Car yard ordered to pay over 'sham' sale

Last updated 05:00 25/09/2012

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A couple with limited English who bought a faulty vehicle under a ''sham'' agreement have been refunded by the car yard involved after a tribunal complaint.  

In February Tere and Ina Isaaka agreed to purchase a 2001 Honda Odyssey for $6900 from Ezy Buy Car Auctions Limited which they later rejected because it was faulty and the trader refused to repair it.

The Cook Islands' couple visited the car yard on February 25, but despite paying a $700 deposit were refused a test drive.

The couple claim the salesman told them if there were any problems with the vehicle the car yard would repair it.

The Isaakas then signed various documents which detailed the vehicle was sold under competitive tender and that they accepted it was ''in an as is where is condition'' and carried no warrant or right of return.

The couple, who traded in their 1994 Mitsubishi Delica for $2500, also purchased a two year mechanical breakdown warranty.

On February 26 the Isaakas returned to the car yard and again asked to test drive the Honda, but were told they couldn't because it was being serviced. However, once various finance agreements were signed, Tere Isaaka was handed the keys.

He told the Motor Vehicle Disputes Tribunal of New Zealand the first time he drove the vehicle it did not idle properly and the engine shook. The next day while his wife was driving the engine cut out and a management light came on.

Ina Isaaka took the vehicle back to the car yard on February 28 and asked for a refund believing she had returned it within an appropriate time period.

According to the tribunal decision a sales manager at the car yard told her she couldn't return the vehicle and that her Mitsubishi trade-in had been sold. Ina Isaaka was then referred to Protecta who her and her husband had bought mechanical cover from.

The Isaaka's say they returned the Honda to the car yard on March 1 and again the following day and were told ''there was no such thing as a refund''.

The couple supplied the tribunal notes from assessors detailing the Honda's mechanical faults which included problems with the engine stalling and the vehicle surging.

On March 3 they had the vehicle scanned which highlighted other electrical problems.

On May 5 Tere Isaaka sent a letter to the car yard claiming the Honda had serious faults, was not of ''merchantable quality nor reasonably fit for purpose'' and that he'd been misled by the trader's conduct.

He rejected the vehicle and sought a refund. The car yard presented the tribunal with 20 documents relating to the sale, including information that stated sales by auction or competitive tender were exempt from the Consumer Guarantees Act 1993.

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The tribunal rejected that the vehicle had been sold by competitive tender as that required ''evidence of rivalrous behaviour by tendering parties'', for which there was none.

''The tribunal, on the fact of this application, is satisfied that the trader has simply attempted by sham documentation and dressing up its sales premises with exclusionary signs to create the illusion that sale of the vehicle to the purchasers took place by competitive tender to attempt to avoid its statutory responsibilities under the Consumer Guarantees Act,'' the tribunal found.

The tribunal said the Isaakas rejected the vehicle within a reasonable time period and found the Honda was faulty at the time of sale.

Ezy Buy Car Auctions Limited was ordered to refund the couple's deposit of $3200, refund them any payments they had made, take over their finance agreement and pay $120 damages.

- Auckland Now

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