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Mascelle v Car Removal Auckland Limited - Reference No. MVD 32/15 (Auckland) [2015] NZMVDT 37 (31 March 2015)

Last Updated: 18 April 2015


Decision No:AK 37/2015
Reference No. MVD 32/15

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN TESSA MASCELLE

Purchaser

AND CAR REMOVAL AUCKLAND LIMITED

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Auckland on 30 March 2015

APPEARANCES

Ms T Mascelle, the purchaser

Mr W J Bridger, partner and witness for the purchaser
There was no appearance by the trader.


DECISION


Background

[1] On 20 November 2014 Ms Mascelle (“the purchaser”) bought a 1996 Landrover Discovery registration BWR735 (“the vehicle”) from Car Removal Auckland Limited (“the trader”) sight unseen for $5,000. The purchaser rejected the vehicle in an email to the trader on 16 December 2014 because she says it has a number of faults which the trader has failed to remedy. The purchaser seeks to have the Tribunal uphold her rejection and order the trader to refund her with the full purchase price.

[2] The trader, although sent notice of the hearing, did not attend the hearing and has given the Tribunal no reason for failing to do so.

[3] Pursuant to clause 10 of Schedule 1 of the Motor Vehicle Sales Act 2003 the Tribunal appointed Mr Gregory as expert assessor to assist in the determination of the complaint. Mr Gregory took the oath required by clause 10(2) of Schedule 1 to that Act. As an assessor Mr Gregory assisted the adjudicator but the application was determined by the adjudicator alone.

Issues
[4] The following issues require consideration:
[a] Whether the vehicle sold to the purchaser was of acceptable quality?
[b] If it was not, did the purchaser require the trader to rectify the failure and, if so, did the trader succeed in doing so within a reasonable time?
[c] Whether the purchaser is entitled to reject the vehicle?

Issue [a]: Whether the vehicle sold to the purchaser was of acceptable quality?

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

[6] The expression "acceptable quality" is defined in s 7 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:
(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.

(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.”

[7] In considering whether or not goods meet the guarantee of acceptable quality in s6 of the Act, the Tribunal must consider the quality elements as set out in s7(1)(a) to (e) of the Act as modified by the factors set out in s7(1)(f) to (j) from the perspective of a “reasonable consumer”. The test is an objective one; it is not a view of those factors from the purchaser’s subjective perspective.

[8] In Stephens v Chevron Motor Court Limited [1996] DCR1, the District Court held that the correct approach to the Act was first to consider whether the vehicle was of “acceptable quality”. If the vehicle was not of acceptable quality, the next point to consider was whether the purchaser required the trader to remedy any faults within a reasonable time in accordance with s19 of the Act. If the failure to comply with the guarantee of acceptable quality was of a “substantial character” within the meaning of s21, or if the faults cannot be remedied, the Tribunal is directed to ask whether the purchaser exercised her right to reject the vehicle within a reasonable time.

Application of law to facts
[9] The purchaser says that whilst in Australia she agreed without first inspecting the vehicle or even test driving it to buy the vehicle on the basis of an advertisement on TradeMe. The purchase price was $5,000. The vehicle is now a 19 year old Landrover Discovery which had travelled 288,000kms at the time of sale. The trader purported to sell it “as is where is” informing purchasers it was a trade in and was sold with no warranty. The purchaser paid no heed to the trader’s warnings. The trader did not supply the purchaser with a signed Consumer Information Notice or even a receipt for the purchase price.

[10] The purchaser collected the vehicle from an address in Onehunga on 23 November 2014 and drove it to the Waiheke Car ferry. She found the two rear tyres were flat and the vehicle had what she described as a “huge oil leak”. On 26 November the purchaser had Surfdale Motors 1997 check the oil leak. They found the cooler hose fitting on the engine was loose and tightened it, changed the oil filter and filled the engine with six litres of oil at a total cost of $149.50. On 1 December the purchaser contacted the trader to ask it to pay Surfdale Motors’ bill and to inform the trader the rear tyres were flat and the vehicle’s sunroof was not working. The trader agreed to cover the cost of the oil leak but has not yet done so. It did not acknowledge the other faults.

[11] In early December 2014 the purchaser says that intermittently the vehicle would not go into reverse gear after it had been driven for about 10 minutes. The vehicle’s battery was flat, the motor started to make a knocking noise, and the electric driver’s seat became stuck in a reclining position. The purchaser contacted the trader to inform it of the vehicle’s faults and the trader promised to contact her but did not do so. On 16 December 2014 the purchaser sent the trader an email rejecting the vehicle and listed the following faults:
“Engine making a rattling and knocking noise resulting in a part falling off and the car breaking down
Major oil leak which resulted in mechanic fixing and doing an oil and filter change
Car not going into reverse intermittently
Car having to be jump started twice and new battery being purchased
Leaking water through the roof at the back left above seat
Drivers car seat electrics ceased working and seat stuck in recline
Two back tyres have a slow leak when auction started these were in excellent condition.”

[12] The trader agreed to repair the vehicle’s faults and asked the purchaser to put the vehicle on the ferry back to Auckland. The purchaser did so on 17 December. On 19 December the purchaser says that Mr Ward of the trader told her the vehicle would be repaired by 22 December and that a pulley on the engine had to be replaced. The purchaser did not hear anything from the trader until 12 January 2015 when the trader told her the vehicle had been fixed and would be put on a ferry back to her. On 14 January the purchaser had the vehicle returned but the driver’s electric seat had not been fixed, the leak in the back tyres was not fixed and the engine was still noisy. The vehicle would not go in reverse. On 19 January after the purchaser contacted the trader again and the trader’s director, Mr Ward, sent the purchaser an email acknowledging receipt of her application to the Tribunal and said he was willing to make an offer “to get this situation out of our lives.” The trader’s offer was for a full refund of the purchase price on the condition that one of the trader’s staff members would meet the purchaser at the ferry terminal on Waiheke Island, inspect the vehicle and make sure that it was in the same condition as it was when purchased. The purchaser accepted the trader’s offer on 20 February by email. However the trader reneged and did not contact the purchaser to make arrangements to inspect the vehicle, collect it and repay the purchaser her purchase price.

[13] The purchaser had Surfdale Motors inspect and report on the vehicle’s faults. Surfdale Motors’ report dated 11 February 2015 was produced to the Tribunal. It records the vehicle’s odometer was 290,575kms on the date of the report and lists the following faults with the vehicle:
Engine lacks power
Exhaust manifold gasket leaking & bolts missing from manifold
Has noise when turbo boosting maybe due to leaking gasket
Engine has oil leaks
Bolts missing between transmission bell housing and engine support braces
No engine coolant in reservoir- coolant very rusty
Engine smokes on start up
Rear drive shaft rubber coupling split at mounting bolts
R/H sill and R/H “A” pillar s to roof area has rust holes
Top of the other pillars to roof areas has surface rust
Vehicle has general cosmetic defects consistent with age and mileage
No evidence of any service history”

[14] The Tribunal requested the purchaser to provide colour photographs of the rust claimed to exist in the vehicle but the purchaser did not do so. Instead she offered the Tribunal several poor quality photographs of the vehicle’s pillars taken on a cellphone with a damaged screen which the Tribunal found lacked clarity and only appeared to show surface rust.

[15] Mr Bridger told the Tribunal that the vehicle’s back door does not always open and that the vehicle is underpowered; a fault which developed a short while after the purchaser bought the vehicle.

[16] The Tribunal on the advice of its Assessor thinks it highly probable that this 18 year old Landrover Discovery which had travelled 288,000 kms when it was sold for only $5,000 has a leaking manifold which is probably responsible for the engine noise complained of by the purchaser and the lack of power complained of by her partner. The vehicle was sold with a current VTNZ warrant of fitness by the trader and apart from the oil leak and the manifold leak it was probably of acceptable quality for its age, high mileage and price at the time of sale. Since the purchaser bought the car the electrics which control the driver’s seat have become faulty so that the driver’s seat is in a reclining position and hence the vehicle would probably fail a warrant of fitness inspection for that reason. The Tribunal is not satisfied that the purchaser proved that the vehicle is badly affected by rust; the rust the Tribunal was able to see from the photographs provided by the purchaser only appears to be surface rust. The leaking roof, unreliable doors and the faulty sunroof are the sort of faults to be expected in an old, cheap, high mileage Landrover. The only faults this vehicle has which the Tribunal considers to amount to a failure in the guarantee of acceptable quality are the leaking manifold and the faulty driver’s seat both of which occurred within a month of sale and probably indicate the vehicle lacked reasonable durability.

Conclusion on issue [a]
[17] The vehicle did not comply with the guarantee of acceptable quality in s6 of the Act first, because it is not as durable as a reasonable consumer would regard as acceptable even for an old high mileage cheap Landrover.

Issue [b]: Did the purchaser require the trader to remedy the vehicle’s fault and did the trader do so within a reasonable time?

Relevant law
[18] 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
result from the failure."

Application of law to facts
[19] The purchaser gave evidence of having tried, prior to 16 December, to get the trader to accept responsibility for the vehicle’s faults culminating in her sending the trader an email on 16 December 2014 rejecting the vehicle. The trader did not accept the purchaser’s rejection but instead required the purchaser to send the vehicle from Waiheke Island to its mechanic in Onehunga to be repaired. The trader has ignored the purchaser’s requests to tell her what work was done on the vehicle but when it was returned to her on 14 January 2015 the driver’s electric seat was still broken in a reclining position, and the engine was still noisy indicating the manifold leak had not been fixed by the trader in the four weeks it had possession of the vehicle.

Conclusion on issue [b]:
[20] The Tribunal is satisfied that the purchaser gave the trader adequate opportunity from mid-December 2014 to mid-January 2015 to rectify the vehicle’s faults which she had identified and required the trader to rectify but the trader had not succeeded in fixing the vehicle’s faults.

Issue [c]: Is the purchaser entitled to reject the vehicle?

Relevant law
[21] Section 18 (2) (b) of the Act (see paragraph 18 above) provides that where a supplier has been required to remedy a failure and does not succeed in doing so within a reasonable time the consumer may, subject to s20, reject the goods in accordance with s22.
Application of law to facts
[22] The Tribunal, having found that the purchaser required the trader to remedy the failure but the trader did not succeed in doing so within a reasonable time, must consider if the purchaser complied with s22 and did so within a reasonable time as provided by s20.

[23] The purchaser exercised her right of rejection in writing and sent notice of it to the trader by email on 16 December 2014 in which she set out the grounds for her rejection. She thus complied with s22(1) of the Act. Rejection took place within one month of the vehicle being supplied to the purchaser by the trader which the Tribunal considers to be within a reasonable time as defined in s20(2) of the Act.

Conclusion on issue [c]
[24] The purchaser is entitled to reject the vehicle. The Tribunal will therefore uphold the purchaser’s rejection of the vehicle with effect from 16 December 2014. It will order the trader to refund the full purchase price of $5,000. The trader will be ordered to collect the vehicle from the purchaser in Surfdale Waiheke Island at its expense because the cost of transporting the vehicle back to the trader would be significant.

Costs
[25] The Tribunal has limited power to make an award of costs to or against a party to any proceedings under clause 14(1) of Schedule 1 to the Motor Vehicle Sales Act 2003. The relevant provision is as follows:

“14 Disputes Tribunal may award costs in certain circumstances
(1)The Disputes Tribunal may award costs to or against a party to any proceedings before it only if,-
(a) in the opinion of the Disputes Tribunal,-
(i) the proceedings are frivolous or vexatious or ought not to have been brought:
(ii) the matter ought reasonably to have been settled before proceeding to a hearing but that the party against whom an award of costs is to be made refused, without reasonable excuse, to take part in the discussions referred to in clause 5(1)(b) or acted in a contemptuous or improper manner during those discussions; or
(b) any party after receiving notice of a hearing, fails to attend the hearing without good cause.
(2) In any case to which subclause (1) applies, the Disputes Tribunal may order a party to pay---
(a) to the Crown all, or any part of either or both of the following:

(i) the reasonable costs of the Disputes Tribunal hearing:
(ii) the fees and expenses of any witness that have been paid or are payable by the Crown; or

(b) to another party all, or any part of the reasonable costs of that other party in connection with the proceedings.”

[26] The trader, after receiving notice of the hearing failed to attend the hearing without good cause. Accordingly the Tribunal will order the trader to contribute $500 towards the costs of the Tribunal’s hearing.

Orders
1. The purchaser’s rejection of the vehicle is upheld with effect from 16 December 2014.

2. The trader shall pay the purchaser $5,000 immediately.

3. The trader shall, as soon as it has made payment to the purchaser of $5,000 specified in Order 2 (above), arrange at its expense to uplift the vehicle from the purchaser’s home.

4. The trader shall within ten days of the date of this order pay $500 towards the Tribunal’s reasonable hearing costs by making payment of $500 to the Crown at the Ministry of Justice, Tribunal’s Unit, Level 1 Chorus House, 41 Federal Street Auckland.

DATED this 31st day of March 2015

C.H Cornwell
Adjudicator


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