01/09/2009 - 06:49

Cape loses second court claim

01/09/2009 - 06:49

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The Federal Court has dismissed another claim from Cape Australia Holdings, which, on this occasion, was seeking relief from nine former employees who left Cape's PCH Group to start rival scaffolding company, Modern Access Services.

The Federal Court has dismissed another claim from Cape Australia Holdings, which, on this occasion, was seeking relief from nine former employees who left Cape's PCH Group to start rival scaffolding company, Modern Access Services.

Yesterday, the Federal Court dismissed the case against Jim Anderson and eight others who parted ways with PCH Group and then established Modern Access Services (MAS), a joint venture with Malaga-based Modern Industries.

The applicants, namely Cape, have also been ordered pay the court costs for Mr Anderson and the eight other employees.

The judgement from Justice Siopsis outlined that Mr Anderson had been major projects director for PCH at the time of his departure.

"He resigned from PCH in December 2007 because he disagreed with the way in which the new management at Cape were running the business of PCH," the judgement read.

"The takeover of PCH by Cape created discontent among some of the employees of PCH and a number of employees of PCH left its employment shortly after the takeover had been completed.

"Each became an employee of MAS shortly after the termination of his employment with PCH."

This is this latest instalment of UK-based Cape plc's ongoing courtroom dramas with various groups of former employees, in particular numerous management staff, who parted ways with Cape shortly after their businesses were purchased during an acquisition-buying frenzy in 2007.

In July, the same court dismissed a claim by Cape, which was then seeking relief from former employee Darren Iannello after he too had started a rival business.

Mr Iannello had been a manager of TCC Group, which was one of three Australian businesses acquired by Cape plc in 2007.

Mr Iannello subsequently established the WA operations of private Sydney company Giovenco Industries.

Cape spent nearly $430 million during 2007 buying PCH Group, Henderson-based TCC Group and Melbourne company Concept Hire, which had previously bought Balcatta company Blackadder Scaffolding.

Managers from Perth companies PCH Group and TCC Group left Cape in order to establish three new competitors including Modern Access Services.

MAS has since been purchased by natural resources service provider Ausgroup.

The other two companies were Giovenco Services, and International Formwork & Scaffolding.

The judgement also outlined how both PCH and MAS each submitted competing tenders for two major projects involving MCC Mining and Woodside Energy.

"In 2008, each of PCH and MAS submitted competing tenders for the hire of scaffolding and the provision of scaffolding services to a company, MCC Mining WA Pty Ltd (MCC Mining) in respect of a project in Western Australia, known as the Sino Iron Ore project," the judgement read.

"Each of MAS and PCH has also submitted tenders to Woodside Energy Ltd (Woodside) for the provision of scaffolding services to the Pluto project to be conducted by Woodside."

MAS was selected as the preferred tender over PCH for work on the Sino Iron Ore project, while both companies were awarded 50 per cent each of the Pluto contract with Woodside.

The judgement also mentioned that the submissions from Cape may not have been clearly addressed.

"I have assumed that it was PCH and not Cape that submitted the tenders, but the evidence on this issue is far from clear," the judgement read.

"I note that the letter from MCC Mining advising that the tender was unsuccessful was addressed to Cape and not PCH."

Cape commenced this proceeding on 19 November 2008 for preliminary discovery of a number of documents.

 

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