Parr v Autoryde Limited - Reference No. MVD 92/15 (Auckland) [2015] NZMVDT 66 (28 May 2015)

Last Updated: 17 June 2015

Decision No: AK 66/2015
Reference No. MVD 92/15

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN ROBYN CLAIRE PARR

Purchaser

AND AUTORYDE LIMITED

Trader

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

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

HEARING at Auckland on 25 May 2015

APPEARANCES

Ms R C Parr, the purchaser

Mr P Norris, partner and witness for the purchaser
Mrs Y Latfullina, manager, representing the trader
Mr R Latfullina, director of the trader.

DECISION

Background

[1] On 7 April 2015 Ms Parr (“the purchaser”) bought a 2005 Volvo V50 registration HZQ425 (“the vehicle”) from Autoryde Limited (“the trader”) for $9,000. The purchaser has applied to the Tribunal to recover $7,000 comprising $5,496 for repairs and $1,504 claimed by the purchaser to have been overpaid for the vehicle.

[2] The trader says the purchaser’s claim of $5,496 for repairs is excessive and is inflated by excessive hours claimed to have been spent repairing the vehicle by the purchaser’s partner, Mr Norris. The trader says that Mr Norris told it initially that the cost of repairing the vehicle would be $700 to $1,300 and similar repairs done in Auckland would cost no more than $997. The trader says it offered to refund the purchaser with her purchase price and $1,300 but this offer was refused.

[3] Pursuant to clause 10 of Schedule 1 of the Motor Vehicle Sales Act 2003 the Tribunal has appointed Mr Gregory as an expert assessor to assist in the determination of the complaint. Mr Gregory took the oath required by cl 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.

[4] As the Tribunal explained to the purchaser at the commencement of the hearing it does not have jurisdiction under s89 of the Motor Vehicle Sales Act 2003, which defines the Tribunal’s jurisdiction, to hear contract based claims. Hence the Tribunal cannot consider the purchaser’s claim for $1,504 which she claimed to have overpaid for the vehicle and referred to as “depreciated value”.

The issues
[5] The following two issues require consideration:
[a] Whether the vehicle was of acceptable quality at the time of sale?
[b] If it was not, what is the reasonable cost of repairs payable by the trader?

Issue [a]: Whether the vehicle was of acceptable quality at the time of sale?

The relevant law
[6] Section 6 of the Consumer Guarantees Act 1993 (“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.”

[7] 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 maintain 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.”

[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.

[9] The purchaser, who lives in Nelson, bought the vehicle from the trader in Auckland on 7 April 2015 for $9,000. The purchaser paid the trader $6,500 cash and traded in a 1997 Mitsubishi Legum for $2,500. The vehicle’s odometer was 65,319kms at the time of sale. The purchaser took the vehicle for a short test drive which disclosed no faults.

[10] The purchaser drove the vehicle from Auckland to Nelson. She says that after about an hour of use on 7 April she found the vehicle’s Tip Tronic system was not working properly although the gearbox was working. Mr Norris telephoned the trader and informed it of the fault and told the trader he would have the vehicle’s transmission inspected when he got to Hamilton. He did not do so but continued to drive the vehicle to Palmerston North. On 9 April after a heavy night of rain in Palmerston North the purchaser found rain water in the rear foot wells of the vehicle, particularly behind the driver’s seat. Mr Norris telephoned the trader to report that fault. It was agreed between Mr Norris and the trader that the purchaser would have the vehicle inspected and a price obtained to repair its faults when she arrived in Nelson.

[11] On 11 April Mr Norris sent the trader an email in which he said “Costs have been quoted at between $700 and $1300 by two local garages and the Christchurch Volvo agents (Archibalds) and they will need the car for a week at least. I may however, be able to get the car stripped and dried for far less than that. Then of course would be the cost of repairs, whatever that may be.” On 14 April Mr Norris sent the trader an email saying the sun roof drains were faulty. In that email Mr Norris informed the trader that Dowie Continental in Nelson had a charge out rate of $85 per hour plus GST and had so far spent four hours on the vehicle and would spend another six hours on the sunroof and hood lining issues but went on to say that he had no idea at that stage of costs in respect of the vehicle. Mrs Latfullina sent an email in reply on 14 April saying she thought “we should go ahead with the repairs, we don’t have any choice and we really want you to enjoy the car knowing it’s been properly fixed.”

[12] The Tribunal in deciding the first issue: whether the vehicle sold to the purchaser complied with the guarantee of acceptable quality in s6 of the Act has had regard first to the fact that the vehicle was, at the time of sale, a ten year old Japanese imported Volvo which had travelled 65,319kms. It was sold for the fairly modest price of $9,000. The Tribunal accepts on the basis of photographs produced by the purchaser and the repair invoices from Dowie Continental Ltd who were involved in repairing the vehicle that at the time of sale the vehicle had two faults; first its Tip Tronic system was not working properly and second, the vehicle leaked water into the headlining caused by a blocked sun roof drain. The vehicle was thus not free from minor defects at the time of sale.

Conclusion on issue [a]:
[13] The vehicle did not comply with the guarantee of acceptable quality at the time of sale because it was neither free from minor faults (the faulty Tip Tronic system and the leaking roof) nor as durable as a reasonable consumer would regard as acceptable for a vehicle of this age, mileage, and price.

Issue [b]: What is the reasonable cost of repairs payable by the trader?

Relevant law
[14] 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:
[15] In this application the trader does not dispute that the purchaser required it to repair the vehicle’s faults or that it agreed to do so. What is in dispute is what sum is reasonable for the cost of repairing the Tip Tronic fault and the water ingress fault.

a) The Tip Tronic fault
[16] The applicant paid Armstrong Prestige $70 for a “blind” required to fix the Tip Tronic system and has been invoiced, but apparently has not yet paid Dowie Continental Ltd $72.51, to clear existing fault codes and reprogram disrupted systems. The Tribunal considers the total of $142.51 is reasonable and will order the trader to reimburse the purchaser with that sum.

b)The Water Ingress Fault- Dowie Continental’s Time
[17] The purchaser produced a copy invoice dated 26 April 2015 from Dowie Continental Ltd for $845.87 for eight hours labour at $85 plus GST to refit the sunroof, hoodlining and remove and replace the transmission switch. The only part supplied was sealant at a cost of $13.04. The invoice also included a further $42.40 plus GST for labour to change the transmission fluid which was not a consequence of the fault and should be paid by the applicant. The Tribunal therefore considers the trader should pay $797.11 of this invoice.

c)The Water Ingress Fault- Mr Norris’ time and costs
[18] The most contentious aspect of this application for the trader was the amount of time that Mr Norris had claimed for his part in getting the purchaser’s vehicle repaired. Mr Norris claimed, in four invoices sent to the trader submitted by a company named Nelson Merchant Surplus Ltd, signed as correct by the purchaser, a total of $1,666.57 including GST. The trader claimed that this was unreasonable. It produced as evidence a copy of an invoice from Milford Auto Electrical Ltd to a trade customer in March 2015 of $997.04 inclusive of GST to strip out the interior and remove all water and locate the fault in the sunroof drain of a Volvo V50 and reassemble and test the vehicle.

[19] The first invoice dated 17 April 2015 for $543.03 was for 14 hours labour for removing the seats, interior panels, waterfall dash, centre console, ‘A’ pillar panels, removing the carpets, extracting water, drying the carpets, and instructing Dowie Continental to fix the vehicle. This invoice also included the cost of providing photos and sending reports to the trader.

[20] The second of the four invoices dated 5 May 2015 was for $967.72 for 26.5 hours of time that Mr Norris claimed he had spent in discussions with Dowies, collecting the vehicle from the workshop, dropping and refitting the hood lining, removing carpets from the boot and drying them and the sound deadening insulation, removing mould from the firewall and dash, rust proofing, refitting carpets seats and panels, cleaning electrical connections and vacuuming the vehicle. The Tribunal considers that a total of 40.5 hours claimed in the first and second invoices, even at the rate charged by Mr Norris of $31 plus GST per hour, is excessive and considers that a fair allowance for Mr Norris’ time is 16 hours at $31 plus GST per hour, say $570.40, together with $40 for CRC and consumables; a total of $610.40 inclusive of GST. The purchaser should also be reimbursed for a trailer hire of $68.31 to transport the vehicle to Dowies and $6.63 for pipe connections; a total of $685.34 which the Tribunal will order the trader to reimburse to the purchaser.

[21] The third invoices was for $102.92 for repairing a dry soldered joint on a switch panel for which Mr Norris claimed 2.5 hours labour and $12 for consumables. The Tribunal considers this to be excessive for the work done and will order the trader to reimburse $43 plus GST or $49.45 of this invoice.

[22] The fourth invoices was for $52.90 for one hour of labour in draining the engine oil, replacing the oil filter and refilling the engine with oil. The trader submitted an invoice to show that BL Automotive Ltd had replaced the engine oil in August 2014 some 1300kms before the vehicle was supplied to the purchaser. However the Tribunal considers, on the basis of several inconsistencies (each of which might be accounted for by sloppy record keeping by BL Automotive Ltd) regarding the brand of oil filter replaced, the grade of engine oil used, and the date the service was done by BL Automotive Ltd that there is some reasonable doubt as to whether the oil and filter change were carried out. In fairness to the purchaser the Tribunal thinks she should be reimbursed for the fair cost of an oil and filter change which the Tribunal calculates to be $123.64 (inclusive of GST).

Costs
[23] The Tribunal has limited jurisdiction to make an award of costs to a party under cl 14 of the Schedule to the Motor Vehicle Sales Act 2003. Unfortunately for the purchaser the Tribunal does not consider that any of the conditions which might justify it in making an order of costs against the trader in terms of cl 14 apply in this case and accordingly the purchaser’s application for her travelling costs and costs of preparation for the hearing must be dismissed.

Order
The trader shall pay the purchaser the sum of $1,798.05 immediately.

DATED at AUCKLAND this 28TH May 2015

C.H Cornwell
Adjudicator