On February 3, 2025, Honda Australia Pty Ltd (Honda Australia) applied 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 after the Supreme Court of Victoria ordered that Honda Australia pay Astoria Brighton $13,676,972 plus interest on December 6, 2024. The total amount Honda Australia paid Astoria Brighton was $17,543,995.32.
The damages award in favour of Astoria Brighton followed Honda Australia terminating Astoria Brighton’s Dealer Agreement mid-term, along with several 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 argues that the Supreme Court incorrectly assessed Astoria Brighton’s entitlement to damages because the award was too high in its favour. 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 annually. 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 consider 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 compensation it will be ordered to pay Astoria Brighton will only be reduced – not overturned completely.
The significant damages award 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. The ACCC prosecuted Honda Australia for misleading and deceptive conduct toward Astoria Brighton’s customers after its terminated Dealer Agreement.
This article was written by Evan Stents, Partner and Nick Holt, Senior Associate, at HWL Ebsworth Lawyers.
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