Jones v Wayne Timms Motor Court Limited - Reference No. MVD 87/14 (Auckland) [2014] NZMVDT 80 (31 July 2014)

Last Updated: 20 August 2014

Decision No. WN 13 /2014

Reference No. MVD 87/14

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN DARRELL JONES

Purchaser

AND WAYNE TIMMS MOTOR COURT LIMITED

Trader

BEFORE THE WELLINGTON MOTOR VEHICLE DISPUTES TRIBUNAL

N J Wills - Barrister, Adjudicator
N Barrett - Assessor

HEARING at CHRISTCHURCH on 23 June 2014

APPEARANCES

Darrell Jones, purchaser
Raewyn Jones, witness for the purchaser
Wayne Timms, director, for the trader
Helen Timms, director, for the trader

DECISION

Background

[1] On 2 August 2013, Darrell Jones (the purchaser) purchased a 2007 Range Rover Vogue (registration GWU 253), (the vehicle) for $55,000 from Wayne Timms Motor Court Limited (the trader). Mr Jones has rejected the car on the grounds that the trader has failed to remedy an air suspension air bag failure and noisy air suspension compressor.

[2] The trader does not accept that Mr Jones is entitled to reject the vehicle.

[3] Prior to the commencement of the tribunal’s inquiry the Tribunal appointed Mr Barrett who took the oath required of an assessor by Schedule 1, cl.10(2) of the Motor Vehicle Sales Act 2003. As an assessor appointed pursuant to the Motor Vehicle Sales Act 2003 Mr Barrett assisted the adjudicator but the application was determined by the adjudicator alone.

Facts
Background

[4] On 2 August 2013 Mr Jones entered into a vehicle offer and sale agreement to buy the vehicle for $55,000. At the time he bought the vehicle the odometer reading was 98,390 kilometres.

[5] On 28 December 2013, Miss Thorne (Mr Jones’ partner) was driving the vehicle when the right front air bag failed, the air bag is a suspension component used insead of springs to allow for height control. On this four wheel drive vehicle it allows the vehicle to be raised and lowered according to the driving terrain. At the time of failure it was not evident that this was the cause of the problem. A warning light illuminated indicating a suspension fault and a warning not to exceed 50 kilometres per hour. Miss Thorne stopped driving and contacted Mr Jones who in turn contacted Mr Timms the trader. Mr Timms told Mr Jones he needed to check what the warning was for and suggested that someone may have played with the suspension levels.

[6] Mr Jones had a look at the warning messages displayed and under the vehicle, he could hear air leaking out the right front suspension airbag. Mr Jones arranged for a transporter to pick up the vehicle and take it back to Miss Thorne’s parents’ property.

[7] Mr Jones contacted Mr Timms by telephone to advise him of the problem. Because Mr Timms was away on holiday on his boat they had some difficulty connecting and most of their subsequent correspondence was via text message. A review of the text messages shows that Mr Timms was initially happy to provide Mr Jones with some assistance to find parts, but on 10 January 2014 in response to Mr Jones’ request for contact details for his mechanic advised that air bags are “not a warrantable item”, and that his daughter had recently had to pay to have an air bag replaced herself. Mr Jones concluded the text message by saying that he was “just doing my best to help the situation and save you some money.” Mr Jones replied “I am going to mta” but did not get a response from Mr Timms.

[8] At the hearing Mr Timms told the tribunal that his text advising that the air bag was not a warrantable item was a reference to the standard terms and conditions of Protecta’s mechanical protection insurance. He said that at this stage, he had not made a final decision not to accept responsibility for the repairs and that he asked Mr Jones to bring the car in so he could assess it.

[9] On 14 January 2014 Mr Jones took the car to Archibalds Motors Ltd (Archibalds). The Archibalds invoice records the vehicle’s odometer reading as 110,773 kilometres so the vehicle had travelled approximately 12,000 kilometres in the four months Mr Jones had it. Archibalds diagnosed a hole in the right front air bag (at a cost to Mr Jones of $103.50). Archibalds estimate to replace the airbag was $2,374. Archibalds noted excessive noise in the air compressor but this was not diagnosed further. It is common ground that the failed air bag is a problem that would result in the vehicle failing a warrant of fitness inspection.

[10] The same day Mr Jones took the car into the trader with a rejection letter on the grounds that the trader has not remedied the fault. The letter noted the problems as a hole in the right front air bag and the air compressor noise. Mr Jones told the tribunal that Mr Timms told him that he had no money, re-iterated that the air bag was a non-warrantable item and finally offered $75 towards the labour costs of the repair.

[11] Mr Timms told the tribunal that Mr Jones did not give him a real chance to do anything about the problem and that he had “never really ever said no”. As far as Mr Timms was concerned the matter was still under negotiation when he received the rejection letter.

[12] Mr Timms told the tribunal that he had obtained alternative estimates for replacement of the air bag. The estimates were for $1,100 and $1,275. He obtained these estimates over the phone and was not able to provide the tribunal with any written details. Mr Timms also suggested that the Christchurch roads may have been a factor in the air bag failure.

The Consumer Guarantees Act 1993

The guarantee of acceptable quality

[13] Section 6 of the Consumer Guarantees Act 1993 (CGA) provides a guarantee as to the acceptable quality of goods sold:

"6 Guarantee as to acceptable quality

(1) Subject to section 41 of this Act, 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 of this Act may give the consumer a right of redress against the supplier; and

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

[14] Section 7 sets out a definition of the guarantee of acceptable quality:

"7 Meaning of “acceptable quality”
(1) For the purposes of section 6 of this Act, 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,—
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—
(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."

[15] In considering whether or not goods meet the guarantee of acceptable quality, the Tribunal must consider the quality elements as set out in section 7(1)(a) to (e) as modified by the factors set out in section 7(1)(f) to (j) from the perspective of a “reasonable consumer”. This test is an objective test. It is not a review of those factors from the purchaser’s subjective perspective.

[16] The vehicle needs the right front airbag replaced. The tribunal accepts Archibalds’ estimate for the cost of those repairs. Relying on the expertise of the tribunal’s assessor Mr Barrett, the tribunal finds those repair costs reasonable. It is noted that often trader’s are able to obtain estimates for repairs at “trade rates” that are significantly less than estimates obtained by purchasers. This may be the case here, although without more detailed evidence of the basis for the estimates, the tribunal is unable to reach any conclusion in regard to that.

[17] The vehicle supplied is a seven year old Range Rover Vogue with an odometer reading of 98,390 km. The purchase price was significant - $55,000. The airbag failed about four months after purchase and around 12,000 kilometres of use. The tribunal accepts that 12,000 kilometres is a significant mileage for that period of time – it is closer to around a year’s average use of a vehicle.

[18] There is no basis to conclude that the problem was caused by Christchurch roads – particularly given that the vehicle is designed for off-road use.

[19] Bearing in mind all of those factors, the tribunal finds that the air bag failure is a failure in the guarantee of acceptable quality. The tribunal does not consider that a reasonable consumer, having spent $55,000 on a seven year old vehicle with relatively low mileage would expect to have to replace a reasonably significant component at a cost of around $2,400 within the first year of ownership.

What are the remedies available to the purchaser?

[20] Section 18 of the Consumer Guarantees Act 1993 sets out the remedies available to the purchaser in respect of a failure in the guarantee of acceptable quality. It 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 of this Act 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—
(a) Require the supplier to remedy the failure within a reasonable time in accordance with section 19 of this Act:
(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,—
(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 of this Act, reject the goods in accordance with section 22 of this Act.
(3) Where the failure cannot be remedied or is of a substantial character within the meaning of section 21 of this Act, the consumer may—
(a) Subject to section 20 of this Act, reject the goods in accordance with section 22 of this Act; 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) of this section, 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."

[21] Mr Jones asked the trader to fix the problem. The tribunal is satisfied that Mr Timms refused to do so. His text message was clear and unequivocal. When Mr Jones replied that he was going to contact the Motor Trade Association, Mr Timms did not respond. These are not the actions of a trader still contemplating his responsibilities. Mr Jones was entitled to conclude that the trader was not going to fix the vehicle. In those circumstances the trader has refused to remedy the failure in the guarantee of acceptable quality as contemplated by section 18(2)(b) (set out above). Mr Jones is therefore entitled to reject the vehicle pursuant to section 18(2)(b)(ii) and he did so on 14 January 2014.

[22] The tribunal upholds Mr Jones rejection. He is also entitled to recover the cost of diagnosing the problem ($103.50). Given that it may be difficult to move the vehicle, it is appropriate that the trader be responsible for collecting the vehicle from Mr Jones once he has refunded the purchase price.

Orders

1. Mr Jones rejection of 14 January 2014 is upheld.
2. The trader shall pay Mr Jones $55,103.50.
3. Once the payment in order 2 has been paid, Mr Jones will release the vehicle to the trader.
   

DATED at WELLINGTON this 31st day of July 2014

___________________
N Wills
Adjudicator