The case, which commenced mid last year, is separate to the class action being brought by 10 former Holden dealers who are seeking compensation from GM-Holden for allegedly breaking their dealer agreements by failing to continue to supply Holden vehicles to their dealerships for sale to the public. 

Alto Pty Ltd said that it incurred losses because it was led to believe by the most senior management at GM-Holden that Holden’s future as a brand was “bright” and that Holden was “here to stay”. 

In documents lodged with the Supreme Court of NSW, Alto said that even though local manufacturing was to be closed down, as late as 2017 and 2018 GM-Holden was assuring its dealers that GM “remained committed” to the Holden brand.

Anthony Altomonte

The court documents allege that those undertakings by GM-Holden, including personal undertakings by the then GM-Holden chairman and managing director Mark Bernhard made to Mr Altomonte, were in breach of Australian Consumer Law because GM-Holden did not have reasonable grounds to make them.

The action against GM-Holden alleges that because of these positive representations on the brand, Mr Altomonte was induced to be positive about the long-term future of Holden and the products it intended to import for sale through the Australian dealer network and, in January 2019, he signed on to the brand for five more years. 

The court papers say that by not honouring that agreement GM-Holden cost Alto a total of $9.26 million.

This was broken down into:

• Lost market value – $1.226 million
• Foregone trading profits – $3.1 millon
• Trading losses – up to $4.5 million
• Cost of moving the dealership from Chatwood to Artarmon – $400,000.

Alto further alleges that signing on with Holden in January 2019 closed off opportunities to put Volkswagen, Mazda or Honda into the Holden dealership site. 

It also said that when GM-Holden announced the closure of the brand, the company was in the middle of a three-month negotiation to sell the Holden dealership and that the announcement brought the sale process to an end with the buyer withdrawing. 

GM-Holden has responded by saying that, at the time of the representations it made on the Holden brand’s future, it was committed to its future in Australia.

It said that:

• During that time it had spent millions of dollars to expand the Holden model portfolio
• It had launched a number of new models
• It had spent $27 million in US facilities to build right hand drive versions of vehicles destined for Australia
• It was investing heavily in sponsoring motor racing in Australia
• It had plans for investing in new headquarters for Australia
• It had made written submissions to the Australian Government regarding future vehicle emissions.

GM-Holden said that it had offered Alto $978,848 as compensation for the loss of the Holden business but Alto refused to accept the figure. GM said that by refusing the offer, Alto had caused the loss that it claimed to suffer. 

The case is headed back to court for directions in early February but the hearing date will most likely be later in the year.

A GM spokesperson says the company does not comment on ongoing litigation.

By John Mellor