Harborne v Fuzhou Holding Co Limited - Reference No. MVD 442/2022 [2023] NZMVDT 27 (1 March 2023)

Last Updated: 24 April 2023

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 442/2022 [2023] NZMVDT 027 UNDER APPEAL BETWEEN JESSICA SUI HARBORNE Applicant AND FUZHOU HOLDING CO. LIMITED Respondent

MEMBERS OF TRIBUNAL

D Watson, Adjudicator

S Gregory, Assessor

HEARING at Auckland on 7 February 2023 (by audio-visual link)

APPEARANCES

Jessica Sui Harborne, Applicant

Qin (Kevin) Ding, for the Respondent

DATE OF DECISION 1st March 2023

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

Fuzhou Holding Co Ltd must pay Jessica Sui Harborne the sum of

$10,087.07 within 10 working days of the date of this decision

_________________________________________________________________

REASONS

Introduction

[1] Jessica Sui Harborne purchased a 2016 Audi S5 vehicle from Fuzhou Holding Co. Ltd (FHL) on 19 April 2018. She later got into financial difficulty and needed to sell the vehicle. She asked FHL to take the vehicle back and sell it for her. She claims that FHL told her the vehicle sold for $43,000, when in fact it sold for $50,000. She wants FHL to pay her damages.
[2] FHL accepts that the vehicle was actually sold for $50,000 but it says that Mrs Harborne has not suffered any loss because the difference was made up of its costs, commission and expenses in connection with the sale. It denies any wrongdoing.

Relevant background

Mrs Harborne’s purchase of the vehicle

[3] In August 2017, Mrs Harborne separated from her husband. Having been a stay-at-home mum for a lengthy period of time, she had never applied for any form of borrowing before in her own name. Although she is now a qualified legal executive, at the time of the events giving rise to this application, she had not yet qualified.
[4] Mrs Harborne needed to buy a vehicle. She was recommended to FHL and Mr Qin (Kevin) Ding, its director, through a mutual friend. She placed a lot of trust in Mr Ding because of that connection.
[5] The purchase price of the vehicle that Mrs Harborne bought from FHL was $78,000. The vehicle offer and sale agreement (VOSA) recorded that, allowing for a trade-in of $6,000 and a deposit of $5,000, the balance payable was $67,000. She borrowed that sum from Heartland Bank Ltd, trading as Marac (Heartland Bank), with the assistance of a finance brokering business introduced to her by FHL, Great Broker Ltd (Great Broker). Great Broker is located at the same premises as FHL. The interest rate that Mrs Harborne agreed to pay on the borrowing was 12.95% per annum.

[6] There was a significant amount of evidence given about the Heartland Bank borrowing, both during the hearing and also contained in a lengthy affidavit Mrs Harborne provided ahead of the hearing. Mrs Harborne initially believed that the borrowing was from Great Broker itself. She believes that it has a role to play in this claim. Ultimately, I do not need to make any findings about the involvement of Great Broker because not only is it clear from the documentation supplied by Mrs Harborne that the lender was in fact Heartland Bank, the identity of the lender and any involvement by Great Broker has no relevance to the issues that I am able to determine.

Mrs Harborne gets into financial difficulty

[7] In November 2018, Mrs Harborne’s former employer suddenly departed New Zealand, leaving her unexpectedly unemployed. This put her under some financial pressure. Adding to this financial pressure, resolution of her relationship property dispute with her former husband had not been as smooth as she had expected.
[8] By around March the following year, Mrs Harborne decided she would need to sell her vehicle. She contacted Mr Ding and told him about her financial circumstances and that she needed to sell the vehicle. She asked Mr Ding if FHL would either buy the car back or resell it for her. FHL could not afford to buy the vehicle back but agreed to try and sell it for her.
[9] Mrs Harborne’s evidence was that FHL was to sell the vehicle for the best price it could get. She said that she trusted Mr Ding and left it to him to decide what price the car should be advertised and sold for.
[10] In terms of what costs would be involved with the sale, Mrs Harborne’s affidavit evidence was that there was a discussion at this time about a “small tidy up” cost. Mr Ding was to let her know what the actual costs would be but he never did. There was no conversation at all about any commission or profit being payable or there being any holding or other costs in connection with the sale.
[11] The discussions between the parties about the vehicle coming back to FHL to be sold were all conducted over the telephone.
[12] When Mrs Harborne dropped the vehicle at FHL, she was asked to sign a document headed “vehicle sale and purchase agreement”. She produced that document as part of her evidence. It is dated 5 March 2019. It is a standard form document which recorded agreement by FHL to purchase the vehicle from Mrs Harborne. Nothing was filled in for the purchase price. Mrs Harborne said there was no explanation about this document; she simply signed it as requested. She did not read the document before signing.
[13] From time to time over the following days, Mrs Harborne would call Mr Ding to ask if the vehicle had sold. He would report that the vehicle had not yet sold and would advise that the price might need to be reduced in order to get a sale. Her evidence was that she simply left that to him.
[14] As time progressed, Mrs Harborne was becoming increasingly financially stressed. She produced a series of We Chat messages which she translated for the Tribunal. These showed that on 17 April 2019 she asked Mr Ding once again if he would purchase the vehicle back. Mr Ding replied that he could not afford to and that she would lose a lot of profit if she sold the vehicle back to him. She then asked him to reduce the asking price and asked if he would take over servicing the monthly loan repayments on the vehicle for two-to-three months. She said she would repay him once the vehicle had sold. The loan repayments were $1,908.65 per month. Mr Ding replied to say that he had now marked the vehicle as being on a “special sale”.
[15] On 24 April 2019, Mrs Harborne followed Mr Ding up again. Mr Ding said that the asking price had dropped and that he would help with the loan repayments.
[16] On 30 April 2019 Mrs Harborne asked once again would Mr Ding consider purchasing the vehicle from her. Mr Ding replied to say she would consider the price too low. The two then had a discussion and the We Chat messages show that on 1 May 2019 Mr Ding[1] offered to buy the vehicle for $45,000.
[17] Mrs Harborne knew that the financed amount was approximately $60,000 and that she would need to release the security on the vehicle as part of any sale. She offered to pay $10,000 and asked if Mr Ding would increase the price to $50,000. This would make up the $60,000 needed to discharge the security.
[18] Not receiving any immediate reply from Mr Ding, Mrs Harborne messaged him on 2 May 2019. She said that if $45,000 was the best offer, she would sell to him.
[19] Mr Ding replied that day, however, to say that he now could not buy the vehicle.

Sale of the car

[20] On 28 August 2019, Mrs Harborne received a telephone call from Mr Ding. According to Mrs Harborne, Mr Ding said that she should sell the vehicle for $40,000. No particular buyer or interested party was mentioned.
[21] Mrs Harborne replied that she could not sell the vehicle at that price because she would not clear the security on the vehicle. According to her affidavit, she said that she could take the vehicle to another yard for a better price and Mr Ding said, “let’s think about it”.
[22] The next day, Mr Ding contacted Mrs Harborne and again asked her if he could sell the vehicle for $40,000. Mrs Harborne replied again that she could not sell the vehicle with a security interest on it at that price. Once again, no particular buyer was mentioned.
[23] Mrs Harborne said that on 31 August 2019, Mr Ding contacted Mrs Harborne once more and said “the buyer” had other people that he was going to buy a vehicle from. Mr Ding said he was now going to sell the vehicle for $40,000, presumably to that “buyer”. There was then a heated conversation, with Mrs Harborne saying that she had a friend who owned a car yard and would be happy to take the vehicle for $52,000.[2] According to Mrs Harborne, the conversation ended with Mr Ding suggesting that she think about it but Mrs Harborne made it clear that she would not.

[24] Prior to the hearing, FHL supplied an exchange of messages from around this time frame in Mandarin. Because they had not been translated, the Tribunal directed the parties to each prepare and provide their own translation of those messages after the hearing. Both parties provided translations, which contained no material differences.

[25] The translations record:

1. on 31 August 2019 Mrs Harborne told Mr Ding she could not sell the vehicle at $40,000 and that she would take the vehicle back and sell it herself. If she could not sell it, she would continue to drive it herself because her property would be unfrozen soon,
2. also on 31 August 2019, Mrs Harborne messaged Mr Ding to ask if he could please get the price to $45,000,

100. Mr Ding replied to say that the vehicle had sold for $43,000.

4. Mrs Harborne replied, “oh k”.
5. The pair then have a discussion about how much was owed to FHL for the finance payments FHL had paid for Mrs Harborne.
6. On 1 September 2019, Mrs Harborne asked Mr Ding for a copy of the sale and purchase agreement to be emailed to her at 10:59 am.

[26] Mrs Harborne’s affidavit evidence was that on 1 September 2019, she tried get her car back. That request was not recorded in the foregoing messages.
[27] On 2 September 2019, Mrs Harborne was copied into an email from Mr Ding to Mr Thomas (of Great Broker) in which Mr Ding said: “hi Ashley I just sold Audi S5 to customer, please transfer $34,500 to Jessia [sic] account to ask her to release security interest of audi s5, thanks”.
[28] Attached to the email was a copy of a sale and purchase agreement recording that FHL had sold the vehicle to a Gong Zheng on 31 August 2019 for $43,000. The address and phone number of the buyer are recorded on the agreement.
[29] On 3 September 2019, Mrs Harborne replied to that email stating:

Re the S5. I am still waiting for the mortgage company to get back to me re the details on loan if I paid $35,000.

The settlement on this car as I have clearly told you and Ashley is $62,000. I have been detailing [sic] with mortgage company Stacey on this matter and she has not got back to me yet

.....

[30] Mrs Harborne took no formal steps to challenge the sale further with FHL, believing that the vehicle had indeed been sold for $43,000, although in her affidavit she states that immediately after receiving a copy of the agreement for sale of the vehicle, she had contacted Mr Ding to ask him to freeze the sale.
[31] Mrs Harborne received $35,000 on 2 September 2019. She assumed that with the sale price being $43,000, the four payments of $1,908 ($7,632) had been deducted), and the balance of $368 was the “small tidying up” costs which had been discussed at the outset.
[32] Mrs Harborne was not presented with any invoices or advice of additional charges from FHL relating to costs it incurred in connection with the sale, or any other charges for which FHL considered her liable to pay, such as commission or profit.
[33] Mrs Harborne did not immediately pay the money she received from FHL to Heartland Bank because when she sought advice, it was suggested to her that if a lump sum was paid off the loan, there might be an additional charge. Eventually, Mrs Harborne did, however, pay half of the $35,000, but by March 2020, when she lost her employment, she was not able to make any more payments.

Demand for payment by FHL’s lawyer

[34] Mrs Harborne had no further dealings with FHL until 23 November 2021 when she received an email from FHL’s lawyer, advising that Heartland Bank had notified FHL that it was liable to pay $65,547.40 owing on the vehicle.[3] The email advised that the vehicle had been sold for $49,295 on 31 August 2019. It recorded that the agreement was that Mrs Harborne would clear the loan and that the net proceeds of $35,000 would be paid to her after deduction of costs and the loan repayments that had been made over a four-month period. FHL’s lawyer asked Mrs Harborne to pay the amount that was owing to Heartland Bank.
[35] Attached to the email was a second version of the agreement to sell the vehicle to Gong Zheng. Mrs Harborne had never seen that version of the agreement before. Parts of it are different from the agreement she had previously been provided with. The agreement bears the same date as the version she had received, but the signatures appear to be different. There are other differences as well. These are:

a) the sale price of the vehicle as $50,000, not $43,000,

b) the street number of the residential address of Gong Zheng is different; and

c) the telephone number of Gong Zheng is slightly different.

[36] The costs that FHL had allegedly incurred with the sale were also attached to the email. These include: details of the four loan payments of $1,908.65 each, a panel beater’s invoice for $740 and a warrant of fitness and servicing invoice of $1,305.

Mrs Harborne’s claim to the Tribunal

[37] Mrs Harborne claimed relief from the Tribunal under a wide range legislation, including the Fair Trading Act 1986 (the FTA), the Consumer Guarantees Act 1993 (the CGA), the Contract and Commercial Law Act 2017 (the CCLA), the Interest on Money Claims Act 2016, the Motor Vehicle Sales Act 2003 (the MVSA), the Crimes Act 1961, and the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. Included in the scope of her claims are Mr Ding personally and Great Broker.
[38] Mrs Harborne claims:

1. the first version of the agreement was false. FHL was not only misleading or deceptive in providing her with a copy of that agreement but it and Mr Ding were also fraudulent.
2. FHL and Mr Ding took advantage of her vulnerable position, having recently separated from her husband and being under financial stress. She claims she was therefore also under duress. She alleges that FHL and Mr Ding’s conduct was unconscionable, given her known hardship as a result of her separation and subsequent legal battles,

100. FHL and Mr Ding did not disclose to Gong Zheng that the vehicle had a security interest on it when it was sold,

4. Mr Ding lied to the Tribunal when he gave evidence that the $35,000 was transferred from FHL’s business account because in fact it was transferred from another account holder,
5. Mrs Harborne did not agree to the sale of the vehicle at $43,000,
6. Mr Ding has been involved in illegal money transaction activities under the Anti-Monetary Laundering and Countering Financing of Terrorism Act 2009.

[39] As was explained to Mrs Harborne at the hearing, the jurisdiction of the Motor Vehicle Disputes Tribunal is limited only to the FTA, the CGA and parts of the CCLA.[4] It may be that if there are valid claims with respect to some of her claims where Mrs Harborne has remedies in other Tribunals or jurisdictions, but I cannot deal with those wider claims in this Tribunal. There is simply no jurisdiction in relation to the other legislation or many claims that Mrs Harborne raises, including those she raised in a memorandum filed after the hearing. I will return to the question of jurisdiction below.
[40] During the hearing, Mrs Harborne was asked to state what order she was seeking against FHL. She submitted that she requires orders for:

1. compensation for the difference between what she was told the vehicle sold for and what it did sell for,
2. an order that she is not liable to pay any of the “costs” that FHL claims that it incurred with respect to the vehicle, other than approximately $200-$250 for car grooming. She claims that she never agreed to any of these costs and that Mr Ding intentionally hid these costs from her. She claims that the invoices are most likely forged or backdated by Mr Ding.

100. interest on these sums pursuant to the Interest on Money Claims Act 2016.[5]

4. costs and an order that a penalty be made against FHL. Costs were not identified, other than the interest sought.

FHL’s position

[41] Mr Ding’s evidence is that the finance amount required to purchase the vehicle was arranged through Great Broker. Great Broker does not itself lend money; it is merely a broker. The borrowing is made between the customer and the relevant finance company, in this case, Heartland Bank.
[42] Mr Ding agrees he was contacted by Mrs Harborne when she got into financial difficulty about buying the vehicle back. He said FHL could not afford to buy the vehicle but it did agree to try and find a buyer. In order to help her, FHL agreed to cover her monthly Heartland Bank payments. FHL made four such payments.
[43] Mr Ding’s evidence was that Mrs Harborne agreed to meet all costs of sale, including all commission, grooming and servicing costs at the time she bought the vehicle in for FHL to sell.
[44] Mr Ding said that with Mrs Harborne’s agreement, the vehicle was initially listed for over $60,000 but then eventually reduced to $49,900. He said that Mrs Harborne was involved in fixing the asking price and that she agreed on subsequent price reductions along the way. He was aware she was very keen to sell because of her financial position and marriage breakup.
[45] He said that on 31 August 2019, Mrs Harborne agreed to the vehicle being sold for $43,000. He referred to the We Chat messages I have summarised above as evidence of that agreement.
[46] Mr Ding accepted, however, that the vehicle was in fact sold for $50,000. When he was asked why he had provided a different version of the sale agreement to Mrs Harborne, he said that he did not want his friend, who was the mutual friend of Mrs Harborne’s who had introduced him to her, to know that he had made a profit with respect to the re-sale.
[47] Mr Ding therefore accepted that the second version of the agreement was in fact the true version of the agreement.
[48] His evidence was that FHL incurred costs on the sale, in addition to the four monthly payments for the loan. These costs were:

1. Trade Me listing: $600
2. grooming fee: $400

100. service fee, parking fees, labour fees, staff commission and petrol: $1,500

4. panel beating: $740
5. vehicle servicing costs, including obtaining a warrant of fitness: $1,305

[49] Invoices were provided to the Tribunal for the servicing and the panel beating costs, but the only corroborating document provided relating to the other costs was a tax invoice from FHL which listed the amounts claimed.
[50] Mr Ding accepted that none of this information about costs was provided to Mrs Harborne at the time the vehicle was sold to Mr Zheng. He did not challenge the fact that they had not been previously discussed with her. Mr Ding nevertheless insists that Mrs Harborne agreed to meet the costs of sale and should be liable to pay them. He says that they were the actual costs incurred in connection with the sale of the vehicle.
[51] Mr Ding says that Mrs Harborne deceived FHL because she agreed to pay the $35,000 to Heartland Bank. Based on that assurance, FHL arranged for the payment to her. He refers to the email she sent on 3 September 2019, which implied that she was just waiting on some information from the lender.
[52] The essence of FHL’s defence to this claim is that it denies any wrongdoing with respect to the sale to Mrs Harborne or the sale to Gong Zheng. It accepts it did not provide the correct version of the agreement to Mrs Harborne, but it says that there is no loss because the difference between the true sale price of the vehicle and the price that Mrs Harborne was told represents FHL’s costs, commission and profit on the sale.

The issues

[53] The issues requiring the Tribunal’s consideration in this case are:

• (a) Has FHL engaged in misleading conduct in breach of s 9 of the FTA?
• (b) What remedy is Mrs Harborne entitled to under the FTA?
• (c) Did FHL engage in conduct that amounted to coercion in breach of s 23 of the FTA?
  

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

[54] 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.

[55] The test for establishing a breach of s 9 was set out by the Supreme Court in Red Eagle Corp Ltd v Ellis:[6]

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. It is not necessary under s 9 to prove that the defendant’s conduct actually misled or deceived the particular plaintiff or anyone else. If the conduct objectively had the capacity to mislead or deceive a hypothetical reasonable person, there has been a breach of s 9. If it is likely to do so, it has the capacity to do so. Of course the fact that someone was actually misled or deceived may well be enough to show that the requisite capacity existed.

[56] I am satisfied that Mrs Harborne has proven FHL engaged in misleading or deceptive conduct, in breach of s 9 of the FTA.
[57] It was not denied by FHL that Mrs Harborne was given the incorrect version of the agreement with Gong Zheng. The vehicle was not sold for $43,000, it was sold for $50,000. The second version of the agreement also had different contact details for the buyer on it. For reasons that were not explained, those details had been adjusted between the two agreements. Mrs Harborne claims that the alterations to the contact details of Gong Zheng was to prevent her from being able to contact the buyer. Given her evidence that she asked for the sale to be stopped, that could well be the case.
[58] Clearly there were two different versions of the agreement and Mrs Harborne was given the false one. It was without a doubt misleading or deceptive for FHL to provide Mrs Harborne with a false version of the agreement which recorded her vehicle was sold for only $43,000 when the sale price was $50,000.
[59] It follows that it was also misleading or deceptive for FHL to advise Mrs Harborne by way of the messages referred to above that the vehicle had been sold for $43,000 when it had then been sold for $50,000.

Issue 2: What remedy is Mrs Harborne entitled to under the FTA?

[60] The remedies available for a breach of the FTA are set out in s 43 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.

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

• (a) Mrs Harborne was in fact misled or deceived;
• (b) Mrs Harborne suffered loss or damage; and
• (c) FHL’s conduct was the effective cause or an effective cause of her loss or damage.

Was Mrs Harborne in fact misled or deceived?

[62] There is no question in my mind that Mrs Harborne was in fact misled and deceived by:

• (i) being told by message that the vehicle had sold for $43,000 when it had in fact been sold for $50,000, and
• (ii) by being provided with a false version of the agreement which contained the sale price of $43,000.

Has Mrs Harborne suffered loss or damage?

[63] An important prerequisite to an order under s 43 of the FTA is a finding that loss or damage has occurred or is likely to occur. Where compensation is appropriate, the measure of compensation is generally assessed on the basis of loss suffered in reliance upon the representation. An award of damages is intended to restore a claimant to the position they would have been in if the misleading or deceptive conduct had not occurred.[7]

• [64] Believing that the sale price of the vehicle was $43,000 and that the only deduction other than a small tidy up cost, was the four finance payments of $1,908.65, Mrs Harborne then accepted without challenge the payment of $35,000. Had she known the truth, she could have challenged the payment of $35,000 and this would have led to her receiving the additional $7,000.
• [65] She eventually paid half of the $35,000 to Heartland Bank, thus reducing her overall liability, but had she received an additional $7,000 at that time, she may well have elected to use that money to further reduce her liability to Heartland Bank, and thus her exposure to interest at the rate of 12.95%. She has therefore suffered additional loss in that her liability to Heartland Bank has increased by the amount of the interest she has incurred liability for in relation to that $7,000.
• [66] FHL cannot argue that because Mrs Harborne had already agreed over the exchange of messages that the vehicle could be sold for $43,000 she therefore suffered no loss because she had already agreed to go as low as $43,000 anyway. Although I find that she did accept, albeit reluctantly, the sale price of $43,000, this has no bearing on her loss. She believed that that was the best price available in the current market; that was why she agreed to it. She was reliant on Mr Ding to get her the best available price in the market at the time and he told her that was the price. She was reliant on the misleading information she was being provided.
• [67] FHL argues that Mrs Harborne has not suffered a loss because she would have had to have paid the additional costs that are referred to above. I disagree.
• [68] I accept Mrs Harborne’s evidence that there was mention of a small tidy up charge being incurred at the outset but I find that there was never any agreement or discussion on her meeting any other costs (including commission or profit), much less any agreement or discussion about what those costs would likely amount to. First, there is no written evidence documenting her agreement for these specific costs to be charged to her when the vehicle sold. Had there been a discussion then I would have expected that there may have been some written record of that discussion in so far as costs were concerned.
• [69] Second, these additional costs were not presented to her until late 2021 when FHL’s lawyer was in communication with Mrs Harborne. Had these costs been agreed by both parties at the outset and then actually incurred, I would have expected her to have been provided with details of them at the time of the sale. She was not.
• [70] I note further that, in any event, the additional documented costs and expenses now claimed do not add up to the $7,000 difference between the represented sale price and the actual sale price.
• [71] The general lack of proper supporting documentation about all of the costs, tends to give an air of unbelievability to FHL’s evidence that these costs were discussed, agreed and actually incurred.
• [72] FHL’s version of events simply does not hold together very well for all or frankly any of the foregoing reasons.
• [73] I find that Mrs Harborne has suffered loss.

Was FHL’s conduct the effective cause or an effective cause of the loss or damage?

[74] I am satisfied FHL’s conduct was the direct cause of the loss that Mrs Harborne suffered.
[75] It provided her with misleading information about the actual sale price of the vehicle. As a result, she did not receive the additional $7,000 and the option of paying that money down against the Heartland Bank liability was removed from her. Her current overall liability to Heartland Bank is higher than it would otherwise have been had she been able to make that payment.

What remedy is Mrs Harborne entitled to under s 43(3) of the FTA?

[76] 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.[8]
[77] I consider that the appropriate remedy is to award damages to Mrs Harborne under s 43(3)(f) of the FTA for the loss she has suffered as a result of being misled by FHL. Had the misleading conduct not taken place, Mrs Harborne would have received an additional $7,000, being the difference between the sale price that was actually fetched for the vehicle and the price that she was told. Also, her liability to Heartland Bank, which is ongoing, could have been reduced by the interest that she has otherwise incurred on the amount outstanding.
[78] Specifically, I find that the loss that Mrs Harborne is entitled to is:

1. the sum of $7,000, being the difference between the sale price that was actually fetched for the vehicle and the price that Mrs Harborne was told,
2. interest on the sum of $7,000 from the date Mrs Harborne received payment of $35,000 (2 September 2019) through to 1 March 2023 (the date of this decision) at the rate of 12.95%. This sum amounts to $3,087.07 as at 1 March 2023.

[79] I am satisfied that Mrs Harborne should receive interest on the $7,000 from 2 September 2019 at the rate she was paying Heartland Bank because I find that even if FHL was not specifically aware of the actual interest rate she was paying, FHL was aware she was borrowing to complete the purchase and that as such, she would be paying a reasonably high interest rate. Further, Mr Ding was well aware that Mrs Harborne needed the vehicle sold to pay off her lender. FHL ought to have known that if it did not account to Mrs Harborne for the correct purchase price that she would not have the opportunity to further reduce the amount owing to Heartland Bank. Although she did not pay Heartland Bank immediately, I am mindful of her evidence was that she did end up paying half of the $35,000 that she received from FHL. Had she received $42,000, she could well have used that extra money to immediately reduce the debt to Heartland Bank, and thus reduce the overall amount of interest she now owes Heartland Bank.

Costs

[80] Mrs Harborne claims costs. Under sch 1 cl 14(1)(a)(ii) and (b) of the Motor Vehicle Sales Act 2003 (“the MVSA”), the Tribunal may award costs against a party where the matter ought to have been settled before a hearing, but that party fails to participate in pre-hearing settlement discussions, or where the other party fails to attend the hearing without reasonable cause.
[81] I have been provided with communications here that shows that the parties did participate in settlement discussions. There has been no non-appearance by FHL.
[82] This is not an appropriate case for costs to be awarded or for the filing fee to be returned to Mrs Harborne.

Issue 3: Did FHL engage in conduct that amounted to coercion in breach of s 23 of the FTA?

[83] Mrs Harborne alleges that FHL engaged in behaviour she described as duress towards her when she bought the vehicle and then when she on sold it. She claims that she was in a vulnerable position and that that FHL took advantage of this vulnerability. She also claims that she did not agree to the sale of the vehicle.
[84] Although the common law cause of action of duress would not be available to her as a result of the Tribunal’s lack of jurisdiction to consider that form of claim,[9] I note that the Tribunal is however able to consider claims under the FTA and this includes behaviour that can be described as “coercion”.
[85] In this regard, s 23 of the FTA provides as follows:

No person shall use physical force or harassment or coercion in connection with the supply or possible supply of goods or services or the payment for goods or services.

[86] In Ellis v Barker,[10] Lord Romilly MR said:

Coercion takes an infinite number of forms, but it may properly be thus defined: — the moment that the person who influences the other does so by the threat of taking away from that other something he then possesses, or of preventing him from obtaining an advantage he would otherwise have obtained, then it becomes coercion and it ceases to be persuasion or consideration.

[87] In Hodges v Webb,[11] Paterson J stated that what was involved with the concept of “coercion” was something in the nature of negation of choice. In other words, there is coercion where conduct is undertaken by one person towards another such that a choice that might be otherwise available to that other party is negated or removed.
[88] A party bringing a claim before the Tribunal must prove their claim to the civil standard. In other words they must prove their case on the balance of probabilities. I am not at all satisfied that there was any conduct of FHL in connection with either the original sale of the vehicle to Mrs Harborne or the on-sale of the vehicle to Gong Zheng that could be categorised as coercion or putting Mrs Harborne in a position where there was a negation of choice.
[89] I find that FHL was most likely aware that Mrs Harborne was recently separated and wanted a new vehicle when she first approached Mr Ding. I also find that FHL was aware that she became under strained financial circumstances when she approached it in 2019, wanting Mr Ding to find a buyer.
[90] The mere awareness by FHL of Mrs Harborne being recently separated and in need of a new vehicle is not in itself evidence of coercion. No doubt there are countless instances where members of the public purchase vehicles in similar circumstances, including circumstances in which they might not have any experience at all in organising borrowing from a finance company or making significant purchases.
[91] Likewise, the fact that FHL was aware that her financial circumstances became strained and that she needed to sell the vehicle is not in and of itself evidence that a choice was removed from her, such that “coercion” has taken place. Mrs Harborne would not be the first person to sell a vehicle under similar circumstances and I find there to be an absence of any cogent evidence that she was forced or in some way had free choice about the on sale agreement removed. I have also found above that albeit reluctantly, she did agree to the sale price at $43,000.
[92] I take into account the fact also that Mrs Harborne presented as assertive, articulate and intelligent. She is now a qualified legal executive, although points out that this is only a recent qualification and postdates the foregoing events. Nevertheless, she does not present as a person susceptible to coercion or as having been coerced in this instance.
[93] I find that the conduct of FHL does not amount to “coercion” required to demonstrate a breach of s 23 of the FTA. It follows that FHL has not breached s 23 of the FTA.
[94] Further, having already awarded Mrs Harborne a remedy pursuant to the FTA for the breach of s 9, I would not have been minded to award additional compensation in any event.
[95] The claim of Mrs Harborne for coercion is therefore dismissed.

For Completion

[96] I mention the matters below for completion purposes only.
[97] Mrs Harborne commenced these proceedings against FHL. Her various memoranda subsequently filed referred to Mr Ding personally as a respondent, as well as Great Broker. Those parties were not, however, joined to the proceedings and were not parties to the application. More importantly, as was explained to Mrs Harborne during the hearing, the Tribunal only has jurisdiction if one, but not both parties, is a motor vehicle trader. The motor vehicle trader here is FHL and there was no basis or evidence provided in support of an allegation that Mr Ding or Great Broker were also motor vehicle traders.
[98] Mrs Harborne took a scattergun approach towards the claims raised by way of this application. She alleged breach of a wide range of statutes, including the MVSA, the FTA, the CCLA, the CGA, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 and the Crimes Act 1961. She also made common law allegations of unconscionable conduct and duress on the part of FHL.
[99] The Tribunal however only has the limited jurisdiction referred to in s 89 of the MVSA. S 89(1)(a) of the MVSA provides:

89Jurisdiction of Disputes Tribunal

(1)A Disputes Tribunal has jurisdiction, on the application of any party, to—

(a) inquire into and determine any application or claim, as the case may be, under any of the following if that application or claim is in respect of the sale of any motor vehicle:

(i)the Fair Trading Act 1986:

(ii) the Consumer Guarantees Act 1993:

(iii) subpart 3 of Part 2 or Part 3 of the Contract and Commercial Law Act 2017; and

...

[100] The jurisdiction of the Tribunal does not therefore extend to include the Crimes Act, the MVSA, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, or common law causes of action based on unconscionability and duress. Nor can a penalty be ordered or can interest be awarded against a respondent before the Tribunal under the Interest on Money Claims Act 2016. In relation to the CCLA, there is overlap between the FTA allegations referred to above and those that could be brought under that part of the CCLA with respect to which the Tribunal has jurisdiction. As I have granted a remedy with respect to the FTA allegations, I consider there is no need to further consider the same allegations as an alternative under the CCLA.

[100] There was no evidence or submissions presented in support of any claim under the CGA and accordingly no remedy is considered under that legislation.
[101] In relation to unconscionability, s 7(1) of the FTA provides that a person must not in trade engage in conduct that is unconscionable. That section however was inserted into the FTA on 16 August 2022, well after the events described above. It is trite that presumption is that enactments do not have retrospective effect.[12] Therefore, no claim could be made by Mrs Harborne for breach of that section.
[102] I note that there were additional complaints made by Mrs Harborne which I mention only briefly and do not consider I need to discuss in any further detail. They seem to be peripheral and do not translate to the possibility of any further relief.
[103] First, Mrs Harborne claims FHL did not advise Gong Zheng that there was a security interest on the vehicle. There was no cogent evidence provided in support of that claim. But even if this was the case it was not stated in what way such a nondisclosure would give Mrs Harborne a claim against FHL.
[104] Second, Mrs Harborne says that Mr Ding lied to the Tribunal when he said the $35,000 was transferred from FHL’s business account whereas it was in fact transferred from another account holder. It was not clear how any specific loss was said to have arisen as a result. This claim appeared to relate to Mrs Harborne’s view that Mr Ding was engaging in money laundering and was in breach of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. I do not consider I need to deal with this complaint as I have no jurisdiction to make any finding in relation to this legislation and I have, in any event, already awarded Mrs Harborne relief pursuant to the FTA.

Outcome

[105] FHL must pay Mrs Harborne the sum of $10,087.07 within 10 working days of the date of this decision.

DATED at AUCKLAND this 1st day of March 2023.

D A Watson
Adjudicator

This decision has been appealed. The outcome of that appeal was unknown at the date of the publication of this decision.

---

[1] By “Mr Ding”, this is in fact a reference to FHL. There was no suggestion that it would be Mr Ding personally who would be buying the vehicle back.

[2] The reference to an offer of $52,000 came from the owner of a car yard that Mrs Harborne’s accountant had recommended to her.

[3] This was because of FHL’s obligations under section 59 of the Personal Property Securities Act 1999 which requires a registered Motor Vehicle Dealers to pay any secured amount to a lender when the vehicle is sold.

[4] See s 89 of the MVSA.

[5] As is set out in paragraph 52 of her affidavit.

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

[7] Harvey Corporation Ltd v Barker [2002] NZCA 34; [2002] 2 NZLR 213 (CA).

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

[9] for reasons discussed below under the heading "For Completion"

[10] (1871) 40 LJ Ch 603, at 607.

[11] [1920] 2 Ch 70, at 86.

[12] See s 7 of the Interpretation Act 1999, now replaced by s 12 of the Legislation Act 2019.