Court rules return of $300K to Supercars Lorinser

The High Court ordered the return to a car dealer of $300,000, that was paid to a master dealer ahead of an agreement for exclusive rights to sell modified cars.

Car dealer Supercars Lorinser and a related company had sued Benzline Auto, which held the master dealer rights in Singapore, for the return of the monies, claiming that no contract was concluded between the parties.

Judicial Commissioner Aedit Abdullah agreed after a six-day hearing earlier this year and having sifted through the evidence which showed there was "certainly nothing agreed as to the exclusive dealership".

"As the payment of the $300,000 was predicated on the basis that such an exclusive dealership would eventually be entered into, and this failed to happen, that sum would be repayable back to (Supercars)," said the Judicial Commissioner in decision grounds issued last week.

A key issue discussed was whether the sum was placed as part of a contract or was a "pre-contractual deposit".

Supercars was incorporated in Singapore with a view to conduct sub-distribution of Mercedes Benz vehicles modified by Sportservice Lorinser Sportliche Autoausrustung (Lorinser), a German-based car-tuning company.

Lorinser ranks among the most well-known brands in the global car tuning industry with dealerships in 42 countries.

Benzline Auto held the master dealer rights in Singapore for the cars modified by Lorinser.

Supercars claimed the sum paid to Benzline in January 2014 was dependent on an exclusive dealership being entered into.

Benzline countered the payment was for an order of 30 cars made separately from the distributorship agreement.

But no agreement was reached and some five months later, the relationship derailed when Supercars noted that Benzline had looked to name another firm as the exclusive sub-dealer.

Supercar's lawyers Ho May Kim and Harry Zheng argued that the planned orders for the 30 cars were premised on their appointment as the exclusive authorised sub-dealer of the cars but no contract was concluded.

Benzline's lawyer Leslie Yeo countered that the sub-dealership and the purchase of cars were separate, and the payment of the $300,000 was a "calculated risk" by Supercars.

Benzline counterclaimed against Supercars seeking damages for the latter's failure to take delivery of 30 cars ordered.

The Judicial Commissioner said the grounds for the $300,000 payment failed as "the payment was made on the basis that it was a pre-contractual payment and not payment for an order".

He dismissed Benzline's counterclaim, finding its losses were not made out by the evidence, among other things.

Benzline is appealing the case.

A version of this article appeared in the print edition of The Straits Times on December 31, 2016, with the headline 'Court rules return of $300K to Supercars Lorinser'. Print Edition | Subscribe