The Australian printing supplies wholesaler has gone into liquidation after a three-year long court battle with a competitor.
ARN Net reported on the placing of Tonnex into liquidation, which took place on 27 August after a three-year battle with a competitor, Dynamic Supplies. This concerned Tonnex supposedly infringing copyrights on Dynamic Supplies products, and The Recycler reported on the start of the case in April 2011, with Tonnex’s appeal failing in November 2012.
Tonnex had been in business for 16 years, with offices in Melbourne, Sydney and Brisbane, and liquidators Ferrier Hodgson are responsible for the company’s liquidation. Tonnex also submitted a notification of resolution to voluntarily wind-up the company on the same day, with the liquidators explicitly noting that the “key factor in the collapse of the company” was the long-running court case.
The case had found that Tonnex had infringed Dynamic Supplies’ copyright, and contravened the Trade Practices Act 1974 (Cth) in a number of respects. The copyright claim related to a CSV file containing model information and pricing on 2,800 Dynamic Supplies products, with the company accusing Tonnex of copying a large quantity of the file for its own database.
Tonnex meanwhile denied copying the database, explaining that it had gathered data from many other sources, but the court ruled that it was “inconceivable” that the “sheer number of instances of precisely the same expression” would have made it into Tonnex’s version by change. The court also found Tonnex had breached sections of the Trade Practices Act via claims it only sold 100 percent genuine products, with the use of several unofficial sources meaning this claim could not be verified.
John Lindholm, Partner at Ferrier Hodgson, commented: “They did have a legal proceeding, which they lost on appeal and that was going to result in a significant cost order and damages against them. That was really what precipitated the directors forming the view that they can’t cover it, which ultimately put them into liquidation.
“There are a few trade players reviewing the assets and we are seeing if they want to make an offer. But the business had reduced trading significantly over the last month and the prospects of it going to a sale are not great. The key is the litigation they were involved with. I think they only have half a dozen remaining staff.
“The Sydney office has been wound down and they just had a few staff left there. We will be seeking to realise the stock over the next few weeks and let the staff go or someone might want to come in and reinvigorate the business.”