Australia's Tonnex Falls Into Liquidation After Lengthy Court Battle

[Anonymous]

Australia's Tonnex  Falls Into Liquidation After Lengthy Court Battle
The company was placed into liquidation on August 27

Brian Karlovsky (ARN)

Printing supplies wholesaler, Tonnex, has gone into liquidation after 16 years in business.

The company, which has offices in Melbourne, Sydney and Brisbane was placed in the hands of liquidator, Ferrier Hodgson, on August 27.

The same day, Tonnex submitted a notification of resolution to voluntarily wind-up the company to ASIC.

Ferrier Hodgson, partner, John Lindholm, told ARN the key factor in the collapse of the company was an unsuccessful court battle with competitor, Dynamic Supplies.

"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," he said.

"That was really what precipitated the directors forming the view that they can't cover it, which ultimately put them into liquidation."

The court battle which led to the company's demise was over the infringement of Dynamic Supplies' copyright.

Dynamic Supplies maintained a database that tracked every cartridge the company had manufactured and sold.

In 2008, an employee of Dynamic Supplies set up a chart that pulled data from its Navision Database, to show relevant information for its customers, which was published on the website.

Tonnex produced a similar chart, that contained parts Dynamic Supplies chart. Tonnex was then accused of copyright infringement.

In April 2011 in the Federal court, Justice Yates found Tonnex had infringed on Dynamic Supplies' copyright.

Tonnex then appealed and lost in November 2012. Justice Yates found that copyright subsisted in Dynamic Supplies' compatibility chart and that therefore Tonnex had infringed Dynamic Supplies' copyright.

Lindholm said Ferrier Hodgson was now looking to sell the company's stock and let go of the "half a dozen" remaining staff if the buyer is not found in the next few weeks.

"There are a few trade players reviewing the assets and we are seeing if they want to make an offer," he said.

"But the business had reduced trading significantly over the last month and the prospects of it going to a sale are not great."

As liquidator, he said he would have a better idea by Monday or Tuesday next week of who the company may be of interest to, in terms of assets.

"The key is the litigation they were involved with," he said.

"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."

Tonnex was established in 1992 and carried a wide range of products from all major manufacturers of consumables for printers, fax machines, and copiers.

ARN contacted Tonnex International for comment, but they had not responded at the time of publication.

Australia's Tonnex  Falls Into Liquidation After Lengthy Court Battle
The company was placed into liquidation on August 27

Brian Karlovsky (ARN)

Printing supplies wholesaler, Tonnex, has gone into liquidation after 16 years in business.

The company, which has offices in Melbourne, Sydney and Brisbane was placed in the hands of liquidator, Ferrier Hodgson, on August 27.

The same day, Tonnex submitted a notification of resolution to voluntarily wind-up the company to ASIC.

Ferrier Hodgson, partner, John Lindholm, told ARN the key factor in the collapse of the company was an unsuccessful court battle with competitor, Dynamic Supplies.

"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," he said.

"That was really what precipitated the directors forming the view that they can't cover it, which ultimately put them into liquidation."

The court battle which led to the company's demise was over the infringement of Dynamic Supplies' copyright.

Dynamic Supplies maintained a database that tracked every cartridge the company had manufactured and sold.

In 2008, an employee of Dynamic Supplies set up a chart that pulled data from its Navision Database, to show relevant information for its customers, which was published on the website.

Tonnex produced a similar chart, that contained parts Dynamic Supplies chart. Tonnex was then accused of copyright infringement.

In April 2011 in the Federal court, Justice Yates found Tonnex had infringed on Dynamic Supplies' copyright.

Tonnex then appealed and lost in November 2012. Justice Yates found that copyright subsisted in Dynamic Supplies' compatibility chart and that therefore Tonnex had infringed Dynamic Supplies' copyright.

Lindholm said Ferrier Hodgson was now looking to sell the company's stock and let go of the "half a dozen" remaining staff if the buyer is not found in the next few weeks.

"There are a few trade players reviewing the assets and we are seeing if they want to make an offer," he said.

"But the business had reduced trading significantly over the last month and the prospects of it going to a sale are not great."

As liquidator, he said he would have a better idea by Monday or Tuesday next week of who the company may be of interest to, in terms of assets.

"The key is the litigation they were involved with," he said.

"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."

Tonnex was established in 1992 and carried a wide range of products from all major manufacturers of consumables for printers, fax machines, and copiers.

ARN contacted Tonnex International for comment, but they had not responded at the time of publication.

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September 2, 2014 at 10:32 AM