Resolving disputes

Case studies

• Business to business dispute

  Summary

  A South Australian wine grower owned a highly specialised piece of machinery which had continually malfunctioned. Over 6 years, the manufacturer carried out a number of repairs with no permanent resolution.

  Background

  The specialised vineyard machinery was only used for two months of each year, around harvest. The grower had owned the machinery for a number of years, however each year it continually malfunctioned. Over the years, the manufacturer carried out many repairs on the machinery, however the grower maintained that the machinery was a “lemon”. The parties approached the Office of the Small Business Commissioner to mediate the issues, with both parties undertaking the mediation in good faith.

  Outcome

  After a negotiation, the manufacturer took back the problematic machinery as a “trade-in” on new updated and fully functioning machinery. The new machinery performed a greater number of specialised tasks within the vineyard and was provided with an extended warranty. The “trade in” price was adjusted by the manufacturer to make the overall changeover price affordable and acceptable to the wine grower.

• Small business dealings with Government

  Summary

  A small business in the building industry was refused work due by a Government Department due to their National Police Certificate being provided by a private company not SA Police.

  Background

  A small business in the building industry wanted to undertake sub-contract work with a larger contractor who did repair and maintenance work for a Government Department. The small businessman was advised by the larger contractor that he needed a National Police Certificate (NPC) to be able to work on Government property. He presented an NPC which he had recently obtained from a private company. However, the larger contractor had been advised by the Government Department that it required an NPC issued by SAPOL. The small businessman contacted the Office of the Small Business Commissioner to query this apparent duplication in “red tape”. A Case Officer conducted enquiries into the provision of NPCs by police forces and private companies. Those enquiries showed that all NPCs, however obtained, rely on information compiled in a national database (“CrimTrac”) maintained by the Federal Government.

  Outcome

  The Case Officer forwarded this information to the Department concerned, which then altered its policy and accepted the ‘privately obtained’ NPC. The small businessman concerned was thereby able to commence working for the larger contractor on Government property without incurring the expense of further NPCs for himself and his employees.

• Retail and commercial leases act dispute

  Summary

  A lessee of an accommodation business was consistently behind in paying rent and was trying to sell the business. However, the business but was unable to obtain the lessor’s assistance in negotiating with potential purchasers of the business.

  Background

  The lessee had purchased the business some years earlier, but began to experience a downturn in the business which led to difficulties in making rent payments. The landlord was usually accommodating with allowing time to pay the rent, but it had become clear that the lessee would be unable to continue in the business and so must sell. Unfortunately, with the reduced income figures of the business, most interested buyers wanted to re-negotiate the rent with the landlord. After several ‘lost opportunities’ the lessee contacted the Office of the Small Business Commissioner for assistance. The Commissioner wrote to the lessor and was able to encourage him to participate in a mediation conducted by an independent mediator (at no cost to the parties). The situation was ideally suited to mediation because the interests of the lessee and the lessor were very closely aligned. If the lessee went into receivership, the lessor would be left in a situation of having no rental income while trying to re-let the premises for a type of business that seemed to be likely to fail. On the other hand, if the landlord could assist in the process of selling the business, a new operator would come in and the landlord would continue to receive rent.

  Outcome

  The mediation process assisted both the lessor and lessee to understand how their financial situations were closely linked. The parties subsequently agreed to terminate the lease on mutually acceptable terms.