Mercedes-Benz defeats $650m dealer compo claim
A $650 million compensation claim brought against German car maker Mercedes-Benz by 38 Australian dealerships has been thrown out by a Federal Court judge.
The dealerships alleged they were bullied into signing new agreements that stripped them of the valuable “goodwill” they had spent millions of dollars establishing over the years.
A case against Mercedes-Benz has been dismissed.
Justice Jonathan Beach on Wednesday ruled in favour of Mercedes-Benz and found the dealers did not prove unconscionable conduct.
In January last year, Mercedes-Benz began using the so-called agency model under which car makers own the stock, not dealers, and set a standardised national price to eliminate price negotiation for consumers in different areas.
“I accept that the dealers were ultimately placed in a position of situational disadvantage and possibly constitutional disadvantage in terms of the agency model,” Justice Beach wrote in his judgment.
“But in a sense this was in part self-induced by the dealers’ entry into the dealer agreements and a willingness, it must be inferred, to accept the risks and the risk allocation enshrined in those agreements including the risks inherent in the contractual power of [Mercedes-Benz Australia] to issue the [non-renewal notices] without cause.
“They made the relevant capital investments knowing of or when they ought to have known of such risks. And on a broader front, the dealers were well-heeled individuals and corporations that hardly had any socio-economic vulnerability.”
Justice Beach’s judgment is 653 pages long, but only 46 pages were made public. The rest has been temporarily redacted because of confidentiality claims that have not been resolved.
A Mercedes-Benz Australia spokesman said: “We
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