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Motor Vehicle Sales Act
Annual Report of the Motor Vehicle Disputes Tribunal Based in Wellington:
Period 1 July 2008 to 30 June 2009
August 2009
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5. Recommendation of Amendment to the Act
I recommend that the Tribunal's jurisdiction be extended to include the Contractual Remedies Act. There seems no good reason for the Tribunal to have jurisdiction under the Fair Trading Act but not the Contractual Remedies Act.
This limitation on jurisdiction has potential for significant unfairness for consumers who pursue their remedies via the MVDT. A misleading representation by a trader may provide a consumer with a cause of action in both the Fair Trading Act and the Contractual Remedies Act. If a consumer elects to bring an application before the MVDT, they are effectively giving up a potential Contractual Remedies Act claim.
This has significant consequences in terms of remedy because under the Fair Trading Act, damages may be awarded on the tort measure (to put the claimant in the position they would have been had the misleading statement not been made) whereas under the Contractual Remedies Act, damages may be awarded on an expectation basis – ie to put the consumer in the position they would have been had the misrepresentation been correct. Consumers appearing before the tribunal invariably consider expectation damages to be the fair approach.
I also recommend a review of section 41(3)(a) of the Consumer Guarantees Act 1993 which excludes the operation of that Act in respect of sales by way of auction. I recommend this because of the huge increase in sales by way of auction by traders through web-sites such as Trade Me. There seems to be no good policy reason why consumers purchasing vehicles in this way should not have the same protection afforded to them as consumers who purchase from a trader's lot.
N J Wills
Adjudicator
Wellington Motor Vehicle Disputes Tribunal
21 August 2009
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