Stallard takes on Athletic Club
A former gym owner claimed yesterday that he was owed more than $100,000 as part of a contract signed with another gym five years ago.
Scott Stallard, who owned The Olympic Club, told the Supreme Court that he had not been compensated in line with a merger deal signed with The Athletic Club in 2014.
Mr Stallard said: “They have avoided paying a single dollar, as well as unpaid rent of $22,000, unpaid Schedule 5 debts of the merger agreement totalling $57,000 and unpaid monies due to the plaintiff of $105,000 to date.”
The legal action was launched last year.
The court heard that The Athletic Club, operated by Kym Herron Scott, was to be the surviving company.
Mr Stallard said that talks with Mrs Herron Scott about the merger had taken place between August 2014 and November 2014. He added that both parties had retained lawyers to “guide and advise them” on the deal.
Mr Stallard said: “Due diligence was performed and direct talks held where both parties and their legal representatives were present to go over details and answer questions prior to signing.
“The defendant claimed not to have cash available to either put down as security or pay for the acquisition by way of merger.”
An amended writ in April 2018 claimed that The Athletic Club had failed to make 16 monthly payment of $3,000 to Mr Stallard.
It also said that social insurance payments that totalled $17,000 had also not been paid.
Neither Mr Stallard nor The Athletic Club were represented by legal counsel at the hearing.
Wayne Scott, the husband of Mrs Herron Scott, who appeared for The Athletic Club, said that Mr Stallard had been in breach of the contract “since Day 1”.
He added: “During the immediate days and weeks following, it became clear that Scott was not, and had not been an honest broker.”
Mr Scott said that Mr Stallard had been “disruptive from the start”. He added that Mr Stallard had “continuously” removed equipment and assets from The Olympic Club after the merger that Mr Stallard claimed were not part of the agreement. Mr Scott said Mr Stallard had also locked The Athletic Club out of The Olympic Club property in March 2015 and had sold equipment that was the property of The Athletic Club after the merger.
He added: “With this act being the final straw, Kym and The Athletic Club invoked the indemnity clause given by Scott Stallard and legally walked away from this mess.”
Mr Scott said that breaches of the contract by Mr Stallard were sufficient to invalidate the merger and that “the only reasonable resolution would be for the court to rule that this agreement is null and void”. He added: “These breaches appear to be calculated and consistent, so much so that if the contract is not voided, there is a strong case for wilful financial fraud, contractual fraud and criminal intent on the behalf of Mr Stallard.”
He said that a ruling should be made to cover costs incurred by The Athletic Club.
Mr Scott said that he was not a director of The Athletic Club, but had served as one between 2015 and 2018 and that his wife was the sole owner and director.
Assistant Justice Jeffrey Elkinson reserved judgment.
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