Flying Pig-Estaronline resolve dispute

A contract dispute over Flying Pig's new website and iSams, the software package licensed to Flying Pig by Estaronline, has been resolved.

A contract dispute over Flying Pig’s new website and iSams, the software package licensed to Flying Pig by Estaronline, has been resolved.

The dispute reached the Auckland High Court last month, where the parties argued over the terms of the contract, under which Estaronline built a new website for Flying Pig — which went live in February — and licensed its iSams software to the etailer for $13,000 a month.

Flying Pig, owned by IT Media, the publishing arm of Wilson Neill, had refused to pay the licensing fees for March and April. Estaronline responded with a statutory demand for payment and Flying Pig reacted by applying to the High Court to have the demand set aside and other costs associated with the establishment of the new website, arguing that difficulties it was having in operating the site and a few days’ delay in getting it up and running were a breach of the agreement. Flying Pig alleged the difficulties with the site and iSams meant it wasn’t reaching financial targets.

At the hearing, Flying Pig put in a counterclaim that Estaronline owed it money for non-performance of the contract.

In its judgment the court said: “Mr Battles states that he was led to believe that once the website was cut over to the new platform, Flying Pig would stop losing about $3000 per day and quickly reach a break-even position. He says that for February, Flying Pig traded at a loss and that some of the loss it claimed was made by failures of the deliverer and installer of the software.”

The court ruled that Flying Pig was obliged to pay the two months’ licensing fees, totalling $26,000, but said it was unable to rule on the other matters, as they were technical and beyond the scope of the hearing. “In my view it is unlikely these defects amount to any justification for a set-off or claim as alleged or for a substantial sum of money but these matters may have a semblance of being arguable," the judgment said.

“Therefore, the demand in respect of the payment due when the site went into use is set aside, allowing the parties to litigate the issue and the sums due under this contract in the appropriate forum, that is, the District Court.”

Shortly after the hearing, Mark Battles resigned as chief executive of IT Media and was replaced by Tim Connell.

Connell and Estaronline chief executive Matthew Darby settled shortly afterwards, with Flying Pig paying the licensing fees and other payments relating to the website it had withheld.

“When Mr Battles left, we were able to get a resolution and everything has been settled,” Darby says.

Connell also says he is happy with the outcome.

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