Thu | Sep 21, 2017

Court knocks down fine against misleading car dealership

Published:Friday | March 24, 2017 | 3:00 AMMcPherse Thompson

The fine against car dealership Crichton Automotive Limited for selling a 2005 car as a 2007 model was chopped nearly in half, but the Court of Appeal upheld a lower court ruling that the company was liable for misleading the customer.

Based on the penalty, Appeal Court Justice Paulette Williams said it could be construed that Crichton was being punished for the stance it took, after the default or breach was detected. The dealership had refused to verify the correct age of the motor vehicle and accept responsibility for resolving the issue.

Williams said the fine of $2 million imposed by the Fair Trading Commission, the FTC, seemed excessive and cut it to $1.2 million.

According to the appeal court judgment, Crichton, which trades in second-hand vehicles, was sued by the FTC for breaching the Fair Competition Act, based on a complaint filed by car buyer Lisbeth Mills.

In 2011, Mills purchased a Nissan motor car for $1.44 million from Crichton, which sales agent Percy Williams told her was a 2007 model.

Mills later learned that the model year may be incorrect when she tried to purchase a moveable rain shield for the car, a suspicion that was subsequently confirmed by the authorised Nissan dealer, Fidelity Motors Jamaica, which told her the car was a 2005 model.

Mills went back to Crichton but was redirected by the dealership to Island Traffic Authority, which also verified the car as a 2005 model.

Mills proposed to Crichton that it either refund her the difference in price between the 2005 and 2007 models and alter the documents accordingly, or refund her the full sum in exchange for a return of the car, but the dealer rejected her suggestions. It was then that she took her complaint to the FTC.

Crichton, based on the evidence before the court, also did not respond to overtures from the FTC to resolve the issue.

The FTC accused Crichton of misleading advertising and asked for an order that the company pay pecuniary penalty not exceeding $5 million.

However, the dealership fought the case in the Supreme Court, saying it believed the information on the documents it received from the Singaporean supplier of the vehicle was correct.

Crichton also argued that Jamaican government agencies, including the Trade Board and Customs, had processed the same information, which meant they had satisfied themselves that the 2007 year was correct.

However, the case was decided against Crichton in May 2015, leading to an appeal that was heard in February of this year.

Justice Williams, who wrote the appeal court decision, noted that in circumstances where Supreme Court Justice Brian Sykes recognised and accepted that Crichton honestly believed in the correctness of the information received from the Singaporean authorities; that he applied a penalty of $2 million, largely because the car dealer had refused to resolve the matter amicably.

"This, in my view, ought not to have been the major consideration," Justice Williams said.

"In this case, the apparent ease with which Miss Mills was able to verify the correct age of the motor vehicle is a factor which could properly impact the penalty to be imposed."

She also noted that the de-registration certificate from the Singaporean authority had a clear disclaimer about the accuracy, adequacy or completeness of the information on the documents.

In adjusting the fine, Justice Williams said Crichton could have made its own disclaimer on the invoice given to Mills, but failed to do so, and as such the car dealer took a risk for which it must bear the consequences.

The funds to be paid by Crichton will all go to the state.

Attorney Dr Delroy Beckford, who appeared with attorney Wendy Duncan for the FTC, said In instances where there is a settlement is between the FTC and the offending company, the agreement may include compensation for the customer. However, in this case, there was no settlement agreement, the lawyer said.

Neither the managing director of the car dealership, Kirk Crichton, nor his lawyer Christopher Dunkley was reached for comment.

Beckford also told the Financial Gleaner that there are several complaints related to model year mix-ups before the FTC, none of which are before the court.

He said the Crichton matter was meant to be a test case, but that the FTC is trying to resolve the other matters without having to resort to litigation.

mcpherse.thompson@gleanerjm.com