Another Franchisee "win" in Australian Courts

The Federal Court of Australia has handed down a judgement that will allow 35 "Allphones" franchisees to proceed with a class action The article appears here http://www.australianit.news.com.au/story/0,,25717108-15306,00.html Allphones hit by class action Print Mahesh Sharma | July 01, 2009 ATTEMPTS by the Allphones group to force franchisees on to new agreements has taken a blow after the Federal Court allowed 35 franchisees to proceed with a class action fighting the move. The new agreements were proposed late last year and faced the first hurdles in January when the corporate watchdog won a court order that banned Allphones from offering preferential treatment to franchisees that took up new agreements. At the time, the ACCC alleged Allphones threatened to withhold stock from franchisees unless they signed the proposed new agreement and agreed not to pursue legal action against Allphones for any past breaches of existing franchise agreements. The new agreements were formulated after the decision last year when the Federal Court found Allphones acted with "calculated dishonesty" and "continuing deceit" by withholding commission payments from Sydney Allphones franchisee Hoy Mobile. The court ordered Allphones to pay $75,169 to Hoy Mobile, but the Federal Court deducted $32,000 from the payout for fraudulent activities of Craig Hoy relating to the sale of unlocked mobile phones. Allphones has appealed against this decision. In April, The Australian revealed the ACCC may pursue a class action against Allphones on behalf of more than 100 franchisees to recoup allegedly withheld commission payments. The ACCC has declined to comment on the possible class action. The proposed class action will be based on similar grounds to the ongoing proceedings between the ACCC and Allphones Retail and key personnel -- chief executive Matthew Donnellan, chief operating officer Tony Baker and former national franchising manager Ian Harkin -- alleging the retailer breached franchise agreements. The next directions hearings will take place on July 15. The action does not include Allphones chairman Tony Mitchell, who was on the federal government's expert panel that advised dropping the original tender process to build a national broadband network. Allphones suffered the latest legal blow in unrelated litigation last week in the Federal Court, which ruled against the mobile phone retailer in the case against Adelaide franchisee Norbert Christian Weimann, trustee of the Weimann family trust. Mr Weimann took his case to the Federal Court earlier this year in a bid to renew the existing franchising agreement -- first signed in April 2004 -- instead of being forced to sign up to the new terms. Mr Weimann's legal representation, Chew & Matthews, successfully sought to convert the proceedings into a class action that would involve 35 Allphones franchisees.