2:20 pm, December 8, 2022
Dealer group boss Kevin Mackie has won the right to appeal against a High Court ruling that meant all franchise car dealer agreements could be ‘ended in just a week’
Mackie Motors says Renault and Nissan’s finance provider, RCI Financial Services – wholly owned by Groupe Renault, unlawfully withdrew key financing, access to essential franchise services and terminated contracts with just seven days’ notice.
The move effectively sank the near-50-year-old Mackie Motors business overnight, but in July this year, the High Court threw out a bid to claim damages.
Despite the setback, Mackie vowed to fight on and has now won the right to appeal against the verdict.
In his ruling, Court of Appeal judge Lord Justice Nugee said Mackie Motors had ‘a sufficiently real prospect of success to justify the grant of permission to appeal’ which had originally been dismissed by Deputy High Court Judge Simon Gleeson.
Reacting to the latest development, Mackie told Car Dealer: ‘As I have said all along, the way we lost our family business was both wrong and inhumane. RCI destroyed people’s lives, livelihoods and our business when there was no good reason to do so.
‘Mackie Motors had an unblemished track record going back more than 45 years at the time of their decision and was the number one Renault dealer in the UK for performance.
‘We built up a phenomenal business with brilliant staff and a huge amount of loyal customers who travelled from all over Scotland to enjoy unbeatable service.
‘I am surprised that the European franchised motor industry appears to have not fully understood that it could face hundreds of millions in costs if it is required to rewrite dealer contracts to take into account that a seven-day termination of a dealers’ used car finance agreements can currently close down a franchise business literally overnight by blocking access to all captive new car finance offers, which in our case were only available via RCI.
‘Although RCI said in previous court appearances that we could get alternative finance providers for new car customer offers, nobody in the industry agrees this is possible.’
‘RCI destroyed everything we had built up over 50 years’
The case dates back to November 2021, when Mackie Motors was suddenly and without warning cut off by both Renault and Nissan via the Groupe Renault-owned RCI.
Following the latest decision, which was reached on Tuesday (Dec 6), the case is now likely to be back in the Court of Appeal in the new year.
Mackie says he has always been bullish that a ruling in his favour will be given.
Richard Coates, partner and head of automotive at Freeths LLP, the law firm representing Mackie Motors, said: ‘This is wonderful news for Mackie Motors and allows Mackie Motors the opportunity to seek to right the wrongs perpetrated against it.
‘We firmly believe that the appeal will be successful and that any future trial will demonstrate that RCI, Renault and Nissan acted unlawfully in the termination of the agreements held with Mackie Motors for over 45 years on just seven days’ notice.
‘The case will be of very real significance to the retail motor industry and beyond – testing, amongst other things the duties to be implied in contracts between commercial parties far beyond those in the agreements themselves.’
(Kevin Mackie at a Nissan Juke launch event in 2019)
Mackie added: ‘RCI’s actions shut us down operationally the minute it stopped access to the essential systems, services, data and captive finance offers we required access to in order to fulfil our dealership agreement obligations.
‘I have yet to talk to any franchise dealer in the UK including any alliance dealer who doesn’t find the whole situation unbelievable and wrong.
‘RCI refused to engage and proceeded to destroy everything we had built up over the past 50 years, paying no regard to the livelihood of 75 loyal employees or our many loyal customers.
‘Unfortunately, during this traumatic time, both Nissan and Renault also refused to engage. They would not return my many phone calls, emails and text messages, pleading for help.
‘To add insult to injury, RCI took our used car vehicle stock and sold it off at “loan value” as opposed to trade value and in a market where demand was higher than ever and there had never been such a shortage of quality used vehicles.’
(Mackie Motors’ Renault showroom in Brechin)
‘Given our geographical location, most of our pre-owned retail stock was one-owner supplied by ourselves and serviced by ourselves,’ he continued.
‘These actions alone cost our company in excess of £400,000 in cash terms that we had invested into these vehicles using our own money.
‘These vehicles had all been fully prepared and serviced ready for sale. The additional £400,000 would even have been raised if they had liquidated these vehicles at auction at trade prices
‘If we had retailed these vehicles, the figure would be closer to £600,000. I pleaded to be allowed to buy back these cars but they refused to engage.
‘The UK adopted the European Block Exemption rules when we exited the EU and the main reason it was introduced was to provide legal certainty for businesses.
‘However, allowing a two-year rolling contract with any manufacturer to be overridden by the manufactures owned finance house on seven days notice is certainly not something that anyone can promote as correct.’
An RCI Financial Services spokesperson said: ‘While we are unable to comment on any ongoing legal proceedings, RCI Financial Services was very pleased with the earlier decisions of both courts to uphold that we acted lawfully regarding our contract with Mackie Motors.’
A spokesman for Renault, which owns RCI, declined to comment when approached by Car Dealer.
A date for the next hearing will be set in due course.
