AADA Response to Mercedes-Benz Judgement

Yesterday afternoon the Honourable Justice Jonathan Beach handed down his judgement on the Federal Court Case – Mercedes-Benz Australia Pacific vs. Mercedes-Benz Dealer Litigants Group.

Disappointingly, Justice Beach found against the applicants (the Dealers) and dismissed their claims.

The judge made brief comments and has released the attached public summary judgment. A more detailed judgment (600+) pages will be released once the Judge rules as to which part of the detailed judgment ought to be redacted for confidentiality.

Among his comments at the hearing were:

  • The applicants (Dealers) put forward a powerful and thorough case.
  • The applicants were successful on many issues of fact but lost on the law.
  • The applicant’s strongest case, although unsuccessful, concerns statutory unconscionable conduct.
  • Justice Beach made mention that there may need to be modifications to the franchising code.

This case is obviously of great interest to all of Australia’s franchised new car Dealers and the AADA will review the judgement in greater detail and provide a comprehensive update to members on the results of the case and wider implications for the industry.

The Government is currently undertaking a comprehensive review of the Franchising Code which presents a significant opportunity for the AADA to use the learnings from this case in our engagements and response. The AADA will highlight the need for stronger mandatory protections and advocate for changes to the Code to ensure it can sufficiently protect Australian Dealers.

This is clearly a very disappointing outcome and AADA will work hard to understand this judgement and fight for a better system for franchised new car Dealers.