3 News – items on black market trade in illegal cars – tax evasion – inaccurate interpretation of Motor Vehicle Dealers Act – partial – victimised businesses/individuals
G14 – more than one view of Motor Vehicle Dealers Act - not inaccurate – no victimisation – no uphold
G19 – editing not a distortion of events – no uphold
This headnote does not form part of the decision.
Items on 3 News broadcast on TV3 on 9 and 10 October 2000 dealt with what appeared to be a flourishing "black market" trade in motor vehicles by unlicensed dealers. According to the items, illegal sellers were evading tax, and people who bought cars from them were not covered by consumer protection legislation.
Ken Horlor complained to TV3 Network Services Ltd, the broadcaster, that the items were unbalanced, untruthful and victimised individuals and businesses trading legally. He said the programme had put forward incorrect legal propositions and had made accusations of illegal activity which were unsupported by any evidence.
TV3 responded that it had found no evidence that the items were biased or inaccurate and declined to uphold the complaint.
Dissatisfied with TV3's response, Mr Horlor referred the complaint to the Broadcasting Standards Authority under s.8(1)(a) of the Broadcasting Act 1989.
For the reasons given, the Authority declines to uphold the complaints.
The members of the Authority have viewed a tape of the items complained about and have read the correspondence which is listed in the Appendix. The Authority determines these complaints without a formal hearing.
On 9 and 10 October 2000, items on 3 News broadcast between 6pm and 7pm on TV3 dealt with the trade in motor vehicles by other than licensed dealers.
The item on 9 October showed footage of the Ellerslie Car Fair in Auckland. It explained that both the Motor Vehicle Dealers Institute and the government were concerned about a flourishing "black market" trade in vehicles by unlicensed dealers. The illegal sellers were evading tax and people who bought cars from other than licensed dealers were not covered by consumer protection legislation, the item reported.
The second item on 10 October followed up the first. It showed footage of what was said to be the illegal trade in motor vehicles going on outside the ambit of the car fair. Footage was shown of a business called Wholesale Cars, which the reporter described as having "all the hallmarks of a legitimate car yard" but which in fact was unlicensed. Footage was also shown of what appeared to be trading going on in the streets and outside private homes, some of which was said to be illegal.
Ken Horlor complained to TV3 Network Services Ltd, the broadcaster, that the items were unbalanced, untruthful and victimised individuals and businesses trading legally. He said the items breached standards G14 and G19 of the Television Code of Broadcasting Practice.
Those standards read:
G14 News must be presented accurately, objectively and impartially.
G19 Care must be taken in the editing of programme material to ensure that the extracts used are a true reflection and not a distortion of the original event or the overall views expressed.
According to Mr Horlor, the programme had put forward several propositions which were wrong in law, and had made accusations of dishonesty and/or illegal activity which were unsupported by any evidence.
In particular, he complained about a member of the public being "singled out" in the first item, with the implication that he was trading illegally. In the second item, several businesses had been identified as illegal traders when "prima facie, they appeared to be legitimate," Mr Horlor said.
Mr Horlor argued that under s.4(4)(b) of the Motor Vehicle Dealers Act 1975 (MVD Act) manufacturers and wholesalers were not motor vehicle dealers. He pointed to the business called Wholesale Cars which had been shown in the second item. He said:
There are further reasons why someone may be selling cars. None of these were explained to provide balance – such as the sellers were not in it for gain – or were in it for gain but had not sold more than the statutory six cars a year.
Mr Horlor also disputed the claim made in the broadcast that the traders shown were committing tax fraud. He said it was impossible to commit tax fraud with regard to imported cars because gst and duty were paid on arrival to Customs. In any case, gst and income tax were matters between individuals and the Inland Revenue, and it was "impossible to ascertain the tax status of individuals," he said.
TV3 considered the complaints under standards G14 and G19, and advised that its standards committee had scrutinised the items for any sign of bias or inaccuracy, and had found none. It said:
Certainly the law in this area seems to be widely misunderstood, somewhat flaunted and extensively under-enforced.
The broadcaster then explained that, legally, only licensed dealers could sell cars for profit. It said in the ordinary course of events, individuals could sell cars for gain only where the overriding motive for sale was other than for profit. For example, an individual could sell a car in order to upgrade the vehicle or because the owner's needs and requirements had changed. According to the broadcaster, if the primary reason for sale was to make a profit then the sale would, on the face of it, be illegal and in breach of the Motor Vehicle Dealers Act. This was made clear in the items, TV3 said.
Having found no evidence of inaccuracy or impartiality, the broadcaster declined to uphold a breach of standard G14.
Turning to standard G19, TV3 said the standard did not appear to apply to the matters Mr Horlor had raised. The broadcaster said it had found no evidence of editing that might have led to a distortion of the material dealt with in the items. As such, it declined to uphold the complaint.
In his referral to the Authority, Mr Horlor said TV3 had "failed to comprehend the substance" of the complaint and had not addressed itself to the relevant sections of the Motor Vehicle Dealers Act. He reiterated that neither of the items complained about had been presented accurately, and had showed partiality by victimising identifiable businesses. He repeated that the business shown called Wholesale Cars could have been a legitimate business under s.4(4)(b) of the MVD Act.
Mr Horlor said TV3 had failed to address the aspect of his complaint that the allegations of tax fraud were incorrect.
In TV3's reply, the Standards Committee have compounded the matter by showing the same lack of understanding of our rights as buyers and sellers of motor vehicles, by stating that "if the primary reason for sale is to make a profit then the sale will, on the face of it, be illegal."
Mr Horlor asserted that this was wrong. He said: "All of us have the right to sell a car with the intent to make a profit." The MVD Act was quite clear that a "dealer" was someone holding themselves out as such, he said. Private individuals, such as those selling at the car fair or on the roadside, were selling lawfully, he said.
He requested that the Authority investigate and review the broadcaster's decision. He said TV3 had failed to understand the manner in which the items were inaccurate and partial, because it did not understand the MVD Act.
In its response to the Authority, TV3 said it had nothing to add to the substance of its previous comments to the complainant. However, it said Mr Horlor had misunderstood its summary of the law. TV3 wrote:
We did not suggest that an "ordinary" seller of a car could not make a gain, the restriction is on conducting the "business" of sale for profit.
TV3 said it had not ignored Mr Horlor's points about tax evasion but had subsumed them in its discussion of standard G14. The broadcaster said the suggestion made in the items that the trade was illegal and that it was likely money made was not being declared for tax purposes, appeared accurate.
In his final comment to the Authority, Mr Horlor repeated that TV3 had "a complete lack of understanding of the Motor Vehicle Dealers Act 1975, on which the programme was based."
He said that, contrary to the way in which the items were promoted, they did not concern the trade in illegal cars, but rather the trade in used cars, and an interpretation of the Motor Vehicle Dealers Act. He reiterated:
The programme was wrong. It failed in its responsibility to be accurate. The programme claimed to have researched, but no hard evidence was produced. Instead the viewer was fed one interpretation of the Motor Vehicle Dealers Act, and so the programme lacked objectivity. They went further in victimising legitimate businesses, and so showed extreme partiality.
As such, TV3 had breached standards G14 and G19, he said.
He said the programme strongly implied that the Ellerslie Car Fair was involved in illegal trade. He cited legal authority to demonstrate that the car fair was not an "illegal market." He said "a lot" had been made of displays of recently imported unregistered vehicles. However, he wrote:
Common sense would reveal that it is not lawful to drive unregistered vehicles on the road, and so dealer plates or transporters were used to move them, which strongly suggests the seller is a licensed Motor Vehicle Dealer.
Again, he pointed to the member of the public who had been identified in the item on 9 October and had not been given "a fair right of reply." Mr Horlor said this person had been heard to say something about "six cars." Mr Horlor quoted legal authority to show that selling six or fewer vehicles for profit was a reasonable defence to breaches of the MVD Act. Instead, he said, the item had supported a private investigator's opinion that selling one car for profit was a breach.
Mr Horlor argued that the test for whether a person was breaching the MVD Act was whether or not a member of the public would believe that the person they were buying from was a licensed motor vehicle dealer. In the items shown, Mr Horlor argued:
[I]t cannot be reasonably proposed that anyone would think the person they were dealing with was licensed. Therefore no-one has been misled, no breach of the Act occurs, and TV3 have failed to point this out.
In relation to the car buyer who had bought a car from a private seller and later discovered that the seller had sold many cars, Mr Horlor said the buyer had no "good complaint" because he had bought from a seller who was not licensed, and the buyer knew the seller was not licensed. TV3 had failed to "show any understanding of these issues, instead labelling lawful trade as 'illegal.'"
Mr Horlor then discussed the businesses which had been identified as being illegal in the 10 October item, including the business named "Wholesale Cars". He repeated that, under s.4(1)(b) of the MVD Act, wholesalers were not motor vehicle dealers. This, he said, was a "serious breach of the Broadcasting Code." He continued:
Another business, clearly a wholesaler, with no signage was also shown. They have suffered a serious blow by the TV3 programme, some may have been dealt a fatal blow. This victimisation, a partiality of TV3 shows their complete lack of understanding of the law, about which the programme was made.
Again, in relation to the allegations of tax fraud, Mr Horlor repeated that all the cars shown were legal, and no evidence was produced to the contrary. In addition, he reiterated that it was impossible to commit tax fraud on motor vehicles, unless the cars had somehow been smuggled into the country "which is a ridiculous proposition."
In the Authority's view, the essence of this complaint is that the broadcaster and the complainant hold differing views about the correct interpretation of the MVD Act 1975. The Authority does not intend to enter the debate about the way in which the Act should be interpreted. However, it notes that what amounts to "illegal trade" in motor vehicles depends substantially on the facts of each case, and that considerable controversy surrounds this complex area of the law. Whether an individual or business will be found to have breached the requirements of the MVD Act, the Authority reiterates, will depend on the circumstances of each case and is ultimately a question for the court.
The complainant contends that the broadcasts breached the requirement in standard G14 to present news accurately, objectively and impartially. He said the items were unbalanced and untruthful and victimised individuals and businesses which were, in his view, prima facie trading legally. As already noted, the Authority accepts that there is more than one view of the law. In its assessment, the items achieved balance by interviewing a range of people, including the owners of the Ellerslie Car Fair, the husband of a woman selling her car at the fair, the chief executive of the Imported Dealers Institute, and the Minister of Customs. The Authority can find no evidence to support the complainant's contention that the items "victimised" individuals or businesses. With regard to the complainant's argument that the items incorrectly claimed traders were committing tax fraud, the Authority finds adequate evidence was advanced, through a broad range of interviews, to support the suggestion that tax fraud was an issue.
As to the aspect of the complaint that standard G19 was breached, the Authority can not find any evidence to suggest that the programme was edited to distort events.
For the reasons given, the Authority declines to uphold the complaint.
Signed for and on behalf of the Authority
20 December 2000
The following correspondence was received and considered by the Authority when it determined this complaint: