Blume v Zenith Global Limited - Reference No. MVD 147/2011 (Auckland) [2011] NZMVDT 111 (16 August 2011)

Last Updated: 18 September 2011

Decision No. AK 91 /2011

Reference No. MVD 147/2011

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN GORDON BLUME

Purchaser

AND ZENITH GLOBAL LIMITED

Trader

BEFORE THE AUCKLAND MOTOR VEHICLE DISPUTES TRIBUNAL

Mr C H Cornwell, Barrister & Solicitor, Adjudicator
Mr G Middleton, Assessor

HEARING at Auckland on 10 August 2011

APPEARANCES
Mr G Blume for the purchaser
Mrs B Blume, witness for the purchaser
Mr V Skamakhin, director for the trader

DECISION

Background

[1] On 18 November 2009 Mr Blume (“the purchaser”) purchased a 2002 Saab vehicle registration number FEE904 (“the vehicle”) for $11,295 (including $295 on road costs) from Zenith Global Limited (“the trader”). The purchaser financed the purchase price by a collateral loan from Marac Finance Ltd. The purchaser has applied to recover the sum of $11,907.70 from the trader being the estimated cost of repairing the vehicle’s transmission of $9,021.75 and other repair costs he has incurred because he says the vehicle was not of acceptable quality.

[2] The trader’s position is that the purchaser has not used or serviced the vehicle properly and that almost 2 years have passed since he purchased the vehicle and accordingly the trader says he is not entitled to the repair costs claimed.
[3] Prior to the commencement of the Tribunal’s inquiry, the Tribunal appointed Mr Middleton 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 Middleton assisted the adjudicator but the application was determined by the adjudicator alone.

Facts

[4] The purchaser bought the vehicle from the trader on 18 November 2009 for $11,295. Its odometer was then 124,999kms. The purchaser says that the vehicle’s transmission was not faulty at the time of sale.

[5] The vehicle’s radiator hose burst on 30 December 2009 after the vehicle had travelled 3,944kms. The purchaser says he tried to notify the trader but could not make contact with the trader and the purchaser had the radiator hose replaced at a cost of $118.80. He asked the trader to reimburse him for the cost of this fault but the trader after initially promising that it would order in a replacement hose from Singapore failed to supply the hose to him or reimburse the purchaser $118.80.

[6] The purchaser spent $855.60 in servicing the vehicle and replacing the front brake pads on 20 April 2010 after travelling 10,536kms. He also spent $3,827 on 21 October 2010 after the vehicle had travelled 17,292kms in repairing an oil leak from the rocker cover gasket, replacing an engine mount, attending to a coolant leak, and having two tyres fitted. The purchaser did not require the trader to remedy the faults with the oil leak or coolant leak before he had the vehicle repaired. The purchaser says that there were no concerns about the transmission at that time.

[7] In April 2011 the purchaser says he first experienced a problem with the vehicle’s transmission. The vehicle went into “limp home” mode and the engine check lamp was illuminated but the following morning it started and its transmission performed satisfactorily. However on 15 May when the vehicle was being driven by Mrs Blume the vehicle’s engine warning light came on and the transmission failed on the motorway. The vehicle had to be towed to the purchaser’s home. The purchaser has been quoted $9,021.75 by Mt Eden Vehicle Care Centre Ltd to have the transmission rebuilt. The vehicle’s odometer was 148,778kms at that time showing the purchaser has travelled 23,779kms in the vehicle since he purchased it.

[8] The trader, represented by its director, Mr Skamakhin, was unable to offer any reason why the trader had failed to reimburse the purchaser with the cost of the radiator hose. He says he asked his office in Singapore to source the radiator hose and send it to him but he has not provided the radiator hose to the purchaser or reimbursed the purchaser for the cost of $118.80 the purchaser incurred in having it replaced.

[9] Mr Skamakhin says that under the Consumer Guarantees Act a consumer may within a reasonable time go back to the supplier of a vehicle to have it fixed however almost 2 years have passed since the trader sold the vehicle to the purchaser and he considers that is too long a period for the purchaser to expect the trader to be responsible for the transmission. Mr Skamakhin also says he believes the purchaser misused the vehicle by inserting a wire into the vehicle’s electronic diagnostic plug, something which he says the purchaser told him he had done, but which the purchaser strongly denies doing.

Issues

[10] The facts raise the following issues:
[a] Whether the vehicle was of acceptable quality at the time of sale in terms of the guarantee in s6 of the Consumer Guarantees Act 1993?
[b] If not, whether the purchaser required the trader to remedy any faults and gave the trader a reasonable time within which to do so?
[c] If so, whether the purchaser is entitled to recover his repair costs from the trader?

The Consumer Guarantees Act 1993 (“the Act”)

[11] 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.”

[12] The expression "acceptable quality" is defined in s 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.”

[13] The guarantee of acceptable quality is in three parts. A set of quality elements set out in s. 7(1)(a) to (e), a reasonable consumer test which applies a consumer’s objective evaluation of those quality elements and a set of factors in s.7(1)( f) to (j) which are to be taken into account by the reasonable consumer to modify his or her assessment of the quality of the goods.

[14] 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 s19 of the Act. If the failure to comply with the guarantee of acceptable quality was of a “substantial character” within the meaning of s21, or if the faults cannot be remedied, the Tribunal is directed to ask whether the purchaser exercised his/her right to reject the vehicle within a reasonable time.
Issue (a): Whether the vehicle was of acceptable quality at the time of sale in terms of the guarantee in s6 of the Act?

[15] The vehicle supplied to the purchaser in November 2009 was then a 7 year old Singaporean imported Saab which had travelled 124,999kms and was sold for $11,295. Within 5 weeks of the date of sale a heater hose burst which the Tribunal considers is something that a reasonable purchaser might expect to happen at any time in a vehicle of this age and high mileage. The purchaser had the hose replaced at a cost of $118.80 and sought to recover the cost from the trader, without success.

[16] The other faults with the vehicle experienced by the purchaser in the 20 month period he has owned and used the vehicle to travel some 23,779kms such as the oil and coolant leaks are, apart from the transmission problem, service/maintenance items which would be expected by a reasonable purchaser to occur in a vehicle of this age and mileage.

[17] In mid- May 2011 after the purchaser had driven 23,779kms in the vehicle over a 20 month period before its transmission failed. The transmission now requires rebuilding at a cost of $9,021.75. There was no evidence that the vehicle’s transmission was faulty at the time of sale or at any time preceding the fault occurring. The Tribunal basis this finding on the following: first, there are no references regarding transmission performance issues recorded on any of the repair/service invoices. Second, the purchaser stated that the transmission did not present any problems preceding the failure in May 2011 and third, there are no records of any radiator/transmission-cooler cross contamination issues (which can lead to transmission failure) noted during the time the purchaser has owned the vehicle. Regrettably, it is neither unusual nor an indication of a lack of durability for a transmission in a second hand imported European car to fail after 9 years and 148,778kms. Accordingly the Tribunal does not think the vehicle in this application failed to comply with the guarantee of acceptable quality because it does not think that a reasonable purchaser of such a vehicle would regard it as unacceptable for the transmission to fail after 20 months and 23,779kms of use. The purchaser’s application to reject the vehicle must therefore be dismissed. The Tribunal notes that there was no evidence provided by Mr Skamakhin to support his claim that the purchaser may have caused the transmission to fail by putting a wire in the vehicle’s electronic diagnostic access plug and the Tribunal, on the advice of its Assessor, rejects that suggestion as technically unfounded nonsense.

Conclusion

[18] The Tribunal, having decided that the vehicle did not fail to comply with the guarantee of acceptable quality, is unable to order the trader to pay the amount claimed by the purchaser. The purchaser’s application must therefore be dismissed.

Order

The purchaser’s application is dismissed.

DATED at Auckland this 16th August 2011

C.H.Cornwell
Adjudicator