Palavi v Venus Allied Limited T/A Venus Motors Reference No. MVD 205/2015 (Wellington) [2015] NZMVDT 153 (1 December 2015)

Last Updated: 19 January 2016

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

Reference No. MVD 205/2015 (WN) 10

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN GENUINE ALEXANDER FONUA PALAVI

Purchaser

AND VENUS ALLIED LIMITED T/A VENUS MOTORS

Trader

MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator
S Gregory – Assessor

HEARING at Auckland on 9 November 2015
DATE OF DECISION 1 December 2015

APPEARANCES

G A F Palavi, Purchaser
E Taufalele and S Palavi, Purchaser’s support persons

A Sharma, Director of Trader

DECISION

Venus Allied Limited must pay Mr Palavi $3,864.00 immediately.

REASONS

Introduction

[1] The purchaser of a Nissan Lafesta has experienced engine problems with his vehicle. Is he entitled to a remedy from the trader? If so, what should the remedy be?
[2] This claim raises the following issues:

• (a) Issue 1: was there a failure to comply with the guarantee of acceptable quality in the Consumer Guarantees Act 1993 (“the Act”)?
• (b) Issue 2: can the failure be remedied?
• (c) Issue 3: has the trader refused to remedy the failure or been unsuccessful in remedying the failure within a reasonable time?
• (d) Issue 4: what is the appropriate remedy?

Background

[3] On 21 October 2014, Mr Palavi purchased a 2006 Nissan Lafesta from Venus Allied Limited (“Venus Motors”). The vehicle had 79,852km on the odometer and the purchase price was $11,995.
[4] Within three months of purchasing the car, Mr Palavi experienced problems starting the vehicle. He returned it to Venus Motors, which arranged for a mechanic to change the battery.
[5] The problem recurred and, once again, Mr Palavi returned the vehicle to the trader who again arranged for a mechanic to address the starting problem.
[6] Subsequently, Mr Palavi has experienced problems with the vehicle’s engine, causing the car to shake, following which the engine cuts out.
[7] Mr Palavi returned the vehicle to Venus Motors, which gave Mr Palavi a mechanical warranty and told him he could have the problem fixed by a mechanic and Venus Motors would pay any excess. There were, however, delays in arranging for a courtesy vehicle for Mr Palavi for the period his vehicle would be under repair. He was told by the mechanic and Venus Motors to wait until a courtesy vehicle became available. Mr Palavi became frustrated with the delay, and eventually applied to the Tribunal on 7 July 2015. The vehicle had been parked up at Mr Palavi’s home for about two months before his application to the Tribunal.
[8] On 31 August 2015, Mr Palavi took the vehicle to Toniki Auto Repairs Limited. Toniki recommended that the vehicle be scanned for faults.
[9] On 25 September 2015, Mr Palavi took the vehicle to Manukau Nissan, which investigated the shaking Mr Palavi observed while driving and stationary. Manukau Nissan also investigated Mr Palavi’s report that the vehicle had a “flat spot”, and died out when stopped for a while.
[10] Manukau Nissan checked the engine and found multiple faults, including overheating. Manukau Nissan advised Mr Palavi that he would need to replace the engine and quoted him $1,150 plus GST and a labour cost of 15 hours at $130 plus GST. Manukau Nissan charged Mr Palavi $299 for this diagnostic work. Mr Sharma told the Tribunal he thought he might be able to get the work done more cheaply, but he did not provide the Tribunal with any alternative estimate for the work.

Issue 1: was there a failure to comply with the guarantee of acceptable quality in the Act?

[11] Section 6 of the Act provides a guarantee that goods are of an acceptable quality. According to s 2 of the Act “goods” includes vehicles.
[12] The meaning of acceptable quality is defined in s 7 of the Act (as far as is relevant) 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,—

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:

(ha) the nature of the supplier and the context in which the supplier supplies 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.

[13] It was not entirely clear when the problems with the engine commenced. It appears likely, however, that they were within the first six months of Mr Palavi’s ownership of the vehicle.
[14] Mr Palavi has only driven approximately 7,000 km in the vehicle; its mileage was recorded at 86,757 km on the Manukau Nissan report, which is dated 25 September 2015.
[15] In my view, having considered the Assessor’s advice, this vehicle was not as durable as a reasonable consumer would regard as acceptable, having regard to its age, mileage and price. A reasonable consumer would expect a 2006 vehicle with 79,852km costing $11,995 to last more than 6 months and 7,000km before needing an engine replacement.
[16] Accordingly, in light of my finding on this issue, I conclude that the vehicle failed to comply with the guarantee of acceptable quality in s 6 of the Act.

Issue 2: can the failure be remedied?

[17] As set out above, Manukau Nissan has provided an estimate to remedy the failure by replacing the engine of the vehicle. The Assessor considered the amount of this estimate to be reasonable.

Issue 3: has the trader refused to remedy or been unsuccessful in remedying the failure within a reasonable time?

[18] Mr Sharma, the director of Venus Motors, indicated at the hearing that he was willing to assist Mr Palavi to ensure that the vehicle is fixed. He said he had made several attempts to contact Mr Palavi, but these attempts were unsuccessful. However, it appears that, up until now, Venus Motors has only offered to pay any excess on a claim under Mr Palavi’s mechanical warranty. As there was a breach of the guarantee of acceptable quality under the Act, Mr Palavi is entitled to seek a remedy under the Act and is not required to claim under the warranty. In any event, as the Assessor pointed out in the hearing, there would also be a question about whether the engine problems were a pre-existing fault, meaning that Mr Palavi could not claim under the warranty.
[19] Mr Palavi denied that Venus Motors had told him to take the vehicle to a mechanic and that it would pay. All Venus Motors said to him was to return the car to Venus Motors and they would fix it. Mr Palavi did this about two months before applying to the Tribunal and was told to wait for a courtesy car, and he had not heard from Venus Motors since. Mr Palavi’s sister in law had been in to Venus Motors several times to inquire about the availability of a courtesy car but was told none was available and that he should continue to wait.
[20] Mr Palavi’s attempts to get Venus Motors to repair the vehicle have not been successful and Mr Palavi has concluded, reasonably in my view, that Venus Motors has either refused to fix the problem or has at least been unsuccessful in doing so.

Issue 4: what is the appropriate remedy?

[21] As I have found that Venus Motors has up until the date of the hearing refused to remedy or has been unsuccessful in remedying the failure of the vehicle to comply with the guarantee of acceptable quality, I conclude that Mr Palavi is entitled to have the failure remedied elsewhere and obtain from Venus Motors all reasonable costs incurred in having the failure remedied.[1]
[22] Accordingly, I order that Venus Motors must immediately pay Mr Palavi the cost, as quoted by Manukau Nissan, for replacing the vehicle’s engine, plus the cost of Manukau Nissan’s diagnostic tests. In total, these costs amount to $3,864.00.

DATED 1 December 2015

J S McHerron
Adjudicator

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[1] Section 18(2)(b)(i) of the Act.