Smith v Rodney Vehicle Sales Limited - Reference No. MVD 141/12 (Auckland) [2012] NZMVDT 105 (18 October 2012)

Last Updated: 15 November 2012

Decision No:AK 85/2012
Reference No. MVD 141/12

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN JACQUELINE SMITH

Purchaser

AND RODNEY VEHICLE SALES LIMITED

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Auckland on 15 October 2012

APPEARANCES

Mrs J Smith, the purchaser

Mr M Smith, witness for the purchaser
Mr P Bayer, director for the trader

DECISION

Background

[1] On 7 July 2012 Mrs Smith (“the purchaser”) purchased a 2006 Mazda Roadster registration number GKS279 (“the vehicle”) from Rodney Vehicle Sales Limited (“the trader”) for $15,995. The purchaser wishes to reject the vehicle because she says the trader has failed to remedy the vehicle’s faults.

[2] The trader says that it is willing to uplift the vehicle from the purchaser in Cambridge and rectify the vehicle’s faults but it does not consider that it should be required to replace either the insulation in the bonnet or connect the steering wheel radio controls to the aftermarket radio system. The trader therefore says the purchaser has no grounds to reject the vehicle.

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

Facts

[4] On 7 July 2012 the purchaser and her husband travelled from Cambridge to Silverdale to inspect and test drive the vehicle which they had seen advertised for sale on TradeMe. The purchaser’s husband told the Tribunal that he had previously owned three other Mazda Roadsters. The purchaser agreed to purchase the vehicle for $15,995 subject to the trader’s agreement to fix the radio (which the trader could not get to work at the time of inspection) and the boot mechanism. The vehicle’s odometer was 103,293kms at the time of sale. The vehicle was supplied to the purchaser in Pokeno on 10 July 2012. The purchase price, less a trade-in allowance of $6,000 for a 2000 BMW car traded in by the purchaser was financed by Marac Finance Limited.

[5] Over the course of the following two weeks the purchaser and her husband noticed minor faults with the vehicle which they had not noticed at the time they agreed to buy it. On 24 July the purchaser sent the trader an email about what she described as “these tiny issues” :
“The audio controls on the steering wheel are not working
The “Auto” of the drivers electric window does not work. You have to hold the switch down/up.
The hand brake does not release when reversing. When it does it makes a loud noise.
There is a missing cover plate under the left front...in front of the wheel
Suggestions?”

[6] The trader, unhelpfully in the Tribunal’s view, replied that he had sent the purchaser’s email to the wholesaler and would come back with his suggestions. The next day the purchaser’s husband sent the trader an email saying he needed the wholesaler to confirm that the vehicle had not been involved in an accident because there was no [sound deadening] lining on the inside of the bonnet and the rubber strip along the front edge of the bonnet was missing. The trader replied that, to its knowledge, the vehicle had not been imported damaged but he would have the wholesaler call the purchaser.

[7] On 2 August the purchaser’s husband sent another email to the trader repeating the list of faults already found- the subject of the purchaser’s email of 24 July- and adding two more; only two of the six speakers in the vehicle were working and the driver’s seatbelt did not retract. He asked the trader if these faults were able to be repaired. The trader did not respond until the purchaser sent another email to the trader on 11 August saying she had waited for over a week for some sort of response from the trader and that she had lost faith in the vehicle and asked the trader what could be done. The trader replied on 13 August saying it was more than happy to come back to her with a solution but needed to know what the issues were so it could get answers for her and if she had prices to fix the issues. The purchaser sent a list by email the same day.

[8] The trader’s response was sent by email on 15 August and in summary was:
1.Bonnet lining: purchaser asked to get a price for the lining and trader agreed to look at it.
2.Missing cover plate- inside left front wheel: purchaser asked to get a price for trader to look at.
3.Audio controls on steering wheel: purchaser asked to get a price to make this work.
4.Auto function on driver’s window: trader said it will need to see it because some cars have computer settings set to disable the auto function.
5. All speakers not working: trader claimed the radio was fit for purpose.
6.Handbrake does not release correctly: trader asked if purchaser had somebody look at it and said further investigation was needed.
7. Sometimes engine does not idle: trader suggested price be obtained to fix this.
8.Driver’s seatbelt does not retract: Needs further investigation.
The trader in its email suggested that the vehicle come back to the wholesalers workshop to have the issues looked at and was unsure if that would be easier than the purchaser getting the prices for repairs. The trader asked the purchaser to let it know if she needed a place to take the vehicle as it had suppliers all around New Zealand that could help.

[9] On 16 August the purchaser sent the trader an email saying the rattle and vibration from the bonnet catch was not mechanical, disagreeing that only two of the six speakers was acceptable and advising the cost to wire up the other speakers would be $135. The purchaser also advised the trader that the driver’s window was now working, not to worry about the seatbelt, and that the idling issue possibly required the cleaning, adjustment or replacement of the “Power Valve”. The Tribunal understands the purchaser was referring to the IAC valve (idle air control valve).

[10] On 25 August the trader sent the purchaser another email saying what it was prepared to do to rectify the six remaining issues. In essence it agreed to adjust the bonnet resting rubber blocks to stop the rattles because the bonnet lining was not present when the purchaser inspected the vehicle at the time she agreed to buy it. The trader agreed to supply and courier the splash plate and clips. The trader refused to pay to have the steering wheel controls connected to the audio system but agreed to pay to have all speakers connected and asked for a quote. The trader was unsure if the handbrake issue was still present and asked the purchaser to have Mazda look at the cause of the vehicle’s failure to idle and authorised the purchaser to spend $100 and notify it if the bill was likely to go over than sum. The trader noted that the auto function on the driver’s window and the seatbelt were no longer issues.

[11] The purchaser’s husband replied by email on 27 August saying the trader’s refusal to rectify the factory fitted items was unacceptable and the purchaser wished to have another vehicle and was not prepared to accept the vehicle with issues.

[12] The purchaser gave evidence that the cost to connect the audio controls on the steering wheel to make them functional was approximately $399, the cost of the hood insulation and clips, the weatherstrip, fasteners and inner guard lining was $301.20 in total.

[13] The trader’s director Mr Bayer told the Tribunal that he had offered to collect the vehicle and repair all the issues requested by the purchaser except for the steering wheel radio controls and the underhood insulator. He says he will also at the trader’s cost obtain a new VTNZ warrant of fitness for the vehicle since the vehicle was supplied to the purchaser without a warrant of fitness issued within a month before the date of sale.

The issues

[14] Having listened to the parties, considered the exchange of emails between them and the facts, the Tribunal concludes that the following issues require consideration:
[a] Whether the vehicle was of acceptable quality at the time of sale?
[b] If it was not, whether the purchaser required the trader to remedy the defects within a reasonable time and whether the trader did so?
[c] If not, whether the purchaser is entitled to reject the vehicle?

Issue [a]: Whether the vehicle sold to the purchaser was of acceptable quality at the time of sale?

[15] 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.”

[16] 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.”

[17] 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 her right to reject the vehicle within a reasonable time.

[18] The goods sold to the purchaser in this application are a second hand Japanese imported 6 year old Mazda Roadster which had travelled 103,292kms and was sold for $15,995. The vehicle appears to the Tribunal to have had several minor faults at the time of sale. There are two issues which the purchaser and the trader dispute the trader’s liability to rectify. First, the vehicle was not fitted with a bonnet insulator to suppress engine noise and second, the steering wheel stereo controls were not connected to the sound system. The Tribunal considers, on balance, that a reasonable consumer paying $15,995 for a vehicle, even a 6 year old Japanese import which had travelled 103,000kms would not find the vehicle of acceptable quality without those two items. Hence the Tribunal finds that at the time of sale the vehicle did not comply with the guarantee of acceptable quality in s 6 of the Act because of those two faults, and several other minor items which the trader has agreed to remedy (the four radio speakers that were not connected, the left hand mud guard liner, the weather strip under the bonnet, a fault in the vehicle’s idle, its handbrake and driver’s seatbelt).

Issue [b]: whether the purchaser required the trader to remedy the defects within a reasonable time and whether the trader did so?

[19] 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 ¾
(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."

[20] In Acquired Holdings Limited v Turvey [2007] NZHC 1251; (2008) 8 NZBLC 102,107 Winkleman J said:
“I consider that on a plain reading of s 18 in circumstances where the defect can be remedied and is not of a substantial character, the purchaser must follow the requirement in s 18(2) to allow the supplier an opportunity to remedy the failure within a reasonable time in accordance with the provisions of s 19.”

[21] The Tribunal considers that the faults with the vehicle were not of a substantial character within the meaning of s 21 so as to entitle the purchaser to reject the vehicle. Taking a broad view of the exchange of email correspondence between the parties particularly the emails from 24 July until 29 August the Tribunal considers first, that the trader handled the purchaser’s request to rectify the vehicle’s faults poorly. Its director Mr Bayer should have immediately accepted responsibility on the trader’s behalf to rectify the vehicle’s faults. He did not do so but instead referred the purchaser to the wholesaler. The purchaser had no contractual dealings with the wholesaler and the trader should not have attempted to avoid its responsibility to the purchaser under the Act by referring her to the wholesaler. Second, when the trader did eventually accept responsibility to rectify the majority of the minor faults the purchaser identified it took an intransigent and the Tribunal considers an unreasonable attitude over two fairly minor faults; the hood noise suppressor and the steering wheel radio controls. The trader could have simply and cheaply resolved the first issue by ordering parts at a cost of $211.66 inclusive of GST from Japan which it could have fitted in less than an hour. The second issue, the steering wheel radio controls, could have been rectified in Hamilton for less than $400.

[22] The Tribunal has therefore come to the conclusion that the trader did not succeed in repairing the vehicle’s faults within a reasonable time and in fact it refused to remedy the faults with the bonnet insulation and the steering wheel radio controls. The purchaser however does not appear to have rejected the vehicle in terms of s 22 of the Act and the Tribunal considers therefore the remedy of rejection is not available to the purchaser. The Tribunal will therefore order the trader, at its expense, to collect the vehicle from the purchaser in Cambridge, carry out all the work listed in the order within 3 working days of uplifting the vehicle and return the vehicle to the purchaser.

Order

The trader shall within one month of the date of this order arrange to collect the vehicle from the purchaser in Cambridge, carry out the following work and return the vehicle to the purchaser within 3 working days of collecting the vehicle:
a) supply and fit an under hood noise suppressor and weatherstrip;
b) supply and fit an inner guard liner to the left hand mud guard;
c) connect all speakers in the vehicle to the stereo amplifier;
d) connect the steering wheel controls to the stereo;
e) remedy the vehicle’s idling fault;
f) remedy the fault with the handbrake;
g) ensure the driver’s seatbelt retracts properly;
h) ensure the driver’s window works on auto function;
i) obtain a new VTNZ warrant of fitness for the vehicle.

DATED at AUCKLAND this 18 October 2012

C.H Cornwell
Adjudicator