said it did not understand “why a plain, vanilla contract case should receive expedition” and why SRG’s interests “should be put second to the diary commitments”.

Justice Lee said in “leaving aside that characterisation”, it was at this hearing that it became apparent Allens had filed a form of an interlocutory order to have Harmers kicked off the proceedings.

Before the court could get to that issue, Justice Lee said he needed to first deal with the issue of the suppression order.

SRG submitted the commercial value of an agreement reached between the parties in May would be “destroyed” if the suppression order was not granted and disclosure of the terms information would be a “disincentive to parties to engage in settlement discussions”.

However, Justice Lee said substantive details of the dispute, the nature of the allegations, and the settlement details were already “out of the bag”, either directly or by being reasonably inferred.

“One cannot help getting the impression this argument is far more about what might be thought by the SRG parties to be convenient, reasonable or sensible and preventing material entering the public domain which the SRG parties would prefer not to be disclosed.

“Moreover … so much is already known or can be inferred from what is already public,” Justice Lee said.

He then added that SRG “flirted” with a “floodgates argument”, but “it was unpersuasive and paid insufficient regard to the ethical responsibilities of legal practitioners not to commence a suit for specific performance unless there was a proper basis to do so”.

“The necessity to make an order so as to guard against the spectre of badly motivated actors bringing improperly specific performances suits to avoid contractual obligations of confidence merely needs to be stated to be rejected,” Justice Lee said.

At the conclusion of Justice Lee’s decision, counsel for SRG said he already had instructions to appeal.

To give the parties time to file an application for leave to appeal and for it to be heard, a limited suppression order was placed over certain information until 28 August.

Naomi Neilson

Naomi Neilson

Naomi Neilson is a senior journalist with a focus on court reporting for Lawyers Weekly. 

You can email Naomi at: This email address is being protected from spambots. You need JavaScript enabled to view it.