Mediation Moves Forward in Sleeping Duck's High-Profile Legal Battle

Highlights

• Mediation ordered in legal dispute involving Sleeping Duck
• Former CFO's document handover crucial in upcoming sessions
• Dispute stems from prior case with investor Adir Shiffman

In a significant development within the Australian corporate legal landscape, the ongoing dispute involving the online mattress firm Sleeping Duck (ASX:SD) is set to proceed to mediation. This decision was facilitated by a Federal Court directive issued last Tuesday, underlining the court's inclination towards a resolution outside the courtroom.

The case, which has captured public attention, revolves around allegations against the company’s former chief financial officer, Sean Curry. This legal confrontation reached a new phase following a brief online hearing by Federal Court of Australia Judge Helen Rofe. Judge Rofe expressed her belief that the case was "well suited to go to mediation at an early opportunity," signaling a push towards an amicable resolution.

The origins of the dispute trace back to May of the previous year, when Sleeping Duck first lodged the case, coinciding closely with a separate lawsuit judgment involving the company and investor Adir Shiffman. In the separate but related litigation, Shiffman accused the company's founders, Selvam Sinappan and Winston Wijeyeratne, of excluding him from an active advisory role post-investment, a role that he was promised. Shiffman’s allegations of being “oppressed” were ultimately dismissed in court.

Further complications arose during the Shiffman trial when Sean Curry’s connections with another online entity, the furniture retailer Eva, became a focal point. The court had earlier mandated Curry to produce various communications and documents pertaining to his dealings with Eva, specifically those related to "trade secrets," financial planning, and performance metrics from February 2022 to April 2024.

At the latest hearing, Mark Waters, representing Sean Curry and a partner at CIE Legal, confirmed that Curry had complied with these orders by surrendering the required documents. Waters’ statement highlighted the ball now being in Sleeping Duck’s court to articulate any potential losses or damages incurred due to Curry’s actions.

Legal representation for Sleeping Duck, provided by Clayton Utz, will play a pivotal role in the upcoming mediation sessions. These sessions are expected to delve into the complexities of the case, including the details of the trade secrets and the broader implications of the dispute on Sleeping Duck’s operational integrity.

This mediation not only represents a crucial step towards resolving a high-stakes legal battle but also sets a precedent for how trade secrets and investor relations are managed in the increasingly digital landscape of Australia’s corporate sector.