No Deposit Cars pointless appeal against upholding of customers mistreatment claim dismissed
Instead of repentance from deceiving the customer, the company had used appeal proceedings to add unnecessary stress and annoyance to him, say judges
An appeal filed by No Deposit Cars, a company with a well-earned reputation for fleecing its customers, was dismissed earlier this week, in a stinging judgement in which an additional fine was also imposed.
No Deposit Cars had filed court proceedings against one former customer in November 2019, claiming that the defendant had only paid one instalment of €300 against the €18,000 purchase price for a Citroen C3. After sending several reminders to keep up with the repayments on the hire-purchase agreement, the company informed the purchaser that it would be taking the car back and had done so several months later.
In his sworn reply to the application, the defendant customer explained that he had, voluntarily and without prompting, returned the vehicle to the company himself, because he had found the car to have considerable damage and latent defects.
In September 2023, the First Hall of the Civil Court had upheld the defendant’s argument that the hire-purchase contract on which No Deposit Cars were basing their claim was illegal on the grounds that it constituted a deceptive commercial practice in terms of the Consumer Affairs Act.
The First Hall also established that the vehicle in question had in fact been sold again in November 2021, and that the second buyer had paid €5,800 for it - which was also never refunded to that buyer.
“A businessman must act fairly and not milk a situation to the buyer’s expense. Profit must be commensurable to that being provided, otherwise it would be a contract of exploitation and not of sale,” read the court judgement in that case.
Two employees of No Deposit Cars: Luke Milton and Thorne Mangion (both of whom are facing criminal charges in separate proceedings), had testified that the customer had made several empty promises about honouring his payments.
But the court observed that the defendant had given a more credible account of what happened. He had testified to having visited the No Deposit Cars offices in Ħal-Farruġ, where he had spoken to Milton about the damaged vehicle, telling him that the company had to pay for its repairs.
“At that moment he changed his tune completely and I had informed him that I would not be paying further instalments unless they repaired the vehicle. In fact I had even sent them a letter on July 5 2019 to tell them all this...” the man said.
The company’s lawyer then wrote back to tell the customer that he had bought the car tale quale, meaning ‘in the condition it was in’. Three months later, still with no repairs to the vehicle, Milton had texted the man again, offering to swap the car with another, older, model for the same price.
“When I refused, he showed me a Citroen C4 Cactus that appeared to be in worse shape than the one I had originally bought, and to make matters worse he wanted a higher price for it. I refused to do that,” the customer told the court.
The First Hall remarked that it was “amazed at how [in his testimony,] Luke Milton did not even remember the messages that he had sent,” which had been exhibited in the acts of the case.
A court expert had examined the car and declared that it was not roadworthy. It had collision damage to the bumper, passenger door and side mirror, mismatched tyres, as well as incorrect repairs to the bodywork that could affect the safety of its occupants. “Proper attention needs to be given to the mechanical and braking system of the vehicle to ensure proper functioning,” his report adds.
The court deciding the case at first instance said that it was convinced that at the moment of sale, the company had been aware of the fact that the car had been involved in a collision and had a number of defects, which was why the contract it issued had expressly excluded any warranty for latent defects and forced the hirerto give up other statutory consumer rights, leaving no avenue for a claim to be made against the company. “Our law is built on good faith," ruled the judge, "No business enjoys immunity from the principle of ‘fraus omnia corrumpit. [fraud renders the entire contract invalid]”
No Deposit Cars had subsequently filed an appeal to that decision.
In a judgement handed down on September 3, the Court of Appeal, presided by Chief Justice Mark Chetcuti together with judges Christian Falzon Scerri and Josette Demicoli, dismissed No Deposit Cars' appeal. quoting case law which had established that the simple fact that the phrase “tale quale” featured in a contract does not release the seller from his obligation to provide a guarantee for the object being sold.
“The vendor company hid an important fact and didn’t stop there, but added a disclaimer against any responsibility for the car. This is deception and a blatant abuse of the defendant consumer,” reads the judgement.
The fact that the car being sold was already used does not absolve the seller from the necessity of selling a car that is fit for use, said the judges. “Certainly this does not give him the right to sell an object that can barely be used at all.”
The defendant’s failure to continue paying for a car, which he had already paid the road licence and insurance for, was not a capricious one, the court said, “but a reaction to the empty promises of the appellant company.”
“The Court cannot fail to express its surprise at how the appellant company accepted the return of the car from the defendant….proceeded to sell it on to third parties and yet persisted in its legal action, despite the contract being dissolved when it accepted to take the car back.” The company had also hidden the fact that the car had been sold again, and this had only been revealed because the defendant happened to spot the vehicle on the road, being driven by a third party.
In closing, the court pointed out that the company had got off lightly when the court of first instance had not imposed the financial penalties for infringements contemplated by the Consumer Affairs Act, despite being found guilty of engaging in unfair commercial practices. “But instead of repenting from its deceptive behaviour and accepting the judgement at first instance, the company used these appeal proceedings to add to the stress and unnecessary bother to the consumer.
"It is fitting therefore that the appellant company be condemned to pay additional costs according to law for filing this pointless appeal which was obviously not going to lead it anywhere,” ruled the Court of Appeal, ordering the company to pay an additional fine of €1,000.
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