The parent company of international coffee and cafe franchise Gloria Jeans is set to fight a $56 million law suit from a former supplier in a case that starts in the NSW Supreme Court today.
A small coffee supplier called Western Export Services, based in the US state of Colorado, is suing Gloria Jeans parent company Jireh International for $56 million over unpaid commissions.
Jireh has launched a cross-claim against Western Export Services and its two directors, Steven Meier and David Cisneros.
The case involves an agreement between WES and Jireh which was made in March 1996, when Jireh became the master franchise for Gloria Jeans in Australia.
WES claims that under an agreement made between Jireh and WES at the same time, Gloria Jeans was to pay WES a commission of 5% of the ex-factory costs on products sourced from the US (where WES was the sole supplier); on Gloria Jeans-branded products sourced from outside the US and supplied to stores in Australian and other countries; and on coffee beans roasted by Jireh or an associated company and supplied to Gloria Jeans stores.
WES says it was paid commissions on goods it supplied between March 1996 and March 2003, but did not receive the other commissions it was entitled to.
Its claim seeks payment of commissions on products sourced from the US after March 2003; commissions on products sourced by Gloria Jeans outside the US and sold to stores after 2003; and commissions on the sale of coffee roasted by Jireh or associated companies since 1996.
Jireh released a short statement on the case this morning.
“In regards to the matter currently before the Supreme Court, the Defendant, Jireh International, is vigorously defending the matter and denies the allegations contained in the claim.”
Supreme Court documents shows Jireh claims the March 1996 agreement with WES “is not a contract, was uncertain and unable to constitute a contract, was unsupported by consideration, and was not entered into by WES but by Mr Meier and Mr Cisneros in their personal capacities”.
Jireh is owned and run by two senior figures in the Hillsong Pentecostal Church community, Nabi Saleh and Peter Irvine.
The case is expected to run for three weeks.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
