Not disclosing a Volkswagen Amarok was a Queensland ‘statutory
write-off’ following flood damage was a breach of the Fair Trading Act. Dunedin car dealer Tokyo Auto Town was
ordered to refund the $40,000 purchase price.
The High
Court was told an Otematata family purchased the Amarok in 2016. Transmission problems surfaced two months
later. Water and/or glycol contamination
of transmission fluid was diagnosed.
Tokyo Auto had imported the damaged vehicle after buying at auction in
Queensland. The customer demanded a
refund. Hearings at the Motor Vehicle
Disputes Tribunal and in the District Court identified the Amarok was well
presented at sale with no indication of damage.
Information that the vehicle was ‘imported as damaged’ was not properly
brought to the buyers’ attention before sale.
In the High
Court, Justice Davidson said dealers must display a Customer Information Notice
(CIN) on used vehicles offered for sale.
The CIN must be given to the customer and signed by the customer before
a sale. The Otematata purchasers never
signed. There was disputed evidence as
to whether the customers read the Amarok CIN before buying. The CIN did state the Amarok was ‘imported as
damaged’. There is damage and there is damage;
ranging from scratched paint to structural failures. Material information regarding prior damage
must be disclosed, Justice Davidson ruled.
That the Amarok had been so seriously water-damaged that re-registration
was not permitted in Queensland was material.
It was a breach of the Fair Trading Act to not disclose this fact prior
to sale.
McBride Street Cars Ltd v. Loach – High Court (12.02.18)
18.035