ACCC launches fresh action against Allphones

Stuart Corner
Tuesday, 18 August 2009 10:51

IT Industry - Strategy

The ACCC has launched a class action against Allphones Retail Pty Ltd and three individuals seeking damages on behalf of 74 current and former Allphones franchisees for alleged unconscionable conduct.

The individual respondents are Allphones' director and CEO, Matthew Donnellan; director and COO, Tony Baker; and former national franchising manager, Ian Harkin. The ACCC alleges they were knowingly concerned in or party to the contravening conduct. The ACCC's action is based, in part, on its existing Federal Court proceedings against the same parties.

In March 2008 the ACCC initiated proceedings against Allphones and Donnellan, Baker and Harkin alleging contraventions of the Trade Practices Act. Allphones and the other respondents are defending those proceedings, which are set down for hearing from March 23 2010.

The ACCC began further proceedings in October 2008 against Allphones that resulted in Allphones giving interim undertakings to the court and the court ordering injunctions restraining Allphones in its dealings with its existing franchisees. The court has not yet set a date for to hear for this hearing.

Both these earlier proceedings include allegations of unconscionable conduct, contravention of an industry code, misleading conduct and misleading representations about certain business activities.

The ACCC says it has initiated this separate class action on behalf of the franchisees "to ensure the best prospects of an efficient and effective outcome for the franchisees." Proceedings for the class action are set for directions hearing on September 8 2009 before Justice Foster.

The ACCC alleges that Allphones received commission or bonus payments from telecommunication networks and rebates from mobile phone handset and other product suppliers none of which were paid to franchisees in accordance with their franchise agreements, and which were not disclosed to franchisees.


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