Court hearing coming up soon - legal advise needed please

[sam.v]

Hi there

I am very new to this forum and I hope I can get some advice before my court hearing.

Under the Consumer Rights Act 2015 goods supplied must be of satisfactory quality, be fit for purpose and match their description. I purchased a used van from a fleet management company via AutoTrader.co.uk and as soon as I drove the vehicle away from the seller, the engine management light came on. After informing the seller immediately, a mobile mechanic was sent to our site several times to rectify the issue (they offered 6 month warranty with the purchase) However only the management light was reset and the problem was not fixed.

As a result of poor communication and constant rejection of our calls, we decided to take the van for a full inspection by Mercedes Benz. The results were SHOCKING. The engine was not compatible with this model and the engine had previously been changed to an older model! There were major issues with this vehicle and as the engine has been changed, the mileage which is on the vehicle is not genuine, as it is from a 2009 model not 2012. Furthermore, from the report the serial number on the engine is different from the one on the logbook. Moreover, there was no indication of the engine being changed on this vehicle at the time of the purchase which is breach of The Sales of Goods Act 1979. According to the Mercedes Report, the engine installed comes from a previous model Sprinter minibus and it is not compatible with 2012 series which has caused a severe oil leakage.

The defendant has claimed that the van was sold to my company not to myself as a private owner hence I have no right to claim a refund for the faulty van sold to me. The ownership was requested to be transferred to me at the time of purchase, but the funds were transferred from my company’s account for tax purposes. The V5C was issued on my name and was not sold to my company. Hence I am the register keeper and owner of the vehicle. I have copy of the email we exchanged confirming this. I have attached the defendant's defence statement

I have the court hearing at the end of the month and the seller has appointed a solicitor to attend the hearing. Your legal advice is much appreciated

[R0b]

Hello, if I were the judge in your claim, based on your post I think I would be inclined (rightly or wrongly) to side with the Defendant.

First of all, the V5C is not proof of ownership so you can't rely on that and the document clearly states that. It can form evidence as alluding to ownership but the registered keeper and the owner can and are commonly different (hire-purchase agreements for example).

The sticking point for me is that you claim to have transferred the funds from your company's bank account for tax purposes. As a consumer, there is generally no tax benefit in the sale and purchase of goods unlike companies. I would also point you to the definition of consumer under the CRA 2015:

"Consumer" means an individual acting for purposes that are wholly or mainly outside that individual's trade, business, craft or profession.

Whether you are acting wholly or mainly outside your trade, business, craft or profession is a question of fact and that will be up to the judge to decide based on the evidence put forward. By transferring the funds from your company account and not from your personal account, that could give rise to a presumption that despite the V5C being under your name rather than the company - I don't think the V5C argument would be good enough and I reckon if the Defendant is aware of that, the solicitor will likely heavily rely on that.

Even if a judge agrees that it is more likely than not that the contract was been your company and the Defendant, you could ask the court to hear an application right then to vary the claimant and/or exercise its general case management powers so that it is your company who is claiming. Your argument could be based on a strike out not being a good use of court's time and resources because the defendant is simply delaying the inevitable and, as you will (I presume) issue a fresh application in the name of the correct claimant, there is no good reason why the court cannot hear the claim today and deal with it in accordance with the overriding objective.

I'm tagging des8 for any further comment but overall, I don't think your evidence appears to be in issue which I am sure you sound like you would succeed on, it's the question as to whether you contracted as a consumer and in my opinion, the issue is whether the funds transferred from a company for tax purposes is considered outside the realms of contracting as a consumer.

I think you need to come at it from a two-pronged approach. You would need to first argue that you did contract as a consumer acting mainly outside of your business and the payment does not affect that. By analogy, it is the equivalent of you buying goods that will be owned by you but someone else is making the payment on your behalf. That payment arrangement which in this case is between you and your company, is irrelevant to the Defendant as it is an issue for you and your company to resolve, it has nothing to do with the Defendant how you arrange payment. An equally equivalent example is when you purchase a car from a dealership on a fixed sum loan agreement where the finance company pays for the car but it is owned by you and in turn you pay back the finance company.

The only recent case law that I can think of from the top of my head which may be relevant is Overy v Paypal High Court case (link here) which concerned a person who opted to contract on paypal business terms when selling their house via a competition for his own private benefit. The court held that he was not a consumer for that purpose. I will see if there is any other case law that is relevant but I don't think there is much.

Finally, something that might help you is Section 2(4) of the CRA 2015 which says the following:

"A trader claiming that an individual was not acting for purposes wholly or mainly outside the individual's trade, business, craft or profession must prove it."

[des8]

Reading the first post I get the impression that whilst the vehicle is registered to OP it is at least partially a works vehicle
cf references to: "our site" "our calls" "we decided" "funds were transferred from my company’s account"

Also I'm fairly sure that I've read that a person purchasing goods for personal use from a trade outlet on a trade account would not be considered a consumer. Possibly the same would apply to using a company bank account for a personal purchase (regardless of the reason).

How has the POC been worded?

And if allowed to change name of claimant, is the claim based on rights conferred under CRA 2015 rather than SGA and The Supply of Goods and Services Act ?

[R0b]

Good points Des. I did a little more digging and found Heifer International Inc v Helge Christiansen [2007] (link here).

Quite a long judgment but the short of it is that the Claimant entered into a contract under a company but argued it was a non-trading entity and only used for tax benefits. It was held that the Claimant was dealing as a consumer (though subsequently lost the case anyway). Note paragraph 249 as being key here.

243. The Claimant's case is that it is an off-shore company holding the assets of Mrs Temple for tax purposes which does not carry on any trade, business or profession. Although I have referred to the evidence already I will now set it out in definitive form.

244. In support of the Claimant's case Mr Temple says at paragraph 3 of his second witness statement: "I confirm that the Claimant is not a trading business and carries on no commercial or profit making activity. It does not have "any trade, business or profession". As I indicated in my first statement it is simply an off-shore holding company established by my wife following advice that she was given as to how she might best structure her affairs from the point of view of sensible tax planning."

245. The Defendants argue that it is the factual situation rather than the alleged motive which is relevant to the test under the Regulations. The Memorandum and Articles of Heifer are widely drawn and give the company power under Article 7: "to carry on the business of a property investment and holding company and for that purpose to purchase … undertake or direct the management of all work … of lands, buildings … and other real property."

...

249. The test which I must adopt in relation to Regulation 3 is "was Heifer acting for purposes outside its trade, business or profession". This is essentially a question of fact. It is the word "purpose" which is at the core of the dispute between the parties. In my view purpose connotes intention. If a party acts in a way which furthers its intention, ie to further its trade, business or profession, its actions are excluded from the Regulations. If an action is for a different purpose but which has an incidental result which furthers its trade, business or profession it does not result in the contract being excluded from the protection of the Regulations.

250. In this case I am satisfied on the evidence and find as a fact that the purpose of buying and renovating the house was to provide a place for Mr and Mrs Temple to live with their family. It was not to provide an investment opportunity for Heifer to benefit from any increase in the value of the house although incidentally such an increase may have resulted. It would be otherwise if the house had been purchased by Heifer as part of an investment portfolio. In these circumstances I find that the Unfair Consumer Regulations apply. I shall consider later whether if there is an agreement to which the Arbitration Act 1996 applies, any of its provisions should be regarded as unfair.

Regarding your point if the contract is in the course of dealings as a business, then no reliance could be placed on CRA 2015 (unless, I believe the business is a sole trader status) and I would expect the SGA to apply, plus any terms and conditions at the time of purchase. With it being a sale on Autotrader, there doesn't tend to be any specific terms other than those contained in the advert but the OP hasn't confirmed if anything was agreed or signed except for the 6 month warranty.

[2222]

Just two practical points:

1. It's a van. Paid for by a company. If I were the judge, I'd immediately assume it's a B2B transaction.

2. It's quite common to include secondhand parts in older vehicles. But, it's one thing to use say a secondhand window winder and quite another to replace the entire engine. As the OP says, the description of the van, in particular the age and mileage is incorrect and misleading. The engine appears to be the wrong part, and hopefully the OP has a report from an engineer to say so. Even for B2B transactions that would be a major difficulty for the defendant.

I would prefer to apply to the court to change the claimant and the claim before the hearing. Is it too late to do that now?

[sam.v]

Thank you all so much for your help, I really appreciate that!

I have some questions to ask:

1) From what I gathered here, the judge would initially conclude that it was a B2B transaction hence Section 2(4) of the CRA 2015 does not apply. In this case does SGA and The Supply of Goods and Services Act apply instead? I bought the van under my name and I am also the policyholder for the van insurance. Can this be used to prove I am a consumer? What's the difference between the two mentioned above? (Sorry if I sound stupid!)

2) Can the claimant be changed? say if the claimant is my business (limited company), would the county court be the right place to resolve the issue? What's the procedure to change the claimant? The court hardly answers any phone calls...

3) Would I lose the case if the judge decides that it was a B2B transaction? The defendant is relying heavily on this matter (I have a copy of the emails we exchanged when I requested the ownership to be transferred to me not my company) and I want to make sure it doesn't happen.

4) The seller did not mention anything about the replaced engine at the time of purchase (I have a copy of the description advertised on AutoTrader) and they offered 6-month warranty. Apart from that there was nothing agreed or signed. I understand car parts can be replaced but has to be fit for purpose and compatible/original...