Hona v Ishtar Cars Limited - Reference No. MVD 188/2010 (Auckland) [2010] NZMVDT 149 (29 October 2010)

Last Updated: 20 February 2011

Decision No. AK 123 /2010

Reference No. MVD 188/2010

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN BEN HONA

Purchaser

AND ISHTAR CARS LIMITED

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

Mr C H Cornwell, Barrister & Solicitor, Adjudicator
Mr M Whinham, Assessor

HEARING at AUCKLAND on 27 October 2010

APPEARANCES
Mr B Hona, the purchaser
Mr K Asadi, Operations Manager, representing the trader

DECISION

Background

[1] On 23 November 2009 Mr Hona (“the purchaser”) purchased a 1997 Daihatsu Pyzer registration number DDW560 (“the vehicle”) from Ishtar Cars Limited (“the trader”) for $3,200. The purchaser seeks to recover the purchase price he paid for the vehicle together with repair costs and the cost of an alarm he fitted to the vehicle totalling $5,442.

[2] The trader says that after replacing the vehicle’s engine in the vehicle on 1 December 2009 it did not hear from the purchaser regarding any faults with the vehicle until it received his application to the Tribunal. The trader does not consider that the purchaser has any right to reject the vehicle.

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

Facts

[4] The purchaser purchased the vehicle for $3,200 from the trader on 23 November 2009 after taking it for a test drive. The vehicle had travelled 182,824 kilometres at the time of sale. It was supplied with a new warrant of fitness.

[5] The purchaser says that after he purchased the vehicle its engine overheated on the way home on 23 November 2009 and broke down on the Mangere Bridge. The purchaser had the vehicle towed back to the trader’s premises and he was supplied with a loan car for three days by the trader. The trader had Holmes Automotive replace the engine with a second hand engine at a cost of $1,558. The vehicle was returned to the purchaser on 1 December 2009.

[6] The purchaser gave evidence that he had the vehicle serviced and the engine flushed by Auckland Express Services Ltd (“AESL”) on 14 December 2009 at a cost of $237.95 and he produces the report of AESL which lists a number of items of work with prices for each which AESL advised him the vehicle might require in the future.

[7] On 15 January 2010 the purchaser had Reber Auto Electrical replace the blown right front headlight and number plate bulbs and fix a damaged cable at a cost of $210. He says he did not approach the trader to request that it do this work because he had lost faith in them.

[8] On 16 April 2010 the purchaser took the vehicle to Landscape Auto for a warrant of fitness. The odometer was then 187,186kms or 4,362km more than the odometer at the date of purchase. The vehicle failed its WOF for two reasons; the left rear brake was binding and both rear tyres were worn. The WOF check sheet also shows the water pump was leaking and the rear seatbelts were only in fair condition. The purchaser had Landscape Auto replace the water pump, cambelt, two rear tyres and had the rear brake rotors machined at a total cost with labour and GST of $1,493. Once again he says did not approach the trader before having that work done.

[9] In July or August 2010 (the purchaser cannot recall the date) the vehicle was involved in an accident and suffered damage whilst parked at the Three Kings Shopping Centre. The purchaser produces an estimate dated 6 August 2010 from Landscape Cars Ltd of $528.75 for the repairs which he says should be paid for by the trader because the vehicle had been previously damaged before he bought it and the accident revealed the previous repairs.

[10] The purchaser produces another undated quotation from Landscape Cars Ltd for body repairs totalling $3,013 which includes repairs to the front bumper, the rear bumper (which the purchaser says he caused), and which he says covers damage present in the vehicle when he bought it.
[11] The trader represented by Mr Asadi says that after the vehicle overheated and its engine was replaced on 1 December 2009 he had the purchaser test drive the vehicle and he produces the purchaser’s written acknowledgment that the vehicle was running well. Mr Asadi says that after that the trader did not hear anything further from the purchaser until it received his application to the Tribunal.

[12] Mr Asadi says he tried to contact the purchaser on the cellphone number in his application and on the VOSA and sent text messages to both numbers but received no response from the purchaser.

Issues

[13] The facts raise the following issues:
[a] Whether the vehicle failed the guarantee of acceptable quality in section 6 of the Consumer Guarantees Act 1993 (“the Act”)?
[b] If so what remedies are available to the purchaser?

The Consumer Guarantees Act 1993

Issue (a): Did the vehicle fail the guarantee of acceptable quality in section 6 of the Act?

[14] Section 6 of the Act imposes on a supplier and the manufacturer of consumer goods "a guarantee that the goods are of acceptable quality." Section 2 of the Act defines "goods" as including "vehicles.”

[15] The expression "acceptable quality" is defined in Section 7 as follows:

“7 Meaning of acceptable quality

(1) For the purposes of section 6, 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, ¾

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 ¾

(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 maintain 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.”

[16] 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) of the Act as modified by the factors set out in section 7(1)(f) to

(j) from the perspective of a “reasonable consumer”. The test is an objective

one; it is not a view of those factors from the purchaser’s subjective perspective.

[17] In Stephens v Chevron Motor Court Limited [1996] DCR1, the District Court held that the correct approach to the Act was first to consider whether the vehicle was of “acceptable quality”. If the vehicle was not of acceptable quality, the next point to consider was whether the purchaser required the trader to remedy any faults within a reasonable time in accordance with Section 19 of the Act. If the failure to comply with the guarantee of acceptable quality was of a “substantial character” within the meaning of Section 21, or if the faults cannot be remedied, the Tribunal is directed to ask whether the purchaser exercised his right to reject the vehicle within a reasonable time.
[18] The factors to be considered by the Tribunal in this case in deciding if the vehicle was of acceptable quality are :
(i) that the vehicle was a 12 year old second hand Daihatsu Pyzer motor vehicle supplied to the purchaser with a current warrant of fitness;
(ii) it had travelled 182,824kms when it was sold to the purchaser;
(iii) the sale price was only $3,200.

[19] The vehicle overheated immediately after it was supplied to the purchaser and had he elected to do so he might have rejected the vehicle immediately. Instead he returned the vehicle to the trader and the Tribunal accepts the trader’s evidence that a replacement second hand engine was fitted to the vehicle, the radiator was flushed and the vehicle was returned to the purchaser in good working order. There is no evidence that the engine has since given any problems. The subsequent faults which the vehicle have all (apart from the alarm fitted after purchase by the purchaser) been a result of fair wear and tear on a 12 year old vehicle which had done 182,824kms when it was sold and which has since travelled a further 7,657kms. The Tribunal considers that the vehicle met the guarantee of acceptable quality and the purchaser’s claim must therefore be dismissed.

Order

The purchaser’s application is dismissed.

DATED at Auckland this 29th day of October 2010

C.H.Cornwell
Adjudicator