On 3 February 2025, Honda Australia Pty Ltd (Honda Australia) filed an application for leave to appeal the quantification of the damages sum that the Supreme Court of Victoria ordered that it pay to Brighton Automotive Holdings Pty Ltd (Astoria Brighton) in December 2024.
The application for leave to appeal was filed following the Supreme Court of Victoria ordering on 6 December 2024 that Honda Australia pay $13,676,972 plus interest to Astoria Brighton. The total sum Honda Australia paid to Astoria Brighton was $17,543,995.32.
The damages award made in favour of Astoria Brighton followed Honda Australia terminating Astoria Brighton’s Dealer Agreement mid-term, along with a number of other Honda Dealer Agreements, as part of its transition to an ‘agency’ distribution model. Honda Australia admitted that its termination was an unlawful repudiation of Astoria Brighton’s Dealer Agreement entitling Astoria Brighton to be paid damages.
In its application for leave to appeal, Honda Australia is arguing that the Supreme Court incorrectly assessed Astoria Brighton’s entitlement to damages in that the award made in its favour was too high. In particular, Honda Australia’s grounds for appeal contend that the Supreme Court:
- incorrectly found that had the Dealer Agreements not been terminated mid-term as part of the transition to an agency model, Honda Australia would have supplied 40,000 vehicles to the Australian market per annum. Honda Australia argues that the figure would have been 33,000 vehicles;
- incorrectly found that Astoria Brighton’s gross profit margin had it remained a Honda dealer would have been based on a 15% discount of the Deloitte Benchmarking gross profit figures. Honda Australia argues that Astoria Brighton’s gross profit figure would have been a 30% discount of the Deloitte Benchmarking gross profit figures; and
- did not adequately reduce the damages award to take into account Astoria Brighton’s taking on a Nissan franchise after losing the Honda franchise.
Astoria Brighton intends to oppose the application for leave to appeal on the basis that all of the findings made by the Court regarding its assessment of damages were correct based on the evidence presented to the Court. Even if Honda Australia succeeds with its appeal, the sum of compensation it will be ordered to pay Astoria Brighton will only be reduced – not overturned completely.
The significant damages award made against Honda Australia follows a separate judgement of the Federal Court of Australia in which Honda Australia was ordered to pay a fine of $6 million after the ACCC prosecuted Honda Australia for engaging in misleading and deceptive conduct towards Astoria Brighton’s customers after its Dealer Agreement was terminated.
This article was written by Evan Stents, Partner and Nick Holt, Senior Associate.
