A dealership which specialised in selling luxury motor vehicles on consignment and its Director have been fined a total of $90,000 by the Perth Magistrates Court for breaking laws designed to protect consumers.

Luxuride Pty Ltd, formerly of West Perth, was fined $70,000 and Director Nicholas Ngo was fined $20,000 on 12 December 2018 and ordered to pay $5,000 in costs. Mr Ngo did not attend the Court hearing and is believed to be living overseas since the dealership closed in April 2018 leaving dozens of customers owed substantial amounts of money.

The company and its Director were convicted of 23 offences under the Motor Vehicle Dealers Act (MVDA) by:

• Selling a vehicle under a consignment agreement and failing to pay proceeds within two business days;
• Receiving money from a consignment sale and failing to pay it into a trust account upon receipt or the day after;
• Failing to ensure a copy of a consignment agreement was given to the vehicle owner immediately after signing;
• Employing two people acting as a sales representative and yard manager without holding an authorisation under the MVDA.

The Australian Consumer Law was also breached on six occasions when false or misleading representations were made to vehicle owners regarding the sale price which enabled the dealership to gain a higher profit. 

Magistrate Campione said the breaches represented a gross indifference to fiduciary responsibilities and the fact that Luxuride did not use their trust accounts was an aggravating factor.

Commissioner for Consumer Protection David Hillyard said the conclusion of the Court action was not the end of this long, sad saga for many Luxuride customers.

“In essence the dealership lied to their customers telling them they could not achieve a particular sale price, when in fact they had already secured that price,” Mr Hillyard said.

“There are many consumers who have lost expensive vehicles and significant amounts of money through their dealings with Luxuride so, for them, the financial pain will continue for quite some time.

“With Mr Ngo continuing to live overseas, it will be difficult for the affected consumers to recover their losses from this business closure but the Court outcome will put on record the breaches of the laws that occurred in this case.

“Consumers considering selling their vehicles by consignment should know the rules and let us know should there be any suspicions that the dealer may not be complying with their obligations.”

Under the MDVA, motor vehicle dealers must adhere to the following conditions that apply to consignment sales:

• All consignment contracts must be in writing and must contain certain regulated terms and conditions;
• The consignment agreement must state in writing the amount which the owner should be paid;
• The dealer can keep any money they receive from the sale in excess of the amount they agree to pay the owner;
• The dealer must give the owner a copy of the consignment agreement immediately after the agreement is signed;
• All proceeds or money from any consignment sale must be held in a trust account;
• The dealer must pay the total net proceeds to the owner within two business days of receiving payment;
• The dealer must get approval from the owner to conduct repairs prior to selling the vehicle; and
• The dealer must pay for all warranty repairs after the vehicle is sold.

For more information regarding the laws covering the selling of vehicles on consignment, go to the Consumer Protection website www.consumerprotection.wa.gov.au or enquiries can be made by email consumer@dmirs.wa.gov.au or by calling 1300 30 40 54.

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Media Contact: Alan Hynd, (08) 6552 9248 / 0429 078 791 / alan.hynd@dmirs.wa.gov.au