Alto Pty Ltd v General Motors Australia and New Zealand Pty Ltd (formerly GM Holden Pty Ltd)

[2022] NSWSC 853

Supreme Court

New South Wales

Medium Neutral Citation:

Alto Pty Ltd v General Motors Australia and New Zealand Pty Ltd (formerly GM Holden Pty Ltd) [2022] NSWSC 853

Hearing dates:

17 June 2022; Redfern Schedule provided 24 June 2022

Date of orders:

28 June 2022

Decision date:

28 June 2022

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Disclosure to be made in accordance with Redfern Schedule; costs of application for disclosure to be the plaintiff’s costs in the cause

Catchwords:

PRACTICE AND PROCEDURE – discovery – alleged misleading or deceptive conduct – representations as to future matters – whether reasonable grounds to make representations – disputed categories – Redfern Schedule

Cases Cited:

Australian Competition and Consumer Commission v Woolworths Limited [2019] FCA 1039

Cummings v Lewis (1993) 41 FCR 559; [1993] FCA 190

Category:

Procedural rulings

Parties:

Alto Pty Ltd (Plaintiff/Applicant)
General Motors Australia and New Zealand Pty Ltd (formerly GM Holden Pty Ltd) (First Defendant/First Respondent)
General Motors Holden Australia NSC Pty Ltd (Second Defendant/Second Respondent)
Mark Bernhard (Third Defendant/Third Respondent)

Representation:

Counsel:
M Henry SC with D Delany (Plaintiff/Applicant)
H Mann (Defendants/Respondents)

Solicitors:
Dentons Australia (Plaintiff/Applicant)
Norton Rose Fulbright Australia (Defendants/Respondents)

File Number(s):

2021/187724

Judgment

1. The plaintiff, Alto Pty Ltd, is a former Holden motor vehicle dealer.

2. Alto was appointed by the first defendant, General Motors Australia and New Zealand Pty Ltd as a Holden dealer between 1 January 2012 and 31 December 2017.

3. In 2013, the first defendant’s ultimate holding company, General Motors Company (a company incorporated in the United States: “General Motors US”) announced that the manufacture of Holden motor vehicles in Australia would cease in 2017 and that, thereafter, Holdens sold in Australia would be imported.

4. On or about 16 February 2018, Alto entered into a Dealer Sales and Service Agreement (“the Dealership Agreement”) with the second defendant, General Motors Holden Australia NSC Pty Ltd, for the period 1 January 2018 to 31 December 2022.

5. Alto alleges that it entered into the Dealership Agreement based on representations made by the defendants in March, May and November 2017 to the effect that Holdens, albeit not ones manufactured in Australia, would continue to be supplied to Holden dealers, including Alto.

6. On 16 February 2020, General Motors US announced it would “cease Holden sales, design and engineering operations by 2021” and stated that it was:

“… taking decisive action to transform its international operations, building on the comprehensive strategy it laid out in 2015 to strengthen its core business, drive significant cost efficiencies and take action in markets that cannot earn an adequate return for its shareholders.”

7. The alleged representations were as to future matters.

8. The defendants contend that they had reasonable grounds to make the representations.

9. A party asserting that it had reasonable grounds to make a future representation must establish that it possessed information that, assessed objectively, gave it a reasonable basis for making the representation. [1]

   1. For example, Australian Competition and Consumer Commission v Woolworths Limited [2019] FCA 1039 at [130] (Mortimer J).

10. The question is thus not only whether the defendants actually relied upon the matters that they contend evidenced reasonable grounds but also whether those matters, assessed objectively in the light of surrounding circumstances, establish reasonable grounds at the time the impugned representations were made. [2]

    2. For example, Cummings v Lewis (1993) 41 FCR 559; [1993] FCA 190 at [24] (Sheppard and Neaves JJ).

11. The reasonable grounds on which the defendants rely are said to arise from, to oversimplify matters somewhat:

1. statements made by General Motors US in March 2017 that it was “100% committed to its business in Australia”;

2. statements at a February 2015 dealers’ conference by a representative of General Motors US confirming General Motors US’s plans for the Australian market, including investing funds to broaden the Holden portfolio and otherwise by way of commitment to the Australian market;

3. approval by General Motors US of the defendants’ 2017 plans and budgets for various product launches; and

4. General Motors US’s knowledge and support of:

1. the defendants’ $7 million upgrade to a test facility at Lang Lang Proving Ground; and

2. plans for the development of a new headquarters at Fishermen’s Bend.

12. I am now considering a discovery application by Alto and, for that purpose, it is agreed I should assume that the various alleged representations were made.

13. By Notice of Motion filed on 25 March 2022 Alto seeks discovery of documents in five broad categories, being:

1. documents relevant to the approval by General Motors US of the defendants’ budgets;

2. documents relevant to the “comprehensive strategy … laid out in 2015” referred to in General Motors US’s announcement on 16 February 2020;

3. documents relevant to the location from where the defendants would source Holden cars;

4. documents relevant to the Lang Lang Proving Ground’s upgrade; and

5. documents relevant to the proposed headquarters at Fishermen’s Bend.

14. Following argument on 17 June 2022, I directed that the parties prepare a schedule setting out their competing contentions as to the discovery categories which remain in dispute.

15. The parties prepared a “Redfern Schedule”. I am grateful for the large amount of work that, obviously, was involved in the preparation of that document.

16. I have populated that schedule with my conclusions in relation to each of those categories.

17. I attach the schedule so completed.   Redfern Schedule (423013, pdf)

18. I order that disclosure be given in accordance with those conclusions.

19. Alto was substantially successful in relation to the disputed categories. But many categories were agreed. Accordingly, I order that the costs of the plaintiff’s Notice of Motion of 25 March 2022 be the plaintiff’s costs in the cause.

20. I stand the proceedings over for directions on 8 July 2022 before the Commercial List Judge.

Endnotes