MTF, Sportzone appeal to be heard by Supreme Court
The Supreme Court has granted Motor Trade Finance [NZDX: MTFHC] and Sportzone Motorcycles leave to appeal a decision by the Court of Appeal over breaches to the Credit Contracts & Consumer Finance Act.
In March the Court of Appeal rejected the motorcycle and car finance businesses' appeals over two High Court decisions that found in favour of the Commerce Commission. The regulator said the company breached consumer protection law over fees charged in 39 loan contracts originated by Sportzone between May 2005 and July 2008. Sportzone had an agreement with MTF allowing the now-defunct motorcycle business to write credit contracts for buyers of motorcycles.
Today's Supreme Court judgment by Justices William Young, Terrence Arnold and Mark O'Regan said the approved question for appeal is "Did the Court of Appeal err in finding that the fees charged by the applicants were unreasonable for the purposes of s41 of the Credit Contracts and Consumer Finance Act 2003?"
In September and October the High Court issued two judgments in favour of the commission that some fees in the lender's loan contracts were unreasonable, while rejecting other aspects of the commission's claims that MTF and Sportzone, which is in liquidation, failed to make proper disclosure of components of credit fees payable under the loan contracts. The Court of Appeal upheld the High Court judgments and dismissed MTF and Sportzone's appeal after a hearing in November, the regulator said in a statement.
Last July, MTF rebuffed a takeover offer from Heartland New Zealand, in part because of the NZX-listed bank's request for information relating to MTF's dispute with the commission over the loans with Sportzone, for which Heartland wasn't prepared to enter into confidentiality agreements. At a special meeting in August shareholders rejected seven out of nine resolutions which sought more information about the Sportzone dispute and its appeal against the commission.
MTF has $40 million of perpetual preference shares listed on NZX's debt market, which were last quoted at 66c in the dollar.