Wigmores Loses First Round To Caterpillar

Sydney Morning Herald

Friday March 17, 1989

By JOHN SEVIOR, in Melbourne, and CATHERINE ARMITAGE

Bond Corporation yesterday lost the first round of its Supreme Court battle to regain the rights for its subsidiary, Wigmores, to distribute Caterpillar earth-moving equipment in Western Australia.

Justice Tadgell, in the Victorian Supreme Court, brought down a ruling that thwarted Bond Corp's attempts to restrain the US-based Caterpillar group from terminating an exclusive 60-year-old franchise agreement with Wigmores.

Wigmores, WA's biggest tractor dealer, came under the control of Bond Corp last year when Bond took over the Bell Group.

The legal battle centres around Caterpillar's attempt to transfer the franchise to another WA-based company, Morgan Equipment. Bond has disputed Caterpillar's right to transfer the franchise, despite the alleged existence of a clause in the original agreement permitting Caterpillar to do this in the event of a change of ownership.

Bond and Morgan Equipment had been negotiating the sale of Wigmores, including its extensive service and distribution network, since late last year. This culminated in Morgan making an offer of more than $90 million for the group.

Negotiations ended after Caterpillar's decision to cancel the franchise, Wigmores' main asset, and award it to Morgan.

In handing down his judgment yesterday, Justice Tadgell said there was not a strong case restraining Caterpillar from appointing a new distributor.

He said the "franchise agreements were destined to be terminated in the very near future", given that Wigmores virtually had conceded that Caterpillar's most recent termination notice, issued in February, was "good in form".

The judge said that in reality the complaint against Caterpillar was coming from Bond and not from Wigmores.

It was Bond which ultimately would be affected by a fall in the price of Wigmores, which could result from Caterpillar appointing another distributor, he said.

The managing director of Bell Group, Mr David Aspinall, said Wigmores was not for sale, and that the company was now "looking at other franchises" to put into the existing distribution network.

He said Wigmores was pursuing further actions, which would include contesting the validity of Caterpillar's termination notice.

Meanwhile, in the Federal Court in Perth on Wednesday, Bond Corp commenced proceedings against Caterpillar and Morgan Equipment (Australia) Pty Ltd over advertisements which appeared in the West Australian newspaper and the Perth Sunday Times in late February and early March.

The advertisements stated that, from March 21, Caterpillar and Morgan Equipment would be "working together delivering service and commitment unlike anything Australia has ever seen before".

Bond Corp is seeking an injunction restraining the publication of any further such advertisements under section 52 of the Trade Practices Act, which relates to deceptive and misleading conduct, and section 55A, which relates to representations about quality of service.

© 1989 Sydney Morning Herald

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