Smith v Motive Trading Ltd - Reference No. MVD 039/2021 [2021] NZMVDT 59 (23 April 2021)

Last Updated: 23 May 2021

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 039/2021 [2021] NZMVDT 59 BETWEEN KEITH SMITH Applicant AND MOTIVE TRADING LTD Respondent

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Gregory, Assessor

HEARING at Auckland on 20 April 2021

APPEARANCES

K Smith, Applicant

J Keit and S Keit for the Respondent

DATE OF DECISION 23 April 2021

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DECISION OF THE TRIBUNAL

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1. Keith Smith’s application is dismissed.

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REASONS

Relevant background

[1] Keith Smith purchased a 1997 Dodge Ram 1500 for $24,990 from Motive Trading Ltd on 8 December 2020. Mr Smith purchased the vehicle for his son to use in a lawnmowing business, but his son then decided that he did not want to use a left hand drive vehicle (as this vehicle is). Consequently, two days later, Mr Smith contacted Motive Trading and said that he had changed his mind about purchasing the vehicle and asked for a refund of the purchase price.
[2] Motive Trading declined to refund the purchase price, principally because it had sold the vehicle on behalf of a third party and had already passed the proceeds of sale (less its commission) on to that third party. Mr Smith then agreed to allow the company to sell the vehicle on his behalf, initially at a price of $24,990 that was then reduced to $19,000 in early January 2021.
[3] Motive Trading had not sold the vehicle by 8 January 2021, so Mr Smith asked it to deliver the vehicle to him so he could attempt to sell the vehicle himself. Motive Trading agreed to deliver the vehicle to Mr Smith on 23 January 2021. It did not deliver the vehicle on that day, and instead advised Mr Smith that the vehicle would be delivered during the following week. Unhappy with the service he had received from Motive Trading and with its failure to deliver the vehicle as promised, Mr Smith told Motive Trading not to deliver the vehicle to him and he has now applied to the Tribunal, seeking to recover the purchase price.
[4] Motive Trading remains willing to deliver the vehicle to Mr Smith.

The issues

[5] Against this background, the issues requiring the Tribunal’s consideration in this case are:

• (a) Is Mr Smith entitled to a refund because he changed his mind?
• (b) Did Motive Trading fail to deliver the vehicle as agreed, in breach of s 5A of the Consumer Guarantees Act 1993 (the CGA)?
• (c) What remedy is Mr Smith entitled to under the CGA?
  

Issue 1: Is Mr Smith entitled to a refund because he changed his mind?

[6] Mr Smith believed that there may be a law that allows for a form of cooling off period, during which a purchaser can change its mind and seek a refund of the purchase price already paid. With respect to the purchase of a motor vehicle, there is no such law.
[7] Some laws, such as the Fair Trading Act 1986 or the Contract and Commercial Law Act 2017, do give the purchaser of a motor vehicle the right to attempt to cancel the contract and obtain a refund of the purchase price if they have been induced into entering in to the contract by misleading or deceptive conduct, or if the other party has breached an important term of that contract, but there was no misleading or deceptive conduct by Motive Trading in this case in respect of the sale of the vehicle and neither did Motive Trading breach any terms of the contract to purchase the vehicle. Consequently, Mr Smith has no legal entitlement to a refund of the purchase price simply because he had changed his mind.

Issue 2: Did Motive Trading fail to deliver the vehicle as agreed?

[8] Under s 5A of the CGA, Mr Smith may be entitled to a remedy if Motive Trading has failed to deliver the vehicle as agreed. Section 5A of the CGA provides that a supplier must deliver goods within a reasonable time. Specifically, s 5A of the CGA states:

5A Guarantee as to delivery

(1) Where a supplier is responsible for delivering, or for arranging for the delivery of, goods to a consumer there is a guarantee that the goods will be received by the consumer—

(a) at a time, or within a period, agreed between the supplier and the consumer; or

(b) if no time or period has been agreed, within a reasonable time.

(2) Where the delivery of the goods fails to comply with the guarantee under this section, Part 2 gives the consumer a right of redress against the supplier and, in that case, the consumer may,—

(a) if the failure is of a substantial character, reject the goods under section 18(3); and

(b) in any case, obtain damages under section 18(4) (other than damages relating to the remedies set out in section 18(2)), whether or not the consumer also rejects the goods.

(3) For the purposes of this section, the reference in section 20(1)(b) to an agent of the supplier must be treated as including any carrier or other person who undertakes to deliver the goods on behalf of the supplier.

(4) A consumer’s rights of redress under Part 2 in relation to the guarantee under this section are limited to those specified in subsection (2).

[9] As a term of the agreement to purchase the vehicle, Motive Trading agreed to deliver the vehicle to Mr Smith’s home in Papamoa. On 8 January 2021, because the vehicle had not been sold and Mr Smith was unhappy with the service provided by Motive Trading, Mr Smith asked the company to deliver the vehicle to him. Motive Trading agreed to deliver the vehicle on 23 January 2021.
[10] Motive Trading’s failure to deliver the vehicle on the agreed date is a breach of s 5A(1)(a) of the CGA. It was responsible for delivering the vehicle and failed to deliver it at the agreed time. There were understandable reasons for this failure, as explained by Sally Keit, who appeared for the company, but those reasons do not provide a defence to a claim that there was a breach of s 5A(1)(a).

Issue 3: What remedy is Mr Smith entitled to under the CGA?

[11] Under s 5A(2) and (4), a consumer’s right of redress in relation to a breach of the guarantee in s 5A is limited to the remedies contained in s 18(3) and (4), which state:

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

.....

(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.

[12] Mr Smith wants a refund of the purchase price. Under s 18(3)(a), he will only be entitled to that remedy if Motive Trading’s failure to deliver the vehicle was a failure of a substantial character, as is defined in s 21 of the CGA:

21. 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.

[13] Section 21(a) is relevant in this case, and I am not satisfied that Motive Trading’s failure to deliver the vehicle on 23 January 2021 was a failure of a substantial character such that a reasonable consumer would have declined to purchase the vehicle if they were fully acquainted with the nature and extent of the failure. Although it failed to deliver the vehicle on the agreed day, Motive Trading remained willing to deliver the vehicle, and offered to do so a few days later, meaning the delay in delivery was a minor inconvenience at best and certainly not sufficient to justify rejection of the vehicle. Any subsequent delay in delivery has then been caused by Mr Smith expressly telling Motive Trading not to deliver the vehicle to him, so he cannot be entitled to any remedy for that further delay.
[14] Mr Smith is also entitled to no remedy under s 18(4), as there was no evidence to show that he suffered any loss or damage as a result of Motive Trading’s failure to deliver the vehicle on 23 January 2021. If any loss or damage has subsequently arisen, that loss or damage has been caused by Mr Smith’s ongoing refusal to accept the delivery of the vehicle.
[15] Mr Smith’s application is therefore dismissed. In dismissing this claim, I note that Motive Trading does have a contractual obligation to deliver the vehicle to Mr Smith, and that it remains willing to do so. It would therefore seem sensible that Motive Trading deliver the vehicle to Mr Smith forthwith.

DATED at AUCKLAND this 23rd day of April 2021

B.R. Carter
Adjudicator