Misrepresentations cost Multigroup Distribution Services $80,000

A failed Townsville freight business will receive $80,000 compensation after settlement of an Australian Competition and Consumer Commission court action.

The Federal Court, Brisbane, has declared that Multigroup Distribution Services Pty Ltd, through its former Townsville manager Mr John O'Neile, engaged in misleading or deceptive conduct by representations made to a prospective line-haul subcontractor.

Mr O'Neile told Mr Wayne Parker and Parker Freight Express Pty Ltd that Multigroup was dissatisfied with its then existing line-haul subcontracting arrangements between Townsville and Mount Isa. Mr Parker and Parker Freight Express were promised work if they started a line-haul business.

In fact, Multigroup had already decided not to change its existing line-hauler and did not intend to provide any line-haul contracts to Mr Parker or Parker Freight Express.

The Federal Court also declared that Mr O'Neile was knowingly concerned in, or party to Multigroup's contravention of section 52 of the Trade Practices Act 1974.

Multigroup and Mr O'Neile consented to the making of the declarations. Multigroup agreed to pay $80,000 compensation to Mr Parker and Parker Freight Express.

Multigroup also agreed to pay $20,000 towards the ACCC's costs.

By consent, the ACCC's application against Mr Roberts, Multigroup's Queensland State Manager, was dismissed.

 "The ACCC is firmly committed to protect small business operators from unlawful behaviour", ACCC Chairman, Mr Graeme Samuel, said today.

"This matter is a prime example of a small operator being the target of misrepresentations by a larger company and suffering loss.  This result serves as a reminder to companies to be vigilant in their business dealings to ensure they act in accordance with the Trade Practices Act".