ACCC v Harrison [2016] FCA 1543: Harrison Telecommunications Guilty of Unconscionable Conduct
Friday 13 January 2017 @ 8.48 a.m. | Trade & Commerce
The Federal Court has found that corporations trading as SoleNet and Sure Telecom (the Harrison Companies) engaged in unconscionable conduct in connection with the supply of telecommunications services.
Harrison Communications is the parent company of both SoleNet and Sure Telecom, and during the time in question restructured the businesses "to avoid regulatory sanctions and unpaid debts to regulators".
The court action was brought in April 2016 by the Australian Competition & Consumer Commission (ACCC), with the assistance of the Telecommunications Industry Ombudsman (TIO) and Australian Communications & Media Authority (ACMA).
Background to the Case
The Court found that between 2013 and 2015, the Harrison Companies were restructured in part to avoid regulatory sanctions and unpaid debts to regulators. As part of this process, customers were transferred from one Harrison Company to another without their knowledge or informed consent, and were then subject to unjustified demands for payment of early termination or cancellation fees, when there was no legitimate contractual basis for the Harrison Company that was seeking the payment to demand payment.
The Judgment
The Court also found the sole director of the Harrison Companies, Mr James Lee Harrison, was involved in the unconscionable conduct. In making this finding, Justice Moshinsky stated at para 136:
“I do not think there is any doubt that Mr Harrison was well aware of each of the elements of the system of conduct or pattern of behaviour… He was aware that the transfers involved, at best, a lack of transparency or, at worst, trickery or deception, vis-à-vis customers.”
The ACCC’s Reaction
In a recent ACCC Media Release, ACCC Chairman Rod Sims was quoted as saying:
“This outcome sends a clear message to companies and directors that they cannot avoid their obligations under the Australian Consumer Law by corporate restructures which involve transferring customers without their consent.”
The Court also found that in the cases of four of the six customers who gave evidence in the proceeding, the Harrison Companies engaged in undue harassment in connection with the supply of services and payment for services.
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Sources:
The Federal Court has slammed a Sydney telco for 'deception' and 'harassment' of customers
Australian Competition and Consumer Commission v Harrison [2016] FCA 1543 (20 December 2016)
SoleNet And Sure Telecom Found Guilty Of Ripping Off Customers
