Reference No. MVD 080/06 (WN) [2006] NZMVDT 101 (12 July 2006)

Motor Vehicle Disputes Tribunal of New Zealand

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Reference No. MVD 080/06 (WN) [2006] NZMVDT 101 (12 July 2006)

Last Updated: 27 November 2007

Decision No. WN 32 /2006

Reference No. MVD 080/06

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN *********************

Purchaser

AND *********************

Trader

BEFORE THE WELLINGTON MOTOR VEHICLE DISPUTES TRIBUNAL

R D Burnard - Barrister, Adjudicator
P A Palmer - Assessor

HEARING at WELLINGTON on 14 June 2006

APPEARANCES

The purchaser in person
Mr ********** for trader

DECISION

[1] This application is made by Mr ******** arising out of his purchase for $15,500 of a BMW 730i vehicle from ************************* on 17 January 2006.

[2] Prior to the commencement of the Tribunal’s enquiry Mr ************* was appointed assessor and he took the oath required by clause 10 of Schedule 1 to the Motor Vehicle Sales Act 2003.

Purchaser’s Evidence

[3] Mr ******** presented a history of his ownership of the vehicle detailing a number of problems which caused him concern in late January, February and March following his purchase of the vehicle. Some of the matters were attended to by the trader but Mr ********* was concerned at various issues and on 23 March 2006 obtained an Automobile Association report which noted a number of “defects requiring urgent attention”. Reference was made to burnt wiring under the bonnet, the engine misfiring at idle and oil leaking at the rear of the transmission. On 29 March Mr ********* delivered a letter to the trader formally rejecting the vehicle under the Consumer Guarantees Act 1993 noting the items recited above and also listing as a fault considerable compression variation and the left hand rear wheel bearing being loose. This latter item had also been mentioned in the Automobile Association report. The trader was not prepared to accept return of the vehicle and Mr ********** commenced his application to the Tribunal. He contended that the series of faults entitled him to reject the vehicle and obtain his money back.

[4] At the forefront of Mr ********** complaint was a contention that the vehicle did not have a warrant of fitness that was less than 28 days old at the time it was sold. He mentioned however that he had recently obtained a new warrant of fitness on the vehicle from a ******** garage without any work being required in respect of warrant of fitness items.

Motor Vehicle Trader’s Evidence

[5] Mr *********** who is a director of ******************** gave evidence. He dealt with the various faults of which Mr ******** had complained. He said that his company had offered to complete the repairs found to be necessary by the AA and that offer still stood. Mr ********* called a Mr ************* who is an A Grade mechanic of some 35 years standing and is now a contract assessor to give evidence particularly relating to compression testing on modern vehicles. Mr *********** contrasted the method of testing the compressions of the vehicle which had been carried out manually by ********************** (which had noted considerable compression variation) and the electronic testing used by the Automobile Association and Mr *********** himself. According to Mr ************ accurate testing on modern engines such as the BMW 7 series is difficult to obtain with a manual gauge and Mr ************ was of the view that the electronic testing used by the Automobile Association (which showed only approximately 10% variation) provided a more accurate figure. Mr ********* said that he had been informed by Mr ******** of ******************** that the standard variation in BMW 7 series engines was 30 pounds pressure.

[6] In summary Mr ******** said that he believed the company had rectified some of Mr ************ complaints and remained prepared to carry out the problems identified by the Automobile Association.

Consumer Guarantees Act 1993

[7] This application is to be determined under the Consumer Guarantees Act 1993 which the Tribunal has jurisdiction to apply by reason of s.89 of the Motor Vehicle Sales Act 2003. Under s.6 of the Consumer Guarantees Act 1993 a guarantee applied that the vehicle was to be of acceptable quality. That expression is explained in s.7(1) of the Act which reads:

“7 Meaning of “acceptable quality”

(1) For the purposes of section 6 of this Act, goods are of acceptable quality if they are as—

(a) Fit for all the purposes for which goods of the type in question are commonly supplied; and

(b) Acceptable in appearance and finish; and

(c) Free from minor defects; and

(d) Safe; and

(e) Durable,—

as a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects, would regard as acceptable, having regard to—

(f) The nature of the goods:

(g) The price (where relevant):

(h) Any statements made about the goods on any packaging or label on the goods:

(i) Any representation made about the goods by the supplier or the manufacturer:

(j) Other relevant circumstances of the supply of the goods”

[8] Where failure to comply with a guarantee under the Act has occurred the purchaser has the options in s.18 which reads:

“18 Options against suppliers where goods do not comply with guarantees

(1) Where a consumer has a right of redress against the supplier in accordance with this Part of this Act in respect of the failure of any goods to comply with a guarantee, the consumer may exercise the following remedies.

(2) Where the failure can be remedied, the consumer may—

(a) Require the supplier to remedy the failure within a reasonable time in accordance with section 19 of this Act:

(b) Where a supplier who has been required to remedy a failure refuses or neglects to do so, or does not succeed in doing so within a reasonable time,—

(i) Have the failure remedied elsewhere and obtain from the supplier all reasonable costs incurred in having the failure remedied; or

(ii) Subject to section 20 of this Act, reject the goods in accordance with section 22 of this Act.

(3) Where the failure cannot be remedied or is of a substantial character within the meaning of section 21 of this Act, the consumer may—

(a) Subject to section 20 of this Act, reject the goods in accordance with section 22 of this Act; or

(b) Obtain from the supplier damages in compensation for any reduction in value of the goods below the price paid or payable by the consumer for the goods.

(4) In addition to the remedies set out in subsection (2) and subsection (3) of this section, the consumer may obtain from the supplier damages for any loss or damage to the consumer resulting from the failure (other than loss or damage through reduction in value of the goods) which was reasonably foreseeable as liable to result from the failure.”

Whether Vehicle of Acceptable Quality

[9] This 10 year old BMW 7 series vehicle had a history of previous importation from Singapore. It was sold for a price of $15,500 which Mr ********** had an opportunity of comparing with the price of other vehicles privately offered for sale through the ************* site on the Internet. According to Mr ******** the vehicle was very well priced and having heard both parties on the point and with the Tribunal’s own trade knowledge the Tribunal has concluded that the price was about average for the age and distance the vehicle had travelled. The vehicle’s subsequent history was that a number of relatively minor items arose after Mr ******** had taken delivery of the vehicle. Particular attention was paid in his evidence to the state of the engine compressions but the Tribunal concurs with Mr ********** view that on sophisticated engines of this type obtaining accurate readings with manual gauges is difficult and the electronic readings from the Automobile Association which describe the relative compression readings as “acceptable for age and mileage of the vehicle” are likely to be more accurate. Attention was also placed on the state of the wiring to the front suspension struts but the trader has recorded that the company is prepared to remedy this fault which is not leading to any risk of fire according to Mr *********** but does need attention. The Tribunal having carefully considered all the matters raised by Mr ********* has concluded that this vehicle, as the AA noted, is overall in satisfactory condition with “some defects noted in average condition for age and mileage as indicated on the odometer”. It has also passed a new warrant of fitness inspection without requiring any expenditure and in these circumstances the Tribunal has concluded that a reasonable consumer would consider that it was of acceptable quality having regard particularly to the price paid and the age and mileage of the vehicle.

[10] There has accordingly been no failure to comply with the guarantee of acceptable quality.

Rejection

[11] If the Tribunal were wrong in having reached the conclusion that the guarantee of acceptable quality has not been breached it does not follow that Mr ********* was entitled to reject the vehicle. It will be noted from s.18 that rejection is only available when the failure to comply with the guarantee cannot be remedied (which is not the case here) or is of a substantial character. The faults discussed by Mr ********* in this vehicle could scarcely be described as amounting to faults of a substantial character and there would be no right to reject the vehicle even if a finding had been made that it was not of acceptable quality.

Conclusion

[12] The Tribunal accordingly dismisses the application. The Tribunal records that the trader has offered to complete the repairs set out in the Automobile Association report and it would obviously be sensible for Mr ********** to take advantage of that offer and have the various items attended to.

DATED at WELLINGTON this day of 2006

___________________
R D Burnard

Mvd 080-06.doc(aw)