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I just had new WOF and buyer is questioning handbrake. They advise pads on the disc calliper only have 1.6mm and they do not believe it is very effective even though it clearly passed a stall test for WOF. Is there any other regulation around handbrake ability or other matters?

Hi there,
The vehicle manufacturer will have a serviceability measurement for the brake pads and discs as to what is checked for at a service and when it is recommended they be replaced.
A WoF can be failed if the brake pad material is worn below manufacturers specs also. You can find the information below.
https://vehicleinspection.nzta.govt.nz/virms/in-service-wof-and-cof/general/brakes/service-brake-and-parking-brake