Vele v Apollo Motorhome Holidays Ltd - Reference No. MVD 024/2022 [2022] NZMVDT 41 (28 March 2022)

Last Updated: 25 April 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 024/2022 [2022] NZMVDT 41 BETWEEN JULIO VELE Applicant AND APOLLO MOTORHOME HOLIDAYS LTD Respondent

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Gregory, Assessor

HEARING at Auckland on 22 March 2022 (by audio-visual link)

APPEARANCES

J Vele, Applicant

A de Lautour for the Respondent

DATE OF DECISION 28 March 2022

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DECISION OF THE TRIBUNAL

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1. The agreement to purchase the vehicle dated 28 September 2021 is void from the date of that agreement.
2. Apollo Motorhome Holidays Ltd shall, within 10 working days of the date of this decision, pay $5,603.53 to Julio Vele.

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REASONS

Introduction

[1] Julio Vele purchased a 2008 Mitsubishi L300 for $5,200 from Apollo Motorhome Holidays Ltd on 28 September 2021.[1] Mr Vele, who lives in Wellington, purchased the vehicle without inspecting it. He says that the vehicle was described in an online advertisement as having seating for three people, but when the vehicle was delivered to him, he discovered that it only had seating for two people and is therefore not fit for his purpose.
[2] Mr Vele has returned the vehicle to Apollo Motorhomes and says that Apollo Motorhomes initially agreed to refund the purchase price. It has not done so, and Mr Vele has now applied to the Tribunal seeking to recover the purchase price, other costs he has incurred and $5,000 compensation for stress and inconvenience.
[3] Apollo Motorhomes says that Mr Vele is entitled to no remedy. It says that the website listing for the vehicle shows that it has two seats. It also says that it never agreed to provide a refund, and the written acknowledge Mr Vele obtained from a staff member was given under duress.

Relevant background

[4] The vehicle was advertised for sale online. Apollo Motorhomes has provided a copy of the online advertising, which contains four relevant representations (the website representations):

• (a) under the heading “Additional information” is the statement
  “Seats: 2”;
• (b) under the heading “Comments” is the statement “Seats: 2”;
• (c) under the heading “Comments” is the statement “2 Berth Camper selling directly from our rental yard. (3 seater in front, middle one with hip belt)”; and
• (d) a photograph shows that the advertised vehicle has seating for three, with the middle seat having a “hip” or lap seat belt.

[5] Mr Vele saw that online advertising and says he was attracted to the vehicle because it had seating for three people. He has a partner and young child and needs a vehicle with seating for at least three people.
[6] A friend of Mr Vele’s collected the vehicle on 16 December 2021 and delivered it to Mr Vele on 25 December. Mr Vele paid that friend $150 to drive the vehicle to him. When the vehicle arrived, Mr Vele discovered that the vehicle does not have seating for three people. It has two single seats at the front.
[7] Mr Vele says that he then contacted Apollo Motorhomes and asked to return the vehicle. He says that he spoke with a manager, who advised him to return the vehicle. There is no record of that discussion. Mr Vele also says that he spoke with the salesperson who sold him the vehicle on 5 January 2022. Mr Vele says that the salesperson advised Mr Vele to return the vehicle for a refund. Again, there is no record of that discussion.
[8] Mr Vele then drove the vehicle from Wellington to Auckland on 6 January 2022 and returned it to Apollo Motorhomes. He spent $179.53 at services stations along the way. Mr Vele then obtained a written acknowledgement from Kieran Bird, of Apollo Motorhomes to the effect that he had returned the vehicle and that Apollo Motorhomes would refund the purchase price. Mr Vele has since filed this claim because Apollo Motorhomes has declined to refund the purchase price.
[9] Apollo Motorhomes says it did not agree to refund the purchase price, and the written acknowledgement from Kieran Bird was obtained under duress. It also denies engaging in misleading conduct and says that its website listing was not misleading. In making that submission, Apollo Motorhomes relies heavily on a disclaimer on its website (the Disclaimer) that states:

PLEASE NOTE: Vehicle specification listing imagery displayed may be model generic. Optional features/ accessories/ colors may be represented that could incur additional charges. Vehicle specifications noted and represented in photos are subject to change without notice and may vary due to modifications and or upgrades. APOLLO Motorhome Holidays cannot be held liable for any such variance.

[10] I understood Apollo Motorhomes to submit that the vehicle was described as having two seats and where there was any discrepancy in the advertised specifications or features, the Disclaimer makes it clear that the vehicle’s actual specifications and features (including the number of seats) may be different from those shown in the advertisement, and Apollo Motorhomes accepts no liability for any difference. It also says that Mr Vele did not advise it that he wanted a three seater vehicle, so it was not aware that Mr Vele was looking for such a vehicle.

The issues

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

• (a) Has Apollo Motorhomes engaged in misleading conduct in breach of s 9 of the Fair Trading Act 1986 (the FTA)?
• (b) If so, what remedy is Mr Vele entitled to?

Issue 1: Has Apollo Motorhomes engaged in conduct that breached s 9 of the FTA?

[12] Section 9 of the FTA provides:

9. 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.

[13] The test for establishing a breach of s 9 was set out by the Supreme Court in Red Eagle Corp Ltd v Ellis:[2]

The question to be answered in relation to s 9 ... is ... 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.

[14] I have considered the website representations in the context of the advertisement as a whole and I find that a reasonable consumer, exercising an appropriate degree of care, could easily have been led to believe that the vehicle had seating for three people. Although there are conflicting representations as to the number of seats, there was a photograph showing seating for three and a statement that this vehicle is a “3 seater in front, middle one with hip belt.” Those are clear representations that the vehicle has seating for three people. Those representations were misleading.
[15] The other website representations that the vehicle had two seats do not cure that misleading impression. Indeed, it seems that the three seater model of this vehicle does have only two seating units - the driver’s seat and a double seat on which two passengers can sit. Consequently, even if a consumer viewing the online advertisement had noticed the conflicting representations as to the number of seats, in the context of the vehicle otherwise being described as a three seater, the references to the vehicle having two seats were not enough to cure the misleading impression given by the representations that the vehicle had seating for three.
[16] As noted above, Apollo Motorhomes also says that the Disclaimer excuses any misleading representation and allows it to supply a vehicle that is different from advertised. Certainly, there are occasions upon which the effect of an otherwise misleading representation can be neutralised by an appropriate disclaimer. But such cases are comparatively rare and are confined to situations in which the Tribunal (or Court) can be satisfied that the disclaimer is likely to have been seen and understood by all those who would otherwise have been misled.
[17] This is not such a case. The Disclaimer is too broad and certainly would not put a reasonable consumer on notice that the vehicle, which was represented as having seating for three, only had seating for two.
[18] Apollo Motorhomes relies on the Disclaimer to enable it to use generic images, specifications and features in its advertising that may not relate to the vehicle being advertised. The use of the Disclaimer in this way does not negate the general obligation to ensure that any representation made by a person in trade is not misleading. Apollo Motorhomes should, as other motor vehicle traders do, prepare a specific advertisement for each vehicle it sells, which lists the specifications and features of that vehicle. It cannot avoid its obligation to properly disclose a vehicle’s specifications and features by relying on a general disclaimer to excuse any misleading statement as to those specification or features.
[19] I therefore find that, by representing that the vehicle had seating for three when it did not, Apollo Motorhomes has engaged in misleading conduct in breach of s 9 of the FTA.

Issue 2: What remedy is Mr Vele entitled to under the FTA

[20] The remedies available for a breach of the FTA are set out in s 43 of the FTA which is as follows:

43 Other orders

(1) This section applies if, in proceedings under this Part or on the application of any person, a court or a Disputes Tribunal finds that a person (person A) has suffered, or is likely to suffer, loss or damage by conduct of another person (person B) that does or may constitute any of the following:

(a) a contravention of a provision of Parts 1 to 4A (a relevant provision):

(b) aiding, abetting, counselling, or procuring a contravention of a relevant provision:

(c) inducing by threats, promises, or otherwise a contravention of a relevant provision:

(d) being in any way directly or indirectly knowingly concerned in, or party to, a contravention of a relevant provision:

(e) conspiring with any other person in the contravention of a relevant provision.

(2) The court or the Disputes Tribunal may make 1 or more of the orders described in subsection (3)—

(a) whether or not the court grants an injunction, or the court or the Disputes Tribunal makes any other order, under this Part; and

(b) whether or not person A made the application or is a party to the proceedings.

(3) The orders are as follows:

(a) an order declaring all or part of a contract made between person A and person B, or a collateral arrangement (for example, a collateral credit agreement) relating to such a contract,—

(i) to be void; and

(ii) if the court or the Disputes Tribunal thinks fit, to have been void at all times on and after a date specified in the order, which may be before the date on which the order is made:

(b) if an order described in paragraph (a) is made in respect of a contract that is associated with a collateral credit agreement, an order vesting in person B all or any of the rights and obligations of person A under the collateral credit agreement:

(c) an order in respect of a contract made between person A and person B, or a collateral arrangement (for example, a collateral credit agreement) relating to such a contract,—

(i) varying the contract or the arrangement in the manner specified in the order; and

(ii) if the court or the Disputes Tribunal thinks fit, declaring the varied contract or arrangement to have had effect on and after a date specified in the order, which may be before the date on which the order is made:

(d) if an order described in paragraph (c) is made in respect of a contract that is associated with a collateral credit agreement, and if that order results in person A no longer having property in the goods that are the subject of the contract, an order vesting in person B the rights and obligations of person A under the collateral credit agreement:

(e) an order directing person B to refund money or return property to person A:

(f) an order directing person B to pay to person A the amount of the loss or damage:

(g) an order directing person B, at person B’s own expense, to repair, or to provide parts for, goods that have been supplied by person B to person A:

(h) an order directing person B, at person B’s own expense, to supply specified goods or services to person A.

(4) In subsection (3)(a) to (d), collateral credit agreement, in relation to a contract for the supply of goods, means a contract or an agreement that—

(a) is arranged or procured by the supplier of the goods; and

(b) is for the provision of credit by a person other than the supplier to enable person A to pay, or defer payment, for the goods.

(5) An order made under subsection (3)(a) to (d) does not prevent proceedings being instituted or commenced under this Part.

(6) This section does not limit or affect—

(a) subpart 5 of Part 2 of the Contract and Commercial Law Act 2017; or

(b) section 317 of the Accident Compensation Act 2001.

[21] The Supreme Court in Red Eagle sets out the approach to be taken in applying s 43. The Tribunal must consider whether:

• (a) Mr Vele was misled or deceived;
• (b) Mr Vele has suffered loss or damage; and
• (c) Apollo Motorhomes’ conduct was the effective cause or an effective cause of that loss or damage.

[22] As set out above, I find that Mr Vele was in fact misled. He was led to believe that the vehicle had seating for three people, when it does not.
[23] I also find that Mr Vele has suffered loss. The vehicle is entirely unfit for his purposes, and to make this vehicle fit for his needs he must replace the front seats. That will be an expensive exercise, if it can be done at all. In addition to purchasing replacement seats, Mr Vele will have to obtain low volume vehicle (LVV) certification, as the seat replacement is a modification for which LVV certification is required. Mr Gregory, the Tribunal’s Assessor, advises that any such repair would cost at least $1,500.
[24] I am also satisfied that Apollo Motorhomes’ conduct was an effective cause of this loss. Mr Vele would not have purchased the vehicle if Apollo Motorhomes had properly represented that it only had seating for two people.
[25] The remedies in s 43(3) of the FTA are discretionary, and the discretion is to be exercised so as to give effect to the policy of the FTA, which includes to protect the interests of consumers. The object of the remedies in s 43(3) of the FTA is to do justice to the parties in the particular circumstances of the case.[3]
[26] In this case, I consider that the appropriate remedy is:

• (a) an order under s 43(3)(a)(i), declaring the agreement to purchase this vehicle void from the date of the agreement;
• (b) an order under s 43(3)(e), directing Apollo Motorhomes to refund the purchase price of $5,200; and
• (c) an order under s 43(3)(f), directing Apollo Motorhomes to pay the costs incurred by Mr Vele when he returned the vehicle to it, specifically:
  • (i) $150 – which Mr Vele paid to have the vehicle driven from Auckland to Wellington;
  • (ii) $179.53 – the cost of returning the vehicle to Auckland;
  • (iii) $74 – the cost of catching a bus from Auckland to Wellington after returning the vehicle.

Those costs were only incurred because Mr Vele was misled and chose to exercise his right to return the vehicle. Those costs are also reasonable, and certainly much less than the cost of having the vehicle transported.

[27] Mr Vele also seeks compensation for taking annual leave to return the vehicle and for stress. Mr Vele has suffered no financial loss by taking annual leave to return the vehicle. It seems that he has been paid for those days, so I cannot award financial compensation to him.
[28] Mr Vele also sought $5,000 in damages for stress and inconvenience arising from this transaction. He says that he has suffered stress, employment difficulties and has been unable to repay rent arrears.
[29] I accept as a general proposition that such damages are available under the FTA, but I am not satisfied that this case merits such an order. In Roberts v Jules Consultancy Ltd, the High Court noted that general damages cover matters such as “pain and suffering, indignity, humiliation and mental distress”.[4] That is a high threshold for the award of general damages and any stress, inconvenience or upset that Mr Vele may have suffered as a result purchasing this vehicle and does not meet that threshold for general damages under the FTA. Mr Vele is therefore not entitled to any damages for stress or inconvenience.
[30] Indeed, I note that Mr Vele’s ability to attend his employment has been unaffected, as he was using public transport before he purchased this vehicle and has continued to do so since it was returned. Likewise, the unpaid rent arrears appear to relate to a debt from many years ago, so any connection between those rent arrears and this claim is tenuous. I also note that Tribunal claims relating to motor vehicles are inherently stressful and time consuming, and the circumstances of this case are similar to many of the cases that come before the Tribunal where a consumer spends time, effort and emotional energy attempting to resolve the issues they have with a vehicle and dealing with the inconvenience caused. I am not satisfied that this is an exceptional case justifying an award of compensatory damages for stress and anxiety.

Outcome

[31] The Tribunal therefore orders that:

• (a) The agreement to purchase the vehicle dated 28 September 2021 is void from the date of that agreement; and
• (b) Apollo Motorhome Holidays Ltd shall, within 10 working days of the date of this decision, pay $5,603.53 to Julio Vele.
  

DATED at AUCKLAND this 28th day of March 2022

B.R. Carter
Adjudicator

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[1] Although Mr Vele gave evidence that he purchased the vehicle in October 2021, the Vehicle Offer and Sale Agreement between the parties is dated 28 September 2021.

[2] Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].

[3] Red Eagle Corp Ltd v Ellis [2010] NZSC 20; [2010] 2 NZLR 492, [31].

[4] At [109].