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.

Peter Fray

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