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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 5 March 2008
Decision No. AK 131/2006
Reference No. MVD 220 /06
IN THE MATTER of the Motor Vehicle Sales Act 2003
AND
IN THE MATTER of a dispute
BETWEEN XXXX
Purchaser
AND XXXX t/a XXXX
Trader
BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
C H Cornwell, Adjudicator.
R G Lewis, Assessor.
HEARING at AUCKLAND on 4th December 2006
APPEARANCES
Mr I. XXXX for the Purchaser
Mr N. XXXX - witness for the Purchaser
Mr
J. A. XXXX appeared on behalf of the Trader
Mr C. XXXX appeared in support
for the Trader
DECISION
[1] Pursuant to Section 82(3) of the Motor Vehicle Sales Act 2003 (“the Act”) the Tribunal appointed Mr R. G. Lewis, as its expert assessor to assist in its determination of this complaint, and Mr Lewis took the oath referred to in Clause 10(2) of Schedule 1 to the Act.
[2] This application concerns the purchase on 22 August 2006 by XXXX (“the Purchaser”) of a 2000 Mercedes CLK 230 vehicle, registration number XXXX (“the vehicle”) for $30,000 from XXXX t/a XXXX (“the Trader”). The odometer reading at the date of purchase was 62,298 kilometres. The vehicle’s odometer reading at 29 November 2006 was 63,330 kilometres.
[3] The issue raised by the application to be determined by the Tribunal was whether the vehicle had sustained a “structural accident” and if so what remedies were appropriate.
THE FACTS
[4] The Purchaser agreed to Purchase, and the Trader to sell the vehicle in terms of a written Vehicle Offer and Sale Agreement, a special term of which was “this car has had no structural accident.”
[5] On 11 October 2006 the Purchaser took the vehicle to XXXX for repairs to damage to the vehicle caused by the Purchaser’s Director, Mr XXXX .
[6] The Managing Director of XXXX Mr N. XXXX , informed Mr XXXX that the vehicle had, in his opinion, sustained serious damage to the right rear corner, less serious damage to the left rear, and that the vehicle had been very poorly repaired following such impact(s).
[7] The Purchaser discovered when it sought valuations for the vehicle in anticipation of the hearing before the Tribunal, that the vehicle had been entirely repainted in an unprofessional manner and that rust was evident in a seam in the roof of the vehicle.
[8] The Purchaser initially sought the Trader’s agreement to pay the cost of repairing the vehicle amounting to $1867.50. However, following the Trader’s rejection of this, the Purchaser sought to recover a sum equivalent to the difference between the price paid for the vehicle of $30,000 and the current retail value of it of $23,450 ($6,550), calculated by averaging retail valuations given by two Mercedes franchisees in Auckland, together with the further sum of $1044 for the Purchaser’s time spent in pursuing its complaint. At the hearing the Purchaser, through its Director, Mr XXXX , said that it now wished to reject the vehicle.
THE PURCHASER’S EVIDENCE
[9] The Purchaser produced a printed written Vehicle Offer and Sale Agreement dated 22nd August 2006 showing the special term referred to in paragraph 4 (above) and copies of a quotation for the repairs and paintwork originally claimed dated 11 October 2006 for $1,867.50, as well as three damage reports on the vehicle each dated 30 November 2006 by XXXX . The damage reports showed the areas claimed to have been damaged and previously poorly repaired and one showed the position of rust in the roof seam.
[10] The Purchaser also arranged for Mr N XXXX of XXXX to give evidence to the Tribunal by telephone conference call. Mr XXXX , the Managing Director of that company, stated that he was, and had been for 25 years, a Member of the Collision Repair Association, and he had been a panel beater in the industry for 35 years.
[11] Mr XXXX described the damage to the Purchaser’s vehicle as probably structural in the right rear and as probably caused by a “reasonable bang” rather than a “horrendous accident”. He described the panels as fitting poorly with some wrinkles underneath the vehicle. He said that he had first inspected the vehicle on 11 October 2006 and inspected it a second time on 30 November after the Purchaser had been advised that it had been repainted. He said that he agreed that it had been very poorly repainted and showed evidence that the paint was not “keying” or adhering to the original paintwork. The Tribunal’s Assessor asked Mr XXXX if the vehicle as inspected by him would pass a compliance inspection. He stated that due to the presence of rust in the roof seam, the inspector, if he had observed that, should have failed the compliance inspection.
[12] Mr XXXX said that at the request of the Trader he had taken the vehicle on 10 August 2006 to the firm XXXX who had agreed with Mr XXXX ’s assessment of the vehicle’s damaged condition.
THE TRADER’S RESPONSE
[13] Mr XXXX the Manager of the Trader said that the vehicle had been imported from Singapore and had undergone a pre-purchase inspection in Singapore. The Purchaser’s Director, Mr XXXX , and members of his family had come to the Trader’s yard and inspected the vehicle over three weeks before agreeing to purchase it. Mr XXXX , said that he had been selling European imported vehicles for 15 years and that he could not see any evidence of structural damage to the vehicle. Mr XXXX considered that if there had been chassis damage or structural damage the vehicle would not have passed its compliance inspection on entering New Zealand. He noted that the XXXX report of 11 October did not comment as to whether the damage was “structural” or not.
[14] Mr XXXX said that in his view the vehicle was still worth its purchase price of $30,000 and that the Mercedes franchisee, XXXX , “bagged” imports.
[15] Mr XXXX , a director of the Trader said that he had been selling imported European vehicles for 15 years and had been in the trade for 20 years. The Trader’s knowledge of second hand cars was vast. He said that he had been present when the vehicle was sold to the Purchaser and there was no structural damage to the vehicle. The only requirement of XXXX , the company that carried out the vehicle compliance inspection on 18 July 2006, was for repairs to be done to the brakes and a wheel balance. The invoice of that company for this work was produced to the Tribunal.
[16] Mr XXXX said that the Trader would have been happy to have an independent panelbeater look at the vehicle and assess whether there had been any major damage to the vehicle. Mr XXXX said that the Trader did not pick up the fact that the vehicle had been repainted. Mr XXXX also said that the Trader was not aware that the vehicle had rust in the roof seam, but would be happy to repair the rust. In reply to a question from the Assessor, Mr XXXX said that it would be hard to know if a purchaser would be affected if he knew that the vehicle had been repainted; he said that in his opinion the vehicle was now still “worth a solid $30,000”.
FAIR TRADING ACT 1986
[17] In terms of Section 89 of the Motor
Vehicle Sales Act 2003 the Tribunal has jurisdiction to inquire into and
determine applications
or claims between a Motor Vehicle Trader and the
purchaser of a motor vehicle. In doing so, it may apply the provisions of the
Sale
of Goods Act 1908, the Fair Trading Act 1986 or the Consumer Guarantees Act
1993, as applicable to the circumstances of the case.
In this case the enactment
of particular relevance is the Fair Trading Act 1986.
[18] Section 13(a) of the Fair Trading Act 1986 reads:
“13 False or misleading representations
No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services,--
(a) make a false or misleading representation that goods are of a particular kind, standard, quality, grade, quantity, composition, style, or model, or have had a particular history or particular previous use; or...”
[19] The authorities note that an intention to mislead need not be proved, a useful test for determining whether conduct falls within the section being that adopted by Tipping J in the Court of Appeal in AMP Finance Ltd v Heaven (1997) 8 TCLR 144; (1988) 6 NZBLC 102, 414 (Court of Appeal) when he said that it was necessary to ask:
[a] Whether the conduct was capable of being misleading;
[b] whether the people concerned were in fact misled by the relevant conduct; and
[c] whether it was in all the circumstances, reasonable for them to have been misled.
[20] The Tribunal considers that representing that a vehicle has had “no structural accident” by including in the contract of sale the term “has had no structural accident” is capable of being misleading when Mr XXXX , as an experienced panel beater stated, the vehicle had undoubtedly been involved in a “reasonable bang” which he considered had caused structural damage to the right rear of the vehicle. Secondly, that the Purchaser was in fact misled by being promised by the Trader as a term of purchase, that the vehicle had not had a structural accident and thus the Purchaser reasonably believed that it had bought a vehicle which had not been involved in such an accident. Thirdly, that it was entirely reasonable in the circumstances under which it purchased the vehicle for the Purchaser to be misled into believing that the Trader - an experienced importer of European vehicles- knew that the vehicle had not been involved in a structural accident.
REMEDY
[21] The Tribunal, rather than attempt to assess the
current value of the vehicle by averaging subjective valuations from Mercedes
franchisees, proposes to make an order under section 43(2) of the Fair Trading
Act 1986 directing the Purchaser to immediately return
the vehicle to the Trader
and, upon doing so, the Purchaser is to receive from the Trader a refund of the
full purchase price paid
for the vehicle of $30,000, less a sum for the
estimated cost to the Trader of repairing damage to the right rear door of the
vehicle
caused by the Purchaser, which the Tribunal’s Assessor estimates
to be $600.
THE ORDERS
[22] The Tribunal orders as follows:
(a) That the Purchaser shall within 7 days of the date of this decision return the Mercedes vehicle, registration number XXXX to the Trader at 17 Stanley Street, Parnell, Auckland.
(b) On receipt of the vehicle the Trader is to pay the Purchaser the sum of $29,450.00 calculated as follows:
(i) Refund of purchase price $30,000.00
(ii) Less allowance to Trader for cost
of repairs
($600) $29,400.00
(iii) Refund of filing fee on application to
the
Tribunal $50.00
Total amount payable to Purchaser
$29,450.00
DATED at AUCKLAND this day of December 2006
C H Cornwell
Adjudicator
DIRECTION TO THE CHIEF EXECUTIVE, MINISTRY OF JUSTICE.
Section 94 of the Motor Vehicle Sales Act 2003 provides that if an application is made to this Tribunal which falls within its jurisdiction and that in determining the application the Tribunal decides against a motor vehicle trader, the Tribunal must direct the Chief Executive of the Department for Courts (now Ministry of Justice) to publish a notice in the Gazette containing the particulars set out in subsection (2). The notice is only to be published once the circumstances described in subsection (3) have occurred. The Chief Executive is directed accordingly.
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URL: http://www.nzlii.org/nz/cases/NZMVDT/2006/200.html