BMW seeks to bankrupt man over racing car loan
BMW sold as race car rather than collector's item
A former businessman facing bankruptcy action by BMW has been given the chance to appeal over the sale of a car he says was the same as the vehicle that won a world motor sport championship.
BMW Financial Services lent Michael Delmont a little over $150,000 in 2008 so he could buy a reconditioned racing car made by the German automaker.
Delmont did not buy the car to race it and regarded it as a collector's item. His evidence is that Spanish driver Antonio Garcia had raced the car for the Italian ROAL team and that it was the same as the car in which Britain's Andy Prialux won the World Touring Car title in 2004/05.
But after buying the car, Delmont's business activities ran into problems and in July 2009 he defaulted on the BMW loan.
After Delmont could not sell the car to service the loan, BMW asked Turners Auctions to do so. They valued it at between $40,000 and $60,000.
The vehicle was sold for $53,395 leaving Delmont owing BMW $125,244. BMW are now seeking to bankrupt him over the debt, a judge said this month.
A dispute erupted in the Auckland District Court between the parties last year. Delmont claimed BMW valued, marketed and sold the vehicle as a racing car rather than a collector's item.
He claims the car's economic value and the proceeds of the sale would have been higher if had been sold to a collector.
The District Court found in BMW's favour last September and earlier this year Delmont sought permission to appeal to the High Court. He needed leave of a judge because this appeal was effectively filed too late after an initial attempt was regarded by the court as being abandoned.
In considering Delmont's bid, Justice Matthew Palmer earlier this month said that the proposed appeal may have merit.
"If BMW should have, but did not, value, market and sell the car as an internationally unique collector's car rather than a racing car, it may have breached its duty to ensure the sale was commercially reasonable," Justice Palmer said.
The judge said the prejudice to Delmont of not being able to appeal was clear and that he would more than likely be bankrupted.
"Though that may occur in any case," the Justice Palmer commented.
"Overall, I consider the interests of justice favour the potential merit of Mr Delmont's appeal being tested, given the consequences to Mr Delmont otherwise. His delay in renewing the appeal comes very close, but not quite close enough, to overriding that consideration. Accordingly, I grant his application for leave to appeal out of time," he said.