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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 27 February 2011
Decision No. WN 34 /2010
Reference No. MVD 150/10
IN THE MATTER of the Motor Vehicle Sales Act 2003
AND
IN THE MATTER of a dispute
BETWEEN JOHN PARKINS
Purchaser
AND BLING BLING MOTOR CO LIMITED
Trader
BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
N J Wills - Barrister, Adjudicator
N Barrett - Assessor
HEARING at Christchurch on 3 November 2010
APPEARANCES
John Parkins, purchaser
Peter Hayes, witness for the purchaser (by
telephone)
John Kitely, director for trader
Bernie Chamberlain, witness
for the trader
Peter Perrim, witness for the trader
Simon Bates, witness
for the trader
DECISION
Background
[1] On 22 April 2010 John Parkins (the purchaser) purchased a 1994 Nissan Silvia registration FHW 543 (the car) for $14,500 from Bling Bling Motor Co Ltd (the trader). The purchaser has applied to the tribunal seeking recovery of the cost of repairs carried out to the car ($3,165.27). Mr Parkins says the repairs were to remedy a failure in the guarantee of acceptable quality and because the trader has refused to repair the car, he is entitled to recover those costs as the reasonable costs of repair.
[2] The trader's position is that the problems with the car do not relate to the state of the car when it was sold to Mr Parkins but rather have arisen because of the way that Mr Parkins has driven the car since he purchased it.
[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.
Summary
[4] Mr Parkins is entitled to recover some of the costs he has claimed to repair the car. He is entitled to do so because:
- [a] The car failed the guarantee of acceptable quality because the synchro cones and selector forks in the gearbox were not sufficiently durable.
- [b] There is insufficient evidence to establish that Mr Parkins method of driving was related in any way to these particular problems.
- [c] Mr Parkins has the right to recover the reasonable cost of repairs because he asked the trader to fix the problem and the trader refused.
[5] The tribunal’s findings of fact and reasoning are set out below.
Facts
[6] Mr Parkins purchased the car from the trader on 22 April 2010 for $14,500. When he bought the car it had an odometer reading of 154,824 kilometres.
[7] There was some dispute between Mr Parkins and the trader as to when Mr Parkins first raised the problems with the car with the trader. Mr Parkins said that he mentioned it to Mr Bates (the trader’s salesperson who sold him the car) about two weeks after purchase. He gave evidence that he told Mr Bates that he had noticed some gearbox noise (which he described as grinding between first and second gear) but Mr Bates did not respond to his comment. At the hearing Mr Bates disagreed about that and said that the first time he recalls the problem being raised was about six weeks after Mr Parkins purchased the car on 15 June 2010.
[8] Mr Parkins approached another trader – Mike at Empire Imports (who deal in this type of car), and described the symptoms to him. Mr Parkins reported to the tribunal that Mike told him that it was likely the synchros (which slow the gear down to allow the gear to engage) had failed. Mr Parkins then returned to Mr Bates with this news and arranged to take the car back to Bling Bling. He took the car in but nothing was done to the car. When he went back to the trader’s yard again in early July there was an altercation between Mr Parkins and Mr Kitely, who Mr Parkins said had accused him of driving the car badly and having likely caused any problems with the transmission.
[9] On 29 June 2010 Mr Parkins sent a letter to the trader rejecting the car because it had serious problems. He described the problems as:
“1. The gearbox makes a loud grinding noise when changing gears from 1st to 2nd gear and also gear changes from 2nd to 3rd and 3rd to 4th have been producing this grinding sound.
2. Whilst driving the motor vehicle I have experienced the inability for the gear to engage in 2nd after leaving 1st gear, this has put the car including passengers at risk as the car is undriveable at this point until another gear has been engaged. This is happening under normal driving conditions.
3. This was first reported to Simon Bates the Manager at Bling Bling only after having the car in my possession for 2 weeks.”
[10] After some correspondence between the parties, in mid-July it was agreed that Mr Parkins would have the transmission stripped for inspection so that the trader could assess whether or not the trader had any responsibility for the repairs. The car was stripped by Peter Hayes at Auto Transmissions Ltd and Mr Bernie Chamberlain of Mechanical Insurance Services inspected the disassembled car on behalf of the trader.
[11] The tribunal heard from Mr Peter Hayes, who carried out the repairs to the car. He is a qualified A-grade mechanic with over 26 years’ experience. He specialises in gear-box repairs. He said that he was asked by Mr Parkins to appraise the performance of the car a few weeks prior to the repairs being carried out. He said that he discovered problems with the gear bearings and synchro cones. The problem was not dramatic but was certainly noticeable and needed repair.
[12] Mr Hayes carried out repairs to the car. The invoice from Auto Transmissions Ltd is dated 29 July 2010 and notes the following:
“POOR 2ND & 3RD SYNCHRO OPERATION
Remove gearbox, dismantle, clean and evaluated. Fit full set of new bearings, gaskets & seals. Replace other parts as shown, reassemble resetting all gear & shaft clearances, refit to vehicle, oil & test.”
[13] The total cost of the repairs was $3,165.27 broken down into the following items/labour costs:
“Gearbox O/H kit 1 480.00 480.00
2nd synchro cone assembly 1 215.28 215.28
3rd synchro cone assembly 1 215.28 215.28
1-2, 3-4, 5th rev selector forks [used] 3 50.00 150.00
Clutch kit [exedy h/d] 1 615.00 615.00
Machine flywheel 1 60.00 60.00
Labour: repair gearbox 8 72.00 576.00
Labour: remove/refit gearbox 6 72.00 432.00
Sealant/Cleaners 1 25.00 25.00
Gearbox oil 2.5 18.00 18.00”
[14] Mr Hayes told the tribunal that when he dismantled the gear-box he discovered wear issues with the synchro cones (that slow the gear down to allow for engagement) and the shift forks (which slide a sleeve over the gear being engaged). His view was that the cause of the failure was not able to be discerned categorically. He said that the problem may have arisen because of hard driving and/or misuse earlier in the vehicle’s life, the symptoms of which arose during Mr Parkins’ ownership.
[15] He also said however, that it does not take long to damage a gearbox if a vehicle is driven hard and hard gear changes are made. Mr Hayes said that he did not drive the car with Mr Parkins so could not comment on his driving style.
[16] In respect of the clutch he said that it had not been what he described as “roasted” and that although it was replaced this was not an essential part of the repair.
[17] Mr Hayes was asked whether he saw any signs of Mr Parkins misusing the car. His response was that he was impressed with the car, it was clean, tidy and what he described as “just about show-room condition”. He said there was no brake dust on the tyres which would ordinarily be present if the car had been driven hard recently, although he noted that the tyres looked new.
[18] Mr Parkins told the tribunal that the tyres had been replaced just before he had the transmission repaired. The warrant of fitness check-sheet for the warrant of fitness inspection just prior to the car being sold to Mr Parkins showed that the rear tyres were 4mm and 5mm at the time of sale so these tyres were replaced after around 5,800 kilometres of use.
[19] Mr Chamberlain, who inspected the car and in particular the disassembled transmission, produced a written report dated 23 July 2010. Mr Chamberlain is an A Grade mechanic who regularly carries out mechanical assessments for insurance purposes. The report records details of his inspection of the car and the disassembled components. The odometer reading at the time of his inspection is recorded as 160,693 indicating that Mr Parkins had travelled some 5,800 kilometres in the car since he purchased it. In essence Mr Chamberlain’s report concluded that the probable cause of the problems with the car was misuse of the vehicle. At the hearing Mr Chamberlain explained that he was unable to determine when that misuse might have occurred – ie whether it occurred before or after the vehicle was sold to Mr Parkins.
[20] The particular factors the led Mr Chamberlain to this conclusion are:
“The first items inspected [sic] the gearbox were the ratio shift forks, it was noted that the shift fork thrust pads on all the forks either had the pads missing or had excessive wear. When the Synchro cones were examined they were found to be severely worn and not working or reaching their end of their economic life, the rest of the gears and bearings were reusable although the bearings should be replaced as precaution.
POINTS OF INTEREST
GENERAL COMMENTS
Tidy looking vehicle no rubber under the guards and the rear tyres are not showing stress but they are near new. However the clutch is blue from heat indicating the drive train has been subject to vigorous driving technique, normally associated with misuse.
The Syncro mesh cones are worn out and it is difficult to determine whether they are subject to misuse or wear and tear, however when you look at the forks that move the syncro mesh hubs to operate the cones, they are showing damage that is normally related to operational misuse (over exuberant gear shifting) this would indicate that the Syncro rings may have been subject to misuse and failed as a result. To repair this gearbox it will require a new set of Syncro cones, shift forks and the bearings should be replaced as a precaution.
CONCLUSION
After carrying out the above inspection the following opinion has been formed. The bluing of the friction faces in the clutch assembly, the damage to the gear shift forks and Syncro cones is not normally associated with acceptable driving techniques and on the balance of probabilities is the result of misuse.”
[21] On behalf of the trader Mr Chamberlain put the conclusions of his report to Mr Hayes. He said that taken in combination the bluing of the clutch together with the overload on the clutch forks and wear and tear on the synchro cones indicated that the transmission had been subject to vigorous driving. Mr Hayes agreed with Mr Chamberlain’s conclusion but said that what was not clear was when the vigorous driving occurred. Mr Chamberlain agreed that he could not determine when the vigorous driving occurred. Mr Chamberlain and Mr Hayes agreed that neither the clutch cover nor the flywheel (which Mr Chamberlain said showed bluing) would have had an effect on the synchro cones. The clutch may have shown signs of blueing due to excessive heat from possibly taking off at high RPM and dropping the clutch but this would not damage the synchro cones or shift forks. Over exuberant gear changes would cause that type of damage.
[22] In his report Mr Chamberlain noted that the flywheel which the clutch is bolted to was a solid flywheel (and not factory standard) as opposed to a two piece flywheel. Mr Hayes noted that the impact on the car of having this type of flywheel is to limit the ability of the clutch plate to absorb resonance or vibrations.
[23] Mr Chamberlain asked Mr Hayes about an AA report that was undertaken by the trader just prior to sale. The AA report made no mention of any problems with the transmission. He suggested that had the problems been evident at the time of sale, they would have been noted in the AA report. Mr Hayes response was that the faults were noticeable but reasonably subtle and that the “clickiness” and “notchiness” of the gears was only noticeable at higher than normal rpms (3,000 to 4,000) when changing gears relatively quickly. He said that for those reasons it was possible that the problems may not have been detected during the AA inspection. In regard to the bearing, he said that the only symptom of this was a little gear chatter at idle.
[24] Mr Hayes’ conclusion was that because the car was not whining or growly through the gears and the bearings had not failed, it was understandable that these issues had not been detected during the AA inspection.
[25] The tribunal heard from Mr Perrin who had previously worked for Indy Cars Ltd – a neighbouring business to the trader. He said that on at least two occasions in May or June this year he had seen the car that is the subject of this application being driven aggressively out of the trader’s car yard. He said that he recognised the car because it was a distinctive car. He described the aggressive nature of the driving as “smoke off the back wheels” – and confirmed Mr Barrett’s explanation that this meant revving the engine, dropping the clutch and accelerating hard with some loss of traction in the back wheels. He did not see who was driving the vehicle – he thought it might have been someone who worked at the trader’s yard.
[26] The tribunal also heard from Mr Bates, the trader’s salesperson who dealt with Mr Parkins. He said that Mr Parkins had been in and out of the trader’s yard frequently in the first few weeks of purchasing the car. He said that he had an alarm and side-skirts fitted to the car, had made enquiries about various other performance parts and had also come into the yard to deliver meat (he is a butcher by profession).
[27] Mr Bates denied that Mr Parkins had raised concerns about the gear-box within a week or two of purchasing the car. He was emphatic in his evidence that the first he had heard of it was six weeks after Mr Parkins purchased the car. He said that he knew this because he had made a note in his diary on 15 June to call Mr Parkins and this was the first time they discussed the gear-box.
[28] Mr Kitely, a director of the trader company, gave evidence and made submissions at the hearing. He said that Mr Parkins had visited the trader’s yard reasonably often since he bought the car and that he would often leave tyre marks when leaving the trader’s premises. When questioned about this it became clear that he had only seen one of these occasions. Mr Kitely submitted that he had concerns that the problems with the car were caused by the way that Mr Parkins drove the car and that he had raised this with Mr Parkins but Mr Parkins was not prepared to discuss his driving.
[29] Mr Kitely submitted that the AA report showed that the car was in good condition when it was sold to Mr Parkins. He also referred to the tyre measurements – the tyres that Mr Parkins replaced were at approximately 4mm and 5mm respectively when they were replaced (so had been driven around 5,800 kilometres prior to replacement). Mr Kitely also submitted that the car is a sixteen year old performance vehicle and that some wear is acceptable.
[30] Mr Parkins emphatically denied that he drove the car hard. He said that he was 31 years of age with a partner and children and was not a “boy racer”. He said the car was his second car and that he used his other vehicle for everyday use. He said that he had used the car to take various long-distance trips – for example to Queenstown, Kaikoura and Hokitika.
[31] Mr Parkins admitted that on one occasion at the trader’s yard he had driven the car in the manner described above (revving the engine, dropping the clutch and accelerating hard with some loss of traction in the back wheels). He said that he had done so because the trader’s mechanics had been winding him up and that he was not in the habit of driving like that.
The issues before the Tribunal
[32] The following issues require consideration:
- [a] Whether the car met the standard of acceptable quality when it was sold to Mr Parkins?
- [b] If so, is Mr Parkins entitled to recover the cost of the repairs.
The Consumer Guarantees Act
1993
The guarantee of acceptable quality
[33] 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."
[34] 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."
[35] 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.
[36] The reasonable consumer test is derived from the statement of Dickson J in Australian Knitting Mills Limited v Grant [1933] HCA 35; (1937) 50 CLR 387:
"The condition that goods are of merchantable quality requires that they should be in such an actual state that a buyer fully acquainted with the facts and, therefore, knowing what hidden defects exist, and not being limited to their apparent condition would buy them without abatement or price ... and without special terms".
[37] In this case the goods are a sixteen year old second-hand performance vehicle with an odometer reading of 154,792 kilometres when it was sold to the purchaser for $14,500. Repairs have been carried out to several different components. The replacement of the clutch and flywheel was not carried out as a result of any particular problem with these components and so the car did not fail the guarantee of acceptable quality in respect of those components.
[38] The gearbox selector forks and synchro cone assemblies are remaining ‘problem’ components. The trader has provided some evidence and submitted that the purchaser’s driving has caused the failure of these components. In reaching a conclusion about this aspect of the case, the tribunal accepts the evidence of the purchaser that he raised these problems at an early stage. Although very upset about the dispute with the trader, Mr Parkins was clear and consistent in his evidence that he had told Mr Bates about his concerns a couple of weeks after purchase. In that regard the tribunal prefers Mr Parkins evidence to that of Mr Bates. It is also possible that Mr Bates may not have recalled Mr Parkins raising this issue – it being much more likely that Mr Parkins has a better recollection of an issue specific to him and his purchase.
[39] Mr Parkins was also open about his driving. He admitted to being provoked into carrying out a “burnout” at the trader’s yard but said that he was not in the habit of that type of driving. Mr Perrin’s evidence is unhelpful in that regard because he could not identify Mr Parkins as the driver of the vehicle that he saw.
[40] The tribunal accepts that evidence and in doing so accepts that this type of driving may have occurred on more than one occasion – but not regularly. This is consistent with the evidence of Mr Kitely and Mr Bates. In that regard, given the car is a performance vehicle, the tribunal is not inclined to conclude there has been “abuse” of the vehicle by the purchaser.
[41] Mr Parkins’ admission is consistent with Mr Chamberlain’s evidence that there had been bluing of the clutch and flywheel – the type of driving he admitted to be likely to be hard on those components. It is also consistent with Mr Chamberlain’s evidence that it would only take a short time for the blueing to go away with ‘regular’ driving.
[42] There is, however, no evidence before the tribunal that Mr Parkins engaged in overly aggressive gear-changes – the trader is in essence inviting the tribunal to conclude that Mr Parkins did so because he had been doing “burnouts”. Both Mr Hayes and Mr Chamberlain said that it was overly aggressive gear changing that would cause the problems with the selector forks and the synchros. Because there is no evidence of Mr Parkins carrying out overly aggressive gear changes and accepting Mr Parkins’ evidence that he raised the problem with Mr Bates within a couple of weeks of purchase, the tribunal concludes that there was a problem with the selector forks and synchros when the car was sold to Mr Parkins.
[43] Applying the test set out in section 7(1) (set out above), the tribunal concludes that a reasonable consumer, purchasing this second-hand car with all its individual characteristics would not regard it as acceptable. In particular the selector forks and synchros were not sufficiently durable.
What are the remedies available to the purchaser?
[44] Section 18 of the Consumer Guarantees Act 1993 sets out the remedies available to the purchaser in respect of a failure in the guarantee of acceptable quality. It provides as follows:
"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."
[45] Mr Parkins is entitled to recover the reasonable costs of repair to the selector forks and the synchros. The total cost of the repairs carried out by Mr Parkins was $3,165.27 however that included repairs additional to the repairs to the selector forks and synchros including replacement of the clutch and flywheel and replacement bearings (which are included in the gearbox overhaul kit). The tribunal’s assessment is that Mr Parkins is entitled to recover the Auto Transmission Ltd repair costs less the cost of the clutch and flywheel, two thirds of the cost of the gearbox overhaul kit (an estimate of the cost of the bearings) and one hour’s labour (to fit the clutch and flywheel). The amount he is entitled to recover is $2,413.75 made up as follows:
1/3rd Gearbox overhaul kit $160.00
2nd synchro cone assembly $215.28
3rd synchro cone assembly $215.28
Selector forks (used) $576.00
Labour: repair gearbox $504.00
Labour: remove/refit gearbox $432.00
Sealant/Cleaners $ 25.00
Gearbox oil $ 18.00
GST $268.20
TOTAL $2,413.75
Orders
DATED at WELLINGTON this 14th day of December 2010
___________________
N Wills
Adjudicator
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