Anomaly in car ownership law causes innocent man to be wrongfully arrested, lose $50,000 worth of possessions

Imagine you're sitting in your car and the police turn up, tell you it belongs to someone else, take you away in cuffs to a police cell, charge you and bail you.

It happened - alongside other similar stories - thanks to an anomaly in the car ownership law.

Living in his car after his divorce, Dave Belmont thought things couldn't get any worse.

But what happened next was like a bizarre nightmare.

"A guy transferred my ute into his partner's name, reported it stolen and gave the police my address. The police came round, arrested me, took my ute, gave my ute and my belongings to this guy," Belmont said.

He later saw the car on sale on Trade Me with modifications, a new number plate and a rewound clock. 

But how could anyone claim someone else's car?

"All you need to do is you pay $9 online, transfer a vehicle into your name and at that point, as far as the police were concerned, you have the right to report it stolen and they just take the vehicle and give it to you," Belmont said.

The police wrongly assumed the registered user of a car is also its legal owner.

But that's not the case. In New Zealand to be considered the legal owner, you need more evidence, such as a receipt.

Belmont had proof of purchase, a copy of the bank transfer, the registration history and a statement from the mechanic - but police still arrested him for receiving stolen property.

"They weren't even willing to look, I asked them again and again to check the registration history and they just wouldn't even look at the registration history. They basically just handcuffed me, took me away, took my vehicle and all my belongings," he said.

Belmont's truck.
Belmont's truck. Photo credit: Newshub.

Belmont reckons his ute and possessions totalled $50,000 and while the charges against him were later dropped, a year on he still had no idea what had happened to his belongings.

And here's where it gets even more bizarre.

The Independent Police Complaints Authority found no misconduct or neglect of duty by police because it said they were "unaware of the car ownership being in dispute" when they released it to the other party.

But Belmont points out he'd already told them and the arresting officer's own statement noted that when they first approached him about the car, "a male (Belmont) presented himself and said that the vehicle belonged to him".

"The police are, as I understand it, trapped with a ridiculous law," Belmont said. "They are forced to commit theft on behalf of criminals because that is what the law tells them to do." 

"The NZTA have just streamlined fraud and allowed this to take place."

Newshub asked the police if they had any financial or moral responsibility to Belmont. 

They didn't answer that question but referred us to an earlier statement in which they said they'd made detailed inquiries but were unable to find evidence of criminal offending by either Belmont or the other party.

Newshub highlighted this issue five months ago.

"It can happen to anyone," Belmont said.

Back in April the owner of a TNT Roma Aspen Fernandez told Newshub police hadn't acted despite her supplying the name of the new user on the Motor Vehicle Register. 

Five months later there is a development but not a good one.

"They did tell me that they had a good idea of where they thought it was and then they went to that person's location and that person told us it was stolen from them," Fernandez said.

Back then Waka Kotahi told Newshub being the registered user only exists for enforcement of tickets and fines.

So Newshub put in an Official Information Request asking the agency what percentage of registered users are actually the legal owners.

Waka Kotahi refused our request on the grounds there is no such database.

An oversight Dog and Lemon guide writer Clive Matthew-Wilson said it is a joke.

"Of course, it's inviting thieves to steal cars and transfer them into their name, sell them on again and walk away free," Matthew-Wilson said.

Police never recover a quarter of missing vehicles, which is 7000 disappearing for a variety of reasons. But there is one reason, Matthew-Wilson said, that is avoidable.

"This is affecting thousands of people as we speak. I've got an inbox full of cases that I'm investigating where totally innocent people bought vehicles where in some cases a few days later the police repossessed them," he said.

Matthew-Wilson said a simple ID check at a post office on the transfer of ownership would curb this particular scam.

"It's an absolute no-brainer," he said. "If you can't prove you own a vehicle you shouldn't be able to change it into anybody else's name.

"Why is the government so thick about this?"

And yet, the message has yet to get through to the Minister of Transport. 

Transport Minister Michael Wood released a statement "closing the loop on this one". 

"This is not a matter that has been raised by officials or members of the public to the Minister. We're confident that any isolated cases of misuse of the register can be handled by Waka Kotahi and the police," Wood said.

Try telling that to Belmont who the police now accept did not perpetrate a $50,000 crime - but unfortunately for him, the police say no one else did either.