A vehicle registered in our name has been sold without our written consent ($43k). It was driven from to Christchurch

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Customer: A vehicle registered in our name has been sold without our written consent ($43k). It was driven from Nelson to Christchurch with only a COF (not road legal) and the seller is refusing to pass on the funds until they are ready. There is an outstanding loan taken out to purchase the truck last year. is there anything we can do about this?
JA: Some laws are different depending where you are, so could you clarify what state you're in?
Customer: Apologies, I searched for Law Advice in New Zealand. You are in the States?
JA: Have you tried anything so far that has helped or clarified the issue?
Customer: Yes. Phone conversations and emails.
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: The person who sold the vehicle is part of a small business that lasted less than 12months. Came into the business with zero money. 3 directors in the business. Myself (20%), my son (40%) and the third person (40%). All funding for the start up of the business was given in good faith. The third person has bad credit and is paying off debt to a debt collection agency.

Answered by Chris The Lawyer in 3 hours 5 months ago

Chris The Lawyer

10+ years of experience

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Expert in: Family Law, Legal, Estate Law, Real Estate Law, Criminal Law, Employment Law, Business Law, Consumer Protection Law, Bankruptcy Law, Traffic Law, Personal Injury Law.

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Chris The Lawyer

43360 Satisfied customers

10+ years of experience

Chris The Lawyer

10+ years of experience

43360 Satisfied customers

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Chris The Lawyer, Expert

Hi My name is ***** ***** I am a New Zealand lawyer based in Wellington with more than 42 years of experience. I am here to help with your questions.

Chris The Lawyer, Expert

Was the car sold to the business? The registration is not evidence of ownership so it is the trail of sale which determines who owns the vehicle

Customer

Hi Chris, I’m unclear if the truck was sold to the business as when I did a report on the vehicle in July it stated ‘ownership status unconfirmed’. I’m in Auckland and the truck was purchased in Christchurch by my son and his business partner who were based in Nelson. We helped them with the set up of the business (that lasted less than 12months unfortunately), and provided the money from a loan we took under our name instead of the business. There is still outstanding balance on the loan and the business partner is holding onto the funds from the sale of the truck. The loan was done in goodwill to support the start up of the business and not under the business name due to both young men having bad credit. The business partner who sold the truck has outstanding debt with baycorp.

Customer

Each of the young men have 40% directorship on the Ltd company and I have 20%.

Customer

Thank you

Chris The Lawyer, Expert

The truck has passed out of your control since it was sold with good title to the new owner. It is the proceeds of sale that should have gone to the company, So th business partner will need to explain this and repay your loan, but if he is already struggling with other debts, that may not be possibel

Customer

Thank you Chris. To confirm, it is legal for someone to take a vehicle not in their name or possession (we had it parked in a secure storage facility), drive it although not legally road worthy and then keep the funds from the sale? In this case we believe was sold for $43k and the loan currently stands approximately $30k outstanding.

Chris The Lawyer, Expert

If they were the owner of the truck, then they can take those steps. Where it gets complicated as if they sold the vehicle and kept the money without paying the loan on the vehicle. In that case it could become a criminal matter because they have kept money which they were not entitled to keep.

Customer

This is good to know, thank you
No they were not the owner of the truck.
Do you know if two directors can vote a third director out of the company (my son and I total 60% of the directorship)?

Chris The Lawyer, Expert

If they were not the owner of the truck, then they could not sell it and cannot keep the proceeds of sale. To remove a director you need a 3/4 majority of shares, that is 75%. So it may be difficult to remove them as a director

Customer

Thanks Chris.
Is it possible for you to advise/recommend next steps for us? Is that type of advise available through this platform?

Chris The Lawyer, Expert

The next step is to evaluate whether suing the other parties is worthwhile-do they have any money and can they be forced to pay?

Customer

Thanks Chris. We will talk with him today and try to come to an agreement.

Customer

As the company hasn't paid any Tax, GST etc yet - if I talk to him about removing himself from the company registration will this mean he will not be liable for this? I'm trying to think of a way for him to leave the business, pay the outstanding loan and potentially walk away with some of the money (even though he came with zero) - my priority is to have the loan paid.

Chris The Lawyer, Expert

He will not be personally liable for the tax, although he may get prosecuted for being an officer of the company and failing to file the returns, but that may apply to other directors, so that is not good . If there is no tax owed, I doubt they will take steps however.

You could try a commercial mediation to try to resolve all matters

Customer

Thanks Chris. The returns are not due until March next year. And I don't think they earnt enough in the 8 months they were in operation. My understanding is the outstanding amount will be minimal.

Chris The Lawyer, Expert

Customer

Thank you for your advise in the last week Chris. We have come to an agreement and the money to settle the loan has been received today. I have removed him from the registration of the business and we will settle any outstanding monies owing to IRD. Thanks again!

Chris The Lawyer, Expert

Great! I am glad this has been resolved

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