Case Study: Enforcing Consumer Rights and Pursuing Personal Director Liability in Vehicle Rejection Claims

Background and the Initial Dispute In June 2025, our client purchased a premium, high-performance vehicle from a dealership for a significant sum of money. The vehicle was marketed as being in an excellent cosmetic and mechanical state, with a sales agent explicitly describing the car’s condition as “perfect”. However, upon delivery, our client immediately noticed several cosmetic defects, including physical damage that appeared to have occurred during transit.

The situation quickly escalated when, after driving the vehicle for approximately 200 miles, it suffered a catastrophic gearbox failure, rendering it entirely undriveable. Our client formally exercised his short-term right to reject the vehicle under the Consumer Rights Act 2015 on 23 June 2025, demanding a full refund. An independent inspection later confirmed the breakdown was caused by a defective billet transmission pump and was completely unrelated to our client’s operation of the vehicle.

The Dealership’s Defence Initially, the dealership and their legal representatives fiercely resisted the rejection. They argued that because the vehicle had been driven fault-free for roughly 200 miles, the fault was neither present nor developing at the point of sale. Relying heavily on the Consumer Rights Act 2015, they asserted that the burden of proof lay with our client to demonstrate the defect existed at the time of purchase, leading them to deny the claim in its entirety.

Settlement Agreement and Repudiatory Breach Despite the dealership’s initial pushback, our firm successfully negotiated a formal Settlement Agreement, which was executed, obligating the dealership to refund the purchase costs.

However, this resolution was short-lived. During an attendance at the dealership’s premises shortly after the agreement was signed, the company’s director explicitly informed our client that the agreed settlement sum would “never” be paid.

We immediately issued formal notice to the dealership, accepting this statement as a repudiatory breach of the contract. This resulted in the discharge of the Settlement Agreement and the withdrawal of our client’s prior offer to waive statutory interest and legal costs.

Piercing the Corporate Veil: Personal Liability and the Tort of Deceit

The director’s blatant admission that he would “never” pay a settlement he had personally signed just days prior served as clear evidence of fraudulent intent. It became evident that the director had entered into the Settlement Agreement deceitfully, intending to induce our client into halting active legal proceedings, with absolutely no intention of honoring the terms.

In response to this bad faith conduct, our firm took aggressive action. We amended the Claim Form to join the director as a Second Defendant in his personal capacity. By pursuing him directly for damages arising from the Tort of Deceit (Fraudulent Misrepresentation), we ensured he could not hide behind the limited liability protection of his company.

Attempted Strike-Off and Final Action

Further compounding the director’s misconduct, the director revealed there was an active application to strike off the dealership from Companies House. Attempting to voluntarily dissolve a company to evade an imminent legal claim without notifying known creditors is a criminal offence under the Companies Act 2006 and can be grounds for severe director disqualification proceedings.

Our firm immediately lodged a formal Objection to Strike-Off with the Registrar at Companies House, accompanied by the breached Settlement Agreement. This swift intervention ensured the company would not be dissolved, allowing the legal proceedings against both the dealership and the director personally to continue unchecked.

If you need help or assistance contact our commercial disputes and regulatory team today or email us at hello@huttonslaw.co.uk