Dispute over faulty computer system heads for appeal

Sydney-based Ateco Automotive Pty Ltd is appealing a decision by the Supreme Court of NSW after the company failed in its claim for close to $1 million against Business Bytes Pty Ltd in a breach of contract dispute over a faulty computer system.

Commenting on the case, Freehills partner Irene Zeitler said the case failed because Ateco - which imports Alfa Romeos, Citroens, Fiats and Kias -- refused to undertake a Requirements Analysis as part of the implementation requesting the system be built to the same specification as the old system without taking into account growth or expansion.

Zeitler said this was despite recommendations by Business Bytes to undertake a Requirements Analysis as part of the installation, but Ateco said it was unnecessary because the system merely had to be capable of performing in the same manner as the existing system.

She said Ateco spent close to $1 million on the system purchasing AS/400 hardware, AS/400 operating software and IMAS/400 application software.

Ateco also refused training. Zeitler said that when the system failed, the company refused to pay invoices totalling $223,000 to Bytes which led to Bytes making a claim of its own for payment of fees, which was successful.

"The Ateco case is a good illustration of how important it is for customers acquiring computer systems to take an active role in the selection and implementation of the system; the customer should have someone within the organisation responsible for the project," she said.

"The irony of the case is that after Ateco ended its relationship with Bytes, it acquired yet another computer system from a third-party.

"The case reports that the system is working, but that it was installed only after a Requirements Analysis and training of personnel was carried out."

Both companies were unwilling to comment but a spokesman for Ateco did confirm the company was launching an appeal.

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