The Australian Competition and Consumer Commission has instituted legal proceedings in the Federal Court in Sydney against Mailpost Australia Limited, its director Mr Peter Kritas, and Mailpost Postie Network Sydney Pty Ltd (MPNS) for alleged contraventions of the Trade Practices Act 1974.
Mailpost is a print and distribution business for unaddressed promotional mail. Mailpost Australia is the Australian master franchisor and MPNS is the sub-franchisor for New South Wales.
The ACCC alleges that Mailpost Australia and MPNS failed to comply with the Franchising Code of Conduct in a number of respects, including not providing prospective franchisees with a disclosure document, contravening section 51AD of the Act.
The ACCC also alleges that Mailpost Australia made a number of representations to franchisees, prospective franchisees and sub-franchisors in contravention of sections 52, 53(g) and 59 of the Act, including that:
- the Mailpost business was not a franchise and therefore franchisees did not have rights under the Franchising Code, and
- the business was 'recession proof' and that Mailpost had a number of corporate customers 'on the way'
when in fact such representations were false, misleading or deceptive.
It is alleged that Mr Kritas was knowingly concerned in the conduct of Mailpost Australia and MPNS.
The ACCC seeks orders including declarations that Mailpost Australia and MPNS engaged in conduct that contravened the Act and that Mr Kritas was knowingly concerned in that conduct; injunctions; an order that Mailpost implement a trade practice compliance program; and costs.
This matter has been listed for a directions hearing on 3 February 2010.