Sharma v N S Motors Limited (in liquidation) - Reference No. MVD 77/2014 (Auckland) [2014] NZMVDT 60 (5 June 2014)

Last Updated: 22 July 2014

Decision No: AK 54/2014
Reference No. MVD77/2014

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN RAJIV SHARMA

Purchaser

AND N S MOTORS LIMITED (IN LIQUIDATION)

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

Mr C H Cornwell, Barrister & Solicitor, Adjudicator
Mr G Middleton, Assessor

HEARING at Auckland on 3rd June 2014

APPEARANCES

Mr R Sharma, the purchaser
Mrs S Sharma, purchaser’s wife
There was no appearance by the trader

DECISION

Background

[1] On 5th June 2013 Mr Sharma (“the purchaser”) bought a 2006 Nissan Tiida registration GYE532 (“the vehicle”) from N S Motors Limited (“the trader”) for $10,000. The vehicle had 32,531kms on its odometer at the date of sale. The trader provided the purchaser with a mechanical breakdown insurance policy with Protecta Insurance NZ Ltd (“Protecta”) with the cost of the cover included in the purchase price for the vehicle.

[2] The vehicle’s transmission developed a fault soon after the purchaser bought the vehicle. In February 2014 after the vehicle had been driven 4,837kms the transmission was overhauled by Kaspa Transmissions Glenfield Ltd. The cost of the transmission overhaul was $4,123.90 of which Protecta paid $3,650 and the purchaser paid the excess of $473.90.

[3] The purchaser requested the trader to reimburse him with the excess of $473.90. The trader is now in voluntary (solvent) liquidation. The trader’s liquidator Pritesh Patel offered on 28 April 2014 to pay the purchaser the sum of $473.90 if the purchaser filed a Proof of Debt. The purchaser has not done so because he believes he is entitled to be paid additional compensation by the trader. He told the Tribunal he wants a further $2,000 because the trader did not supply him with a good vehicle.

[4] The trader did not appear at the hearing.

[5] Prior to the commencement of the hearing the Tribunal appointed Mr Middleton 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 Middleton assisted the adjudicator but the application was determined by the adjudicator alone.

Relevant Law

[6] Section 6 of the Act imposes on a supplier "a guarantee that the goods are of acceptable quality." Section 2 defines "goods" as including "vehicles.”

[7] 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 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

[8] The Tribunal accepts that the vehicle supplied to the purchaser developed a transmission fault in July 2013 which resulted in the transmission being overhauled by Kaspa Transmissions Glenfield Ltd at a cost of $4,123.90 of which Protecta has paid $3,650 and the purchaser $473.90. Clearly the vehicle was not as durable as a reasonable consumer paying $10,000 for a vehicle with 32,531kms on its odometer would regard as acceptable. The Tribunal thus finds the vehicle did not comply with the guarantee of acceptable quality.

[9] The Tribunal accepts that the purchaser was offered reimbursement of the $473.90 he paid as an excess by the trader if he filed a proof of debt with the trader’s liquidator. The purchaser refused that offer and thus it has now been withdrawn by the trader’s liquidator.

[10] The purchaser claims compensation from the trader on the basis first, that the vehicle was not as good as he was told it was and second, that the he may lose money when he sells the vehicle and that he should be compensated in some way for this. When asked by the Tribunal at the hearing what sum he expected as compensation from the trader, he said he would like about $2,000.

[11] The purchaser, despite being requested to do so by the Tribunal before the hearing, failed to bring to the hearing any evidence to support his claim that the vehicle’s value had or would likely be reduced by the transmission fault and its repair or that he has suffered any other loss or damage. As a matter of common sense it appears unlikely to the Tribunal that the vehicle’s value has been reduced by having its transmission (including its torque converter and transmission cooler) overhauled at a cost equivalent to about 40% of the cost price of the vehicle. The Tribunal therefore has no basis on which to make a finding that the purchaser has suffered any loss. The consequence is that the purchaser’s application for compensation must be dismissed.

[12] The purchaser has, for reasons the Tribunal cannot fathom, refused to file a proof of debt for the $473.90 he paid towards the transmission repair cost and the liquidator has withdrawn its offer to pay him that sum. That is a matter the purchaser may wish to re-open with the trader’s liquidator.

Order

The purchaser’s application for compensation is dismissed.

DATED at Auckland this 5th June 2014

C H Cornwell
Adjudicator