A Queensland businessman who took payments from small businesses for a business exhibition that was later postponed and then cancelled has been fined $5000 for breaching Australian Consumer Law.
Sole trader Howard George Kodra, whose business trades as Live and Local Expo Pty Ltd, faced the Brisbane Magistrates Court last week on three counts of failing to supply services under the Australian Consumer Law (ACL), to which he pled guilty.
The charges were the outcome of an investigation by Queensland’s Office of Fair Trading, which said in a statement that Kodra tricked small businesses into paying for the “bogus” event.
Kodra approached small businesses in Beenleigh, Springwood and Logan with the promise of a stall and advertising and promotion for their businesses at the exhibition, which they were told was to be held at Griffith University.
The exhibition was to be held between 13 and 16 March in 2013 but was postponed on 20 February and rescheduled to take place on 19-22 June at Canterbury College. The event was then cancelled on 27 May, with Kodra citing a lack of exhibitors as the reason.
However, the OFT said both Griffith University and Canterbury College did not have signed contracts with Kodra for the event, which the government agency says indicates “that Mr Kodra was, at no time, in a position to hold the expo despite taking payments”.
According to a Courier Mail article at the time, the event was to feature 100 trade booths, as well as a breakfast, forums and speed networking activities. It is not clear how much money was paid to Kodra’s business by the small businesses, however, the Magistrates Court heard that Kodra’s daughter repaid three affected small businesses a total of $7,310 prior to the court hearing.
How to protect your business
Ursula Hogben, principal and general counsel at LegalVision, told SmartCompany small businesses should use a “trifecta” of steps to minimise risk in situations like this, and indeed in many other business transactions.
The first step is understanding how the ACL applies to business owners and operators, Hogben says. Consumer law applies to transactions up to the value of $40,000 and so small businesses that enter into transactions under this limit have the same legal protections as individual consumers.
Secondly, Hogben says small businesses should ensure they have a contract that spells out “exactly what they are getting” from the transaction.
“The contract should set out what the expo owner is actually providing, by when and for what price,” Hogben says.
Hogben says a clearly worded contract, rather than an email exchange or phone conversation, will help businesses owners in the event that they take a dispute to small claims tribunals, such as state-based civil and administrative tribunals.
The third step is to undertake your own due diligence, says Hogben.
“Look up the person and see if they look legitimate,” she says.
“Do some common sense checks like, have they had the event before?”
Hogben says these checks may help a business owner decide not to enter into a transaction entirely, or may give them a reason to alter the payment terms. For example, they may be able to pay a small deposit upfront and then pay the remaining amount when the service has been delivered.
SmartCompany was unable to contact Kodra prior to publication. The Live and Local Expo website is offline and a phone number for Kodra has been disconnected.
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