Sumby v Aschenbrenner T/A Good Value Cars - Reference No. MVD 163/11 (Wellington) [2011] NZMVDT 151 (1 November 2011)

Last Updated: 16 December 2011

Decision No. WN 24 /2011

Reference No. MVD 163/11

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN KIM SUMBY

Purchaser

AND MARTIN ASCHENBRENNER trading as GOOD VALUE CARS

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

N J Wills - Barrister, Adjudicator
S Gregory - Assessor

HEARING at Auckland on 7 September 2011

APPEARANCES

Kim Sumby, purchaser
Martin Aschenbrenner, trader
Isaac Wulf, Manager, for the trader

DECISION

Background

[1] On 17 November 2010 Kim Sumby (the purchaser) purchased a Mitsubishi L300 Van, registration YU9324 (the van) for $5,999 from Martin Aschenbrenner (the trader). Mr Sumby has had problems with the van’s engine and says that the state of the van was mis-represented to him. He now wants to reject the van and obtain a refund of the purchase price, reimbursement for various costs incurred trying to fix the van and consequential losses – totalling around $13,000.

[2] The trader says he is prepared to take the van back and refund the purchase price but is not prepared to reimburse the purchaser for other costs incurred.

[3] Prior to the commencement of the hearing the tribunal appointed Mr Gregory as the tribunal’s assessor and he 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 Gregory assisted the adjudicator but the application was determined by the adjudicator alone.

Summary

[4] Mr Sumby’s application is dismissed. The application is dismissed because:

• [a] The tribunal does not find Mr Sumby to be a credible witness;
• [b] Mr Sumby has not established the condition of the van to the requisite standard of proof (the balance of probabilities);
• [c] In the absence of suitable evidence as to the condition of the van there is no factual foundation to base any claim for misleading conduct or a failure in the guarantee of acceptable quality.
  

[5] The tribunal’s findings of fact and reasoning are set out below.

Facts

[6] In mid-November 2010 Mr Sumby saw the van advertised on Trade Me. He contacted the trader (who he knew as Martin Matinka) by phone who told him that the van was a “good runner”, did not use excessive oil, was in a tidy condition, had been recently serviced and that the cam belt had been recently replaced. Mr Sumby told the tribunal that the trader gave him assurances that the van met those criteria. Mr Sumby agreed to pay $5,999 (via Trade Me) for the car and told the trader that he needed to organise finance and then he would travel to Auckland to collect the car. Mr Sumby borrowed $7,000 (listed in the Motor Trade Finance agreement dated 16 November 2010 “the MTF agreement” as the value of the security), although it was not made clear at the hearing what the additional $1,000 was for.

[7] On 17 November 2010 Mr Sumby flew from Nelson (where he lives and works) to Auckland and collected the van. When he collected the van the odometer reading was 243,329 kilometres. Mr Sumby drove the van back to Nelson. He told the tribunal that the van overheated when he got as far as Taupo. Mr Sumby added water to the radiator and about a litre of oil to the engine. Mr Sumby concluded from the dark colour of the oil in the engine that contrary to what he had been told, the van had not been serviced. Mr Sumby said that when he got to Palmerston North he had to top up the radiator and add more oil to the engine. During the trip back to Nelson Mr Sumby also noticed an engine noise he later discovered to be the hydraulic lifters.

[8] Mr Sumby told the tribunal that when he got back to Nelson he had some mechanical work carried out on the van. Mr Sumby was personally involved in some of the mechanical work that was carried out on the van with assistance from a mechanically minded (if not qualified) friend who had connections with a firm of mechanics Richmond VTS 2003 Ltd (Richmond VTS). Mr Sumby told the tribunal that the first thing he did was to service the van. The service included an engine flush. Various valve lifter treatments were applied but these treatments did not reduce the oil consumption or engine noise. Mr Sumby did not produce an invoice for this work.

[9] Mr Sumby provided the tribunal with a written statement from Barry Andrews an automotive engineer who owns Richmond VTS (it was not clarified at the hearing whether or not it was Mr Andrews who was Mr Sumby’s mechanically minded friend). In his written statement Mr Andrews confirmed that multiple services had been carried out on the van but Mr Andrews did not provide any details as to the cost of any of the work carried out on the car or how much Mr Sumby had paid to have the work carried out.

[10] Mr Andrews’ statement said that in January 2011 Richmond VTS carried out a compression test that gave good results indicating that the compression rings were in good condition. A leak-down test was also performed. This indicated that the exhaust valves were not closing properly. Mr Sumby decided to remove the head, replace the valve stem seals and valve lifters and do a valve grind. Richmond VTS estimated the cost for this work at $1,000 to $1,500. Mr Sumby did not initially contact the trader about this work – he told the tribunal that he considered having to spend $1,000 to $1,500 as being a reasonable amount to spend on maintenance of the van given the age and mileage of the van.

The 14 January 2011 tax invoice

[11] Mr Sumby produced in evidence a Richmond VTS tax invoice dated 14 January 2011 for $2,576.85 (numbered 15032 – 1). The invoice records that it was printed out on 14 January 2011 at 5.05pm. This invoice does not set out in detail the work the invoice relates to but the “Description” field at the top of the invoice contains “Head Set” and the components charged for include a head set, head bolt, lifters, “hand repair” (which is presumably “head repair” mis-spelled), oil, oil filter, sundries, freight, Wynns coolant treatment, anti-freeze and includes ten hours labour. At the hearing Mr Sumby told the tribunal that this document was in fact a quote for repairs and not an invoice.

[12] In his statement Mr Andrews said that he received a re-conditioner report on 14th January 2011 (but did not say whether the report was written or verbal). He said that the report indicated that:

“The engine had at some stage broken a cam belt, all valve guides were severely damaged, the head needed to be planed and crack tested, there were valve marks on the inlet side of all the pistons, the cam belt cover was smashed, the balance shaft belt pulley backing plate was smashed damaging the belt, the tensioner was not done up, one of the valve lifters had been installed the wrong way up, multiple bolts were missing, all spark plug lead holders were broken and the radiator was 80% blocked. Work which had been carried out on the engine was very rough.”

[13] Mr Sumby told the tribunal that he had provided Mr Aschenbrenner with the 14 January 2011 tax invoice (that he described as a quote) and that he told Mr Aschenbrenner about the other problems that had been diagnosed and that the repair would cost significantly more than indicated on the 14 January 2011 invoice. They agreed to discuss where the contributions would fall after the final price of repairs was determined.

[14] The work was carried out at Richmond VTS 2003 Ltd (Richmond VTS) in Nelson. In his statement Mr Andrews said that the work done was to re-condition and replace the head and renew the cam belt, tensioner and water pump and clean the radiator.

[15] Mr Sumby’s evidence was that the account for the work totalled $3,071.67 (as set out in a Richmond VTS job-card dated 18 January 2011). The trader agreed to pay for half of that amount less GST ($1,335) and has paid Mr Sumby that amount. Mr Sumby told the tribunal that he only asked the trader to contribute half of the account because part of the costs were associated with taking of the head off the engine – which he had already taken off in order to carry out the maintenance he had originally intended to do on the van. Mr Sumby now wishes to be reimbursed for the remainder of the amount he paid.

[16] Mr Sumby told the tribunal that after that repair was completed, the van was still using oil and smoking. Mr Sumby contacted the trader who agreed to supply a replacement engine for the van. The agreement reached between Mr Sumby and the trader was that the trader would source an engine and Mr Sumby would pay to have the engine installed. Mr Aschenbrenner told the tribunal that he sourced a second-hand engine for $800 and had that sent down to Mr Sumby.

[17] The engine was installed by Richmond VTS in March 2011. Mr Sumby produced a copy invoice from Richmond VTS dated 29 March 2011 and printed on 23 May 2011 for $1,421.86. This invoice included an amount in the body of the invoice for labour but unlike all of the other Richmond VTS invoices the labour component was not set out as a separate total but was included under the sub-total for “Parts”. Mr Sumby now wishes to recover the cost of this installation from the trader.

[18] Mr Sumby’s evidence was that the replacement engine used as much oil and was just as smoky and noisy as the previous engine. In his written statement Mr Andrews says that “As time has gone by it has become apparent that the engine that was supplied was no better than the original engine.” Mr Andrews did not provide any further detail of the problems with the engine.

[19] Mr Sumby contacted Mr Aschenbrenner again. They discussed the prospect of getting the original engine reconditioned. Mr Aschenbrenner suggested that Mr Sumby obtain a quote for that work to be done. Mr Sumby produced a job-card from Richmond VTS dated 1 June 2011. The job-card contained a quote for a short block rebuild at a cost of $2,311.45. Handwritten at the bottom of the job-card was “+ 1200 to remove and install”. Mr Sumby said that he paid $149.50 to have the car disassembled and assessed and produced Richmond VTS tax invoice dated June 23 2011 for that amount.

[20] Mr Sumby sent the quote to Mr Aschenbrenner but at this point negotiations between the parties broke down. Mr Sumby filed this claim on 26 July 2011. At the hearing Mr Sumby claimed the following amounts:

Purchase price $5,999.00

Air fares (to collect vehicle) 185.00

Loan insurance (under credit contract) 496.58

Credit contract fees 445.00

Bluebridge ferry (to transport van to Nelson) 158.00

Fuel (to transport van to Nelson) 200.00

Van alarm 311.99

Engine work (18 Jan job-card) 3,071.67

Engine work (29 March invoice) 1,421.86

Time wasted @ $25 per hour 1,000.00

Disassemble old engine and assess (June 23 invoice) 149.50

Engine work (May 31 and July 28 invoices) 351.33

Legal fees so far 230.00

Sub-total 14,019.93

Less trader’s payment 1,335.00

Total $12,684.93

[21] Mr Sumby acknowledged that the $1,000 claim for his time was an estimate. He said that the $351.33 engine work (the May 31 and July 28 2011 invoices) was for spark plugs, welding, a warrant of fitness inspection and oil.

[22] Mr Aschenbrenner gave evidence for the trader. In essence his evidence was that the trader had attempted to try and sort out the various problems with the van. The trader had paid a considerable contribution to the first repair and had then supplied a second-hand engine.

[23] Mr Aschenbrenner told the tribunal that he first heard about the problems with the van in January 2011 but that by the time he heard about the problems the van’s engine had been stripped. Mr Aschenbrenner asked about the cost of repairs and said that he could supply parts but was told by Mr Sumby that it was too late, the parts had been ordered and that he was getting “mates rates” on the repair. Mr Aschenbrenner asked for a copy of the invoice and was provided with the January 12 2011 invoice. He offered to pay half of the invoice but was told later that there were additional costs. He then received the 18 January 2011 job-card and on the basis of that agreed to pay (and did pay) $1,335.

[24] Mr Aschenbrenner told the tribunal that he was happy to pay for the additional costs because he wanted the van fixed properly and in good condition for the purchaser.

[25] About four weeks later Mr Aschenbrenner received another call from Mr Sumby about the van. He said that Mr Sumby told him that the smoking problem was still not fixed – that there was a problem with the bottom half of the engine so it was agreed that the engine would be replaced with the trader supplying the engine and Mr Sumby meeting the costs of having the engine fitted. The engine was supplied on 19 March 2011. Some time after this Mr Aschenbrenner received another phone call from Mr Sumby advising that the engine was no good. Mr Aschenbrenner said that Mr Sumby wanted to be paid $12,000 or another vehicle or the old engine reconditioned.

[26] Mr Aschenbrenner said that he asked Mr Sumby for copies of receipts for all the work carried out on the van – his idea being that he could go to the Automobile Association for a second opinion. He told the tribunal that he didn’t receive this from Mr Sumby – he had only received the 14 January 2011 invoice, the 18 January 2011 job-card and the 1 June 2011 quote.

[27] Mr Aschenbrenner told the tribunal that he made some enquiries and discovered that Mr Sumby had driven around 7,000 kilometres in the van since he bought it and that it had passed a warrant of fitness inspection on 12 May 2011. He submitted that if the car was smoking excessively it would not have passed the warrant of fitness inspection. Mr Aschenbrenner said that the trader had taken the steps that it did to assist Mr Sumby not necessarily because it was legally obliged to do so but because the trader wanted to assist Mr Sumby and have a happy customer.

The 18 January 2011 job-card

[28] In support of his claim Mr Sumby produced a job-card from Richmond VTS dated January 18 2011 with costs for the work carried out totalling $3,071.67 (numbered 15071). The description field contained the reference “Parts Only” but the job-card included ten hours labour (the same amount that was recorded on the 14 January 2011 invoice).

[29] The list of parts on the job-card included some of those set out in the 14 January 2011 tax invoice - the oil, oil filter, lifters, sundries and labour were for identical amounts. Peculiarly the freight was substantially less (down from $22 to $8.50) and the head repair/outwork increased from $640 to $716.09 but the parts for the head were charged at a lesser amount. The 14 January 2011 invoice recorded a total of $404 (head set and head bolt) whereas the 18 January 2011 job-card recorded a total of $320 (head gasket set and head bolt set). The 18 January 2011 job-card included the following additional items – “ht lead set”, tensioner bearing, timing belt, water-pump, brake clean, exhaust gasket, plastic weld timing cover and fan belt. A couple of items - the Wynns coolant treatment and anti-freeze do not appear at all on the January 18 2011 job-card.

[30] At the hearing Mr Sumby was asked if he had an invoice for the work set out in the job-card. He told the tribunal that he had paid Richmond VTS on the basis of the job card by direct credit but agreed to send the original invoice to the tribunal after the hearing.

The 18 January 2011 tax invoice

[31] After the hearing the tribunal received a photo-copy of a tax invoice dated January 18 2011 (numbered 15071) for $3.071.57 from Mr Sumby. (The invoice was for nine cents less than the job-card - the amount for “outwork h&m development” differed slightly between the two documents.)

[32] Having reviewed other examples of invoice, copy invoice and job-sheet documentation from Richmond VTS provided by Mr Sumby in support of his claims, the tribunal had a number of concerns about the validity of the January 18 invoice.

The 26 September 2011 copy invoice

[33] The tribunal’s initial attempt to allay these concerns was to ask Mr Sumby to provide the original invoice document. That was not available but Mr Sumby then provided a copy invoice dated 26 September 2011 for the same amount but with a different reference number – 16278 – 1. The body of the invoice otherwise differed in small ways to the 18 January 2011 invoice – for example, details of a discount were recorded in the 26 September copy invoice that weren’t recorded in the 18 January invoice (although the total amount was the same).

[34] The tribunal set out in some detail the reasons for those concerns in a minute that was sent to the parties:

“[5] The tribunal has been provided with a number of documents from Richmond VTS and so has examples of the Richmond VTS format for a job-card, tax invoice and copy invoice. Mr Gregory, the tribunal’s assessor is familiar with the workshop management system that produces this suite of documents. He notes the following:

[a] Once a tax invoice is generated the system does not enable the date of that tax invoice to be changed. A tax invoice contains a reference to the job number in the header that identifies the document as a job-card and also that header also contains the date that the job-card was created. A tax invoice does not contain details of payment in the footer because it is generated for the purposes of obtaining payment.
[b] If a “copy invoice” is generated, the system produces a document headed “copy invoice” and the date on that document is the same as the original tax invoice. The date of printing is identified at the bottom of the page in a footer in a box that contains the job number, the date and time of printing, and if the invoice has been paid at the time of printing, the fact that the invoice has been paid.
[c] A job-card is not a tax invoice and that fact is identified in the footer of the job-card. The footer also identifies the date and time of printing.

[6] Given the tribunal’s understanding of the workshop management system, the tribunal has a number of concerns about the January 18 tax invoice. In particular:

[a] The tribunal has not had an opportunity to see the original tax invoice;

[b] The header of the document appears to be a copy of a job-card header with the heading “job-card” changed to “tax invoice”. The tribunal says this because the document provided has the date indented which is characteristic to the job-card format. The other tax invoices provided have the date in the footer in line with the customer’s name and address below (rather then indented from the address).

[c] The tax invoice is missing the “Description” field in the right hand box below the header.

[d] The other tax invoice provided to the tribunal at the hearing contains the job number in the footer. This one does not.
[e] This tax invoice notes “PAID EFTPOS” in the footer. No other tax invoice sets out payment details which makes common sense given that a tax invoice is generated for the purpose of obtaining payment so is by definition before payment has been made.
[f] The print date of the invoice is 8 September 2011. This seems more consistent with a copy invoice.

[7] When Mr Sumby was subsequently asked to provide the original tax invoice but was unable to obtain this from Richmond VTS. He obtained instead a “copy invoice” dated September 26 2011 job number 16278 - 1 (the September 26 copy invoice). The tribunal has a number of concerns about this document:

[a] A “copy invoice” document generally has the same date as the original invoice which in this case the tribunal has been told is January 18 2011.

[b] This copy invoice has a different job number to the January 18 tax invoice (which it is ostensibly a copy of).

[c] This document contains slightly different details including an odometer reading that is not in the January 18 tax invoice, capital “T”s for Tensioner bearing and Timing belt (again, not in the January 18 tax invoice) and a discount of 70 cents for freight that was not identified in the January 18 tax invoice (although the amount was the same).

[d] The September 26 copy invoice does not identify that this account has been paid although it was printed at a later date than the January 18 tax invoice which says it has been paid.

[8] The tribunal has concerns that neither of these documents are what they purport to be and invites the purchaser to provide an explanation for the identified concerns. The purchaser is invited to provide a written explanation to the tribunal (which will be provided to the trader) in the first instance and the tribunal will decide what steps will be taken once that has been received.”

[35] Mr Sumby responded to some of those concerns by email to the tribunal dated 10 October 2011:

“At the time it was requested I supply a copy of the Tax invoice the office manager at RVTS was on annual leave and no one else had a decent enough understanding of how to get a copy of the tax invoice. So a new one was produced and the number 15071 attached and copied.

This was in no way done to deceive the tribuneral [sic] but in an effort to supply documentation as requested with the original numbers. the second invoice was subsequently deleted so as not to interfere with the accounts.

The invoice supplied 16278 – 1 was supplied as instructed by the Rose-Marie David after 2 phone calls I had with her. This is an official tax invoice and will be used by me for tax purposes as the original 15071 job card was never entered as a tax invoice so can not be supplied as evidence to the tribuneral [sic].

If this is not satisfactory I would ask that it be removed from evidence and deducted from my claim. I apologise that this has happened but it is out of my control I was certain that all my documentation was in order before the hearing and apologise that this was not the case. it does not however change the fact that my costs are the same but will understand it if is not included.”

[36] The tribunal then asked Mr Sumby to provide proof of payment by providing the tribunal with copies of bank statements for all Richmond VTS invoices that he wanted to be reimbursed for. Mr Sumby was asked to identify which payments related to the various invoices Mr Sumby had provided to the tribunal.

[37] Mr Sumby responded by providing a copy of a business account statement in the name of Jask Holdings Ltd showing a branch teller transaction withdrawal of $850 on 18 February 2011. He also provided a Globalplus credit card statement for a credit card in Mr Sumby’s name that identified a payment to Richmond VTS of $2,185.75 on 25 January 2011. Mr Sumby advised that these payments in addition to some cash he had in his wallet made up the payment of “what i believed to be the original tax invoice 15071 which has since been replaced with 16278-1”. Mr Sumby did not provide details of any other payments to Richmond VTS.

[38] This evidence about payment was different to his evidence at the tribunal hearing. At the hearing Mr Sumby was asked by Mr Gregory how he had paid for this repair and he said that he had paid for it by “direct credit”.

The issues before the Tribunal

[39] Mr Sumby’s possible causes of action are under the Fair Trading Act 1986 (misleading conduct) and a possible failure in the guarantee of acceptable quality under the Consumer Guarantees Act 1993. Fundamental to either of these causes of action is the condition of the van when it was sold to Mr Sumby.

The condition of the van at the time of sale

[40] Given the course of correspondence and discussions between the trader and the purchaser it seems likely that there have been some mechanical problems with the van however for the reasons set out below the tribunal is not in a position to reach any firm conclusion as to the extent or nature of those problems.

[41] Having heard from Mr Sumby, both in person and in writing following the conclusion of the tribunal’s hearing, the tribunal has very little confidence in Mr Sumby’s evidence.

[42] Mr Sumby has by his own admission been involved in manufacturing evidence in support of his claim – he has admitted that the 18 January 2011 invoice provided to the tribunal after the hearing was in fact a “constructed” document. He had also claimed reimbursement for a number of other invoices from Richmond VTS that he told the tribunal he had paid but when he was given the opportunity to prove that he has paid those invoices has either chosen not to or has not been able to.

[43] He has contradicted himself in his evidence. He told the tribunal that he had paid for the initial repairs by direct credit at the hearing and later said that he had paid partly by credit card and partly in cash.

[44] There is no other credible independent evidence about the condition of the van. Because the trader is based in Auckland and Mr Sumby resides in Nelson, the trader has not inspected the van. Mr Aschenbrenner has accepted Mr Sumby’s complaints about the van up until the most recent complaint without requiring any independent inspection of the van.

[45] Mr Sumby has supplied a written statement from Mr Barry Andrews of Richmond VTS. Although such a written statement is not normally admissible in a court of law (because it is not provided directly to the tribunal from Mr Andrews in person), the tribunal has a discretion to accept such evidence. In this case, the tribunal is not inclined to exercise that discretion to accept Mr Andrews’ evidence in circumstances where the written statement is produced by a witness the tribunal considers has very little credibility.

Conclusion

[46] For the reasons set out above Mr Sumby has not established the condition of the van to the required standard of proof (the balance of probabilities). There is no established factual foundation to support any allegation of misleading conduct or a failure in the guarantee of acceptable quality and the tribunal has no option but to dismiss his claim.

[47] The tribunal has jurisdiction to award costs against a party in a case that it considers ought not to have been brought. This is such a case. Whether or not Mr Sumby had a valid case, the case presented to the tribunal (including the manufactured invoice) is in the tribunal’s opinion a case that ought not to have been brought. In those circumstances the tribunal considers it appropriate to make an award of costs against Mr Sumby.

Orders

1. The purchaser’s application is dismissed.
2. The purchaser will pay costs of $500.
   

DATED at WELLINGTON this 1st day of November 2011

___________________

N Wills
Adjudicator