Palmer v Tandarra Enterprises Limited t/a Pearce Brothers - Reference No. MVD 085/2017 (Auckland) [2017] NZMVDT 70; [2017] NZMVT Auckland 70 (20 June 2017)

Last Updated: 18 July 2017

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
		[2017] NZMVDT Auckland 70 Reference No. MVD 085/2017
	IN THE MATTER	of the Motor Vehicle Sales Act 2003
	AND
	IN THE MATTER	of a dispute
	BETWEEN	STEVEN ANTHONY PALMER
		Purchaser
	AND	TANDARRA ENTERPRISES LIMITED TRADING AS PEARCE BROTHERS
		Trader
MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Gregory, Assessor
HEARING at Auckland on 24 May 2017
DATE OF DECISION 20 June 2017
APPEARANCES
Mr S A Palmer, Purchaser
Mr M Vongprem, Witness for the Purchaser
Mr A Lucich, for the Trader

ORDERS

A. Tandarra Enterprises shall, within 10 working days of this decision, pay to Mr Palmer the amount equivalent to 81% of all the interest paid between 21 November 2016 and the date of this decision under the collateral credit agreement with UDC Finance Limited.

DECISION

[1] Mr Palmer is entitled to recover 81% of all the interest paid between 21 November 2016 and the date of this decision on the loan with UDC Finance dated 21 November 2016.
[2] He is not entitled to recover any other costs or losses.

REASONS

Introduction

[3] On 21 November 2016, Steven Palmer purchased a 2005 Nissan Murano from Tandarra Enterprises Limited, trading as Pearce Brothers for $14,975. Mr Palmer also purchased an extended warranty for $595. As part of the purchase arrangement, Mr Palmer received $2,000 for the trade in of his 2001 BMW 330I.
[4] Mr Palmer had earlier borrowed money from UDC Finance to purchase the BMW 330I and still owed $5,717.90 on that vehicle. Consequently, Mr Palmer entered into a further loan agreement with UDC Finance on 21 November 2016 (“the collateral credit agreement”) under which he borrowed the balance of the purchase price of the Nissan Murano and the outstanding balance of the earlier loan.
[5] Mr Palmer’s ownership of the Nissan Murano was not a happy one. The Nissan Murano had a fault that Tandarra Enterprises was unable to repair. Mr Palmer was also distressed by the way Tandarra Enterprises conducted itself during this dispute.
[6] Mr Palmer rejected the vehicle. Tandarra Enterprises has accepted that rejection. It agrees that the vehicle had a fault that it did not succeed in repairing in a reasonable time as required by the Consumer Guarantees Act 1993 (“the Act”).
[7] Tandarra Enterprises has refunded the purchase price of the Nissan Murano and the cost of the extended warranty. Mr Palmer has now applied to the Tribunal to recover the remaining balance of the collateral credit agreement – including the amounts still owing on the BMW 330I. He also seeks damages from Tandarra Enterprises for loss of business that he says arises from the way Tandarra Enterprises conducted itself during this dispute.
[8] Mr Palmer has also applied to recover $2,000, being the trade in price of his BMW 330I, and $655.13, being the capital payments made against the collateral credit agreement.

The Issue

[9] Mr Palmer has rejected the vehicle and that rejection has been accepted. The sole issue in this case is what, if any, further remedy is Mr Palmer entitled to under the Act?

What further remedy is Mr Palmer entitled to under the Act?

Mr Palmer has no further entitlement to a refund under s 23 of the Act

[10] Mr Palmer has rejected the Nissan Murano because it breached the acceptable quality guarantee in s 6 of the Act and Tandarra Enterprises did not succeed in repairing the Nissan Murano in a reasonable time. Mr Palmer is entitled to do this under s 18(2)(b)(ii) of the Act.
[11] Section 23(1)(a) of the Act provides that Mr Palmer is entitled to a refund of the money paid to purchase the Nissan Murano. Tandarra Enterprises has refunded the purchase price of the vehicle and the cost of the extended warranty. Mr Palmer is entitled to no further remedies under s 23(1)(a) of the Act.

Mr Palmer is entitled to recover a proportion of the interest paid on the collateral credit agreement

[12] Under s 23A(2) of the Act, the Tribunal may order that any or all of Mr Palmer’s obligations under the collateral credit agreement vest in Tandarra Enterprises. Mr Palmer seeks an order under s 23A(2) of the Act. He has asked the Tribunal to order that Tandarra Enterprises pay all amounts outstanding on the collateral credit agreement.
[13] I do not think an order transferring all of Mr Palmer’s obligations to Tandarra Enterprises would do justice between the parties in this case. The outstanding balance of the collateral credit agreement includes the amounts still owing on the BMW 300I. I do not consider it appropriate for Tandarra Enterprises to compensate Mr Palmer for his unpaid debt on a previous vehicle. That would be a windfall to Mr Palmer and would enrich him at the expense of Tandarra Enterprises.
[14] However, I do consider that Tandarra Enterprises should compensate Mr Palmer for interest paid by Mr Palmer on the amount borrowed to purchase the Nissan Murano.
[15] Under the collateral finance agreement, Mr Palmer borrowed a total of $19,719.90 from UDC Finance. On my calculation, 81% of that loan ($16,002) related to the purchase of the Nissan Murano. The remaining 19% of the loan was the outstanding balance of the earlier BMW 330I loan.
[16] On the basis of those calculations, I consider that Mr Palmer is entitled to receive 81% of all interest payments he has made under the collateral credit contract between 21 November 2016 and the date of this decision.
[17] I do not have sufficient information before me to specify the precise amounts that must be paid to Mr Palmer, and will leave that to the parties to resolve. I expect this can be done by Mr Palmer obtaining a statement from UDC Finance setting out the amount of all interest paid since 21 November 2016 and then calculating 81% of that amount. However, if the parties cannot agree between themselves as to the amount to be paid to Mr Palmer, they have leave to seek guidance from the Tribunal.

Mr Palmer is not entitled to recover loss of business income

[18] Mr Palmer also seeks compensation for loss of business income. Mr Palmer operates a hairdressing business. Mr Palmer says the way in which Tandarra Enterprises has dealt with this dispute has caused him to lose business, a loss he values at $912.40.
[19] Section 18(4) of the CGA sets out the circumstances in which Mr Palmer can recover loss where a vehicle has failed to comply with the acceptable quality guarantee, as in this case.

18. Options against suppliers where goods do not comply with guarantees
    

...

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

[20] Mr Palmer’s claim for loss of business income faces two hurdles. First, the loss complained of by Mr Palmer is not a reasonably foreseeable consequence of the vehicle’s failure. The alleged loss was not caused by the vehicle’s failure. Mr Palmer says it was caused by the way in which Tandarra Holdings conducted itself during the dispute. That loss is not recoverable under s 18(4) of the Act.
[21] The second is that, even if this type of loss was recoverable under s 18(4) of the Act, Mr Palmer has not provided sufficient evidence to show that he has in fact lost income, or if he has, the extent of that income loss.
[22] Consequently, Mr Palmer is not entitled to compensation for loss of business income under s 18(4) of the Act.

Mr Palmer cannot recover the trade in amount or the amount of capital payments

[23] Mr Palmer’s seeks to recover $2,000 from Tandarra Enterprises, which is the amount he received when he traded in his BMW 330I. Mr Palmer says he is entitled to this amount as it would put him in the position that he would have been in had he not purchased the Nissan Murano.
[24] Mr Palmer’s claim to recover the trade in amount must fail. He has already received that money - the amount he borrowed from UDC Finance to purchase the Nissan Murano and refinance the earlier loan was reduced by $2,000 to reflect the value of the trade in. He cannot recover it again.
[25] Mr Palmer also seeks to recover $655.13, being the value of capital payments made against the collateral credit agreement. Again, Mr Palmer has already been compensated for those amounts – Tandarra Enterprises has refunded the entire purchase price of the Nissan Murano and the extended warranty. The amount of that refund necessarily included all of the capital payments made under the collateral credit agreement that relate to the purchase of the Nissan Murano. Mr Palmer is not entitled to be compensated for those amounts again.

Conclusion

[26] Mr Palmer is entitled to recover 81% of all the interest paid between 21 November 2016 and the date of this decision on the loan with UDC Finance dated 21 November 2016.
[27] He is not entitled to recover any other costs or losses under the Act.

DATED at AUCKLAND this 20th day of June 2017

B.R. Carter
Adjudicator