Super Retail wins first case against former executive whistleblowers

Super Retail has won the first major court battle against its two former most senior female executives turned whistleblowers, but the war is still to come.

Whistleblowers Rebecca Farrell and Amelia Berczelly at Federal Court in Sydney this year. Picture: Monique Harmer/NewsWire

Whistleblowers Rebecca Farrell and Amelia Berczelly had their opening case against their former employer Super Retail Group dismissed by judge Michael Lee in the Federal Court, meaning their attempt to force the retailer to meet the provisions of an alleged settlement offer has failed.

While Ms Farrell and Ms Berczelly – once the most powerful female executives working for Super Retail – have lost the opening battle against the $3.5bn retailer that owns chains such as Rebel and Supercheap Auto, the war is yet to come, with both sides bracing for a protracted court ­battle next year that could last as long as six weeks and rely on as many as 40 witnesses. These could include medical witnesses.

That substantive case where former Super Retail chief legal officer Ms Farrell and former co-company secretary Ms Berczelly will allege a range of improper and sensational workplace behaviours that took place at Super Retail’s Brisbane offices, including an alleged illicit affair between the chief executive and former head of HR, might not take place until July as fresh documents and evidence are sought by both parties.

The thought of that case dragging in 40 witnesses and not potentially starting until the middle of 2025 caused some exasperation on the part of Justice Lee on Monday as he addressed both parties and set about locking in court dates.

The judge, who became well-known for presiding over the defamation case involving Bruce Lehrmann and the Ten Network, said it was “staggering” that the case might not start until July.

“I just find this staggering, staggering … that’s 7.5 months away,” Justice Lee said.

Addressing counsel for Ms Farrell and Ms Berczelly, John Hyde Page, he questioned the ­reason for such a delay and long lead times in gathering evidence.

“Are these people serious about their case being heard or not? I just find it extraordinary,” Justice Lee said.

Meanwhile, in a saga that has carried on through most of 2024 and involving accusations of improper workplace behaviour at the retailer’s head office, an alleged affair between chief executive Anthony Heraghty and head of human resources Jane Kelly, the improper use of travel budgets to further that illicit affair and accusations of a toxic work environment, Super Retail had a first court victory.

Ms Farrell and Ms Berczelly had taken Super Retail to court claiming the retailer had made a settlement offer in early May after their workplace accusations were made but had not carried out the provisions of that offer.

The former executives turned whistleblowers had taken Super Retail to court to enforce that deal, but on Monday Justice Lee found that no contract was entered into.

“The applicants (Ms Farrell and Ms Berczelly) prayer for relief in the nature of specific performance (is) dismissed,” Justice Lee said.

Super Retail had argued in court earlier this month that no offer was made to the whistleblowers, and in court its lawyer said the suggestion was “fanciful” that such a settlement was reached with Ms Farrell and Ms Berczelly in early May.

The details of that settlement offer – both in terms of monetary compensation and actions – were kept suppressed by the courts on the request of lawyers acting for Super Retail, and it remains unknown at this stage what the offer was or the details of negotiations between the whistleblowers, their lawyers and lawyers acting for Super Retail.

Super Retail CEO Anthony Heraghty and former executive and whistleblower Rebecca Farrell.

Over three days of hearings this month, lawyers for Ms Farrell and Super Retail argued before Justice Lee over whether that settlement offer ever existed and if it should be enforced.

The publicly listed Super Retail owns Rebel Sport, Supercheap Auto, BCF and Macpac, and in April it issued an ASX statement revealing it was the subject of potential legal action from – at that time – unnamed executives over allegations of workplace bullying.

Super Retail warned investors the cost of the litigation could be as much as $50m and the accusations included a number of sensational claims including a toxic work culture within Super Retail that extended to senior executives and board members.

There were also allegations of bullying, harassment and fiery staff meetings where the CEO ­allegedly spat and yelled at ­managers.

Super Retail has strongly denied all the allegations, including that of an affair between the CEO and former head of HR, and recently issued concerns notices to Ms Berczelly and Ms Farrell, threatening the pair with defamation proceedings over some of their allegations.

Earlier this month, the Federal Court was told the two Super Retail whistleblowers, Ms Farrell and Ms Berczelly, had been hos­pitalised.

Shane Prince SC, counsel for former Super Retail chief legal officer Ms Farrell, told the Federal Court the women were recuperating but being in hospital could make it difficult for them to give evidence in the current case.

Mr Prince did not describe to the court the reason for the hospitalisation, but sources close to the parties told The Australian it was stress-related.

Ms Farrell later gave evidence via a video link. Justice Lee on Monday dismissed Ms Farrell’s application to enforce Super Retail to meet its obligations under the alleged settlement offer.

After the ruling on Monday, counsel for Super Retail, Matthew Follett SC, tried to widen the previous suppression order to include parts of Justice Lee’s published ruling but this was denied.

Originally published as Super Retail wins first case against former executive whistleblowers