March 2018. . . Purchasing a used car can be a stressful and daunting exercise, particularly for those of us who know little or nothing about a car’s mysterious inner workings. An influx of statutory write-offs from Australia has entered the New Zealand market, creating even more issues for unsuspecting purchasers.

An Australian vehicle is written-off if it has been so badly damaged that it is unsafe to repair (statutory write-off) or uneconomical to repair (repairable write-of). A statutory write-off cannot be re-registered in Australia. They have usually sustained excessive structural, fire, water, or stripping damage.

In the recent High Court decision of McBride Street Cars Ltd v Loach, we successfully obtained a full refund for our clients who purchased an Australian statutory write-off from a Dunedin trader. The vehicle was imported and sold by McBride Street Cars Ltd who knew it was written-off due to water damage, but did not tell the Loaches. Shortly after purchase, the vehicle developed transmission problems. Upon discovering the vehicle’s history, the Loaches demanded a refund.

McBride claimed that they did not mislead the Loaches because they provided a Customer Information Notice (“CIN”) which recorded the vehicle as “imported as damaged”. The court found this disclosure to be insufficient, and held that McBride’s failure to disclose that the vehicle was a statutory write-off was misleading and deceptive, and therefore a breach of the Fair Trading Act.

This case reinforces the trader’s obligation to provide a full and frank disclosure about a vehicle’s history, particularly when the vehicle has sustained significant damage. Registered motor vehicle traders must display a CIN (which contains basic information about the vehicle) on all used motor vehicles offered for sale. There are also legislative safeguards against traders engaging in misleading and deceptive conduct, and guarantees that the vehicle is of acceptable quality.

If you have unknowingly purchased an Australian statutory write-off, the trader may be in breach of these consumer protections, and you may be entitled to a refund, compensation, or to cancel the contract. Call us to discuss the range of options available to you to fix the problem.

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