Wilford v Team Auto Market Auckland Limited T/A Team AutoMarket Reference No. MVD 149/14 (Auckland) [2014] NZMVDT 110 (6 October 2014)

Last Updated: 28 November 2014

Decision No. AK 94 /2014

Reference No. MVD 149/14

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN STEPHEN MATTHEW DENIS WILFORD

Purchaser

AND TEAM AUTO MARKET AUCKLAND LIMITED T/A TEAM AUTO MARKET

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Auckland on 29 September 2014

APPEARANCES

Mr S M D Wilford, the purchaser

Ms M Matthew, purchaser’s wife and witness
Mr T M Barrow, director of the trader
Mr W Kirkpatrick, salesperson for the trader

DECISION

Introduction

[1] On 5 October 2013 Mr Wilford (“the purchaser”) bought a 2007 Nissan Vanette registration HCD74 (“the vehicle”) for $8,440 from Team Auto Market Auckland Limited (“the trader”). The purchaser has applied to recover $2,701 he spent in replacing the vehicle’s engine because its crank shaft was damaged by a poorly fitted cam belt in the vehicle at the time he bought it. The purchaser claims the vehicle had a fault when it was supplied to him by the trader and did not comply with the guarantee of acceptable quality in the Consumer Guarantees Act 1993 (“the Act”).

[2] The trader says the purchaser did not inform the trader that there was a problem with the vehicle lacking power until the trader’s director Mr Barrow telephoned the purchaser on 4 July 2014. The trader says it considers it unfair that it should be expected to pay for the fault ten months and 10,773kms after the vehicle was supplied to the purchaser.

[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 in this case are:
[a] Whether the vehicle was of acceptable quality at the time of sale in terms of the Act?
[b] If not whether the purchaser required the trader to remedy the failure before having it repaired?
[c] If so what sum is the purchaser entitled to obtain from the trader?

Issue [a]: Whether the vehicle was of acceptable quality at the time of sale in terms of the Act?

Relevant law

[5] The expression "acceptable quality" was defined, at the time of sale of this vehicle, 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.

[6] 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
[7] The purchaser is an electrician. His van was involved in an accident and he received a payment from an insurance company which he decided to use to purchase a replacement van to carry on his business and also to use to take his children to school. He went to the trader and agreed, after being taken for a test drive by the trader’s salesman, to buy it for $8,440. The vehicle had 168,480kms on its odometer and was a Japanese import. The purchaser says he decided to buy a Nissan Vanette because he mistakenly thought that all Nissan vehicles were fitted with cam chains rather than cam belts. He says that he asked the trader’s salesman if the vehicle had a cam chain or a cam belt and the salesman, Mr Kirkpatrick told him, he says it “probably” had a cam chain. Mr Kirkpatrick gave evidence that he had been selling passenger and commercial vehicles for about 40 years and could not remember if he told the purchaser the vehicle probably had a cam chain.

[8] After buying the vehicle the purchaser says it lacked power, particularly on hills. He claimed it would only drive up hills 20kph. The purchaser had the vehicle serviced by Auto Super Shoppe Birkenhead (“ASSB”) on 18 June 2014 at 178,487kms (10,007kms after purchasing it). ASSB’s invoice describes the work done in servicing the vehicle followed by the following:
“NOTE
Cambelt was replaced at 105,000kms”.
The purchaser told the Tribunal he saw that note on the invoice but did not make any contact with the trader.

[9] On 2 July 2014 the purchaser had ASSB check the vehicle for poor running. ASSB’s invoice records they cleaned the air mass sensor and noticed a slight improvement, checked the fuel pressure and suspected a faulty air mass sensor or fuel supply. They obtained and fitted a replacement air mass sensor at a cost of $344.65. The purchaser did not contact the trader before having the air mass sensor replaced.

[10] The purchaser says that after the air mass sensor was replaced he drove the vehicle but did not notice any significant improvement in the vehicle’s performance. He returned the vehicle to ASSB on 3 or 4 July 2014 to have ASSB investigate the vehicle’s fuel pump. ASSB then found the crank shaft bolt on the vehicle was loose and the timing belt pulley was moving and causing wear in the key way of the crank shaft. ASSB told the purchaser that it was not economic for it to replace the crank shaft; they recommended removing the old engine and replacing it and at the same time supplying and fitting a new water pump and timing belt, pulley, tensioner and seals. ASSB did that work and completed it at a cost of $2,701.81 on 9 July 2014. ASSB’s invoice records the vehicle’s odometer as 179,253kms or 10,773kms more than at the time the vehicle was sold to the purchaser.

[11] The purchaser told the Tribunal that he thought that the repairs to the vehicle had been completed before he telephoned the trader to speak to it about contributing to his repair costs. However Mr Barrow told the Tribunal that he had received a message to telephone the purchaser and had done so on 4 July 2014. The purchaser had spoken to him and told him that the cam belt had broken. The purchaser was unable to tell Mr Barrow the vehicle’s odometer at that time and as a result Mr Barrow had told the purchaser that the trader did not consider it had any obligation to contribute towards the replacement of the vehicle’s engine.

[12] Mr Barrow told the Tribunal that most Nissan vehicles have chain belts but the Nissan Vanette is a Mazda which is badged as a Nissan and has a cam belt. He says the purchaser did not contact the trader after he bought the vehicle to tell it the vehicle lacked power. Mr Barrow says that when he telephoned and spoke to the purchaser on 4 July the purchaser told him the cam belt had broken but was unable to say what the vehicle’s mileage was. Mr Barrow says that after receiving a copy of the purchaser’s application from the Tribunal he made contact with the purchaser and arranged to meet the purchaser to try and mediate the dispute. He says he offered the purchaser $500 which the purchaser referred to his wife and subsequently refused. Mr Barrow says the purchaser has used the vehicle for nine months to travel 10,773kms before the issue arose and he considers it unreasonable to expect the trader to contribute to the vehicle’s repair costs after that amount of use.

[13] The Tribunal has to decide whether the vehicle complied with the guarantee of acceptable quality at the time of sale. In order to do that it has had regard to the following factors relevant to determining the expectations of a reasonable consumer. The vehicle supplied to the purchaser by the trader was a seven year old imported Nissan Vanette. It was sold for $8,440 and it had travelled 168,480kms at the date of sale. The Trader might have, had it chosen to do so, agreed in writing with the purchaser to exclude the provisions of the Act from applying to this transaction in terms of s43(2) of the Act because clearly the purchaser was buying the vehicle almost exclusively for his business as an electrician. The trader did not do so and so the purchaser has the benefit of the statutory guarantees in the Act.

[14] The purchaser produced photographic evidence of the worn key way on the vehicle’s crank shaft. The Tribunal’s Assessor has advised the Tribunal that he considers it very probable that when the vehicle’s cam belt was changed in Japan at 105,000kms the cam belt pulley was not tightened properly allowing the pulley to move about causing wear in the crank shaft key way. The Tribunal’s Assessor has advised the Tribunal that this fault would have been present when the trader sold the vehicle to the purchaser and it probably explains the vehicle’s lack of power under load when going up hills. The Tribunal considers this fault ultimately resulted in the crank shaft becoming worn and was the reason the vehicle needed a new engine in July 2014. In summary the vehicle had a fault at the time it was sold to the purchaser which ultimately resulted in the need to replace the vehicle’s engine. The Tribunal does not consider that a reasonable consumer would regard that fault as acceptable even in a seven year old moderately high mileage vehicle sold for $8,440.

Conclusion on issue [a]

[15] The Tribunal concludes that the vehicle did not, at the time of sale, comply with the guarantee of acceptable quality because of the loose cam belt pulley.

Issue [b]: Whether the purchaser required the trader to remedy the failure before having it repaired?

Relevant law

[16] Section 18 of the Act 21 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

[17] The purchaser gave evidence to the Tribunal that he had the vehicle’s engine replaced before he telephoned the trader and asked it to pay for the repairs. The trader however, to the purchaser’s advantage and indeed to the credit of Mr Barrow’s honesty, told a different story. Mr Barrow said that he had received a telephone call from the purchaser about 3 or 4 July asking Mr Barrow to ring the purchaser. Mr Barrow says that when he telephoned the purchaser on 4 July (and Mr Barrow appeared to be sure of the date) the purchaser told him about the vehicle’s engine problem and asked the trader to pay to have it repaired before he had it repaired. Mr Barrow said that he refused to do so for the reasons recorded in paragraph [12] (above).

Conclusion on issue [b]

[18] The Tribunal finds, on the basis of the evidence given by Mr Barrow, that the purchaser required the trader to pay the cost of replacing the vehicle’s engine on 4 July before the purchaser had the work done by ASSB on 7 July 2014. The trader refused the purchaser’s request. The Tribunal, having found that the vehicle failed to comply with the guarantee of acceptable quality and the trader having refused to repair the vehicle’s engine, is satisfied that the purchaser was entitled to proceed to have the work done by ASSB and is entitled to recover the reasonable cost of doing so from the trader.

Issue [c]: What are the reasonable costs incurred in having the failure remedied?

Relevant law

[19] Section 18 of the Act sets out the remedies available to a consumer where a supplier fails to comply with the guarantees in the Act.
Application of law to facts

[20] Tribunal has found that the vehicle’s cam pulley failure amounted to a breach of the guarantee of acceptable quality which the trader, after being required to do so, refused to remedy. The purchaser provided evidence that he had spent $2,701.81 having a replacement engine fitted to the vehicle. The replacement engine had travelled 97,000kms whereas the engine in the purchaser’s vehicle had travelled 179,000kms at the time the cam pulley failed. The Tribunal thinks that the purchaser has probably obtained some betterment from replacing the vehicle’s engine with one which has supposedly travelled 82,000 fewer kilometers. The Tribunal therefore considers that a modest reduction in the purchaser’s repair costs to allow for that betterment is reasonable. The Tribunal will allow $700 for betterment and order the trader to pay the purchaser $2,000.

Conclusion

[21] The Tribunal will order the trader to pay the purchaser $2,000 immediately.

Order

Team Auto Market Auckland Limited shall pay Stephen Wilford $2,000.00 immediately.

DATED at AUCKLAND this 6th day of October 2014

C.H.Cornwell
Adjudicator