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Lawson v Hamilton Electric Vehicles Limited t/a Hamilton EV Reference No. MVD 396/2023 [2023] NZMVDT 278 (18 December 2023)

Last Updated: 26 January 2024

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 396/2023
[2023] NZMVDT 278

BETWEEN GREGORY DAVID LAWSON

Purchaser

AND HAMILTON ELECTRIC VEHICLES LIMITED TA HAMILTON EV

First Respondent

AND NICHOLAS JAMES DOWN

Second Respondent

HEARING on 26 October 2023 (via Microsoft Teams), further submissions received on 22 November 2023
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator
S Haynes – Assessor

APPEARANCES

G D Lawson, Purchaser
N J Down, Director of Hamilton Electric Vehicles Ltd and in his personal capacity

DATE OF DECISION 18 December 2023

___________________________________________________________________

DECISION OF THE TRIBUNAL

___________________________________________________________________

Gregory Lawson’s application is dismissed.

___________________________________________________________________

REASONS

Introduction and background

[1] Gregory Lawson seeks a refund of the $9,500 he paid to purchase a 2015 Holden Barina on 23 December 2022. Mr Lawson says there is air trapped in the vehicle’s cooling system. He is concerned this could lead to an airlock, which could cause the engine to overheat, leading to engine damage.
[2] Mr Lawson alleges that Hamilton Electric Vehicles Ltd (Hamilton EV) sold him the vehicle. Its director and shareholder, Nicholas Down, denies the vehicle was sold by Hamilton EV. Mr Down says he sold the vehicle to Mr Lawson personally. Mr Down denies that he did so in the capacity of a motor vehicle trader. If Mr Down is correct on both of these points, then the Motor Vehicle Disputes Tribunal (MVDT) has no jurisdiction to determine Mr Lawson’s claim.[1]
[3] From this brief background, the following primary issues arise for the MVDT’s determination:
[4] However, before considering these issues, I will outline the procedural history of this matter.

Procedural history

[5] Mr Lawson first applied to the MVDT in March 2023. A hearing took place on 20 April 2023. On 25 May 2023, Adjudicator Carter transferred the proceeding to the Disputes Tribunal.[2] In his transfer order, Mr Carter recorded that Hamilton EV denied selling the vehicle to Mr Lawson. Hamilton EV said that it owned the vehicle, which it on sold to its director Mr Down, who then on sold it in his personal capacity to Mr Lawson. In support of this position, Hamilton EV produced:
[6] In his transfer order, Mr Carter noted that:[3]

Mr Down is not a registered motor vehicle trader. If Mr Down did sell this vehicle to Mr Lawson in his personal capacity, the [MVDT] will only have jurisdiction if Mr Down otherwise qualifies as a motor vehicle trader – for example if he held himself out as a motor vehicle trader, or sold more than six vehicles within a 12 month period and is unable to prove that he did not do so for the primary purpose of gain. I understood Mr Down to deny that he meets this definition.

If Mr Down sold the vehicle and if he does not meet the definition of a motor vehicle trader – which is what Hamilton Electric Vehicles and Mr Down both say – the [MVDT] cannot determine this claim.

[7] A Disputes Tribunal hearing took place. On 15 September 2023, the referee determined that the claim could more properly be determined by the MVDT and transferred the matter back to the MVDT. The referee found Mr Down sold the vehicle to Mr Lawson and that he was a motor vehicle trader. The referee stated:[4]

I find that Mr Down is a motor vehicle trader because he is a person who carries on the business of motor vehicle trading; and he held himself out as a person carrying on the business of motor vehicle trading. In addition, he conducted the sale and dealt with the after sale issues of the car from the [Hamilton EV] site, that is clearly a motor vehicle trading business.

I have considered Mr Down’s argument that HEVL had sold him the car privately and he on-sold it to Mr Lawson in his private capacity. However, I am satisfied that this was not communicated to Mr Lawson at any time before or after the sale. I find that at all times, the actions of Mr Down were consistent with a person representing HEVL.

There is no clear evidence of a sale from HEVL to Mr Down. The car was not registered to Mr Down and the alleged sales document (the VOSA) has too many parts redacted for me to be satisfied that it is a bona fide document. Regardless of whether Mr Down had purchased the car from HEVL, there is no clear separation between the actions of Mr Down and HEVL, including in the office and on the HEVL yard.


[8] The MVDT is not required to follow the Disputes Tribunal’s findings, but can reach its own conclusions based on the evidence. The Disputes Tribunal’s order transferring Mr Lawson’s claim to the MVDT names both Hamilton EV and Mr Down as respondents. However, when Mr Lawson completed an MVDT application form on 29 September 2023, he only named Hamilton EV as the respondent. As a result, only Hamilton EV was named as a respondent in correspondence from the MVDT relating to the application.

Joinder of Mr Down as second respondent

[9] Mr Down attended the second MVDT hearing on 26 October 2023. He submitted that Mr Lawson’s claim could only proceed against Hamilton EV, rather than against Mr Down personally. That is because of Mr Carter’s statement (as set out above at [6]) that Mr Down is not a registered motor vehicle trader.
[10] However, as I explained at the hearing, a person can be treated as a motor vehicle trader, and thus be subject to the MVDT’s jurisdiction, even though they are not registered as a motor vehicle trader, if they:[5]
[11] “Holding out” that a person is carrying on the business of motor vehicle trading is further defined in s 8(2) of the Motor Vehicle Sales Act 2003, as follows:

(2) For the purposes of subsection (1)(a), a person holds out that the person is carrying on the business of motor vehicle trading if that person—

(a) advertises or notifies or states that the person carries on the business of motor vehicle trading; or
(b) in any way represents that the person is ready to carry, or is carrying, on the business of motor vehicle trading.

[12] As noted, Mr Down was joined as second respondent in the Disputes Tribunal proceeding. Further:
[13] Accordingly, at the 26 October 2023 hearing, for the avoidance of doubt, I joined Mr Down as second respondent to Mr Lawson’s application. Mr Down acknowledged that, as Hamilton EV director, he had received all the submissions and evidence that Mr Lawson had supplied with his application.

Issue one: Who sold the vehicle to Mr Lawson?

Disputes Tribunal’s findings

[14] The Disputes Tribunal referee was sceptical about the veracity of the sale of the vehicle by Hamilton EV to Mr Down, prior to Mr Lawson’s purchase. The referee also considered there was “no clear separation” between the actions of Mr Down and Hamilton EV. Nevertheless, the referee found that Mr Down was a motor vehicle trader and that he sold the vehicle to Mr Lawson. However, the referee found that he was doing so while “representing” Hamilton EV.
[15] I record that I respectfully disagree with the Disputes Tribunal referee’s findings on this specific point – that Mr Down was “representing” Hamilton EV when he sold the vehicle to Mr Lawson. If, as the referee found, Mr Down was representing Hamilton EV in selling the vehicle then I respectfully consider the referee should have found that Hamilton EV sold the vehicle. Such a finding would have been available under s 9(1) of the Motor Vehicle Sales Act 2003, which provides:
  1. Who is not treated as motor vehicle trader

(1) A person is not treated as carrying on the business of motor vehicle trading for the purposes of this Act only because that person is—

(a) an employee or an agent of a motor vehicle trader; or
(b) under a contract for services with a motor vehicle trader; or ...
[16] This provision allows for individuals who are employees or agents of motor vehicle traders to participate in selling motor vehicles for those traders without being treated as carrying on the business of motor vehicle trading (and without needing to be registered as motor vehicle traders) in their own right.
[17] I have reached the same conclusion as the referee, that Mr Down sold the vehicle. But I do not consider that Mr Lawson has established that Mr Down was necessarily “representing” Hamilton EV when he sold the vehicle. However, as I go on to explain, that is not the only route by which Mr Down can be treated as a motor vehicle trader.

Circumstances of the sale according to Mr Lawson

[18] Mr Lawson’s evidence was the vehicle was displayed for sale directly outside Hamilton EV’s premises. He had driven past the vehicle a couple of times over the previous weeks. There were A4-sized signs in the vehicle’s windows advertising it for sale as a trade in for $9,500. There was no Hamilton EV branding on the signs. No consumer information notice was displayed with the vehicle.
[19] Mr Lawson telephoned the number that was printed on the signs, which was Mr Down’s number. Mr Down then walked out of Hamilton EV’s premises. Mr Down and Mr Lawson discussed the vehicle. Mr Lawson asked if he could take it for a test drive and Mr Down agreed. Mr Lawson took the vehicle for a short test drive, then he returned to Hamilton EV and went inside and talked about finance. Mr Lawson said he was interested in purchasing the vehicle but would arrange his own finance. Mr Down agreed to provide a new warrant of fitness plus 12 months’ licensing for the vehicle, any servicing that was required and a valet. About a week later, Mr Lawson collected the vehicle.
[20] Mr Lawson submitted that he thought he was buying the vehicle from Hamilton EV. Mr Lawson said that Mr Down never made it clear that he was selling the vehicle privately. According to Mr Lawson, the first time Mr Down told Mr Lawson it was a private sale was in the conversation in which Mr Lawson rejected the vehicle.
[21] Mr Lawson said he did not know who Mr Down was – whether he was the owner of Hamilton EV or a salesperson. Hamilton EV is a car dealership. Mr Down saw a car there, and he purchased it. It did not occur to him at the time that he would need to “delve into who was selling who what”.
[22] There was no vehicle offer and sale agreement or consumer information notice. Instead, Mr Down sent Mr Lawson an invoice with Mr Down’s name on it, a bank account number on it, and the vehicle details. The invoice does not refer to Hamilton EV. Mr Lawson accepted that, in hindsight, the invoice suggests that Mr Down was the seller of the vehicle.

Circumstances of the sale according to Mr Down

[23] Mr Down said that he told Mr Lawson he was selling the vehicle in his private capacity within the first five minutes of meeting him on the side of the road, before he test-drove it, by reinforcing what was said on the printed signs attached to the vehicle. These signs made it clear that it was a private sale.
[24] I asked Mr Down if he retained a copy of the sale and if so if he could send it to the MVDT. He replied that he could send the original Microsoft Word version. I said it would be helpful to have that version to show (from the metadata) when it was created. Mr Down produced a PDF version of the sign after the hearing and said that the Microsoft Word version had been overwritten by another staff member selling their caravan.
[25] The PDF’s metadata indicates the file was created on 2 November 2023, the same day that Mr Down submitted it to the MVDT. I was therefore somewhat sceptical as to whether this was truly the original sign, though Mr Lawson did not challenge it, so I am prepared to accept it was the sign displayed on the vehicle when Mr Lawson purchased the vehicle. The sign produced by Mr Down states “FOR SALE” in large letters and gives the price. Then, in small letters, the sign says:

Just traded and fantastic price and condition

Selling as traded privately on an EV Car

Excellent condition inside and out, I will put a new WOF on it before delivery.

On Trademe for between $12,000 and $13,500

[26] At the bottom of the sign, in larger letters, is an invitation to “Phone or Text” with Mr Down’s mobile number. This number is also the primary business contact number for Hamilton EV, as advertised on its website.
[27] Mr Down disputed that when the vehicle was displayed for sale it was directly outside Hamilton EV. He said that, “to be technical”, the vehicle had been parked on State Highway One between Hamilton EV and the saddlery business next door. Two wheels of the vehicle were parked outside Hamiton EV’s property and two wheels of the vehicle were parked outside the saddlery.
[28] Mr Down also disputed that any of the negotiations relating to the sale of the vehicle took place inside Hamilton EV’s premises. Rather, he said that all of the negotiations took place on the footpath. Mr Down said he explained that as Hamilton EV does not sell petrol or diesel vehicles, “I just put them out on the road and I just get rid of them. I’ve done it twice in two years. Now we just send them to Turners...it’s just not worth the hassle.” However, he accepted that when Mr Lawson came back and said he wanted to buy the vehicle, some discussions took place inside Hamilton EV’s premises.

MVDT’s assessment

[29] I consider the evidence establishes that Mr Down was carrying on the business of motor vehicle trading when he sold the vehicle to Mr Lawson. He is therefore treated as a motor vehicle trader even though he is not registered as one.[6] The following factors point to Mr Down’s holding himself out (in the sense of advertising, notifying or representing) that he was carrying on the business of motor vehicle trading, in respect of the sale of the vehicle to Mr Lawson:
[30] I do not consider that the use of the word “privately” in the for sale sign is enough to negate these factors. The placement of that word after the word “traded” makes it difficult to assess whether the word “privately” is meant to qualify the purchase of the vehicle by Hamilton EV as a trade-in, or the subsequent sale to Mr Lawson. In any event, it is not possible to convert a sale by someone treated according to the test in s 9 of the Motor Vehicle Sales Act 2003 as a motor vehicle trader, into a private sale, simply by asserting that it is a private sale.[7]

Conclusion

[31] Mr Down is treated as a motor vehicle trader for the purposes of the sale of the vehicle to Mr Lawson.
[32] I will now turn to the remaining issue, whether Mr Lawson has established that the vehicle failed to comply with the guarantee of acceptable quality.

Issue three: Did the vehicle fail to comply with the guarantee of acceptable quality?

[33] Section 6(1) of the Consumer Guarantees Act 1993 (the CGA) provides that “where goods are supplied to a consumer there is a guarantee that the goods are of acceptable quality”. According to s 2 of the CGA, “goods” includes vehicles.
[34] “Acceptable quality” is defined in s 7 of the CGA (as far as is relevant) as follows:
  1. Meaning of acceptable quality

(1) For the purposes of section 6, goods are of acceptable quality if they are as—

(a) fit for all the purposes for which goods of the type in question are commonly supplied; and

(b) acceptable in appearance and finish; and

(c) free from minor defects; and

(d) safe; and

(e) durable,—

as a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects, would regard as acceptable, having regard to—

(f) the nature of the goods:

(g) the price (where relevant):

(h) any statements made about the goods on any packaging or label on the goods:

(ha) the nature of the supplier and the context in which the supplier supplies the goods:

(i) any representation made about the goods by the supplier or the manufacturer:

(j) all other relevant circumstances of the supply of the goods.

...

[35] Whether a vehicle is of acceptable quality is considered from the point of view of a reasonable consumer who is fully acquainted with the state and condition of the vehicle, including any hidden defects.
[36] About two weeks after Mr Lawson purchased the vehicle it started making a gurgling noise from underneath the dashboard. The noise worsened over the next couple of weeks.
[37] Mr Lawson contacted Mr Down about the gurgling noise and he asked Mr Lawson to bring the vehicle back to Hamilton EV so he could assess it. Mr Lawson dropped the vehicle off on 17 February 2023. Later that day, Mr Lawson received a call from Paul, a technician at Hamilton EV, who told Mr Lawson that he could not find a fault with the car (but he acknowledged the presence of the noise).
[38] The job card from Hamilton EV’s assessment records that it found no leaks or pressure test issues, with no sign of overheating or loss of pressure. Its technician drove the vehicle with maximum load on its cooling system and the air conditioning running on full. No temperature issues were detected.
[39] Mr Lawson booked the vehicle for assessment by a radiator specialist, Coombes and Rennie Radiators on 22 February 2023. Two days prior to that assessment, the vehicle’s check engine light illuminated and the vehicle went into limp mode. But no evidence was presented to suggest why this occurred. There was no evidence that the vehicle had overheated.
[40] Coombes and Rennie Radiators’ report records that the vehicle’s heater core was found to be approximately half full of air. A full test of the cooling system was completed and no leaks were found with all components recorded as functional and operating correctly. The radiator heat was even and the vents were operating correctly. The vehicle was sent out to Kings Automotive for a cylinder head test and head gasket check with no issues found. Coombes and Rennie Radiators suspected that there is a compression leak into the cooling system when the engine is warm, but they were unable to confirm exactly where.
[41] The MVDT’s Assessor, Mr Haynes, noted that from Coombes and Rennie Radiators’ report there was no evidence that it had performed a flow test on either the radiator or the heater core. Therefore, according to Mr Haynes, it was not possible to tell, from the diagnosis carried out, whether the heater core was partially blocked or if there was a blockage causing the gurgling noise.
[42] Mr Down said at the hearing that he does not accept Mr Lawson has established that the vehicle has any issues that require addressing or further investigation, given that:
[43] Mr Down suggests the reason the car went into limp mode was simply because (as the Melville Service Centre found) a coil had been unplugged, but no fault was found with the coil or the leads.
[44] As articulated by Mr Down at the hearing, Hamilton EV will rerun the tests it carried out in February 2023, but if no fault is found then it proposes to invoice Mr Lawson.
[45] Mr Haynes suggested it would be a good idea to have an independent conditioning specialist check the high and low gas pressures and assess how much oil is in the air conditioning/HVAC system. Mr Down agreed this should be done. Mr Down also said he will also take the vehicle at “our time” and “our expense” to all of the places that Mr Lawson has taken the vehicle to and ask them to run exactly the same tests that they ran on the date of their invoices.
[46] It may be that, following such further testing a fault may be found. In that event, Mr Lawson will be able to seek Mr Down’s assistance in remedying the fault, and to lodge a further MVDT application against him if he refuses to assist. However, in the absence of such testing, Mr Lawson has not established that the vehicle failed to comply with the guarantee of acceptable quality.
[47] However, in light of my finding that the vehicle was sold by Mr Down as a motor vehicle trader, Mr Lawson will have recourse against him under the CGA if he can establish a fault amounting to a failure to comply with the guarantee of acceptable quality.
[48] After the hearing, Mr Lawson also mentioned that, contrary to the promise made in the for sale sign, the vehicle’s warrant of fitness had not been renewed before delivery. Mr Lawson also referred to a promise to renew the vehicle’s licence that had not been met. As this matter was not raised in Mr Lawson’s application and is not referred to in the document he produced entitled “summary of the claim” I am not prepared to allow him to add it to his claim after the hearing. He should raise that in the first instance with Mr Down and he can bring a further MVDT claim on that issue if necessary.

Result

[49] Mr Lawson’s application is dismissed.

J S McHerron
Adjudicator

[1] Motor Vehicle Sales Act 2003, s 90(1)(a), which provides that the MVDT only has jurisdiction if one party, but not both parties, is a motor vehicle trader.

[2] Lawson v Hamilton Electric Vehicles Ltd transfer order dated 25 May 2023 (Transfer Order).

[3] Transfer Order at [7]-[8] (footnotes omitted).

[4] Lawson v Hamilton Electric Vehicles Ltd Disputes Tribunal Hamilton CIV-2023-019-000955, 15 September 2023 at [12]-[14] (footnotes omitted).

[5] Motor Vehicle Sales Act 2003, s 8(1)

[6] Motor Vehicle Sales Act 2003, s 8(1)(a).

[7] Also relevant is s 91 of the Motor Vehicle Sales Act 2003, which provides that a provision in a contract to exclude or limit the MVDT’s jurisdiction, or the right of any person to invoke that jurisdiction, has no effect.

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