Keystone Concepts Ltd v Olgo Motors 3 Limited t/a Olgo Motors Burnside - Reference No. MVD 024/2024 [2024] NZMVDT 143 (7 August 2024)

Last Updated: 20 September 2024

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 024/2024 [2024] NZMVDT 143 BETWEEN KEYSTONE CONCEPTS LIMTED Purchaser AND OLGO MOTORS 3 LIMITED trading as Olgo Motors Burnside Trader

MEMBERS OF TRIBUNAL

D M Jackson, Barrister – Adjudicator

S Cousins, Assessor

HEARING at Christchurch on 20 June 2024

APPEARANCES

S Swiety, Director for the Purchaser

F Filho, Director for the Trader

DATE OF DECISION 7 August 2024

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DECISION OF THE TRIBUNAL

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1. Keystone Concepts Limited’s application is dismissed.

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REASONS

Introduction

[1] On 10 April 2024, Keystone Concepts Limited (the Purchaser) agreed to purchase a Nissan NV350 from Olgo Motors 3 Limited trading as Olgo Motors Burnside (the Trader) for $24,295. The vehicle’s odometer read 122,100 kms at the time of sale. There is no dispute that because the vehicle was purchased by a company (the Purchaser) and for business purposes, the parties agreed to contract out of the consumer protection provisions of the Consumer Guarantees Act 1993.
[2] Rather, the Purchaser complains that upon delivery of the vehicle (to Queenstown from Christchurch) it identified several defects in the vehicle and notified these to the Trader immediately. The Purchaser says it rejected the vehicle due to the defects which were more than the “slight and minor cosmetic details” represented by the Trader. The Purchaser says the Trader accepted its rejection and arranged for the vehicle to be transported back to Christchurch. It says the Trader asked for the Purchaser’s bank account details so that a refund could be paid upon receipt of the vehicle.
[3] However, upon returning the vehicle to Christchurch, the Purchaser says the Trader reneged on the agreed refund and now wants to return the vehicle to the Purchaser, having repaired the various defects complained of. The Purchaser says that the Trader has both its money and the vehicle. It cries foul. The Trader says that it did not agree to refund the Purchaser immediately upon being notified of defects in the vehicle, but wanted to inspect the vehicle first and determine whether any repairs were necessary, and if so, carry out those repairs. The Trader says the vehicle has been repaired and can now be returned to the Purchaser. It says it never agreed to a refund and made that clear to the Purchaser before the vehicle was returned to Christchurch.

The issue

[4] I consider that the evidence presented shows that this is a matter involving misrepresentation and cancellation of a contract, to which the Contract and Commercial Law Act 2017 (the CCLA) applies. Accordingly, I consider the issues requiring consideration are:

• (a) Was there a misrepresentation as to the condition of the vehicle entitling the Purchaser to cancel under the CCLA?

Issue 1: Was there a misrepresentation entitling cancellation?

[5] Under s 35 of the CCLA a misrepresentation inducing entry into a contract is redressable in damages as if it were a term of a contract. Section 37 of the CCLA provides that a contract may be cancelled for misrepresentation in cases where the misrepresentation is in respect of some essential matter, or has substantial consequences for the innocent party. Under s 37 cancellation for misrepresentation is treated the same as cancellation for breach of contract.
[6] Here, the Purchaser argues the Trader represented that the vehicle had no more defects than “slight and minor cosmetic details”, which representation was false. It says the representation of the condition of the vehicle was essential to it.
[7] The defects complained of included engine shake, poor performance, heavy steering, rust on right sliding door handle, failed door closing sensor (right sliding door), brake squeal, and a rattling noise from the exhaust. The Trader accepts that some of these defects required repair. The Purchaser says it would not have purchased the vehicle had it known of these defects hence the essentiality of the representation as to condition.
[8] The Trader denies the representation, or if it was made, denies that it was false or that it was as essential to the Purchaser as now alleged. It did not know of any performance issues with the vehicle at the time of sale and says, had it known of them, it would have repaired them prior to sale. It says the repairs it did carry out were relatively minor regardless noting that most of the Purchaser’s complaints were, in fact, minor or cosmetic or otherwise consistent with the age and mileage of the vehicle.
[9] I am not satisfied that the Purchaser has proven that the alleged representations were made or otherwise induced it to enter into the contract or that it was impliedly agreed that the condition of the vehicle as represented was express or impliedly essential to it.
[10] The agreement, a Vehicle Offer and Sale Agreement (VOSA) signed by the parties on 10 April 2024, includes a clause, clause 10, which is entitled “Exclusion of Warranties”. Clause 10.1 provides:

“Except as otherwise provided in this Agreement and subject to the Motor Vehicle Sales Act 2004 [sic] and the Consumer Guarantees Act 1993, no warranty condition will be implied against MVT by any statue, at common law or otherwise and no representation, express condition or variation of the Agreement will be binding on MVT unless it is in writing and signed by MVT.”

[11] There was a dearth of evidence as to the representations alleged, how they were conveyed and in what context and by whom, and I find clause 10.1 is a complete answer to the claim regardless (that is, even if those representations were made, which I am not satisfied of). The clause serves to record the parties’ agreement that no representation will be binding on the Trader unless it is in writing and signed by the Trader. There is no such record of the representation alleged, which might bind the Trader.
[12] Rather, the Purchaser argues here that I can rely on the Trader’s alleged agreement to refund the Purchaser as evidence that it conceded that it had breached its promise. The Purchaser relies on an email exchange between the parties to prove that they agreed to bring the contract to an end in this way. The email exchange occurred between 16 and 18 April 2024 between Mr Swiety for the Purchaser and Mr Taylor for the Trader. I will not quote the emails verbatim but it is enough to record that Mr Swiety notified him of multiple problems with the vehicle discovered on its delivery, then on 17 April Mr Taylor replied to advise that he had booked a truck to collect the vehicle and to ask for the Purchaser’s bank account details “for a refund to be processed”. Mr Swiety provided those details and then chased Mr Taylor for confirmation of when the refund would be processed and the amount. Mr Taylor replied to confirm that the refund would be processed “once the van returns to the dealership”.
[13] The next morning (18 April 2024), Mr Swiety followed up asking to confirm the refund amount, to which Mr Taylor replied a few minutes later explaining that a refund would have to be “signed off” by the owner of the Trader.
[14] The Trader explained that the parties had spoken on 17 April 2024 by telephone about the vehicle and its condition. The discussion became heated, which prompted the Trader to arrange for the vehicle’s return to Christchurch so that it could verify the Purchaser’s claims.
[15] The Trader submits that its email of 18 April 2024 clarifies that a refund was not confirmed; it needed approval from both the owner and the accounts department, and the process would only start once the vehicle arrived. The Trader provided evidence which confirms that the vehicle was not uplifted from Queenstown until the following day.
[16] Once the vehicle arrived, the Trader verified the claims and carried out a number of repairs which it has produced evidence of in the form of invoices from local repairers. It did offer the Purchaser the option of selecting a different vehicle, but the Purchaser refused and demanded a refund.
[17] The Trader says the main issue was traced back to a faulty EGR valve, which has been rectified. It produced reports, which confirm that the engine shake issue has been addressed and the vehicle now performs as it should for a vehicle of this age and mileage.
[18] It follows from the above that I am not satisfied that the Trader misrepresented the condition of the vehicle in a way which engages the cancellation remedy under the CCLA. The Purchaser’s claim is dismissed as a result.

DATED at CHRISTCHURCH this 7th of August 2024

D M Jackson
Adjudicator