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The issue came to light after a man seized a trailer rented out by a Dunedin petrol station, claiming an unsecured section of metal swung down and could have severed his thumb.
The rusty trailer had a heavy metal sign allegedly secured by only a single rivet, but was registered as a 2018-new vehicle last year.
As a result, when registered last year it was eligible for a three-year warrant of fitness (Wof), according to NZ Transport Agency (NZTA) rules.
But inquiries have revealed the trailer was already several years old when it was re-registered as a ''new'' vehicle, without its age being checked, a loophole a city mechanic says is being widely exploited to obtain three-year Wofs for trailers.
Following questions from the Otago Daily Times, the NZTA announced this week it was investigating concerns over the trailers rented by the petrol station.
The agency is also inquiring into whether the practice of re-registering old trailers as new to obtain three-yearly Wofs was more widespread.
The saga began last Monday, when Northland man Bill Gillanders was working at his brother's Burnside green waste dump.
A woman arrived towing a rental trailer, and Mr Gillanders said he went to help her.
''Trying to be a gentleman, as my mother told me to always open gates and doors for ladies, I went round and opened he back door of the trailer.''
He swung up the rear gate of the trailer's cage, when a metal sign, attached by only a single rivet, swung down into his thumb, he said.
''It swung down like a guillotine and nearly took my thumb off.''
Mr Gillanders said he then seized the trailer from the woman, paying her the cost of the deposit and the rental fee.
''I said, 'no you're not taking this back. God knows what else is wrong with the trailer'.''
The petrol station owner laid a complaint to police on the basis Mr Gillanders had illegally seized the trailer, further alleging he had demanded $4000 for its return.
Speaking on his way back to Northland with his family this week, Mr Gillanders denied those allegations, saying he only wanted to recoup the cost of the deposit and rental he had paid the woman.
''I defy police to charge me.''
He had complained about the trailer to both the NZTA and police, but was not satisfied with the response.
The station owner said the registration of their old trailers as new vehicles was a mistake.
Staff went to get a new plate for the trailers, but instead were issued a plate for a new trailer.
The owner later claimed the trailer was perfectly safe when it left the petrol station, and that Mr Gillanders had caused the damage.
The ODT understands the trailer seized by Mr Gillanders was about five years old, and had been rented out by the previous owners of the petrol station.
A Dunedin mechanic, who requested anonymity, said anyone could re-register an old trailer as a new vehicle, thereby allowing it to have a three-year Wof and avoid regular re-checks.
While it would still need to have an initial Wof inspection, rental trailers had a hard life, and in his view required regular re-inspection,
The loophole was regularly exploited, he said.
An NZTA spokesman said it would investigate the issues raised by Mr Gillanders regarding the trailers.
''The transport agency is also concerned that some older trailers are being re-registered as new and issued with three-yearly Wofs, and we are looking into whether this issue is more widespread.''
Addressing the issue would likely require a change in the Vehicle Standards Compliance Rule, and the agency would work with the Ministry of Transport on this, the spokesman said.
NZTA staff visited the petrol station and inspected the trailers, but the spokesman would not comment further except to say the trailers had been deregistered.