Burrell v Magwarehouse.com Ltd - Reference No. MVD 333/2019 [2019] NZMVDT 258 (28 November 2019)

Last Updated: 20 December 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 333/2019 [2019] NZMVDT 258 BETWEEN JOHN BURRELL Purchaser AND MAGWAREHOUSE.COM LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 7 November 2019

APPEARANCES

J Burrell, Purchaser

J Seddon, for the Trader

DATE OF DECISION 28 November 2019

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DECISION OF THE TRIBUNAL

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1. John Burrell’s application is dismissed.

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REASONS

Introduction

[1] On about 24 August 2018, John Burrell purchased a 1989 Ford Bronco 4X4, (the Bronco), for $19,500 from Magwarehouse.com Ltd.[1] Mr Burrell now seeks to reject the Bronco, alleging that it has not been of acceptable quality for the purposes of the Consumer Guarantees Act 1993 (the CGA) because it has several faults that caused it to fail a warrant of fitness inspection.
[2] Magwarehouse.com is prepared to rectify the faults that caused the Bronco to fail the warrant of fitness inspection but does not consider that Mr Burrell should be entitled to reject it. Further, it notes that Mr Burrell purchased the Bronco with the intention of reselling it.

The issue

[3] The sole issue requiring consideration is whether Mr Burrell is entitled to bring a claim under the CGA.

Is Mr Burrell entitled to bring a claim under the CGA?

[4] The CGA applies where a consumer purchases goods or services from a supplier. Under s 2 of the CGA, a consumer is a person who:

(a) acquires from a supplier goods or services of a kind ordinarily acquired for personal, domestic, or household use or consumption; and

(b) does not acquire the goods or services, or hold himself or herself out as acquiring the goods or services, for the purpose of—

(i) resupplying them in trade; or

(ii) consuming them in the course of a process of production or manufacture; or

(iii) in the case of goods, repairing or treating in trade other goods or fixtures on land.

[5] If a person does not meet the definition of consumer, then they cannot bring a claim under the CGA. Relevant to this case, Mr Burrell will not be a consumer if:

• (a) he is “in trade”; and
• (b) he acquired the Bronco with the purpose of resupplying it in trade.

Is Mr Burrell in trade?

[6] The definition of “trade” in s 2 of the CGA is a wide one and conduct carried on in any business, industry, profession, occupation, or commercial activity amounts to conduct “in trade”, as does conduct occurring in any undertaking relating to the supply or acquisition of goods or services.
[7] During the hearing, Mr Burrell advised that he regularly buys and sells vehicles as a hobby and that almost immediately after purchasing the Bronco (after some cosmetic panel repairs were completed) he listed it for sale in the “Bay Trader” magazine and displayed it for sale on the roadside.
[8] After the hearing, Mr Burrell provided two spreadsheets, which contained details of vehicles he has bought and sold in recent years (both in his and his wife’s name).[2] That information shows that Mr Burrell has sold 12 vehicles since February 2016.
[9] Although the volume of vehicles sold by Mr Burrell since February 2016 does not trigger the presumption in the Motor Vehicle Sales Act 2003 that he is a motor vehicle trader,[3] and although the information shows that Mr Burrell sometimes retains the vehicles for a period of time before onselling them, I am satisfied that there is a sufficient number, continuity, pattern, and coherence to these transactions to constitute a commercial undertaking. In reaching this conclusion, I note that Mr Burrell described his acquisition and sale of motor vehicles as being a hobby. It may be that this is Mr Burrell’s hobby, but I am satisfied that his regular acquisition and sale of vehicles is also an undertaking relating to the supply or acquisition of services, meaning Mr Burrell is in trade for the purposes of the CGA.

Did Mr Burrell purchase the vehicle for the purpose of resupplying it in trade?

[10] The evidence shows that Mr Burrell purchased the vehicle with the intention of reselling it. Jade Seddon, who appeared for Magwarehouse.com, gave evidence that Mr Burrell advised Magwarehouse.com that he intended to resell the vehicle. Likewise, although Mr Burrell gave evidence that he intended to use the vehicle for some time before selling it, he also said that he put the vehicle up for sale almost immediately after taking possession of it by advertising it in the Bay Trader magazine and on the roadside. He was unable to sell the vehicle, and once it failed a warrant of fitness inspection six months after purchase, he attempted to return it to Magwarehouse.com.
[11] Consequently, because Mr Burrell is in trade as he is engaged in an undertaking relating to the supply or acquisition of motor vehicles and because the Bronco was purchased with the intention of resupplying it as part of that undertaking, Mr Burrell’s application must be dismissed, as he is not a consumer for the purposes of the CGA.

DATED at AUCKLAND this 28th day of November 2019

B.R. Carter
Adjudicator

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[1] Although Magwarehouse.com Ltd is primarily a seller of wheels and accessories, it is also an importer and seller of motor vehicles.

[2] Mr Burrell that advises that his vehicles are primarily registered in his wife’s name as he is not able to hold a driver’s licence.

[3] Under s 8(1)(b) of the Motor Vehicle Sales Act 2003 a person is considered a motor vehicle trader if they sell more than six vehicles in any 12 month period.