Black v X T Motors Limited - Reference No. MVD 115/14 (Wellington) [2014] NZMVDT 81 (4 August 2014)

Last Updated: 24 September 2014

Decision No. WN 14 /2014

Reference No. MVD 115/14

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN SHANNON BLACK

Purchaser

AND X T MOTORS LIMITED

Trader

BEFORE THE WELLINGTON MOTOR VEHICLE DISPUTES TRIBUNAL

N J Wills - Barrister, Adjudicator
S Gregory - Assessor

HEARING at AUCKLAND on 24 June 2014

APPEARANCES

Shannon Black, purchaser
Malcolm Miller, for the purchaser
Xintuo Zhao, director, for the trader

DECISION

Background

[1] On 30 March 2014, Shannon Black (the purchaser) purchased a 2005 Nissan Presage (registration HJL 632), (the car) for $9,295 from X T Motors Limited (the trader). Ms Black has rejected the car on the grounds that the trader has failed to remedy a stalling problem.

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

[3] Prior to the commencement of the Tribunal’s inquiry the Tribunal appointed Mr Gregory 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 Gregory assisted the adjudicator but the application was determined by the adjudicator alone.

Facts
Background

[4] On 30 March 2014 Ms Black entered into a vehicle offer and sale agreement to buy the car for $9,295. When she bought the car the odometer reading was 84,800 kilometres. A few days after taking possession of the car, it developed a stalling problem. On starting the car the engine would start and then immediately stall. The purchaser also noticed the car had very high fuel consumption.

[5] The purchaser contacted Mr Zhao, the director of the trader. Mr Zhao collected the car and had the spark plugs cleaned and changed the oil and filter. Mr Zhao told the tribunal that he had this work carried out by a company that carries out import compliance checks for the trader. He was not able to provide any invoices for this work at the hearing.

[6] The fault recurred a few days later. Ms Black sent a text message to Mr Zhao on 11 April 2014. Mr Zhao suggested that she purchase a mechanical protection insurance policy and that Ms Black could claim for any necessary repairs under that policy. Ms Black declined this option because the fault was existing at the time of sale and was not prepared to adopt that course of action.

[7] Mr Zhao asked for a few days grace so he could try and figure out what needed to be done to fix the car. Ms Black dropped the car at the trader on 16 April 2014 and left if with the trader over the Easter weekend. Ms Black got the car back on 23 April 2014. Mr Zhao told her that one of his customers had advised him to clean the throttle body and that he had done this. What he did not tell her was that he did this himself by simply wiping the throttle body with a rag.

[8] Ms Black had no further problems with the car for the next fourteen days and the fuel consumption was much better. Because she thought the problem was fixed, Ms Black decided to have a towbar fitted to the car at a cost of $320.

[9] On May 3, Ms Black noticed the fuel decreasing noticeably and on 7 May the car started stalling again. On 10 May Ms Black sent Mr Zhao a text. That text and subsequent texts (all received on the same day) are set out below:

“Hi Simon, the presage wasn’t too bad for the first week but since last weekend the fuel economy has started going down again and the it cut out once on Wednesday and once on Friday.”

“Morning if it’s getting worse again I will come and clean the throttle body for you. Thanks”

“I’ve spoken to MTA and they say if it was cleaned and got better and then gets worse again it probably needs to be replaced. We would really like it if it could be checked by someone with the proper computer so that we can find out what is really going on.”

“It’s just about the throttle body the computer doesn’t show anything fault on the car. It’s dirty so that the idle speed will be low. Try start the car and wait 1 or 2 seconds then shift the gear don’t do it too hurry.”

[10] Ms Black told the tribunal that she concluded from the trader’s texts that the trader was only prepared to re-clean the throttle body and was not prepared to take further steps to remedy the fault. As the throttle body had already been cleaned, Ms Black did not think the trader’s offer was helpful.

[11] What was not known to Ms Black was that Mr Zhao had cleaned the throttle body himself by wiping it with a rag. Mr Zhao told the tribunal that when he heard that the problem had returned, he thought the problem may be able to be resolved by a “proper” clean (which involves removal of the throttle body so that both sides of the blade can be cleaned). It was this thought process that prompted his suggestion of cleaning the throttle body again.

[12] Ms Black took further advice from the MTA who advised her that the trader had failed to repair the problem and that she would be within her rights to reject the car. Ms Black took the car to City Nissan on 20 May 2014. The car was scanned (at a cost of $65.50). The scan indicated a crank sensor fault. Nissan provided an estimate for the cost of replacing the crank sensor and inspecting the timing chain of $365.70. The inspection of the timing chain was recommended to ensure that it had not stretched past its serviceable length because if this has occurred it can trip an erroneous crank sensor fault.

[13] On 21 May 2014, Ms Black sent a letter to the trader rejecting the car on the grounds that the trader had not repaired the car within a reasonable time-frame. Ms Black told the tribunal that at that stage the trader had been notified of the fault three times and that eight weeks had passed since she first told the trader about the problem.

[14] The trader did not accept that Ms Black is entitled to reject the car. Ms Black then made this application to the tribunal. At the request of the tribunal, Ms Black had City Nissan inspect the timing chain at a cost of $131.10. City Nissan determined that there was no problem with the timing chain – the required repair is replacement of the crankshaft position sensor at a cost of $234.60.

[15] Mr Zhao appeared for the trader. He did not dispute Ms Black’s version of events. He submitted that the problem was an intermittent problem and is not easily diagnosed. Mr Zhao said that the first time the car came in he sought advice from the company that carries out compliance on vehicles he imports. He got that company to clean the spark plugs and change the oil.

[16] The next time the car came in, Mr Zhao took advice from a customer who has mechanical expertise and a mechanic at a panel beating workshop called Infinity. The customer he took advice from suggested that he have the throttle body cleaned. Mr Zhao told the tribunal that Infinity also carried out a diagnostic scan which did not reveal any problem. He said that Infinity did not charge him for this work, so he had no invoice to provide the tribunal.

[17] When Ms Black contacted him for the third time, Mr Zhao concluded that the throttle body probably needed a professional clean using solvents and it was in this context that he offered to clean the throttle body.

[18] Mr Zhao does not dispute the fault identified by City Nissan. He remains of the view that he would have carried out the necessary repairs but did not have the opportunity to do so.

The Consumer Guarantees Act 1993

The guarantee of acceptable quality

[19] 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."

[20] 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."

[21] 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.

[22] The car started stalling within a few days of Ms Black purchasing it. It is a nine year old second hand car with an odometer reading of 84,800 kilometres, sold to Ms Black for $9,295. The problem is minor and can be repaired for a few hundred dollars. The tribunal is satisfied that a reasonable consumer would not regard a car to be of acceptable quality where almost immediately repairs had to be carried out – even if they were only going to cost around $300.

What are the remedies available to the purchaser?

[23] 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."

[24] In this case Ms Black asked the trader to fix the problem. The trader had two opportunities to fix the problem before Ms Black rejected the car. At the hearing Mr Zhao submitted that the problem was unusual, displayed intermittent symptoms and was difficult to diagnose. Relying on the expertise of the tribunal’s assessor Mr Gregory, the tribunal does not accept that this is an unusual problem or difficult to diagnose or repair.

[25] The throttle body should have been the first component that was checked but there was no attempt to do this the first time the car was returned to the trader. When the car was returned on the second ocassion, Mr Zhao made an attempt to clean the throttle body but it did not clean it properly.

[26] Ms Black then rejected the car which she was entitled to do if the trader had neglected to remedy the failure or did not succeed in remedying the failure within a reasonable timeframe (see section 18(2)(b) set out above).

[27] The tribunal is satisfied that the trader did not remedy the failure within a reasonable timeframe. Over the course of eight weeks the trader did not obtain the appropriate professional advice to deal with the problem and then made half-hearted attempts to fix the problem himself when he knew that he did not have the mechanical expertise to do so.

[28] In those circumstances, and notwithstanding that the problem requires only a minor repair, Ms Black did have the right to reject the car and has done so lawfully. The tribunal upholds her rejection. Ms Black is entitled to a refund of the purchase price and to be reimbursed for the Nissan City scan ($65.50) and the timing chain inspection ($131.10). Ms Black is also entitled to be reimbursed for the cost of fitting the towbar ($320).

Orders

1. Ms Black’s rejection of the car dated 21 may 2014 is upheld.
2. The trader shall pay Ms Black $9,811.60.
3. Once the payment in order 2 has been paid, Ms Black shall return the car to the trader.
   

DATED at WELLINGTON this 4th day of August 2014

___________________
N Wills
Adjudicator