Suncorp has prevailed in a dispute sparked by its decision to reject a motor claim from the owners of a Mercedes-Benz who had arranged for a car dealer to sell the vehicle, but never received the sale proceeds of $55,000.

The complainants, who are represented by a lawyer, insisted they should be indemnified for the loss, saying the car dealer had stolen the vehicle upon taking possession of it.

But the Australian Financial Complaints Authority (AFCA) dismissed their argument, ruling the circumstances of their loss does not fit the meaning of “stolen” as described by the Macquarie Dictionary.

AFCA also says investigations from the Department of Fair Trading show that the dealer had passed the 2015 Mercedes-Benz CLA 45 to another car yard and ultimately to a new owner.

It says while it is clear the complainants have suffered a loss, the dispute is about whether the insured vehicle was lost or stolen for the purposes of the policy they held with Suncorp.

The complainants’ policy provides cover for loss and damage to the vehicle, if it is stolen or suffers accidental loss or damage.

Since the policy does not define the word “stolen”, AFCA says the term therefore takes its ordinary meaning from the Macquarie Dictionary, which describes it as “to take or take away dishonestly or wrongfully, especially secretly; to commit or practise theft”.

When the complainants lodged their claim, they advised they had “given” their vehicle to the car dealer “under a consignment agreement” in early June 2019. The consignment agreement authorises the car dealer to sell the vehicle on the complainants’ behalf and then pay them as stated in the contract.

They provided the vehicle to the car dealer voluntarily for the express purpose of enabling it to be sold, according to the AFCA ruling.

AFCA says the sale of the vehicle to the new owner was a “legitimate” transaction, only souring when the car dealer did not transfer the proceeds after informing them in late June 2019 that he had sold it.

“In this instance, there is no loss or damage to the vehicle itself,” AFCA said. “Rather the loss is confined to the loss of the sale proceeds which falls outside the ambit of cover provided by the insurer’s policy.

“The complainants had ceased to own the vehicle when the relevant loss occurred.”

AFCA says the sale of the vehicle does not constitute accidental loss either since the complainants voluntarily provided the vehicle and the keys to the car dealer with the intention for it to be sold, in accordance with the commercial arrangement between them.

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