Kaur v Xtreme Motors Limited - Reference No. MVD 225/2011 (Auckland) [2011] NZMVDT 174 (14 December 2011)

Motor Vehicle Disputes Tribunal of New Zealand

[Index] [Search] [Download] [Help]

---

Kaur v Xtreme Motors Limited - Reference No. MVD 225/2011 (Auckland) [2011] NZMVDT 174 (14 December 2011)

Last Updated: 9 February 2012

Decision No AK 140 /2011

Reference No. MVD 225/2011

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN GURPREET KAUR

Purchaser

AND XTREME MOTORS LIMITED

Trader

BEFORE THE AUCKLAND MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Auckland on 12 December 2011

APPEARANCES
Mrs G Kaur, the purchaser
Mr G P Singh, witness for the purchaser
There was no appearance by the trader

DECISION

Background

[1] On 4 June 2011 Mrs Kaur (“the purchaser”) agreed to purchase a 2001 Honda Stream registration number FZD502 (“the vehicle”) from Xtreme Motors Limited (“the trader”) for $7,000. The purchaser wishes to reject the vehicle because she says the vehicle was not supplied to her free from an undisclosed security.

[2] The trader did not appear at the hearing after being sent a copy of the purchaser’s application and written notice of the place, date and time of the Tribunal’s hearing to its registered office. The documents sent to the trader have both been returned to the Tribunal by New Zealand Post and attempts to telephone the trader have been unsuccessful.

[3] Pursuant to clause 10 of Schedule 1 of the Motor Vehicle Sales Act 2003 the Tribunal has appointed Mr 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.

The Purchaser’s Sworn Evidence

[4] Through a Punjabi court appointed interpreter the purchaser told the Tribunal that on 4 June 2011 she went to 42a Onslow Avenue Epsom where four or five cars were displayed for sale. She says she selected the vehicle which was shown to her by a man named Zahoor Elahi who was a salesperson for the trader. Mr Singh a witness for the purchaser gave evidence that Mr Zahoor Elahi is the father of the sole director of the trader company, Mr Madiha Elahi. Mr Singh says he understands that Mr Madiha Elahi has now left the country.

[5] The purchaser says she agreed to purchase the vehicle for $7,000 and paid to Mr Zahoor Elahi a deposit of $500. Although the purchaser claims she signed a printed sales agreement she was unable to produce a copy of it because a copy was not given to her at the time. Apparently the trader promised to post her a copy but she has not received it.

[6] The purchaser further says that on 6 June she deposited $5,000 into the nominated account given to her by the trader and a further $1500 by internet banking on 11 June 2011. Although the purchaser produced a copy of her bank statement which shows transfers of $5000 and $1500 were made from the account on 6 and 11 June the purchaser was unable to provide any evidence to show that these sums were in fact transferred into the trader’s bank account. The purchaser says that on 13 June she transferred ownership of the vehicle into her name at the office of VTNZ Takanini.

[7] A Motorweb Vehicle Information Report (“the VIR”) dated 23 June 2011 lodged by the purchaser with her application shows that the vehicle was first registered in New Zealand on 13 June 2011 in the name of the purchaser. The vehicle’s odometer reading as at the date it received its pre-registration check on 19 May 2011 was 104,640kms. The VIR also shows that there are two financial securities registered against the vehicle; one to Nichibo Japan Trading Co Ltd (“Nichibo”) (FS: FUOR9254G09U62A5) registered on 18 April 2011 (prior to the date of sale of the vehicle to the purchaser), and a second to Motor 1 Limited (FS: FM06DP8126NJ3272) which was registered on 22 June 2011 (after the date the purchaser bought the vehicle from the trader).

[8] On 12 September 2011 a person named Shannon Kane purporting to represent Motor 1 Ltd went to the purchaser’s residence and claimed the vehicle belonged to Motor 1 Ltd because a cheque paid by the trader to Motor 1 Ltd for $7,500 dated 13 June 2011 had been dishonoured on presentation by the trader’s bank on 15 June 2011. In spite of protests by the purchaser Motor 1 Limited towed the vehicle away and according to the purchaser that company has retained possession of the vehicle. The purchaser may wish to obtain legal advice as to whether, in view of the fact that Motor 1 Limited did not have a registered security over the vehicle at the time the purchaser bought it from the trader, the purchaser has any remedy against Motor 1 Limited.

[9] Mr Singh gave evidence that the trader and its director Mr Madihu Elahi were well known within the Indian Community in Auckland as motor vehicle dealers.

The Issues before the Tribunal

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

[a] Whether the vehicle complied with the guarantee as to title in s 5 of the Consumer Guarantees Act 1993 (“the Act”)
[b] If not what remedy is available to the purchaser?

Issue [a]: Whether the vehicle complied with the guarantee as to title in s.5 of the Act?

[11] Section 5 of the Act imposes on a supplier of consumer goods " guarantees as to title." Section 2 of the Act defines "goods" as including "vehicles”.

[12] Section 5 of the Act provides as follows:

“5 Guarantees as to title
(1) Subject to section 41, the following guarantees apply where goods are supplied to a consumer:
(a) that the supplier has a right to sell the goods; and
(b) that the goods are free from any undisclosed security; and

(c) that the consumer has the right to undisturbed possession of the goods, except in so far as that right is varied pursuant to –

(i) a term of the agreement for supply in any case where that agreement is a hire purchase Agreement within the meaning of the Hire Purchase Act 1971; or

(ii) a security, or a term of the agreement for supply, in respect of which the consumer has received-

(A) oral advice, acknowledged in writing by the consumer, as to the way in which the consumer’s right to undisturbed possession of the goods could be affected, sufficient to enable a reasonable consumer to understand the general nature and effect of the variation; and

(B) a written copy of the agreement for supply or security, or a written copy of the part thereof which provides for the variation.

(2) A reference in subsection (1)(a) to a right to sell goods means a right to dispose of the ownership of the goods to the consumer at the time when that ownership is to pass.

(3) An undisclosed security referred to in this section means any security that was neither disclosed to the consumer in writing before he or she agreed to the supply nor created by or with the express consent of the consumer.

(4)Nothing in subsection (1)(a) or (1)(b) shall apply in any case where goods are only hired or leased.

(5) Where the goods are only hired or leased, the guarantee set out in subsection (1)(c) shall confer a right to undisturbed possession of the goods only for the period of the hire or lease.

(6) Part 2 gives the consumer a right of redress against the supplier where the goods fail to comply with any guarantee in this section.”

[13] The Tribunal is satisfied from the evidence given by the purchaser and the VIR Report dated, that, at the time of supply to the purchaser, the vehicle was not free from an undisclosed security namely the undisclosed security registered by Nichibo 18 April 2011. The existence of the charge over the vehicle in favour of Nichibo was not disclosed to the purchaser in writing by the seller before it agreed to supply the vehicle to the purchaser. Accordingly the Tribunal finds the seller failed to comply with s 5 of the Act.

Issue (b): What remedy is available to the purchaser?

[14] Section 5(6) of the Act provides that Part 2 of the Act gives a consumer has a right of redress against the supplier if the goods fail to comply with any guarantee in s 5. The purchaser’s options are contained in s 18 of the Act which provides as follows:

“18 Options against suppliers where goods do not comply with guarantees
(1) Where a consumer has a right of redress against the supplier in accordance with this Part in respect of the failure of any goods to comply with a guarantee, the consumer may exercise the following remedies:

(2) Where the failure can be remedied, the consumer may ¾
(a) require the supplier to remedy the failure within a reasonable time in accordance with section 19:
(b) where a supplier who has been required to remedy a failure refuses or neglects to do so, or does not succeed in doing so within a reasonable time, ¾
(i) have the failure remedied elsewhere and obtain from the supplier all reasonable costs incurred in having the failure remedied; or
(ii) subject to section 20, reject the goods in accordance with section 22.

(3) Where the failure cannot be remedied or is of a substantial character within the meaning of Section 21, the consumer may ¾

(a) subject to section 20, reject the goods in accordance with section 22; or

(b) obtain from the supplier damages in compensation for any reduction in

value of the goods below the price paid or payable by the consumer for the

goods.

(4) In addition to the remedies set out in subsection (2) and subsection (3), the

consumer may obtain from the supplier damages for any loss or damage to the

consumer resulting from the failure (other than loss or damage through

reduction in value of the goods) which was reasonably foreseeable as liable to

result from the failure."

[15] The purchaser has not exercised her right of rejection by notifying the trader of her decision to reject the goods as required by s 22(1) of the Act and it appears to the Tribunal that her remedy is to obtain from the trader damages in compensation for the reduction in value of the goods below the price she paid for the vehicle. The Tribunal considers that the measure of the purchaser’s loss is the purchase price she paid of $7,000 and it will accordingly order the trader to pay her that sum.

Order

The trader shall pay the purchaser $7,000 immediately.

DATED at Auckland this 14 December 2011

C H Cornwell
Adjudicator