12:03 pm, September 3, 2024
A used car dealer group has won a legal battle against a man who regularly exploited a loophole in the distance-selling rules.
Williams Group Maidstone trading as PCBS Sales, which has branches in Maidstone and Wolverhampton, sold a used Tesla X to a Duncan Edward Humber in 2022 for £81,975.
Automotive legal consultancy Lawgistics said Humber, of Oxted in Surrey, engineered a scenario to pay for the EV on September 7 – the day before he collected it – with the sales invoice signed by him and the dealership via email.
He claimed he preferred having a collection-only experience as it took the stress out of things for him.
That meant it was all done remotely and not on site, and the dealership thought no more about it.
However, the following June, Humber emailed the dealership to ask for a full refund since it was a distance sale under the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (CCR).
He said he hadn’t been given a distance sale notice advising that he had 14 days in which he could return the vehicle, so he had a year and 14 days to return the goods under the CCR for a full refund.
The car was at that point estimated to be worth about £55,000, meaning the dealership would lose out to the tune of almost £27,000.
It got in touch with Lawgistics and it transpired that the consultancy had had previous experience of Humber.
On that occasion, though, in 2021 – when Humber bought two Teslas – the unnamed dealership ended up having to refund him as it had breached the regulations.
However, the case involving Williams Group Maidstone was different, with it hinging on the definition of an organised distance sales scheme.
Williams Group Maidstone didn’t run such a scheme, though, since its business model was based on customers visiting to view and test-drive vehicles, and there was no mention on its website or in its literature of deliveries or distance sales.
In addition, staff didn’t advocate such a scheme.
Second opinion
Lawgistics said that although a fee was taken from customers if they wanted to have a vehicle taken off sale until they were able to visit, that didn’t constitute a contract to buy it and was refundable if the customer visited and decided not to buy.
It advised the dealership that it wasn’t obliged to give a refund, but because of the high value of the Tesla, it got a second opinion from barrister Iain Bain of Fenners Chambers.
He agreed with Lawgistics’ assessment of the claim, so a full denial of liability was issued to Humber on the basis that the CCR didn’t apply.
Humber subsequently started proceedings. However, he didn’t issue them for a return of the vehicle’s value, which would have cost him a court fee of £4,100, but for a declaration by the court that the CCR applied, costing £332.
The case was heard at Bromley County Court, pictured, on August 9 this year, before District Judge Paul Brooks.
Humber, who has a law degree but isn’t a solicitor, admitted at the court that this had been the fourth time he’d bought a vehicle then tried to get a full refund under the CCR.
He tried to argue that paying a deposit constituted a contract to buy the Tesla, meaning Williams Group Maidstone ran an organised distance sales scheme.
Lawgistics counter-argued that the deposit didn’t form a contract, with evidence showing that Humber was never asked to pay the balance ahead of the sale, just that there were cleared funds, nor was he ever asked to sign a sales invoice ahead of collection.
Instead, he repeatedly asked for the sales invoice to be signed by the dealership, and a different member of staff who took over the sale did so the day before collection.
But although the invoice was signed remotely, the judge dismissed the case, saying that the email exchange didn’t constitute a binding contract.
He awarded costs of £23,400 against Humber and in favour of the dealership. Humber was also denied leave to appeal.
‘Misleading’
In his judgment, which was handed down last Friday, Judge Brooks said the payment of the holding deposit didn’t constitute a contract.
He also said: ‘Although it is not suggested that [Humber] acted illegally, or indeed immorally, it is clear from his previous endeavours where he had successfully relied on the CCR…that he was doing his utmost to secure a remote purchase.
‘In my judgment when he informed (the sales person) that he wished to have a collection-only experience, this was at best misleading and at worst untruthful, as his true intention was to secure a remote transaction to ensure he could rely on the CCR and reject the car when he chose to.’
The judge added: ‘He knew exactly what he was seeking to achieve.
‘Whilst there may be some truth to wanting a collection-only experience, I find that he was being disingenuous as it is clear from his evidence that his true intention was that he wanted the ability to reject the car at a time of his choosing.’
The Tesla is now worth about £35,000, and after the verdict, Lawgistics told Car Dealer it was an important judgment for traders who don’t want to be involved in distance sales and are worried they may fall foul of the regulations through no fault of their own.
It said: ‘Although only a county court judgment, this is important for the industry as it shows that dealers really need to understand their business model and whether they are offering an organised distance-selling scheme or not.
‘In either scenario, it is essential that their processes and paperwork are correct to avoid falling foul of the regulations.’
Lawgistics urged dealers to make it clear that:
- A holding deposit is purely to take a vehicle off viewing rather than an actual deposit on the vehicle
- The dealership doesn’t operate an organised distance sales scheme
It also recommended that dealers drop the word ‘deposit’ altogether in these cases and use the term ‘reservation fee’ instead.
Main image via Google Street View
