About this guide

This guide aims to help users navigate the process of taking a claim about a defective motor vehicle to the Motor Vehicle Disputes Tribunal.

The decisions from this Tribunal can be found on NZLII here

Content by Caitlin Leigh.

Introduction

So you've discovered a fault with the vehicle you've bought from a dealer.

First steps

You need to contact the dealer and describe what is wrong with the vehicle. You need to give them the opportunity to have the vehicle repaired or to exchange the vehicle or to refund you. You need to give them this opportunity before you go and look at getting the vehicle repaired elsewhere. If the dealer refuses to do so or drags their feet unreasonably, you may be able to make a claim to the MVDT.

General Information About MVDT

The Motor Vehicle Disputes Tribunal (MVDT) and the Disputes Tribunal (which used to be called the Small Claims Court) are both places that people can go to resolve issues about a vehicle that they have bought. If you bought the vehicle from a private seller, you would need to go to the Disputes Tribunal. If you bought the vehicle from a dealer, you would need to go to the MVDT. You can't agree with a dealer not to use the MVDT, therefore it doesn't matter if you have signed a document agreeing not to use them.

First checks

Does your vehicle qualify under section 6 of the Motor Vehicle Sales Act 2003? You need to have bought the motor vehicle for personal, domestic, or household use. This means you can't have bought it for your business or be using it most of the time for your business. It also needs to have been used, which means it needs to have been registered. Mopeds, motorcycles under 60cc, tractors or other farming machinery, trailers, and mobility devices don't qualify under the Act.

Does the dealer you bought the vehicle from qualify under section 7 of the Motor Vehicle Sales Act 2003? For you to be able to go to the MVDT, the dealer you bought the vehicle from needs to be a 'motor vehicle trader' under the Act. This means they need to be registered as a trader, or they need to act like a trader without being registered. For them to act like a trader, they need to sell more than six motor vehicles in any 12 consecutive months or import more than three motor vehicles, though there are exclusions to this. The definition of a 'motor vehicle trader' includes importers, wholesalers, car auctioneers, and car consultants. You can look up whether a dealer is registered on the Motor Vehicle Traders Register, and a dealer must show you a copy of their trading certificate if you ask.

If the dealer has gone bankrupt or gone into liquidation since you bought the car, you will need to get the High Court's permission or the liquidator's permission before there can be a hearing with the MVDT.

Do you have a claim?

You could have a claim under the Consumer Guarantees Act 1993 or under the Fair Trading Act 1986. Even if you have signed a document with the dealer to say that these Acts don't apply, they still do. Additionally, you can only make a claim with the MVDT if it is under $100,000, unless you and the dealer agree in writing to waive this requirement.

Were you told about any of the issues or were any of the issues listed in the CIN?

A Consumer Information Notice (CIN) includes information about the vehicle, about the dealer, and whether there is any security interest over the vehicle that has been registered on the Personal Property Securities Register.

The CIN must be included in a prominent position wherever the vehicle is advertised. If the vehicle is advertised in person, the CIN must be clearly visible from outside the vehicle. If the motor vehicle is being advertised online, the CIN must be clearly and prominently displayed on the same webpage where the vehicle is being listed for sale. Regardless, the CIN must be complete, clear, and legible with the correct information, and the dealer must update it to reflect any change as soon as practicable after change occurs.

If you agree to buy the vehicle, the dealer has to give you a copy of the CIN immediately before the sale and you have to give a written acknowledgement (usually a signature) to say that you have received it. This written acknowledgement means you acknowledge that you know about any faults or damage listed in the CIN.

It is highly unlikely that you will be successful in a claim for any of the damages listed in the CIN or told to you by the dealer, unless they are significantly worse than described.

Time

Even if the warranty has expired on the vehicle, it's possible that you can still make a claim with the MVDT. However, this depends on how much you paid for the vehicle, the vehicle's age and mileage, the time since you bought the vehicle, and the time since you discovered the issue.

Additionally, you must have discovered the fault within a reasonable time from buying the vehicle. A 'reasonable time' here means the time from when you bought the vehicle to when it would be reasonable to expect a fault to show itself. This takes into account what you are using the vehicle for, the length of time the vehicle is expected to be used for, and the amount it has been used. Most successful claims have the buyer discovering the fault anywhere from immediately after buying to a couple of months after buying, depending on the fault.

Types of claims

You can make a claim with the MVDT under sections 39 or 47 of the Consumer Guarantees Act 1993, and section 43(2) of the Fair Trading Act 1986.

Under the Consumer Guarantees Act, a dealer guarantees that the vehicle they are selling is of 'acceptable quality' (section 6). This means it must be fit for purpose, acceptable in appearance and finish, free from minor defects, safe, durable, and a reasonable person must find it acceptable (section 7). The definition of 'acceptable quality' also takes into account the price, anything the dealer has said about the vehicle, and other relevant circumstances such as mileage.

If the vehicle is not of an acceptable quality, you then need to argue that the fault is of a 'substantial character' if you want to get a refund. 'Substantial character' is where a reasonable person wouldn't have bought the vehicle if they had known about the fault, or the vehicle is substantially unfit for purpose, or where the vehicle isn't of acceptable quality because it isn't safe.

However, if the dealer tells you about a defect in the vehicle before you buy it, then it is unlikely that you will be able to make a successful claim. This includes being told in the CIN or another written notice displayed with the vehicle. Additionally, if you have used the vehicle in an unreasonable manner or to an unreasonable extent, then it is unlikely that you will be able to make a successful claim.

Under the Fair Trading Act, a dealer must not make false or misleading representations. This can include, but isn't limited to: lying about or misrepresenting any damage to the vehicle, lying or misrepresenting the history of the vehicle, and lying or misrepresenting the title of the vehicle.

Finally, you could make a claim under s 194 of the Contract and Commercial Law Act 2017, however it is possible that the claim may need to be transferred to the Disputes Tribunal or the District Court.

Previous MVDT cases can be found here. Some examples of claims made include:

• engine failure caused by illegal and non-compliant modifications to the steering column made before the vehicle was bought
• cruise control sensor not working and a warning light appearing on the dashboard
• faulty air-conditioning
• cigarette lighter/power outlets not working
• vehicle pulling to one side
• very low battery health under acceptable levels and battery wouldn't charge
• damage to the engine to the point that it required a complete rebuild

Do you have evidence to support your claim?

If you think you have a claim, you need to gather evidence to support that claim. This will be presented to the adjudicator in a hearing, and can include documents and witnesses.

Some things to consider doing:

• Make a timeline of events e.g. when you bought the vehicle, when you noticed any damage, when you contacted the dealer about the damage, any repairs done, any relevant contact you had with the dealer etc.
• Get an independent mechanic's report if you can afford it, and an estimate or quote for how much the fault would take to repair. This means it can't be a report from one of your mates who happens to be a mechanic.

Some examples of evidence that you should include if you have it:

• the vehicle's advertisement
• the CIN
• the sale and purchase agreement or the hire purchase agreement
• any financing agreement you have made for the vehicle
• colour photos of any faults or damage to the vehicle
• any independent reports about the faults and bills/quotes/estimates for the repairs
• contact between you and the dealer including emails, texts, letters etc.
• any bills for other expenses you might have which are caused by you not being able to use the vehicle.

The dealer will also be providing evidence including a copy of the CIN you signed if you signed one, copies of any contact they had with you, any independent reports they have of the fault, and any independent reports they have of the cost of repairing the fault.

How to file

The fee to file your claim with the MVDT is $84. It's non-refundable and it can't be waived. You can file your claim:

• online through the Ministry of Justice website.
• in person by printing and filling out a paper copy of the application form, posting it to the Motor Vehicle Dispute Tribunal, EX11086, Auckland, and contacting the Tribunal or your nearest court to pay the application fee.

If your claim is over $100,000, you need to give the MVDT a copy of the written agreement between you and the dealer saying that you both agree to go to the MVDT.

Once you file your claim, the MVDT will contact the dealer and tell them that you have made a claim. The dealer is then required to contact you in writing to discuss whether any aspects of your claim can be settled with you outside of an MVDT hearing. If you both decide that there are still matters in your claim that need to go to an MVDT hearing, the dealer will contact the MVDT within 14 days of receiving a copy of your claim to let them know that there will be a hearing for the matters that haven't been settled. If the MVDT doesn't hear from the dealer within those 14 days, they will organise a hearing.

It is important that you know that the MVDT can order you to pay the dealer for any costs related to the hearing if your claim is frivolous or vexatious i.e. you continue to pursue the claim without any real grounds to do so, or where you have unreasonably refused to participate in any discussions with the dealer about settling. While this is not meant to discourage you from making a claim, it does mean you need to engage with the dealer in good faith.

We recommend filing within a reasonable time after you discover the fault as, if you take too long to file, you can lose some avenues of resolution (for example, rejecting the vehicle).

Evidence

You need to provide three copies of each piece of evidence when you file your claim.

What to ask for

When you file your claim, you need to tell the MVDT what you want them to decide. You can ask for a range of outcomes including:

• the dealer being ordered to have your vehicle repaired
• the dealer reimbursing you for any repairs you have had done on the vehicle, within reason
• the dealer taking back the vehicle and refunding you (called 'rejecting the vehicle')
• all rights and obligations under a credit contract being transferred to the dealer if you bought the vehicle on credit
• the dealer compensating you for any reduction in the vehicle's value, and
• the dealer paying you for any loss or damage that was caused by the fault and was reasonably foreseeable.

The MVDT can't give you interest for the money you used to pay for the vehicle, but you could make an argument for any financial consequences caused by the fact that you didn't have the money available for a period of time. However, that is likely to be a very small amount and it is unlikely to be worth the effort.

You can ask for multiple outcomes, however you need to know that there are certain requirements to reject a vehicle. The vehicle's fault must be of a 'substantial character' or unable to be fixed. Your independent mechanic's report will help to determine whether these apply, but if you don't have one of these reports then you will have to argue this yourself.

You are very unlikely to get an outcome you want if there has been damage to the car that is more than general wear and tear, and the damage isn't related to any fault in the car from before you bought it.

Going to a hearing

Preparing for the hearing

You will need to bring five copies of any written statement you want to show at the hearing, and four copies of any document that you haven't already given to the MVDT when you submitted the claim.

If you have witnesses, they will most likely need to give their evidence in person, and if they can't, you need to contact the MVDT as soon as possible.

You can bring a support person, but they can't be a lawyer. You also can't have a lawyer represent you. If you need an interpreter, you need to contact the MVDT as soon as possible.

At the hearing

The purpose of a hearing is to have the opportunity to present your evidence to an adjudicator. You need to prove your case on 'a balance of probabilities'. This is a legal phrase that means you need to convince the adjudicator that it is more likely than not that you are right.

Your hearing will either be on the papers or in person.

A hearing on the papers

If your hearing is 'on the papers', the adjudicator will make a decision based on the evidence you and the dealer submitted, and they will not ask you or the dealer any questions. However, the adjudicator will discuss which option is most appropriate with you and the dealer first and hear your views.

A hearing in person

It is more likely that your hearing will be in person.

An 'in person' hearing includes you, the dealer or their representative, an adjucator (the person who runs the hearing and decides the outcome), and an assessor (someone who helps the adjudicator with technical issues and often has a background in the motor vehicle trade).

You need to show up to the hearing. If you don't, the MVDT might strike out the claim or make a decision without you. It is likely that you will have to pay the dealer's costs for going to the hearing as well. If you can't make it, you need to let the MVDT know as soon as possible, but not less than five working days before the hearing date.

If you can, wear business casual clothing.

At the hearing, you will be given the opportunity to present your case. You can ask witnesses to give evidence and you can talk about any relevant documents you have brought along with you. It can be helpful to write out what you want to say beforehand and then read it out at the hearing. You need to present the facts of your claim and what you want; you don't need an in-depth knowledge of the law. The dealer will then present their case by asking their witnesses to give evidence and talking about any relevant documents they have brought along with them. You might be allowed to ask the dealer's witnesses some questions and you might be given some time to respond to what the dealer has said, but this depends on what the adjudicator allows. The adjudicator and the assessor will ask you and the dealer questions either at the end or while you both are talking.

It is important to remember that MVDT hearings are not like fictional court cases on TV. Insults, interruptions, obstruction, and other forms of misbehaviour could mean that the adjudicator has to end the hearing before they have enough information to decide the case.

After the hearing

MVDT decision

After the hearing, the adjudicator will make their decision. Even if they agree with your side of the story, it is unlikely you will get everything you asked for. They make make an order for costs, which is where the unsuccessful party has to pay the other party's fee for going to the hearing, or pay for the MVDT's costs for the hearing.

Once you get a copy of the decision, if the dealer doesn't comply with the MVDT's decision in the specified timeframe, you can file a copy in the District Court closest to where you bought the vehicle. This will mean that it is enforceable against the dealer. You can only file this after the appeal period ends (10 days after the decision), and you can't file it if you or the dealer makes an appeal.

If you disagree with the MVDT decision

The MVDT can't have another hearing for your claim. If you are unhappy with their decision, you can appeal that decision to the District Court. This appeal needs to be made within 10 working days from the date of the MVDT decision. Due to the strict time constraint, it is recommended that you don't post your appeal but instead file it in person with your local District Court.

Things you can appeal:

• procedural unfairness: if you believe the hearing was conducted in a manner that was unfair and this unfairness caused the MVDT to decide against you

◦ e.g. if the MVDT didn't consider a piece of law that was brought to its attention at the hearing, and therefore they make a mistake in their decision that is unfair to you

• errors in fact or law: if you believe the MVDT made a mistake about facts or law (note: this only applies if the amount you are claiming is over $12,500)

Things that you can't appeal:

• the MVDT not transferring the claim to the District Court
• the MVDT not letting you have a certain representative or support person with you
• any arguments that weren't made to the MVDT in your original claim

The rules for who pays the fees of both parties when going to the District Court for an appeal are found in Part 14 and Sch 4 of the District Court Rules 2014. It is possible that the District Court could decide that you should pay your own fees as well as the dealer's fees.

-- JudiEathorneGould - 23 January 2025