News and Resources > Counterclaim Defeated, Recapture of $1.3 Million Debt

Counterclaim Defeated, Recapture of $1.3 Million Debt

In a recent legal battle at the County Court of Victoria, an international vehicle parts manufacturer faced a significant challenge: recovering a substantial debt of $1.3 m from an Australian distribution partner. However, what seemed like a straightforward debt recovery case took a contentious turn when the defendants filed a $1.3 m counterclaim.

The distributor counterclaimed, contending our client breached an alleged exclusive distribution agreement and/or engaged in misleading conduct and as such, sought damages under the Australian Consumer Law.

These allegations posed a serious threat not only to our client’s financial interests but also to their reputation in the industry.

To strengthen our client’s position, we initiated strategies to compel the defendants to substantiate their counterclaim early in the proceedings. Additionally, we strategically used formal offers to improve our client’s chances of recovering their legal costs if the matter proceeded to trial.

During the four-day trial, it became evident that the defendants lacked sufficient evidence to support their counterclaim. The court ultimately dismissed their allegations, ruling in favour of our client. As a result, the defendants were ordered to pay the full $1.3 million debt, along with interest and our client’s legal costs.

The successful resolution of this dispute shielded the manufacturer’s reputation from potentially damaging allegations, secured payment of a significant debt, and covered a majority of legal expenses.

This case highlights the importance of proactive legal strategies in debt recovery and dispute resolution.

By partnering with a dedicated and specialist commercial legal team and employing strategic measures, businesses can protect their financial interests and reputation, even in the face of contentious legal challenges.

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