"Commencement of Federal Court legal proceedings by Micro-X
Micro-X Limited (ASX:MX1, “Micro-X” advises that it has commenced proceedings in the Federal Court of Australia against:
1. Allora Services Pty Ltd (“Allora” for damages for (i) breach of contract and (ii) misleading and deceptive conduct under Australian Consumer Law; and
2. Allora’s proprietor and Managing Director, Mr Mark Brydon, for “aiding and abetting” Allora’s misleading and deceptive conduct under the Australian Consumer Law.
This action follows a demand issued last year by Micro-X against Allora for approximately $13.7 million. Micro-X's claim is for loss and damages arising from:
a) breaches of the Performance term of the contract in failures to carry out work with due care and skill and in accordance with industry standards;
b) misleading representations regarding price; and
c) misleading representations regarding capability;
in relation to the provision of the engineering design services in the development of the DRX Revolution Nano. Relevant background to today’s announcement includes:
Micro-X contracted the engineering design of the DRX Revolution Nano to Hydrix Services Pty Ltd (“Hydrix Services”, then a design consultancy based in Melbourne. This corporate entity, which no longer trades, has been re-named Allora Services Pty Ltd, after the Hydrix business was sold to Panorama Synergy Ltd (ASX SY) in 2017.
Panorama Synergy Ltd has since been re-named Hydrix Ltd (ASX:HYD).
The invoices from Hydrix Services (as it was then known) to Micro-X on the Nano project totalled $19M.
Following a number of disputes with Hydrix Services during 2015 relating to overcharging, project cost overruns and costs associated with rectifying design defects prior to product release, Micro-X withheld payment of $1.8M of invoices in mid-2016. This amount has appeared in the Micro-X’s accounts under Trade Payables since June 2016.
Allora Services has previously demanded payment of the unpaid invoices, with interest, and is expected to lodge a cross claim for these amounts against Micro-X in the proceedings.
