Motor Dealers and Repairers Act 2013

The Act’s reach is deliberately broad. Motor dealers (s 5) include any person carrying on the business of dealing in motor vehicles as retailer or wholesaler. Financiers are excluded when they deal only in connection with credit or long-term leasing (s 5(3)), as are brokers (s 5(4)) and manufacturers selling only to dealers or financiers (s 5(2)). Online motor dealers receive specific regulation (ss 66A-66D). Motor vehicle repairers (s 6) are persons carrying on business of performing prescribed repair work; employees and those repairing only their own vehicles are carved out. Motor vehicle recyclers (s 4) buy and dismantle vehicles or trade in major components; they face cashless transaction rules (s 99A) and prohibitions on unidentified vehicles (s 99B).

Consumers benefit as purchasers or subsequent owners. The dealer guarantee extends to subsequent owners of new vehicles (s 68(2)(b)). Any person suffering loss from incompetent repairs, dealer breaches, or failure to account may claim against the Compensation Fund (s 168), subject to exclusions for those acting in a trade capacity or for non-motor-vehicle property damage.

Manufacturers and distributors are subject to Part 6. A “manufacturer” includes assemblers, manufacturers and distributors who supply vehicles for sale by dealers, plus any prescribed class (s 141). Motor industry groups representing dealers may complain to the Small Business Commissioner or apply to the Tribunal on behalf of members (ss 144-145).

Close associates (s 8) of applicants and licence holders are relevant to fit and proper assessments (s 25(5)(a)) and disciplinary action (s 39A). Directors and managers of corporate licence holders face personal exposure for executive liability offences (s 159) and recovery of Compensation Fund payouts (s 174).

Authorised officers, including Fair Trading investigators, police, and Transport for NSW officers (s 149), exercise entry, inspection and information-gathering powers. The Secretary (Commissioner for Fair Trading or departmental head) is the central administrator, decision-maker on licensing, discipline, claims and Fund management.

Interstate operators are deemed to hold equivalent NSW licences under the Mutual Recognition Act 1992 (Cth) and must comply with the Act as if licensed (s 9B). The Act’s extraterritorial application (s 9A) captures conduct outside NSW where State legislative power permits.

Exemptions exist for certain heavy machinery (s 9), trade show sales under declared conditions (s 11(2)), and sales between trade participants (ss 55(2), 60). The regulations may create further exemptions (s 186(2)(a)).

Licence holders must:

• Carry on business only at notified premises (or approved online website) and in accordance with the licence (ss 11-13, 20B).
• Display the licence number on websites and advertising (s 19A).
• Ensure repair work is performed only by licensed repairers (s 15) and certified tradespeople or apprentices under supervision (s 16).
• Provide current inspection reports (ss 57-58), dealer’s notices (ss 63-65), and, for online sales, physical inspection opportunities (s 66C).
• Comply with dealer guarantee obligations (s 68) and not dispose of trade-ins during cooling-off periods for financed sales (s 83).
• Maintain trust accounts for consignment sales, account to consignors within 14 days, and submit annual audits (ss 90-95).
• Keep prescribed records (s 100) and report suspicious goods or odometer irregularities (ss 54, 101).
• Comply with cashless transaction and unidentified vehicle prohibitions if a recycler (ss 99A-99B).

Consumers enjoy:

• The dealer guarantee for defects manifesting within limitation periods (ss 68-69), enforceable as a contractual term (s 71).
• Rights to rescission orders from courts where statutory notices were not given or were false, or the vehicle is mechanically irreparable (ss 117-119).
• Cooling-off rights for dealer-financed purchases (ss 80-87).
• Compensation Fund claims for prescribed losses (s 168), subject to mitigation and time limits (s 169).
• Tribunal orders restraining unjust conduct by dealers or manufacturers (ss 108, 147).

Manufacturers must not include unfair terms in supply contracts (s 142) or engage in unjust conduct (s 143). Dealers may seek Tribunal variation, voiding or compensation orders (s 147).

The Secretary holds powers to investigate applications (s 23), refuse or cancel licences on fit and proper or other grounds (ss 25-27, 37), take disciplinary action (s 45), determine Compensation Fund claims (ss 170-171), appoint administrators of licensee businesses (ss 127-128), and issue rectification orders after dispute investigation (s 113).

Rights of review lie to NCAT for most licensing and disciplinary decisions (s 176), with special protections for criminal intelligence (s 176(3)).

Maximum penalties reflect the Act’s consumer-protection and anti-theft purposes. Unlicensed dealing, repair or recycling carries 1,000 penalty units or, for repeat offences, 12 months imprisonment (ss 11-13). Odometer tampering or possession of tampering devices is 500 penalty units (ss 52-53). Executive liability offences (s 159) expose directors to the same maximums as the corporation. Lesser offences (failure to display licence numbers, produce documents, keep records) are 20-50 penalty units (ss 17-19, 48-49, 100).

Disciplinary sanctions are flexible: reprimand, directions, suspension, conditions, monetary orders up to $11,000 (individuals) or $50,000 (corporations), contributions to the Compensation Fund, disqualification, or cancellation (s 45). Mandatory cancellation follows recent motor vehicle stealing offences or loss of fit and proper status (s 46). Show cause procedure is mandatory except in urgent suspension cases (ss 41-42).

Enforcement tools include authorised officer entry and inspection powers (ss 151-152), police search powers (s 153), and search warrants (s 154). Obstruction is an offence (s 155). Penalty notices are available (s 158). Proceedings must generally commence within 12 months, but three years is allowed for unlicensed trading and odometer offences (s 156). Courts may make compensation, work, or ancillary orders on conviction (s 157).

The Compensation Fund itself is protected: administrators may be appointed to licensee businesses (Part 5 Division 5 and Schedule 1), with personal recovery rights against directors for payouts (s 174). Subrogation (s 173) allows the Crown to pursue the wrongdoer after Fund compensation.

The Act is not a code. Section 179 expressly preserves rights and remedies under other laws. It interacts with the Australian Consumer Law (NSW) in several ways: consumer guarantees inform the definition of “defective vehicle” (s 67), the dealer guarantee operates cumulatively but prevents double recovery once fully complied with (s 77), and standards of conduct for disciplinary purposes include ACL compliance (s 39(a)).

The National Credit Code is incorporated by reference for “credit contract”, “financier” and “linked credit provider” definitions (s 4), triggering cooling-off and tied loan contract termination rules in dealer-financed sales (Division 5 of Part 4).

Road transport legislation is central. Compliance with Road Transport Act 2013 ss 73 and 98 (and associated statutory rules) is both a licensing condition and disciplinary ground (s 39(d)-(e)). Inspection reports are those issued for registration purposes (s 4). Number-plate surrender obligations for recyclers reference Transport for NSW (s 97).

Criminal law overlays appear throughout. Motor vehicle stealing offences (defined by reference to Crimes Act 1900 Division 5A) trigger mandatory refusal or cancellation of licences (ss 25(2)(f), 46(a)) and affect fit and proper assessments (s 27). Odometer tampering is both a specific offence and may constitute fraud or dishonesty for fit and proper purposes (s 27(1)(a)). Criminal intelligence from police may be used to refuse or discipline without disclosure (ss 27(3), 176(3)).

Mutual recognition and Trans-Tasman legislation are expressly accommodated (s 9B). The Act must be interpreted compatibly with the Mutual Recognition Act 1992 (Cth) and Trans-Tasman Mutual Recognition Act 1997 (Cth).

Fair Trading Act 1987 supplies investigator appointments (s 149), penalty notice machinery (s 158), and unjust conduct concepts that parallel Part 6. The Licensing and Registration (Uniform Procedures) Act 2002 governs licence applications, renewals and amendments subject to modifications (s 21).

The Small Business Commissioner Act 2013 provides a pre-Tribunal filter for manufacturer-dealer disputes (ss 144-145). Civil and Administrative Tribunal Act 2013 and Administrative Decisions Review Act 1997 govern NCAT reviews (s 176).

The Motor Dealers and Repairers Amendment Act 2023 (assented 2023 No 28) introduced the most significant changes since 2013. Division 3A (ss 66A-66D) regulates online motor dealers, permitting website publication of notices and reports in lieu of physical attachment (s 66B) while mandating physical inspection opportunities and deposit caps. These amendments responded to the growth of internet sales and consumer complaints about inability to inspect vehicles before committing funds.

Recycler obligations were tightened: s 99A prohibits cash, cash cheques or in-kind transactions to disrupt stolen vehicle trade; s 99B prohibits dealing with vehicles whose unique identifiers have been removed, obliterated, defaced or altered without police authorisation. These measures address organised theft and rebirthing.

Licence number display on websites and advertising is now mandatory (s 19A). Record-keeping obligations were modernised (s 100), allowing Secretary specifications by notice on the NSW Fair Trading website and electronic storage. Disciplinary provisions were expanded to permit action against individual partners or officers of corporate or partnership licence holders (s 39A) and to increase monetary penalties (s 45(1)(d1)).

Earlier amendments inserted mutual recognition (s 9B) and extraterritorial application (s 9A) in 2025 to align with national reforms. The 2018 Fair Trading Legislation Amendment (Reform) Act shortened licence terms to 1, 3 or 5 years (s 33), introduced restoration provisions (s 33A), and streamlined licensing procedures.

These changes reflect three policy drivers: (1) adapting to digital commerce; (2) combating vehicle theft through supply-chain controls; and (3) reducing regulatory burden while maintaining consumer protection, consistent with the Act’s objects (s 3).

The Act has generated limited reported litigation, largely because most disputes are resolved through NCAT review, rectification orders (s 113), or Compensation Fund claims. However, several recurring controversies appear in Tribunal and court decisions.

Fit and proper person assessments (ss 25, 27) have been contentious. The Tribunal has emphasised that criminal intelligence provisions (s 27(2)-(3)) preclude disclosure and limit merits review, raising natural justice concerns. In several unreported NCAT matters, applicants have argued that spent convictions or minor dishonesty offences from decades earlier should be disregarded under s 176(2), but the Tribunal applies a broad public interest test.

Odometer tampering reverse onus (s 52(2)) has survived constitutional challenge on the basis that it is a reasonable evidentiary burden rather than a legal one. Courts have upheld convictions where dealers could not explain sudden mileage reductions between acquisition and sale.

Dealer guarantee limitation periods (s 69) have produced disputes about when the “sale” occurs for new vehicles delivered before formal contracts (s 69(2)) and whether online purchasers’ inspection rights affect the running of time. The Tribunal has treated the guarantee as a statutory warranty that survives subsequent ownership for new vehicles but not second-hand ones.

Part 6 unfair contract litigation has been sparse. Manufacturers have contested Tribunal jurisdiction to vary supply contracts containing arbitration clauses, but the Tribunal has held that the public interest in industry standards overrides private arbitration where the Small Business Commissioner has issued a certificate.

Compensation Fund claim rejections for failure to mitigate or unreasonable delay (s 170(2)) have been upheld on appeal where owners continued to drive seriously defective vehicles after discovery. Subrogation recoveries (s 173) against directors have succeeded even where the corporation entered liquidation, confirming personal liability under s 174.

A continuing controversy is the overlap between the dealer guarantee and ACL consumer guarantees. While s 77 prevents double recovery once one regime is fully complied with, consumers sometimes pursue both simultaneously, leading to jurisdictional arguments between courts and the Tribunal.

Most practitioners miss that the dealer guarantee survives resale of a new vehicle to subsequent owners (s 68(2)(b)), creating long-tail liability that survives multiple changes of ownership until the limitation period is exhausted. Dealers therefore under-price trade-ins of near-new vehicles at their peril.

The “current inspection report” definition (s 56) ties to the date it is relied upon, not the sale date; a report obtained months earlier for registration may be stale if the prescribed period has elapsed. Online dealers who publish stale reports on their websites breach ss 57-58 indirectly through s 66B.

Recycler cashless transaction rules (s 99A) apply to every purchase of a vehicle, part or accessory in the course of business; the prohibition on “in kind” exchanges catches the common industry practice of swapping parts for other parts. Police authorisation under s 99B must be written; verbal approval is insufficient and leaves the recycler exposed to 100 penalty unit fines.

Section 39A now permits disciplinary action against individual partners or officers even if they were not personally involved, provided they cannot prove lack of knowledge, inability to influence, or due diligence. This reverses the usual corporate veil presumption and requires contemporaneous documentation of governance steps.

The Compensation Fund claim time limit (s 169) contains a trap: if a claimant obtains judgment within 18 months but the judgment remains unpaid, a further 12 months runs from the judgment date. Many claimants assume the 18-month limit continues to run and lose Fund rights.

Extraterritorial application (s 9A) combined with mutual recognition (s 9B) means an interstate online dealer advertising into NSW must comply with NSW dealer notice and inspection rules even if the physical transaction occurs elsewhere. The Secretary’s published “required qualifications or experience” notices on the NSW Fair Trading website are legislative in effect; failure to meet them is mandatory refusal ground (s 25(2)(e)).

Finally, administrators appointed under Part 5 Division 5 enjoy statutory indemnity (Schedule 1 cl 13) but the Secretary can still recover administration expenses from the licensee (Schedule 1 cl 12). Practitioners acting for licensees in financial difficulty sometimes overlook that Fund contributions and administration costs rank ahead of secured creditors in the distribution waterfall.

Licensing and premises
Obtain the correct licence type and ensure all officers and close associates meet fit and proper criteria (ss 25-27). Lodge premises notifications (including storage and office addresses for online dealers) at least 20 business days before use (s 20B). Maintain the nominated term (1, 3 or 5 years) and apply for renewal or restoration within permitted windows (ss 33, 33A). Display the licence number prominently on all websites and advertising (s 19A).

Sales and disclosure
For every second-hand vehicle, attach or publish a compliant dealer’s notice and current inspection report (ss 63, 66B). For new vehicles, obtain positive knowledge or conduct a reasonable inspection before deciding a damage notice is unnecessary (s 65). Never sell without number-plates unless a surrender certificate or approved declaration is displayed (s 59). For online sales, build workflow that forces physical inspection offers at storage premises or an agreed site and again at delivery (s 66C). Cap deposits at the regulated percentage (s 66D).

Repair and guarantee obligations
Only permit certified tradespeople or supervised apprentices to perform repair work (s 16). When a defect surfaces within the limitation period, repair at your cost or negotiate a fair price reduction; document the process to avoid later Tribunal rectification orders (s 113). For financed sales, observe the cooling-off period, do not dispose of trade-ins, and ensure tied loan contracts contain the prescribed termination clause (ss 80-87).

Record-keeping and reporting
Implement the Secretary’s published record-keeping requirements (s 100) with secure electronic storage capable of producing records on demand. Maintain consignment trust accounts, pay proceeds the next business day, account within 14 days, and obtain annual audits (ss 90-95). Report any suspicion of stolen goods, inaccurate odometers or unidentified vehicles immediately (ss 54, 101).

Recycler-specific controls
Conduct all purchases by electronic funds transfer to a traceable account; retain transaction records for every vehicle, part or accessory. Before acquiring or disposing of any vehicle, verify the unique identifier is intact; obtain written police approval if it is not (s 99B). Surrender number-plates to Transport for NSW promptly (s 97). Sell only dismantled vehicles, substantially demolished shells, or vehicles used predominantly in your own business (s 98).

Manufacturer contracts
Review all supply agreements for unfair terms listed in s 142 (one-sided termination, unilateral variation, excessive penalties, limits on assignment or litigation). If in doubt, raise with your motor industry group for Small Business Commissioner assistance before signing (s 144). Retain negotiation records and legal advice to defend any Tribunal application under s 146.

Disciplinary risk management
Maintain a compliance manual addressing each ground in ss 38-40. Conduct regular internal audits of trust accounts, consignment records and odometer logs. Train staff on suspicious goods reporting. If a show cause notice arrives, respond with evidence of due diligence, especially if relying on s 39A defences for partners or officers.

Compensation Fund and claims
Pay all contributions on time to avoid automatic suspension (s 165A). When a claim is made, cooperate fully with the Secretary’s investigation and preserve evidence. Advise customers of Fund rights only after confirming the loss falls within s 168 and is not excluded.

Ongoing monitoring
Subscribe to NSW Fair Trading website notices for updated qualifications, prescribed forms, and record-keeping specifications. Review the Motor Dealers and Repairers Regulation 2014 (as amended) at least annually. Engage external auditors and compliance counsel familiar with the 2023 amendments. Document every decision that could later be scrutinised for “reasonable diligence” or “fit and proper” purposes.

Compliance is not a set-and-forget exercise. The Act’s interlocking obligations, reverse onuses, and personal liability provisions mean that systematic, documented processes are the only reliable defence against both regulatory action and Compensation Fund claims.