Cloudy headlights are a common cause for WOF failures. However there is much variation and inconsistancy in where exactly the threshold is for when cloudy headlights fail to meet New Zealand safety standards. This explains why some vehicles fail a WOF while other vehicles with worse headlights are still on the road.
The New Zealand Transport Agency specifies, with respect to headlight performance [Inspection info here], that a WOF inspection will fail if:
"When switched on, a headlamp emits a light that is:
not substantially white or amber, or
not bright enough to illuminate the road ahead, eg due to modification, deterioration or an incorrect light source, or
the light beam produces an incorrect beam pattern, is not focused, or is reduced or altered, or..."
These are very subjective and non-scientific tests. Whether a vehicle meets these minimum standards depends on the WOF inspector's interpretation of "not substantially white" and "not bright enough" and by how much a light beam can be "reduced" before it becomes a failure. They totally depend on the particular tester's rigorousness, aptitude and assessment.
So somethimes cloudy headlights will pass a WOF and at other times they wont.
Are they safe? [see here]