$30,000 fine for "briefcase dealing" or "licence borrowing" (Adam Golding)
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A former car yard manager who bought and sold more than a hundred vehicles without a dealer’s licence has been fined $30,000 by the Perth Magistrates Court.
Adam David Golding, who was licensed as a yard manager only, had engaged in the illegal practice known in the industry as “briefcase dealing” or “licence borrowing”. Mr Golding pleaded not guilty to the charges but told the Court by email that he could not attend the hearing to answer the charges as he wasn’t planning to return to Perth until July next year. He was convicted in his absence, fined $30,000 and ordered to pay court costs of $800 on 2 October 2012.
Consumer Protection told the court that Mr Golding had bought and arranged the sale of 102 vehicles in dealings with several Perth dealerships while purportedly employed as Yard Manager at Harry Dutton Motor Co. in Myaree between February 2010 and May 2010. Consumer Protection had evidence that Mr Golding had carried on this form of dealing over a many years but charged Mr Golding for a finite period of transactions. While Mr Golding gave the appearance of operating under the car yard’s name, the proceeds from the wholesale transactions were deposited into an account controlled by Mr Golding and the car yard retained a commission for every vehicle sold. The car yard has since closed down.
While imposing the substantial fine, Chief Magistrate Heath said there could be difficulties if the person engaged in this practice is not reputable and if the practice prevents Consumer Protection from properly assessing dealers. He said there was a need to send a clear message to the industry that this conduct is not acceptable and it is important for this legislation to be enforced.
Commissioner for Consumer Protection Anne Driscoll said, while this is not a case of backyard dealing, the arrangement is known in the industry as “briefcase dealing” or “licence borrowing”, and is illegal.
“Mr Golding was operating as an unlicensed dealer and his activities went far beyond what his yard manager’s licence would allow,” Ms Driscoll said.
“The criteria for obtaining a dealer’s licence are stricter than a yard manager’s licence so it’s important that licence holders only engage in activities which are covered by their specific type of licence.
“A dealer, for example, must demonstrate that they have sufficient finances to cover consumer warranty claims and are obliged to disclose their financial status. Mr Golding attempted to avoid these requirements by operating privately from the premises of a licensed dealer.”
Dealers must also operate business premises which satisfy local government requirements, such as being located in areas zoned for vehicle selling, have appropriate facilities and are of a certain standard for occupational health and environmental reasons. Vehicles owned by the dealer are stored at these premises so that they can be safety inspected.
Dealers must satisfy a good character test and are expected to conduct themselves in a manner which provides leadership for yard managers, who are still supervised. They must also keep records of their stock, and other records regarding the vehicles they buy and sell so that the vehicle licensing authorities and police can track the vehicles.
“The illegal practice of briefcase dealing and other forms of licence borrowing must stop and immediate action will be taken by Consumer Protection against anyone in the motor vehicle industry who engages in this practice,” the Commissioner said.
“It’s also in the industry’s best interests for members to report this activity to safeguard the integrity of the licensing system and provide the best possible protection for consumers.”
Reports concerning illegal and unlicensed activities in the motor vehicle industry can be made to Consumer Protection on 1300 30 40 54 or by email: firstname.lastname@example.org.
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(Consumer Protection is a division of the Department of Commerce)
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