Bowring v Vision Auto Sales Limited - Reference No. MVD 158/12 (Auckland) [2012] NZMVDT 111 (2 November 2012)

Last Updated: 4 January 2013

Decision No: AK 89 /2012
Reference No. MVD 158/12

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN GRANT ANTHONY BOWRING

Purchaser

AND VISION AUTO SALES LIMITED

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Auckland on 29 October 2012

APPEARANCES

Mr G A Bowring, the purchaser

Mr J L Bennie, manager/owner for the trader

DECISION

Background

[1] On 6 January 2012 Mr Bowring (“the purchaser”) purchased a 2003 Mercedes-Benz SLK230 registration number GFB380 (“the vehicle”) from Vision Auto Sales Limited (“the trader”) for $19,800. The purchaser wishes to recover $2,090.47 from the trader which he claims to have spent in repairing the vehicle in May and July 2012 and $1072.26 he has been quoted to replace the vehicle’s fuse box.

[2] The trader denies liability for the purchaser’s repair costs.

[3] Pursuant to clause 10 of Schedule 1 of the Motor Vehicle Sales Act 2003 the Tribunal appointed Mr 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 inspected and test drove the vehicle in December 2011 and noticed the safety restraint system (“SRS”) warning light was lit on the vehicle’s instrument panel. On 29 December 2011 the purchaser sent an email to the trader’s director Mr Bennie which said:
“Hi John
We would like to proceed with the Merc SLK230 Price $19800.00 all inclusive Subject to clean AA report and fixing SRS light
Many thanks please send details for deposit
Regards Grant Bowring”
Mr Bennie immediately sent the purchaser an email thanking him and giving details of the bank account to which he asked the purchaser to lodge $2000 as a deposit. The trader said it would contact the purchaser when the vehicle was ready.

[5] The trader then obtained compliance of the vehicle, a warrant of fitness and a one page AA Vehicle Appraisal from Auckland Mobile Inspections on 6 January 2012 which records the odometer as 84,689kms. That report states that it was prepared by the AA acting as technical consultant for the trader and not for any prospective purchaser of the vehicle. The report also states that it is external and visual only and recommends that purchasers can obtain greater protection from a full AA vehicle inspection. The trader sent the purchaser a copy of the AA Vehicle Appraisal on 6 January 2012 with an email in which Mr Bennie referred to it as “A perfect report”. The AA Appraisal Report rated the vehicle as “sound: vehicle is in above average condition for age and mileage.”

[6] The purchaser collected the vehicle on 7 January 2012. The SRS light fault had not been rectified and it also had an illegal string puncture repair on the driver’s side rear tyre. Neither of these two faults, each of which ought to have resulted in the vehicle failing a warrant of fitness and failing compliance testing, were discovered by VTNZ New Lynn who complied the vehicle. Neither of these two safety faults were recorded by the AA in its Vehicle Appraisal report.

[7] The purchaser sent the trader an email on 12 January 2012 drawing its attention to the two safety issues with the string puncture repair and the SRS light. The trader promised in an email the same day to fix these “ASAP”. However when the purchaser telephoned the trader’s service manager to arrange to bring the vehicle back to be repaired the trader’s service manager told him the vehicle needed to be brought back to the trader at 8am or the trader could not fix the faults for three weeks. The purchaser reasonably felt it was the trader’s problem to repair the vehicle and he had to telephone Mr Bennie to get the trader’s service manager to repair it. The vehicle was not repaired properly by the trader and had to be returned to it twice over the following two weeks to have the SRS light fixed. On the third visit in mid February 2012 the trader fixed the SRS light but the vehicle’s indicators did not function when the vehicle was returned to the purchaser.
[8] The purchaser had lost patience with the trader’s ineffectual repair attempts and took the vehicle to East City Auto Electrical who found the fuse box was faulty and made a temporary repair to get the indicators to work which only lasted a few weeks. The vehicle was returned to the trader once again but the trader’s mechanic merely replaced a fuse in the fuse box which failed to get the indicators working. The trader agreed to the purchaser having the fault fixed by his repairer and agreed to pay the costs involved. On 13 July the purchaser took the vehicle to K W Historics who traced the fault to a poor connection in the fuse box and found an internal soldered connection between the fuse holder and main circuit board had broken. They fitted an inline fuse holder, refitted the fuse box and reconnected the wiring looms at a cost with GST of $336.38. The trader has still not reimbursed the purchaser with that sum. They priced a new fuse box assembly at $932.40 plus GST. The purchaser says that the vehicle’s headlamps and fog lamps cease to function intermittently and the vehicle requires a new fuse box assembly to rectify that fault.

[9] The purchaser also told the trader that the vehicle’s water level indicator light had never worked and he had asked the trader on a number of occasions to fix that fault. The purchaser reminded the trader of this in an email on 3 May 2012 but received no response from the trader. On 22 May the purchaser had the vehicle’s cooling system checked by K W Historics. The vehicle had then travelled 90,716kms or 6,027kms since it had been supplied. K W Historics found the vehicle’s water pump had been weeping and the header tank sensor was not operating. It removed the auxiliary drive belt and water pump pulley and fitted a new water pump, refilled the cooling system with the correct coolant and bled the system at a cost of $528.09. The purchaser sent the trader a copy of the invoice for this repair on 23 May but received no response.

[10] The purchaser says that when the vehicle required a new warrant of fitness and his daughter took it to VTNZ for an inspection on 5 July 2012 at 92,304kms or 7,652kms after it was supplied. The vehicle failed its WOF because there was play in both front wheels and the lower ball joints had to be replaced. The purchaser says that he considers it most unlikely that the extent of the play in the lower ball joints could have occurred so soon after the vehicle was given its previous warrant of fitness. The cost of replacing the lower ball joints was $306.25. The purchaser said he had not contacted the trader and asked it to pay for this repair before he had K W Historics do the work on 5 July 2012.

[11] On 30 July the vehicle’s engine started to make a rumbling noise caused by a broken tensioner on the auxiliary belt driving the alternator. K W Historics invoice for the replacement of the tensioner and idler units also notes the tensioner and idler for the compressor belt were worn. They replaced both tensioner units and one idler bearing and fitted bearings supplied by the purchaser. The cost of this work was $730.23 and parts purchased by the purchaser were an extra $189.52. The purchaser did not contact the trader to request it to rectify this fault before he had the work done.

[12] Mr Bennie for the trader says the vehicle passed compliance on 6 January 2012 and was issued with a warrant of fitness by either VTNZ or the AA but he was unsure who had issued the vehicle with its first warrant of fitness. Mr Bennie although requested to bring details of the work done to repair the SRS said he did not have the information with him and told the Tribunal he had no idea what work was done to repair the vehicle. He says he does not recall the purchaser mentioning the problem with the water level indicator.

The issues

[13] Having considered 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 before he had the work done?
[c] Whether the purchaser is entitled to recover all or part of his repair costs?

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

[14] 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.”

[15] 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.”

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

[17] The vehicle sold to the purchaser is an imported 9 year old Mercedes-Benz SLK230 which had travelled 84,689kms and was sold for $19,800. The Tribunal is very surprised that the vehicle passed compliance and its first warrant of fitness in January 2012 because it was not safe because it had two safety faults when it was supplied to the purchaser. First, its SRS light remained on. This fault was present when the vehicle was inspected by the purchaser in December 2011 before it passed compliance at 84648km by VTNZ New Lynn on 6 January 2012. The trader agreed to repair the SRS fault as a condition of sale. The Tribunal finds that the trader failed to do so. It took the purchaser several return visits to the trader’s workshop until the SRS fault was fixed in mid February 2012. The second safety fault was the string puncture repair on the driver’s side rear tyre at the time of supply. The vehicle also lacked durability. Within a month of being supplied the indicators faulted and the vehicle’s fuse box had to be repaired temporarily to fix that fault. The faulty fuse box is, the Tribunal considers, most probably the reason why the vehicle’s headlamps and fog lamps now continue to fail intermittently. The water level indicator was not working from the time the vehicle was supplied. In May 2012 that fault was found by the purchaser’s repairer (after the trader had failed to fix it) to be as a result of the water pump weeping and the header tank sensor ceasing to operate. In early July the purchaser had to replace the lower ball joints when the vehicle failed its first warrant of fitness only 7,615kms after sale and later the same month the tensioner for the auxiliary belt driving the alternator broke. The Tribunal does not consider that a reasonable purchaser paying $19,800 for a nine year old imported Mercedes-Benz of moderate mileage would regard this collection of faults to be acceptable. Hence the Tribunal concludes that at the time of sale the vehicle did not comply with the guarantee of acceptable quality in s 6 of the Act because it was neither free of minor faults, as safe or as durable as a reasonable consumer would regard as acceptable.

Issue [b]: whether the purchaser required the trader to remedy the vehicle’s defects?

[18] 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."

[19] In this case the purchaser returned the vehicle on three occasions to give the trader the opportunity to repair the SRS, the electrical system and the water level indicator. The trader eventually fixed the SRS system but the Tribunal finds it failed to fix the fuse box which was the probable cause of the indicators not working and the headlights and fog lamps failing intermittently. The trader’s mechanic also failed to rectify the water level indicator fault after being required to do so. The Tribunal considers that the trader was given a reasonable time to fix those faults but failed to do so. Unfortunately the purchaser did not require the trader to repair the worn lower ball joints when the vehicle failed its first WOF on 5 July 2012 before he had K W Historics replace them nor did the purchaser require the trader to replace the worn tensioners and idler before he had that work done on 30 July 2012.

Issue [c]: Whether the purchaser is entitled to recover all or part of his repair costs?

[20] The Tribunal considers the amounts charged to the purchaser by K W Historics to repair the cooling system of $528.09 in May 2012 and the electrical system of $336.38 in July 2012 are both reasonable and will order the trader to reimburse the purchaser with those sums totaling $864.47. In addition the Tribunal has found that the trader failed to remedy the defect with the vehicle’s fuse box. The reasonable costs of obtaining and fitting a replacement fuse box to the vehicle are $932.40 plus GST for the fuse box assembly and one hour of labour at $70 plus GST; a total of $1,152.76. The Tribunal will therefore order the trader to pay the purchaser the sum of $2,017.23.

[21] The purchaser is not entitled to recover the sums he spent on replacing the lower ball joint of $306.25 and the broken tensioner and idler of $730.23 because he did not require the trader to remedy those faults before having the repairs done by his repairer.

Order

The trader shall pay the purchaser $2,017.23.

DATED at AUCKLAND this 2 November 2012

C.H Cornwell
Adjudicator