Misleading or deceptive conduct - Woolworths is at it again
From Crikey.com
Tuesday, 21 November 2006
Michael Pascoe writes
Woolworths under recently retired CEO Roger Corbett achieved many fine things. As a business, extremely successful things. But it also seemed to
develop a character flaw that has again landed it in court on the wrong side of a misleading or deceptive conduct charge.
Woolworths's ruthless attitude towards competitors, however small, has been well documented. The saga of its
Safeways bread case ran all the way to the High Court with the company still refusing to
embrace its failings and learn from them. And then there's the very grubby business involving NSW liquor licences. At some stage, that attitude becomes
culture and results in further trouble.
Enter Judge Richard White in the NSW Supreme Court ordering Woolworths to pay something between $1.1 and $1.8 million in compensation to a developer
the company misled. Along the way, the judge questioned the evidence of Woolworths national property manager, Peter Hunt, saying his evidence was
not always credible.
The AFR has the story about Woolworths entering into a lease in July 2001 for a site in Sydney's Auburn. The developer, EK Nominees, proceeded to
build the thing to Woolworths's specifications. But in January 2002, Hunt received a phone call from another developer about a nearby site.
"Mr Hunt began negotiating with the other developer and told the Woolworths
property committee to enter into a lease with them and organise an exit from the EK Nominees site,' reports the Fin. "Despite regular meetings with EK
Nominees at the time, Woolworths did not tell them about the other plans and
they only found out about the second site when a subcontractor mentioned he had heard a rumour about it."
Finds the judge: "Woolworths's failure to disclose its changed position, while continuing to encourage EK Nominees to carry out work on the project,
and continuing to negotiate terms of the agreement for lease, was conduct, in trade or commerce, which was misleading or deceptive."
Predictably, Woolworths is considering an appeal. Total legal costs could well end up being more than the actual compensation payment, but that's the
culture. Not the stuff found growing on moral high ground.
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