The Court of Appeal held that the trial judge erred in finding Honda would have maintained a national sales target of 40,000 vehicles per annum throughout the remaining contract period, because the evidence — including Honda's own witnesses — established that the reduction to 33,000 units was a short-term measure taken before the agency model decision and the long-term viability threshold of 40,000 units was of limited relevance to a single-year counterfactual. The Court upheld the trial judge's adoption of a 15 per cent discount to the Deloitte Benchmarks for gross profit per unit, finding no inconsistency between improved profit margins driven by sustained demand and a modest supply reduction in the counterfactual. On mitigation, the Court held that Honda failed to discharge its evidentiary onus to establish that Brighton would not have acquired the Nissan franchise by the end of the Dealer Agreement in the counterfactual, and left open the legal question of whether post-contract-term profits from a mitigating acquisition can be deducted from damages.
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