Corporate governance adviser, Ownership Matters boss Dean Paatsch, has demanded access to view court documents linked to the embattled Super Retail Group which is facing accusations of bullying, harassing and victimising its employees, among other claims.

Paatsch has argued that shareholders ought to know the nature of the legal and financial threats as well as governance deficiencies at one of Australia’s largest retailers.

Rebecca Farrell, the former legal head at Super Retail Group, has dragged the retail giant, its chairwoman and chief executive, among other top execs at the company, to a federal court.

The proceedings were filed by Harmers Workplace Lawyers who claims that Farrell was the whistleblower who exposed “serious corporate governance issues within the company.”

She also claims a settlement with Super Retail was reached on May 6 and she is now taking the company and its executives, including chairwoman Sally Pitkin, to court to enforce that settlement.

The statement of claim by Farrell was kept confidential in court last week, following a suppression order issued by Federal Court Justice John Halley. Justice Halley had referred to a document request from an “investor consultancy organisation”, and that submission was reportedly made by Paatsch and Ownership Matters, reported The Australian.

“It’s interesting because it involves allegations about the credibility of the company’s whistleblower regime and those things may not be material to share price, but they’re material to the way in which the company conducts itself generally in risk management,” said Paatsch.

“At the very least, it suggests that there are questions that the board would respond to, particularly given that board members themselves (chair Pitkin and director Annabelle Chaplain) are named in the document.

Ownership Matters

“We know when we apply for court documents that they will be contested allegations. We are quite comfortable seeing through what might be spurious and what is simply an allegation and the independent verification, but occasionally you will find absolute gems which pose questions that the board and management ought to answer.

“So it’s on the public record. I want to know about it. If there’s nothing to see here, I will determine that for myself.”

Last year, the Federal Court updated its internal rules restricting who can access certain court documents – including journalists – until the case has appeared in court. They added a sentence to the Rules of Court that “prevents a person who is not a party from inspecting certain documents in a proceeding until after the first directions hearing or hearing (whichever is earlier).”

Paatsch has described that ruling as “curious”, saying courts were “running a protection racket” for companies and the “hurt feelings” of directors that flies in the face of the fundamental concept of “open justice”.

The legal troubles at Super Retail Group which owns brands such as Rebel, Supercheap Auto, Macpac and Boating, and Camping Fishing with a total of around 736 stores, surfaced in April this year when the group’s CEO Anthony Heraghty was accused of an undisclosed relationship with the company’s former chief human resources officer Jane Kelly. The company claimed in a filing to the ASX at the time that it was staring at a claim of loss and damage in the range of A$30 million to A$50 million.

“I’m totally OK with working out what is maybe a spicy but unverifiable claim and looking through it, and so it is a concern to me that the Federal Court is imposing this blanket ban (of documents) which may be useful to investors without any overwhelming public interest in the suppression itself,” noted Heraghty, referencing the affair.

“From our perspective, the public access to court documents at the earliest instance is an important resource for investors, so that they can inform themselves about the trust and confidence of management.”

He argued that the release of these documents shouldn’t affect the share price. “By its nature, it is very rarely material to stock price. And that is something that’s really important here, because if it were material, if there were allegations in there (Farrell’s statement of claim) that were true and that would affect the stock price, well then the company itself would be required to issue a release. So by its very nature, the suppression of court documents is suppressing documents that are not material to stock price.

“The Federal Court’s position is curious, and the only thing that I can discern is that they seem to be placing weight on protecting the interest of the reputations of directors, or in some strange way, the reputation of the company.”

While Farrell has taken Super Retail to court over her settlement agreement not being honoured, separately, Super Retail’s company’s board said that it was supported by independent external advisers and conducted a review and investigation into the other allegations made against the company and concluded that none of them were substantiated.