By James Wells
SYDNEY: Justice Jacobson, Federal Court Justice involved in the Navman price maintenance case, has criticised the company’s corporate culture, saying the company lacked basic legal training for its executives and subordinates.
According to a report in The Australian, Justice Jacobson said the $1.25 million fine for former director Christopher Baird and former Australian sales manager David King was “at the very bottom of the permissible range” after taking into consideration that over the offending period the turnover of the Australian subsidiary grew from $3.6 million in 2001 to $29 million in 2004, while the company’s turnover was $NZ200 million.
Jacobson said he had “real reservations” whether King’s fine was “within the permissible range”.
“I would have thought senior managers of a multinational company would have, at the very least, a basic understanding of the law even without the need for detailed training,” he said.
“In any event, the failure of the company to provide training and see that its senior managers arranged training for their subordinates reflects badly on Navman’s corporate culture.”
Jacobson added Navman’s actions were: “…not merely deliberate… it was pursued in an aggressive and high-handed way by the company’s most senior managers.”
According to a report in the Sydney Morning Herald, Navman was fearful of powerful retail giants for illegally forcing smaller retailers to sell its products at full price. These ‘big’ customers included Harvey Norman, the Woolworths-owned Dick Smith Powerhouse, Strathfield Group and marine retailer Whitworth’s Nautical World.
The fines follow an investigation initiated by the Australian Competition and Consumer Commission (ACCC) which found that the company had engaged in 35 cases of resale price maintenance between 2001 and 2004 which breached section 48 of the Trade Practices Act.
Navman admitted it sought to ensure that dealers selling its products did not sell below the benchmark which it used for the pricing of its products and went to the extent of actually cutting off supply to some retailers.
Navman particularly sought to prevent discounting below specified prices by retailers via the internet and also threatened the withdrawal of stock.
In one instance in September 2002, Baird wrote to a dealer and said: “There is only one issue that will stop Navman and that is discounting!! I will not allow our great products to be prostituted – take the warning now.”
A second email from Baird in January 2004 said:” If you can’t sell our products without discounting, then I suggest it’s time to sell any of our competitor’s products – simple as that.”