Archem Australia Pty Ltd and Maintenance Franchise Services Pty Ltd
ss. 52, 51A. Alleged misleading or deceptive conduct, representations as to future matters
22 December 2004: the ACCC instituted legal proceedings in the Federal Court, Brisbane, against fertilizer manufacturer Archem Australia Pty Ltd, alleging misleading or deceptive conduct regarding representations made about the sale of domestic fertilizer spray franchises in Queensland.
The ACCC also instituted proceedings against a related company, Maintenance Franchise Services Pty Ltd and director Mr Gregory Bath.
Archem manufactures and supplies chemicals and fertiliser products to businesses throughout Australia. It is alleged that Maintenance Franchise Services was the franchisor for the domestic fertilizer spray services which sprayed Archem fertiliser.
The ACCC alleged that Archem and Maintenance Franchise Services contravened the Trade Practices Act by representing without reasonable grounds:
that franchisees could earn high incomes from repeat business and operate profitably without engaging in selling activities
that Archem had existing customers for the franchise services
that Archem had successfully conducted a business of the type offered to franchisees
that Archem products supplied to franchisees performed satisfactorily in all the areas where the Archem franchises were offered for sale.
The ACCC has also alleged that Mr Bath was knowingly concerned in, or party to, the alleged contraventions by Archem and Maintenance Franchise Services.
The ACCC is seeking injunctions, declarations, compliance programs for the companies, compliance training for Mr Bath, findings of fact and costs.
11 February 2005: The matter has been listed for a directions hearing in the Federal Court, Brisbane.
22 March 2005: The respondent's defence was filed and a directions hearing was scheduled for 8 April 2005 before Justice Spender in the Federal Court, Brisbane.
29 April 2005: Directions made for further interlocutory steps in matter. Next directions hearing set for 16 June 2005.
15 June 2005: The respondents filed a further amended cross-claim against Oak Dedicated Limited.
16 June 2005: Directions made for the cross-respondent to file a defence.
20 July 2005: Directions made for further interlocutory steps in the matter. A further directions hearing has been listed for a date to be fixed after 23 September 2005.
14 November 2005: Spender J made orders for discovery.A further directions hearing is to occur on 10 February 2006.
6 February 2006:The matter is listed for 8 February 2006. The ACCC is seeking to discontinue proceedings against the corporate respondents (under administration) without orders as to costs.Settlement negotiations are in progress regarding the individual respondent.
2 March 2006: The directions hearing on 8 February 2006 was adjourned until 13 March 2006 to allow the parties to continue settlement negotiations. The ACCC is seeking to discontinue proceedings against Archem (under administration), however settlement discussions are in progress regarding Maintenance Franchise Services and the individual respondent.
13 March 2006: Federal Court, Brisbane, granted orders by consent against franchisor, Maintenance Franchise Services Pty Ltd (MFS) and its managing director, Mr Gregory Bath. Proceedings were discontinued against Archem Australia Pty Ltd after it was put into liquidation. The court ordered:
declarations;
injunctions;
the third respondent was ordered to attend compliance training about the consumer protection requirements of the Trade Practices Act and pay the ACCC's costs.
In a separate private settlement brokered by the ACCC, 11 of the affected former franchisees will also receive agreed amounts of compensation from the insurer for MFS and related company Archem Australia Pty Ltd.
