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Reference No. MVD 96-2009 (WN) [2009] NZMVDT 87 (7 August 2009)

Last Updated: 2 September 2009

Decision No. WN 20 /2009

Reference No. MVD 96-2009

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN XXXX

Purchaser

AND YYYY

Trader

BEFORE THE WELLINGTON MOTOR VEHICLE DISPUTES TRIBUNAL

N J Wills - Barrister, Adjudicator
N Barrett - Assessor

HEARING at CHRISTCHURCH on 20 July 2009

APPEARANCES

XXXX, purchaser
AAAA, support person for purchaser
BBBB, witness for the purchaser (by telephone)
CCCC, Chief Executive Officer, for trader


DECISION

Background

[1] On 4 June 2009 XXXX (the purchaser) purchased a 1998 Subaru Legacy (the car) for $6,990 from YYYY (the trader). Miss XXXX’s complaint is that the trader has failed to remedy a problem with the car that existed when she bought the car. She also alleges that although the car was sold with a current warrant of fitness, the car should not have passed the warrant of fitness inspection. Miss XXXX has rejected the car and has applied to the tribunal to have that rejection upheld.

[2] Mr CCCC on behalf of the trader submits that Miss XXXX is not entitled to reject the car. He says that the trader has not been given adequate opportunity to remedy the problems and that they are minor problems and easily remediable.

[3] Prior to the commencement of the Tribunal’s inquiry the Tribunal appointed Mr Barrett who took the oath required of an assessor by Schedule 1, cl.10(2) of the Motor Vehicle Sales Act 2003. As an assessor appointed pursuant to the Motor Vehicle Sales Act 2003 Mr Barrett assisted the adjudicator but the application was determined by the adjudicator alone.

[4] Prior to the hearing it became apparent that a witness for the purchaser (Mr BBBB) is employed by the same employer as Mr Barrett – DDDD. Mr Barrett advised the tribunal that although he and Mr BBBB shared an employer, they worked at different premises and did not know each other personally. The parties were advised of the connection and that the tribunal’s preliminary view was that the connection did not amount to a conflict. The parties were invited to advise if they considered a conflict arose and if so to provide written reasons which would then be considered by the tribunal. Both parties confirmed in writing that they had no objections to Mr Barrett sitting as an assessor.

Issues

[5] The Tribunal has jurisdiction to inquire into and determine issues arising under the Fair Trading Act 1986, the Consumer Guarantees Act 1993 or the Sale of Goods Act 1908. Having reviewed the evidence in this case the Tribunal concludes that the issues are:

Facts

[6] Miss XXXX bought the car from the trader on 4 June 2009 for $6,990. The trader arranged finance for her for the entire purchase price through EEEE (through a finance agreement dated 4 June 2009). On the day she bought the car Miss XXXX noticed a knocking noise in the front of the car. She took the car to FFFF where a mechanic diagnosed a problem with the inner rack joint. She was given a note setting this out and she took that note to the trader. Mr CCCC (the CEO of the trader) agreed to send the car to GGGG for repair on Monday 8 June 2009.

[7] On Monday 8 June Miss XXXX took the car into the trader in the morning and returned in the afternoon to check on progress. She then went directly to GGGG only to discover that her car was not there. It transpired that the car had been sent to another workshop – HHHH Miss XXXX went to HHHH and a mechanic called JJJJ told her the inner rack joint had been replaced. An invoice from HHHH to the trader confirms this. Mr CCCC’s evidence was that the inner rack joint was replaced because of the diagnosis passed on by Miss XXXX from FFFF.

[8] Shortly after collecting the car from HHHH, Miss XXXX noticed the knocking noise again. She contacted HHHH and spoke to JJJJ who said he suspected a problem with the suspension and asked her to bring the car back the next morning. Miss XXXX took the car back the next morning (Tuesday 9 June) and left it at HHHH for the day. When she returned to collect her car she was told by JJJJ that the noise was no longer there, and no repairs were needed. He explained that the noise may have been because the car had been hoisted and assured her that the noise would not come back.

[9] Miss XXXX took the car and later that day noticed the noise again. The following day (Wednesday 10 June 2009) Miss XXXX delivered a letter to the trader addressed to Mr CCCC setting out the problems with the car, the failure to repair and giving the trader a further opportunity to have the car repaired (at a repairer other than HHHH). Mr CCCC contacted Ms XXXX and it was agreed that the car would be taken to GGGG for repairs. GGGG inspected the car on Friday 12 June 2009. Miss XXXX was told by KKKK (the JJJJ employee) who inspected the car that he suspected there was a problem with the right outer tie rod end and that he had discovered two oil leaks from the cam covers one of which was leaking onto the exhaust (causing an oily smell). Arrangements were made for the car to be repaired the following Monday.

[10] Over the weekend a further problem developed. The car lost power and the engine light came on. A friend of Miss XXXX checked the fault code and found that it indicated a faulty airflow sensor. The car was taken to GGGG on Monday and KKKK was advised of the airflow sensor problem. At around 12.30pm that day Miss XXXX received a call from KKKK advising her that the car was fixed and ready to be picked up. Miss XXXX’s boyfriend collected the car and on her instructions he asked for an invoice so she would know what had been done to the car. The receptionist at GGGG advised Miss XXXX’s boyfriend that there was no invoice ready but that one would be posted to Miss XXXX when it was available.

[11] Later that night Miss XXXX noticed both the knocking noise and the oily smell were still apparent. On Wednesday 17 June Miss XXXX arranged for an independent inspection of the car by MMMM the following day. The same day she received from GGGG a copy of the invoice detailing the work carried out on the car.

[12] The GGGG invoice described the work undertaken as follows:

“Replace right outer tie rod end. Check and report on air flow sensor.

Carry out relevant checks to find right outer tie rod end seized. Obtain and fit new tie rod end to vehicle and carry out Wheel alignment.

Check and clean rocker cover gasket oil leaks.

Recommend to recheck oil leak after driven.

Carry out fault code read and found code for Mass Air flow sensor. Remove and clean. Reassemble to vehicle. Road test and all ok. Clear fault code.”


[13] Miss XXXX’s evidence was that when she was told the car was ready to be picked up she was told that the car was fixed. She was not told to bring the car back to check on the oil leaks. The MMMM inspection was carried out on Thursday 18 June. At the time of the inspection the car’s odometer reading was 165,082 kilometres (so the car had travelled around 1,000 kilometres). The report noted the following items as requiring attention (ie items that would fail a warrant of fitness inspection):

“Battery terminal loose. Battery loose. Spare wheel not secured. Rear wiper not operating correctly and wiper blade perished. Front park lights not working. Horn not operating. Oil leaks both sides of engine – possibly cam cover gaskets. Light oil leak at rear of engine. Knocking noise from R/side steering rack.”


[14] The report noted a number of other minor items under the “general comments” heading.

[15] On receipt of the report Miss XXXX decided to reject the car. She wrote a letter to the trader and hand delivered it on 18 June. The letter set out the following:

“The car I purchased from you, 1998 Subaru Legacy Wagon RRRR on 5th June 2009 has a serious fault. The fault is three oil leaks, one from the rear of the engine and from each side in the cam cover gaskets and fault with the steering rack and a number of faults that shouldn’t have let the car pass its current warrant. I have included a mechanic’s report that proves this. You have been given three opportunities to have this rectified and the problems are still apparent, in saying this I am now entitled to reject the car under the Consumer Guarantees Act. This letter is to inform you that I am rejecting the car today. I now require that you refund me the purchase price of the vehicle. Please contact me to arrange this. I will return the car once you have agreed to refund the purchase price. I would appreciate a reply within two working days of your receipt of this letter.”


[16] The trader did not accept that Miss XXXX was entitled to reject the car so Miss XXXX made this application to the tribunal. Prior to the hearing she had the car checked and assessed by DDDD. BBBB from DDDD gave evidence at the hearing. He is the service foreman of the DDDD workshop. He has eight years experience in Subaru vehicles, twenty years experience as a trade qualified mechanic and is qualified to carry out warrant of fitness inspections. Before discussing his evidence it is helpful to set out his findings as recorded in the DDDD invoice dated 15 July 2009.

“Carried out check over vehicle and appraisal.

[17] At the hearing Ms XXXX clarified that she had been told by BBBB at DDDD that the $300 for the cooling system was for a replacement cooling system because the existing system had rusted.

[18] Mr BBBB gave evidence that he had a technician carry out a detailed inspection of the car on 15 July. He had earlier given Miss XXXX advice following a kerbside inspection. The invoice set out the findings of his later and more detailed inspection.

[19] He said that the car was inspected on the hoist and the cause of the knocking noise was diagnosed as excessive wear on the sway bar links. The cause of the oil leaks was diagnosed as coming from the rocker covers. Mr BBBB’s evidence was that these problems were straightforward and not difficult to diagnose.

[20] Mr BBBB said that a number of the identified problems with the car (as set out in the invoice dated 15 July) were items that would cause the car to fail a warrant of fitness inspection. He accepted that he could not be certain that the problems existed when the car was purchased by Miss XXXX because the car had travelled approximately 2,000 kilometres in the intervening period. In that regard the tribunal found Mr BBBB to be very careful and considered in the conclusions he reached in his evidence.

[21] The items he identified that would fail a warrant of fitness inspection are as follows:

[22] Mr BBBB’s view was that the problem with the sway bar links was possibly also a problem that would cause the vehicle to fail a warrant of fitness inspection (although this was challenged by Mr CCCC and Mr BBBB accepted that he was unsure and would need to check the warrant of fitness manual).

[23] Mr BBBB’s evidence about the problem with the air flow meter was that he checked the car’s computer and noted that a fault code was present for the air flow meter. He said that the fact that a fault code was present indicated that the repair carried out by GGGG was not effective. In his view the appropriate step to be taken when this fault code is indicated is to send the air flow meter to a specialist for either repair or replacement. He was aware that some companies would simply remove and clean the air flow meter in their workshop (as was done by GGGG) but in his experience this was not always successful and would not be the approach he would take.

[24] Mr CCCC was given the opportunity to ask Mr BBBB questions. In answer to questions by Mr CCCC, Mr BBBB confirmed that the steering rack did not need overhauling and that it was common for older Subarus to leak from the tappet cover gaskets.

[25] Mr CCCC put to Mr BBBB his theory that the leaks may have been caused by the failure of the O ring in the power steering which could cause oil to run down the engine and exit at the front of the cam cover. Mr BBBB did not agree with that theory – his evidence was that it was more likely that in that circumstance oil would sit in the block casings and that the oil would be a different colour to that he observed. When Mr CCCC suggested to Mr BBBB that oil could leak from a failed O ring and drip onto the exhaust (to cause an oily smell), Mr BBBB said that if that was the case the power steering reservoir would be totally empty and in this case the level in the reservoir just needed topping up.

[26] Mr BBBB agreed with Mr CCCC that Subaru cars have a tendency to oil leaks and with his suggestion that they are sometimes difficult to locate unless a car is cleaned and then run. He said however that in this case, he did not recall the engine being particularly clean and there was no difficulty identifying the cause of the leak.

[27] Mr BBBB agreed with Mr CCCC’s suggestion that the problems with the car that would fail a warrant of fitness inspection were basically minor and could be easily repaired.

[28] There was some dispute at the hearing as to the seriousness of the problem with the sway bar links. The sway bar links attach the sway bar to the lower suspension arms and prevent excessive body roll when cornering. Mr BBBB advised the tribunal that they were easily identified as being quite badly worn because when he inspected them he could see that they were on an angle due to wear (an unworn link sits vertically). He expressed the view that a safety issue arose because if the sway bar link broke while the car was being driven the car could suddenly become difficult to handle. In answer to a question from Mr CCCC Mr BBBB conceded that older cars do not have sway bar links at all.

[29] At the conclusion of Miss XXXX’s evidence Mr CCCC confirmed to the tribunal that he did not disagree with the MMMM report and that he did not wish to ask any questions of the mechanic who carried out the MMMM inspection.

[30] Mr CCCC said that Miss XXXX talked about cancelling the contract when she brought the vehicle back for the first time (the day she bought the car) and that she called and emailed the finance company about taking this step.

[31] Mr CCCC’s key submission was that the trader had made every effort to have the car repaired. He said that the initial repair to the tie rod end was prompted by the note given to him by Miss XXXX from FFFF. Mr CCCC said he was told by JJJJ from HHHH that Miss XXXX had advised the second time she brought the car back (on the 9th of June) that the noise was fixed (although when Miss XXXX disputed this and suggested it was illogical given she had left the car at HHHH that day for further repairs Mr CCCC agreed but reiterated that he was repeating what he was told by HHHH).

[32] Mr CCCC said that when it was clear the problem had not been solved by the work carried out by HHHH he asked GGGG to fix the problem. He gave evidence that his instructions to GGGG were to fix the oil leaks and repair the knocking noise. He said that his expectation was that GGGG would replace the cam covers but that he did not have a discussion with GGGG at the time about what work would be done. After Miss XXXX collected the car Mr CCCC had a discussion with KKKK at GGGG about whether or not the car was fixed. He said KKKK told him that he was 95% certain he had fixed the knocking noise and that he had not done any work to remedy the oil leak but had cleaned the engine. Mr CCCC was unhappy that the oil leak had not been remedied and said he may have expressed that unhappiness to KKKK. He did not however contact the purchaser to discuss any next steps with her.

[33] Mr CCCC said that he accepted the DDDD diagnosis of the problems with the car (as set out in the DDDD invoice) except for the warrant of fitness items. He submitted that Mr BBBB’s conclusions as to what the car would fail for in a warrant of fitness inspection were inconsistent with the MMMM report. He also did not agree with the prices for repair set out in the DDDD invoice. He submitted that they were a franchise dealer price which he said was not necessarily the cheapest price.

[34] Mr CCCC made the following comments about the DDDD invoice:

[35] Mr CCCC submitted on behalf of the trader that the trader was happy to replace the sway bar links and attend to the oil leaks. He said that the delay in carrying out the repair was because the trader had not been given the opportunity to put it right.

[36] In answer to a question by Miss XXXX about why the two mechanics used by the trader could not diagnose the problems when DDDD had been able to diagnose the problems in an hour, Mr CCCC said that he could only assume that the Subaru mechanics were of better quality than the mechanics he had been using or because the Subaru mechanics were experts. Mr CCCC conceded he was unhappy that the mechanics he used didn’t remedy the problems.

Were the problems a failure in the guarantee of acceptable quality?

The guarantee of acceptable quality

[37] Section 6 of the Consumer Guarantees Act 1993 provides a guarantee as to the acceptable quality of goods sold:

"6 Guarantee as to acceptable quality

(1) Subject to section 41 of this Act, where goods are supplied to a consumer there is a guarantee that the goods are of acceptable quality.

(2) Where the goods fail to comply with the guarantee in this section,—

(a) Part 2 of this Act may give the consumer a right of redress against the supplier; and

(b) Part 3 of this Act may give the consumer a right of redress against the manufacturer."


[38] Section 7 sets out a definition of the guarantee of acceptable quality:

"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) All other relevant circumstances of the supply of the goods.
(2) Where any defects in goods have been specifically drawn to the consumer's attention before he or she agreed to the supply, then notwithstanding that a reasonable consumer may not have regarded the goods as acceptable with those defects, the goods will not fail to comply with the guarantee as to acceptable quality by reason only of those defects.
(3) Where goods are displayed for sale or hire, the defects that are to be treated as having been specifically drawn to the consumer's attention for the purposes of subsection (2) of this section are those disclosed on a written notice displayed with the goods.
(4) Goods will not fail to comply with the guarantee of acceptable quality if—
(a) The goods have been used in a manner, or to an extent which is inconsistent with the manner or extent of use that a reasonable consumer would expect to obtain from the goods; and
(b) The goods would have complied with the guarantee of acceptable quality if they had not been used in that manner or to that extent.
(5) A reference in subsections (2) and (3) of this section to a defect means any failure of the goods to comply with the guarantee of acceptable quality."

[39] In considering whether or not goods meet the guarantee of acceptable quality, the Tribunal must consider the quality elements as set out in section 7(1)(a) to (e) as modified by the factors set out in section 7(1)(f) to (j) from the perspective of a “reasonable consumer”. This test is an objective test. It is not a review of those factors from the purchaser’s subjective perspective.

[40] The time at which the quality of the vehicle is assessed is at the time of sale – although the durability characteristic may involve consideration of evidence of failure at a later date. In this case other relevant factors for consideration are that the car was a second hand 1998 Subaru Legacy that was sold for a purchase price of $6,990 and had travelled over 164,000 kilometres when it was sold. Those are factors that to some degree limit a consumer’s reasonable expectation as to quality.

[41] In this case the purchaser has alleged a number of problems. Having heard all the evidence, the tribunal accepts the evidence of Mr BBBB and prefers his evidence to that of Mr CCCC. Mr BBBB is an experienced Subaru mechanic who was careful and considered in the conclusions he reached. He was an independent witness with no interest in the outcome of this case. In his evidence Mr CCCC relied on hearsay evidence of what he had been told about the various problems by the mechanics he used. It is fair to say that Mr CCCC himself did not appear to have great confidence in the mechanics he used and that in essence he accepted the diagnosis carried out by Mr BBBB.

[42] All the problems Mr CCCC identified as problems that would affect the ability of the car to pass a warrant of fitness inspection (set out in paragraph 21 above) were also identified in the MMMM inspection. The tribunal accepts that evidence establishes the existence of those problems. Mr CCCC challenged the DDDD conclusion that there was excessive play in the steering rack mounts, making the observation that the mounts are designed to have some play. Because that observation was not supported by any expert evidence nor was it based on any inspection of the car the tribunal prefers the evidence of Mr BBBB.

[43] What is not entirely clear from the evidence is whether it has been proven on the balance of probabilities that those problems that are relevant to a warrant of fitness inspection were in the same condition at the time of sale as the condition recorded in the MMMM inspection and when Mr BBBB carried out his inspection. The tribunal is not prepared to conclude that they were in the same condition because all of the problems are problems that would have worsened over time. The tribunal is however satisfied on the balance of probabilities that those problems did amount to failures in the guarantee of acceptable quality because the car was not sufficiently durable. A reasonable purchaser of a vehicle such as the car in this case would not expect these types of problems to worsen to a point the car would fail a warrant of fitness so soon after purchase of the car.

[44] The knocking noise in the engine has clearly been in existence since Miss XXXX purchased the vehicle – she complained about the noise almost immediately after purchase. The tribunal accepts Mr BBBB’s evidence that the knocking noise was caused by the sway bar links and that this was a problem that should have been easily diagnosed. The tribunal also accepts Mr BBBB’s evidence that because the sway bar links were worn there was a risk of sudden failure and that sudden failure of the links could cause handling difficulties (which is a different scenario altogether to that of a car which did not have sway bar links at all).

[45] The fluid leaks were identified shortly after purchase by the trader’s mechanic. The tribunal accepts Mr BBBB’s evidence that the leaks were caused by failure of the rocker cover gaskets and in that regard prefers Mr BBBB’s evidence to that of Mr CCCC (who submitted that the leaks were caused by a failed O ring in the power steering pump).

[46] The tribunal is satisfied that the worn sway bar links and the fluid leaks were failures in the guarantee of acceptable quality. A reasonable consumer fully acquainted with these problems would not have regarded the car as acceptable. They are the sorts of problems that a purchaser would require to be repaired before taking possession of the car. That finding is consistent with the trader having accepted responsibility for the repair of these problems.

[47] The problem with the air flow sensor occurred within ten days of purchase. The exact nature of this problem was not evident from the evidence but it was clear that the repair carried out by GGGG was not successful. There is insufficient evidence for the tribunal to conclude there has been a failure in the guarantee of acceptable quality in regard to the air flow sensor because it is not clear what was wrong with it or what would be required to repair it.

[48] There are a number of problems noted by Mr BBBB other than those considered above – for example the cooling system and the worn right front tyre. The tribunal is not prepared to conclude that those items were failures in the guarantee of acceptable quality, primarily because they were not traversed in detail in Mr BBBB’s evidence so the tribunal has insufficient evidence to reach any particular conclusion as to the nature or extent of those problems.

Was there a substantial failure in the guarantee of acceptable quality?

[49] Section 21 sets out the circumstances in which a failure is deemed to be a substantial failure in the guarantee of acceptable quality. Whether or not the failure is substantial as defined in section 21 has ramifications for the remedies available to the purchaser.

[50] Section 21 provides:

“21 Failure of substantial character

For the purposes of section 18(3) of this Act, a failure to comply with a guarantee is of a substantial character in any case where—

(a) The goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b) The goods depart in one or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model; or

(c) The goods are substantially unfit for a purpose for which goods of the type in question are commonly supplied or, where section 8(1) of this Act applies, the goods are unfit for a particular purpose made known to the supplier or represented by the supplier to be a purpose for which the goods would be fit, and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or

(d) The goods are not of acceptable quality within the meaning of section 7 of this Act because they are unsafe.”

[51] The tribunal is satisfied that the various problems found to fail the guarantee of acceptable quality set out above amount to a substantial failure as defined in section 21. In particular the tribunal is satisfied that a reasonable consumer fully acquainted with the nature and extent of those problems would not have purchased the car. While individually some of the problems are not particularly significant collectively they amount to a substantial failure (see Cooper v Ashley & Johnson Motors Ltd (1996) 7 TCLR 407).

[52] Making allowance for the possibility that Mr BBBB’s estimate of repairs is at the more expensive end of the range, it is likely that a conservative estimate of the cost of repairs to the guarantee failures identified would be in the vicinity of at least $1,000 which is a significant amount when considered in the context of the $6,990 purchase price. In reaching that conclusion the tribunal does not accept Mr CCCC’s submission that a mechanic could fix all of the problems in one hour. That is a clear exaggeration and completely at odds with Mr BBBB’s estimate.

[53] Bearing all those factors in mind the tribunal finds that the various problems that failed the guarantee of acceptable quality amounted to a significant failure because a reasonable consumer fully acquainted with the various problems would not have purchased the car.

What remedies are available to the purchaser?


[54] Section 18 of the Consumer Guarantees Act 1993 sets out the remedies available to the purchaser for a failure in the guarantee of acceptable quality. It provides:

"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."

[55] In this case Miss XXXX initially required the trader to remedy the knocking noise. At that time she was not aware of the other problems with the car. After three visits to two different mechanics the knocking noise was still not remedied. After the second trip to the trader’s mechanic the oil leak was identified but that was not remedied on the third visit to the trader’s mechanic. Mr CCCC knew that it had not been remedied (the engine was merely cleaned) but took no further steps to have the appropriate repairs carried out.

[56] Mr CCCC submitted that the trader was ready willing and able to remedy the various problems with the car but that submission does not sit well with the facts as set out above. In those circumstances the tribunal does not accept Mr CCCC’s submission that he bent over backwards to have the repairs carried out.

[57] In his submissions Mr CCCC appeared to be suggesting that the failure to repair the knocking noise and fluid leaks were the fault of his repairers and that the effect of that non-repair should not be visited on the trader. The tribunal cannot accept that suggestion. It is the trader’s statutory obligation to carry out those repairs within a reasonable timeframe.

[58] Bearing in mind all the circumstances the tribunal has no hesitation in concluding that the trader has not remedied the problems identified to the trader (before the first visit to the trader’s repairer the knocking noise, the second visit the knocking noise and oil leaks) within a reasonable time frame. In reaching that conclusion the tribunal accepts Mr BBBB’s evidence that the knocking noise and fluid leaks were not problems that were difficult to diagnose. In those circumstances Miss XXXX has the right to reject the car pursuant to section 18(2)(b)(ii) of the Act.

[59] The tribunal notes that it considers that Miss XXXX also has the right to reject the car because the car has substantially failed the guarantee of acceptable quality (section 18(3) of the Act).

[60] Rejection must be carried out within a reasonable time of the defects becoming apparent. Miss XXXX first notified the trader that she considered she was entitled to reject the car on 29 June 2009 which was only a few days after some of the defects became apparent and a few weeks after the initial problem was apparent. The tribunal is satisfied that rejection occurred within a reasonable timeframe.

[61] In this case the trader arranged finance for Miss XXXX to fund the purchase of the car. In those circumstances pursuant to section 89(2) of the Motor Vehicle Sales Act 2005, the tribunal has jurisdiction to order that the rights and obligations of the buyer of a motor vehicle under such a finance agreement vest in the motor vehicle trader.

Orders


  1. The purchaser is entitled to reject the vehicle.
  2. The trader will refund the purchaser an amount equal to the principal repayments she has made to date under the finance agreement with EEEE dated 4 June 2009. If the parties are unable to agree on the amount of this payment leave is reserved to refer that issue back to the tribunal.
  3. The purchaser will return the car to the trader.
  4. The rights and obligations of XXXX under the finance agreement with EEEE dated 4 June 2009 shall vest in YYYY.

DATED at WELLINGTON this 7 day of August 2009

___________________
N Wills
Adjudicator


DIRECTION TO THE CHIEF EXECUTIVE, MINISTRY OF JUSTICE

Section 94 of the Motor Vehicle Sales Act 2003 provides that if an application is made to this Tribunal which falls within its jurisdiction and that in determining the application the Tribunal decides against a motor vehicle trader, the Tribunal must direct the Chief Executive of the Department for Courts (now Ministry of Justice) to publish a notice in the Gazette containing the particulars set out in subsection (2). The notice is only to be published once the circumstances described in subsection (3) have occurred. The Chief Executive is directed accordingly.

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