Hucklesby v Zhu t/a EZ Motors - Reference No. MVD 199/2016 (Auckland) [2016] NZMVDT 125; [2016] NZMVT Auckland 125 (29 August 2016)

Last Updated: 20 September 2016

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

[2016] NZMVT Auckland 125

Reference No. MVD 199/2016

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN MARK HUCKLESBY

Purchaser

AND YI ZHU AKA EASON ZHU T/A EZ MOTORS

Trader

MEMBERS OF TRIBUNAL

Mr C H Cornwell, Barrister & Solicitor, Adjudicator

Mr S D Gregory, Assessor

HEARING at Auckland on 29 August 2016

DATE OF DECISION 29 August 2016

APPEARANCES

Mr M Hucklesby, the purchaser

Mr H F W Hucklesby, purchaser’s son and witness

Mr J Hucklesby, support person for purchaser

Mr Y Zhu, also known as Jason Zhu, the trader

DECISION

Mr Y Zhu trading as EZ Motors shall pay Mark Hucklesby $747.50 immediately.

REASONS

Background

[1] On 5 February 2016, Mr Hucklesby (“the purchaser”) bought a 2008 Volkswagen Golf registration number JQE559 (“the vehicle”) for $11,100 from Yi Zhu also known as Eason Zhu trading as EZ Motors (“the trader”). The purchaser also bought a Janssen mechanical breakdown insurance cover (“MBI”) for the vehicle.

[2] The purchaser says the vehicle’s passenger door ceased to open in April 2016, and that the purchaser’s son telephoned the trader and required him to fix the door, but the trader refused to do so. The purchaser had the door lock replaced at a cost of $1,054.15 which he now seeks to recover from the trader.

[3] The trader denied, prior to the hearing, that the purchaser had required him to repair the vehicle’s door before having it repaired. At the hearing the trader did not deny that the purchaser’s son had telephoned him and asked him to pay but he had told the purchaser’s son to use his mechanical breakdown insurance policy to have the vehicle fixed. The trader also claims the repair cost is excessive.

[4] Pursuant to cl 10 of Schedule 1 of the Motor Vehicle Sales Act 2003 the Tribunal has appointed Mr Gregory as 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 Tribunal’s decision was made by the adjudicator.

The issues

[5] The issues requiring consideration are:

(a) Did the vehicle comply with the guarantee of acceptable quality in s 6 of the Act?
(b) If not, did the purchaser require the trader to rectify the vehicle’s fault and if so, did the trader agree to do so?
(c) If not, what is the reasonable cost of having the door lock replaced?

Issue [a]: Did the vehicle comply with the guarantee of acceptable quality in s 6 of the Act?

Relevant law

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

(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) 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) 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 the Tribunal must consider the quality elements as set out in s 7(1)(a)-(e) of the Act as modified by the factors set out in s 7(1)(f)-(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 s 19 of the Act. If the failure to comply with the guarantee of acceptable quality is of a “substantial character” within the meaning of s 21, or if the faults cannot be remedied, the Tribunal is directed to ask whether the purchaser exercised his right to reject the vehicle within a reasonable time.

Application of law to facts

[9] The purchaser bought the vehicle from the trader on 5 February 2016, for his son’s use in travelling to University. He says that in early April 2016, the front passenger’s door lock became unreliable and eventually froze so that the front passenger’s door could not be opened from inside or outside of the vehicle.

[10] The purchaser’s, son Mr Hugh Hucklesby, gave sworn evidence that on 7 April 2016 at 1615hrs he made a telephone call from his prepay telephone to the trader. He produced an email from Vodafone NZ confirming a call for a duration of two minutes and seven seconds had been made to number 21998937, which is the trader’s telephone number. In the course of that call Mr Hugh Hucklesby said he had told the trader the front passenger’s door lock had failed and frozen and asked the trader to be responsible for repairing it. He says the trader refused to do so and told him he was only responsible for faults occurring within a month after sale. Hugh Hucklesby says the trader told him to claim on his MBI policy.

[11] The purchaser says his wife took the vehicle to Mt Albert Automotive on 27 April 2016 to have the door lock replaced. This involved removing the door skin to obtain access to the lock mechanism. The purchaser’s wife collected and paid $1,054.15 for the vehicle’s repairs on 28 April 2016. The purchaser produced the invoice and EFTPOS receipt (both dated 28 April 2016) from Mt Albert Automotive.

[12] Mr Hugh Hucklesby said he made a second telephone call to the trader on 2 May 2016 and produced an email from Vodafone NZ confirming that call was made, asking the trader to pay the repair costs of $1,054.15. The trader refused to pay and told him he should have used his MBI policy.

[13] Mr Zhu told the Tribunal that he told Mr Hugh Hucklesby when he first telephoned him to use his MBI policy because a period of one month had expired since the vehicle was sold. Mr Zhu also claimed, without any supporting evidence, that the vehicle had already been repaired when he was asked to pay for it.

[14] In determining whether the vehicle supplied by the trader complied with the guarantee of acceptable quality, I have had regard first, to the nature of the goods; in this case an eight-year-old Japanese imported Volkswagen Golf which had 56,662kms on its odometer at the time it was sold for $11,100. The vehicle’s passenger door lock became faulty and froze within two months of sale. No reasonable purchaser paying $11,100 for a moderately low mileage eight-year-old Volkswagen Golf would consider that to be acceptable. I consider the vehicle lacked durability.

Conclusion on issue [a]

[15] This vehicle did not comply with the guarantee of acceptable quality in s 6 of the Act at the time of sale, because its passenger door lock was not as durable as a reasonable consumer would regard as acceptable.

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

Relevant law

[16] 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—

(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,—

(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—

(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

[17] The purchaser’s son gave evidence that he had telephoned the trader first, on 7 April 2016 and asked the trader to fix the door lock. I am satisfied after listening to the trader’s explanation of his conversation with Mr Hugh Hucklesby that he did not offer or agree to do so at his expense but told the purchaser’s son he was no longer responsible for the vehicle and the purchaser should use the MBI policy to claim the cost of repairs. When Mr Hugh Hucklesby telephoned the trader on 2 May 2016 to tell the trader the cost of repairs, which by then had been completed on 28 April 2016, the trader again refused to pay the repair costs.

Conclusion on issue [b]

[18] I find as a fact that the trader was required to repair the vehicle’s front passenger door lock fault on 7 April 2016, in a telephone call made to the trader that day. The trader refused to repair the fault. The purchaser then had the lock repaired on 27 to 28 April 2016. I therefore find that the purchaser became entitled, by s 18(2)(b)(i) of the Act, to have the failure remedied elsewhere and obtain from the supplier, all reasonable costs incurred in doing so.

Issue [c]: What is the reasonable cost of having the door lock replaced?

Relevant law

[19] Section 18(2)(b)(i) of the Act, which is reproduced in paragraph 16 (above) provides that a consumer is able to recover from the supplier all reasonable costs incurred in having a failure remedied where the trader refuses, after being required to remedy a failure, to do so.

Application of law to facts

[20] The purchaser incurred $1,054.15 to Mt Albert Automotive for parts and labour to replace the door mechanism. This comprised $691.65 for labour and $225.00 for parts (both with GST). The Tribunal’s assessor considers that the removal of the door skin and replacement of the door mechanism should have been carried out in a maximum of four hours which, allowing for a technician’s labour at a reasonable charge-out rate of $106.25 per hour should have resulted in the purchaser being charged $425 for labour and $225 for parts; a total of $650 plus GST or $747.50.

Conclusion on issue [c]

[21] I find that a reasonable cost for replacing the front door mechanism on the vehicle is $747.50 and I will order the trader to pay that sum to the purchaser immediately.

DATED at AUCKLAND this 29th day of August 2016

C. H. Cornwell
Adjudicator