AUSTRALIA’S peak dealer body has called on the NSW transport minister to fix the toll charge system in the state to ensure dealers are not financially liable for vehicles they no longer own.

The Australian Automotive Dealer Association (AADA) said that under NSW’s current arrangements, dealers remain liable for tolls incurred by third parties despite having legally sold the vehicle and complied with all regulatory obligations. 

This liability stems from the NSW government in July ceasing driver nominations via statutory declarations for a toll payment. It places the onus on the previous owner of the vehicle to track down the new owner and pass on the bill for the toll payment.

The matter has been raised in the NSW parliament this week by deputy liberal leader Natalie Ward. 

At question time in parliament this week, she said to NSW transport minister John Graham: “Attempting recovery through private administrative and legal action is costly. What steps is the minister taking to save the 1216 motor dealers across NSW from having to pay tolls on vehicles they no longer own?”

Ms Ward said: “This has left dealers liable for tolls incurred on a vehicle which they no longer own but for which registration transfer has not yet been processed”.

“This is commercially absurd,” she said in question time. “It forces a business to pay a stranger’s toll and then chase that person privately for reimbursement of the toll. That is a regulatory failure. 

“The processing lag penalises dealers because notices of disposal take days to clear, but the toll charges are instant. 

“Escalation is a broken solution. Telling dealers to wait is not good enough. This is a glaring blind spot. 

“The opposition is very concerned about the dealerships. I wonder whether we need to get Professor Allan Fels back to sort this out.”

Mr Graham said the changes to the previous need for a statutory declaration for toll payments was triggered by toll avoidance “so we made changes to the nomination system”. 

“We are working closely with industries to examine the impacts of the change,” Mr Graham said in parliament.

“The government is very open to the concerns raised by industry and by the member (Ms Ward) today. There is ongoing consultation to make sure that administrative systems are in place, but the bottom line is that, if someone incurs a toll, we need them to pay the toll.”

Mr Graham also pointed at Victorian motorists and the French as reasons for the change in the toll practice.“French delivery drivers were systematically avoiding getting points on their licence and then fleeing the country,” he said.

“They were passing the points or nominating in a nomination circle and avoiding any penalty. That is very dangerous on our streets.” 

And the Victorians: “There was some avoidance of paying the tolls post-COVID. I suspect it was the Victorians, but I will not advance down that path. As a former resident of Albury, that is always my suspicion.”

The AADA said: “Until this inconsistency is resolved, our members will continue to face ongoing financial exposure and administrative burden for vehicles they no longer own”.

It said that the reforms have created “significant administrative burdens”.

“One dealer group recently reported receiving approximately 180 toll notices in a single batch after experiencing a delay of several weeks without receiving any notices,” the AADA said.

“Members have also reported challenges administering toll notices under the new framework and a lack of practical mechanisms to redirect liability to the individual who actually incurred the tolls.  

“Our members are particularly concerned that these changes were implemented without consultation with the franchised dealer network regarding their operational impact. 

“Had industry consultation occurred, we believe the interaction between the tolling reforms and the existing vehicle registration transfer process would have been identified as a significant concern prior to implementation.  

“Most importantly, every day that passes following the lawful sale of a vehicle creates further exposure for dealers. 

“Once a vehicle has been sold and the appropriate disposal notification has been lodged, any subsequent toll usage is entirely outside the dealer’s control. 

“Yet liability continues to be attached to the dealership until registration records are updated. Until this inconsistency is addressed, NSW dealers will continue to face financial exposure for vehicles they no longer own.”  

In a letter to Mr Graham, the AADA said it now urges the NSW government to review the operation of these reforms as a matter of priority and that it stands ready to work constructively with Transport for NSW and NSW Motorways to develop a practical solution.

James Voortman

AADA CEO James Voortman said: “While we support efforts to improve the efficiency of the tolling system and reduce disputes relating to unpaid tolls, it has become increasingly apparent that the reforms have created significant unintended consequences for licensed motor vehicle dealers”.

“Motor vehicle traders occupy a unique position within the economy. Unlike fleet operators, rental car companies, rideshare operators and other businesses that retain vehicles for ongoing commercial use, the principal purpose of a licensed motor dealer is to sell vehicles and transfer ownership to consumers. 

“Once a vehicle has been sold and delivered, the dealer no longer owns, possesses or controls the vehicle.

“Despite this, the current framework continues to impose toll liabilities on dealers until registration records are updated.”  

Mr Voortman said that this placed dealers in the extraordinary position of being liable for tolls incurred on vehicles they do not legally own. 

“Dealers no longer have access to the previous statutory declaration process that enabled responsibility to be assigned to the driver who incurred the toll,” he said.

“Instead, dealers are required to pay notices issued in relation to vehicles that have already been sold and may only seek recovery directly from the purchaser through private administrative or legal channels.

“In practice, pursuing recovery through civil proceedings is often neither proportionate nor commercially viable given the relatively low value of individual toll notices.”

He said that this issue arose despite dealers complying with all regulatory obligations imposed  upon them under NSW law. 

“Under section 38 of the Road Transport (Vehicle Registration) Regulation 2017 (NSW), licensed motor dealers are required to notify Transport for NSW immediately upon disposal of a vehicle and provide details of the purchaser and transaction,” Mr Voortman said.

“However, section 39 of the same regulation provides purchasers with 14 days to transfer the registration into their own name.  

“As a result, ownership and registration records can become disconnected. A dealer may have legally sold a vehicle, transferred possession to the purchaser, and fulfilled all statutory obligations, yet still remain recorded as the registered operator.

“Under the new toll liability regime, tolls incurred during that period can continue to be directed to the dealer despite the dealer having no ability to control  the use of the vehicle or ensure tolls are paid.”  

Mr Voortman said that AADA members have highlighted that this issue is not theoretical. 

“For many years, purchasers have occasionally delayed transferring registration beyond the prescribed period,” he said.

“Under the previous tolling framework, this issue could be managed through the statutory declaration process. The removal of that mechanism means liability now remains with the former owner despite ownership having already transferred.”  

AADA Recommendations  

The AADA respectfully recommends that the NSW government:  

• Recognise a lodged Notice of Disposal as the point at which toll liability transfers from a licensed motor dealer.  
• Establish a practical exemption process where dealers can demonstrate that a vehicle had been sold prior to the toll being incurred.  
• Review the interaction between the current toll liability framework and the 14-day registration transfer period under the Road Transport (Vehicle  Registration) Regulation 2017 (NSW).  
• Consult with the motor retail industry on administrative arrangements to ensure future reforms do not create unintended consequences for NSW businesses.