Crichton fined for selling misdated car, court says honest error no defence
Car dealership Crichton Automotive Limited (CAL) has been fined $2 million for selling a 2005 car as a 2007 model, even though the court found that the company may have made an honest error.
Justice Brian Sykes ruled that while Crichton provided information to the customer it believed to be true, honesty in that belief was irrelevant to liability.
The car dealership, which trades in second-hand vehicles, was sued by the Fair Trading Commission for breaching the Fair Competition Act, based on a complaint filed by car buyer Lisbeth Mills.
Mills purchased a Nissan motor car for $1.44 million from Crichton, which she was told was a 2007 model by sales agent Percy Williams.
Williams gave her a pro forma invoice and a customs declaration form, both of which referred to the car as a 2007 model.
Justice Sykes noted that Mills' suspicions were first aroused based on the reaction of a clerk at an auto parts store where she had gone to purchase a movable rain shield. Her intuition was confirmed when she visited authorised Nissan dealer Fidelity Motors Jamaica Limited, which told her the car was a 2005 model.
Mills went back to Crichton where another of its agent advised her to have the model verified by the Island Traffic Authority, which also confirmed that it was a 2005 model.
Mills proposed to Crichton that it either refund her the difference between the years 2005 and 2007 and alter the documents accordingly, or refund her the full sum in exchange for a return of the car, but the car dealer rejected her suggestions. It was then that she took her complaint to the FTC.
The FTC accused Crichton of false and misleading advertisement, but the dealership resisted the allegation on the ground that it believed that the information on the document it received from the Singaporean exporter was correct.
Crichton also argued that Jamaican government agencies, including the Trade Board and Customs, had acted on the same information, which meant they had satisfied themselves that the 2007 information was correct.
Chief Executive Officer Kirk Crichton, who provided affidavit evidence, said the Nissan was imported from Singapore and that before any used car can be imported into Jamaica the relevant documents from the exporting country are sent to his company and then sent on to the Trade Board, along with an application for an import licence.
Justice Sykes noted that during the hearing Crichton's attorney, Christopher Dunkley, referred to the ministry paper on motor vehicle import policy that came into effect on April 3, 2014, which deals with the determination of the age of vehicles. However, the judge said a 2014 policy was of no assistance in deciding what happened in 2011.
"In any event, as far as the court is concerned, the executive branch of government cannot alter a law enacted by the legislature; only the legislature can do that. The court cannot apply the views of the executive in a ministry paper to determine what the proper interpretation of a statute is," said Sykes.
The judge added that even if the government agencies had taken it upon themselves to guarantee the accuracy of the year of manufacture, it still would not exonerate Crichton. The dealership is required by law to give accurate information to purchasers of its goods and services.
"There is no defence under the statute of, 'it is not false if verified by a government agency'," he said.
Sykes said the deregistration certificate from the Singaporean authorities, on which Crichton relied, expressly stated that the accuracy of the information on the document was not guaranteed and that was putting the company on alert that it may not be correct.
That should have meant that if the customer turned up with credible evidence that the information was incorrect, then Crichton was obligated to take it seriously.
Instead, Crichton took the position that "everyone else was to blame but itself. It tried to say that since the Trade Board, the customs department and the ITA accepted the information then all was well," Justice Sykes said.
The other point which struck the court was the relative ease with which Mills, who does not appear to be mechanically inclined, was able to find out that the year of the car was incorrect.
"CAL has been in the business over a decade and one would think that it would be able to resolve a matter of this nature without litigation. Two solutions were put forward by Miss Mills. They were rejected. Even when CAL was presented with evidence from Fidelity, the only authorised dealer, that the year was incorrect, CAL refused to budge," he said.
Crichton, based on the evidence to the court, also did not respond to overtures from the FTC to resolve the issue.
The FTC asked the court to impose the maximum fine of $5 million, but Sykes ruled that penalty should be $2 million, saying the infraction was not as egregious as a similar case in which the fine imposed was $2.5 million.
FTC Executive Director David Miller told the Financial Gleaner on Wednesday that the agency intends to take similar action against other used-car dealers, but those cases have not yet been filed with the court.