Megasave Couriers fined $1.9m over dud franchises

Megasave boss Gary Bourne says he didn’t know what to do as the courier company “got out of control”, while a “redress” scheme looks set to short-change franchisees.

The Federal Court has imposed a $1.9 million penalty on NSW-based courier company Megasave and fined sole director Gary Bourne $120,000 after dozens of people were duped into buying dud franchises.

In Melbourne on Thursday, Justice David O’Callaghan also ordered the company and Mr Bourne pay $500,000 into a redress scheme for franchisees.

However, it is likely that the penalties will never be paid because Megasave and Mr Bourne do not have the money. Even the redress scheme may not be fully funded.

The orders made by the court mirrored submissions by the Australian Competition and Consumer Commission, which brought the action.

Megasave sole director Gary Bourne has been fined $120,000 by the Federal Court.

Mr Bourne, who represented himself and Megasave, told the court he did not oppose what the ACCC sought.

“I do accept responsibility,” Mr Bourne, of Gosford, said via video link. “Megasave got out of control very quickly and I didn’t know how to control it properly.”

The company sold franchises between September 2019 and July last year, guaranteeing would-be buyers that for an initial outlay of $27,500 they would receive minimum weekly payments – typically $2000 per week – and an annual income of $91,000.

But the promised payments were not made and 46 buyers complained to the ACCC.

Last month, the court declared Megasave had made false or misleading representations.

Prior to that declaration, Mr Bourne admitted he was “knowingly concerned” in the conduct.

Mariz Bourne, who is the partner of Megasave owner Gary Bourne.

Gary Bourne represented himself in court.

On Thursday, Catherine Button QC, for the ACCC, described the behaviour as “very serious”.

Megasave had sold 52 franchises, bringing in $1.419 million, Dr Button said.

Only $54,000 had been repaid following mediation, she added.

At least $176,000 of the funds raised had been used for the personal expenses of Mr Bourne, of Gosford, and his partner. Her name is Mariz Bourne and she is understood to live in the Philippines.

Dr Button said the redress scheme was a “sum short” of what franchisees had lost.

But, she said, even if franchisees only got $300 back from it they could still pursue “the balance of their claim.

The court heard Megasave owner Gary Bourne (right) did not have the assets to pay his fine. Source: Facebook

Dr Button told the court that Megasave did not appear to have the money to pay the $1.9m penalty; nor did Mr Bourne have $120,000. His assets were limited to little more than a house in the Philippines worth $25,000.

However, Dr Button said, “the purpose of deterrence is still very much front and centre”.

Dr Button said some franchise buyers were now in a worse financial situation than when they started.

One had described it as the “worst experience of his life,” Dr Button said.

If at least $1000 is paid into the redress scheme by June 30, franchisees will be contacted and asked if they wish to accept an equal share.

If the redress scheme is fully funded, the penalty payments will not be due until June 30, 2022.

The ACCC sought and was granted an order that Megasave and Mr Bourne pay $200,000 towards the ACCC’s legal expenses, which were more than double that amount.