Resellers, ASI Solutions and Webster Computer Systems, have won a significant victory over Fujitsu Australia in the Federal Court more than five years after first planning legal action against the hardware vendor.
The pair were among several resellers exposed to substantial commercial losses after selling Fujitsu’s MPG3 and MPF faulty hard drives between 2000 and 2002. Although steps were made to launch a class action suit on behalf of the resellers in 2003, it was stymied after lawyers, Levitt Robinson Solicitors, failed to secure backing from at least seven parties.
As a result, ASI and Webster individually filed lawsuits against Fujitsu’s Australia subsidiary and global parent in 2007 for deceptive and misleading conduct under the Commonwealth Trade Practices Act and NSW Fair Trading Act.
The companies allege the vendor made misleading and deceptive claims about the range of hard disk drives, which contained a chip defect that caused over 50 per cent of the units to fail within 18 months of use. At the heart of their case is that Fujitsu Ltd knew of the product fault in early 2001 but failed to adequately inform its OEM customers of the fault, or take steps to remove the drives from the market.
The cases have been in and out of the Federal Court of Australia following cross action by Fujitsu Australia, a wholly owned subsidiary of Fujitsu Ltd, in an effort to prevent the resellers from pursuing its parent company in Japan.
According to the latest Federal Court judgement in the case between ASI’s business entity, Anabelle Bits Pty Ltd and Fujitsu Ltd, dated September 25, 2009, which was sighted by ARN, Fujitsu Australia had challenged claims that its parent, Fujitsu Ltd, should face trial for its role in the faulty hard drives.
However, Judge J Graham ruled against Fujitsu and ordered Webster and Anabelle Bits be allowed to serve Fujitsu Ltd in Japan under the Commonwealth Trade Practices Act and NSW Fair Trading Act. The court also ordered the vendor to pay both resellers’ legal costs.
The court documents show Anabelle Bits purchased 17,000 of the faulty hard drives between December 2007 and September 2001. It is understood 14,000 were faulty. Webster meanwhile, bought approximately 1600 drives and reported faults with 1100 of them.
Webster and ASI were unable to comment further on the case for legal reasons. Fujitsu Australia had not responded to a request for comment at time of press.
Several local players, including Lincoln Computers, Anabelle Bits and Webster, previously told ARN they lost hundreds of thousands of dollars, as well as relationships with key customers, because of the flawed hard drives.
Australian resellers became further aggrieved in 2004 after it was revealed Fujitsu had been offering a warranty credit system applicable to the faulty drives for several years, which they were unaware of. This claim was subsequently denied by Fujitsu and distributor, Tech Pacific.
For more on this story, check out our full report in this week’s edition of ARN.