The Australian Competition and Consumer Commission has initiated class action proceedings against Allphones Retail and three individuals seeking damages on behalf of 74 current and former Allphones franchisees.
Allphones director and chief executive officer Matthew Donnellan, director and chief operating officer Tony Baker; and former national franchising manager, Ian Harkin, are part of the class action for allegedly being knowingly concerned in or party to the contravening conduct.
The action was begun under the Trade Practices Act 1974 for alleged breaches of section 51 AC of the Act, which prohibits unconscionable conduct. It is based, in part, on existing ACCC Federal Court proceedings against the same parties.
Under the class action, the ACCC alleges that Allphones received commission or bonus payments from telecommunication networks which were not paid to franchisees in accordance with their franchise agreements, and which were not disclosed to franchisees; received rebates from mobile phone handset and other product suppliers which were not paid to franchisees in accordance with their franchise agreements, and which were not disclosed to franchisees, and made unilateral deductions from commission payments payable to franchisees which were not permitted by their franchise agreements in circumstances which, in the context of Allphones’ relationship with its franchisees, was unconscionable.
Under the class action, the ACCC is seeking damages for losses sustained by the represented franchisees which the ACCC alleges flowed from this alleged unconscionable conduct.
Proceedings for the class action is set for directions hearing on 8 September 2009 before Justice Foster.