Panchalingam v Alfa Motors Limited t/a Car4U - Reference No. MVD 80/2013 (Auckland) [2013] NZMVDT 69 (28 June 2013)

Last Updated: 16 July 2013

Decision No: AK 60/2013
Reference No. MVD 80/2013

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN RAJAMOKAN PANCHALINGAM

Purchaser

AND ALFA MOTORS LIMITED TRADING AS CAR4U

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Auckland on 24 June 2013

APPEARANCES

Mr R Panchalingam, the purchaser

Mr A Nezam, director for the trader
Mr G Sharma, salesman and witness for the trader

DECISION

Background

[1] On 26 September 2012 Rajamokan Panchalingam (“the purchaser”) bought a 2005 Honda Airwave registration GNN363 (“the vehicle”) from Alfa Motors Limited trading as Car4u (“the trader) for $13,995. The purchaser has rejected the vehicle because he claims the tyres on the vehicle were mismatched and because faults with the vehicle’s panel work, windscreen and reverse gear were not fixed by the trader.

[2] The trader says that it accepts that the tyres on the vehicle were mismatched at the time of sale but that it asked the purchaser to return the vehicle so that it could have that fault rectified and the purchaser failed to do so. The trader says that there was nothing wrong with the vehicle’s panels, its windscreen or its transmission at the time of sale and the purchaser has not required it to repair any of those faults of which it claims it has no knowledge.

[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 cl 10(2) of Schedule 1 to that Act. As an assessor Mr Gregory assisted the adjudicator but the application was determined by the adjudicator alone.

Issues

[4] The issues in this application are:
[a] Whether the vehicle sold to the purchaser was of acceptable quality when it was supplied to him?
[b] If not, did the purchaser require the trader to remedy the faults and give the trader a reasonable time within which to do so?
[c] If so, is the purchaser entitled to reject the vehicle?

Issue [a]: Whether the vehicle sold to the purchaser was of acceptable quality when it was supplied to him?

Legal Principles

[5] Section 6 of the Consumer Guarantees Act 1993 (“the Act”) provides a guarantee that goods supplied to a consumer must be of acceptable quality. Section 6 provides:
“6 Guarantee as to acceptable quality
(1) Subject to section 41, where goods are supplied to a consumer there is a guarantee that the goods are of acceptable quality.

(2) Where the goods fail to comply with the guarantee in this section,-

(a) Part 2 may give the consumer a right of redress against the supplier; and

(b) Part 3 may give the consumer a right of redress against the manufacturer.”

[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.

(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 s 19 of the Act. If the failure to comply with the guarantee of acceptable quality is 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 has exercised his/her right to reject the vehicle within a reasonable time.

Application of law to facts

[8] The purchaser agreed to buy the vehicle from the trader on 26 September 2012 after test driving it. The vehicle’s odometer was 111,101kms. The trader says it obtained a warrant of fitness for the vehicle before it supplied it to the purchaser. The purchaser agreed to pay $13,995 for the vehicle and traded in a 1996 Toyota Camry which, after paying back an encumbrance on that car left a credit balance of $37.92 which reduced the purchase price to $13,957.08. The purchaser financed that sum through a collateral loan from Alphera Financial Services repayable over a 47 month term.

[9] Shortly before the vehicle was supplied to the purchaser the trader says it noticed that one of the tyres had a puncture. The trader says it replaced the punctured tyre with one which did not match the other tyres on the vehicle and it asked the purchaser to bring the vehicle back in a day or two to have that rectified. The trader says the purchaser did not do so.

[10] The purchaser says that a day or two after he bought the vehicle he noticed a small stone chip in the bottom of the middle of the windscreen in an area of the windscreen not swept by the windscreen wipers. He also says he noticed panel damage and the vehicle did not drive properly in reverse gear. The purchaser says he telephoned the trader about those faults and the trader promised to have them fixed but the trader denies that the purchaser ever told it about those faults or required it to rectify any of them. The purchaser admits he did not return the vehicle to the trader to rectify any of the faults because he was too busy.

[11] On 2 April 2013 the purchaser took the vehicle to VTNZ for a warrant of fitness, the previous warrant obtained by the trader before it sold the vehicle to the purchaser having expired on 28 March 2013. The vehicle’s odometer was recorded by VTNZ as 113,592kms showing the purchaser had driven the vehicle 2,491kms in the six months since he purchased it. The vehicle failed the 2 April 2013 warrant of fitness for the following reasons recorded on the VTNZ checksheet as: “Font tyres L/F rotation R/F radial. Rear tyres L/rear 195 R/rear 185. Right front tyre badly worn on edges. Renew wiper blades.”

[12] The purchaser says a few days later he went to see Mr Sharma at the trader’s premises and Mr Sharma promised to change the tyres. There is a conflict of evidence as to what happened next. The purchaser says that Mr Sharma asked the purchaser to take the vehicle to the trader’s mechanic to have the job done. On the first occasion the purchaser did so he says the trader’s mechanic refused to do the job unless the purchaser paid him $140 because the mechanic told the purchaser the trader did not pay his bills. The purchaser acknowledges that on a second occasion he took the vehicle back to the trader’s mechanic he missed an appointment he had made with the mechanic and when he took the vehicle in the mechanic told him he was unable to do the job because he had sold the tyres when the purchaser had not kept the appointment he had made with the mechanic. The trader says that when the purchaser brought the vehicle back in April he demanded the trader pay him $200 for each of four new tyres he wanted to fit to the vehicle. The trader says it offered the purchaser $400 and when the purchaser refused that offer the trader says it agreed to have its mechanic fit four replacement tyres to the vehicle. However the purchaser did not keep appointments it made with the mechanic to fit the tyres and the tyres were not replaced.

[13] Mr Sharma gave evidence that he had never been told by the purchaser that there were any issues with the panels, a stone chip in the windscreen or reverse gear and on the occasion the purchaser brought the vehicle back in April 2013 regarding the tyres he did not see any damage to the vehicle’s panels.

[14] The purchaser did not produce any photographic evidence to support his claim that there was a stone chip in the windscreen or damage to the panel work. The purchaser did not offer any evidence those faults existed at the time the vehicle was supplied to the purchaser.

[15] The quotation produced by the purchaser dated 12 June 2013 from AOSC of $2,371.30 to replace the transmission which the purchaser produced did not contain any information to establish the vehicle’s transmission had been tested and what fault(s) had been found to exist with the transmission. In the absence of any evidence of the nature of this fault the Tribunal is not satisfied that the purchaser proved on a balance of probabilities that the claimed fault with the transmission’s reverse gear exists.

Conclusion on issue [a]:

[16] The Tribunal finds that the vehicle sold by the trader to the purchaser was not of acceptable quality at the time of sale because the tyres fitted to the vehicle were mismatched in the front and rear. The Tribunal does not think that a reasonable consumer paying $13,995 for a seven year old Honda would regard the vehicle as acceptable with mismatched tyres. Accordingly the Tribunal concludes the vehicle did not comply with the guarantee of acceptable quality at the time of sale.

Issue [b]: Did the purchaser require the trader to remedy the faults and give the trader a reasonable time within which to do so?

Legal Principles

[17] 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."

[18] The Tribunal, after listening to and questioning the purchaser is satisfied that he did not take the vehicle back to the trader and require it to repair any of the three faults he claimed existed with the stone chip in the windscreen, the damaged panel, or the fault he claimed existed with reverse gear. The purchaser’s explanation for not doing so was because he was too busy.

[19] However the Tribunal accepts that the purchaser certainly required the trader to remedy the fault with the mismatched tyres. After listening to each party and observing the purchaser who displayed a volatile temperament at the hearing, the Tribunal thinks the purchaser most probably adopted an unreasonable attitude over the mismatched tyres and required the trader to pay $800 for four new tyres. The Tribunal accepts the trader’s evidence that it was willing to pay to have its mechanic replace the tyres but the purchaser did not keep an appointment he made with the trader’s mechanic to take the vehicle back to have the replacement tyres fitted. Hence the Tribunal finds that the purchaser did not comply with his obligation under s 18(2)(a) of the Act to give the trader a reasonable time within which to remedy the faulty tyres before he went out and bought four second hand tyres from Don Tyres Ltd on 7 May 2013 and had them fitted to the vehicle. The purchaser is therefore not now entitled to recover the $200 he spent on 7 May 2013 buying four tyres from Don Tyres Ltd. For the same reason he is not entitled to reject the vehicle under s18(2)(b)(ii) of the Act.

Conclusion on issue [b]:

[20] The Tribunal concludes that the purchaser did not comply with his obligation under s18(2)(a) of the Act and he was therefore not entitled to reject the vehicle on 21 May 2013.

Order

The purchaser’s application is dismissed.

DATED at Auckland 28 June 2013

C.H Cornwell
Adjudicator