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Judge cautions Franklins owner over former boss

Sydney Morning Herald

Saturday February 12, 2011

Elisabeth Sexton

THE owner of Franklins, Pick n Pay Retailers, would "almost" be in contempt of court if it tried to link the payment of retirement benefits to the supermarket chain's former managing director with his participation in a trade practices case, a Federal Court judge said yesterday.Justice Arthur Emmett said he "assumed" a January letter from Pick n Pay's lawyers to Aubrey Zelinsky, which was not before the court, did not make that link.The competition regulator wants Mr Zelinsky to give evidence in the Federal Court suit it began in December to stop Metcash buying Franklins from Pick n Pay.His solicitor, Kevin Lynch, told a directions hearing yesterday his client was reluctant to participate unless compelled by a court order.Mr Lynch, a partner of Johnson Winter & Slattery, said Pick n Pay's lawyers had sent a letter on January 17 "reminding" Mr Zelinksy of the confidentiality provisions in his employment contract.A second issue was that Pick n Pay had not yet paid his client - who left Franklins in June after nine years in the top job - his retirement package."It may be a coincidence but they have advised him they are only going to consider that matter in April this year," Mr Lynch said.The case is due to run for two weeks next month."It's almost a contempt to say 'If you co-operate we are not going to pay you,"' Justice Emmett said. "I assume that's not the proper construction of the letter."Pick n Pay's barrister, Cameron Moore, said: "I'm sure it's not but I don't know enough about it to illuminate the court at all."His client did not oppose the court instructing Mr Zelinsky to speak to lawyers for the Australian Competition and Consumer Commission but "we may want to speak to him as well", Mr Moore said.Court rules would influence the types of questions Mr Zelinsky could be asked.The commission will propose an order to Justice Emmett next week.Its barrister, John Halley, SC, said it would also call evidence from Lou Jardin, a former senior Metcash executive who recently joined its small Queensland rival, SPAR.Mr Halley said SPAR was named in his client's submissions on how the independent grocery sector might compete if the merger were blocked as "one of the alternative parties ... that might be interested in acquiring the Franklins assets".

© 2011 Sydney Morning Herald

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