Chand v Top One Trading Ltd - Reference No. MVD 188/2019 [2019] NZMVDT 156 (23 July 2019)

Last Updated: 23 August 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 188/2019 [2019] NZMVDT 156 BETWEEN MOHINI CHAND & SATISH CHAND Purchasers AND TOP ONE TRADING LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 11 July 2019

APPEARANCES

M Chand and S Chand, Purchasers

A Kassouri and C Wu, for the Trader

DATE OF DECISION 23 July 2019

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DECISION OF THE TRIBUNAL

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1. Top One Trading Ltd shall, within 10 working days of the date of this decision, pay $104 to Mohini Chand and Satish Chand.

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REASONS

Introduction

[1] On 7 April 2019, Mohini and Satish Chand entered into an agreement to purchase a 2008 BMW 530i M-Sport from Top One Trading Ltd (the agreement). They paid a deposit of $1,000 on that day. They now seek to recover that deposit, together with other costs, claiming that Top One Trading Ltd failed to perform the repairs and grooming that were a condition of the agreement.
[2] Top One Trading Ltd says that Mr and Mrs Chand are not entitled to recover the deposit. It says that the repairs and grooming were not a condition of the agreement. Further, it says that it has performed the required grooming and repairs, other than the replacement of parts that had to be ordered from overseas, which Mr and Mrs Chand agreed could take some time to be obtained.

The Issues

[3] Against this background, the issues requiring consideration are:

• (a) Were Mr and Mrs Chand entitled to cancel the agreement under s 37 of the Contract and Commercial Law Act 2017 (the CCLA)?
• (b) Is Top One Trading Ltd entitled to retain the deposit under the CCLA?
  

Were Mr and Mrs Chand entitled to cancel the agreement?

[4] Under s 37(b) of the CCLA, a party to a contract may cancel it if a term in the contract is breached by another party to the contract. Mr and Mrs Chand say they were entitled to cancel the contract to purchase the vehicle entered into on 7 April 2019 and recover the $1,000 deposit because Top One Trading Ltd breached a term of the agreement by failing to perform the required repairs and grooming.
[5] I understood Mr and Mrs Chand to submit that Top One Trading Ltd had breached the terms of the agreement because it failed to:

• (a) adequately groom the vehicle;
• (b) adequately touch up defects with the vehicle’s paintwork;
• (c) install replacement windscreen seals to a “professional BMW standard”; and
• (d) install replacement bonnet struts.

[6] I am not satisfied that Mr and Mrs Chand have proven that it was a condition of the agreement that Top One Trading Ltd would perform these tasks. Ordinarily, in the context of the sale and purchase of a motor vehicle, such a term would be reflected in the written contract between the parties. The agreement, a Vehicle Offer and Sale Agreement (VOSA) signed by the parties on 7 April 2019, contains a section for such “special conditions”. Although the VOSA contains two special conditions (that the vehicle required servicing on delivery and that the vehicle came with a 30-day warranty), neither of those special conditions corresponded with the conditions that Mr and Mrs Chand now say applied to the agreement.
[7] Further, although there was a handwritten list of agreed “thing to do”, which Mr and Mrs Chand provided to Top One Trading Ltd on 7 April 2019, I am not satisfied that Mr and Mrs Chand have proven that Top One Trading Ltd was required to perform those tasks as a condition of the agreement.
[8] I accept the evidence of Jackie Wu, a director of Top One Trading Ltd, that he agreed to do his best to perform the requested repairs and grooming but did not understand that Mr and Mrs Chand could cancel the agreement if Top One Trading Ltd failed to perform any of those tasks. In that regard, I note the evidence from Mr Chand that Mr Wu did repeatedly say words to the effect that “we will try our best but cannot guarantee anything.”
[9] In those circumstances, given the conflicting evidence from the parties and the lack of any documents to prove that it was a condition of the agreement that Top One Trading Ltd would perform the required repairs and grooming, I am not satisfied that Mr and Mrs Chand were entitled to cancel the agreement because of any failure by Top One Trading Ltd to perform the requested tasks.

Is Top One Trading Ltd entitled to retain the deposit under the CCLA?

[10] By refusing to purchase the vehicle, Mr and Mrs Chand repudiated the contract. Under s 36(1) of the CCLA, Top One Trading Ltd was then entitled to cancel the contract following Mr and Mrs Chand’s repudiation, which it has done. Having cancelled the contract, Top One Trading Ltd was then entitled to retain a reasonable estimate of its costs and losses arising from the repudiation of the contract.
[11] Amin Kassouri, on behalf of Top One Trading Ltd, said that Top One Trading Ltd incurred costs in preparing the vehicle to be supplied to Mr and Mrs Chand, including performing most of the required list of repairs and grooming tasks and obtaining a new warrant of fitness. Top One Trading Ltd provided invoices from Auckland City BMW and from a China-based supplier for components purchased to perform the work required by Mr and Mrs Chand. Top One Trading Ltd say that its combined costs were $896. It has previously offered to refund the remaining deposit to Mr and Mrs Chand.
[12] Under s 43(1) of the CCLA, where a contract has been cancelled, the Tribunal can grant relief where it is just and practicable to do so. That relief can include an order under s 43(3)(a) of the CCLA directing a party to pay a sum that the Tribunal thinks just. In the circumstances of this case, I consider that the $896 estimate provided by Top One Trading Ltd is a reasonable estimate of the costs it incurred in preparing the vehicle for sale to Mr and Mrs Chand, and I consider it just that Top One Trading Ltd retain that amount. I also consider it just that Top One Trading Ltd refund the remainder to Mr and Mrs Chand.
[13] Accordingly, under s 43(1) of the CCLA the Tribunal orders that Top One Trading Ltd shall, within 10 working days of the date of this decision, pay $104 to Mr and Mrs Chand.

DATED at AUCKLAND this 23rd day of July 2019

B.R. Carter
Adjudicator