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Jeep dealers sue Fiat Chrysler Australia

Motorworld Australia lodged a statement of claim in the Federal Court in Victoria on Tuesday.

A group of three Melbourne Jeep dealerships that allegedly received $2.495 million under former Fiat Chrysler Australia boss Clyde Campbell, is now taking the car maker to court for blocking the sale of those businesses.

Three Melbourne Jeep dealerships named in a Federal Court case for allegedly receiving $2.495 million under former Fiat Chrysler Australia boss Clyde Campbell have themselves launched legal action against the US car giant.

The dealer group alleges in its court document Fiat Chrysler Australia blocked an agreement for the sale of its three dealerships.

Motorworld Australia, which owns dealerships in Brighton, Mentone and Oakleigh -- selling Alfa Romeo, Chrysler, Fiat and Jeep vehicles -- lodged a statement of claim in the Federal Court in Victoria on Tuesday.

The dealer group alleges in its court document Fiat Chrysler Australia blocked an agreement for the sale of its three dealerships.

The court documents claim Motorworld was approached by another dealer group in March 2015 to buy its three dealerships, and that Fiat Chrysler Australia was advised of the sale two months later and at that time didn’t raise any concerns.

The court documents claim the agreement between the buyer and the seller of the dealerships occurred on May 19.

This was three days before Fiat Chrysler Australia launched Federal Court action against former boss Clyde Campbell, who it alleges mis-spent $30 million in corporate funds, including on free loan cars to sports stars and celebrities such as Harry Kewell, Shane Warne, Liz Hurley and Jesinta Campbell.

However, in June, Motorworld claims Fiat Chrysler Australia would not approve the sale because the car giant wanted the dealer group to “repay the funds it had received (from FCA) before it would consider any assignment or transfer of the said dealer agreements”.

Given that the prospective buyer has withdrawn its offer to take over the three Melbourne dealerships, Motorworld says it is seeking compensation for “loss and damage”.

The Motorworld dealer group was named in a statement of claim filed by Fiat Chrysler Australia in May 2015.

FCA alleges the dealer group received $2.495 million for marketing assistance and to establish two of its three dealerships under former FCA Australia boss Clyde Campbell.

FCA’s court document claims the Motorworld deals were “uncommercial” and “detrimental” to the car giant and not part of its normal business practice.

Mr Campbell’s defence says that he and FCA were “authorised and directed by his superiors to make the payments to Motorworld”.

Mr Campbell’s defence document lodged in the Federal Court last month says: “The direction was oral at a monthly management group meeting in Shanghai in which, in the presence of other … executives, Mike Manley told Campbell … words to the effect: ‘Get 100 dealerships by June next year or you’re out of a job. I don’t care how you do it, I don’t care how much it costs, just get it done. All your marketing is being wasted if you do not have a dealer network to deliver on it’.”

Motorworld Australia, trading as Brighton CJ Investment Pty Ltd, is jointly owned by former Mercedes-Benz executive Ernst Lieb and Melbourne car dealer David Piva.

Mr Lieb and Mr Campbell previously worked at Mercedes-Benz Australia at the same time.

From 2003 to 2006 Mr Lieb was the CEO and President of DaimlerChrysler Australia-Pacific, which represented the Mercedes-Benz and Chrysler group of companies that were jointly owned at the time.

Mr Campbell was general manager of sales for Mercedes-Benz cars in Australia from 2004 to 2007.

Mr Lieb was sacked from his role as the boss of Mercedes-Benz USA, in October 2011, after the company found he used corporate funds to pay for renovations to his New Jersey house, including adding a home theater, a gym, a washer and dryer and a barbecue.

In November 2012 Mr Lieb appealed the decision and tried to sue for wrongful dismissal. But the court in Stuttgart, Germany, dismissed the case saying the claims against Mr Lieb were “so serious that any further employment [at Mercedes-Benz] would be unacceptable”.

Sources close to Mr Lieb claim the house was never owned by him, and that he paid $10,000 per month to rent the property. However, Mercedes-Benz said he should have not approved the spending on the company home.

Mr Lieb, who was born in Germany, eventually returned to Australia and helped establish a group of Jeep dealerships with business partner David Piva.

Mr Piva and Mr Lieb have jointly owned the three dealerships for more than three years.

FCA Australia has been approached for comment on the allegations made by the Motorworld dealer group and was yet to respond as this article was prepared.