Healy v Turners Auctions Limited - Reference No. MVD 228/10 (Auckland) [2010] NZMVDT 183 (16 December 2010)

Last Updated: 27 February 2011

Decision No. AK 149 /2010

Reference No. MVD 228/10

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN LISA MAREE HEALY

Purchaser

AND TURNERS AUCTIONS LIMITED

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at AUCKLAND on 14 December 2010

APPEARANCES

Mrs L M Healy, the purchaser

Mrs M Bosich, support person for the purchaser
Mr C Broadhurst, Sales manager for the trader

DECISION

Background

[1] On 5 December 2009 Mrs Healy (“the purchaser”) purchased a 2001 Nissan Primera registration number FEL425 (“the vehicle”) for $8,700 by auction from Turners Auctions Limited (“the trader”). The purchaser seeks to recover some $9,992 which she says she has and will incur in repairing the vehicle because she says the vehicle is not performing in the manner she expected at the time of purchase.

[2] The trader says that the vehicle was supplied to the purchaser by auction and that accordingly the provisions of the Consumer Guarantees Act 1993 do not apply to the sale of the vehicle to the purchaser.
[3] Pursuant to clause 10 of Schedule 1 of the Motor Vehicle Sales Act 2003 the Tribunal has appointed Mr G Middleton as expert assessor to assist in the determination of the complaint. Mr Middleton took the oath required by (2) of Schedule 1 to that Act. As an assessor Mr Middleton assisted the adjudicator but the application was determined by the adjudicator alone.

Facts

[4] The purchaser inspected the vehicle at the trader’s premises on 4 December 2009 and took the vehicle for a short test drive. The purchaser says she read a Pre Auction Vehicle Condition Report completed by the trader which was in the vehicle. The Pre Auction Condition Report which she produced covers the various components of the vehicle’s engine, transmission, brakes, tyres, suspension, exhaust, and air conditioning and rates them as either a “Pass,” “Needs attention” or “Not applicable.” The purchaser says that she found the Pre Auction Condition Report to be an accurate description of the vehicle at the time of sale but that she thought that the vehicle would be more reliable than it has proved to be for an $8,000 vehicle.

[5] The purchaser engaged an independent inspector, Car Inspections Services (“CIS”), to undertake a pre-purchase inspection of the vehicle for which she paid CIS $135. She produces the written report from CIS which describes the vehicle’s general condition as “good” but still lists faults with the left front window mechanism, right low beam, right stop light, and minor panel repairs.

[6] On 5 December 2009 the purchaser was the successful bidder for the vehicle at $8,000 and also agreed to pay the trader $395 for on road charges and $305 for a TPP fee. The vehicle’s odometer at the time of sale was 83,000kms. The vehicle was sold with a current warrant of fitness.

[7] The purchaser used the vehicle for private purposes and has travelled some 12,618kms in it in the 12 months she has owned it. In September 2010 she began to experience issues with the vehicle and attempted, with little success, to contact the trader to discuss the problems with it. Towards the end of October she finally spoke to Mr Broadhurst who offered to groom and resell the vehicle at no cost to her however the purchaser found this offer unacceptable and filed an application with the Tribunal on 22 November 2010.

[8] In her application to the Tribunal the purchaser stated “The above car is not performing in a manner expected at the time of purchase and we are receiving little productive assistance in resolving the issue with the Respondent from whom we purchased it.” The purchaser sought a full cash refund of the total purchase price plus the cost of all the repair bills which she claimed was $9,992.07.

[9] The Tribunal wrote to the purchaser before the hearing drawing her attention to the provisions of s.41(3) of the Consumer Guarantees Act 1993 and asking her to advise the basis of her claim. The purchaser replied acknowledging that her case was not covered by the Consumer Guarantees Act because she had bought via an auction but said she believed that her claim would be covered by the Fair Trading Act.

[10] The trader represented by Mr Broadhurst said that the vehicle was an 8 year old second hand fresh import. He says he does not consider that the trader did anything to misrepresent the vehicle. Mr Broadhurst apologised to the purchaser for his tardiness in replying to the purchaser’s numerous telephone calls.

[11] Mr Broadhurst says the purchaser signed a bidder’s form which contains an acknowledgment by the purchaser that she agreed to the trader’s terms and conditions as displayed in the auction room and printed inside the catalogue cover. He produced photographs showing boards containing the conditions of auction at the trader’s auction premises. Mr Broadhurst said that the purchaser must have been aware that she was buying the vehicle in an “as is where is” condition.

[12] Mr Broadhurst says that the trader’s offer to sell the vehicle for the purchaser free of cost to her was worth about $600.

The issues before the Tribunal

[13] Having considered the facts, the Tribunal concludes that the following issues require consideration:

[a] Whether the trader misled the purchaser?
[b] If so what remedy is appropriate?

Legal Principles

[14] In terms of s.89 of the Motor Vehicle Sales Act 2003 the Tribunal only 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.

[15] The vehicle was sold by auction. The purchaser does not therefore have the protection of the statutory guarantees (including the guarantee of acceptable quality) in the Consumer Guarantees Act because section 41 provides that nothing in that Act applies in cases where goods are supplied by auction. The purchaser acknowledged in writing before the hearing that she was aware of this provision in the Act and understood that she had no claim under the Act.

[16] The purchaser does have the protection of the Fair Trading Act 1986 section 9 of which reads 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.”

[17] The essence of the purchaser’s claim appears to be that because the vehicle was sold to her for $8,000 the trader had (implicitly) represented that the vehicle was one which would be durable and reliable.

[18] 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. and 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.

[19] The words “mislead” and “deceive” are not defined in the Fair Trading Act however the Concise Oxford Dictionary defines “mislead” as “cause (a person) to go wrong, in conduct, belief, etc” and “lead astray in the wrong direction”. “Deceive” is defined as “make (a person) believe what is false, mislead purposely”.

[20] Conduct cannot be categorised as misleading or deceptive, or likely to be misleading or deceptive for the purposes of s.9 unless it contains or conveys a misrepresentation: Taco Co of Australia Inc v Taco Bell Pty Ltd [1982] FCA 136; (1982) 42 ALR 177; ATPR 40-303.

[21] Having examined the factual background to the purchaser’s decision to purchase the vehicle the Tribunal cannot find anything in the trader’s conduct which can be said to be misleading or deceptive. The Tribunal considers that the purchaser’s decision to buy the vehicle at auction was not made on the basis of any false or misleading conduct by the trader but on the basis of her own judgment founded on the test drive, the Pre Auction Vehicle Condition Report (which the purchaser agreed was accurate and true) and the CIS Inspection Report. Accordingly there is no basis for the purchaser’s claim against the trader and her claim must be dismissed.

Costs

[22] 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. 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.”

[23] The Tribunal rarely makes an award of its hearing costs against an applicant. However in this case the Tribunal considers that this application ought not to have been brought by the purchaser because there was no evidence of misrepresentation by the trader and the purchaser knew that she had no claim against the trader under the Consumer Guarantees Act. The Tribunal will therefore order the purchaser to pay the Tribunal’s reasonable costs of the hearing of $350.

Orders

1. The purchaser’s application is dismissed.

2. The purchaser shall pay the Tribunal’s hearing costs of $350 to the Crown at the Auckland District Court, Albert Street, Auckland within 21 days of the date of this decision.

DATED at AUCKLAND this 16 December 2010

C.H Cornwell
Adjudicator