Chen alleges that Gu failed to disclose the vehicle had a security interest registered to it when he bought it and now he is without the car.
So, now he’s taken the matter to court saying he wants his “money back”.
He initially applied to the Motor Vehicle Disputes Tribunal to help resolve the issue.
However, the tribunal can’t hear cases where a vehicle’s purchase price exceeds $100,000 unless both parties agree to waive that jurisdiction cap. Gu refused to sign such a waiver so Chen has taken both him and Falcon Advances to court.
Gu is currently overseas and did not want to comment.
The owner of Falcon Advances Ltd, Nigel Brown, said he was unable to comment on the specific case as it was still before the courts.
However, he did say it serves as “a warning for people to check the Personal Properties Securities Register before buying a motor vehicle”.
Tribunal adjudicator Brett Carter said that Chen’s claim raised issues that did fall within its jurisdiction as the Consumer Guarantees Act 1993 provides a guarantee that goods are free from any undisclosed security.
Carter said he gave both parties an opportunity to comment before striking the claim out on the basis that it would be inappropriate to have the case heard both in court and at the tribunal, and that the claim exceeded the $100,000 cap.
Consumer law expert Steve Graham from law firm McVeagh Fleming said dealers are expected to tell a prospective buyer if there was money owing on a vehicle.
Graham said it was different with private sales where the onus was on the purchaser to do their due diligence and check that a car doesn’t already have security interest owing. Private buyers can purchase this information from CarJam.co.nz.
Graham said it was an unusual case and it wouldn’t be often that the tribunal’s $100,000 jurisdiction cap was reached.
Chen and Gu are due in the Auckland District Court in September for the civil case.
