Aussie car parts retailer Carpart UK ‘scandalous’ to the point of bankruptcy
AUSTRALIA’S biggest car parts retailers have become embroiled in a scandalous legal battle over who controls what car parts.
Key points:AUSTRALIAN car parts seller Carpart NZ filed for bankruptcy in OctoberThe lawsuit claims Carpart has “failed to comply with the Australian Consumer Law”The case is now before the Federal CourtThe Australian Consumer Commission is suing Carpart for breaches of consumer lawThe Australian Federal Court has now heard an appeal against Carpart’s decision to seek legal action against the company.
Carpart NZ was set up by former Australian car parts salesman Robert Dutton and has now been shut down after it failed to pay a $15,000 fine for breaching Australian consumer law.
It is the latest in a series of car parts recalls by the company, which is now embroiled in an ongoing legal battle with the Federal Government.
The dispute began when Carpart was accused of breaking Australian consumer laws in 2016 by its Australian counterpart, the Australian Competition and Consumer Commission.
The Australian Competition Commission (ACCC) alleged Carpart and its employees engaged in a practice of misrepresenting to consumers what was and was not available in the market and that Carpart had failed to provide information on the availability of parts for its cars.
The ACCC also alleged Carparks failure to provide “federal consumer law information” about parts in the Australian market.
In its court filing in October, Carpart alleged the ACCC “failed in its statutory duty to provide [it] with relevant consumer law legislation” in its complaint.
“This failure has resulted in Carpart being unable to supply parts to consumers,” the company said.
The company has also been accused of failing to “provide any information to consumers on the condition of their continued purchase of car repairs”.
“These matters are not an isolated or isolated event, but instead represent a continuing failure by Carpart to provide consumers with relevant information in the context of their purchasing of goods and services,” the court said.
In October, the Federal Treasurer, Scott Morrison, said it was “absolutely outrageous” for Carpart not to comply fully with Australian consumer legislation, and warned the Federal government against “pushing through a law that is not working”.
“If Carpart cannot comply with our law and act in a way that is consistent with our consumer laws, it will be unable to continue to operate in the retail sector,” he said.
“We will not stand by and watch as the Australian economy continues to fall into the hands of an unscrupulous business.”
The company is now seeking to have the case thrown out by the Federal Circuit Court of Australia.
“I think the whole point of our case is that this is a massive breach of our consumer rights, it’s not just the car parts,” Carpart lawyer Peter Jones said.”[We] are arguing that Carparts failure to comply was so egregious that it constitutes an act of criminal conduct.”‘
Failing to comply’ is an offence in Australia and Carpart is seeking a $1.2 million fine from the Federal Council of Trade Unions for breach of its consumer rights.
“The only reason Carpart could be able to do this is because of its very strong business model,” Mr Jones said, arguing that the company is “not going to be allowed to operate as it has done over the past six months”.
“We are asking for the full power of the Australian courts to come in and impose a fine that will be paid to the Australian consumer.”‘
A complete disgrace’Carpart was originally set up in the late 1990s by Mr Dutton, who had previously worked as a commercial driver.
Mr Dutton was sacked from his job at a local shop in 1998 and sold his business to Carpart in 1999.
In 2004, he was promoted to head of sales and marketing for Carparts NZ, but his replacement as the group’s general manager was sacked the following year.
He returned to work in 2013 and led Carpart through a series “reorganisations”, including a “reinvention” of the company that brought it into being.
In 2016, Mr Dutons son was named the new general manager of Carpart.
Mr Jones said the new management had not met with Mr DUTONS family and did not understand the organisation’s values.
“That is not the sort of person who would want to run an organisation which had a business model which had the potential to collapse at any moment,” Mr Moore said.
He said Carpart also had a “fundamental conflict of interest” with its Australian customers.
“Carpart is owned by the people who are making the cars in the first place and that has created an environment in which they have been able to get away with what they have done for so long,” he argued.
Mr Moore also accused Carpart of “inadequate” oversight of its business model, arguing Carpart should have “a clear-cut set of guidelines