Jul 16 2015

4Projects facing Au$9m reseller claim

4Projects by Viewpoint - blueThe UK-based SaaS construction collaboration technology vendor 4Projects, now owned by Viewpoint, is was being sued in the Australian courts by Melbourne-based Project Collaboration, once the exclusive reseller of the 4Projects platform in Australasia.

According to a statement of claim filed in the County Court of Victoria,* Project Collaboration Pty Ltd is was suing 4Projects Ltd for breach of contract, claiming almost Au$9m (around £4.4m or US$6.7m) in damages. A hearing date has had been set for next Monday, 20 July 2015.

Court action backstory

projectCollaboration.com.au-logoIn February 2012 4Projects appointed Project Collaboration as an agent to sell licences and provide first line account management and support services to third party clients in Australia for use of 4Projects’ software (27 August 2012 post). This agreement was subsequently amended in June 2013, applying for a further four years commencing 1 July 2013, with an option to renew for two further years.

In between these two agreements, in February 2013, 4Projects was acquired by Viewpoint, which had an Australian office, headed by Scott Haladay, selling ERP software in the region. This wasn’t initially seen as any impediment to Project Collaboration; indeed, just before the variation agreement was signed in June 2013, both sides appeared very positive about the relationship – see ProjectCollaboration growing 4Projects in Australia.

But on 1 April 2014, Project Collaboration received a letter from Viewpoint seeking to terminate the agreement. Almost simultaneously their access to the 4Projects system was shut down, effectively preventing them from providing first line support or demonstrating the application. Project Collaboration rejected the termination (Viewpoint was not a party to the agreement) and sought to regain access to the 4Projects platform, but on 16 April, 4Projects responded by claiming a material breach of the contract and repeated their intention to terminate the contract. (Around that time, when I asked 4Projects about the state of the relationship, on 22 April 2014, I was told it was “in transition” and that 4Projects would be sold as Viewpoint for Collaboration in Australasia by a directly employed sales team.) The court records show Project Collaboration filed a writ for damages on 6 May 2014.

Project Collaboration disputes the breach of contract claim and states it has been deprived of an opportunity to earn profits performing the agreement for the balance of the initial term and for the optional further term of the agreement, and has thereby suffered loss. It argues that 4Projects was not entitled to take its actions, or was “recklessly indifferent as to whether it was entitled to do so”; it claims “the conduct of 4P constituted wilful misconduct in the performance of its obligations under the agreement” and is seeking “Indemnity for its loss and damage suffered by reason of 4P’s wilful misconduct”. A figure of Au$$8,991,378 was mentioned in the initial statement of claim.

Some 14 months after the first court filing, it appears from the publicly available court filing records that initial efforts at mediation came to nothing, and efforts by 4Projects to limit the proceeding to the question of liability were refused. As is common in civil disputes, 4Projects has also made a counterclaim against Project Collaboration. The latter’s team has now moved on to other businesses, but I asked 4Projects for comment. They said (not unexpectedly in light of the ongoing proceedings):

I’m afraid we won’t be able to talk to you about this at this point.  The matter is “live” and as such it would be inappropriate of us (or in our view any party) to pass any comment at this time.

Update (17 July 2015, 10.45am BST) – It appears that an out-of court settlement has been agreed. According to the court filing records, Monday’s hearing has been cancelled, and the case’s filing details were updated, stating:

1. The Proceeding (including the Counterclaim) be dismissed with no order as to costs with the right of reinstatement reserved to the Plaintiff
2. Reserve costs.

* The statement of claim is available to visitors to the court upon payment of a small fee; a copy was sent to me by a follower of this blog.

Permanent link to this article: http://extranetevolution.com/2015/07/4projects-facing-au9m-claim/

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