Appeal Court rejects MTF Sportzone appeal over credit fee 31 Mar 2015
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
- NZ home sales creep up in March, still subdued Property
- Actions For Young Driver Safety Get Green Light News
- NZ economy expands at fastest pace in two years Business
Court of Appeal rejects MTF Sportzone appeal over credit fees
By Suze Metherell
March 31 (BusinessDesk) - The Court of Appeal has dismissed an appeal by Motor Trade Finance and Sportzone Motorcyles over breaches of the Credit Contracts & Consumer Finance Act and the Fair Trading Act.
The Commerce Commission said the motorcycle and car finance businesses 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 defunct motorcycle business to write credit contracts for buyers of motorcycles.
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.
Commissioner Anna Rawlings said the Court of Appeal has provided a clear statement on the approach lenders should take to the fees they charge.
“The Court’s ruling provides easy to understand guidance for lenders, making it clear that credit fees should only cover costs that are closely related to the particular loan transaction," Rawlings said. "The Court of Appeal agreed with the Commission that the purpose of the CCCFA is to protect borrowers, especially vulnerable borrowers, by ensuring transparency in the costs of borrowing. Fees should not be used to recover general business costs or to generate profits – that is what interest is for."
The earlier High Court decisions rejected the commission's claim that the labels used for establishment and account maintenance fees were misleading, deceptive and breached the Fair Trading Act. The regulator didn't challenge that ruling in the Court of Appeal.
MTF chief executive Glenn Todd said the Court of Appeal's decision was disappointing and he was considering whether to take any further steps. Todd said that the nature of MTF's business has changed substantially, as had the way it calculated fees and costs.
"MTF’s view is this judgment will not assist borrowers to identify any unreasonable fees charged by competing lenders," Todd said in a statement on the NZX. " A borrower would not know whether a fee is unreasonable by simply looking at the dollar amount or any benchmark against commercial practice. The fees charged by MTF and Sportzone are similar to those charged by many finance companies and banks in the New Zealand market."
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.
Last November, MTF reported a 25 percent drop in annual earnings to $6.1 million in the year ended Sept. 30, as a loss in the value of financial instruments offset gains in a growing loan book. Net interest income rose 11 percent to $45.4 million and the lender issued $415.5 million in new loans, up from $320.1 million a year earlier.
MTF has $40 million of perpetual preference shares listed on NZX's debt market, which were last quoted at 70 cents in the dollar.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more