Are you aware of the recent legal case regarding the removal of an MBM distributor? In 2021, Michael Chandler MMC, owner of the MMC Corporation, was brought to court in a Federal Court on charges that he had encouraged his distributors to try to force out current distributors for failing to meet performance targets. Mr. Chandler’s motion was denied by the court based upon a claim that the distributor should have first used his authority to second the distributors and that they did not have first-hand evidence that the actions were taken. He claimed that he could not be held guilty of common law unfair competition because there had been no formal written agreement or contract between him and the current distributor. But the court found otherwise and ruled in favour of Mr. Chandler.
The court found that the fact that the distributor was not using his authority properly to prevent another distributor from unfairly competing with him should be given effect to a finding of unfair competition. The court found that there was no such agreement between Mr. Chandler and the other distributor and that he was merely trying to shift the blame from himself to the other man for failing to meet performance targets. The court found this fact to be a sufficient basis for making an unfair competition claim against Mr. Chandler and awarded him a large monetary award. The case was heard by the Federal Magistrates’ Court but was found by the High Court not to be ripe for appeal.
There is an interesting historical note to this litigation. Back in 1995, when Mr. Justice Oliver Cates of the UK spent many hours deciding what should be done in respect of a company which had conspired with a rival company to fix prices so as to increase profits. This was a highly public case in which it was obvious that the claims made against the MMC Corporation and its founder, Mr. James Clark, was based on both factual allegations and also on unfair competitive grounds.
Mr. Justice Oliver Cates concluded that it was not possible for a fair and reasonable inference to be drawn by the courts as to the conduct of the parties to the pricing disputes. He went on to state that he could not find that the distributors, in this case the MMC, had acted unreasonably or in bad faith. His view was that they had relied upon information provided by their competitors and that they had in effect conspired to fix their own price.
At the appeal stage Mr. Justice Oliver again stated that he could not find a reasonable inference to be drawn as to the conduct of the parties. His reliance on the precedents set by previous decisions was misplaced. His reliance on the case of R v Halsbury arose from the fact that there was an attempt to apply a reasoning rule which resulted in the dismissal of the action. The argument applied was that there was no attempt to fix the price and that therefore there was no basis for a case against the Corporation. However, a considerable difficulty was caused in my view because Halsbury was the only authority in this area to say that there was a conspiracy.
The fourth aspect of the motion, that there was no evidence of any bad faith or bad intention, was not accepted by the appeal judges. This part of the motion was rejected on the basis that it could not be shown that MCM had engaged in any bad faith or was engaged in any wrongful or improper conduct. The submissions of counsel were that there were two other matters that might lead to an inference of bad faith but that they did not raise a genuine issue of fact as to whether MCM was acting in bad faith. Other than that, the submissions of counsel were accepted that there was insufficient evidence to support a conclusion that MCM was guilty of any wrongdoing at all.
It is submitted that the next step in the application should be that the motion be dismissed because the first step failed to produce a reasonable likelihood of a favourable result on the facts of the case. The second step failed to produce a reasonable likelihood of a justifiable or desirable result on the facts of the case. Finally, the third step failed to establish a genuine issue of fact and was not an abuse of process. In these circumstances, the appeal is granted.
Accordingly, we are pleased to dismiss the complaint against Matt Maharaj. Accordingly, we are also granting the motion for summary dismissal. We will consider the arguments advanced by the parties in separate reports. Accordingly, this entry hereby provides the detailed grounds of the claim against Matt Maharaj and the reasons why we agree with the submissions of the Solicitor’s Expert Witness that there is no genuine issue of fact as to the liability of Matt Maharaj as regards the facts of the case.