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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 5 December 2019
IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA
MVD
262/2019
[2019] NZMVDT 219
BETWEEN CECELIA MARY O’CONNELL
Purchaser
AND HONDA NEW ZEALAND LIMITED T/A HONDA CARS CHRISTCHURCH
Trader
HEARING at Christchurch on 1 October 2019, additional submissions
received on 7 and 9 October 2019
MEMBERS OF TRIBUNAL
J S McHerron, Barrister – Adjudicator
S D Gregory – Assessor
APPEARANCES
C M O’Connell, Purchaser
P M O’Connell, Son of Purchaser
K
S A’Court, Salesman for Trader
M Webster, General Sales Manager of
Trader
DATE OF DECISION 14 October 2019
___________________________________________________________________
DECISION OF THE TRIBUNAL
___________________________________________________________________
Cecelia O’Connell’s application is dismissed.
___________________________________________________________________
REASONS
Introduction
[1] Cecelia O’Connell claims $6,000 in damages from Honda New Zealand Ltd, trading as Honda Cars Christchurch (Honda Cars). She says that Honda Cars made a false or misleading representation to her about the price of a 2010 Honda Jazz it sold to her on or around 21 March 2014.
[2] Mrs O’Connell claims that Honda Cars’ salesman Keith A’Court told her that the purchase price for the Honda was $14,000. From that price, she says she expected $6,000 would be deducted which, she says, was the agreed price for her trade-in, a 2001 Honda Civic that Honda Cars agreed to purchase from her.
[3] However, Honda Cars never paid the $6,000 to Mrs O’Connell. More than five years later, she has applied to the Tribunal for reimbursement of this sum.
[4] Honda Cars says the purchase price for the Honda Jazz was, in fact, $19,950. The trade-in value of Mrs O’Connell’s Honda Civic, $5,950, was deducted from that price to derive a net changeover figure of $14,000. All of this is clearly documented on the sales agreement which Mrs O’Connell signed.
[5] Honda Cars denies making any false or misleading representation with respect to the price of the Honda Jazz. Moreover, Honda Cars denies Mrs O’Connell has suffered any loss, as she paid a fair market price for her Honda Jazz, and she received a fair price for the trade-in of her Honda Civic.
Relevant law
[6] The relevant law which the Tribunal needs to apply to the facts of the present case is set out in the Fair Trading Act 1986 (the Act). The relevant provisions of the Act are as follows:
- 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.
No person shall, in trade, in connection with the supply or possible supply of goods or services or with the promotion by any means of the supply or use of goods or services ...
(g) make a false or misleading representation with respect to the price of any goods or services; ...
[7] In essence, the Tribunal needs to determine whether Honda Cars made a false or misleading representation with respect to the price of the Honda Jazz it sold to Mrs O’Connell, and whether that amounted to misleading and deceptive conduct in terms of s 9 of the Act. If so, the Tribunal then needs to assess whether Mrs O’Connell suffered any loss or damage as a result of the misleading conduct, for which Honda Cars should compensate her.
[8] The Supreme Court has provided guidance as to the way in which s 9 is to be interpreted and how the Tribunal should assess whether a claimant has suffered loss or damage if they are able to establish misleading and deceptive conduct in breach of s 9:[1]
[28] 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 said to be affected. ... 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.
[29] Then, with breach proved and moving to s 43, the court must look to see whether it is proved that the claimant has suffered loss or damage “by” the conduct of the defendant. ...
The sale of the Honda Jazz to Mrs O’Connell
[9] In early 2014, Mrs O’Connell was looking for a Honda Jazz in the price range of $13,000 to $17,000. She had been attracted to a red Honda Jazz for sale by Honda Cars but missed out because it was sold. Mr A’Court told her that he would not have sold that car to her anyway because it had been damaged. Mr A’Court then offered to show her a blue Honda Jazz, which had 40,000 km on the odometer and was a 2010 model with front and back parking sensors that was for sale for $16,950.
[10] However, before showing Mrs O’Connell this vehicle, Mr A’Court mentioned that another Honda Jazz with lower mileage had just been traded in. He brought that car out to show Mrs O’Connell. She took the vehicle for a test drive and then made an offer to purchase it. Mrs O’Connell produced a copy of her handwritten offer, which stated as follows:
Offer of $13,000
Trade in my Honda Civic 2001 74,000 k
Plus front & rear parking sensors & warranty
[Mrs O’Connell’s signature]
[11] After she had presented this offer, Mr A’Court asked Mrs O’Connell if she could make a higher offer. Mrs O’Connell thought for a while and said she would offer $14,000 for the car. Mr A’Court then left the office. He returned a short time later with his hand extended to shake hers. Mr A’Court said “congratulations Mrs O’Connell you have bought the car”. Mrs O’Connell said that she then realised that Mr A’Court had not yet looked at the Honda Civic that she wished to trade in. She reported that Mr A’Court then said “we had better see what we will give you for your car”. This sequence of events was disputed by Mr A’Court and Honda Cars’ Sales Manager, Mark Webster, who said that the appraisal of Mrs O’Connell’s Honda Civic occurred before the figure of $14,000 was agreed.
[12] I could not resolve this dispute on the evidence. So much time has passed since the transaction and Mr A’Court’s recollection of what happened in 2014 was patchy. However, I was not persuaded that Mrs O’Connell’s account of the sequence of these events was wrong. And, if she was right that the appraisal of her Honda Civic only occurred after the figure of $14,000 was agreed, then I think it supports her claim that she thought the trade-in value of the Civic would be deducted from the purchase price for the Jazz, which was agreed to be $14,000.
[14] Mr A’Court then proceeded to draw up a sales agreement for the vehicle. A copy of this agreement was produced by Mrs O’Connell. It is dated 21 March 2014. It records the Honda Jazz’s “recommended retail price” as $19,950. This figure is also recorded as the “total price (including GST)”. Beneath that figure is a description of the trade-in vehicle, the Honda Civic, for which a “Trade in Price” of $5,950 is recorded. Next to that figure is a small dash or “minus” figure, indicating that it is to be subtracted from the recommended retail price, to reach a figure of $14,000, which is described in the sales agreement as the “total vehicle amount”. Beneath these numbers are several conditions, including condition number 3 which states as follows:
I/we will purchase the vehicle at the TOTAL AMOUNT DUE in cash and tender herewith as payment a deposit of $500 ... and the Traded Vehicle. On delivery, I/we agree to pay the balance, being $13,500.00 ...
[15] The figure of $13,500.00 was circled in pen on the sales agreement, which Mrs O’Connell said was done by Mr A’Court in front of her. She was aware that this was the balance that she had to pay when she collected the Jazz on 26 March 2014, having already paid the $500 deposit on her credit card.
[16] On or around 26 March 2014, Mrs O’Connell paid the balance of $13,500 by personal cheque and at the same time she handed over her Honda Civic. That reflected the written terms of the agreement, namely that the purchase price for the Jazz was $14,000 plus the traded-in Civic.
[17] Mrs O’Connell said that when she signed the sales agreement for the Honda Jazz on 21 March 2014, she had bad close up eyesight due to a cataract in one of her eyes. She was incapable of reading the small print on the sales agreement without a magnifying glass, which she had not brought with her to Honda Cars.
[18] Mrs O’Connell said that Mr A’Court did not clearly explain to her the various amounts set out on the sales agreement or what those amounts represented. She said she had considerable trust in Mr A’Court, and was experiencing “euphoria” from her purchase of the Honda Jazz at what she thought was a good price.
[19] Mrs O’Connell said she thought that the $14,000 agreed price did not factor in the trade-in price for her own vehicle, namely the $6,000 figure she had agreed with Mr A’Court. Nevertheless, she did not question the fact that she was required by Honda Cars to pay it a total of $14,000 and that no deduction was made for the $6,000 trade-in price.
[20] Nor did Mrs O’Connell discuss or make any arrangements with Honda Cars for the payment of the $6,000 she says she was owed.
[21] Indeed, it was only about six to twelve months later, after talking with a friend, that it dawned on Mrs O’Connell that the $6,000 trade-in amount was outstanding.
Tribunal’s assessment
[22] Having considered all of the evidence I am satisfied that a reasonable consumer would have understood that the agreed upon figure of $14,000 was on top of, not inclusive of, the trade-in value of Mrs O’Connell’s Honda Civic. Indeed, I think that is reflected in Mrs O’Connell’s own original handwritten offer of $13,000, that she was offering to buy the Honda Jazz for $13,000 in cash plus her Honda Civic. Moreover, there are aspects of Mrs O’Connell’s own conduct which makes me doubt whether she was actually misled in this case.
[23] First, she paid the full purchase price of $14,000. In my view, a reasonable consumer would only expect to pay $8,000 if that was the true balance of the retail price after the trade-in value had been taken into account.
[24] Mrs O’Connell explained that the reason she did not question why she was required to pay the full amount of $14,000, and not $8,000 after the $6,000 trade in price had been deducted, was that she was in a “euphoric state” having purchased a vehicle and did not think to ask what had happened to the “missing” $6,000.
[25] I accept that it is common for significant purchases to generate a degree of excitement and happiness (and sometimes remorse). I also accept Mrs O’Connell’s evidence that her purchase of the Honda Jazz made her euphoric. But, from my observations at the hearing, I was also impressed with Mrs O’Connell’s clear recollection of events, her forthrightness, intelligence and determination. In short, she did not strike me as particularly vulnerable to being taken advantage of, in relation to a commercial transaction. However, I do acknowledge her evidence that she had poor eyesight at the time, and that she was inexperienced with purchasing cars (for which her husband had taken responsibility when he was alive).
[26] Ultimately, however, applying the test from Red Eagle, the Tribunal needs to ascertain whether a reasonable person in Mrs O’Connell’s situation – that is, with the characteristics known to Honda Cars or of which it ought to have been aware – would likely have been misled or deceived.
[27] In my view, a reasonable consumer would only expect to pay the retail price of the car minus any agreed trade-in figure. I consider that a reasonable consumer who thought the net price after trade in was only $8,000 (as Mrs O’Connell says she did) would have asked the trader to explain why she was being asked to pay the full price of $14,000. That is especially so where there were several days between the date when the parties agreed on the price and the $500 deposit was paid (21 March 2014) and the date when the cars were exchanged and Mrs O’Connell paid the balance of the purchase price (26 March 2014). During that interval, any euphoria associated with the purchase is likely to have died down, allowing calm reflection on the transaction.
[28] In the present case, there was a dispute about what the agreed trade-in price was. Mrs O’Connell’s evidence was that Mr A’Court told her that the trade-in price for her Honda Civic was assessed at $6,000. I found her a credible and astute witness who had clear recall of the events of the transaction. By contrast, Mr A’Court did not appear to have a very clear recollection of the events that occurred. He was, understandably given the amount of time that had elapsed, dependent on the written documents which recorded a trade-in value of $5,950. Mr Webster’s evidence was of no real assistance because he did not actively participate in the negotiation that occurred between Mr A’Court and Mrs O’Connell. I think what is likely to have happened is that Mr A’Court had no flexibility in terms of the retail price of $19,950. He did, however, have some flexibility in terms of the trade-in value that Honda Cars was prepared to give Mrs O’Connell. The documented figure of $5,950 appears to have been tailored to fit within the parameters of the agreed offer of $14,000 as made by Mrs O’Connell and the fixed retail price of $19,950. But Mr A’Court did not actively challenge Mrs O’Connell’s recall that he had told her she was eligible for $6,000 by way of a trade-in contribution for her Honda Civic.
[29] The other document which is relevant to assessing whether Honda Cars misrepresented the price of the Honda Jazz is the consumer information notice. Unfortunately, it was not clear when this document was presented to Mrs O’Connell. However, the date on the bottom suggests that it was signed on 26 March 2014, when Mrs O’Connell came to collect the Honda Jazz and pay the $13,500 balance. Mrs O’Connell denied that she had seen this document before signing it. In particular, she denied that the consumer information notice had been displayed in the vehicle. The significance of the consumer information notice for present purposes is that it clearly records the cash price of the vehicle as $19,950. This is in somewhat larger print than the print on the sales agreement. Mrs O’Connell told the Tribunal that, notwithstanding her vision difficulties at the time the vehicle was sold to her, the print size of the $19,950 figure was large enough that she would have been able to read it at the time she signed that document. Nevertheless, Mrs O’Connell did not recall seeing that figure of $19,950 on the document.
[30] Indeed, there was a lack of evidence that the retail price of $19,950 was ever specifically drawn to Mrs O’Connell’s attention. She could not recall whether Mr A’Court had told her that figure over the phone and nor could Mr A’Court recall whether he had ever told Mrs O’Connell that the vehicle’s price was $19,950. For him, the important price was the net figure, after the trade in had been deducted. That was $14,000 and, from his perspective, it included Mrs O’Connell’s traded-in Honda Civic. That is essentially where the parties departed from one another. Honda Cars was adamant that the $14,000 figure agreed included the trade-in, whereas Mrs O’Connell was adamant that the trade-in price ought to have been further deducted from the $14,000.
[31] Ultimately, while I do not think that Mrs O’Connell has established Honda Cars engaged in misleading and deceptive conduct in relation to the price at which it sold the Honda Jazz to her, I do consider that the evidence establishes that she was underpaid $50 in respect of her trade-in. That is because I found her evidence that the agreed trade-in price was $6,000 rather than $5,950 to be credible. I have no power to order Honda Cars to pay Mrs O’Connell to pay this sum of $50 but, in good conscience, I invite it to do so.
[32] In any event, even if I am wrong in relation to Mrs O’Connell’s primary claim, namely that she was not misled about whether the $6,000 trade-in figure should be deducted from the $14,000 she paid, it would still be necessary for her to prove loss suffered by her as a result of Honda Cars’ misleading conduct. In this regard, I note that the object of the remedies that are available under s 43 of the Fair Trading Act is to do justice to the parties in the particular circumstances of the case.[3] Although Mrs O’Connell thought she had reached a great deal with Honda Cars, and has felt considerable disappointment and embarrassment ever since she realised that it was not going to pay her the $6,000 she believed she was entitled to, the Tribunal’s Assessor, Mr Gregory, and I consider that the evidence does not establish that she paid an unfair price for the Honda Jazz. Honda Cars produced evidence of sales that it made at the same period of similar vehicles, which suggests that the price charged to her for the car was not unreasonable and was in fact a fair price. Moreover, in our view, she was paid a fair price for her Honda Civic trade-in.
[33] Accordingly, it is important to make clear to Mrs O’Connell that we believe that she has not been “ripped off” by Honda Cars, to put it colloquially. Even if the evidence was stronger in her favour in establishing misleading and deceptive conduct by Honda Cars in respect of the pricing of the vehicle, I do not consider that she would be entitled to any remedy because she has not established losses of the kind that would entitle her to a remedy in the particular circumstances of the present case.
In any event, Mrs O’Connell’s claim is outside the three-year limitation period
[34] Finally, as this Tribunal only has jurisdiction to consider Mrs O’Connell’s claim under the Fair Trading Act 1986,[4] it is necessary to address the extraordinary length of time she has taken to commence her claim. The purchase of the Honda Jazz took place in March 2014, yet Mrs O’Connell did not apply to the Tribunal until July 2019, more than five years later. Even if I had found in her favour that she was misled about the price of the Jazz, her claim for damages under s 43 of the Act would have been precluded by s 43A, which provides:
43A Application for order under section 43
A person may apply to a court or the Disputes Tribunal for an order under section 43 at any time within 3 years after the date on which the loss or damage, or the likelihood of loss or damage, was discovered or ought reasonably to have been discovered.
[35] Allowing for any “euphoria” associated with the purchase to die down, a reasonable consumer would have realised they had been short-changed within a month or so after the sale, at the very most. That means Mrs O’Connell would only have been able to bring her claim for damages under the Act within three years after April or May 2014, namely April or May 2017, more than two years before she did so.
Conclusion
[36] For the above reasons, Mrs O’Connell’s application is dismissed.
J S McHerron
Adjudicator
[1] Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28], [29] (footnotes omitted).
[3] Red Eagle Corp Ltd v Ellis (above n 1) at [31].
[4] I note, for example, that the Tribunal has no jurisdiction to award damages for misrepresentation under s 35 of the Contract and Commercial Law Act 2017: Motor Vehicle Sales Act 2003, s 89(1)(b)(iv).
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