Franchisor in Contempt of Court Orders

Franchisor in Contempt of Court Orders

The Federal Court has penalised Allphones Retail Pty Ltd $45,000 for contempt of orders following action by the Australian Competition and Consumer Commission.

Justice Nicholas found that the conduct was both ‘serious’ and ‘deliberate’, having been undertaken by a number of Allphones’ senior personnel.

The orders which Allphones has been found to have breached concerned two undertakings given by Allphones to the court in October 2008.

They prohibited the company from withholding consent to the assignment of an Allphones franchise if the franchisee would not sign a deed releasing Allphones from liability and required Allphones to give the ACCC 7 days’ written notice of its intention to withhold consent to the assignment of an Allphones franchise on the basis that the new franchisee must enter into a new franchise agreement.

“This decision sends a clear message that the ACCC and the Court regard breaches of court orders very seriously,” ACCC Chairman Graeme Samuel said today.

“Those who act in contempt of court can expect to be vigorously pursued by the ACCC,” Mr Samuel said.  Allphones acknowledged that its conduct was both wrongful and culpable, and apologised to the Court and franchisees.

Allphones made joint recommendations with the ACCC to the court as to the appropriate fine.

Riba Business Lawyers

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