Ford Motor Co. is suing participants in an alleged civil conspiracy to improperly acquire a custom-built 2018 Ford GT supercar in Canada, resell it for a profit and swiftly resell it again for yet another profit, all within a matter of weeks.
Ford charges the defendants with flipping a new GT model worth C$690,800 ($520,000 USD) and selling it for more than double that price within a few weeks, in violation of the manufacturer’s 24-month prohibition against reselling the vehicle, according to a case in the Ontario Superior Court of Justice.
The defendants are Timothy Quocksister, president of Silver Arrow Cars in Victoria, B.C.; Bradley Nullmeyer, former CEO of Element Fleet Management Corp. of Toronto; Steven Hudson, former CEO of Element Financial Corp.; and Engineered Automotive, a vehicle servicing firm in Concord, Ont.
It’s a complex, high-stakes tale in which all defendants deny wrongdoing while sometimes pointing an accusing figure at others among them. The dispute has generated a brown banker’s box full of documents filed with the court clerk.
Ford said in court papers that it learned the GT was offered for sale in Europe, and Justice Edward Morgan said an “undisclosed buyer” in Hong Kong had purchased it from an exotic car dealership in Richmond, B.C., SR Auto Group.
In a Nov. 13 decision, Morgan upheld a temporary injunction blocking the transfer or sale of the high-performance car pending trial, which isn’t yet scheduled.
Ford’s suit seeks to rescind the original sale deal and block any transfer or resale of the GT. It also demands C$1 million ($750,000 USD) in damages for misrepresentation and breach of contract, plus attorney fees.
“Ford’s evidence is that very few ‘supercars’ like this are manufactured and that it is very selective about who can buy this kind of vehicle,” Morgan wrote in his decision. “A very expensive automobile like this is often sold to dealers and collectors who use it for promotional purposes.”
To prevent flipping, the order confirmation form explicitly prohibited its resale or reconveyance for 24 months.
'Not good for business'
A Ford spokesman said the resale restriction, “common for the world’s most exclusive cars,” is part of an extensive owner-selection process to “ensure the passion surrounding the Ford GT” is maintained. Ford selected owners “in part based on the likelihood they would showcase their Ford GT on an ongoing basis at events, on social media and on the road and at [race] tracks.” The spokesman said the company cannot comment on the suit itself.
Ford custom-built only eight 2018 model year GTs for Canadian purchasers at prices starting “in excess of” C$500,000, the company said in court papers.
Pennsylvania lawyer Bryan Shook, who specializes in vintage-car law and transactions involving collectible and antique cars, said: “If you look at it from Ford’s business standpoint, it’s not good for business suing customers, but it has an interest in maintaining the brand and the value of the vehicle.” That includes requiring purchasers to prequalify and to “protect the price point.”
Concerns include use of “straw” buyers to hide the identity of the real purchaser or so the real purchaser can avoid disclosing his or her assets to the manufacturer, said Shook, who is not involved in the Canadian case.
At the same time, there are situations where a buyer’s financial or family situation may change within the two-year no-transfer period, he said.
The story
Here’s what apparently happened, according to Morgan’s decision and documents filed by the parties:
Ford says it negotiated with co-defendant Hudson to sell the GT supercar through co-plaintiff Downtown Ford in Toronto. Hudson never consummated the deal.
Ford claims it was unaware at the time that Hudson had no ownership interest in the eventual purchaser, a holding company allegedly controlled by co-defendant Nullmeyer, Hudson’s then-business associate.
Hudson declined an interview, but the statement of defense filed in court said, “he was not aware of any allegation or suggestion that Nullmeyer had misled Ford.” The statement denies “any involvement in a conspiracy” and “making any misrepresentations to Ford.”
Hudson’s lawyer, Chris Paliare of Toronto, told Automotive News Canada: “Mr. Hudson is now aware someone else used his name without authorization. When Ford brought this purchase to his attention, Mr. Hudson cooperated fully in the process (and) provided proof he had no involvement in the initial purchase...nor any subsequent sales transactions.”
Paliare said, “Mr. Hudson has testified in this matter to clear his name and will continue to defend his reputation.”
Downtown Ford’s general sales manager, Tim Foster, said he cannot discuss the case until it is resolved.
Nullmeyer didn’t respond to requests for comment, but his lawyer told Ford’s lawyer in a letter that Nullmeyer “vehemently denies the allegations in the claim.”
‘Secret commission'
Only 20 days after the initial sale, and despite the two-year ownership restriction, Nullmeyer’s holding company sold all its shares to Quocksister, the decision said. Quocksister’s Silver Arrows Cars is a collectible and luxury vehicles dealership. “Most of the cars Silver Arrows sells go to global buyers,” according to an August 2018 profile in the Victoria News. He denied any wrongdoing but declined to discuss the case with Automotive News Canada.
Quocksister negotiated the deal with the assistance of Concord, Ont., vehicle broker Jeffrey Seigel, who allegedly received a C$126,560 commission from Quocksister, plus what Morgan described as a C$200,000 “secret commission” from Nullmeyer.
Engineered Automotive allegedly stored the car for about a month on Nullmeyer’s behalf. Its court filing denied being “party to any conspiracy” or being involved in negotiations to sell the GT.
Quocksister contends he didn’t know about the resale restriction, but Morgan’s decision cited evidence that he did, including his admission that the confirmation order was in the package of material Seigel gave him. Seigel testified that he discussed the restriction with Quocksister, the decision said.
The decision said Seigel lied under oath by trying to hide his dealings with the owner of the holding company that bought the GT from Ford. In a court filing Siegel denied lying.
The judge continued: “Given the notoriety of these rare, ultrahigh-end cars among car dealers, Seigel’s statement [about talking with Quocksister about the restriction] makes a certain amount of sense. One does not pay C$1,500,000 for an automobile without knowing a little something about it.”
‘Tidy' profit
Seigel, whom Quocksister brought into the case through a C$1.5 million third-party claim, told Automotive News Canada that he can’t discuss the case.
Quocksister resold the car – “unloaded” it, as Morgan put it – to SR Auto Group the same day he bought it, May 1, 2018, the decision said. The price was $1.35 million USD ($1,734,480 Canadian), “making for a tidy profit for Quocksister once the currency exchange rate is taken into account.”
SR Auto Group quickly resold it to “an undisclosed buyer from Hong Kong,” also within Ford’s no-transfer period, the decision said. SR Auto Group didn’t respond to phone and email messages.
The decision doesn’t specify the current location of the car.
Automakers’ anti-flipping suits are rare but not unheard of. In 2018, professional wrestler John Cena paid Ford an undisclosed amount to settle a case accusing him of improperly reselling his 2017 GT supercar only a few weeks into the two-year prohibition period. He had paid $463,376 USD for the car.
John Irwin contributed to this report.
