New South Wales Consolidated Acts

MOTOR DEALERS ACT 1974 - SECT 38

38 Rescission of sale

(1) In this section, a reference to a court of competent jurisdiction is, in relation to an order for rescission of the sale of a motor vehicle, a reference to:

(a) the Local Court in its exercise of jurisdiction under Part 3 of the Local Court Act 2007 if the cash price for which the motor vehicle was sold does not exceed the jurisdictional limit of the Local Court when sitting in its General Division within the meaning of the Local Court Act 2007 , and

(b) the District Court if the cash price for which the motor vehicle was sold does not exceed the amount for the time being specified in section 44 (1) (a) of the District Court Act 1973 , and

(c) the Supreme Court.

(2) Upon application being made by the Director-General, a court of competent jurisdiction may, if:

(a) an inspection report required under section 23B, a certificate, receipt or declaration required under section 23C or a notice required under section 24 to be attached to a motor vehicle was not attached at all material times when the vehicle was offered or displayed for sale by a dealer,

(b) a notice required under section 24 to be delivered by a dealer to the purchaser of a motor vehicle was not delivered at or before the time of sale of the vehicle,

(c) the prescribed particulars contained in a notice attached to a motor vehicle, or delivered to the purchaser of a motor vehicle, by a dealer under section 24 were, in the opinion of the court, false or misleading in a material particular, or

(d) the body of, or mechanical equipment in, a motor vehicle sold by a dealer was, at the time it was sold by the dealer, in such a condition that, in the opinion of the court, it is not practicable to repair or make good the defects in the vehicle so as to place the vehicle in a reasonable condition having regard to its age,

order that the sale be rescinded, the vehicle returned to the dealer and, subject to any order the court thinks fit to make by way of financial adjustment between the dealer and the purchaser, any consideration passed by the purchaser or the value of any such consideration assessed under subsection (5) returned to the purchaser, and make such further or consequential orders, including an order as to the payment of the costs of the application, as to the court seem necessary or desirable.

(3) A court of competent jurisdiction shall not make an order under subsection (2) until the court has afforded the Director-General or a representative of the Director-General, and any other person likely to be affected by the order, an opportunity of being heard.

(3A) Notwithstanding any Act or law to the contrary, it shall not be a bar to the making of an order under subsection (2) that such a period of time has elapsed since the date of sale of the motor vehicle or that such circumstances have occurred since that date that the parties under any contract or agreement relating to the sale or under any collateral credit agreement associated with the sale cannot be restored to the positions that existed prior to the sale.

(3B) An appeal lies to the Supreme Court against an order made under subsection (2):

(a) by the Local Court as if it were exercising jurisdiction under Part 3 of the Local Court Act 2007 , and

(b) by the District Court as if it were exercising jurisdiction under the District Court Act 1973 .

(4) Subject to subsection (8), where a dealer is convicted of an offence under section 23B, 23C or 24 in respect of a motor vehicle sold by the dealer, the court may, in addition to any penalty imposed, order that the sale be rescinded, the vehicle returned to the dealer and any consideration passed by the purchaser or the value of any such consideration assessed under subsection (5) returned to the purchaser, and may make such further or consequential orders as to the court seem necessary or desirable.

(5) Where in respect of any sale referred to in subsection (2) or subsection (4) all or part of the consideration that passed from the purchaser is represented by a motor vehicle or other thing, the court may for the purposes of this section assess the value of that motor vehicle or other thing.

(6) Where there is a collateral credit agreement associated with a sale of a motor vehicle that has been rescinded under this section the obligations and rights of the purchaser under that agreement shall, by force of this section, be transferred from the purchaser to the dealer and subject to this section may be enforced by or against the dealer in all respects as if the dealer were the purchaser.

(7) Notwithstanding any Act or law to the contrary, upon the making of an order rescinding a sale of a motor vehicle the rights and obligations of the parties under any contract or agreement relating to the sale or under any collateral credit agreement associated with the sale of the motor vehicle shall be as provided for in that order or in any order ancillary to or consequential upon that order.

(8) A court shall not make an order under subsection (4) if the total amount of any consideration passed by the purchaser or the value of any such consideration assessed under subsection (5) exceeds the jurisdictional limit of the Local Court when sitting in its General Division within the meaning of the Local Court Act 2007 .

(9) For the purposes of this section a collateral credit agreement associated with the sale of a motor vehicle is a contract or agreement, arranged or procured by the dealer selling the vehicle, for the provision of credit by a person (other than that dealer) for the purposes of the sale of the vehicle.

(10) The regulations may provide for the enforcement of any order made under this section.