Federal Court blocks release of ALP senator Deb O’Neill’s letters linked to $650m court battle with Mercedes-Benz

Labor senator Deb O’Neill has been dragged into the company and its local car dealers, who she has backed in speeches delivered under parliamentary privilege.

Mercedes-Benz decision to alter its sales model in Australia has sparked the court case. Picture: AFP

The Federal Court has blocked the release of private correspondence between Labor senator Deborah O’Neill, a group of aggrieved Mercedes-Benz car dealers and their lobbyists after lawyers argued the documents were covered by parliamentary privilege and should remain out of reach of opposing counsel.

It means that emails as well as other documents generated by Senator O’Neill and her office will not be handed over to lawyers for Mercedes-Benz. The emails could have thrown more light on the discussions between the Labor senator and the nation’s car dealers.

However, the road for Mercedes-Benz to unearth more evidence for their case is not completely blocked off, with the court considering whether to release correspondence between the car dealers, a public relations firm and a well-connected car dealer industry lobbyist.

Senator O’Neill found herself in the middle of a $650m lawsuit between 38 dealers and the car maker – which started in Melbourne on Tuesday – after questioning company executives about their new sales model at a Senate inquiry in 2020.

Senator O’Neill followed up that interrogation with an incendiary speech this year when, under parliamentary privilege, she claimed those Mercedes-Benz executives appeared to have misled the Senate inquiry.

Labor senator Deb O’Neill. Picture: Peter Clark

On Thursday, before Federal Court judge Jonathan Beach, lawyers and barristers acting for parties dragged into the Mercedes-Benz court battle, including the car dealers, their supporters at the Australian Automotive Dealers Association, a public relations firm called Fowlstone Communications and the carmaker itself, fought over access to Senator O’Neill’s emails.

Reaching back to past court cases such as those involving former National MP Bill O’Chee, and a recent defamation case between Greens senator Sarah Hanson-Young and former senator David Leyonhjelm, counsels for the Mercedes-Benz car dealers and others argued parliamentary privilege applied to senator O’Neill’s correspondence.

They argued these documents, covering correspondence to and from Senator O’Neill in the lead up to the courtroom battle, should be blocked from opposing counsel as to release parliamentary privileged documents would have a “chilling effect” on the work of the Senate.

Senator O’Neill has shown strong public support for car dealers in the face of the move by Mercedes-Benz to alter its sales model in Australia, a move that has sparked the court case.

Under the new agency model that commenced this year, dealers will no longer purchase cars from Mercedes-Benz to resell to consumers. Instead, Mercedes-Benz will retain ownership of the vehicles, which the dealer will sell to the consumer for a fixed price in exchange for a commission. This has now formed the crux of the court dispute where the car dealers claim their businesses will be greatly damaged by the new model and that they weren’t properly consulted.

Kathleen Foley SC, appearing for Mercedes-Benz, told the court that Senator O’Neill had expressed concerns to a lawyer acting for the AADA and their advisers about privilege covering the documents but Mercedes-Benz were in the dark as to why the correspondence was created and for what purpose.

Ms Foley argued before the court that Mercedes-Benz would need access to the senator’s correspondence to help in possibly other lines of inquiry, discovering further evidence or leading to other witnesses it could call.

However, Justice Beach then ruled and refused to release the Senator O’Neill documents that Mercedes-Benz was chasing.

The case is continuing.