Blanken v Taylor's Cars Limited - Reference No. MVD 351/2016 (Wellington) [2017] NZMVDT 1096; [2017] NZMVT Wellington 96 (20 February 2017)

Motor Vehicle Disputes Tribunal of New Zealand

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Blanken v Taylor's Cars Limited - Reference No. MVD 351/2016 (Wellington) [2017] NZMVDT 1096 (20 February 2017); [2017] NZMVT Wellington 96

Last Updated: 21 March 2017

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

Reference No. MVD 351/2016 (WN96)

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN AMANDA NICOLE BLANKEN

Purchaser

AND TAYLOR'S CARS LIMITED

Trader

MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

D Binding – Assessor

HEARING at Christchurch on 31 January 2017

DATE OF DECISION 20 February 2017
APPEARANCES

A N Blanken, Purchaser
T J Ryan, Director of Trader (by AVL)
M Ryan, Employee of Trader (by AVL)

DECISION

Taylor's Cars Limited must pay Ms Blanken $1,208.55 immediately.

REASONS

Introduction

[1] The automatic transmission of Ms Blanken’s vehicle has been intermittently sticking in third gear. This problem first arose in the week after she purchased the vehicle. The trader paid for some repairs but these have not fixed the problem. The following issues arise:

• (a) Did the vehicle fail to comply with the guarantee of acceptable quality in s 6 of the Consumer Guarantees Act 1993 (“the Act”)?
• (b) If so, what remedy is the purchaser entitled to, if any?

Background

[2] On 7 July 2015, Ms Blanken purchased a 2004 Toyota Crown Athlete with 134,000 km on the odometer for $12,500 from Taylor’s Cars Limited. On 11 July 2015, Ms Blanken’s partner flew to Nelson to collect the vehicle and drive it back to Christchurch. In the week following the vehicle’s arrival in Christchurch, Ms Blanken experienced a problem with the vehicle sticking in third gear. The problem was intermittent at first, and then gradually became more serious.
[3] Ms Blanken took the vehicle to Miles Toyota in Christchurch, which diagnosed a transmission fault code "P0751 shift solenoid A performance – stuck off".[1] Miles Toyota advised replacing shift solenoid A. It cleared the codes and road-tested the vehicle to monitor its gear shifts. Miles Toyota reported that the vehicle went up to fifth gear and back to first gear satisfactorily. It recommended Ms Blanken rebook the vehicle if the fault recurred. Taylor’s Cars paid Miles Toyota’s invoice but, instead of simply following Miles Toyota’s recommendation to replace shift solenoid A, it requested Ms Blanken to take the vehicle to Auto Transmissions Limited.
[4] Ms Blanken did as requested by Taylor’s Cars and, on 10 August 2015, Auto Transmissions Limited replaced solenoid 3 (not solenoid A). Auto Transmissions Limited’s invoice in the sum of $972.82 was paid by Taylor’s Cars.
[5] The vehicle’s transmission operated successfully for the next few weeks, but in October 2015 it started sticking in third gear again.
[6] Ms Blanken took her vehicle back to Auto Transmissions on several occasions between October and December 2015, but it was unable to find anything wrong with the transmission. Auto Transmissions thought that the fault may be caused by a computer issue.
[7] On 18 December 2015, Ms Blanken collected her vehicle from Auto Transmissions and shortly thereafter it began sticking in third gear again. Ms Blanken had a telephone discussion with Taylor’s Cars, which told her that if she was still concerned with the vehicle, she should contact Taylor’s Cars again to arrange for the vehicle to be taken to Vantage Automotive.
[8] On 21 December 2015, Ms Blanken emailed Taylor’s Cars rejecting the vehicle. At that point, the trader attempted to arrange for Ms Blanken to take the vehicle to Vantage Automotive as it had recommended, but she refused to do so. Ms Blanken sent a further rejection email on 30 December 2015.
[9] Despite having rejected the vehicle, Ms Blanken continued to drive it between January and August 2016 and travelled at least 5,000 km in the vehicle in that time. In total, the purchaser has travelled approximately 15,000 km in the vehicle since purchase.
[10] On 8 March 2016, Ms Blanken took the vehicle to Miles Toyota again. It was unable to fault the transmission but did find historical codes, including P0751 shift solenoid A performance – stuck off. Miles Toyota again recommended replacing shift solenoid A and quoted her $1,123.55 for that work.
[11] On 22 November 2016, Ms Blanken applied to the Tribunal for orders upholding her rejection of the vehicle.

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

[12] 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.
[13] 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.

...

[14] 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.
[15] One of the difficulties with Ms Blanken’s claim is that she has left it a very long time before bringing her application to the Tribunal. In the meantime, she has driven the vehicle approximately 15,000 km. A further problem is that the various repairers who have looked at the vehicle have been unable to replicate the problem experienced by the purchaser, namely that the vehicle's transmission sticks in third gear. Nevertheless, within a short time after the purchase of the vehicle, Ms Blanken obtained a report from Miles Toyota diagnosing a transmission fault code and making a clear recommendation to her that she should replace shift solenoid A.
[16] For whatever reason, the trader has elected not to follow Miles Toyota’s recommendation. Instead, Taylor’s Cars arranged for the vehicle to be seen by Auto Transmissions, which was unable to rectify the fault experienced by Ms Blanken.
[17] On behalf of Taylor’s Cars, Mr Marcus Ryan, an employee of the trader, explained to the Tribunal that he did not think replacing shift solenoid A would necessarily fix the problem. That was why the trader recommended that Vantage Automotive look at the vehicle, because they are specialist automotive electricians.
[18] Ms Blanken is frustrated by the delay and the apparent inability of the trader’s preferred repairer to fix the problem. She cannot understand why the simple recommendation Miles Toyota made in the first place, to replace shift solenoid A, was not followed.
[19] Assuming the purchaser’s experience is correct, and that the vehicle is sticking intermittently in third gear, then that is a problem that arose very soon after she purchased the vehicle. Indeed, the purchaser’s evidence was that the problem arose within the first week after she purchased the vehicle. It seems likely, in the Tribunal’s Assessor Mr Binding’s opinion, that there was a pre-existing fault with the vehicle’s transmission or, alternatively, that the fault occurred so soon after purchase that it reflects poorly on the vehicle’s durability in terms of the definition of acceptable quality in s 7(1)(e) of the Act.
[20] Accordingly, in respect of the vehicle’s transmission sticking in third gear, I conclude that the vehicle failed to comply with the guarantee of acceptable quality in s 6 of the Act. For the avoidance of doubt, I do not consider that the other matters raised by the purchaser, including that the tyres were the wrong size and that a shock absorber needs to be replaced, are further breaches of the guarantee of acceptable quality. These matters have only been identified a considerable time after the vehicle was purchased. I do not consider that the purchaser is entitled to any remedy in relation to these matters.

What remedy is the purchaser entitled to, if any?

[21] Section 18 of the Act provides the options against a trader where a vehicle does not comply with a guarantee:

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.

[22] In terms of s 18(2)(a) of the Act, Ms Blanken required Taylor’s Cars to remedy the failure with the vehicle's transmission within a reasonable time. In terms of the trader’s obligations under s 18(2)(b), I do not think that Taylor’s Cars has refused to remedy the failure or neglected to do so. Perhaps it could be said that Taylor’s Cars has not succeeded in remedying the failure within a reasonable time. However, I accept the submission made on behalf of Taylor’s Cars that Ms Blanken herself has made it difficult for Taylor’s Cars to make progress in solving the problem with her vehicle, because she has refused to make the vehicle available for further assessment, including by Vantage Automotive.
[23] Moreover, the option provided in s 18(2)(b)(ii) to reject the vehicle is not available to Ms Blanken because she has acted inconsistently with wanting to reject the vehicle, by continuing to drive it for at least 5,000 km after giving her notice of rejection. She has waived any right to reject the vehicle.
[24] The trader took a constructive approach in the Tribunal’s hearing. Mr Marcus Ryan indicated that Taylor’s Cars would still be willing to allow Ms Blanken to take the vehicle to Vantage Automotive for further exploratory work to be done on what is the cause of the transmission problem in her vehicle. As an alternative, Mr Taylor Ryan (the trader's director) told the Tribunal that he would be prepared to simply pay Ms Blanken for the cost of replacing shift solenoid A, if that was what Ms Blanken preferred.
[25] For herself, Ms Blanken indicated that she is not opposed to keeping the vehicle. She understands why her application to reject the vehicle is problematic, in light of her continued use of the vehicle after notifying her intention to reject it.
[26] Mr Binding considers that the course of action that was most likely to solve the problem was for shift solenoid A to be replaced in accordance with Miles Toyota’s recommendation.
[27] Accordingly, consistent with Mr Binding’s recommended approach, I will order Taylor’s Cars to pay Ms Blanken for the amount quoted by Miles Toyota to replace this part, $1,123.55, plus the cost of Miles Toyota’s assessment of the vehicle in March 2016, $85, a total of $1,208.55.

J S McHerron
Adjudicator

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[1] Shift solenoid valve A assists with shifting gears to the optimum position. It is turned on or off by the transmission control module in response to signals sent from the transmission selector, vehicle speed and engine control module.