ACCC sues Original Mama's Pizza & Ribs and its principals for alleged small business sting

7 February 2006

The Australian Competition and Consumer Commission has commenced legal proceedings against The Original Mama's Pizza & Ribs Pty Ltd, its managing director, Mr George Terence Hilder (aka George Hilder, George Hilda, Brett Hilder, Brett Hilda, Terry George Hilder, Terry George Hilda) and sales representative, Mr Richard Soo.

The ACCC has made allegations over the parties' involvement in an alleged small business 'sting' about the supply of oven systems and signing up small business owners to long term financing agreements.

The ACCC alleges that Original Mama's Pizza & Ribs, Mr Hilder and Mr Soo made misrepresentations to small business owners, such as service station, cafe and convenience store owners, which induced them to enter into long-term financing agreements with third party finance companies, in order to obtain the oven systems. 

These misrepresentations allegedly included representations to the effect that:

  • if the oven system was not a success, the small business owner would be able to cancel their financing agreement and Original Mama's Pizzas & Ribs would be obliged to remove the oven, with no costs being incurred by the small business owner, and that the small business consumer would be released from all financial obligations in respect of the oven, and
  • the oven system would be risk free because of a six or 12 month free trial period. 

In addition, the ACCC alleges that in some cases Original Mama's Pizza & Ribs represented to the small business owners that the financing agreement was only six months long when in fact it was 60 months long.

The ACCC alleges that once the small business owners had entered into the financing agreements, the third party finance companies would forward large sums of money to Original Mama's Pizza & Ribs in respect of the ovens that had been financed.

The ACCC alleges that the small business owners sought to contact Original Mama's Pizza & Ribs with a view to terminating their obligations under the financing agreements, and having the ovens removed.  However when the small business owners sought to contact Original Mama's Pizza & Ribs they were either advised that the financing agreement could not be cancelled, that Original Mama's Pizzas & Ribs did not guarantee to remove the pizza system, or in some cases were unable to make any contact with the company at all.

The ACCC alleges that the conduct of Original Mama's Pizza & Ribs breached sections 52 and 53(g) of the Trade Practices Act 1974. The ACCC also alleges that Mr Hilder and Mr Soo were knowingly concerned in the alleged contraventions of the Act by Original Mama's Pizza & Ribs.

The ACCC Chief Executive Officer has also instituted legal proceedings against Original Mama's Pizza & Ribs for alleged contraventions of sections 12DA(1) and 12DB(1)(g) of the ASIC Act pursuant to a delegation provided to him by ASIC. He has also alleged that Mr Hilder and Mr Soo were knowingly concerned in the company's contraventions of the Australian Securities and Investments Commission Act 2001.

The ACCC is seeking a range of orders against Original Mama's Pizza & Ribs, Mr Hilder and Mr Soo, including injunctions, declarations, findings of fact, costs and non-punitive orders.

The first directions hearing took place before Justice Madgwick in the Federal Court, Sydney, today. At that hearing the ACCC obtained orders for substituted service of Mr Richard Soo.

Release number: 
MR 022/06
ACCC Infocentre: 

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