Badland v Euromarque Holdings Limited - Reference No. 123/2020 MVD [2020] NZMVDT 116 (28 July 2020)

Last Updated: 24 August 2020

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 123/2020
[2020] NZMVDT 116

BETWEEN MARK RICHARD BADLAND

Purchaser

AND EUROMARQUE HOLDINGS LIMITED

Trader

HEARING at Christchurch on 16 July 2020
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

R C Dixon – Assessor
APPEARANCES

M R Badland, Purchaser (by VMR)
M A Pullan, Aftersales Manager of Trader
M Cockram, Sales Manager of Trader

DATE OF DECISION 28 July 2020

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DECISION OF THE TRIBUNAL

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Mark Badland’s application is dismissed.

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REASONS

Mr Badland’s claim

[1] Mark Badland purchased a 2016 Land Rover Range Rover Sport with 51,400 km on the odometer for $102,990 from Euromarque Holdings Ltd on 11 May 2019. Its key features were listed on a fuel economy label displayed on or with the car prior to sale, including that it was “New Zealand new”. The same description was also used orally, according to Mr Badland, by two Euromarque employees with whom he discussed the vehicle before buying it.
[2] Mr Badland says he understood the expression “New Zealand new” to mean that the vehicle had been imported to New Zealand through an accredited retailer by Land Rover New Zealand. However, he has since discovered that his vehicle was a so-called “grey import”. As used by Mr Badland, the expression “grey import” has the same meaning as “parallel import”, namely a vehicle that has been imported privately, rather than through authorised franchise dealer channels.
[3] Mr Badland did not allege that there was any discussion between him and Euromarque representatives at the time of sale about whether the vehicle had been a parallel or grey import. He did not allege that he had made any enquiries about its importation status. Nor did Mr Badland allege that Euromarque had told him the vehicle had been imported through authorised franchise dealer channels.
[4] Rather, Mr Badland argued that the description “New Zealand new” is incorrect when applied to his Range Rover because it implies that the vehicle was brought into the country through the “correct Land Rover New Zealand channels”. In his oral submissions, Mr Badland developed his primary argument to assert that Euromarque had a duty to disclose to a potential buyer that a vehicle had been parallel imported.
[5] Mr Badland said that in March 2020, some 10 months after he purchased the vehicle, he found out that it had been parallel imported. Mr Badland alleged that, because of this, the vehicle had a “face value” of approximately 10 per cent less than a vehicle that was “landed in New Zealand via the brand manufacturer and distributer”.
[6] Mr Badland seeks to return the Range Rover to Euromarque and obtain a refund of $90,000, reflecting 10 per cent depreciation for the 12 months he has used it.
[7] Alternatively, Mr Badland seeks $10,000 damages, representing what he argues is the 10 per cent devaluation of the vehicle due to its parallel imported status.

Tribunal’s request for further evidence

[8] In a pre-hearing direction, I asked Mr Badland to provide evidence to support his allegation that the vehicle was worth 10 per cent less than a vehicle imported to New Zealand via the brand manufacturer and distributer. Mr Badland said he had attempted to trade the vehicle in and was told by one or two potential purchasers that they would have considered offering him a higher trade-in price were the vehicle not parallel imported. However, Mr Badland produced no written evidence supporting these alleged comments.

Was the vehicle new when first registered in New Zealand?

[9] Euromarque submitted that the description of the vehicle on the fuel economy label as “New Zealand new” is correct. The same description is also correctly included in a Carjam vehicle information report for the Range Rover, a copy of which was produced by Euromarque.
[10] Matthew Pullan, Euromarque’s aftersales manager, submitted that the expression “New Zealand new” reflects that, prior to its first registration in New Zealand in 2016, the vehicle:

• (a) had not been registered and operated in New Zealand or any other country;
• (b) had not been operated on a road in New Zealand or any other country as a demonstration or courtesy vehicle;
• (c) had not been used for training or testing purposes; and
• (d) was not a scratch-built vehicle that contained components that had been fitted to a vehicle that had been operated on the road in New Zealand or in any other country.

[11] The criteria listed above were given to Euromarque by the New Zealand Transport Agency in response to a specific enquiry by Mr Pullan as to the definition of a New Zealand new vehicle. The New Zealand Transport Agency’s response does not specifically define the expression “New Zealand new”, the expression used on the label. Rather it refers to the definition of a new vehicle. This corresponds with the definition of a new vehicle in the Motor Vehicle Sales Act 2003. In s 6 of that Act, “new motor vehicle” is defined as “a motor vehicle that is not a used motor vehicle”. The definition of “used motor vehicle” is as follows:

used motor vehicle—

(a) means a motor vehicle that has, at any time before being offered or displayed for sale,—

(i) been registered under—

(A) the Transport Act 1962; or

(B) the Transport (Vehicle and Driver Registration and Licensing) Act 1986 or Part 17 of the Land Transport Act 1998; or

(C) any corresponding enactment of another country:

(ii) been used for a purpose not connected with its manufacture or sale; and

(b) includes a motor vehicle that has been used for the purpose of demonstration in connection with the sale of another motor vehicle
[12] According to these definitions, to qualify as “new”, a motor vehicle must not have been:

• (a) registered before being offered or displayed for sale, either in New Zealand or in another country;
• (b) used for another purpose not connected with the vehicle’s manufacture or sale; or
• (c) used as a demonstrator.

[13] Mr Badland did not produce any evidence to suggest that his vehicle did not qualify as “new” in 2016 according to any of these criteria. Rather, the available evidence indicates the Range Rover was accurately sold to him as a new vehicle.

Conclusion

[14] Accordingly, I find that Mr Badland has not established any basis upon which it was inaccurate for Euromarque to describe the vehicle as having been new in 2016 when it was first registered in New Zealand.

Significance of the words “New Zealand” in the expression “New Zealand new”

[15] Does the inclusion of the words “New Zealand” in the expression “New Zealand new” give it the meaning asserted by Mr Badland, namely that the vehicle was “brought into the country through the correct Land Rover New Zealand channels giving it both value and credibility”?
[16] I do not consider that a reasonable consumer would interpret these words in that way. Rather, the expression “New Zealand new” is commonly used to distinguish vehicles that have been registered as new for the first time in New Zealand from vehicles that have been imported into New Zealand as used vehicles. The expression “New Zealand new” gained currency from the 1980s, when it became common to import used vehicles into New Zealand from Japan, to distinguish those vehicles from vehicles that had been imported and then sold as new vehicles in New Zealand. “New Zealand new” thus developed as an expression applicable to used vehicles, rather than new vehicles. I consider that the expression “New Zealand new” was appropriately applied to Mr Badland’s vehicle as it was still new when it arrived in New Zealand; it was not a used import.

Was Euromarque obliged to disclose that the vehicle was parallel imported?

[17] As to Mr Badland’s further submission that Euromarque was obliged to disclose to him that the vehicle had been parallel imported, I am not persuaded that this is an aspect of the vehicle’s history that a trader is generally obliged to disclose. In other words, according to the usual tests under the Fair Trading Act 1986, I do not consider a reasonable consumer would necessarily be misled were a trader to omit disclosure of that information.
[18] It would be a different matter if a prospective purchaser asked a trader whether a vehicle had been parallel imported and the trader gave an incorrect answer to that question. It would also be misleading if a trader said that it did not know whether the vehicle had been parallel imported despite having access to that information. But neither of these scenarios applies in the present case. Mr Badland did not allege that he had specifically asked Euromarque about this aspect of the vehicle’s history. Nor did he give any evidence that Euromarque positively told him that the vehicle had not been parallel imported.

Conclusion

[19] Accordingly, I do not consider that Mr Badland has established that Euromarque engaged in any misleading conduct in relation to the sale of this vehicle to him. Similarly, I reject Mr Badland’s allegation that in describing the vehicle as “New Zealand new”, the vehicle was described inaccurately or in a misleading fashion. Rather, I accept Euromarque’s submission that describing this vehicle as “New Zealand new” was accurate on the facts of this case.
[20] In any event, even if I had upheld Mr Badland’s submission that Euromarque misdescribed the vehicle or otherwise misled him, I do not consider that Mr Badland produced sufficient evidence to establish that he has suffered any losses in relation to the vehicle having been parallel imported. It is a necessary element of any Fair Trading Act claim that the claimant establish that misleading conduct has resulted in losses for them. However, the hearsay comments referred to by Mr Badland did not establish that the fact this vehicle had been parallel imported led to it having any reduced value relative to its purchase price.
[21] Finally, I record that at the beginning of the hearing Mr Badland began to argue that he had a further complaint of misleading conduct against Euromarque regarding the vehicle’s model year. I stopped Mr Badland from proceeding with his submission on this matter as it had not been disclosed by him as part of his claim, thereby giving rise to unfairness against Euromarque as it had not had any opportunity to prepare a response on this aspect. For this reason, I confirm that I did not consider this new allegation any further.
[22] Mr Badland’s claim is dismissed.

J S McHerron
Adjudicator