Bullen v Auto Spot North Shore Limited - Reference No. MVD 46/16 (Auckland) [2016] NZMVDT 52; [2016] NZMVT Auckland 52 (29 April 2016)

Last Updated: 17 May 2016

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

[2016] NZMVT Auckland 52

Reference No. MVD 46/16

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN CHRISTOPHER PETER BULLEN

Purchaser

AND AUTO SPOT NORTH SHORE LIMITED

Trader

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

HEARING at Auckland on 27 April 2016

DATE OF DECISION 29 April 2016

APPEARANCES

Mr C P Bullen, the purchaser

Mr A Brown, director of the trader

DECISION

The purchaser’s application to reject the vehicle is dismissed.

REASONS
Background

[1] On 19 June 2015 Mr Bullen (“the purchaser”) bought a 2006 Subaru Legacy registration JEJ236 (“the vehicle”) for $13,500 from Park and Sell Limited, now Auto Spot (North Shore) Limited (“the trader”). The purchaser has rejected the vehicle because he says it has faults with its electrical system which the trader has failed to repair within a reasonable time. The purchaser has applied to have the Tribunal uphold his rejection, and the trader ordered to refund the purchase price.
[2] The trader says that the vehicle’s electrical faults were caused by the purchaser installing an alarm system in the vehicle and the trader has, at its cost, rectified the fault.
[3] Pursuant to clause 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 clause 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

[4] The issues requiring consideration are:

• (a) Whether the vehicle complied with the guarantee of acceptable quality in s 6 of the Consumer Guarantees Act 1993?
• (b) If it did not, did the purchaser require the trader to repair the vehicle’s fault and if so did the trader fix it within a reasonable time?
• (c) If not, is the purchaser entitled to reject the vehicle?

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

Relevant law

[5] In terms of s 89 of the Motor Vehicle Sales Act 2003 the Tribunal has jurisdiction to inquire into and determine applications or claims between a motor vehicle trader and the purchaser of a motor vehicle. In doing so, it may apply the provisions of the Sale of Goods Act 1908, the Fair Trading Act 1986, the Contractual Remedies Act 1979 or the Consumer Guarantees Act 1993, as applicable to the circumstances of the case. In this application the Consumer Guarantees Act 1993 (“the Act”) is applicable.
[6] 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.”
[7] 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.

[8] 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.
[9] 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

[10] The purchaser bought the vehicle from the trader following a test drive on 19 June 2015. Its odometer at the time of sale was 95,738kms. The purchaser says the vehicle’s fuel light was on when he test drove the vehicle but on putting a third of a can of petrol in the vehicle’s fuel tank the light went off. The purchaser says he filled the vehicle’s tank with fuel on the day he bought it and the fuel gauge appeared to be working properly.

[11] On 29 June 2015, the purchaser had a Mongoose alarm with remote locking fitted to the vehicle by Automotive Security Systems NZ Ltd (“ASS”) at a cost of $580.

[12] On 16 July 2015, the vehicle ran out of fuel but the vehicle’s fuel gauge showed the tank was half full. The trader agreed to the purchaser taking the vehicle to a local garage in Waiuku to rectify the fuel gauge issue but their solution of replacing both sender units in the fuel tank was unsuccessful. On 5 October 2015, the purchaser returned the vehicle to the trader to have it repaired by the trader’s repairer, ACE Auto Electrical Ltd who had to replace the BCM and recode the key chip to the new BCM at a cost of $980-95 which the trader had done at its expense. The purchaser collected the vehicle on 27 October after the trader had the vehicle tested.

[13] On 30 October 2015, the vehicle would not start. The trader sent a new battery to the purchaser which he received on 11 November and fitted to the vehicle. On 13 November the battery was flat. The purchaser attempted to jump start the vehicle but it would not start. The purchaser says he saw a solicitor who sent a letter rejecting the vehicle to the trader but the letter was apparently sent to a stale address and was not received by the trader. The purchaser was unable to produce a copy for the Tribunal.

[14] On 16 February 2016, the purchaser took the vehicle to Autolec Ltd who found that the stand by current draw rate of the battery was 0.06amps (and noted it should be “0.03ish”), which they advised was at the high end of what was acceptable. Their invoice states that this draw rate would cause the battery to go flat if the vehicle was not used every day. They also found a fault code with the vehicle’s immobiliser indicating a key fault. They disconnected the Mongoose alarm and found it had no effect on the Subaru system and recommended the vehicle be taken to a Subaru dealer for repair.

[15] On 17 March 2016, the trader collected the vehicle. The trader produced a tax invoice from North Harbour Autoelectrical which states they traced the battery drain to the alarm system and battery backup siren taking a draw of 0.06amps but when they disconnected the alarm the draw was at 0.01 of an amp. They also found an incorrect key chip and the BCM had been replaced but the key supplied to the trader by the purchaser had not been coded to the BCM. They cut another key and coded it to the vehicle. The trader paid the cost of $756-13 for that work.

[16] The trader, represented by Mr Brown says the vehicle now starts first time every time with no issues. Mr Brown says that the reason the vehicle would not start is because the purchaser was using the incorrect key, not the key coded to the vehicle by Ace Auto Electrical Ltd on 14 October 2015. The reason the vehicle’s battery went flat was because the purchaser’s aftermarket alarm is drawing 0.06amps and if the vehicle is not used for a few days this will flatten the vehicle’s battery.

The Tribunal’s finding on issue [a]

[17] In determining whether the vehicle supplied by the trader complied with the guarantee of acceptable quality, I have had regard to the nature of the goods; in this case a nine year old Japanese imported Subaru Legacy which had travelled 95,758kms at the time of sale and was sold for $13,500. On the advice of the Assessor, I consider it probable that the fault which occurred with the fuel gauge was caused by the installation by the purchaser of the aftermarket alarm on the 29 June 2015 because the fuel gauge appears to have been working properly at the time the vehicle was sold and was first filled with fuel by the purchaser on 19 June 2015. The fault only became apparent when the purchaser’s wife ran out of fuel on 16 July 2015. The purchaser’s local garage mistakenly replaced the vehicle’s fuel sender units but that did not cure the fault. It was not until the vehicle was returned to the trader and it had its repairer, Ace Auto Electrical Ltd, rectify the fault on 14 October 2015 by replacing the BCM and recoding the key chip, that this issue was fixed.

[18] The fault with the battery flattening was unlikely to be as a result of the battery being faulty, but rather because the alarm system installed by the purchaser was drawing more current from the battery at rest than was being replaced by the use of the vehicle. The purchaser told the Tribunal that there were times when the vehicle was not driven for several days. It has only travelled 2,899kms since the purchaser bought it, according to the purchaser.

Conclusion on issue [a]

[19] I am not persuaded that the vehicle was either faulty at the time of sale or lacked durability. I accept that the purchaser and his wife have been inconvenienced by the faults with the vehicle’s electrical system but I believe, on the advice of the Assessor, supported by the reports of Autolec Ltd and North Harbour Autoelectrical that the electrical faults were the result of the purchaser’s action in having an aftermarket alarm system fitted by ASS ten days after he bought the vehicle. It seems too coincidental that the BCM, which interprets the signal from the fuel senders and operates the fuel gauge, became faulty straight after the alarm was fitted. The alarm interferes with the starting and central locking systems which are again controlled by the BCM. Hence I do not find the vehicle failed to comply with the guarantee of acceptable quality at the time of sale and I must therefore dismiss the purchaser’s application. The purchaser should arrange to collect the vehicle from the trader.

DATED at Auckland this 29th day of April 2016

C. H. Cornwell
Adjudicator