Federal Court orders Freechoice to pay TSG’s legal costs

Dear all,

Following the Federal Court ruling that Freechoice has engaged in deceptive conduct after ‘actively poaching’ franchises from TSG, The Federal Court pronounced Judgment that Freechoice pay TSG’s costs of the Federal Court proceedings,

Please see below TSG’s statement:

Federal Court orders Freechoice to pay TSG’s legal costs

On the 20th July 2016, Justice Davies of the Federal Court of Australia pronounced Judgment that Freechoice pay TSG’s costs of the Federal Court proceedings that TSG launched TSG against Freechoice, with such costs to be paid on an indemnity basis as from 3 July 2015.

Her Honour gave judgment that –

“In the present case, there was misconduct by Freechoice by its willful disregard of its discovery obligations. In the judgment, I found Freechoice’s discovery to be manifestly inadequate.

Mr Whelan swore an affidavit in which he purported to provide an explanation for the failure to provide proper discovery which I found to be “both unconvincing and unsatisfactory”.

I rejected Mr Whelan’s explanation as to why those documents were not discovered earlier, which was evasive and not plausible.

I accept the submission for TSG that the failure to discover critical documents without proper explanation justifies an award of indemnity costs”

TSG’s lawyers have assessed the costs to be in excess of $300,000.

“We are delighted with the Court’s decision”, said Mr Bruno Santi, TSG’s Chairman.

On the 8th June 2016, the Federal Court ruled that Freechoice’s Travers ‘Candyman’ Beynon has engaged in deceptive conduct after ‘actively poaching’ franchises from TSG.

The Federal Court found that Freechoice had unlawfully interfered with TSG’s contractual relations with its franchisees.

In 2015 TSG sued Freechoice after numerous approaches were made by Freechoice to TSG franchised stores, seeking to convince them to breach their agreements and end their relationship with TSG and move across to Freechoice.

The Court found that Freechoice unlawfully targeted TSG’s franchisees by offering them financial incentives to terminate their TSG contracts and enter into franchise agreements with Freechoice.

The Court also ruled that Freechoice made a number of misleading or deceptive statements to TSG franchisees in seeking to persuade them to breach their contracts and win their business.

Freechoice Managing Director, Mr.Travers “Candyman” Beynon was the architect of a strategy known as “The Competitor Project” the sole purpose of which was to target competitor stores and induce those stores to terminate existing franchise agreements and enter into new contracts with Freechoice.

The Court found that Freechoice’s conduct was deliberate and calculated and demonstrated a persistent, deliberate and intentional disregard of the contractual obligations of TSG’s franchisees.

The Court criticized the conduct of Freechoice’s then General Manager, Mr. Andrew Whelan and further found that Mr. Whelan at all times was acting with the authority and knowledge of Mr. Beynon, who was present in Court throughout the proceedings but did not give evidence.

TSG was granted a permanent injunction prohibiting Freechoice from seeking to induce further TSG franchisees to breach their TSG franchise agreements.

“The decision of the Court sends a powerful message; follow the rules or suffer the consequences,” said Mr. Bruno Santi, TSG’s Chairman

“The TSG store network has dramatically grown to over 400 stores in the past year because people trust our brand and our commitment to exceptional customer service.

 

New TSG franchisees join the TSG team because our dealings are honest & transparent – we are committed to building trust and respect ” said Mr. Santi