Dunnes, Whelans hearing to begin in July

The High Court clash between Dunnes Stores and Whelan Frozen Foods is set to take place in July.

The High Court clash between Dunnes Stores and Whelan Frozen Foods is set to take place in July.

Whelans is seeking an extension to a notice of termination received from Dunnes in February. Dunnes is the company's only customer and has been for 25 years. Whelans has 470 employees and may go into liquidation once the termination comes into effect. Its business with Dunnes is worth in the region of €180 million in annual turnover.

Whelan's provides centralised logistics services to Dunnes for both frozen foods and textiles. In February, it was given a year's notice in relation to the frozen and chilled foods business. It was also given six months' notice in relation to the textiles and ambient (not chilled) foods business.

The company is seeking a year's notice in relation to both types of service. Its difficulties with Dunnes began in November last year when the retailer introduced reduced payment rates, which Whelans challenged.

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The president of the High Court Mr Justice Finnegan, was told yesterday by Rachel Casey BL, for Dunnes Stores, that the case could take six to eight days.

Mr Justice Finnegan said the parties should prepare an agreed statement of issues as well as lists of witnesses they propose calling, for June 14th. He said he may seek to try have the expected length of the hearing shortened.

Earlier this year, Whelan's successfully sought an interlocutory injunction against Dunnes after it reduced the rates it was paying for the services being supplied by Whelans. It said the reduced rates would put it out of business.

Ms Casey said both parties were anxious that a date would be set for the hearing. She said Michael Cush SC and Dermot Gleeson SC, would be acting for Dunnes, and Paul Gallagher SC for Whelan Frozen Foods.

There was discovery of documents still outstanding but she believed it would be taken care of by July.

Mr Justice Finnegan put the case in for hearing on July 11th and for mention on June 14th. He said he needed to see if it would be possible to reduce the timescale and he wanted the counsel involved to talk about matters that might be agreed.

Evelyn Savage, of Frank Ward and Co, solicitors, was present yesterday for Whelan Frozen Foods. Matheson Ormsby Prentice is acting for Dunnes.

It has been reported that among the documents being sought by Whelans as part of the discovery process are board minutes of Dunnes Stores.

Whelans managing director Paddy Whelan said in an affidavit to the High Court in February that Dunnes director Frank Dunne had threatened to halve the business given to the distributor if it did not cut operating costs. Mr Whelan claimed Dunnes was using "economic duress" as a negotiating tool to obtain information about Whelan's accounts, in order to direct the company on how it should manage its business.

At that hearing, Mr Justice MacMenamin directed Dunnes to pay more than €650,000 that the retailer had withheld when it imposed the new rates. The money was handed over pending the full hearing of the case.

Dunnes is understood to be the only major retailer in the Irish market which does not have its own central logistics system.

The latest filed accounts for Whelan Frozen Foods show it had a turnover in the year to the end of January 2005 of €188 million, up from €169 million the previous year. Profits before tax were €1.7 million, up from €786,000 the previous year. There was no dividend paid but directors' remuneration was €795,460.