Vaoga v Tagaloa & Sons Limited T/A Five Stars Motors - Reference No. MVD 164/11 (Auckland) [2011] NZMVDT 126 (30 September 2011)

Last Updated: 16 October 2011

Decision No. AK 102 /2011

Reference No. MVD 164/11

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN FAUSAGA VAOGA

Purchaser

AND TAGALOA & SONS LIMITED T/A FIVE STAR MOTORS

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

Mr C H Cornwell, Barrister & Solicitor, Adjudicator
Mr S Gregory, Assessor

HEARING at AUCKLAND on 28 September 2011

APPEARANCES

Mr F Vaoga, the purchase

Mrs E Vaoga, witness for the purchaser
Miss A Vaoga, witness for the purchaser
Mr A Said, mechanic and witness for the purchaser
Mr F Manase, Director representing the trader

DECISION

Background

[1] On 26 May 2011 Mr Vaoga (“the purchaser”) purchased a 2000 Toyota Estima registration number FYL3 (“the vehicle”) from Tagaloa & Sons Limited trading as Five Star Motors (“the trader”) for $14,345. The purchaser seeks to recover the sum of $770.50 for repairs to the vehicle which the purchaser says the trader agreed to pay and storage charges for the vehicle the purchaser has incurred of $15 a day from 17 August to the date the purchaser pays the repair costs and his vehicle is released to him.

[2] The trader, claims it only agreed to pay $379 for the repair of the vehicle and that the repairer’s charges are unreasonable.

[3] Pursuant to clause 10 of Schedule 1 of the Motor Vehicle Sales Act 2003 the Tribunal appointed Mr S Gregory, as expert assessor to assist in the determination of the complaint however the application was determined by the Adjudicator alone. Mr Gregory took the oath required by clause 10(2) of Schedule 1 to that Act.

The facts

[4] The purchaser bought the vehicle for $14,345 from the trader on 26 May 2011 and took delivery of the vehicle two days later. Its odometer at the date of sale was 84,368kms.

[5] Within five days of the date of supply the purchaser’s daughter told the Tribunal she had trouble getting the vehicle to drive properly; the vehicle would stall if the accelerator was not depressed, the vehicle appeared to lack power and the foot brake was heavy to operate. The purchaser’s wife telephoned the trader who asked her to bring the vehicle back so that it could be seen by the trader’s mechanic. Mrs Vaoga says she took the vehicle back to the trader but its mechanic was unable to find the fault and claimed there was nothing wrong with the vehicle.

[6] A few days later the same fault occurred again when the vehicle was being driven by the purchaser’s daughter. The purchaser and Mrs Vaoga returned the vehicle to the trader but Mr Tagaloa told them the trader’s mechanic was too busy to fix the vehicle and suggested the purchaser take the vehicle to their mechanic to have it fixed. Mrs Vaoga says she gave Mr Tagaloa the number of her mechanic (Cartronics) and asked Mr Tagaloa to talk to her mechanic. In Mrs Vaoga’s presence Mr Tagaloa telephoned Cartronics and she overheard Mr Tagaloa asking her mechanic Mr A Said how much it would cost to have the fault repaired. She says she overheard Mr Said tell Mr Tagaloa that the cost of the part would be about $300 plus his labour and GST which Mr Tagaloa accepted and agreed to pay. Mr Tagaloa delivered the vehicle to Cartronics to have the work done.

[7] Mr Said the mechanic and owner of Cartronics gave evidence to the Tribunal that he had orally quoted Mr Tagaloa about $300 plus labour and GST to fix the vehicle and that Mr Tagaloa had accepted that quotation and delivered the vehicle to him to repair. His repair costs comprised $345 for a second hand brake booster and his labour costs of 5 hours at $65 per hour and 2 litres of fluids of $325, GST on $670 of $100.50; a total of $$770.50. Mr Said gave evidence that he had given the purchaser an invoice dated 15 June 2011 for that amount when he had completed the work and was satisfied the fault had not reoccurred.

[8] The purchaser delivered Cartronics’ invoice for $770.50 to the trader on 16 June and handed it to Mr Tagaloa. The trader failed to pay the invoice. On 15 July the purchaser took a letter to the trader requesting payment of the Cartronics’ account but the trader made no effort to contact the purchaser or make payment of the account.

[9] The purchaser filed his application with the Tribunal on 3 August. On 13 August the purchaser received a telephone call from Mr Tagaloa promising to pay the account immediately but saying that he still wanted to go to the Tribunal. The trader has still not paid the account.

[10] On 16 August Cartronics asked the purchaser to deliver the vehicle to them and hand them the keys to hold the vehicle until their account of $770.50 is paid. The purchaser complied with this request. Mr Said says that he is charging the purchaser storage charges of $15 a night from 17 August until the account is paid and the vehicle will then be released to the purchaser. Cartronics has not invoiced the purchaser for its storage charges.

[11] Mr Tagaloa for the trader says he believes Mr Said quoted him $379 to repair the fault with the vehicle and he considers the charge of $770.50 to be excessive.

The issues before the Tribunal

[12] Having considered the facts, the Tribunal concludes that the following issues require consideration:
[a] Whether the vehicle was of acceptable quality at the date of sale?
[b] If not, did the trader agree to remedy the defect within a reasonable time?
[c] If so what is the reasonable cost of the repairs?
[d] Is the purchaser entitled to recover his storage costs?

Legal Principles

The Consumer Guarantees Act 1993 (“the Act”)

[13] Section 6 of the Act imposes on a supplier (in this case the trader) "a guarantee that the goods are of acceptable quality." Section 2 of the Act defines "goods" as including “vehicles”.

[14] 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.”

[15] 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 has exercised his/her right to reject the vehicle within a reasonable time.

Issue (a): Was the vehicle of acceptable quality?
[16] 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.

[17] The vehicle sold to the purchaser on 26 May 2011 for $14,345 is an 11 year old Toyota Estima with 84,368kms on its odometer. Within a week of being supplied the vehicle’s brake booster developed a fault and required replacement at a cost of $770.50. The Tribunal does not consider that this vehicle was either as either free from minor faults or as durable as a reasonable purchaser would regard as acceptable. Accordingly the Tribunal finds the vehicle did not comply with the guarantee of acceptable quality in s6 of the Act.

Issue (b): Did the trader agree to remedy the defect within a reasonable time?

[18] The Tribunal finds on the evidence of Mrs Vaoga and Mr Said that the trader agreed to have the defect remedied by having the work done by the purchaser’s repairer, Cartronics. It also finds that Mr Tagaloa delivered the vehicle to Cartronics so the work could be done.

Issue (c) : What is the reasonable cost of the repairs?

[19] The Tribunal’s Assessor has advised the Tribunal that a reasonable cost for a second hand brake booster for a Toyota Estima is between $350 and $400 and a new brake booster is about $750. The Assessor also considers the charge made by Cartronics for 5 hours labour at $65 per hour to diagnose and rectify the fault is reasonable. Accordingly the Tribunal finds the charge made by Cartronics of $770.50 inclusive of GST to be fair and reasonable and will order the trader to pay it immediately

Issue (d) Is the purchaser entitled to recover his storage costs?

[20] Section 18(4) of the Act provides that a consumer may obtain from a supplier (here the trader) damages for any loss or damage to the consumer resulting from the failure which was reasonably foreseeable as liable to result from the failure. In this application the purchaser agreed to return the vehicle to the repairer, Cartronics, as security for the unpaid repair costs and has not had the use of the vehicle since 17 August. Mr Said told the Tribunal that his terms of trade provide for a storage charge of $15 a night. The Tribunal considers that storage charges are probably reasonably foreseeable where a vehicle has to be repaired and stored as a consequence of a lengthy repair being undertaken but are probably not reasonably foreseeable where, as here, the customer incurs storage charges when he voluntarily returns his vehicle to the repairer to be held as security for an unpaid account. In any event Cartronics have not rendered an account for storage charges to the purchaser so there is no proof the purchaser has or will incur storage charges.

Costs

[21] The Tribunal has limited power to make an award of costs to or against a party to any proceedings under clause 14(1) of Schedule 1 to the Motor Vehicle Sales Act 2003. The relevant provision is as follows:

“14 Disputes Tribunal may award costs in certain circumstances

(1) The Disputes Tribunal may award costs to or against a party to any proceedings before it only if,-

• (a) in the opinion of the Disputes Tribunal,-
  

(i) the proceedings are frivolous or vexatious or ought not to have been brought:

(ii) the matter ought reasonably to have been settled before proceeding to a hearing but that the party against whom an award of costs is to be made refused, without reasonable excuse, to take part in the discussions referred to in clause 5(1)(b) or acted in a contemptuous or improper manner during those discussions; or

(b) any party, after receiving notice of a hearing, fails to attend the hearing without good cause.
(2) In any case to which subclause (1) applies, the Disputes Tribunal may order a party to pay---

• (a) to the Crown all, or any part of either or both of the following:
  • (i) the reasonable costs of the Disputes Tribunal hearing:
  • (ii) the fees and expenses of any witness that have been paid or are payable by the Crown; or

(b) to another party all or any part of the reasonable costs of that other party in connection with the proceedings.”

[22] The Tribunal accepts the evidence of the purchaser that the trader did not make any effort to contact the purchaser after his application to the Tribunal was filed to take part in the discussions referred to in clause 5(1)(b) of the Schedule to the Motor Vehicle Sales Act 2003 but merely made an empty promise to pay the repairers account; a promise the trader has not fulfilled. The Tribunal considers that the matter ought to have been settled by the trader before proceeding to a hearing. It should not have been necessary for the hearing to take place. It will therefore order the trader to pay the reasonable costs of the Tribunal’s hearing, including the costs of a Samoan interpreter of $750.

Orders

1. That the trader shall pay the purchaser the sum of $770.50 by Bank Cheque immediately.

2. The trader is to pay the Tribunal’s reasonable hearing costs of $750 to the Auckland District Court, Corner Albert and Kingston Streets, Auckland within 14 days of the date of this order.

DATED at Auckland this 30th September 2011

C.H.Cornwell
Adjudicator