Yesterday the Federal Court found SoleNet and Sure Telecom engaged in “unconscionable conduct” between 2013 and 2015, transferring customers from one company to the other without their knowledge or informed consent, where they were met with “unjustified demands” for payment of early termination or cancellation fees amounting, in some cases, to harassment.
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 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 “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.”
ACCC Chairman Rod Sims said the outcome “sends a clear message to companies and directors” that they cannot avoid their obligations under the Australian Consumer Law by corporate restructures.
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.
The Court has ordered the parties to file submissions on relief including penalty by 10 February 2017. Both the Telecommunications Indusrtry Ombudsmen and the ACMA assisted the ACCC in its investigation of Mr Harrison and the Harrison Companies.