Ultra Tune appeal dismissed, $1.5m fines upheld

Ultra Tune appeal dismissed
The Full Federal Court has rejected Ultra Tune’s arguments. (Source: Bigstock)

The Full Federal Court has upheld a decision to fine car servicing business Ultra Tune $1.5 million for four separate instances of contempt of court.

Ultra Tune had appealed a March 2024 Federal Court decision that related to earlier breaches of the Australian Consumer Law and the Franchising Code of Conduct.

The auto business claimed the court had no power to punish for contempt if no endorsement was included on the relevant orders indicating the consequences of non-compliance. Ultra Tune also called into question how the fines were calculated.

In dismissing the appeal, the Full Federal Court rejected any suggestion of error by the primary judge in either claim.

Ultra Tune fined back in 2019

The original court case was in 2019, when Ultra Tune was fined a total of $2.604 million (reduced to $2.014 million on appeal) for late production and dissemination of marketing fund statements and disclosure documents, and for misleading a prospective franchisee.

The Australian Competition and Consumer Commission (ACCC) had brought the initial case to court. Ultra Tune appealed, unsuccessfully, when the court ordered it to implement a compliance program and to restrain from contravening certain provisions in the ACL and Franchising Code.

In 2022 the ACCC filed proceedings for contempt of court.

ACCC Commissioner Liza Carver said “We are pleased with the Full Court upholding this decision, which we consider a clear message that compliance with the Franchising Code is of utmost importance.

“This is a serious matter because Ultra Tune had failed to comply with the requirements which are in place to protect franchisees even after judgments in earlier ACCC court action against it.

“We will continue to monitor the compliance by Ultra Tune and other franchisors, and take appropriate action if required,” Carver said.

The Court also awarded the ACCC its costs of the appeal.