Unpaid bill row goes to court

By MICHAEL FOREMAN

Internet service provider LG Holdings has applied to the High Court to set aside a statutory demand from Telecom for $200,000.

The statutory demand was served at the end of last month, after Telecom had already cut off the Hamilton company's circuits, leaving about 300 clients unable to use e-mail or the internet for five days.

Telecom said LG Holdings had not paid for $200,000 in services that were not in dispute.

But LG managing director Lloyd Gallagher said he had filed documents, which showed Telecom had admitted making billing mistakes and had promised to correct them, with the High Court at Hamilton last Tuesday.

Mr Gallagher said the documents also showed that Telecom had charged for non-existent 128 Kbps circuits.

He was expecting a response from Telecom by the end of the week.

Telecom spokesman Andrew Bristol said Lloyd Gallagher Group has a $226,000 debt with Telecom, which stopped providing service to prevent further debt.

"It is important to note Telecom has received no payment from Lloyd Gallagher Group for a year and has continued to provide services over that period.

"This customer knew the situation was not sustainable, and we took the standard step before eventually terminating services."

Mr Bristol said Telecom would resist Lloyd Gallagher Group's effort to have the court set aside its debt recovery proceedings.

"Telecom is always reluctant to terminate services for a customer, but this is one of those cases where commercially we have no real choice."

Mr Gallagher estimated that the losses suffered by his clients as a result of the disconnection last month amounted to about $1.2 million.

He said that, after a successful outcome on the statutory demand hearing, the company would sue Telecom to recover losses.

Mr Gallagher said other internet providers who had experienced similar problems with Telecom over billing were waiting in the wings.

"If we go to court it will open the way for everyone else," he said.

Telecom has also accused Clear of owing $19 million.

But last week Clear corporate affairs general manager Kevin Millar said Clear had presented Telecom with 300 pages of correspondence regarding its disputed invoices.

These had included admissions by Telecom billing staff of overcharging.

Nick Wood, managing director of ihug, said his company had previous disputes with Telecom, Clear and Telstra, but they had been resolved.

"All telcos have problems with their billing, no one can put their hand in the air and say they don't happen," he said.

"We've had disputes with all three carriers but usually we get them sorted."

LGR Tech