Mackie Motors wins right to appeal High Court ruling with 'seismic' implications

Former Mackie Motors managing director Kevin Mackie has won the right to appeal a ‘seismic’ High Court judgment which could pave the way to a seven-day termination period for franchised car retailers.

Mackie told AM how he and his family were rocked when OEM-owned captive finance house RCI Financial Services withdrew all its finance agreements with the Brechin-based retail group with just seven days’ notice last December in a move that left it unable to trade – forcing its sale to Park’s Motor Group.

The devastated former group boss said the entire European franchised car retail sector should be wary after a High Court ruling this summer found in favour of RCI, effectively “allowing OEMs to sidestep Block Exemption rules and terminate retailers in days”.

But now Mackie is fighting back after Court of Appeal Judge Lord Justice Nugee granted Mackie Motors the right to take its case back to court, stating the appeal has “a sufficiently real prospect of success to justify the grant of permission to appeal” which had originally been dismissed by Deputy High Court Judge Simon Gleeson.

Speaking to AM today Mackie, who had suggested in an earlier interview that his ordeal cost him in the region of £4 million, said: “To sit and watch a judgment reached in the earlier hearing by someone who clearly didn’t understand how automotive retail sector works was agonising.

“I am a fighter and after what happened to my business, I want to see justice done.

“I’m confident now that we’ll be going back to trial at the High Court and I really want to see it properly heard, to understand the grounds RCI think they had to destroy a business that was high-performing and employed an entire workforce.

“If the case doesn’t ultimately end in our favour, the repercussions will be seismic. Removing a captive finance support from a franchised car retailer would basically become an alternative way of ending franchise agreements and all dealer contracts would have to be re-written, along with Block Exemption rules, to accommodate for that.”

Fraud allegations

RCI took action against Dacia, MG, Nissan and Renault franchisee Mackie Motors after unfounded allegations of fraud were made over the internet against Mackie’s now former wife.

Mackie described the allegations as “unfounded” and “clickbait”, stating that the loans that formed part of the allegations had been independently audited, with processes overseen and approved in consultation with KPMG.

He said that RCI had also been provided with bank statements showing all transactions that were approved by LGT Bank in Zurich.

In an earlier court hearing David Cavender KC said RCI had cancelled its deal on the back of “unsourced allegations”.

The National Crime Agency deemed it unnecessary to investigate the “internet gossip”, meanwhile.

National law firm Freeths said that no action had been taken against Mackie’s by the Financial Conduct Authority (FCA), adding that no investigation of its finances had been undertaken that could justify RCI’s actions against it.

Mackie branded a lack of engagement from the RCI and former franchise partners Renault and Nissan, as events transpired to strip him of his franchised car retail business, as “unacceptable”.

Back to court

Commenting on news of Mackie’s newly-won right to appeal Freeths partner and national head of automotive, Richard Coates, said: “This is wonderful news for Mackie Motors and allows Mackie Motors the opportunity to seek to right the wrongs perpetrated against it. 

“We firmly believe that the appeal will be successful and that any future trial will demonstrate that RCI, Renault and Nissan acted unlawfully in the termination of the agreements it held with Mackie Motors for over 45 years on just seven days’ notice. 

“The case will be of very real significance to the retail motor industry and beyond – testing, amongst other things the duties to be implied in contracts between commercial parties far beyond those in the agreements themselves.”

In a statement issued to AM, an RCI Financial Services spokesperson said: “While we are unable to comment on any ongoing legal proceedings, RCI Financial Services was very pleased with the earlier decisions of both courts to uphold that we acted lawfully regarding our contract with Mackie Motors.

“We expect the Court of Appeal will also uphold the earlier two court decisions.” 

AM has approached Nissan GB and Renault UK for a comment.