The ruling that closed the escape hatch
A buyer rejected her car. The dealer eventually repaired it. The dealer thought that was game over. It wasn’t.
The Nelson District Court has overruled the Motor Vehicle Disputes Tribunal and ordered Christchurch dealer Rick Armstrong Motors Peugeot to refund Dr Julie Blommaert the full $63,415 purchase price of a new Opel Mokka-e EV, plus interest and costs. She bought the car on 15 April 2023, and over the next 17 months it developed a string of faults, the worst being a noisy driveshaft that neither the dealer nor the importer could fix because the manufacturer had blocked the part and was redesigning it in Europe. She rejected the vehicle on 10 September 2024. A repair was finally completed on 5 December 2024, nearly three months later. The dealer argued that repair defeated the claim. The court said no.
Why the legal reasoning bites
The court’s holdings, per The Lawyer Mag’s case summary, are the part dealers need to read carefully.
First, the right to reject is assessed at the moment of rejection, not with hindsight. A later repair, even a successful one, cannot undo a rejection that was valid when made. Second, the driveshaft fault combined with the earlier problems amounted to a failure of substantial character under the Consumer Guarantees Act 1993, because a reasonable buyer who knew about the faults would not have paid $63,000. Third, the tribunal got the law wrong twice, by treating repair as the supplier’s primary obligation and by reducing the statutory test to whether the buyer had simply lost confidence.
The fourth point is the sharpest. The supplier’s lack of fault did not prevent rejection. The dealer and importer couldn’t get the part because the manufacturer blocked it, but that was irrelevant to the buyer’s statutory rights. Translation for anyone selling imported vehicles, especially EVs, where parts hinge on overseas manufacturers who set their own timelines: you carry the CGA liability regardless of where the supply-chain failure originates.
Dr Blommaert described the process to Newsroom as “legal chicken”, a war of attrition most consumers lose because they run out of money or resolve before the dealer does. This ruling shows what happens when one doesn’t.
A rising tide of disputes, and EVs are the hard cases
The timing matters because complaints are climbing. The Motor Vehicle Disputes Tribunal received 716 new applications in the year to 30 June 2025, up 22.6% and more than double the 258 lodged a decade earlier. EVs are flagged as adding technical complexity, with one case involving a Tesla Model X whose failed high-voltage battery pack carried a $59,035 replacement quote.
Cars are already a problem category. The 2024 NZ Consumer Survey from the Commerce Commission and MBIE found dealer-sold vehicles have a 17% problem incidence, above the 12% average, while private-seller cars hit 22% and cost over $12,000 to fix on average. Faulty or non-functioning products were the single largest category of CGA enquiries in MBIE service centre data, at 52% in 2023.
The industry wants the law changed
Dealers can see the direction of travel. On the day the case surfaced, the Motor Trade Association published its election manifesto calling for the Consumer Guarantees Act to be amended so tribunals can deduct reasonable depreciation when a car is rejected after significant use. The MTA also wants the tribunal expanded to hear workmanship disputes and a legislated right-to-repair framework. MTA chief executive Lee Marshall said “the automotive industry is ready. We have the people, the data, the technology, and the will. What we need now is a government that shares our ambition.”
That is not a small lobby. The MTA represents more than 4,000 businesses accounting for $6.8 billion of GDP and more than 65,000 jobs. The depreciation-deduction ask is a direct response to rulings exactly like this one, where a buyer walks away with 100 cents in the dollar after 17 months behind the wheel.
What it means for anyone selling high-value goods
The commercial lesson runs beyond car yards. The tribunal has long functioned as a cheap first line of defence, and a repair squeezed in before a hearing could often kill a rejection claim. This ruling shuts that door. If the rejection was valid when made, running out the clock no longer cures it, and escalation to the District Court is now a live threat rather than a bluff.
For EV dealers the squeeze is structural. Import volumes are contracting, with EV imports down over 50% in value in recent data, so margins are thin at exactly the moment CGA exposure is getting more expensive. Handle a complaint as a delay exercise and you may end up owning the car back. Whether the government hands the industry its depreciation relief is now the real question, and this ruling has just made the lobbying louder.
Sources
- District Court at Nelson upholds buyer’s car rejection despite completed repair (2026-07-23)
- Precedent-setting ruling in ‘legal chicken’ with car dealer (2026-07-22)
- EV complexity challenging Motor Vehicle Disputes Tribunal (2025-09-15)
- Scrappage scheme, trades fund headline MTA election manifesto (2026-07-22)
- NZ Consumer Survey 2024 (2024-07)
- Electric vehicle imports lose charge as volumes drop