A Northland garage has had its licence to issue warrants of fitness suspended indefinitely after it issued a WoF to a vehicle which was later involved in a fatal crash.

New Zealand Transport Agency Chief Executive Fergus Gammie said the circumstances which saw Dargaville Diesel Specialists issue a WoF to an "unsafe" car which was involved in a fatal crash on January 6 this year were "totally unacceptable".

Sixty-five year-old William Ball was a front seat passenger in a car which lost control and crashed into a ditch on State Highway 12 near Turiwiri, Dargaville. He died 26 days after the crash.

The driver of the vehicle has pleaded guilty to driving related charges but has yet to be sentenced.

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Police investigating the crash found the front seat passenger seatbelt was frayed and failed in the crash.

NZTA said Dargaville Diesel Specialists (DDS), who had issued a WoF to the car in December 2017, admitted it had done so without properly inspecting the vehicle, in particular the seatbelts.

"Dargaville Diesel Specialists didn't check the vehicle properly. They failed William Ball," Gammie said.

"However, the NZ Transport Agency's regulatory regime also failed him and that is unacceptable."

The NZ Transport Agency was aware DDS had serious regulatory compliance issues on an intermittent basis since 2011.

There were a number of opportunities to undertake enforcement action, and the most serious infraction took place just weeks prior to the crash when NZTA observed staff issuing warrants without properly inspecting vehicles, including seatbelts.

In late August, DDS was suspended from issuing any vehicle certifications.

DDS owner Rodney Wilson disputed that he had a shoddy inspection system.

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He said he had been involved in mechanics for 50 years and there was no way he would do anything that impacted on people's safety.

''I've had 50 years in the mechanics trade and they are telling me that I don't know anything about cars and safety. It's bullshit,'' Wilson said.

''The whole WOF system is crook and needs fixing. The whole system is wrong.''

He said the seatbelt on the vehicle involved in the fatal crash was not in the condition it was at during the crash when he tested it.

''There's no way I would let that car pass the warrant if the seatbelt had been like that when I tested it. No way.''

NZTA has written to all vehicle owners receiving WoFs from DDS to strongly recommend they get their vehicles re-checked, with NZTA meeting the cost of re-inspection.

"What happened in Dargaville is an example of how our previous high-trust, education-focused regulatory regime has failed New Zealanders. We effectively trusted DDS to voluntarily improve its practices despite it having a significant track record of non-compliance," Gammie said.

"Furthermore, last December when the lack of seatbelt checks during WoF inspections were uncovered, the Transport Agency didn't take decisive action or appropriately escalate the issue internally."

In mid-October, the NZTA Board together with the Minister of Transport Phil Twyford announced an extensive review of NZTA compliance files by law firm Meredith Connell was underway and a tougher enforcement regime was being implemented.

Meredith Connell is currently leading the regulatory function at NZTA.

"As a result of Mr Ball's death, alongside our review of regulatory compliance, NZTA has also engaged Kristy McDonald QC to conduct a full inquiry into this case.

"Her report – which will be released to the public once complete – will independently establish the facts, identify the specific failings of the Transport Agency's performance as a regulator and make recommendations on any further steps we should take."

Wilson said he did not believe that the cars that were retested and failed their first recheck had the faults when they left his business with a new WOF.

''This is Dargaville, you don't know what it's like over here.

"We have people putting on their mate's good tyres to get a WOF then changing back to their old crappy ones once they get the warrant.

"We have people swapping over seatbelts after getting a warrant, you can't control that.''