VIC Bought & sold car under finance unknowingly

[PabloP]

Hi, so I bought and sold a car which unknowingly had a finance on it. Wasn't aware of PPSR being new to the country. This was back in 2016 and used it for 5 months. After 5 months, I sold it and buyer spent an hour inspecting with a mechanic as he agreed to buy with no RWC and car was bought "as is, where is". So all was settled and transaction was completed.

More than a year later, buyer comes back saying there is finance on it, this was the only time I was made aware of a PPSR check. Buyer keeps on visiting my house and saying he has spoken to a lawyer and giving me two options, either to return his money and he will return the car OR he will speak to his lawyer and make a report to the police.

My question is does he have enough legal grounds to sue me if I wasn't aware the car had finance on it?

Appreciate the help.

 

[Rob Legat - SBPL]

This is not an uncommon occurrence, because all the various Transport Departments won't allow notation of a secured interest on the registration of a vehicle (unlike land, for example).

PPSR is one of the things everyone is 'supposed' to know about. Registration of an interest on PPSR is deemed 'notice to the world' - meaning you were aware of it at law (just not in actuality). However, just as you were legally aware of the interest when you bought the vehicle, so was the person you sold it to. Unfortunately, any action they will take is against you as that is where the contractual relationship is. You would then have to join the person you bought it from as a co-defendant, assuming you can find them.

 

[Clancy]

You know, it would not be hard for finance companies to register the finance with the RTA and freeze any transfer of registration being possible. But that would not save people who handed over cash for a vehicle without checking and then walking into the RTA to transfer the rego and whoops!

So really, the moment you handed over your money to buy this car in the first place - that is the point at which you lost your money, you just didn't know it yet!

 

[PabloP]

This is not an uncommon occurrence, because all the various Transport Departments won't allow notation of a secured interest on the registration of a vehicle (unlike land, for example).

PPSR is one of the things everyone is 'supposed' to know about. Registration of an interest on PPSR is deemed 'notice to the world' - meaning you were aware of it at law (just not in actuality). However, just as you were legally aware of the interest when you bought the vehicle, so was the person you sold it to. Unfortunately, any action they will take is against you as that is where the contractual relationship is. You would then have to join the person you bought it from as a co-defendant, assuming you can find them.

So what legal basis can they use to take action? The fact that I sold it unknowingly it had finance and a year has already past.

 

[Rob Legat - SBPL]

It would have to be some sort of common law contract claim, such as breach of warranty or failure to give good title. I'm not a litigator, so it's not really my area.

I don't think that it would necessarily be a good claim, but it would be about the only one they could bring.

 

[PabloP]

You know, it would not be hard for finance companies to register the finance with the RTA and freeze any transfer of registration being possible. But that would not save people who handed over cash for a vehicle without checking and then walking into the RTA to transfer the rego and whoops!

So really, the moment you handed over your money to buy this car in the first place - that is the point at which you lost your money, you just didn't know it yet!

Buyer Beware right?

 

[PabloP]

It would have to be some sort of common law contract claim, such as breach of warranty or failure to give good title. I'm not a litigator, so it's not really my area.

I don't think that it would necessarily be a good claim, but it would be about the only one they could bring.

Thanks for your help. I doubt about the breach of warranty as it is a used car and about failure to give good title, isn't it under caveat emptor? I acted in good faith and have enough documents to prove I was not aware of the PPSR. Person I bought it from was not aware of it too!

 

[Rob Legat - SBPL]

Not a breach of warranty in terms of the fitness of the car mechanically, but an implied warranty that the car is free of encumbrance. Their problem would be that they're under the same "deemed to be aware" position that you are. Any claim they make may not be easily won for them, but that may not stop the claim being made in the first place.

 

[PabloP]

Not a breach of warranty in terms of the fitness of the car mechanically, but an implied warranty that the car is free of encumbrance. Their problem would be that they're under the same "deemed to be aware" position that you are. Any claim they make may not be easily won for them, but that may not stop the claim being made in the first place.

OK Thank you

 

[Clancy]

Buyer Beware right?

And you should beware! There are allot of things to check when you buy a car privately.

I have seen that story on tv where a person brought a car, then later on noticed the chasis number was wrong. He then brought it to the attention of the RTA that the Chassis number was wrong. Police came and took the car since it turned out to be a reworked stolen car. The hapless owner who reported the issue was then rewarded with,,, was,, was.... ahem, sorry,... 'punished' for his horrendous crime by having his car taken and being out of pocket by thousands of dollars.

What is the moral of the above story? Two things... check before you buy and failing that, if you want to avoid punishment, keep your mouth shut!