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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 17 June 2017
BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
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[2017] NZMVDT Auckland 50
Reference No. MVD 047/2017
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IN THE MATTER
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of the Motor Vehicle Sales Act 2003
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AND
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IN THE MATTER
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of a dispute
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BETWEEN
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ANNEMIEKE JOHANNA MARGARETHA DE JONG
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(Purchaser)
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AND
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LIFESTYLE CARS LIMITED
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(Trader)
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MEMBERS OF TRIBUNAL
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B R Carter, Barrister – Adjudicator
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S Gregory, Assessor
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HEARING at Auckland on 27 April 2017
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DATE OF DECISION 8 May 2017
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APPEARANCES
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Ms A J M De Jong, Purchaser
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Mr R Antunovich, for the Trader
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ORDERS
DECISION
[1] The vehicle did not comply with the guarantee as to acceptable quality in s 6 of the Consumer Guarantees Act 1993 (“CGA”). The vehicle has numerous faults, of varying degrees of severity. A reasonable consumer would not expect a vehicle of this age, price and mileage to have these faults. See paragraphs [18] to [26].
[2] The purchaser has the right to reject the vehicle on three grounds:
(a) The vehicle has three individual faults that are each, in their own right, failures of a substantial character sufficient to justify rejection. See paragraphs [27] to [30];
(b) The vehicle’s faults listed at paragraph [23], when considered in combination, amount to an accumulation of defects sufficient to justify rejection. See paragraphs [31] to [39]; and
(c) The faults with the vehicle’s gas and 12 volt electrical systems make the vehicle unsafe to live in. See paragraph [40].
[3] The purchaser is entitled to a refund of the purchase price of the vehicle, as set out in the orders above. The purchaser is not entitled to recover the cost of repairs performed on the vehicle – she did not first give the trader a reasonable opportunity to perform those repairs. The purchaser is also not entitled to recover her travel costs. See paragraphs [41] to [49].
[4] The trader made representations to the purchaser about the characteristics and suitability of the vehicle that were misleading and breach s 9 of the Fair Trading Act 1986 (“FTA”). The trader did not know that the representations were misleading, but is nonetheless liable for those representations. See paragraphs [50] to [55].
[5] Under the FTA, the purchaser is entitled to cancel the contract and receive a refund of the purchase price. However, given the purchaser’s entitlement to a refund under the CGA, the Tribunal does not make further orders under the FTA. The Tribunal does however note that the purchaser would have been entitled to a refund under the FTA if her CGA claim had failed. See paragraphs [56] to [61].
REASONS
Background
[6] On 1 December 2016, Annemieke De Jong, (“the purchaser”) purchased a 1990 Toyota Cruiser B30 Motorhome, registration number APR293 for $45,000 from Lifestyle Cars Limited (“the trader”). The vehicle had travelled 187,353 km at the time of sale.
[7] The vehicle is a self contained motorhome. The purchaser had sold her house and purchased the vehicle to live in. She had plans to travel around New Zealand in the vehicle.
Pre-purchase representations made by the trader
[8] The purchaser first became aware that the vehicle was for sale through a listing on the Trade Me website (“the Trade Me listing”). Relevant to this matter, the Trade Me listing stated that the vehicle:
- (a) was “very tidy”;
- (b) “well looked after”; and
- (c) could easily be live in “for a long period of time”.
[9] The purchaser travelled from Christchurch to Kumeu to inspect the vehicle. Before purchasing the vehicle the purchaser spoke with Mr Matthew Barnett, an employee of the trader at that time. The purchaser gave evidence that Mr Barnett advised her that:
- (a) the previous owner was a fastidious engineer who had maintained the vehicle really well;
- (b) the vehicle had virtually no rust;
- (c) the purchaser could easily live in the vehicle for a year or more;
- (d) the previous owner had signed a contract saying that everything was in working order and well maintained; and
- (e) that the vehicle was in great condition for its age.
[10] After purchasing the vehicle and while driving the vehicle from Kumeu to Christchurch, the purchaser noticed a number of faults with the vehicle. On 13 December 2016 the purchaser contacted the trader and advised it of the list of defects identified.
[11] Then followed at least six weeks of correspondence between the purchaser and trader as the purchaser attempted to have the defects assessed and repaired by a suitable repairer of the trader’s choice.
[12] The purchaser’s efforts were unsuccessful. The trader made minimal effort to have the vehicle assessed or the defects remedied. To prompt action, the purchaser located two Christchurch-based businesses that could assess the vehicle and perform repairs and sent their details to the trader. The trader elected not to use either of those companies and instead referred the purchaser to a Christchurch-based repairer that the trader had used in the past. The trader’s preferred repairer proved to be ill-equipped to perform the assessment or repair work required.
[13] Finally, on 8 February 2017, the trader asked the purchaser to return the vehicle to it to enable the defects to be assessed. The trader advised that the purchaser would have to bear the cost of returning the vehicle, and any transportation would be at the risk of the purchaser. The purchaser was living in the vehicle at this time. The trader declined to assist the purchaser in covering the cost of alternative accommodation while the vehicle was being transported north and assessed.
[14] Further correspondence followed, without any consensus being reached on how, or by whom, the vehicle would be assessed and repaired. In the interim, the purchaser took the vehicle to Total Autobody Rust n Resto in Christchurch (“Total Autobody”) to have a faulty toilet pump repaired, at a cost of $276.
[15] In early March 2017, following four days of rain, the vehicle leaked. The purchaser took the vehicle to Total Autobody to have the cause of the leak determined and any necessary repairs conducted. Total Autobody then identified a number of further defects with the vehicle. Total Autobody has since performed work on the vehicle to remedy some of the defects identified. The purchaser says these were the “emergency repairs” that needed to be performed to remedy the damage identified following the water leak. The purchaser was charged $1,200 for those repairs.
[16] The purchaser has now rejected the vehicle, and seeks an order from the Tribunal upholding the rejection and to recover the cost of repairs done to the vehicle. The purchaser also seeks to recover other consequential losses.
The issues
[17] The following issues arise:
- (a) Did the vehicle fail to comply with the guarantee of acceptable quality in s 6 of the CGA?
- (b) Did the vehicle fail to comply with the fitness for purpose guarantee in s 8 of the CGA?
- (c) Were the failures of a substantial character within the meaning of section 21 of the CGA?
- (d) What remedy under section 18 of the CGA is available to the purchaser?
- (e) Has the trader made misleading representations about the vehicle under the FTA?
- (f) If so, what remedies under the FTA are available to the purchaser?
Did the vehicle comply with the guarantee of acceptable quality
[18] Section 6 of the CGA imposes on suppliers and manufacturers of consumer goods “a guarantee that the goods are of acceptable quality”. Section 2 of the CGA defines "goods" as including vehicles.
[19] The expression “acceptable quality” is defined in s 7 as follows:
7 Meaning of acceptable quality
(1) For the purposes of section 6, goods are of acceptable quality if they are as—
(a) fit for all the purposes for which goods of the type in question are commonly supplied; and
(b) acceptable in appearance and finish; and
(c) free from minor defects; and
(d) safe; and
(e) durable,—
as a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects, would regard as acceptable, having regard to—
(f) the nature of the goods:
(g) the price (where relevant):
(h) any statements made about the goods on any packaging or label on the goods:
(ha) the nature of the supplier and the context in which the supplier supplies the goods:
(i) any representation made about the goods by the supplier or the manufacturer:
(j) all other relevant circumstances of the supply of the goods.
(2) Where any defects in goods have been specifically drawn to the consumer's attention before he or she agreed to the supply, then notwithstanding that a reasonable consumer may not have regarded the goods as acceptable with those defects, the goods will not fail to comply with the guarantee as to acceptable quality by reason only of those defects.
(3) Where goods are displayed for sale or hire, the defects that are to be treated as having been specifically drawn to the consumer's attention for the purposes of subsection (2) are those disclosed on a written notice displayed with the goods.
(4) Goods will not fail to comply with the guarantee of acceptable quality if—
(a) the goods have been used in a manner, or to an extent which is inconsistent with the manner or extent of use that a reasonable consumer would expect to obtain from the goods; and
(b) the goods would have complied with the guarantee of acceptable quality if they had not been used in that manner or to that extent.
(5) A reference in subsections (2) and (3) to a defect means any failure of the goods to comply with the guarantee of acceptable quality.
[20] In considering whether or not goods meet the guarantee of acceptable quality, the Tribunal must consider the quality elements as set out in s 7(1)(a)-(e) of the CGA as modified by the factors set out in s 7(1)(f)-(j), from the perspective of a “reasonable consumer”. The test is an objective one, it is not a view of those factors from the purchaser’s subjective perspective.
[21] In Stephens v Chevron Motor Court Limited,[1] the District Court held that the correct approach to the CGA was first to consider whether the vehicle was of acceptable quality. If the vehicle was not of acceptable quality, the next point to consider was whether the purchaser required the trader to remedy any faults within a reasonable time in accordance with s 19 of the CGA. If the failure to comply with the guarantee of acceptable quality is of a “substantial character” within the meaning of s 21, or if the faults cannot be remedied, the Tribunal is directed to ask whether the purchaser exercised its right to reject the vehicle within a reasonable time.
The vehicle was not free from minor defects or durable
[22] The vehicle did not comply with the guarantee of acceptable quality in s 6 of the CGA because it was not free of defects at the time of sale, has not been durable and is not safe.
[23] In a statement supplied to the Tribunal by the purchaser, Mr Stephen Daly of Total Autobody identifies the defects he has found with the vehicle. The list of defects is long, and includes:
- (a) The vehicle is not watertight. Two holes have been drilled into the vehicle’s roof without adequate waterproofing, causing water to leak into the vehicle.
- (b) The floor, at least in places, was wet and rotten caused by water leaking through the holes in the roof.
- (c) The vehicle has rust and corrosion in the vehicle’s bodywork beneath the wet and rotten floor caused by water ingress. Mr Daly has identified and performed repairs on the areas of rust and corrosion that he has found. However, he states that without further invasive inspection it is impossible to determine the true extent of the rust and corrosion caused by water ingress from the holes in the roof.
- (d) The vehicle’s 12V electrical wiring is substandard and unsafe. Mr Daly notes that the wiring “looks like [a] DIY job using remnants of wires rather than correct cabling”. Mr Daly also notes that the wiring system is “a mess”, that “many open joints are not insulated”, that “wires can easily touch each other”, causing “a short” and that the wiring is a “potential fire hazard”. Mr Daly’s observations are supported by a number of photographs provided to the Tribunal.
- (e) The connection between the hot water boiler and the main gas line is illegal and unsafe. Mr Daly notes that the coupling is illegal and would not pass Gas Certification.
- (f) The house battery is not secure and has inadequate wiring and terminals.
- (g) The gas heater does not work.
- (h) There are cracks in the bathroom floor, causing water to leak through the floor.
- (i) The refrigerator does not work when connected to a 240V power supply.
- (j) The hot water boiler works when the vehicle is connected to 240V power, but not when the boiler is connected to the gas supply.
- (k) The freshwater tank leaks and is bulging.
(l) The grey water tank leaks.
- (m) The pump for the vehicle’s toilet was broken, although it has now been repaired.
- (n) The vehicle’s awning is frayed in places and requires cleaning.
[24] The Tribunal’s assessor considers that these faults are largely a consequence of substandard do-it-yourself work performed by a previous owner of the vehicle.
[25] I consider that, by some considerable margin, the vehicle has failed to comply with the acceptable quality guarantee. The purchaser paid $45,000 for a 26 year old motorhome which had travelled 187,353 kms at the date of purchase. Notwithstanding the age and mileage of the vehicle, I consider that a reasonable consumer would not expect a motorhome of this price, age and mileage, which has been described as suitable for living in, to have defects of this nature.
[26] Further, I consider that the defects with the vehicle’s 12V wiring and the connection between the hot water boiler and main gas line make the vehicle unsafe. The 12V wiring is a fire hazard and the gas connection is illegal.
Was the vehicle fit for purpose?
[27] Section 8 of the CGA provide as follows:
8 Guarantees as to fitness for particular purpose
(1) Subject to section 41, the following guarantees apply where goods are supplied to a consumer:
(a) that the goods are reasonably fit for any particular purpose that the
consumer makes known, expressly or by implication, to the
supplier as the
purpose for which the goods are being acquired by the consumer; and
(b) that
the goods are reasonably fit for any particular purpose for which the supplier
represents that they are or will be fit.
(2) Those guarantees do not apply where the circumstances show that—
(a) the consumer does not rely on the supplier’s skill or judgment;
or
(b) it is unreasonable for the consumer to rely on the supplier’s
skill or judgment.
(3) This section applies whether or not the purpose is a purpose for which the goods are commonly supplied.
(4) Part 2 gives the consumer a right of redress against the supplier where the goods fail to comply with any guarantee in this section.
[28] I consider that Ms De Jong has established that the trader has breached the guarantee as to fitness for particular purpose in s 8 of the CGA. Ms De Jong told the trader before purchasing the vehicle that she was looking for a motorhome that she could live in for long periods of time. The trader confirmed this vehicle would be suitable for that purpose. Indeed the trader made representations in the Trade Me listing that it was suitable for this purpose.
[29] The vehicle was not suitable for this purpose due to the defects identified in paragraph [23] above. In particular, the vehicle is not watertight, its 12V wiring is substandard, parts of the floor are rotten, it has unsafe and illegal gas fittings, the gas heater does not work and the hot water and refrigerator do not function properly.
[30] Ms De Jong obtained a pre-purchase mechanical inspection for the vehicle, but she relied on the trader’s representations that the vehicle was fit, and safe, for living in. It was reasonable for Ms De Jong to rely on the trader’s skill and judgement as to the fitness for purpose of the vehicle. The trader is a registered motor vehicle dealer. Ms De Jong was justified in placing trust in such a person to supply a vehicle that was suitable for the needs Ms De Jong had described.
Are the failures of a substantial character?
Relevant law
[31] Section 21 of the CGA defines the circumstances in which a failure to comply with the guarantee as to acceptable quality will be regarded as being a failure of a substantial character for the purposes of s 18(3) of the CGA. Section 21 of the CGA provides as follows:
21 Failure of substantial character
For the purposes of section 18(3), a failure to comply with a guarantee is of a substantial character in any case where—
(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
(b) the goods depart in 1 or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model; or
(c) the goods are substantially unfit for a purpose for which goods of the type in question are commonly supplied or, where section 8(1) applies, the goods are unfit for a particular purpose made known to the supplier or represented by the supplier to be a purpose for which the goods would be fit, and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or
(d) the goods are not of acceptable quality within the meaning of section 7 because they are unsafe.
[32] The vehicle’s defects amount to a failure of a substantial character in terms of s 21(a) and (d) of the CGA for the reasons set out in paragraphs [35] to [41].
[33] I am not satisfied that the defects amount to a failure in terms of s 21(c) of the CGA. The vehicle is certainly unfit for its purpose – it is not currently habitable due to faults with the vehicle. However, s 21(c) of the CGA also requires that the faults with the vehicle cannot be remedied easily within a reasonable time. The evidence before the Tribunal suggests that most of the faults can be easily and quickly remedied.
[34] The only fault that appears to require further diagnosis is the rust in the vehicle. The true extent of that fault, and the time and effort required to remedy it, will not be known without further invasive testing. Until that invasive testing occurs there can be no certainty that the remaining rust problem cannot be easily and quickly repaired. As a result, on the evidence available to the Tribunal, I conclude that the known defects with the vehicle can be remedied easily within a reasonable time.
A reasonable consumer would not have purchased the vehicle for the price paid by the purchaser
[35] I am satisfied on two grounds that, for the purposes of s 21(a) of the CGA, a reasonable consumer would not have purchased this vehicle for the price paid by the purchaser if it had known that the vehicle had the defects referred to at paragraph [23] above.
[36] First, the defects listed at paragraph [23](a) to (c) are each failures of a substantial character. I am satisfied that a reasonable consumer would not have purchased this vehicle had it been aware that the vehicle was not watertight, that parts of the vehicle’s floor were rotten due to water leaks and that there was rust in the vehicle’s bodywork, also probably caused by water ingress, that would require further invasive testing to determine its true extent. I consider a reasonable consumer would have been alarmed about the potential damage caused to the vehicle by water ingress and would not have purchased the vehicle for the price paid by the purchaser.
[37] Second, the defects identified in paragraph [23] amount to an accumulation of defects that constitute a failure of a substantial character. In Cooper v Ashley & Johnson Motors Limited,[2] the District Court stated that a purchaser may reject a vehicle where there had been an accumulation of minor defects. The Court noted that a point will eventually be reached where the purchaser could say convincingly that he or she had “no confidence in the reliability of the vehicle”.[3]
[38] I am satisfied that there has been an accumulation of defects with the vehicle sufficient to justify rejection. A reasonable consumer would not have purchased this vehicle for the price paid by the purchaser if it had known that the vehicle had such a list of defects.
The vehicle is unsafe
[39] I am also satisfied that the vehicle is unsafe to live in. Mr Daly describes the vehicle’s 12V wiring as being “a mess” and a potential fire hazard and the connection between the hot water boiler and the main gas line is illegal. Photographs supplied to the Tribunal support these observations.
[40] I acknowledge that these defects are remediable. However, under s 21(d) of the CGA, a safety defect of any kind entitles the purchaser to reject the goods, irrespective of how easily reparable that defect is.
What remedy is the purchaser entitled to under the CGA?
[41] The purchaser therefore has the right to reject the vehicle under s 18(3)(a) of the CGA because the vehicle has defects that amount to a failure of a substantial character.
[42] The Tribunal upholds the purchaser’s rejection. Under s 23(1)(a) of the CGA, the purchaser is entitled to a refund of any money paid in respect of the rejected vehicle. Accordingly, the Tribunal orders that the trader should refund the vehicle’s purchase price within 10 working days of this decision.
[43] The purchaser has also applied to recover the cost of repairs already performed on the vehicle.
[44] Although I have found that the vehicle was not of an acceptable quality because of the list of defects with the vehicle, the purchaser is not entitled to recover the cost of repairs already performed. This is because the purchaser did not give the trader a reasonable opportunity to repair the vehicle.
[45] In Acquired Holdings Ltd v Turvey,[4] the High Court concluded that under s 18(2) of the CGA, the consumer must first give the supplier an opportunity to remedy the failure within a reasonable time. I am satisfied, on the evidence presented by the purchaser, that the purchaser did not give the trader an opportunity to perform the repairs to the toilet or the emergency repairs before having those repairs performed by Total Autobody.
[46] I have some sympathy for the purchaser in not first approaching the trader. She had experienced real frustration in previous attempts to have the trader assess and repair other defects with the vehicle, and she quite rightly considered that the repairs needed to be performed urgently to make the vehicle habitable.
[47] However, I must apply Acquired Holdings, and as such the purchaser is not entitled to recover the cost of the repairs under s 18(2) of the CGA.
[48] The purchaser also seeks to recover $211.98 being the cost of travelling from Christchurch to attend the hearing in Auckland. I am not satisfied that these costs result from the vehicle’s defects. They are a result of the purchaser pursuing its dispute with the trader and the cost of bringing its claim to the Tribunal. Costs of this nature are governed by cl 14 of sch 1 to the Motor Vehicle Sales Act 2003. Under cal 14(1)(a)(ii) the Tribunal may order costs where, in the opinion of the Tribunal:
“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.”
[49] I find that the trader did not refuse, without reasonable excuse, to discuss the application with the purchaser. There has been extensive, although often fruitless, email and telephone discussion between the parties. Accordingly, I decline to award costs against the trader.
Did the trader mislead the purchaser as to the suitability of the vehicle?
[50] Section 9 of the FTA 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.”
[51] The appropriate approach to determining whether conduct is misleading and deceptive has been considered by the Supreme Court in Red Eagle Corporation Ltd v Ellis [2010] NZLR 492. The judgment of the Court was delivered by Blanchard J:
“It is, to begin with, necessary to decide whether the claimant has proved a breach of s 9. That section is directed to promoting fair dealing in trade by proscribing conduct which, examined objectively, is deceptive or misleading in the particular circumstances. Naturally that will depend upon the context, including the characteristics of the person or persons likely to be affected. Conduct towards a sophisticated businessman may, for instance be less likely to be objectively regarded as capable of misleading or deceiving such a person than similar conduct directed towards a consumer or, to take an extreme case, towards an individual known by the defendant to have intellectual difficulties ... The question to be answered in relation to s 9 in a case of this kind is accordingly whether a reasonable person in the claimant’s situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely have been misled or deceived. If so, a breach of s 9 has been established. It is not necessary under s 9 to prove that the defendant’s conduct actually misled or deceived the particular plaintiff or anyone else. If the conduct objectively had the capacity to mislead or deceive the hypothetical reasonable person, there has been a breach of s 9. If it is likely to do so, it has the capacity to do so. Of course the fact that someone was actually misled or deceived may well be enough to show that the requisite capacity existed.”
[52] I am satisfied that the trader made a number of representations about the characteristics of the vehicle and its suitability for use as a motorhome. Those representations are set out at paragraphs [8] and [9] above.
[53] I am also satisfied that those representations were misleading. For example, on the evidence I have seen:
- (a) The vehicle was not “very tidy”.
- (b) The vehicle was not suitable for living in for long periods of time.
- (c) The vehicle was not well maintained or well looked after.
- (d) The vehicle was not in great condition for its age.
[54] Indeed, the vehicle is in poor condition, and requires significant and costly work to bring it to anywhere near the standard represented by the trader.
[55] The trader did not know of the problems with the vehicle. I am satisfied that it has relied upon representations made by the previous owner. However, the FTA does not require that the trader have knowledge that its statements were misleading. In order to breach s 9 there is no requirement that there be an intention to mislead or deceive see Taylor Bros Limited v Taylors Textile Services Auckland Limited.[5] The trader is strictly liable for the claims it has made about the vehicle.
What remedy is available to the purchaser?
[56] The remedies available for a breach of the FTA are discretionary. They are set out in s 43 of the FTA which is as follows:
43 Other orders
(1) This section applies if, in proceedings under this Part or on the application of any person, a court or a Disputes Tribunal finds that a person (person A) has suffered, or is likely to suffer, loss or damage by conduct of another person (person B) that does or may constitute any of the following:
(a) a contravention of a provision of Parts 1 to 4AM (a relevant provision):
(b) aiding, abetting, counselling, or procuring a contravention of a relevant provision:
(c) inducing by threats, promises, or otherwise a contravention of a relevant provision:
(d) being in any way directly or indirectly knowingly concerned in, or party to, a contravention of a relevant provision:
(e) conspiring with any other person in the contravention of a relevant provision.
(2) The court or the Disputes Tribunal may make 1 or more of the orders described in subsection (3)—
(a) whether or not the court grants an injunction, or the court or the Disputes Tribunal makes any other order, under this Part; and
(b) whether or not person A made the application or is a party to the proceedings.
(3) The orders are as follows:
(a) an order declaring all or part of a contract made between person A and person B, or a collateral arrangement (for example, a collateral credit agreement) relating to such a contract,—
(i) to be void; and
(ii) if the court or the Disputes Tribunal thinks fit, to have been void at all times on and after a date specified in the order, which may be before the date on which the order is made:
(b) if an order described in paragraph (a) is made in respect of a contract that is associated with a collateral credit agreement, an order vesting in person B all or any of the rights and obligations of person A under the collateral credit agreement:
(c) an order in respect of a contract made between person A and person B, or a collateral arrangement (for example, a collateral credit agreement) relating to such a contract,—
(i) varying the contract or the arrangement in the manner specified in the order; and
(ii) if the court or the Disputes Tribunal thinks fit, declaring the varied contract or arrangement to have had effect on and after a date specified in the order, which may be before the date on which the order is made:
(d) if an order described in paragraph (c) is made in respect of a contract that is associated with a collateral credit agreement, and if that order results in person A no longer having property in the goods that are the subject of the contract, an order vesting in person B the rights and obligations of person A under the collateral credit agreement:
(e) an order directing person B to refund money or return property to person A:
(f) an order directing person B to pay to person A the amount of the loss or damage:
(g) an order directing person B, at person B’s own expense, to repair, or to provide parts for, goods that have been supplied by person B to person A:
(h) an order directing person B, at person B’s own expense, to supply specified goods or services to person A.
(4) In subsection (3) (a) to (d), collateral credit agreement, in relation to a contract for the supply of goods, means a contract or an agreement that—
(a) is arranged or procured by the supplier of the goods; and
(b) is for the provision of credit by a person other than the supplier to enable person A to pay, or defer payment, for the goods.
(5) An order made under subsection (3) (a) to (d) does not prevent proceedings being instituted or commenced under this Part.
(6) This section does not limit or affect—
(a) the Illegal Contracts Act 1970; or
(b) section 317 of the Accident Compensation Act 2001.
[57] The Supreme Court in Red Eagle sets out the approach to be taken in applying s 43. The Tribunal must consider whether:
- (a) the purchaser was in fact misled or deceived; and
- (b) If so, was the trader’s conduct the effective cause or an effective cause of the purchaser’s loss or damage?
[58] As set out above, I find that the purchaser was in fact misled.
[59] I am satisfied that the purchaser has suffered loss. She paid $45,000 for a motorhome that has numerous defects, is unfit for its purpose and is unsafe. I am satisfied that the vehicle is, in its current state, worth substantially less than the amount the purchaser paid.
[60] I am also satisfied that the trader’s conduct was an effective cause of the purchaser’s loss or damage. The purchaser was specifically looking for a vehicle to live in for a lengthy period of time. Had the trader not made the representations about the vehicle’s characteristics or its suitability for living in for long periods of time, I very much doubt that the purchaser would have purchased the vehicle.
[61] In all the circumstances of this case, the appropriate remedy under the FTA would be to declare the contract between the parties to purchase the vehicle to be void as at the date of this decision under s 43(3)(a)(ii) of the FTA and to direct the trader to refund the full purchase price under s43(3)(e) of the FTA. However, as I have already found that the purchaser is entitled to a refund of the purchase price under the CGA, I make no further orders under the FTA. I do note though that the purchaser would have been entitled to this remedy under the FTA if her CGA claim had failed.
DATED at AUCKLAND this 8th day of May 2017
B.R. Carter
Adjudicator
[1] Stephens v Chevron Motor Court Limited [1996] DCR1.
[2] Cooper v Ashley & Johnson Motors Limited [1996] 7 TCLR 407
[3] Ibid, at 417
[4] Acquired Holdings Ltd v Turvey [2007] NZHC 1251; (2007) 8 NZBLC 102,107
[5] Taylor Bros Limited v Taylors Textile Services Auckland Limited (1987) 2 TCLR 415 at 447.
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