Lenaghan v The Wholesale Car Centre Limited - Reference No. MVD 203/2010 (Auckland) [2010] NZMVDT 160 (12 November 2010)

Last Updated: 27 February 2011

Decision No. AK 133 /2010

Reference No. MVD 203/2010

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN KEVIN ANTHONY LENAGHAN

Purchaser

AND THE WHOLESALE CAR CENTRE LIMITED

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

Mr C H Cornwell, Barrister & Solicitor, Adjudicator
Mr G Middleton, Assessor

HEARINGS at AUCKLAND on 9 November 2010

APPEARANCES
Mr K A Lenaghan, the purchaser
Mr G D Aspinall, Manager, for the trader

DECISION

Background

[1] On or about 24 May 2010 Mr Lenaghan (“the purchaser”) agreed to purchase a 2000 BMW 330i registration number DYL332 (“the vehicle”) from The Wholesale Car Centre Ltd (“the trader”) for $14,800. The purchaser says that the trader represented to him that he would be the first NZ owner of the vehicle. Since purchasing the vehicle the purchaser says he has discovered that he is not the first NZ owner, that there have been three previous owners one of whom was a private owner. The purchaser seeks the remedy of rejection under the Fair Trading Act 1986.

[2] The trader’s manager, Mr Aspinall, says that there is no truth in the purchaser’s claim because he personally informed the purchaser that the vehicle had been previously owned by one private owner.

[3] Prior to the commencement of the Tribunal’s inquiry, the Tribunal appointed Mr Middleton who took the oath required of an assessor by Schedule 1 cl. 10(2) of the Motor Vehicle Sales Act 2003. As an assessor Mr Middleton assisted the adjudicator but the application was determined by the adjudicator alone.

Facts

[4] The purchaser says that in late May or June 2010 he read an advertisement for the vehicle on TradeMe which he is unable to produce. He says he arranged for the trader to bring the vehicle to his home for a demonstration test drive. He says he test drove it and subsequently applied for finance from Motor Trade Finance (“MTF”) to buy the vehicle. The agreed purchase price was $12,800 but the parties agreed that this was to be documented as $14,800 to enable the purchaser to appear to have paid a deposit of $2,500 so as to obtain a collateral loan of $12,300 from MTF. The purchaser agreed to pay $500 to the trader but has not done so. He says that when finance was approved he arranged for a tow truck to collect the vehicle and tow it to his home. He says he has used the vehicle to travel some 4,000kms and it has only recently been transferred into his name by the trader. He says that he has never signed a vehicle offer and sale agreement or a consumer information notice in respect of the vehicle.

[5] The purchaser also says that Mr Aspinall told him when he brought the vehicle to him to test drive it that he would be the first NZ owner, but he has since discovered he is the fourth NZ owner and the second private owner of the vehicle. He says he is unable to provide any evidence to show the difference in value between a vehicle of this type with one NZ private owner and one which has been freshly imported without a previous NZ owner.

[6] The trader says that the purchaser agreed to buy the vehicle on 26 May 2010 from the trader for $14,800 (a price which he says was inflated by $2,000 so as to obtain a collateral loan of $12,300 from MTF). The purchaser went to sign the finance agreement but did not sign either the VOSA or the CIN which Mr Aspinall said he had prepared for the purchaser to sign. The purchaser arranged to have the vehicle towed from the trader’s premises without returning to sign the VOSA and CIN or pay the trader a balance of $500 owing under the oral contract of purchase. He says the purchaser has neglected to return to the trader to sign these two documents because he still owes the trader $500.

[7] Mr Aspinall says that he told the purchaser when he took the vehicle to him to enable him to test drive it that he would be the second NZ private owner of the vehicle and says he did not say that he would be the first. He says this is supported by the fact that the vehicle had been previously registered, it had a service sticker on the windscreen, its registration number began with the letter “D”, and the vehicle licence sticker showed the year of registration of the vehicle. He says the trader purchased the vehicle from Farmer Motor Group Ltd of Tauranga who purchased the vehicle from the first NZ private owner, a Mr A G Ball. Mr Aspinall says he believes the purchaser is simply seeking to avoid the transaction.

Issues

[8] The issues raised by the facts of this application are as follows:
[a] Whether the trader mislead or deceived the purchaser regarding the number of previous owners before the purchaser?
[b] If so what remedy is appropriate?

The Fair Trading Act 1986 (“the Act”)

[9] Section 9 of the Act provides as follows:

“9 Misleading and deceptive conduct generally
No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

[10] The essence of the purchaser’s claim is that the trader’s conduct breaches s.9 of the Act by misleading him as to the number of previous private owners of the vehicle. The purchaser says that he was told by Mr Aspinall that he would be the first NZ private owner of the vehicle. That he subsequently discovered when he received the Certificate of Registration in September that the vehicle was registered in Tauranga on 21 May 2007 and was from that date owned and driven by a private owner until April 2010.

[11] The authorities note that an intention to mislead need not be proved, Taylor Bros Limited v Taylors Textile Services Auckland Limited (1987) 2 TCLR 415, at 447.

[12] A useful test for determining whether conduct falls within the section is 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.

[13] The Tribunal after listening to the purchaser’s evidence is not satisfied that the purchaser proved that the trader’s conduct was capable of being misleading or indeed that he was misled as to the number of previous owners of the vehicle. Furthermore, the Tribunal, even if it had been satisfied that the purchaser had been misled over the number of previous owners would not have been able to give the purchaser a remedy because the purchaser offered no evidence of any loss he had or would suffer from buying a vehicle of which he was not the first NZ private owner. Accordingly the purchaser’s application will be dismissed.

Costs

[14] The Tribunal has limited power to make an award of costs to or against a party to any proceedings under clause 14(1) of Schedule 1 to the Motor Vehicle Sales Act 2003 and very rarely exercises its discretion to order costs against an applicant. The relevant provision is as follows:

“14 Disputes Tribunal may award costs in certain circumstances

(1) The Disputes Tribunal may award costs to or against a party to any proceedings before it only if,-

• (a) in the opinion of the Disputes Tribunal,-
  

(i) the proceedings are frivolous or vexatious or ought not to have been brought:

(ii) the matter ought reasonably to have been settled before proceeding to a hearing but that the party against whom an award of costs is to be made refused, without reasonable excuse, to take part in the discussions referred to in clause 5(1)(b) or acted in a contemptuous or improper manner during those discussions; or

(b) any party, after receiving notice of the hearing, fails to attend the hearing without good cause.
(2) In any case to which subclause (1) applies, the Disputes Tribunal may order a party to pay---

• (a) to the Crown all, or any part of either or both of the following:
  • (i) the reasonable costs of the Disputes Tribunal hearing:
  • (ii) the fees and expenses of any witness that have been paid or are payable by the Crown; or

(b) to another party all, or any part of the reasonable costs of that other party in connection with the proceedings.”

[15] The Tribunal considers that in this case the purchaser’s application was frivolous and that it ought not to have been brought. The purchaser was unable to offer any reliable evidence to show that the trader had misled him about the vehicle’s previous ownership and the purchaser also failed to obtain and bring to the Tribunal any evidence of the loss which he claimed he had suffered by not being the first NZ private owner of the vehicle. The Tribunal considers the purchaser wasted the Tribunal’s time in lodging his application and that the application should not have been brought. The purchaser will be ordered to pay $500 towards the Tribunal’s hearing costs.

Orders

1. The purchaser’s application is dismissed.

2. The purchaser shall pay to the Crown at the Auckland District Court, Albert Street, Auckland the reasonable hearing costs of the Tribunal of $500 within 21 days of the date of this decision.

DATED at Auckland this 12th day of November 2010

C.H.Cornwell
Adjudicator