Hawkins v Nigel Thompson Motor Company Limited - Reference No. MVD 237/2016 (Wellington) [2016] NZMVDT 1069; [2016] NZMVT Wellington 69 (24 November 2016)

Last Updated: 17 May 2017

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

Reference No. MVD 237/2016 (WN69)

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN TERI CYNTHIA HAWKINS

Purchaser

AND NIGEL THOMPSON MOTOR COMPANY LIMITED

Trader

MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

R Dixon – Assessor

HEARING at Christchurch on 28 October 2016

DATE OF DECISION 24 November 2016
APPEARANCES

T C Hawkins, Purchaser

N T W Thompson, Trader

DECISION

Ms Hawkins' application is dismissed.

REASONS

Introduction

[1] The cam belt on the purchaser’s vehicle failed approximately six months after she purchased it. The purchaser has been quoted nearly $3,000 for repairs, which is almost the same as what she paid for the vehicle. In view of the vehicle’s age, mileage and price, does the purchaser have a remedy against the trader?
[2] The issue in this proceeding is whether the vehicle failed to comply with the guarantee of acceptable quality in s 6 of the Consumer Guarantees Act 1993 (“the Act”).

Background

[3] The purchaser, Ms Hawkins, purchased a 2003 Holden Astra City with 196,596 km on the odometer on 29 December 2015 for $2,999 from the trader, Nigel Thompson Motor Company Limited (“NTMC”). There was no evidence that Ms Hawkins arranged for a pre-purchase inspection of the vehicle. She told the Tribunal that, when she purchased the vehicle, she was not made aware the cam belt needed replacing.
[4] NTMC’s evidence was that it had already paid for various repairs. Due to the vehicle’s age, it did not have modern child restraint fittings, and so NTMC agreed to supply an anchor point. In addition, NTMC replaced both front sway bar links and both rear shock absorbers, serviced the vehicle, obtained a new warrant of fitness, and replaced the starter motor, in February 2016, all at its expense.
[5] Mr Thompson appeared on behalf of NTMC. He was personally involved in selling the vehicle to Ms Hawkins and with after-sales service. His evidence was that no representations were made to Ms Hawkins about the cam belt when she purchased the vehicle.
[6] Within six months of her purchasing the vehicle, and after having travelled approximately 4,700 km, the vehicle’s cam belt snapped, causing engine damage. Ms Hawkins produced an estimate from AMMA Motors that replacing the cam belt, bent valves and damaged guides as well as machining and resetting up the head, and other associated work will cost $2,969.88 including GST, which is nearly the full price Ms Hawkins paid for the vehicle six months earlier.
[7] The purchaser also claimed she was misled by NTMC’s website which, she said, showed that NTMC was an MTA member, but that she has since been advised this was not the case.
[8] The trader’s response is that it is not an MTA member and nor does it advertise as such or promote itself as being an MTA member. Ms Hawkins did not produce any evidence to the contrary and so this aspect of her claim is dismissed.
[9] NTMC’s response to Ms Hawkins’ claim in relation to the broken cam belt is that a cam belt in an older vehicle can break at any stage. It always advises clients purchasing such vehicles to ensure that they are regularly checked and serviced. NTMC submits that the vehicle was fit for purpose at the time of sale and there was no clear evidence produced by Ms Hawkins indicating the cam belt was not in an acceptable condition at the time of purchase.
[10] NTMC told the Tribunal that it had attempted to settle Ms Hawkins’ dispute with her by offering to arrange for repairs to the vehicle at a discount rate that would be capped at $1,500 (which NTMC would ensure by providing its labour for free). Mr Thompson also indicated that NTMC would arrange for the towing of the vehicle to the repairer at its cost. Mr Thompson confirmed at the hearing that the offer remained open.

Did the vehicle fail to comply with the guarantee of acceptable quality in s 6 of the Act?

[11] Section 6(1) of the Act provides that where goods are supplied to a consumer there is a guarantee “that the goods are of 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] The question whether a vehicle is of acceptable quality is considered from the point of view of a reasonable consumer who is fully acquainted with the state and condition of the vehicle, including any hidden defects.
[14] Ms Hawkins’ vehicle is 13 years old, with nearly 200,000 km on the odometer at the time of purchase, and was sold for only $2,999. The vehicle is nearly at the end of its life. There was no evidence of any representations by the trader that the cam belt had been replaced at the time of purchase and Ms Hawkins gave no evidence that she made any enquiries about its service history.
[15] Moreover, there was no evidence that there was any defect with the vehicle’s cam belt at the time of sale. As Mr Thompson pointed out, it drove satisfactorily for 4,700 km before the cam belt broke.
[16] The Tribunal’s Assessor, Mr Dixon, considers that a cam belt is a maintenance item that is subject to wear and tear and is likely to break if it has not been replaced in accordance with the manufacturer's recommendations. There is no evidence that the cam belt has been replaced on this vehicle or, if so, when. In the absence of such evidence, and having regard to Mr Dixon’s advice, I consider that a reasonable purchaser paying $2,999 for this 200,000 km 13 year-old vehicle with no service history would generally not expect much more than a month or two of durability. Accordingly, I do not consider the vehicle failed to comply with the guarantee of acceptable quality in s 6 of the Act, and Ms Hawkins’ application is dismissed.
[17] I note also that, NTMC has made a perfectly reasonable settlement offer in this preceding, and that the matter ought reasonably to have been settled before proceeding to a hearing. In these circumstances I consider the Tribunal would have jurisdiction to make an award of costs against Ms Hawkins.[1] I have decided, in the circumstances of this case, not to make an award of costs, but I would encourage Ms Hawkins to accept the reasonable offer that Mr Thompson made to her and which he repeated in the hearing.

J S McHerron
Adjudicator

---

[1] Clause 14(1)(a)(ii) of the Motor Vehicle Sales Act 2003.