Honda Australia ordered to pay $13.6 million to former dealer – report
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After rejecting an offer to pay $9.5 million to settle the case before it went before a judge, the Supreme Court has ordered Honda Australia hand over more than $13.6 million to a former dealership following the brand’s 2021 decision to move to a fixed-price ‘agency’ model.
A former Honda dealership in Melbourne’s southeast suburbs has won millions of dollars in damages from the Japanese car brand, after Honda Australia switched to a fixed-price ‘agency’ model.
The Victorian Supreme Court ruled Honda must pay Brighton Automotive – formerly trading as Brighton Honda – $13.6 million plus interest, due to the thousands of cars it would have sold had its five-year contract not been broken early, website Lawyerly reports.
In 2021, Honda became the first brand to switch to the so-called ‘agency’ model, which meant the company owned all new-car stock at dealerships, while prices were locked by head office – removing the ability for customers to negotiate with dealerships.
The court found Honda breached its contract with Brighton, claiming the dealership lost profits from 2605 new cars it would have sold between January 2021 and June 2023.
As Drive reported in June 2024, the dealership had originally sought $22 million in damages, while Honda Australia – which admitted to the breach of contract – claimed damages only amounted to $5 million.
At the time, the court rejected Brighton’s allegation of ‘unconscionable conduct’ by the car company, while also clearing Honda Australia of ‘misleading and deceptive conduct’.
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According to the report, Brighton offered to call off proceedings in February 2024 if Honda paid a settlement of $9.5 million – an offer the car company rejected.
Representatives for Honda Australia claimed the settlement offer wasn’t genuine, but rather a tactic to force the brand to pay for costs – a position the court disagreed with.
As Honda effectively declined the settlement – with the offer going “completely unanswered” – the court ordered it be forced to pay the majority of the legal fees incurred by Brighton to date.
However, Honda was conversely awarded the costs involved in the ‘unconscionable conduct’ and ‘misleading and deceptive conduct’ allegations against the company – claims rejected by the court in June 2024.
“Honda Australia has been ordered to pay $13.6 million [plus] interest in damages to Brighton Automotive Holdings and we acknowledge this judgment,” a spokesperson for Honda Australia told Drive in a written statement.
“As a business we remain focused on the future of the ‘Agency’ model in Australia and to providing exceptional products, customer experience, and value to our customers and Honda network.”
The post Honda Australia ordered to pay $13.6 million to former dealer – report appeared first on Drive.
