Update: AADA/MTAA Legal Dispute

AADA Chairman Ian Field shares his insights into the current legal dispute with the defunct MTAA:

Understanding the current legal dispute between the defunct MTAA and the new AADA is only possible when the history of AADA and MTAA is properly put into context. The AADA has been in existence for 46 years, predating MTAA by 20 years.

Arguments that MTAA still has control over assets which were created by Dealers are highly questionable. Unfortunately, Dealers who have been distracted by running complex businesses have allowed non-dealers in the past to control the Dealer agenda. It’s not surprising that now, non-dealers are reluctant to relinquish control.

In 1968, Dealers from around Australia agreed to the formation of a national body to represent their interests. This became the Australian Automobile Dealers Association (AADA). Traditionally, the problem for Dealers has been that industry Associations have had to represent Dealer competitors, as well as Dealers.

For example, the VACC in recent times has been supporting an agenda which benefits independent repairers, but puts Dealers at a disadvantage in the form of the ‘right to repair’ debate. With the intervention of the AADA, we now have an agreement for an industry code of conduct, providing repair information by the OEMs at a reasonable price.

In 1985, the State and Territory AADA chairs’ understanding of the need for Dealers to operate within their own company, rather than an unincorporated body with no legal standing, created the Australian Automobile Dealers Association Limited.

The intention was to acquire, at the appropriate time, the assets of the unincorporated AADA. This was sidelined by a decision in 1988 to form MTAA Limited as a peak body for the allied motor industries. The unincorporated AADA however, continued to operate and in 1989 agreed to a joint budget with MTAA.

With the retirement of foundation directors by 2004, AADA Limited’s purpose was changed to one of protecting the AADA name. More unsettling was the change made from being limited by the guarantee of motor dealers, to a company limited by shares. Two shares were issued during this time to MTAA Limited. These changes were approved and instigated by the then sole director, a non-dealer.

AADA the company, never traded and AADA activities continued in the unincorporated AADA until the demise of MTAA in 2010.AADA never agreed to become an allied industry division of MTAA as some have suggested. It held its 43rd and last AGM in February 2011.

In 2010, the eight State and Territory associations agreed to the formation of the Australian Motor Industry Federation (AMIF). As part of this restructure, the AADA would no longer have a joint budget and would become a full member, paying full membership fees. An amount of approximately $300,000 was transferred from the MTAA bank account to an AADA Pty Ltd bank account.

MTAA also required that three units in a Canberra building trust, worth about $450,000, be transferred to this AADA Company. The Trustee at the time did in fact recognise that change of ownership and as such, changed the trust register with the consent of all parties.

The most appropriate ownership for a non-profit association is one limited by guarantee, rather than shares. Australian tax law prohibited the reversal of the now AADA share company back to one limited by guarantee and as a consequence, a brand new AADA was formed with a slightly different name – Australian Automotive Dealer Association Limited.

This company now majority owns the old AADA company, renamed Dealer Support Services Pty Ltd.

So why has the AADA board instigated legal action against the building trustee and MTAA?

Legal proceedings have been commenced primarily because the old AADA Company has sought to sell its units in the House Trust, and the Trustee has denied that the old AADA Company is a Unit holder.
Adding to this, the old AADA Company has sought to have the registration of the trademark in the old AADA name and logo, as well as a website, assigned to it as the rightful owner of that intellectual property – but MTAA Ltd has refused to do so.

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