Motor Vehicle Dealers Institute Inc v Auckland Motor Vehicle Disputes Tribunal [2000] NZCA 147; (2000) 6 NZBLC 103,159 (31 July 2000)

Last Updated: 8 December 2011

IN THE COURT OF APPEAL OF NEW ZEALAND

CA 67/00

	BETWEEN	THE MOTOR VEHICLE DEALERS INSTITUTE INCORPORATED
		Appellant

	AND	AUCKLAND MOTOR VEHICLE DISPUTES TRIBUNAL
		First Respondent

	AND	MUSHTAQ ALI
		Second Respondent

	AND	WHOLESALE CAR BAZAAR LIMITED (IN LIQUIDATION)
		Third Respondent

Hearing:	20 July 2000
Coram:	Keith J Doogue J Fisher J
Appearances:	M P Reed QC and P A Morten for appellant JAL Oliver for first respondent No appearance for second and third respondents
Judgment:	31 July 2000

JUDGMENT OF THE COURT DELIVERED BY DOOGUE J

Introduction

[1] The Motor Vehicle Dealers Institute Incorporated (“MVDI”) brought review proceedings under the Judicature Amendment Act 1972 challenging a decision of the Auckland Motor Vehicle Disputes Tribunal (“the Tribunal”) under s 101 Motor Vehicle Dealers Act 1975 (“the Act”). The High Court found the Tribunal did not determine, as it was required to do:

(a) Whether the vehicle in the dispute before it was substantially different from the vehicle as represented by the licensee to the purchaser, or,

(b) Whether, having regard to all the circumstances of the case, an order for rescission might be unwarranted or unjust.

However, Anderson J withheld relief from the MVDI as a matter of discretion for three reasons:

(a) The parties directly affected cannot effectively be put in a position to re-litigate before the Tribunal;

(b) The MVDI was concerned in terms of principle at the reasoning processes of the Tribunal and by the terms of the judgment had received the benefit of direction to the Tribunal;

(c) The philosophy of the scheme relating to the Tribunal under the Act is inconsistent with the inherently expensive and technical process of judicial review in the High Court.

[2] Neither the MVDI nor the Tribunal, which is represented solely because the parties to the transaction have taken no steps in the proceedings, questions the substantive findings of the High Court. Rather the MVDI seeks to set aside the Court’s exercise of its discretion. The MVDI accepts that the Judge was entitled to consider the first factor relied upon by him, but submits he erred in respect of the second and the third.

Principle Applicable to the Appeal

[3] The appeal is against the exercise of a discretion. The appellants must show that the Judge acted on a wrong principle or that he failed to take into account some relevant matter or that he took into account some irrelevant matter, or that he was plainly wrong: May v May (1982) 1 NZFLR 165, 170.

Relevant Provisions of the Act and Background

[4] The relevant provisions of the Act all relate to the protection of purchasers of motor vehicles from licensed dealers.
[5] Section 30 of the Act establishes a fund to be known as the Motor Vehicle Dealers Fidelity Guarantee Fund which is stated to be the property of the MVDI and to be held in trust for the purposes specified in Part III of the Act.
[6] Expenditure from the Fund is authorised under s 31 of the Act and is primarily directed towards the meeting of all claims, including costs allowed or established against the Fund in accordance with the Act, and all expenses as identified in the Act relevant to that purpose. If the amount of the Fund exceeds $250,000, then the Council of the MVDI has certain powers to apply the income derived from the investment of the Fund towards meeting other costs which could be loosely described as for the public benefit.
[7] Section 39 of the Act provides for a range of circumstances in which persons who have suffered loss or are entitled to payment by reason of a breach of certain provisions of the Act are entitled to reimbursement from the Fund.
[8] Section 40 provides for claims by such persons against the Fund, with the Council of the MVDI having the right to receive and settle any claim against the Fund in respect of any claim under certain provisions of s 39. If there is a finding of loss by a Disputes Tribunal or the District Court other claims can be brought against the Fund: s 40(3). Under s 41 the MVDI has available to it in respect of any claim against the Fund any defence available to the dealer.
[9] In the present case the second respondent, who now lives in Australia, made a claim against the Fund pursuant to s 39(e) of the Act. He alleged that the motor vehicle sold to him by the third respondent dealer was substantially different from the vehicle as represented to him in the notice attached to the vehicle at the time of sale. As a result, the claim was referred to the Tribunal under s 96(4) of the Act.
[10] The case before the Tribunal turned on a window notice as to the odometer reading of the vehicle purchased by the second respondent from the third respondent. Section 90(1) requires a dealer offering or displaying for sale a second hand non-commercial vehicle to attach a notice to the vehicle in a prominent position in the prescribed form containing the required particulars. Among the particulars required in the form is that provided for in s 90(3)(ca), which reads:

(ca) In any case where there are reasonable grounds to believe that the odometer reading of the motor vehicle may not be correct, the words "Warning. Odometer reading may be incorrect"

[11] In this case the Tribunal held the notice, which stated “We make no representation as to the accuracy of the odometer reading”, did not comply with the statute. That finding was not disturbed by Anderson J and is not challenged in the appeal.
[12] We do note, however, that a mere failure to follow the precise statutory words may not of itself invalidate the notice. Section 26 Interpretation Act 1999 specifically states:

26. Use of prescribed forms -

A form is not invalid just because it contains minor differences from a prescribed form as long as the form still has the same effect and is not misleading.

[13] Here the form provided requires the particulars set out in s 90. Those particulars are nevertheless part of a form and it would seem s 26 Interpretation Act 1999 would apply. On the other hand we would not encourage departure from the strict statutory wording. As the present case illustrated, any variation carries the risk that the warning will be inadvertently weakened and the defence lost. However, the point did not form part of the appeal and the views just expressed do not form part of the reasons for judgment in this case.
[14] Disputes Tribunals are established under ss 97 and 98 of the Act. Their procedure is prescribed by s 99 of the Act. They are to conduct their enquiries into a dispute in private. In respect of any dispute the purchaser and the motor vehicle dealer licensee concerned shall be entitled to appear before the Disputes Tribunal and to be heard but are not entitled to be represented by a barrister or solicitor. There is no provision within the sections for the MVDI to be represented at any such hearing. Equally, however, there is no provision prohibiting the MVDI being heard with the leave of a Disputes Tribunal. Often there would be good grounds for permitting such a course, particularly when a dealer is unrepresented or, as here, is in liquidation. The MVDI is, after all, the owner and trustee of the Fund and has a duty to ensure it is properly applied.
[15] Section 101 provides for the method of determination of disputes that allege a motor vehicle is substantially different from that represented. It was the critical section in the High Court in this case. It reads in part:

101. Determination of disputes alleging motor vehicle substantially different from that represented -

(1) Where any dispute referred to a Disputes Tribunal under section 96 of this Act involves an allegation that a secondhand motor vehicle (not being a commercial vehicle) as sold by the licensee to the purchaser -

(a) Is substantially different from the vehicle as represented in the notice attached to it in purported compliance with section 90 of this Act; or

(b) Did not have a notice attached to it as required by section 90 of this Act and is substantially different from the vehicle as represented to the purchaser by the licensee, -

the Tribunal may, if it is satisfied that the vehicle is substantially different as aforesaid, -

(c) Order that the contract of sale be rescinded in accordance with this section; or

(d) Where, having regard to all the circumstances of the case, it considers that such an order for rescission would be unwarranted or unjust, order the licensee to pay to the purchaser, or to any other person claiming through the purchaser, such sum (not exceeding $12,000) as the Tribunal thinks just by way of compensation in respect of the difference in value between the vehicle as represented and the vehicle as sold by the licensee, -

and, in either such case, the Tribunal may make such further or consequential order as it thinks fit.

(1A) Notwithstanding anything in section 98 of this Act, a Disputes Tribunal may make an order under subsection (1) (c) of this section in any case where it is satisfied that the value of the motor vehicle in dispute does not exceed $30,000.

(2) An order may be made under subsection (1) (c) of this section notwithstanding that the parties cannot be restored to the position that they were in immediately before the contract was made, and in any such case the rights and obligations of each party shall be as specified in the order.

....

(4A) For the avoidance of doubt, it is hereby declared that the Tribunal may make an order under subsection (1) of this section in any case where it is proved that the distance travelled by a secondhand motor vehicle substantially exceeded the odometer reading as represented to the purchaser by the licensee, notwithstanding that a notice was attached to the vehicle pursuant to section 90 (1) of this Act that stated the reading on the odometer at the time the vehicle was displayed for sale, unless the notice or a separate notice contained the statement referred to in section 90 (3) (ca) of this Act.

[16] The Tribunal took the view that the window notice did not comply with the requirements of s 90(3)(ca) in providing a disclaimer as to the possible faulty odometer reading. It found a faulty odometer reading only consistent with the odometer having been wound back. It concluded:

In these circumstances the Tribunal considers it has no option but to make an order for rescission of the contract which it does. [p 6]

[17] In so concluding the Tribunal was plainly wrong as the High Court found. First it had not put its mind to the issue under s 101(1)(a) of whether the vehicle sold was “substantially different from the vehicle as represented in the notice attached to it in purported compliance with section 90 of the Act”. Secondly, it had not put its mind to the issue under s 101(1)(d) of whether in “all the circumstances of the case ... an order for rescission would be unwarranted or unjust”. Thus the substantive decision of Anderson J is not under challenge.
[18] In the present case the Tribunal had ordered:

(a) That the contract of sale be rescinded;

(b) The second respondent deliver up the vehicle to the MVDI; and,

(c) The second respondent receive back the cash he had paid and the value of the trade-in he had supplied, as well as capital payments made by him under a hire purchase agreement, subject to the right of the third respondent to set off a modest sum against the monies to be refunded.

It was further ordered that the second respondent’s rights and obligations under the collateral credit agreement with the finance company should vest in the third respondent.

[19] These orders were capable of enforcement under s 104 of the Act as final judgments of the District Court in its civil jurisdiction on a filing of a duplicate of the decision of the Tribunal in the office of that Court.
[20] Under s 133 of the Act the parties have a right of appeal from a decision of Disputes Tribunals under Part VII of the Act to the District Court. The decision of the District Court is final. The MVDI has no right of appeal under that section. There was no appeal by either the purchaser second respondent or the dealer third respondent.
[21] It should be noted that nowhere in Part VII of the Act dealing with the position of the Disputes Tribunals is there any provision for the MVDI to have any involvement.
[22] The second respondent no longer owns the vehicle, and its whereabouts are unknown. Following the decision of the Tribunal the contract was treated as rescinded. Aside from any issues relating to the vehicle itself, the amount in issue is some $8,500, being the combined value of the second respondent’s trade-in vehicle, which he now no longer has, and his cash deposit. As already noted, he is not in New Zealand, while the dealer is in liquidation and indifferent to the dispute.

First Ground For Exercising Discretion: The parties directly affected cannot effectively be put in a position to re-litigate before the tribunal

[23] The MVDI acknowledges that the Judge was entitled to consider this factor when deciding whether or not to exercise his discretion to grant relief. That reason is not challenged and, in the circumstances that now exist, cannot be challenged. In our view that consideration alone justified the way in which the Judge exercised his discretion.
[24] In any event, we would not be prepared to follow the course urged upon us by the MVDI to grant relief. It could have no utility in the present circumstances..
[25] The MVDI’s argument under this head was one of expedience. It suggested the second respondent could be better off with a rehearing. It submits the second respondent may have difficulty enforcing the order of the Tribunal, as he cannot return the vehicle to the MVDI. However, the second respondent has chosen to take no steps in these proceedings, and we are not prepared to make such a judgment on his behalf when he has the benefit of the order of the Tribunal.
[26] It is only out of deference to the position of the MVDI in respect of the Act that we go on to consider the other matters urged upon us on its behalf.

Second Ground For Exercising Discretion: The MVDI was concerned in terms of principle at the reasoning processes of the Tribunal and by the terms of the judgment had received the benefit of direction to the Tribunal

[27] It is submitted for the MVDI that the Judge erred in taking into account this factor or that he gave undue weight to it.
[28] The MVDI’s primary submission is that the Judge erred in not granting the relief sought by it as the result is the Fund is required to pay compensation to a claimant who has not established any entitlement under the Act.
[29] The Judge, as was open to him, took the view that the MVDI was more interested in the issues of principle involved in the dispute than the relatively small sum of money involved. (That sum of money has very likely been exceeded by the costs of this litigation, which are themselves no doubt a charge upon the Fund.)
[30] We consider that the Judge was fully entitled to take the view that the Court’s determination of the substantive issues would result in Disputes Tribunals correctly applying the law in subsequent cases. Any slight loss to the Fund in the present case could be well outweighed by the long-term effects of the Court’s decision.

Third Ground of Exercise of Discretion: The philosophy of the scheme relating to the Tribunal under the Act is inconsistent with the inherently expensive and technical process of judicial review in the High Court

[31] On this issue the Judge said this:

Next, the philosophy of the Motor Vehicle Disputes Tribunal scheme is inconsistent with the inherently expensive and technical process of judicial review in the High Court. A party appearing before a Tribunal cannot be represented by a barrister or solicitor - s 99(3). A party dissatisfied with a decision of a Tribunal has a right of appeal under s 133 but there are limitations both of time and grounds stipulated in that section and a decision on appeal is final. In this case the applicant [MVDI] has side-stepped the limitations of the appeal procedure and come straight to the High Court by way of review. As this Court has noted in such cases as Director-General of Social Welfare v Disputes Tribunal (1999) 6 NZBLC 102,747, in connection with Disputes Tribunals proceedings for judicial review in the High Court are not to be encouraged, and the same principles apply here. [para 18, pages 7-8]

[32] It is submitted that the Judge was plainly wrong. It is submitted that judicial review was the only way in which the MVDI could obtain resolution of the matter. The MVDI’s status is that of the owner and trustee of the Fund to which every motor vehicle dealer is obliged to contribute pursuant to s 35 of the Act. As such, it is said, it has an obligation to ensure that the Fund is only applied to reimburse a claimant who has satisfied the statutory criteria, which, it is said, the Tribunal has not done.
[33] The submission for the MVDI is that, whether it has been granted a hearing before a Disputes Tribunal or not, it is not a party to a dispute before a Disputes Tribunal and it has no right to appeal under the provisions of s 133 of the Act. Only the parties are entitled to appeal under that section. Nor can it have any right to appeal from a District Court Judge’s decision under that section.
[34] Thus it is submitted that the MVDI has no appeal rights and the only way in which it can challenge a decision of a Disputes Tribunal which it considers to be wrong is by way of judicial review.
[35] There is no argument the MVDI has standing to bring a proceeding such as the present having regard to its interest in the Fund.
[36] If the Judge took the view the MVDI was a party to the dispute before the Tribunal and had appeal rights, then we think he erred. However, if he intended to suggest he would not grant relief having regard to the scheme of the Act, we can see justification for his view. The scheme of the Act gives the MVDI no place in the Disputes Tribunal processes, and one would expect determinations of the Disputes Tribunals to be honoured by the MVDI without challenge as, subject to appeal to the District Court, they are the bodies responsible for such determinations. There is no provision in the Act which enables the MVDI to step into the shoes of a dealer who is taking no steps in respect of a dispute before a Disputes Tribunal: compare s 41 in respect of other claims against the Fund. Of course it is always open to the Tribunal to allow the MVDI to be heard especially where the dealer is unrepresented. However, if the Legislature had intended anyone other than the purchaser and the dealer to be involved in the processes of the Disputes Tribunal as of right, the Act could have so provided. It could have provided for the MVDI to have standing before a Disputes Tribunal in any case where a dealer is not directly represented. That would have enabled the MVDI to appeal in circumstances such as the present.
[37] We agree with Anderson J that the process of judicial review will usually be inapt in circumstances such as the present. It is clear that the intention of the Legislature through the Act is to provide for a simple and direct method of dispute resolution in respect of small disputes. To enable the MVDI of all bodies to build on to that a right to require the process to start again on an application for review, in circumstances where it is not satisfied as to the outcome of a dispute through the Disputes Tribunal processes, would appear to be contrary to the purposes of the Act. It may be that from time to time the MVDI will feel obliged to bring proceedings such as the present to correct errors by Disputes Tribunals. It does not follow that other relief should also be granted.
[38] We do note that the Act is one that has regularly been the subject-matter of amendment. It would clearly be advantageous if the MVDI could have standing before a Disputes Tribunal where a dealer was not represented, with the same rights of appeal as the dealer would otherwise have had. In that way the scheme of the Act and its benefits to the public, and in particular the purchasers of vehicles, would be preserved, without recourse to proceedings such as the present. For this reason we direct a copy of this judgment be sent to the Ministry of Justice as the department responsible for the Act.

Result

[39] The appeal is dismissed. There is no order as to costs.

Solicitors
Izard Weston for appellant
Crown Law Office, Wellington, for first respondent