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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 25 March 2013
Decision No: AK 6/2013
Reference No. MVD 209/12
IN THE MATTER of the Motor Vehicle Sales Act 2003
AND
IN THE MATTER of a dispute
BETWEEN THOMAS GILLEN
Purchaser
AND TAMAKI LIMITED T/A GRANGE MOTOR COMPANY
Trader
BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
Mr C H Cornwell, Barrister & Solicitor, Adjudicator
Mr S D Gregory,
Assessor
HEARING at Auckland on 29 January 2013
APPEARANCES
Mr T Gillen, the purchaser
Mr G Markham, manager for the trader
DECISION
Background
[1] On 10 August 2012 Mr Gillen bought a 2007 Nissan Navara utility vehicle from Tamaki Limited trading as Grange Motor Company for $26,500. On 2 December 2012 the vehicle’s heater pipe failed. Mr Gillen asked Tamaki to pay the cost of replacing the heater pipe but Tamaki has refused to do so. Mr Gillen claims the cost of replacing the heater pipe of $754 on the grounds that the vehicle supplied by Tamaki was not of acceptable quality at the time of sale because it was not reasonably durable.
[2] Mr Markham, Tamaki’s manager says that the vehicle sold to Mr
Gillen had travelled 4,400kms over almost four months of use
at the time the
heater pipe failed. Tamaki considers that at some stage its responsibility to a
purchaser to remedy defects ends.
It considers that point had been reached and
it does not consider the vehicle failed the guarantee of acceptable
quality.
[3] Pursuant to clause 10 of Schedule 1 of the Motor Vehicle Sales
Act 2003 the Tribunal has 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.
The issues
[4] The following two issues require
consideration:
[a] Whether the vehicle was of acceptable quality at the time
of sale?
[b] If it was not, whether Mr Gillen is entitled to recover his
repair costs from Tamaki?
Issue [a]: Whether the vehicle was of acceptable quality at the time of sale?
The relevant law
[5] Section 6 of the Consumer Guarantees
Act 1993 (“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.”
[6] 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.”
[7] 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/her right to reject the vehicle within a reasonable time.
[8] Mr Gillen purchased the vehicle for $26,500. It is a New Zealand new Nissan Navara utility which had travelled 145,830kms at the time of sale. Mr Gillen travelled a further 4,400kms in it before he noticed on 2 December 2012 green coolant on the floor of his garage. The coolant had leaked from the vehicle’s engine’s heater hose.
[9] Mr Gillen asked Mr Markham to accept responsibility for the cost of repairing the leak on 3 December. Mr Markham asked Mr Gillen to get a price to repair the leaking heater hose which Mr Gillen did and told Mr Markham at 12-42pm on 3 December would be about $500 plus GST for the part and some labour. Mr Markham promised to speak to his manager and phone Mr Gillen with an answer. At 3pm when Mr Markham had not telephoned Mr Gillen, Mr Gillen made contact with him to be told that Tamaki would not pay for the repair.
[10] On 4 December Mr Gillen had the vehicle repaired by Seoul Motors Ltd at a cost of $754. On 7 December Mr Gillen filed an application for the repair cost with the Tribunal which resulted in Tamaki offering to pay one half of the repair cost; an offer which Mr Gillen rejected.
[11] The Tribunal in deciding whether the vehicle sold to Mr Gillen complied
with the guarantee of acceptable quality in s6 of the
Act has had regard to to
the fact that the vehicle was at the time of sale a five year old New Zealand
new Nissan Navara diesel utility
which had travelled 145,830kms and was sold for
$26,500. The Tribunal thinks the vehicle was probably free from minor defects
at
the time of sale but that its engine and in particular the heater hose
connected to it was not as durable as a reasonable consumer
paying $26,500 for a
vehicle of this age and type would regard as acceptable.
Conclusion on
issue [a]:
[12] The vehicle did not comply with the guarantee of
acceptable quality at the time of sale because it was not as durable as a
reasonable
consumer would regard as acceptable.
Issue [b]: Is Mr Gillen is entitled to recover his repair costs from Tamaki?
Relevant law
[13] 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."
Application of law to facts:
[14] Mr Markham did not dispute
that Mr Gillen had required Tamaki to pay the repair costs. The Tribunal is
satisfied that Mr Gillen
did so on 3 December 2012 and Tamaki refused to pay to
have the vehicle repaired. The Tribunal considers that Mr Gillen was therefore
entitled on 4 December to have the vehicle repaired by Seoul Motors Ltd and that
their cost of repair of $754 is reasonable.
Conclusion on issue [b]:
[15] Mr Gillen is entitled to be
refunded the full cost of replacing the vehicle’s heater pipe of $754 by
Tamaki.
Order
Tamaki Limited shall pay Mr Gillen $754.
DATED at AUCKLAND this 29 January 2013.
C.H Cornwell
Adjudicator
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URL: http://www.nzlii.org/nz/cases/NZMVDT/2013/6.html