Automotive News Canada - February 2020 - v2 - 22

* F E B R U A R Y 2020

Ford seeks $1 million in damages
and to rescind original sale deal

OWNERS CAREFULLY CHOSEN
A Ford spokesman said the
resale restriction, "common for
the world's most exclusive cars,"
is part of an extensive owner-selection process to "ensure the passion surrounding the Ford GT" is
maintained. Ford selected owners
"in part based on the likelihood
they would showcase their Ford
GT on an ongoing basis at events,
on social media and on the road
and at [race] tracks." The spokesman said the company cannot
comment on the suit itself.
Ford custom-built only eight
2018 model year GTs for Canadian
purchasers at prices starting "in
excess of" $500,000, the company
said in court papers.
Pennsylvania lawyer Bryan
Shook, who specializes in vintage-car law and transactions
involving collectible and antique
cars, said: "If you look at it from
Ford's business standpoint, it's not
good for business suing customers,
but it has an interest in maintaining the brand and the value of the
vehicle." That includes requiring
purchasers to prequalify and to
"protect the price point."
Concerns include use of
"straw" buyers to hide the identity of the real purchaser or so the
real purchaser can avoid disclosing his or her assets to the manufacturer, said Shook, who is not
involved in the Canadian case.
At the same time, there are situations where a buyer's financial
or family situation may change
within the two-year no-transfer
period, he said.

THE STORY
Here's what apparently happened, according to Morgan's decision and documents filed by the
parties:
Ford says it negotiated with
co-defendant Hudson to sell the

changed so dramatically
in the last even three to
features, racing heritage
four years."
and accessories, among
McLaren and the
other topics.
local exotic-vehicle
dealer Grand Touring
AUTO SHOW NO-SHOWS
Automobiles will take up
the real estate vacated by
Automaker exits from
Mercedes and Volvo in
auto shows worldwide are
Toronto, Campbell
due to pressure to
said. The Grand
cut costs and find
Touring space
other ways to conwill include three
nect with customers,
vehicles making
often through the
Canadian autouse of social media.
show debuts,
Audi, Mercedesincluding the
Benz and Volvo
Bugatti La Voiture
skipped Montreal,
Noir.
and the latter two
Jean Marc
The auto show
will be no-shows
Leclerc:
wants to bring
at CIAS. Across
Honda
Mercedes and
the border, the
Canada
Volvo back to
North American
wants its
Toronto in the
International Auto auto-show
future, Campbell
Show in Detroit
displays
said, adding that
moved its event to
to be more
June from January entertaining the show's location
by "doing
in one of North
and promised
something
America's larglower setup costs
est and wealthiest
in a bid to win back different
and more
markets makes it
automakers.
ideal for premium
A Volvo Canada engaging."
brands to sell vehispokeswoman said F I L E P H O T O
cles.
the brand would
participate in a variety
'CAN'T STOP' NEW TACTICS
of events across Canada
that "allow us to reach
Still, Campbell
new audiences and also
acknowledged that autoshowcase our products."
makers are looking to try
She pointed to Volvo's
new ways to interact with
attendance at January's
customers.
Interior Design Show in
"There will always be
Toronto, where a Volvo
people that want to try
XC60 plug-in hybrid crossnew things. You can't
over was on display.
stop it. You just have to
Despite the loss of
show that this is the best
Mercedes and Volvo,
place for them. We've gone
Toronto's auto show,
through this cycle before
which drew 357,745 peowhere there have been one
ple in 2019, is better posior two brands that have
tioned to retain automakdecided to leave and come
ers than its larger interna- back."
tional counterpart because
Even executives at car
it is a less expensive, concompanies that returned
sumer-driven event, said
to the Montreal event
Jason Campbell, CIAS gen- admitted that there are
eral manager.
questions about the releWhile the Detroit show, vance of auto shows.
for instance, remained a
Honda Canada thinks
major draw for consumers its new display, called
in 2019, media coverage
"The Intersection," is the
has suffered because of
answer. Though relatively
several high-profile autofew vehicles were on hand,
maker dropouts, he said.
consumers could walk
"Those are the shows
through several interacwhich are very much
tive displays.
facing the biggest chalLeclerc said consumers
lenge from manufacturing withdrawals because
SEE HYUNDAI'S NEXT PAGE
the nature of media has
CONTINUED FROM PA GE 1

CONTINUED FROM PA GE 1

dispute has generated a brown
banker's box full of documents
filed with the court clerk.
Ford said in court papers that
it learned the GT was offered
for sale in Europe, and Justice
Edward Morgan said an "undisclosed buyer" in Hong Kong had
purchased it from an exotic car
dealership in Richmond, B.C., SR
Auto Group.
In a Nov. 13 decision, Morgan
upheld a temporary injunction
blocking the transfer or sale of
the high-performance car pending
trial, which isn't yet scheduled.
Ford's suit seeks to rescind the
original sale deal and block any
transfer or resale of the GT. It also
demands $1 million in damages
for misrepresentation and breach
of contract, plus attorney fees.
"Ford's evidence is that very
few 'supercars' like this are manufactured and that it is very selective about who can buy this kind
of vehicle," Morgan wrote in his
decision. "A very expensive automobile like this is often sold to
dealers and collectors who use it
for promotional purposes."
To prevent flipping, the order
confirmation form explicitly prohibited its resale or reconveyance
for 24 months.

CIAS has 'gone through
this cycle before'

A representative photo of the GT supercar at the centre of a Ford
resale lawsuit. The automaker custom-built eight 2018-model-year
GTs for Canadian purchasers at prices starting "in excess of"
$500,000, the company said in court papers. P H O T O : F O R D

GT supercar through co-plaintiff Downtown Ford in Toronto.
Hudson never consummated the
deal.
Ford claims it was unaware
at the time that Hudson had no
ownership interest in the eventual purchaser, a holding company allegedly controlled by co-defendant Nullmeyer, Hudson's
then-business associate.
Hudson declined an interview,
but the statement of defence filed
in court said, "he was not aware of
any allegation or suggestion that
Nullmeyer had misled Ford." The
statement denies "any involvement in a conspiracy" and "making any misrepresentations to
Ford."
Hudson's lawyer, Chris Paliare
of Toronto, told Automotive News
Canada: "Mr. Hudson is now
aware someone else used his name
without authorization. When Ford
brought this
purchase to his
attention, Mr.
Hudson cooperated fully
in the process
(and) provided proof he had
no involvement
in the initial
Vintage-car
purchase...nor
law expert
any subsequent
Bryan Shook
sales transacsays Ford's
tions."
decision to
Paliare said,
go to court
"Mr. Hudson
shows it has
has testified in
an interest in
this matter to
preserving
clear his name
the brand
and will continand value of
ue to defend his
vehicles such
reputation."
as the GT.
Downtown
PHOTO VIA
Ford's general
B R YA N S H O O K
sales manager,
Tim Foster, said he cannot discuss
the case until it is resolved.
Nullmeyer didn't respond to
requests for comment, but his
lawyer told Ford's lawyer in a letter that Nullmeyer "vehemently denies the allegations in the
claim."

'SECRET COMMISSION'
Only 20 days after the initial
sale, and despite the two-year ownership restriction, Nullmeyer's
holding company sold all its
shares to Quocksister, the decision said. Quocksister's Silver
Arrows Cars is a collectible and
luxury vehicles dealership. "Most
of the cars Silver Arrows sells go
to global buyers," according to an
August 2018 profile in the Victoria
News. He denied any wrongdoing
but declined to discuss the case
with Automotive News Canada.
Quocksister negotiated the deal
with the assistance of Concord,

Ont., vehicle broker Jeffrey Seigel,
who allegedly received a $126,560
commission from Quocksister,
plus what Morgan described as a
$200,000 "secret commission" from
Nullmeyer.
Engineered Automotive
allegedly stored the car for about a
month on Nullmeyer's behalf. Its
court filing denied being "party to
any conspiracy" or being involved
in negotiations to sell the GT.
Quocksister contends he didn't
know about the resale restriction,
but Morgan's decision cited evidence that he did, including his
admission that the confirmation
order was in the package of material Seigel gave him. Seigel testified that he discussed the restriction with Quocksister, the decision said.
The decision said Seigel lied
under oath by trying to hide his
dealings with the owner of the
holding company that bought the
GT from Ford. In a court filing
Siegel denied lying.
The judge continued: "Given
the notoriety of these rare, ultrahigh-end cars among car dealers, Seigel's statement [about
talking with Quocksister about
the restriction] makes a certain
amount of sense. One does not pay
$1,500,000 for an automobile without knowing a little something
about it."

'TIDY' PROFIT
Seigel, whom Quocksister
brought into the case through a
$1.5 million third-party claim, told
Automotive News Canada that he
can't discuss the case.
Quocksister resold the car -
"unloaded" it, as Morgan put it -
to SR Auto Group the same day he
bought it, May 1, 2018, the decision
said. The price was US $1.35 million ($1,734,480 Canadian), "making for a tidy profit for Quocksister
once the currency exchange rate is
taken into account."
SR Auto Group quickly resold
it to "an undisclosed buyer from
Hong Kong," also within Ford's
no-transfer period, the decision said. SR Auto Group didn't
respond to phone and email messages.
The decision doesn't specify the
current location of the car.
Automakers' anti-flipping suits
are rare but not unheard of. In
2018, professional wrestler John
Cena paid Ford an undisclosed
amount to settle a case accusing
him of improperly reselling his
2017 GT supercar only a few weeks
into the two-year prohibition period. He had paid US $463,376 for the
car. - ANC
- John Irwin contributed
to this report.

At January's Montreal Auto Show, Honda's booth
featured interactive displays instead of the traditional
ensemble of new vehicles. P H O T O : J O H N I R W I N

Automotive News Canada - February 2020 - v2

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