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Committee reports on Motor Vehicle Sales Bill

Media release - Commerce Committee

Parliamentary select committee reports on

Motor Vehicle Sales Bill

6 June 2002

Committee Chairperson David Cunliffe said “The Commerce Committee has examined the Motor Vehicles Sales Bill and recommends that the bill be passed with the amendments shown.’

Mr Cunliffe noted that “The bill when enacted will subject all motor vehicle traders to a set of key controls and will capture a greater number of motor vehicle sales. The bill will minimise compliance costs and trading restrictions to encourage traders to register and so enable more consumers to receive the benefits of regulation. The Motor Vehicle Dealers Act 1975 was overly prescriptive and no longer addresses the needs of the industry and consumers.’

“The Commerce Committee supports the principle behind this bill, which is to broaden coverage of the registration framework across the industry, while minimising compliance costs. We considered a number of changes to the bill,’ Mr Cunliffe added.

The committee heard a range of submissions and considered a number of amendments. It recommends the following changes:

- amending clause 6(3), so that it covers shareholders as a person who “participates in the business of motor vehicle trading’ for the purpose of the Act; and to clearly include electronic car markets

- amending the bill to include an amendment to section 58 of the Personal Property Securities Act 1999 so that where a registered trader acts as agent in the sale of a vehicle to a consumer any undisclosed security interests in the vehicle are extinguished

- amending section 59 of the PPSA to provide that a registered trader who acts as agent in a sale of a vehicle to a consumer is obliged to reimburse a secured party whose registered security interest is extinguished under section 58

- amending the bill to record on the register all trading names used by the trader and to require proof of authenticity of an “address for service’

- that the bill be amended to allow the liquidator of a company that was previously registered as a trader to dispose of the company’s stock in the course of liquidation and not be treated as a motor vehicle trader

- amending the bill to provide for an automatic ban if any two of the specified breaches occur over a ten-year period

- amending clause 64(1)(c) to include the further criteria of a person who has been concerned in the management of a company that has failed to comply with an order of the Motor Vehicle Disputes Tribunal (Disputes Tribunal)

- that the bill be amended so that the Disputes Tribunal consists of an adjudicator and an assessor, with adjudicators appointed for a fixed term of five years, instead of three years, and an assessor appointed to a pre-approved list for the same period

- that clause 79(1) of the bill be amended to give the Disputes Tribunal the power to make inquiries

- amending the bill so that the requirement for a contract of sale to exist between trader and applicant before the Disputes Tribunal has jurisdiction over a claim is removed

- amending the bill allow the Disputes Tribunal to dispose of a credit contract where an order is made that the consumer may reject the vehicle and receive a refund of all monies paid

- that the bill be amended so that for claims under $12,500 a decision of the Disputes Tribunal can only be appealed on the grounds of a procedural mistake by the Disputes Tribunal

- that the bill be amended so that for claims in excess of $12,500 a decision of the Disputes Tribunal be able to be appealed on the grounds of an error in law or a procedural mistake

- that clause 16 of the bill be amended to ensure that car market operators are not required to obtain written acknowledgement that purchasers of motor vehicles received a copy of the notice required under the Consumer Information Standard.

The committee was unable to reach agreement on the following matters:

- that clause 14 be amended to apply only where a car market operator fails to take reasonable steps to ensure that the notice is displayed

- amending the bill to include a requirement for a review of the protections afforded to consumers under the bill after it has been in force for a period

- amending the bill to require registered traders to account to vendors in relation to “on behalf’ sales within 5 working days and provide that funds received in relation to “on behalf’ sales are not available for payment of the registered trader’s debts

- that car fair operators should be excluded from the bill

- that the bill be amended to include a requirement that monies received from sales on consignment must be paid into a trust account.

A copy of the report has been replaced on the Office of the Clerk website.

Contact for comment or details:


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