Fastlane Autos’ appeal dismissed:
Issued 21 April 2003-04/113
Fastlane Autos’ appeal dismissed: ‘mistake of law’ no defence
Following a recent High Court decision, the Commerce Commission is highlighting to businesses that they cannot avoid liability under the Fair Trading Act by claiming they were ignorant of or misunderstood the law.
The Auckland High Court has dismissed an appeal by Fastlane Autos Limited against a conviction of six charges of breaching the Fair Trading Act in relation to the advertising of motor vehicles.
Fastlane Autos Limited was fined a total of $18,000 plus costs in the Waitakere District Court in June last year. The Commerce Commission laid the charges against Fastlane Autos for failing to adequately disclose that a $5,000 minimum trade-in offer did not apply to all trade in vehicles, and that financial terms were not readily available as advertised.
In his judgment, Justice Randerson dismissed Fastlane Autos’ argument that it had a defence under the Fair Trading Act in that it had made a ‘mistake of law’ in understanding it was entitled to make deductions from the advertised trade-in figure. Justice Randerson clarified that there is no ‘mistake of law’ defence under the Act.
He also commented that on the facts, the original Judge was fully justified in concluding that the advertisements and the representations were made in an unqualified way and were false or misleading.
Commission Chair Paula Rebstock said the Commission was pleased with the High Court decision to dismiss the appeal.
“This case sends a strong message to businesses that ignorance of the law or a mistake of law does not constitute a defence.
“It is also a reminder to motor vehicle dealers, and retailers in general, to be clear in all advertising and verbal representations to customers about any terms or conditions that apply to an offer,” Ms Rebstock said.
Auckland-based car dealer Fastlane Auto Limited was fined $18,000 plus $880 costs in the Waitakere District Court in June 2003 for six breaches of the Fair Trading Act.
The Commission laid the charges against Fastlane Auto for failing to adequately disclose that a $5,000 minimum trade-in offer did not apply to all trade in vehicles, and that financial terms were not readily available as advertised.
Fastlane Auto offered financial terms of various weekly payments over a three year term. The offer did not, however, disclose specific term and conditions on the finance, which were: finance was only to approved borrowers; vehicles over ten years old could only be financed over two years; the weekly payments quoted were not always available, as they were dependent on the amount of the deposit.
Fastlane Auto made the claims through advertising in the Auto Trader magazine between January and July 2000, and through representations to at least one customer at the car yard.