Wikitera v CMST Limited t/a Moom Group Automotive - Reference No. MVD 236/2019 [2019] NZMVDT 242 (12 November 2019)

Last Updated: 20 December 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 236/2019
[2019] NZMVDT 242

BETWEEN OKENA TE PAENGA SIMON WIKITERA AND S.H.A.W INVESTMENTS LIMITED

Purchasers

AND CMST LIMITED T/A MOOM GROUP AUTOMOTIVE

Trader

HEARING at Auckland on 15 October 2019
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

S D Gregory – Assessor
APPEARANCES

O T P Simon Wikitera, Purchaser/Director of Purchaser
R Luo, Finance Manager of Trader

DATE OF DECISION 12 November 2019

___________________________________________________________________

DECISION OF THE TRIBUNAL

___________________________________________________________________

Mr Simon Wikitera’s rejection of the Nissan NV350 is upheld. CMST Ltd must pay S.H.A.W Investments Ltd $22,947.92 no later than 26 November 2019.

___________________________________________________________________

REASONS

Introduction

[1] Okena Simon Wikitera and his company S.H.A.W Investments Ltd purchased a Nissan NV350 diesel van with 155,030 km on the odometer for $19,390 on 17 September 2018 from CMST Ltd trading as Moom Group Automotive. Mr Simon Wikitera and his company purchased the van for their expanding courier business. Within a few days after taking delivery of the van, it started having engine problems. Moom Group Automotive made some repairs, but this did not fix the problems.
[2] Mr Simon Wikitera immediately returned the van to the repairer. It seems that its engine has now been replaced with a secondhand engine. But Moom Group Automotive refuses to return the van to Mr Simon Wikitera. It argues that the engine damage was caused by him putting petrol into the vehicle’s fuel tank instead of diesel. Moom Group Automotive argues that Mr Simon Wikitera must pay for the engine repairs. It also argues Mr Simon Wikitera or his staff has damaged two loan vehicles that were provided to him by Moom Group Automotive.
[3] Mr Simon Wikitera simply asked for the vehicle he purchased to be returned to him. He has not had the vehicle since 27 September 2018, only 10 days after he bought it. Mr Simon Wikitera argues that neither he nor his company should have to pay for the repairs that Moom Group Automotive carried out on the vehicle.

What is this claim about?

[4] Mr Simon Wikitera was in the process of filing a claim in the Motor Vehicle Disputes Tribunal when he received notice of a claim that Moom Group Automotive had filed against S.H.A.W Investments in the Disputes Tribunal. A hearing for that claim occurred on 5 July 2019 but no one appeared at the hearing on behalf of Moom Group Automotive. The Disputes Tribunal referee ordered that Moom Group Automotive’s claim and S.H.A.W Investments’ counterclaim be transferred to the Motor Vehicle Disputes Tribunal. Moom Group Automotive then applied for a rehearing in the Disputes Tribunal. The rehearing took place on 10 September 2019. No one from Moom Group Automotive attended the rehearing. The Disputes Tribunal ordered the matter to proceed in the Motor Vehicle Disputes Tribunal. It stated that it will not consider any further application for a rehearing, nor hold any further hearings in relation to Moom Group Automotive’s claim.[1]
[5] The Motor Vehicle Disputes Tribunal’s jurisdiction relates to applications “in respect of the sale of any motor vehicle”.[2] Accordingly, while this Tribunal can resolve Mr Simon Wikitera’s claim in respect of his Nissan, the Tribunal has no jurisdiction to consider Moom Group Automotive’s counterclaim, in relation to the loan vehicles.
[6] As I explained to Roger Luo, Moom Group Automotive’s Finance Manager, at the hearing, the present proceeding only relates to Mr Simon Wikitera’s van. Any claim that Moom Group Automotive may have in relation to any other vehicle needs to be brought in a different forum. This Tribunal has no jurisdiction to consider any claim in respect of the loan vehicles. Nor can this Tribunal offset any liability that may or may not exist in respect of loan vehicles used by Mr Simon Wikitera or his employees, against any relief that is ordered in his favour to be paid by Moom Group Automotive.
[7] Nor does Moom Group Automotive have an excuse for any non-compliance with this Tribunal’s orders because of any grievance that it may have against Mr Simon Wikitera in respect of other vehicles. They are two separate issues that will need to be resolved separately. Moom Group Automotive had an opportunity to advance its claim against Mr Simon Wikitera or his company in the Disputes Tribunal. However, it failed to take advantage of that opportunity by failing to attend the Disputes Tribunal hearing on two occasions. Moom Group Automotive now has no excuse for not complying with the Motor Vehicle Disputes Tribunal’s orders, as set out at the beginning of this decision.
[8] Having clarified what this claim is about, I summarise the issues that the Tribunal needs to resolve:

• (a) Did the parties agree to contract out of the Consumer Guarantees Act 1993 (the Act)?
• (b) If not, did the Nissan fail to comply with the guarantee of acceptable quality?
• (c) If so, was it a failure of a substantial character?
• (d) What remedy, if any, is Mr Simon Wikitera/S.H.A.W Investments entitled to?

Issue one: Did the parties agree to contract out of the Act?

[9] One of the issues raised by Moom Group Automotive in its defence to Mr Simon Wikitera’s claim is that, because the vehicle was sold to a business, namely Mr Simon Wikitera’s courier business, there is “no warranty”.
[10] In support of that argument, Moom Group Automotive invokes cl 7 of the vehicle offer and sale agreement (VOSA), which provides:

7 Consumer Guarantees Act 1993:

... 7.2 I am acquiring the vehicle for business purposes, and agree that the Consumer Guarantees Act does not apply.

[11] The copy of the VOSA produced to the Tribunal was signed by Mr Luo on behalf of Moom Group Automotive and by Mr Simon Wikitera. However, cl 7.2, as set out above, was not separately initialled. Mr Simon Wikitera said that he was not even aware of cl 7.2 when he signed the agreement (as he did not read it) and that the provision was not discussed with him by Mr Luo or negotiated in any way.
[12] Mr Luo acknowledged that he did not explain that Moom Group Automotive was intending to contract out of the Act. Mr Luo also accepted that cl 7.2 was not negotiated between the parties, but was a standard form small print provision in its VOSA forms.
[13] It was not in dispute that the Nissan was acquired for “business purposes”. However, a Nissan NV350 is a light commercial vehicle that is “of a kind ordinarily acquired for personal, domestic, or household use or consumption”.[3] It is a multi-purpose vehicle that is not limited to business use. Because he bought a vehicle that is ordinarily acquired for personal, domestic, or household use or consumption, he is properly regarded as a “consumer” under the Act. Therefore, it would have been necessary for the parties to expressly contract out of the Act under s 43, in order to exclude the Act’s coverage in respect of the vehicle purchased.
[14] Section 43 of the Act provides (as far as is relevant) as follows:

43. No contracting out except for business transactions

(1) Subject to this section and to sections 40, 41, and 43A, the provisions of this Act shall have effect notwithstanding any provision to the contrary in any agreement.

(2) However, despite subsection (1), parties to an agreement may include a provision in their agreement to the effect that the provisions of this Act will not apply to that agreement, provided that—

(a) the agreement is in writing; and

(b) the goods or services are, or (in connection only with the guarantee of acceptable quality in section 7A) the gas or electricity is, supplied and acquired in trade; and

(c) all parties to the agreement—

(i) are in trade; and

(ii) agree to contract out of the provisions of this Act; and

(d) it is fair and reasonable that the parties are bound by the provision in the agreement.

(2A) If, in any case, a court is required to decide what is fair and reasonable for the purposes of subsection (2)(d), the court must take account of all the circumstances of the agreement, including—

(a) the subject matter of the agreement; and

(b) the value of the goods, services, gas, or electricity (as relevant); and

(c) the respective bargaining power of the parties, including—

(i) the extent to which a party was able to negotiate the terms of the agreement; and

(ii) whether a party was required to either accept or reject the agreement on the terms and conditions presented by another party; and

(d) whether all or any of the parties received advice from, or were represented by, a lawyer, either at the time of the negotiations leading to the agreement or at any other relevant time.

....

[15] In terms of the requirements of s 43(2) of the Act, the agreement was in writing, the vehicle was supplied and acquired in trade, all parties to the agreement are in trade and, on the face of the document, it is arguable that all parties agreed to contract out of the Act’s provisions in writing.
[16] However, the Tribunal still needs to be persuaded that “it is fair and reasonable that the parties are bound by the provision” in the VOSA, as is required by s 43(2)(d). As is clear from s 43(2A), in assessing whether the provision should be binding, the Tribunal needs to take into account the respective bargaining power of the parties, including the extent to which a party was able to negotiate the terms of the agreement to contract out of the Act, and whether a party was required to either accept or reject the agreement on the terms and conditions presented by another party. In addition, s 43(2A)(d) provides that the Tribunal must take into account whether all or any of the parties received advice from, or were represented by a lawyer, either at the time of the negotiations leading to the agreement or at any other relevant time.
[17] From these provisions, it is clear that for a contracting out agreement to be considered “fair and reasonable”, it generally must be one that is freely negotiated between the parties. In the present case, there was no evidence that the contracting out provision in the VOSA was negotiated at all. Mr Simon Wikitera’s evidence, which was accepted by Mr Luo, was that there was no negotiation between the parties about contracting out of the Act. Nor was any legal advice taken on contracting out. It was therefore a surprise to Mr Simon Wikitera to learn that Moom Group Automotive did not accept the Act applied.
[18] Having regard to these factors, in particular the fact that cl 7.2 of the VOSA was not negotiated, but instead appears to have been presented on a take it or leave it basis, I conclude that, under s 43(2)(d) of the Act, it is not fair and reasonable that the parties be bound by that clause.

Conclusion

[19] The Act applies to this dispute.
[20] I will proceed to consider whether the vehicle failed to comply with the guarantee of acceptable quality.

Issue two: Did the vehicle fail to comply with the guarantee of acceptable quality?

[21] Section 6(1) of the Act provides that “where goods are supplied to a consumer there is a guarantee that the goods are of acceptable quality”. According to s 2 of the Act, “goods” includes vehicles.
[22] “Acceptable quality” is defined in s 7 of the Act (as far as is relevant) 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.

...

(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.

[23] Whether a vehicle is of acceptable quality is considered from the point of view of a reasonable consumer who is fully acquainted with the state and condition of the vehicle, including any hidden defects.
[24] Mr Simon Wikitera took delivery of the vehicle on 20 September 2018. On 24 September 2018, after driving the vehicle twice, two warning lights appeared on the dashboard, the check engine light and the diesel particulate filter (DPF) light. The van started to lose much of its power. Mr Simon Wikitera contact Mr Luo who advised him to take the vehicle to Moom Group Automotive’s repairer, Joshua Motors.
[25] On 27 September 2018, Joshua Motors called Mr Simon Wikitera to advise that the vehicle was fixed and ready to collect. No information was provided to Mr Simon Wikitera about the repairs that were done to the vehicle, either then or afterwards, despite two requests by the Tribunal, including at the hearing itself, except to say that the DPF had been blocked and was now fixed.
[26] After collecting the vehicle, Mr Simon Wikitera drove it back onto the motorway at Freemans Bay, the last on-ramp before the Auckland Harbour Bridge heading North. On the Harbour Bridge, the vehicle lost power and started to produce smoke. Mr Simon Wikitera could not stop on the bridge so he drove as far as Esmonde Road, then left the motorway. Mr Simon Wikitera then called Moom Group Automotive, which told him to take the vehicle back to Joshua Motors.
[27] On 29 October 2018, “Jay”, who Mr Luo described as the owner of Moom Group Automotive, advised Mr Simon Wikitera by text that petrol had been found in his van’s engine. The van has never been returned to Mr Simon Wikitera, despite his making several requests for information on what was happening with it.
[28] On 16 April 2019, nearly seven months after he had dropped the vehicle in for repairs, Mr Simon Wikitera went to Moom Group Automotive to take back possession of his Nissan van. There, he was told by Mr Luo, who was conveying a message from Jay, that, as Mr Simon Wikitera had put petrol in his van, he would be liable to pay for the repairs that were carried out.
[29] Moom Group Automotive’s response to Mr Simon Wikitera’s claim is summarised in a letter which was sent to Mr Simon Wikitera on 20 April 2019. The letter states as follows:

This is our letter regarding the issue with your VAN.

1, At first stage we trying to help you.

We then let you go Joshua motors for clear the DPF.

But you are using the bad language to everyone. That’s why they told us they went stop service you.

And after the car making white smoking. We help you again give the car to Simms Diesel & Turbocharger Service LTD.

We got the report for this van, someone put the petrol inside of the car. You using the bad language to us again, and try to lie to us. By the law, company to company have no warranty on it. And also this is totally not our problem. Its you guys put the petrol inside of the car.

And you don’t want pay the fix fee which why we don’t release the car to you.

2, During the time we help you. We give you the best service, We loan an other van to you. But you give to your staff driving it and got big accident. We help you towing both car away for fix. And you saying “fking claim your company insurance, its fking your problem”.

And we losing 5K on our other van. Also we need pay 500 dollars excess fee on each claim. Which are the van I loan to you and other Subaru been accident with you. Policeman already give the answer that’s totally your staff problem.

Now we giving five days to you to paid everything we need to charge you. Otherwise we will take this case to the Court.

Totally amount 16140.

1, Towing fee 150.

2, Clean the DPF 850.

3, Simms Diesel & Turbocharger Service LTD check fee 785.

4, Change the Engie 8625.

5, Two excess fee 1000.

6, Loan car fix fee 5000.

[30] As already mentioned, any claims that Moom Group Automotive has in relation to its loan vehicles are not for this Tribunal to determine. This Tribunal simply needs to assess whether Mr Simon Wikitera’s Nissan van failed to comply with the guarantee of acceptable quality. In assessing that issue, it is relevant to consider whether Mr Simon Wikitera is responsible for putting petrol into his diesel van. If he can be shown to have done so then that would be inconsistent with the manner in which a reasonable consumer would treat the vehicle, in terms of s 7(4) of the Act. As long as the vehicle was acceptable in other respects, that would give Moom Group Automotive a defence against Mr Simon Wikitera’s claim.
[31] Mr Simon Wikitera denied putting petrol in the vehicle and provided records which satisfied the Tribunal’s Assessor, Mr Gregory, and me that, in the short time he possessed the Nissan, Mr Simon Wikitera only put diesel in it. Mr Simon Wikitera established this by showing that his fuel card only permits diesel and oil to be purchased for the vehicle. Furthermore, Mr Simon Wikitera produced a statement indicating that the fuel card was only used twice in the relevant period to fill the vehicle with diesel.
[32] Moom Group Automotive arranged for samples of diesel and engine oil to be sent for testing, to establish whether petrol had been put into the vehicle. However, the test results were not provided to the Tribunal. And, at the hearing, Mr Luo conceded that the results were inconclusive and did not establish petrol had been put into the van by Mr Simon Wikitera.
[33] Accordingly, I find that Moom Group Automotive has not established that Mr Simon Wikitera or anyone responsible to him put petrol into the Nissan van.
[34] Simms Diesel’s invoice records that the vehicle was noisy and had excessive smelly exhaust smoke. It drained the fuel filter and noted that the fuel had an unusual smell, colour and metal particles floating/suspended in liquid. Simms Diesel suspected the fuel pump was breaking up internally due to whatever is in the fuel but that it needed to have the fuel analysed. Simms Diesel recommended removing the fuel pump and fuel injectors to check and test them. It also suggested it may simply be cheaper to fit a replacement engine. Simms Diesel said that it did not know the condition of the engine.
[35] After the hearing, Moom Group Automotive produced a further invoice from D & G Auto Ltd, dated 13 March 2019. This invoice records that a secondhand engine was installed in the vehicle at a cost of $7,900.50. The notes on the invoice state as follows:

Find noise and smelly smoke when start the car.

Open fuel filter has unusual smell feels like wrong fuel has been put in.

May damage engine piston or bearings.

Secondhand engine replace recommended.

[36] I note also that at no point did Moom Group Automotive give Mr Simon Wikitera information on what his repair options were in respect of his vehicle. Rather, it appears that Moom Group Automotive simply went ahead and repaired the vehicle without providing any information to Mr Simon Wikitera about what exactly was wrong with it. It was only when Mr Simon Wikitera demanded the vehicle be returned to him that Moom Group Automotive responded by refusing to provide it to him. Rather, it insisted that, before it was returned, Mr Simon Wikitera would be liable, not only to pay the repair costs in respect of his own vehicle but the other costs identified by Moom Group Automotive in its 20 April 2019 letter to him.

Tribunal’s assessment

[37] It is clear that the vehicle’s engine has suffered a catastrophic failure, at least to the point where an assessment was made by Moom Group Automotive, on advice from its technicians, that the most economic repair option was simply to replace the van’s engine. This occurred only a few days after Mr Simon Wikitera took delivery of the vehicle, and only after he had travelled a few hundred kilometres in it.
[38] Although Moom Group Automotive has attempted to blame Mr Simon Wikitera for the problems in the van’s engine, I do not consider it has established any responsibility on his part for the vehicle’s failure. In particular, I find that Moom Group Automotive has failed to prove that Mr Simon Wikitera, or anyone employed by him, put petrol in the van.
[39] Even though this was a relatively high mileage vehicle when Mr Simon Wikitera purchased it, I do not consider that a reasonable consumer would find it acceptable, having paid over $19,000 for a five year old vehicle, for its engine to fail and need to be replaced, only a week or so after delivery. Accordingly, I have no hesitation in concluding that the vehicle failed to comply with the guarantee of acceptable quality.

Conclusion

[40] Mr Simon Wikitera has established that his vehicle failed to comply with the guarantee of acceptable quality.

Issue three: Was the failure of a substantial character?

[41] A failure to comply with the guarantee of acceptable quality will be found to be of a substantial character in the circumstances set out in s 21 of the Act, which provides:

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.

[42] In the present case, I consider that paras (a) and (c) of s 21 apply.
[43] First, I do not consider that a reasonable consumer would have acquired this vehicle, knowing that its engine would fail and require replacement within a matter of days after delivery, at a cost to remedy of approximately $8,000.
[44] Second, it goes without saying that for the engine to fail to the point that it needs replacement renders the vehicle substantially unfit for the primary purpose for which such a vehicle is acquired; namely to be driven.

Conclusion

[45] Accordingly, for both reasons, I conclude that the vehicle’s failure to comply with the guarantee of acceptable quality was of a substantial character.

Issue four: What remedy is Mr Simon Wikitera entitled to?

[46] The remedies available to a consumer under the Act in respect of a failure to comply with the guarantee of acceptable quality are set out in s 18, which provides:

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

(1) Where a consumer has a right of redress against the supplier in accordance with this Part in respect of the failure of any goods to comply with a guarantee, the consumer may exercise the following remedies.

(2) Where the failure can be remedied, the consumer may—

(a) require the supplier to remedy the failure within a reasonable time in accordance with section 19:

(b) where a supplier who has been required to remedy a failure refuses or neglects to do so, or does not succeed in doing so within a reasonable time,—

(i) have the failure remedied elsewhere and obtain from the supplier all reasonable costs incurred in having the failure remedied; or

(ii) subject to section 20, reject the goods in accordance with section 22.

(3) Where the failure cannot be remedied or is of a substantial character within the meaning of section 21, the consumer may—

(a) subject to section 20, reject the goods in accordance with section 22; or

(b) obtain from the supplier damages in compensation for any reduction in value of the goods below the price paid or payable by the consumer for the goods.

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

[47] The primary remedy available under s 18 is that set out in s 18(2)(a), namely for the purchaser to require the supplier to remedy the failure within a reasonable time. In the present case, it appears that Moom Group Automotive has remedied the failure by replacing the engine. It has not, however, done so within a reasonable time. It appears that the repair was only carried out in March 2019, almost six months after the failure occurred. Moreover, and significantly, Moom Group Automotive refuses to return the vehicle to Mr Simon Wikitera. In effect, therefore, even though the vehicle appears to have been fixed, Moom Group Automotive has effectively refused to remedy the failure for Mr Simon Wikitera at its expense.
[48] Accordingly, that triggers Mr Simon Wikitera’s right to reject the vehicle under s 18(2)(b)(ii). In addition, and independently, as I have found that the vehicle’s failure to comply with the guarantee of acceptable quality was of a substantial character, Mr Simon Wikitera also had the right to reject the vehicle under s 18(3)(a).
[49] Notwithstanding his right to reject the vehicle, at the hearing Mr Simon Wikitera told the Tribunal that he fundamentally just wanted his van back.
[50] Accordingly, the primary remedy in this case would ordinarily have been to order Moom Group Automotive to return the Nissan to Mr Simon Wikitera without insisting that he pay for the repairs that have been carried out.
[51] However, Moom Group Automotive has failed to provide the Tribunal with any information about the van’s current whereabouts or its odometer reading, despite being specifically requested by the Tribunal to do so.
[52] Doubts about whether Moom Group Automotive intends to return the vehicle to Mr Simon Wikitera, or even whether it still possesses the vehicle, prompted him to reassess the remedy he seeks from the Tribunal. After the hearing, Mr Simon Wikitera confirmed that he wishes to reject the vehicle. To that end, he supplied a letter of rejection dated 16 October 2019.
[53] In the unusual circumstances of this case, where the trader has had possession of the vehicle since a few days after selling it and effectively refuses to let the purchaser have the vehicle back after repairs have been carried out, I uphold Mr Simon Wikitera’s rejection of the vehicle. Moom Group Automotive must refund the full purchase price, $19,390.[4]
[54] Mr Simon Wikitera purchased the vehicle with the assistance of a loan to S.H.A.W Investments from David Stacey Ltd trading as MTF Henderson. I would have considered vesting that loan in Moom Group Automotive as a collateral credit agreement.[5] However, in May 2019, S.H.A.W Investments settled the original loan and took out a new loan from Branded Financial Services. Because this was a new loan, I do not think it qualifies as a collateral credit contract under s 89 of the Motor Vehicle Sales Act 2003, as it was not “associated with the contract for the sale of [the] motor vehicle” in terms of s 89(2)(a) of that Act.
[55] However, the interest cost payable on both loans for the van during the period while it has been in Moom Group Automotive’s possession is recoverable as a reasonably foreseeable loss, consequential on the failure of the vehicle to comply with the guarantee of acceptable quality. That is because the vehicle’s engine’s problems have prevented the vehicle from being used as a revenue generating asset in Mr Simon Wikitera’s courier business.
[56] I asked Mr Simon Wikitera to obtain calculations of the cost of interest paid by S.H.A.W Investments over this period. He provided information from the two finance companies involved establishing that S.H.A.W Investments has paid $3,557.92 in interest over the period when the vehicle has not been in his possession. I will award S.H.A.W Investments this amount under s 18(4) of the Act.
[57] Mr Simon Wikitera also claimed a substantial amount of lost income. It is to be recalled that the purpose of his acquisition of this vehicle was to expand his courier business. Mr Simon Wikitera produced a letter from his accountant estimating that the potential loss of income in relation to the Nissan amounted to $41,678 gross profit between November 2018 and June 2019. After the hearing, Mr Simon Wikitera revised this claim for lost income to $87,773, covering the period up to September 2019.
[58] I do not propose to uphold Mr Simon Wikitera’s claim for lost income. I am not satisfied that Mr Simon Wikitera has established a sufficiently close causal connection between the lost income sought and any failure with his vehicle, which he needs to do to be entitled to claim that amount under s 18(4) of the Act. I do not consider the alleged lost income was a reasonably foreseeable consequence of the fault with the vehicle. In particular, when I asked Mr Simon Wikitera why he did not explore obtaining a rental vehicle to allow his planned business expansion to continue, notwithstanding the difficulties with the Nissan, he identified other relevant factors preventing him from doing so. They included the employment status of the driver that he intended to use to drive the Nissan. This suggested to me that these losses were, as the accountant put it, only potential losses of income. There were other reasons why the courier business did not expand. It was not solely attributable to the problems with the Nissan. I am not persuaded that Mr Simon Wikitera could not have obtained temporary use of another vehicle if his business was truly ready to expand.
[59] I have therefore reached the conclusion that the alleged loss of income is too remote from the problems with the Nissan for Mr Simon Wikitera to add those prospective losses to his claim under s 18(4). Rather, I think that the best encapsulation of the losses recoverable under s 18(4) is S.H.A.W Investments’ interest payments as provided for above.
[60] Although Mr Simon Wikitera is named on the VOSA as the purchaser of the vehicle, the application to the Tribunal was brought jointly by him and S.H.A.W Investments. I will order Moom Group Automotive to refund S.H.A.W Investments the purchase price and interest payments as the underlying transactions suggest that it was the true purchaser of the vehicle.

Conclusion

[61] Mr Simon Wikitera’s rejection of the Nissan NV350 is upheld. CMST Ltd must pay S.H.A.W Investments Ltd $22,947.92 no later than 26 November 2019.
[62] Mr Simon Wikitera should advise the case manager if CMST Ltd fails to make full payment by the deadline and I will consider taking further steps.

J S McHerron
Adjudicator

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[1] CMST Ltd v S.H.A.W Investments Ltd DT Waitakere, CIV-2019-090-00074, 10 September 2019.

[2] Motor Vehicle Sales Act 2003, s 89(1)(a).

[3] Consumer Guarantees Act 1993, s 2(1), definition of “consumer”.

[4] Consumer Guarantees Act 1993, s 23(1)(a).

[5] Motor Vehicle Sales Act 2003, s 89(2).