Prinsloo v Ingham Motors Napier Limited t/a Mercedes-Benz Hawkes Bay - Reference No. MVD 154/2014 (Auckland) [2014] NZMVDT 105 (26 September 2014)

Last Updated: 19 October 2014

Decision No. AK 89 /2014

Reference No. MVD 154/2014

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN RUDI PUTTER PRINSLOO

Purchaser

AND INGHAM MOTORS NAPIER LIMITED T/A MERCEDES-BENZ HAWKES BAY

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Napier on 19 September 2014

APPEARANCES

Mr R P Prinsloo, the purchaser
Mrs C Prinsloo, purchaser’s mother and support person
Mr S J Pallesen, General Manager of the trader
Mr C Bromley, Service manager of the trader

DECISION

Background

[1] On 12 October 2012 Mr Prinsloo (“the purchaser”) bought a 2006 Mercedes-Benz ML500 registration GMT458 (“the vehicle”) from Ingham Motors Napier Limited trading as Mercedes-Benz Hawkes Bay. The purchaser says the vehicle’s transmission is faulty and the trader has failed to repair it. The purchaser wants to reject the vehicle and have a refund of the purchase price.

[2] The trader denies that there is anything wrong with the vehicle’s transmission and therefore denies that the purchaser is entitled to reject the vehicle.

[3] Prior to the commencement of the hearing the Tribunal appointed Mr Gregory 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 Gregory 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 was of acceptable quality when it was sold to the purchaser?
[b] If not, did the purchaser require the trader to rectify the faults and, if so, has the trader done so within a reasonable time?
[c] Is the purchaser entitled to reject the vehicle?

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

Relevant Law

[5] Section 6 of the Consumer Guarantees Act 1993 (“the Act”) 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" was, at the time the vehicle was sold to the purchaser 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 obtain 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.”

Application of law to facts

The Purchaser’s Chronology of events
[7] The vehicle had 42,300kms on its odometer when it was sold to the purchaser.
The purchaser produced a chronology of the issues he says he has had with the vehicle since he bought it. A precis of the issues relevant to this application is as follows:
13 November 2012: purchaser says there was a loud whining noise from the vehicle when he accelerated. The purchaser says this noise is still present in the vehicle now but is louder. He says the transmission hesitates and often selects a gear with a thump. There is also harsh shifting present when the gears change down and sometimes the power is applied very quickly.

23 November 2012: the air suspension system failed.

25 November 2012: the purchaser took the vehicle into Mercedes Benz North Shore (“MBNS”) to be repaired. MBNS readapted the transmission, updated the firmware and replaced the airmatic suspension compressor pump.

4 December 2012: purchaser advised trader all problems with the transmission were still present.

17 December 2012: At trader’s request purchaser took car to Coutts Newmarket who had the vehicle for the rest of the year and was driven by Johannes Visser for a week.

9 May 2013: Trader advises purchaser that because the problem with the transmission is intermittent and that Autosure will not accept a claim to repair it and purchaser should wait until problem becomes worse.

10 May 2013: Purchaser says he took the vehicle to Autohaus Auckland, EC Mercedez Ltd, Euro Car Services, Auckland Automatics and The Gearbox Factory and says that the overwhelming response he received was that the majority of the symptoms he had reported were evident when driving the vehicle and there is a serious problem with the transmission, possibly a faulty valve body and the engine mounts are worn.

10 June 2013: Purchaser took vehicle back to Coutts and drove it with Mr Visser from Coutts and Mr Hynes from Autosure. The vehicle did not show any faults during that test drive. An agreement was made between Autosure, Coutts and the purchaser that they would each contribute one third of the cost of having the valve body replaced in the transmission. The cost was $3,900 and the purchaser contributed $1,300.

5 August 2013: The valve body and the air conditioning compressor were replaced and Coutts informed the purchaser that they considered the matter resolved.

15 August to 5 December 2013: Autosure replaced the air conditioning compressor because Coutts had supplied Autosure with the wrong part number and the compressor was faulty. Coutts supplied Autosure with the correct part number and Autosure sourced and replaced the compressor for the third time.

January to June 2014: The purchaser says the transmission was still noisy and on 16 June 2014 the purchaser took it to Autohaus who, in a report dated 18 June 2014, say they found “suspected noise” from the vehicle’s front differential. They road tested the vehicle for several days and confirmed “very harsh downshift into 1st or 2nd gear.” Their report notes “Concern is intermittent and difficult to simulate. Concern most prevalent when cold.” There were no stored or current fault codes. The odometer was then 69,321kms or 27,021kms more than at the date of supply.

19 June 2014: the purchaser informed the trader of the findings of Autohaus and Mr Pallesen agreed to discuss them with Autohaus and Autosure. The next day Mr Pallesen told him his experts think the fault may be the circlip or torque converter. The purchaser says he told Mr Pallesen that he wanted to return the vehicle because he does not think there will be a positive outcome. The purchaser took the vehicle back to Coutts from 23 June to 1 July 2014.

1 July 2014: The purchaser says that Mr Pallesen proposed in a phone call to him that Coutts remove the vehicle’s transmission and strip it at the trader’s cost and if there is any fault it will be covered by Autosure. The purchaser says he had concerns about the possibility of not being able to renew his mechanical breakdown insurance cover and he says he told Mr Pallesen that the trader could use his mechanical breakdown insurance policy to cover the cost of repairing the vehicle but the purchaser wanted a replacement vehicle of equal value to the cost price of his vehicle. On the same day the trader sent the purchaser an email containing five possible options involving the purchaser exchanging the vehicle for various models of Mercedes Benz cars and either receiving or paying a small cash difference. None of the options was acceptable to the purchaser.

27 July 2014: the purchaser sent the trader an email saying he wanted a full refund of his purchase price, the premium he had paid for a mechanical breakdown insurance policy of $1,690.50 and the $1,300 he had paid as his agreed share of the valve body replacement.

7 August 2014: Mr John Ingham telephoned the purchaser and asked if he could test drive the vehicle for 20 minutes. The purchaser replied that the trader’s mechanics had driven the vehicle and that he had rejected the vehicle because he did not think it was fit for purpose. He told Mr Ingham that Mr Pallesen had already offered him a replacement vehicle. Later the same day Mr Ingham telephoned the purchaser back to say that Mr Visser had told him there was nothing wrong with the vehicle’s transmission. After a lengthy discussion between the purchaser and Mr Ingham, the purchaser says that Mr Ingham offered him a goodwill trade for a vehicle he says is worth $35,000. When the purchaser told Mr Ingham that Mr Pallesen had already offered him cars worth approximately $52,000 Mr Ingham said that he is the boss.

The trader’s response
[8] Mr Pallesen told the Tribunal that the trader does not dispute the time line provided by the purchaser. However he says that from 5 August 2013 until 19 June 2014 the trader did not hear from the purchaser and he thought the purchaser’s concern regarding the transmission had been resolved. He says that as Coutts were the local agent for Mercedes-Benz he left them to deal with the purchaser. Mr Pallesen says that until he received the purchaser’s application he was not aware of the issues he had with the vehicle’s air conditioning compressor.

[9] Mr Pallesen says that the work he had proposed to the purchaser in July 2014 involved removing the vehicle’s transmission, pulling it apart and torqueing-up the internal components.

[10] On 7 August 2014 Mr Pallesen said that Mr Ingham became involved and asked to drive the vehicle. The purchaser did not agree to Mr Ingham doing so.

[11] Mr Pallesen says that the trader does not believe that there is anything wrong with the vehicle’s transmission and he says that he does not consider that Autohaus have acknowledged there is a problem. The vehicle’s transmission has not been assessed by the trader and it has relied on the advice it has had from Coutts Newmarket who have seen and driven the vehicle.

[12] The Tribunal took the sworn evidence of Mr Johannes Visser, the senior diagnostic technician at Coutts Newmarket by telephone conference call. He said that he had seen the purchaser’s vehicle about three or four times. He says it has harsh gear shifts from 1st to 2nd gear but Mr Visser says he has not been able to fault shifts down in gear and it has never exhibited a fault. He says he has tested the transmission in all sorts of conditions and drove the vehicle for a whole week. He has also been out in the vehicle with the purchaser when the purchaser was driving the vehicle. The purchaser could not simulate the experience he claimed he had with the transmission.

[13] In reply to a question to Mr Pallesen as to why he had suggested pulling apart the transmission Mr Pallesen said that this was a precaution to tighten up the clearances within the transmission and he had only ever told the purchaser that the trader could do that.

The Tribunal’s decision
[14] In deciding the first issue: whether the vehicle complied with the guarantee of acceptable quality in s6 of the Act, the Tribunal has taken account of the fact that the vehicle in this application was when it was sold to the purchaser in October 2012 a six year old New Zealand new Mercedes-Benz ML500 with 42,300kms on its odometer. Its purchase price was $52,000 and it was supplied by a franchised Mercedes Benz dealer. The Tribunal considers that most consumers would expect this vehicle, having regard to its age, low mileage, price and the Mercedes-Benz reputation for quality and reliability to be completely fault free at the time of sale and durable for some considerable time thereafter. In fact, as the purchaser’s chronology of events showed, the vehicle had a number of faults. The first fault, a little more than one month after the date of sale, was the airmatic pump which had to be replaced. At the same time the vehicle’s firmwear had a re-adaptation and the vehicle needed a wheel alignment. The purchaser also found the transmission to be clunky with an erratic shift pattern.

[15] The trader arranged for the purchaser to take the vehicle to Coutts Newmarket in February 2013 after about 6,000kms of use. They removed the transmission pan and lowered and checked the valve body. They also replaced the vehicle’s air flow meter. By August 2013 the engine mounts required replacement and the air conditioning compressor required replacement.

[16] Clearly this vehicle has lacked the durability that a reasonable consumer would regard as acceptable for an expensive low mileage quality European car. H++ence the Tribunal finds that it has failed for that reason to comply with the guarantee of acceptable quality in s6 of the Act.

[17] However, throughout the period he has owned the vehicle, the purchaser has maintained that there is a fault with the transmission and it is that fault on which he relied to reject the vehicle in July 2014. The purchaser’s evidence was that on 10 May 2013 he took the vehicle to Autohaus Auckland Ltd, EC Mercedez Ltd, Euro Car Services Ltd, Auckland Automatics and The Gearbox Factory and that:
“the overwhelming response that I received is that the major symptoms I have reported are evident when driving the car”. However the purchaser did not produce any reports from any of those five firms to show that on that date in May 2013 any of them found anything wrong with the vehicle’s transmission.

[18] In fact the only evidence the purchaser produced to prove that the transmission may be faulty was a copy invoice dated 18 June 2014 and a letter dated 15 September 2014 both from Autohaus Auckland. The invoice refers to a “suspected noise” from the front differential and their finding after road testing the vehicle for several days that it has “very harsh downshift into 1st or 2nd gear” +which they further qualified by describing it as a “concern” that was intermittent and difficult to simulate and was prevalent when cold. Autohaus’ letter of 15 September 2014 contains the same information and a quote of $6,000 to $10,000 to overhaul the transmission; a sum which appears to the Tribunal, on the advice of its Assessor to be wildly extravagant. Significantly, Autohaus Auckland did not find any stored or current fault codes indicating a fault with the vehicle’s transmission.

[19] Mr Johannes Visser, Coutts’ technician gave evidence for the trader that he had driven the vehicle for a week on one of the three or four occasions he has seen the vehicle. He said that apart from a harsh shift from 1st to 2nd gear he has not observed any fault with the vehicle’s transmission.

Conclusion on issue [a]:
[20] Although the vehicle failed to comply with the guarantee of acceptable quality in s6 of the Act because it was not as durable as a reasonable consumer would regard as acceptable for this type of vehicle the Tribunal is not satisfied that the purchaser proved, as he was required to do on a balance of probabilities, that the vehicle’s transmission is faulty.

[21] The Tribunal also considers that even if it had found the transmission was faulty it considers that it probably could not have been able to uphold the purchaser’s rejection of the vehicle because the purchaser did not exercise any right of rejection he might have had within a reasonable time of the date of supply of the vehicle.

Order

The purchaser’s application to reject the vehicle is declined.

DATED at Auckland this 26th day of September 2014.

C.H.Cornwell
Adjudicator