SALE OF CAR TO DEALER

Press, Volume XCIII, Issue 27909, 5 March 1956, Page 12

SALE OF CAR TO DEALER

ACTION IN SUPREME COURT

BREACH OF AGREEMENT ALLEGED (From Our Own Reporter) GREYMOUTH, March 3. A claim by Betts Motors, Ltd., Westport, against John Neil Mouat, of Westport, for £lOOO on the ground of alleged breach of agreement, was completed in Supreme Court at Greymouth before the Chief Justice (Sir Harold Barrowclough) on Saturday morning. His Honour reserved his decision. Mr T. P. Cleary, of Wellington, and Mr W. D. Taylor, of Greymouth, appeared for the plaintiff company, and Mouat was represented by Mr P. H. T. Alpers, of Christchurch, and Mr B. Lovell,, of Westport. The claim arose over the purchase of a 1954 model American motor-ear by defendant from the company and his subsequent sale of the car to a second-hand dealer in Christchurch. The company held the franchise for the sale of these cars in the Buller district. The price paid for the car was £1207 and, under the conditions of sale, a covenant was taken out whereby Mouat agreed that if he wished to sell the car within two years, he gave the company the first option.

It was alleged that defendant sold the car in Christchurch for £l7OO and a few days later it changed hands for £l9OO, a Dunedin dealer being the purchaser. A further profit resulted from still another sale of the vehicle to a resident of Mosgiel. Mr Cleary said the case was of far more importance than the present dispute indicated. The covenant system operated in England as well as New Zealand and it governed the sale of American cars in both countries. The sale of such cars was not governed by legislation, but by the government’s adoption of the covenant system. He claimed that the agreement signed by the two parties was legally binding under the covenant introduced by the Board of Trade.