King v Priceline Autos Limited Reference No. MVD 165/14 (Auckland) [2014] NZMVDT 121 (20 October 2014)

Last Updated: 28 November 2014

Decision No. AK 104/2014
Reference No. MVD 165/14

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN BRENDON JOHN KING

Purchaser

AND PRICELINE AUTOS LIMITED

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Auckland on 15 October 2014

APPEARANCES

Mr B J King, the purchaser

Mrs D King, purchaser’s mother and support person
Ms K K Devi, manager for the trader
Mr S Prasad, managing director of the trader

DECISION

Background

[1] On 11 August 2014 Mr King (“the purchaser”) bought a 2008 Maxda Axela registration HPK71 (“the vehicle”) from Priceline Autos Limited (“the trader”) for $13,500. The purchaser claims the vehicle has serious faults and has rejected it under s18(3)(a) of the Consumer Guarantees Act 1993 (“the Act”) and seeks a refund of his purchase price and other sums he has incurred totalling $1,309.93.

[2] The trader, represented at the hearing by its managing director Mr Prasad and its manager, Ms Devi has offered and, according to Mr Prasad’s statement to the Tribunal at the hearing, is still willing to refund the purchaser with the full purchase price of $13,500 and to pay the cost of transporting the vehicle from the purchaser’s home near Napier to the trader’s premises in Auckland.

[3] The Tribunal considers that the only live issue between the purchaser and the trader is what consequential costs the purchaser is entitled to recover from the trader.

[4] 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 Issue
[5] The only issue raised by this application is: what damages (if any) is the purchaser entitled to recover from the trader as a consequence of the failure of the vehicle to comply with the Act?

Relevant law
[6] 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

Application of law to facts
[7] The purchaser claimed the following amounts in an email sent to the Tribunal on 9 September 2014:

(a) cost of flights from Napier to Auckland to purchase the vehicle $337.90, accommodation, $119 and rental car $188.50; total $645.40;
(b) cost of replacing two car tyres $370;
(c) wheel alignment $50;
(d) servicing costs $218.50;
(e) vehicle insurance $214.53.

(a) Costs of flight to Auckland, accommodation and hire car
[8] The purchaser told the Tribunal that the amounts claimed under (a) above for flights to Auckland, accommodation and a rental car totalling $645.40 were incurred when he travelled to Auckland to view and buy the vehicle on 11 August 2014. Section 18(4) only allows the Tribunal to order the supplier to pay for any loss or damage resulting from the failure of the vehicle to comply with the guarantee; in this case the guarantee of acceptable quality, which was reasonable foreseeable as likely to result from the failure. The Tribunal does not consider that costs incurred in coming to Auckland to buy the vehicle can be considered to be costs arising from the failure of the guarantee because of course the purchaser incurred them before he bought the vehicle and certainly before it failed the guarantee of acceptable quality. None of those costs were reasonably foreseeable.

(b) Cost of replacing two tyres and
(c) wheel alignment
[9] The cost claimed by the purchaser for two tyres of $370 was incurred by the purchaser on 17 August 2014. There was no evidence that the reason the front right tyre failed was because of any fault with the vehicle’s wheel alignment. In the Assessor’s view it is far more likely that the reason the front right tyre’s side walls failed was because the driver of the vehicle continued to drive the vehicle after the tyre had punctured and drove the tyre to destruction.

[10] However the reason the Tribunal is unable to order the trader to pay the cost of the two front tyres of $370 incurred on 17 August , or the wheel alignment charge of $50 incurred on 19 August is because the purchaser did not, before he incurred the cost of the two tyres or the cost of the wheel alignment, require the trader to replace the tyres or have a wheel alignment done at its cost as he was required to do in terms of s18(2)(a) of the Act. The Tribunal is therefore unable to order the trader to reimburse the purchaser with those two amounts.

(d) Servicing costs
[11] The purchaser claimed $218.50 for the cost of replacing the vehicle’s oil, oil filter, clips carried out on 21 August 2014 by Dave Sutton. This is a normal servicing cost of ownership of a vehicle and was not a cost incurred resulting from the failure of the vehicle to comply with the guarantee of acceptable quality. The Tribunal is likewise unable to order the trader to reimburse that sum.

(e)Insurance cost
[12] The amount the purchaser claimed for insurance of $214.53 is not a cost resulting from the failure of the vehicle to comply with the guarantee of acceptable quality but it is a sum paid by the owner of the vehicle to insure himself against unforeseen damage to the vehicle or liability to the owner as a consequence of the vehicle becoming involved in an accident. As such the Tribunal is unable to order the trader to reimburse the purchaser with that sum because it does not fall within the type of loss the Tribunal can order under s18(4) of the Act.

Conclusion
[13] The Tribunal will, as the trader agreed, order the trader to refund the purchaser with the purchase price of $13,500 and will also order the trader, at its cost, to collect the vehicle from the purchaser’s home and transport it back to Auckland. All the purchaser’s claims for consequential loss will be dismissed for the reasons appearing above.

Orders

1. The trader shall refund the purchaser with his purchase price of $13,500 immediately.
   
2. As soon as it has paid the purchaser the sum of $13,500 the trader shall arrange at its cost to collect the vehicle from the purchaser’s home.
   
3. All the purchaser’s claims for consequential loss are dismissed.
   

DATED at Auckland this 20th day of October 2014.

C.H.Cornwell
Adjudicator