New Mardi Gras is suing one of its major sponsors, financial company GAL, for an alleged breach of a three-year sponsorship agreement.
In court papers filed last week and obtained by Sydney Star Observer, New Mardi Gras -“ which is currently half-way through a three-year sponsorship deal with GAL -“ alleged GAL’s Home Loan and Credit Card Services was more than three months behind in payments and owed $38,500.
The legal documents show New Mardi Gras entered into a $210,000 sponsorship deal with GAL in December 2004.
According to the documents, GAL agreed to pay the amount in six instalments of $35,000 plus GST over three years from 2005-2008.
In the documents, New Mardi Gras alleged that GAL made its first payment on time and that the second payment was three to four months late. The third payment, due to be made in January 2006, never came, they have claimed.
The instalment plus GST is worth $38,500. New Mardi Gras is also seeking to recover interest plus court fees and solicitors’ costs, bringing the total amount to $40,417.
GAL had yet to respond to the claims, lawyers representing New Mardi Gras told Sydney Star Observer.
Col Hahne, CEO of the Melbourne-based GAL Group, did not return several phone calls from Sydney Star Observer journalists this week.
New Mardi Gras chair Marcus Bourget would not comment on the matter.
Two other gay and lesbian festival organisations have made claims against GAL alleging possible breaches of sponsorship contracts.
In 2005, Melbourne’s Midsumma festival terminated its three year sponsorship deal with GAL a year early and filed legal papers against the finance company, claiming the organisation had not paid $17,500 in sponsorship money.
The legal proceedings were dropped when GAL paid the full amount, MCV newspaper reported.
A spokesperson from Adelaide’s Feast festival, which is currently in a three-year sponsorship deal with GAL, told Sydney Star Observer the organisation had encountered similar difficulties with payment.
The current situation with GAL leaves Feast unsure if GAL will be in a position to fulfil their financial obligations as per their sponsorship agreement with Feast, a Feast spokesperson told the Star in a written statement.
Feast is very concerned and is currently seeking legal advice and waiting for a response from GAL.
GAL was formed by Hahne in 2000. He told the Star in 2003 he was inspired to start a gay and lesbian home loan business after experiencing homophobia at banks when he tried to get a loan with his partner.
The company has received many accolades from the home loan industry over the years. In June last year the Star reported Hahne was named Independent Operator of the Year and Mortgage Manager of the Year by the Mortgage Industry Association of Australia.