Former RFG boss in test case ruling

A HIGH Court judge will today rule on a test case – involving ex-Retail Food Group executive Tony Alford – of the powers of joint parliamentary committees to force witnesses to answer questions.

After a 90-minute hearing yesterday morning on whether Mr Alford, the former franchise boss of Donut King and Gloria Jean’s, must face a grilling by a parliamentary joint committee, which is looking into franchising, Justice Michelle Gordon adjourned to consider her decision.

Barrister Gillian Dempsey, for Mr Alford, argued that the Constitution does not give joint parliamentary committees the right to force citizens to attend for questioning.

A second plaintiff in the case is former RFG senior executive Alicia Atkinson.

Dr Dempsey argued that on October 18 the committee had “directed” Mr Alford to appear to give evidence this Monday but that he should not have to face the “real danger” of prison for contempt if he is a no-show.

She argued that the chair of the parliamentary joint committee on corporations and financial services, Liberal MP Michael Sukkar, was “threatening” to find Mr Alford in contempt of the Senate if he did not attend on Monday.

She argued Mr Alford should not have to answer questions because it could harm his ongoing defamation action against Fairfax Media in the Federal Court.

This case was launched on November 15, weeks after Mr Alford was directed to appear before the committee.

Barrister Steven Free SC, for the Attorney-General Christian Porter, argued the application should be dismissed because there was no serious question for the High Court to examine.

Justice Gordon will give her decision today at 2.15pm.

In March, the Senate referred an inquiry into the operation and effectiveness of the Franchising Code of Conduct to the Parliamentary Joint Committee on Corporations and Financial Services.

The inquiry has been looking into why so many franchisees have been financially devastated or forced to take shortcuts such as underpaying workers to stay afloat.

The original reporting date of September 30 was extended in June to December 6.

The spotlight was thrown on RFG after revelations at the end of last year that its franchise model had proven unsustainable for many franchisees.

RFG’s share price was pummelled and it turned in an after-tax loss of $306.7 million for the past financial year.

The company has called on turnaround specialist Peter George to help restore the company’s fortunes.

Mr George previously said his role would be to support the board and CEO to steer the company back to a position of improved performance and financial stability.

Under Mr Alford’s leadership, RFG rapidly gobbled up a number of companies including Crust Gourmet Pizza and Di Bella Coffee Group.

In 2015, Mr Alford was ranked the richest boss on the Gold Coast in the BRW 2015 Richest Bosses.

The former accountant’s stake in RFG rose to $147.2 million, up 44.6 per cent from $101.8 million in 2014.

He vacated the managing director’s chair in 2016 and a year later gave up his nonexecutive board seat. The fortunes of the company crumbled at the end of 2017.

Mr Alford has been asked to appear before the committee on Monday alongside ex-RFG managing director Andre Nell and Ms Atkinson.

A source said that if Mr Alford wins his case, parliament will act to pass legislation to give joint parliamentary committees the power to force witnesses to answer questions.

Shares in RFG were steady yesterday, closing at 40¢.