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High Court Tells Daewoo It Breached The Law

High Court Tells Daewoo It Fundamentally Breached The Law

In a decision released earlier this week, Justice Wild of the High Court in Wellington stated that Daewoo `fundamentally breached the licensing regime in the [Motor Vehicle Dealers] Act, and the detailed requirements applying to it.' Justice Wild has referred the matter back to the Motor Vehicle Dealers Licensing Board.

Daewoo's lawyers argued that the Board erred in finding Daewoo guilty of misconduct. Justice Wild disagreed saying that the Motor Vehicle Dealers Act `achieves its purpose of protecting the interests of consumers by requiring every person carrying on business as a motor vehicle dealer to be licensed under the Act.' In this regard the judge believed that the Motor Vehicle Dealers Institute (MVDI) were right to bring the Daewoo matter before the Board.

`The issues of this case became very blurred. Like Daewoo, the media and the general public MVDI felt that the law was outdated. However, regardless of whether the law is right or not, MVDI has a statutory function and therefore must apply the law. After all, the law is the law' says MVDI Executive Director Steve Downes.

Justice Wild agreed, saying, `Daewoo's two senior managers, Messrs Vidak and Horn were experienced and well aware of the requirements of the Act, and formulated and then embarked upon Daewoo Direct knowing all along that it did not comply with the Act. Daewoo was carrying on unlicensed dealing around New Zealand outside Auckland.'

The matter has been referred back to the Board as the judge believes the initial decision to cancel Daewoo's license to be overly harsh. `The Board has a wealth of expertise and experience which the Court lacks and therefore it is inappropriate for the Court to `second guess' the Board's specialist expertise' said Justice Wild.

The High Court proceedings came about as a result of the Motor Vehicle Dealers Licensing Board's (the Board) decision in January this year which cancelled Daewoo's motor vehicle dealers license. Interim relief was granted by the High Court in February which allowed Daewoo to trade in the Auckland area until a substantive hearing.

On 1 July this year the Motor Vehicle Dealers Amendment Act 1999 (the `Daewoo Amendment') was passed. This allows new motor vehicle business to be conducted anywhere in New Zealand, provided the person carrying on the business has at least one licensed place of business in New Zealand. The amendment comes into effect 13 September 1999.


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