Spindler v Brian Corric Motors Limited; Reference No. MVD 37/11 (Auckland) [2011] NZMVDT 36 (25 March 2011)

Last Updated: 22 April 2011

Decision No. AK 33 /2011

Reference No. MVD 37/11

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN SHARYN LEA SPINDLER

Purchaser

AND BRIAN CORRIC MOTORS LIMITED

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at AUCKLAND on 21 March 2011

APPEARANCES

Ms S L Spindler, the purchaser
Mr R J Aldridge, witness for the purchaser
Miss L Stephenson, witness for the purchaser
Mr B P Corric, Director for the trader

DECISION

Background

[1] On 24 August 2010 Ms Spindler (“the purchaser”) purchased a red 2001 Toyota Vitz Clavia registration number FMK976 (“the vehicle”) for $7,120 from Brian Corric Motors Limited (“the trader”). The purchaser seeks an order that the trader pay $874 she has been quoted to rectify a fault with the vehicle’s paintwork. The purchaser says that the vehicle’s paint is affected by “acid rain” and that it does not comply with the guarantee of acceptable quality in the Consumer Guarantees Act 1993.

[2] The trader denies that it is responsible for the cost of repairing the paintwork because it says the vehicle’s paintwork was “faded” when the purchaser bought the vehicle and the trader pointed that out to the purchaser. The trader says the vehicle is in the same condition now as it was at the time of sale.

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

Facts

[4] The purchaser went to the trader’s premises on or about 20 August and inspected the vehicle, test drove it, and says the paint work looked immaculate. She says the trader’s director Mr Corric told her that the paint had faded on the roof and bonnet but as she could not see anything wrong with the paintwork she says she was not concerned.

[5] The purchaser’s partner Mr Aldridge gave evidence that he had VTNZ do a pre purchase inspection of the vehicle on 23 August 2010 and the report’s general comments state:
“Vehicle in very good condition for age.
Minor paint defects.”

[6] The purchaser decided to buy the vehicle and negotiated a price of $7,120 to include registration. She paid a deposit of $620. On 24 August 2010 the purchaser, in the company of two friends went to collect the vehicle and pay the balance of the purchase price. One of the friends present at the time the purchaser collected the vehicle was Miss Stephenson who gave evidence that she did not notice any fault with the vehicle’s paint work and that it looked perfect to her when the purchaser bought the vehicle from the trader.

[7] The purchaser gave evidence that when she first washed the vehicle on 3 October she noticed, whilst drying the vehicle’s exterior, that she could not get small specks off the paint on the vehicle’s bonnet, roof and tailgate. A month or so later, not thinking that there was any problem, she cut and polished the roof and bonnet but says the spots were still present after doing so; the cutting and polishing did not remove them.

[8] On 2 December the purchaser went to see the trader. Mr Corric was not present but one of his colleagues attempted but was unable to remove the spots and suggested the purchaser take the vehicle to the panel repairer next door to the trader. The purchaser took the vehicle to East Coast Bays European 2005 Ltd (“ECBE”) and spoke to one of the technicians there who told her it looked as if the paint work had been affected by “acid rain”.

[9] On 9 December the purchaser telephoned the trader and explained her concerns to Mr Corric and subsequently arranged to take the vehicle in for his inspection on 23 December 2010. Mr Corric told the purchaser that she had bought the vehicle in that condition which he referred to as “paint fade”. On 29 December the purchaser sent the trader an email requesting that it rectify the problem but the trader insisted the vehicle was in the same condition as when the purchaser had bought it. The purchaser made a further attempt on 19 January to have the trader accept responsibility for fixing the vehicle’s paintwork. The purchaser produced colour photographs of the paint work on the vehicle’s bonnet and roof.

[10] On 4 February the purchaser obtained a written estimate from ECBE of $1012 to rectify the problem and paint the vehicle (which includes the top of the bumper of $120 plus GST which the purchaser is not claiming from the trader) and on 15 February 2011 lodged her application with the Tribunal. The work has not yet been done.

[11] Mr Aldridge, a witness for the purchaser said the spotting was slowly getting worse. He agrees that VTNZ referred to “paint defects” in their report but says they did not refer to the paint as faded.

[12] The Tribunal spoke by telephone conference call to Mr John O’Connor of ECBE during the hearing. Mr O’Connor said he thought the spots were caused by acid rain. When asked why if that was the cause the guards and doors were not affected he said that acid rain just affected top surfaces. He was asked if he had noticed a similar fault in Honda Prelude cars but said he had not nor had he seen anything like this before. He says he has not seen paintwork affected by acid rain. He was unable to say if the paint on the vehicle was a re-spray.

[13] Mr Corric says that when he showed the vehicle to the purchaser and Mr Aldridge on 20 August he mentioned that the paint on the bonnet, roof and bumper was fading and then Mr Aldridge took the vehicle away to have VTNZ inspect it. He says nearly 4 months later on 9 December he had a phone call from the purchaser and an email claiming the vehicle had been affected by acid rain. On 23 December he examined the vehicle and told the purchaser that there was no difference in his opinion between the condition of the paint when the vehicle was sold to the purchaser and its then current condition. Mr Corric says he is sorry the purchaser did not notice the paint condition at the time of sale. He says he made an offer of $200 to the purchaser towards the repair costs but she rejected that offer.

[14] In reply to questions from the Assessor Mr Corric says he sees paint fade every now and then from Japanese imports which are affected- generally by UV light and that red coloured cars appear to be more affected than other coloured cars.

[15] Following the hearing the Adjudicator and the Assessor met the parties in Kingston Street, Auckland and examined the vehicle’s paintwork. Light rain was falling at the time of the inspection and the light was poor.

The issues before the Tribunal

[16] Having considered the facts, the Tribunal concludes that the following issues require consideration:

[a] Whether the vehicle complies with the guarantee of acceptable quality in s.6 of the Consumer Guarantees Act 1993?
[b] If not, whether the purchaser has given the trader a reasonable time within which to remedy the fault?
[c] Whether the purchaser is entitled to have the vehicle’s fault remedied elsewhere?

Legal Principles

[17] In terms of s.89 of the Motor Vehicle Sales Act 2003 the Tribunal has jurisdiction to inquire into and determine applications or claims between a Motor Vehicle Trader and the purchaser of a motor vehicle. In doing so, it may apply the provisions of the Sale of Goods Act 1908, the Fair Trading Act 1986 or the Consumer Guarantees Act 1993, as applicable to the circumstances of the case. In this application the Consumer Guarantees Act is applicable.

Issue [a]: Whether the vehicle complied with the guarantee of acceptable quality in s.6 of the Consumer Guarantees Act 1993 (“the Act”)?

[18] 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.”

[19] The expression "acceptable quality" is defined in s 7 of the Act 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.”

[20] In considering whether or not goods meet the guarantee of acceptable quality, the Tribunal must consider the quality elements as set out in s 7(1)(a)to (e) of the Act as modified by the factors set out in s 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 purchasers’ subjective perspective.

[21] 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 s 19 of the Act. If the failure to comply with the guarantee of acceptable quality was of a “substantial character” within the meaning of s 21, or if the faults cannot be remedied, the Tribunal is directed to ask whether the purchaser exercised her right to reject the vehicle within a reasonable time.
[22] The factors to be considered by the Tribunal in deciding if the vehicle is of acceptable quality are that at the time of sale the vehicle was a 9 year old Japanese imported Toyota Vitz Clavia which had travelled 65,611kms and was sold for $7,120. The Tribunal considers that there may have been some fault with the paintwork at the time of sale because the only independent inspection of the vehicle; that of VTNZ on 23 August 2010 notes the vehicle has “minor paint defects.” The purchaser was told by the trader that the vehicle had what the trader’s director Mr Corric insisted was paint “fade” on its bonnet and roof. However the purchaser gave evidence that she was unable to see any evidence of paint fade in the sense of any dulling of the intensity of the paint colour on the bonnet or roof which is what she apparently thought the trader was referring to.

[23] The Tribunal’s Assessor made a careful study of the vehicle’s paintwork and his advice to the Adjudicator- which is accepted- is that the small spots on the paint work are not caused by “acid rain” (which Mr O’Connor of ECBE said he had not previously seen) nor are they “fading” caused by degradation of the paintwork by UV light as the trader claimed but are caused by the vehicle having been resprayed and the marks are the result of poor preparation. The primer coat used is visible under the worst of the spots and was probably not prepared properly, has absorbed water, and is now coming through the clear coat. The Tribunal has therefore decided that the vehicle’s paintwork had a latent paint fault when the vehicle was sold to the purchaser and was probably not of acceptable quality at the time of sale because its paint work is not as durable as a reasonable purchaser would regard as acceptable for a $7,000 9 year old imported vehicle.

[24] Section 7(2) of the Act provides that where any defects are specifically drawn to a consumer’s attention before supply the goods, the goods will not fail to comply with the guarantee of acceptable quality by reason only of those defects. However s 7(3) of the Act provides that the defects that are to be treated as having been specifically drawn to the consumer’s attention are any defects which are disclosed on a written notice displayed with the goods. In this case the trader did not specifically disclose the paint fault on a written notice displayed with the goods and so the trader is unable to avoid its obligation under s 6 of the Act- to supply goods that comply with the guarantee of acceptable quality.

Issue (b): Whether the purchaser has given the trader a reasonable opportunity to remedy the fault?

[25] Section 18 of the Act 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 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 ¾
(a) require the supplier to remedy the failure within a reasonable time in accordance with section 19:
(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, ¾
(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, reject the goods in accordance with section 22.

(3) Where the failure cannot be remedied or is of a substantial character within the meaning of section 21, the consumer may—

(a) subject to section 20, reject the goods in accordance with section 22; 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), 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.”

[26] The purchaser first required the trader to rectify the fault on 9 December and again on 23 December when the trader inspected the vehicle. She wrote the trader an email on 29 December asking the trader how it proposed to rectify the defect but the trader advised in an email to the purchaser on 9 January that its position was unchanged; that it considered it had told the purchaser the paint work was faded at the time of sale. Accordingly the Tribunal is satisfied that the purchaser has complied with s 18(2(a) of the Act and required the trader to remedy the failure but the trader has refused to do so.

Issue (c): What remedy is the purchaser entitled to?

[27] The Tribunal considers that the purchaser is now entitled- pursuant to s 18(2)(b)(i) of the Act to have the fault with the paint work remedied elsewhere and obtain from the trader all reasonable costs incurred in doing so. She has been given a quote by ECBE of $854 to fix the fault. The Tribunal considers this to be very reasonable and will order the trader to pay the purchaser the sum of $854 to resolve this dispute.

Order

The trader shall pay the purchaser $854 immediately.

DATED at Auckland this 25th day of March 2011

C H Cornwell
Adjudicator