Ji v Wellington Prestige Limited t/a Hutt Wholesale Cars - Reference No. MVD 082/2017 (Wellington) [2017] NZMVDT 1119; [2017] NZMVT Wellington 119 (13 June 2017)

Motor Vehicle Disputes Tribunal of New Zealand

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Ji v Wellington Prestige Limited t/a Hutt Wholesale Cars - Reference No. MVD 082/2017 (Wellington) [2017] NZMVDT 1119 (13 June 2017); [2017] NZMVT Wellington 119

Last Updated: 18 July 2017

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
		Reference No. MVD 082/2017 (WN119)
	IN THE MATTER	of the Motor Vehicle Sales Act 2003
	AND
	IN THE MATTER	of a dispute
	BETWEEN	YINGSHAN JI
		Purchaser
	AND	WELLINGTON PRESTIGE LIMITED T/A HUTT WHOLESALE CARS
		Trader
MEMBERS OF TRIBUNAL
J S McHerron, Barrister – Adjudicator
D Binding, Assessor
HEARING at Wellington on 25 May 2017
DATE OF DECISION 13 June 2017
APPEARANCES
Y Ji, Purchaser B W Brodie, Partner of Purchaser J M Stevens, Director of Trader

DECISION

Ms Ji’s application is dismissed.

REASONS

Introduction

[1] Yingshan Ji and Wellington Prestige Limited signed a vehicle offer and sale agreement ("VOSA") for the sale to Ms Ji of a 2015 Mercedes C250 and for the purchase by Wellington Prestige of her 2008 Mercedes C200 as a trade-in. However, the next day, before any money or vehicles changed hands, Wellington Prestige emailed Ms Ji to say: "The deal is now cancelled." Wellington Prestige did so because it was concerned Ms Ji was not going to meet the special conditions of the VOSA. Ms Ji applies to the Tribunal for an order requiring Wellington Prestige to complete the transaction – to allow her to purchase the Mercedes C250 and to trade-in her Mercedes C200.
[2] In general terms, the following issue arises:

• (a) whether the Tribunal has jurisdiction under either of the Sale of Goods Act 1908 or the Contractual Remedies Act 1979 to require Wellington Prestige to sell its vehicle to Ms Ji in return for her vehicle and the agreed purchase price; and, if so
• (b) whether the Tribunal should grant such a remedy.

Wellington Prestige's concerns that Ms Ji would not meet the special conditions

[3] The VOSA was expressly subject to the following special conditions, which were separately signed by Ms Ji:

clear title of [Ms Ji’s trade in vehicle], Finance to be approved in writing by 23/03/2017 5.00 pm

[4] The VOSA also states that the balance of the purchase price after deducting the trade-in allowance, $34,000, was to be "financed by MTF”.
[5] Wellington Prestige became concerned that Ms Ji was not going to meet the special conditions when, on the morning of 23 March 2017, it received a phone call from a Masterton car dealer, Lawson Hoggard, asking for $500 commission in return for financing the purchase of the Mercedes C250 for Ms Ji. At this point, Wellington Prestige decided not to proceed with the transaction because it did not want to be involved in paying other dealers commission for financing the vehicle's purchase.
[6] Later that morning, Wellington Prestige emailed Ms Ji to say "this deal is now cancelled". The email attached a copy of the VOSA with the word “cancelled” handwritten in large letters diagonally across the page and the words “deal cancelled re Lawson asking me to finance you” handwritten at the top.
[7] Ms Ji’s lawyer e-mailed Wellington Prestige that afternoon stating “I confirm finance” and that “clear title is a condition of any sale, and does not need to be confirmed”. However, Ms Ji's lawyer's email did not reassure Wellington Prestige.
[8] Ms Ji did not pay any of the purchase price to the trader. Nor were the vehicles exchanged.
[9] Wellington Prestige produced a vehicle information report printed on 4 April 2017 (12 days after the date of the VOSA special condition deadline). That document contains an alert stating that “there is a financial interest in this vehicle. It is very likely that money is owing on it”. Details of three secured parties are listed. At the hearing, Wellington Prestige confirmed that, according to its inquiries, those security interests still exist in respect of Ms Ji's trade in vehicle.

Limits on the Tribunal’s jurisdiction

[10] This Tribunal’s jurisdiction is limited by s 89 of the Motor Vehicle Sales Act 2003. The Tribunal may only determine claims under the Sale of Goods Act 1908, the Fair Trading Act 1986, the Consumer Guarantees Act 1993 and the Contractual Remedies Act 1979. Neither the Consumer Guarantees Act nor the Fair Trading Act applies in the present case.
[11] Under the Sale of Goods Act, the Tribunal can only make an order under s 53, which provides for an order for specific performance in lieu of damages in an action for breach of contract to deliver specific or ascertained goods.
[12] Under the Contractual Remedies Act, the Tribunal can only make orders under s 9, which provides a broad power to grant relief when a contract is cancelled by any party.
[13] In light of the Tribunal's jurisdiction under those two Acts, the specific issue for determination is whether the Tribunal should require the contract as recorded in the VOSA to be reinstated and completed, either:

• (a) under s 53 of the Sale of Goods Act; or
• (b) under s 9 of the Contractual Remedies Act.

What Ms Ji wants

[14] Ms Ji would like to follow the original contract which she signed and complete the trade with the trader. In other words, she would like to pay the money, buy the car and trade in her own car.

Wellington Prestige’s argument in response

[15] Wellington Prestige submitted that it does not want to proceed with the contract because Ms Ji failed to satisfy the special conditions. She did not provide clear title to the trade in vehicle. Nor did Ms Ji adequately demonstrate that finance was approved in writing. Wellington Prestige argues it should not be required to complete the trade.

Issue one: Should the Tribunal require the contract to be reinstated and completed under s 53 of the Sale of Goods Act?

[16] In my view, Wellington Prestige had a perfectly valid reason for deciding not to proceed with the transaction, based on its concerns about the finance arrangements for the vehicle. These concerns were not assuaged by the email from Ms Ji's lawyer stating "I confirm finance". No finance agreement was produced so the lawyer's email was, at best, an assertion that finance was approved. Wellington Prestige was justified in remaining concerned, based on the earlier request by Lawson Hoggard for a $500 commission to provide finance. Ms Ji produced bank statements purporting to show that she had sufficient funds available to purchase the vehicle. But these bank statements post-date the finance deadline by several days. In any event, the presence of the special condition suggests Ms Ji did not intend to purchase the vehicle exclusively from her own funds.
[17] Wellington Prestige did not know about the security interests on the vehicle until several days after the deadline. But the existence of those security interests provide additional justification for Wellington Prestige not proceeding with the transaction. Ms Ji's lawyer's assertion in his email to Wellington Prestige that "Clear title is a condition of any sale, and does not need to be confirmed" is unlikely to have reassured Wellington Prestige that Ms Ji would abide by that condition, which indeed she did not.
[18] Even if, contrary to my conclusion, Wellington Prestige had no valid reason for cancelling the contract, I do not think it ought to be required to perform the contract specifically by supplying the vehicle Ms Ji wants to purchase, in return for the money she agreed to pay and the vehicle she agreed to trade in.
[19] Specific performance under s 53 of the Sale of Goods Act is a discretionary remedy. The Courts normally prefer to award damages for a breach of contract rather than forcing parties to perform it specifically. Specific performance is reserved for those unusual cases where there is something particularly special about the item purchased, and similar goods cannot be obtained on the market.
[20] Ms Ji has not persuaded me or the Tribunal’s Assessor Mr Binding that there was anything special about the Mercedes she agreed to purchase from Wellington Prestige. She will be able to purchase a similar model on the market without too much difficulty. Ms Stevens, one of Wellington Prestige's directors, told the Tribunal that she was aware of several similar vehicles currently listed on Trade Me.
[21] For this reason, it would be inappropriate to make an order for specific performance under s 53 of the Sale of Goods Act. The Tribunal has no general jurisdiction to award damages for breach of contract.

Issue two: Should the Tribunal make an order under s 9 of the Contractual Remedies Act?

[22] Section 9 of the Contractual Remedies Act 1979 is a broad power to grant relief “when a contract is cancelled by any party”. The Tribunal may only make such an order “if it is just and practicable to do so”. Section 7(2) of the Contractual Remedies Act provides that:

...a party to a contract may cancel it if, by words or conduct, another party repudiates the contract by making it clear that he does not intend to perform his obligations under it or, as the case may be, to complete such performance.

[23] Section 7(3) provides that a party may cancel if “a term in the contract is broken by another party to that contract” or if “it is clear that a term in the contract will be broken by another party to that contract”. Section 7(4)(a) provides that the parties must have agreed that performance of the term is essential for the cancelling party.
[24] Section 8 of the Contractual Remedies Act provides that cancellation takes effect from the time it is made known to other parties and that:

...the cancellation may be known by words, or by conduct evincing an intention to cancel, or both. It shall not be necessary to use any particular form of words, so long as the intention to cancel is made known.

[25] Once the contract is cancelled, “so far as the contract remains unperformed at the time of the cancellation, no party shall be obliged or entitled to perform it further” (s 8(3)(a)).

Who cancelled the contract?

[26] In the present case, Wellington Prestige made known the contract was cancelled, by emailing a copy of the VOSA to the purchaser with the words “cancelled” written diagonally across the whole page and the words “deal cancelled re Lawson asking me to finance you” written at the top.
[27] Wellington Prestige has purported to cancel the contract because Ms Ji broke a term in the contract or made it clear she was going to break a term. She failed to comply with either of the special conditions that had been agreed between the parties. If Wellington Prestige’s cancellation is valid, which in my view it is, then Wellington Prestige would be the injured party in this failed transaction. If the Tribunal were to make any order under s 9 of the Contractual Remedies Act, it would therefore be likely to be made in Wellington Prestige's favour, not in favour of Ms Ji.
[28] Ms Ji’s strongest point is that Wellington Prestige pre-empted the deadline of 5 pm on 23 March 2017 by purporting to cancel the contract at 11.29 am that day. But apart from Mr Langford’s e-mail sent at 4.45 pm that day there was no written evidence that “finance was approved” provided before the deadline. I agree with Wellington Prestige that it was entitled to expect more than an email from the purchaser’s solicitor, such as the written agreement or at least confirmation from the finance company (MTF was specifically mentioned in the VOSA).
[29] In any event, the fact that Wellington Prestige was requested to pay another dealer commission for financing the transaction suggests finance was at best conditional and not on terms that Wellington Prestige accepted.
[30] Moreover, the other condition regarding clear title to the trade-in vehicle was not satisfied by the deadline and still has not been satisfied. Security interests still existed over the trade-in vehicle on the day before the hearing.
[31] As well, Ms Ji expressly argued that the contract has not been cancelled. Her solicitor argued that he had confirmed finance before 5 pm on 23 March 2017 and so it was not open to the trader to cancel. Ms Ji’s partner Mr Brody argued at the hearing that Wellington Prestige had no contractual right to cancel the agreement. If that were correct, then the Tribunal would have no jurisdiction to make any order under s 9 of the Contractual Remedies Act. That is because the Tribunal's s 9 jurisdiction depends on a contract having been validly cancelled.
[32] As I have indicated, the contract was validly cancelled by Wellington Prestige because of Ms Ji's failure to comply with the special conditions or because she had made clear that she was not going to comply with those conditions. On that analysis, even though she was understandably disappointed at missing out on the vehicle she wanted to purchase, Ms Ji has no right to any relief under s 9.
[33] Alternatively, if Ms Ji is correct that the contract has not been cancelled validly at all, the Tribunal lacks any jurisdiction to make an order under s 9.
[34] Either way, Ms Ji is not entitled to any relief under the Sale of Goods Act or the Contractual Remedies Act. Her claim must be dismissed.

J S McHerron
Adjudicator