Van Beek v North Albany Motors Limited t/a Albany Toyota - Reference No. MVD 178/12 (Auckland) [2012] NZMVDT 127 (28 November 2012)

Last Updated: 4 January 2013

Decision No. AK 101/2012

Reference No. MVD 178/12

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN CAROL ELIZABETH VAN BEEK

Purchaser

AND NORTH ALBANY MOTORS LIMITED T/A ALBANY TOYOTA

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Auckland on 26 November 2012

APPEARANCES

Mrs C E Van Beek, the purchaser

Mr P J Van Beek, purchaser’s husband and witness
Mr N Kumar, Group Service Manager, representing the trader.

DECISION

Background

[1] On 21 May 2012 Mrs Van Beek bought a new 2012 Toyota Corolla for $28,990 from North Albany Motors Limited trading as Albany Toyota. Mrs Van Beek says that in winter beads of condensation form in the headlamps and the tail lamps on the vehicle. She says that she asked Albany Toyota to fix the condensation issue and gave them a reasonable time within which to do so. They have failed to do so. Mrs Van Beek has rejected the vehicle and wants a full refund of her purchase price.

[2] Albany Toyota say that the vehicle is not faulty; that the condensation is caused by atmospheric conditions and that Mrs Van Beek is not entitled to reject the vehicle.

[3] Prior to the commencement of the hearing the Tribunal appointed Mr Middleton 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 Mr Middleton assisted the adjudicator but the application was determined by the adjudicator alone.

The Issues
[4] The issues raised by this application are:
[a] Whether the vehicle complies with the guarantee of acceptable quality?
[b] If not, is Mrs Van Beek entitled to reject the vehicle?

Issue [a]: Whether the vehicle complies with the guarantee of acceptable quality?
[5] Section 6 of the Consumer Guarantees Act 1993 imposes on a supplier "a guarantee that the goods are of acceptable quality." Section 2 defines "goods" as including "vehicles.”

[6] The expression "acceptable quality" is defined in s 7(1) 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.

[7] Mrs Van Beek works at North Shore Hospital. She starts work about 6am after driving to the Hospital from her home in Beachhaven. After Mrs Van Beek had travelled about 98kms in the vehicle which was in early June 2012 she says she noticed condensation was present in its front and rear lamps. She took several close-up photographs of sections of the front and rear lamps and emailed them to Albany Toyota. She produces the photographs as Exhibit 2.

[8] Albany Toyota asked Mrs Van Beek to bring the vehicle in and on 11 June they swapped all four lamps on the vehicle with those from another Toyota Corolla they had on their premises. Within two hours Mrs Van Beek telephoned Albany Toyota and told them that condensation was present in the new lamps. Albany Toyota say that there was no condensation on the lamps they removed from Mrs Van Beek’s vehicle and put on the donor vehicle.

[9] In August Albany Toyota asked Mrs Van Beek for the use of her vehicle for about two weeks to try and identify the cause of the condensation in the lamps. Albany Toyota provided Mrs Van Beek with two loan cars whilst they were examining hers. The first was a new Toyota Corolla. She says that condensation formed in the lamps of that car and that it was seen by Mr Boyd, the Service Advisor at Albany Toyota when he collected it to deliver it to a purchaser. The second loan car was a new Yaris. Mrs Van Beet says that condensation also occurred in the lamps of the Yaris. Mr Kumar agreed that Mr Boyd also saw the condensation in the lamps of that vehicle.

[10] Albany Toyota contacted Toyota NZ for its technical assistance. Toyota NZ authorised Albany Toyota to replace the headlamps on the vehicle but not the tail lamps. Toyota NZ investigated the matter although according to Mr Kumar they have not examined Mrs Van Beek’s vehicle. Toyota NZ decided the fault was not a manufacturing defect and hence they would not agree to accept responsibility for it. They say headlamp fogging can be caused by dew condensation when the lens is cooled by rain or water from washing the vehicle or by water entry. Moisture in the air inside the headlamp or taillamp condenses on the inside of the lens resulting in a foggy appearance.

[11] Mrs Van Beek says that the relevant vehicle inspection requirement in the VIRM[1] Version 4, Amendment 4 dated April 2012 has been changed since 9 June 2012 to require warrant of fitness inspectors to reject a vehicle if a lamp contains “moisture in the form of large droplets, runs or puddles”. Mrs Van Beek took copies of the photographs of the vehicle’s rear lamps sent in June to Albany Toyota to Mr Orange who is the manager of Birkdale Motors Ltd. Mr Orange is also a WOF Inspector. Mr Orange, in a “To Whom it May Concern” letter dated 2 October 2012 produced by Mrs Van Beek says that if the vehicle was presented to his workshop for a WOF inspection in the condition of the photograph he would have no option but to fail the inspection.

[12] Mr Van Beek also happens to be a WOF inspector. He gave evidence that he is employed by German Motors Ltd trading as Forrest Hill Motors. Mr Van Beek says he has been a WOF inspector for approximately 15 years and is also a qualified mechanic. He says he would fail the vehicle for a warrant of fitness if it was presented to him for a WOF with the tail lamp having had the moisture in it shown in the photograph marked by Mr Orange. Mr T Zachacker, another vehicle inspector employed by Forrest Hill Motors sent an undated To Whom It May Concern letter saying the same thing. The Tribunal notes that neither Mr Orange nor Mr Zachacker have seen the vehicle with condensation in the tail lamp; they have only been shown pictures of moisture in a tail lamp upon which they have expressed their opinions. Accordingly the Tribunal has placed little weight on their letters.

[13] Mrs Van Beek decided to reject the vehicle when the problem was not solved by Albany Toyota. She says that she sent an email rejecting the vehicle on 8 October through Toyota’s website. The Tribunal were not provided with a copy of that. On 17 October Mrs Van Beek sent another email to a person named Andrew purporting to reject the vehicle.

[14] Mr Kumar for Albany Toyota says that Mrs Van Beek was requested in an email dated 15 August sent by Mr Boyd to return the vehicle so that new rear lamps could be fitted to it but Mrs Van Beek has refused to do so because she says that Albany Toyota has had sufficient time within which to remedy the fault.

[15] The vehicle the subject of this dispute was supplied new to Mrs Van Beek on 21 May 2012 by Albany Toyota. Although described as a demonstrator it only had a few kilometres on its odometer at the time of sale. The purchase price was $28,990. The Tribunal considers that a new $29,000 motor vehicle should be fault free. The vehicle supplied to Mrs Van Beek was not. There was condensation in the headlamps and tail lamps. The vehicle is not affected by condensation during the warmer months but the Tribunal thinks the condensation problem will probably re-occur in the winter. The Tribunal does not think that a reasonable consumer paying $28,990 for a new Toyota would regard the presence of condensation in the head and tail lamps as acceptable. The Tribunal concludes that the vehicle supplied to Mrs Van Beek by Albany Toyota did not comply with the guarantee of acceptable quality in s 6 of the Act because it is not free of minor faults, namely condensation in its headlamps and tail lamps. In coming to this conclusion the Tribunal makes no finding that the vehicle is unsafe. Nor has it, for obvious reasons, placed any weight on the evidence of Mr Van Beek or his work colleague Mr Zachacker. Mr Orange has not seen the vehicle and his opinion was given on the basis of viewing a photograph of only part of the tail lamp assembly. The Tribunal therefor placed very limited weight on his opinion.

Issue [b]: Is Mrs Van Beek entitled to reject the vehicle?

[16] Section 18 of the Act provides that where a failure to comply with a guarantee can be remedied the consumer must require the supplier to do so within a reasonable time. If the supplier refuses or neglects or fails to do so the consumer may then have the failure remedied elsewhere and obtain from the supplier all reasonable costs incurred in having the failure remedied, or the consumer may reject the goods. The relevant section is 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."

[17] The Tribunal considers, on the facts of this case that the failure was one that could be remedied. Mrs Van Beek gave Albany Toyota a reasonable time to find an acceptable solution to the fault. She gave them from early June until mid October. The Tribunal considers that Albany Toyota made a reasonable attempt to solve their customer’s problem but ultimately decided, following advice from Toyota NZ, that it was not a manufacturing fault but that the condensation was down to the changing atmospheric conditions and that there was not much they could do apart from replacing the tail lights. The Tribunal thinks that Mrs Van Beek was entitled by 17 October to reject the vehicle and have a refund of her purchase price because Albany Toyota had not fixed the fault within a reasonable time.

[18] Mrs Van Beek rejected the vehicle within five months of the date of supply which is within a reasonable period in terms of s 20 of the Act allowing for the time that had to pass whilst she met her obligation under the Act to give Albany Toyota a reasonable time to fix the fault which they did not do.
Orders

1. Mrs Van Beek’s rejection of the vehicle on 17 October 2012 is upheld.
2. North Albany Motors Ltd shall pay Mrs Van Beek the sum of $28,990.
3. As soon as Mrs Van Beek receives $28,990 from North Albany Motors Ltd she shall promptly return the vehicle to them.

DATED at AUCKLAND this 28th November 2012

C.H.Cornwell
Adjudicator

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[1] Vehicle Inspection Requirement Manual published by NZTA