Jackson v M.P.H Trading Company Limited - Reference No. MVD 74/16 (Auckland) [2016] NZMVDT 47; [2016] NZMVT Auckland 47 (18 April 2016)

Last Updated: 17 May 2016

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

[2016] NZMVT Auckland 47

Reference No. MVD 74/16

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN DAVID HUGH MCGREGOR JACKSON

Purchaser

AND M.P.H.TRADING COMPANY LIMITED

Trader

MEMBERS OF TRIBUNAL
Mr C H Cornwell, Barrister & Solicitor - Adjudicator
Mr S D Gregory - Assessor

HEARING at Auckland on 12 April 2016

DATE OF DECISION 18 April 2016

APPEARANCES

Mr D H M Jackson, the purchaser

Mrs R Jackson, wife and witness for purchaser
Mr M P H Ball, Director representing the trader
Ms V Kitto, support person for Mr Ball

ORDERS

1. Mr Jackson’s rejection of the 2006 Chevrolet Corvette registration JQJ79 is upheld.
   
2. M.P.H.Trading Company Limited shall pay Mr Jackson $100,000 immediately.
   
3. As soon as M.P.H.Trading Company Limited has paid Mr Jackson $100,000 it shall, at its expense, arrange to uplift the vehicle from Mr Jackson in Timaru.
   

REASONS

Background

[1] On 2 December 2015 Mr David Jackson of Timaru (“the purchaser”) agreed to buy a 2006 Twin Turbo Chevrolet Corvette (“the vehicle”) for $110,000. The purchaser claims the seller of the vehicle was M.P.H. Trading Company Limited (“M.P.H.”) and that M.P.H. is a motor vehicle trader.

[2] The vehicle’s engine overheated when the purchaser drove the vehicle to Timaru. The purchaser claims that occurred because the trader filled it with the incorrect fuel before he supplied the vehicle, and also because Mr Ball, a director of M.P.H, told the purchaser to use 98 octane instead of 110 octane aviation gas. The purchaser says that as a consequence the vehicle’s engine has been badly damaged and requires replacing or rebuilding. The purchaser claims the vehicle failed to comply with the guarantee of acceptable quality in the Consumer Guarantees Act 1993 (“the Act”), and that such failure is of substantial character. The purchaser has rejected the vehicle and seeks the Tribunal’s order upholding his rejection ordering M.P.H to repay him $100,000.

[3] Although the purchaser paid $110,000 for the vehicle, he has abandoned the excess over $100,000 in order to bring the claim within the Tribunal’s jurisdiction of $100,000.

[4] Mr Ball, the director of M.P.H., appeared at the hearing and says that it was he, selling in a private capacity, and not M.P.H, who sold the vehicle to the purchaser. Mr Ball also says that the reason the vehicle’s engine was damaged on the purchaser’s journey to Timaru was because the purchaser did not know how to drive the vehicle.

[5] Pursuant to clause 10 of Schedule 1 of the Motor Vehicle Sales Act 2003 (“MVSA”) I have 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.

The issues

[6] The issues raised by this application are:

(a) Whether the sale of the vehicle was made by Mr Ball in a private capacity or by M.P.H?
(b) If the vehicle was sold by M.P.H, did it comply with the guarantee of acceptable quality in the Act?
(c) If the vehicle did not comply with the guarantee of acceptable quality, was the failure to do so of substantial character?
(d) Is the purchaser entitled to reject the vehicle and have a refund of $100,000 of his purchase price?

Issue [a]: Whether the sale of the vehicle was made by Mr Ball in a private capacity or by M.P.H?

Relevant law

[7] Section 8 of the MVSA provides as follows:

8 Who is treated as motor vehicle trader

(1) A person is treated as carrying on the business of motor vehicle trading for the purposes of this Act if—

(a) the person holds out that the person is carrying on the business of motor vehicle trading; or

(b) in any specified period, the person sells more than 6 motor vehicles, unless that person proves that those motor vehicles were not sold for the primary purpose of gain; or

(c) in any specified period, the person imports more than 3 motor vehicles, unless that person proves that those motor vehicles were not imported to be sold for the primary purpose of gain.

(2) For the purposes of subsection (1)(a), a person holds out that the person is carrying on the business of motor vehicle trading if that person—

(a) advertises or notifies or states that the person carries on the business of motor vehicle trading; or

(b) in any way represents that the person is ready to carry, or is carrying, on the business of motor vehicle trading.

(3) Subsection (1)(b) does not apply to any trustee corporation (within the meaning of section 2(1) of the Trustee Act 1956) acting in the capacity of executor, administrator, trustee, guardian, committee, manager, agent, attorney, or liquidator, or in any fiduciary capacity, unless the trustee corporation is acting on behalf of the same person or estate.

Application of law to facts

[8] The purchaser says he read about the vehicle in an article published in “NZV8 Magazine” and read in that article that it was for sale on TradeMe. The article in the magazine reported a person named Mike, which Mr Ball said was him, saying of the vehicle: “You could daily drive it if you wanted. I wouldn’t, but you could.” The vehicle was photographed with dealer plate X7120 attached to it.

[9] The purchaser made contact with Mr Ball and travelled to Auckland on 2 December 2015. Mr Ball demonstrated the vehicle to him and told the purchaser the vehicle was fuelled with aviation gas, which the purchaser, who says he is a participant in motor sports, claims he recognised because of its distinctive odour. The purchaser says Mr Ball told him that he used to have a car yard but that he “only wholesaled cars now”.

[10] The vehicle required a left hand drive permit of which only a limited number are made available each year. Mr Ball told the purchaser that all left hand drive permits for 2015 had been issued, so a left hand drive permit vehicle would not become available until 2016. The purchaser agreed to buy the vehicle for $110,000 and Mr Ball prepared a handwritten document which recorded the purchaser had paid a deposit of $11,000 with the full price being $110,000. The balance of $99,000 was due “upon a left hand drive permit and car compliance and registration with new plates in the name of [the purchaser].” All costs of compliance were to be paid by Mr Ball. Mr Ball and the purchaser signed the document.

[11] On 17 February 2016 the purchaser and Mrs Jackson travelled to Auckland where they were met at the airport by Mr Ball and driven to his home in Takanini. The vehicle had been registered as JQJ79 but Mr Ball did not then and has not since provided the purchaser with evidence that the vehicle has been issued with a low volume certificate for the various modifications it has undergone, or any evidence that a left hand drive permit has been issued for the vehicle.

[12] The purchaser says that Mr Ball provided him with a Consumer Information Notice which names the supplier of the vehicle as M.P.H. Trading and contains its correct vehicle trader registration number, M281449. The CIN notice is complete except that it fails to show if there is any security interest over the vehicle, its VIN or chassis number, whether it is a re-registered vehicle and, significantly in terms of the dispute between the parties, its operating fuel type. The CIN was signed by Mr Ball on behalf of MPH Trading Limited (those words were handwritten on the CIN by Mr Ball) and signed by “John McGregor” as the buyer. The purchaser and Mr Ball both dated the CIN “17/2/16”. The purchaser was unable to say why he signed the CIN as “John McGregor” other than to offer that he did not read it properly. Mr Ball says the purchaser asked him for some evidence he had become the owner of the vehicle and that is why he says he signed a “blank CIN” however the purchaser denies he asked Mr Ball for the CIN and says he believes Mr Ball had prepared it before he arrived to collect the vehicle.

[13] Mr Ball says that he bought the vehicle personally in his private capacity to better the land speed record in New Zealand. Mr Ball submitted a copy of the article which appeared in “NZV8 Magazine” in which he was reported as having the intention to challenge the land speed record with the vehicle. Mr Ball also produced a copy of the Trade Me advertisement and says it makes no reference to his selling the vehicle in trad or as a trader.

[14] Mr Ball says he ceased to trade as M.P.H. on 1 September 2015 when he cancelled M.P.H. as a motor vehicle trader. The Register of Motor Vehicle Traders records that M.P.H’s registration as a trader expired on 1 September 2015 after 12 months.

[15] In reply to questions from the Tribunal, Mr Ball says he is unemployed. However when shown a list, supplied by TradeMe, of six vehicles offered for sale by him from August 2015 to April 2016, Mr Ball said initially, that he was employed by Long Island Limited. He later admitted that he was a director of Long Island Limited and that Long Island Limited was the seller of the vehicles.

[16] In deciding whether the vehicle was sold by Mr Ball in a private capacity or by M.P.H. I have had regard to three factors which I consider to be relevant. First, the sworn statement which the purchaser says Mr Ball made to him on 2 December 2015 that Mr Ball was no longer retailing vehicles but was a wholesaler of vehicles. Second, to the form of the agreement which Mr Ball prepared and had the purchaser sign on 2 December 2015, and third the CIN notice. I do not consider it relevant that the registration of M.P.H expired on 1 September 2015 because Mr Ball could still have continued to trade vehicles in the name of M.P.H, after that date, with little risk of detection.

[17] In considering the contents of the agreement Mr Ball prepared and had the purchaser sign on 2 December 2015, I observe that it merely provides for the purchaser to pay a price of $110,000 for the vehicle, a deposit of 10% or $11,000 and the balance after Mr Ball obtained a left hand drive permit, compliance, registration and plates in the purchaser’s name and that the costs of his doing so would be paid by Mr Ball. The agreement fails to record the name of the seller of the vehicle so I find it unhelpful in determining the first issue and certainly not determinative of who the owner or seller of the vehicle was.

[18] I consider the most relevant piece of evidence the purchaser produced to establish that the seller was M.P.H was the CIN, signed by Mr Ball on behalf of M.P.H., which named M.P.H as the supplier of the vehicle and included its ( by then expired) motor vehicle trader number. The CIN was substantially completed by Mr Ball and there was no reason, if the vehicle was, as he says, a private sale, for him to supply the purchaser with the CIN. Mr Ball’s explanation for the CIN was, in a letter he sent the Tribunal on 5 April 2016 as follows:

“Lastly, as to the issue of the “Window Card” the vehicle never had a window card, after receipt of full payment and the Sales Agreement made in December 2015, the complainant after the contract had been finalized and this deal was done, he said to me, he needed something to show that he was legally entitled to the vehicle as it was unregistered and not in my name. Only then as a receipt, I could not issue him a company receipt, I took a blank window card and gave it to him, as initially I had imported the car into the company and (sic) my then company name”

[19] In the course of giving evidence at the hearing Mr Ball confirmed that M.P.H was the legal entity which had imported the vehicle from the U.S.A. He also claimed that the CIN he gave the purchaser was “blank”.

[20] I found Mr Ball’s evidence regarding how the CIN came to be completed and signed and handed to the purchaser to lack any credibility. The CIN was completed and signed by Mr Ball; it was not “blank” as he claims. There was no reason for Mr Ball to give the purchaser a completed CIN if the vehicle had been sold privately by Mr Ball, as he claims. It was not sold privately. I consider it far more likely that, as Mr Ball said, the vehicle was imported by M.P.H, and I think that it was still owned by that company when it was sold to the purchaser.

Conclusion on issue[a]

[21] I am satisfied that the purchaser established, on a balance of probabilities, that Mr Ball held himself out as a motor vehicle trader in terms of s8(1)(a) of the MVSA by telling the purchaser on 2 December 2015, that he was a wholesale motor vehicle trader. Second, that the CIN completed by Mr Ball, and signed by him on behalf of M.P.H, is strong evidence that the vehicle was sold to the purchaser by M.P.H and not Mr Ball. Accordingly, I find as a fact that the vehicle was sold by M.P.H. and not Mr Ball in a private capacity.

Issue [b]: Whether the vehicle complied with the guarantee of acceptable quality in s 6 of the Act?

Relevant law

[22] 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.”

[23] 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.

[24] 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) to (e) of the Act as modified by the factors set out in s 7(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.

[25] 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 was 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

[26] The purchaser gave evidence that he asked Mr Ball what grade of fuel he should put in the vehicle’s tank. He says, and Mr Ball does not deny, that Mr Ball replied that he had already filled up the tank with “98”. Mrs Jackson also gave evidence that she overheard Mr Ball tell the purchaser that he had filled up the vehicle’s tank with “98”. Mrs Jackson says she particularly recalls Mr Ball’s statement that he had filled the tank with “98” because she says she was concerned about having to navigate around Auckland to buy fuel and his statement that he had filled the tank with “98” relieved her of that concern.

[27] The purchaser and Mrs Jackson first drove from Takanini to Coromandel but the vehicle began miss-firing as soon as the purchaser drove on to SH2 after the Bombay Hills, and the purchaser says the engine made a loud droning noise. The purchaser says that a warning light lit up in the vehicle’s instrument panel: “Service Electrical Systems.” The purchaser says he tried to telephone Mr Ball, without success. The vehicle’s engine became very hot. At Coromandel the purchaser had the vehicle’s electrical system checked. There was no fault found by the mechanic with the vehicle’s electrical systems but the purchaser was advised to return the vehicle to Auckland which he did the following day after continuing to try and contact Mr Ball.

[28] The purchaser says when he returned to Auckland from the Coromandel he arranged for the vehicle’s sparkplugs and leads to be replaced at Pittstop because both the plugs and leads had been damaged by the heat generated by the engine. Mr Ball paid for those items. The purchaser then drove the vehicle to Tauranga to stay with a family member before continuing to drive the vehicle to Timaru.

[29] On 25 February 2016 Mr Parmenter of Autogas Specialists inspected the vehicle and the purchaser submitted his undated report in which Mr Parmenter states he found the spark plug leads had melted from the heat of the exhaust manifolds. On starting the engine he noticed it was mis-firing and sparks jumped through the melted leads. He removed the spark plugs and ordered new leads and new heat socks from Sylvester Performance which he fitted on 26 February. He reports the vehicle was then running on eight cylinders but after the engine ran for several minutes the temperature had risen to above normal and the fans had not come on. After allowing the engine to cool Mr Parmenter and the purchaser took the vehicle for a run. It was running rough and the engine check light was flicking on and off and warning lights came on in the dash reading. “check service electrical system” and “change engine oil.”

[30] Mr Parmenter’s letter says that in his experience if a vehicle is tuned for 110 octane it will not operate on lower octane fuel correctly. To do so will cause the engine to detonate as the ignition curve will not match the fuel burn speed.

[31] Mr Konrad Scott of Scott Waterjet sent the purchaser an email which he produced dated 11 March 2016 in which Mr Scott qualifies himself as a mechanic who for over 35 years has built race engines for boats and cars. His company specialises in building high performance jet boats and its high end engine of choice are Chevrolet LS engines. Mr Scott’s observations are set out in the email. He states that he listened to the engine running, and read the build specifications and claimed output. He states first, that he does not believe the engine will operate on anything other than high octane race gas, certainly not station available 98 octane or less. Second, that the overheating is caused by several factors including a fault in the electrical fan system which is not switching the fans on as the engine temperature rises. Third, that the engine will be experiencing knock (detonation) from running on fuel that is unsuitable and the vehicle’s computer will be retarding the timing to try and stop the knock from damaging the engine. However when the ignition timing is retarded it raises the combustion chamber temperature which causes the surrounding components such as the exhaust manifolds to run extremely hot which would explain the melting spark plugs and high water temperature. Finally Mr Scott states the engine is mechanically noisy and there is an audible lifter and or bearing noise that requires further investigation.

[32] The purchaser had Alltech Auto Electrics Ltd check the vehicle on a diagnostic tool on 14 March 2016. They reported that the fan plug assembly was burnt out from excessive current. They also found a fault code logged for the MAP sensor and found the sensor damaged. They temporarily repaired the solenoid connection.

[33] The purchaser had a sample of the vehicle’s engine oil analysed by Oil Lab on 17 March 2016. Their report found as follows:

“Cu- copper, very high level 11ppm would normally indicate either a change of additive on a copper type oil cooler rarely found in automotive applications as aluminium is traditionally used. Levels as seen here would normally indicate wear of thrust, main and conrod bearings on the crankshaft

Fe-Iron, wear metal most common from crankshaft, camshaft, or cylinder bore. Level is high at 74ppm. Normal operation should be under 10ppm.

Cr-Chromium. Low level at 4ppm and would be found coming from upper piston rings or also from cylinder bore in some engine types, unsure of bore material used in this application.

Pd-Lead, very high level for 1500km of operation. This may be from leaded race fuel used however is still exceptionally high and most likely is from thrust, main and big end bearing material as bearing composition is traditionally lead copper tin silver all of those levels are elevated in this sample.

Al- Aluminium. Probable dust entry or piston wear.

crankcase and is reinforced by the presence of water in the sample.

Na- Sodium as found in antifreeze formulations would indicate a coolant leak into the

Mo- Moly, most likely from wear of the piston rings or could be a trace oil additive.

Ni-Nickel. Low level and may be part of piston ring coating or other component composition.

Mg- Magnesium. Level is high and is a wear metal. Possible (sic) from conrod or piston depending on composition of components.”

[34] Mr Michael Johnston of Triangle Garage Ltd of Ashburton sent the purchaser a report dated 9 April 2016 in which he states he does not know if the existing engine in the vehicle can be saved and repaired to an acceptable standard, or whether it is more cost effective to simply replace the engine. He says the engine will need to be dismantled to make that determination. The prices he submitted are to obtain a standard LS7 crate engine 550 HP from USA including shipping $NZ25,000. His letter states the special Warhawk engine in the vehicle could cost anything up to $NZ55,000 to rebuild.

[35] In reply to questions from the Assessor, the purchaser said that he had not changed the boost settings on the vehicle during his trip from Auckland to Timaru. The vehicle’s cylinder heads have not been removed. No leak down or compression tests have been carried out to the engine.

[36] Mr Ball, as part of his personal submission, stated that he did not know that the purchaser proposed to drive the vehicle back to Timaru; he thought it would be transported to Timaru. He also said that he could not accept that the vehicle could be driven for 1500km overheating and missing and [still] making the journey there.

[37] Mr Ball says the purchaser was an incompetent driver in the matter of driving the vehicle and all the issues once technically addressed will show none of the issues existed as “part of the collection of the vehicle, but all the issues arose as a result of the conduct of the complainant [the purchaser].” Mr Ball says the vehicle was sold as seen and tested.

[38] In deciding if the vehicle complied with the guarantee of acceptable quality I have had regard to the age, mileage, and price paid by the purchaser for this vehicle. The vehicle was 10 years old when it was supplied to the purchaser. The TradeMe advertisement stated it had travelled 12,000km and the CIN 13,000km. The purchaser’s application stated the vehicle had travelled 4,947 miles, equivalent to 7,961kms. The purchase price paid by the purchaser was $110,000. There seems little doubt that at the time of sale this low mileage highly specified vehicle was probably in excellent condition. However, within 1500kms of being driven from Takanini to Timaru the engine, I accept, has been seriously damaged. The results of the oil test indicate that the engine requires a significant amount of repair work to most of the vital engine components because they are worn. Clearly the vehicle was not durable.

[39] I find as a fact, on the basis of the technical evidence submitted by the purchaser, which was not challenged with any technical expert’s evidence by Mr Ball, that the damage to the engine occurred because the engine was run on the wrong fuel. Mr Ball must bear responsibility for that by telling the purchaser the vehicle could be driven on 98 octane. I accept the purchaser and Mrs Jackson’s evidence that Mr Ball told the purchaser that he had topped up tank with 98 octane fuel before they set off to drive the vehicle to Timaru.

[40] I reject as nonsense Mr Ball’s claim that he thought the purchaser was going to transport the vehicle back to Timaru. The purchaser and Mrs Jackson came to Auckland on 17 February 2016 to drive the vehicle back to Timaru and that Mr Ball was told that. It must have been obvious to him that was the purchaser’s intention when he collected he and Mrs Jackson from Auckland Airport, supplied the vehicle to them in Takanini, and saw them drive it away.

[41] I also reject as unproven, Mr Ball’s claim that the purchaser caused the damage to the engine by his incompetent driving of the vehicle back to Timaru. The purchaser appears to have been very conscious that he had to nurse the vehicle back to Timaru after it overheated on the trip to Coromandel. The purchaser said that he had not changed the boost settings on the vehicle and there was no evidence to suggest that he had changed the boost settings.

Conclusion on issue [b]

[42] The vehicle supplied by M.P.H. to the purchaser failed to comply with the guarantee of acceptable quality in the Act because it was not as durable as a reasonable consumer would regard as acceptable for a vehicle of this age, low mileage and high price.

Issue [c]: Is the failure of the vehicle to comply with the guarantee of acceptable quality of substantial character?

Relevant law

[43] Section 21 of the Act defines the circumstances in which a failure to comply with the guarantee as to acceptable quality will be regarded as being a failure of a substantial character for the purposes of s 18(3) of the Act. Section 21 of the Act provides as follows:

21 Failure of substantial character

For the purposes of section 18(3), a failure to comply with a guarantee is of a substantial character in any case where—

(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b) the goods depart in 1 or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model; or

(c) the goods are substantially unfit for a purpose for which goods of the type in question are commonly supplied or, where section 8(1) applies, the goods are unfit for a particular purpose made known to the supplier or represented by the supplier to be a purpose for which the goods would be fit, and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or

(d) the goods are not of acceptable quality within the meaning of section 7 because they are unsafe.

Application of law to facts

[44] The purchaser provided evidence to show that the vehicle will either require a new engine at a cost of $25,000 or a rebuild of the existing engine at a cost of up to $55,000. The extent of the damage to the engine as the result of it being run on 98 octane fuel is unknown and will be until the engine is stripped down, which in itself with be an expensive activity.

[45] On the basis of the information in the Triangle Garage Ltd report I think it is reasonable to conclude that the vehicle is now substantially unfit for the purpose for which vehicles of the type in question are commonly supplied, and that it cannot easily and within a reasonable time be remedied to make it fit for such purpose.

Conclusion on issue [c]

[46] The failure to comply with the guarantee of acceptable quality is of substantial character within the meaning of s21(c) of the Act.

Issue [d]: Was the purchaser entitled to reject the vehicle?

[47] The purchaser rejected the vehicle in his letter of 23 March 2016 sent to Mr Ball of M.P.H and gave his reasons for doing so in that letter. Rejection occurred within five weeks of being supplied with the vehicle on 17 February 2016 which I consider to be well within a reasonable time of supply.

[48] The purchaser’s rejection of the vehicle will be upheld with effect from 23 March 2016. M.P.H will be ordered to refund the purchaser with $100,000 and collect the vehicle at its expense once it has done so.
DATED at AUCKLAND this 18th day of April 2016

C. H. Cornwell
Adjudicator