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Wyatt v GB Initiatives Limited t/a Car Click - Reference No. MVD 178/2017 [2017] NZMVDT 114 (7 August 2017)

Last Updated: 15 September 2017

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL



Reference No. MVD 178/2017


IN THE MATTER
of the Motor Vehicle Sales Act 2003


AND


IN THE MATTER
of a dispute


BETWEEN
SAMUEL WYATT


Purchaser


AND
GB INITIATIVES LIMITED TRADING AS CAR CLICK


Trader


MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Gregory, Assessor

HEARING at Auckland on 2 August 2017

DATE OF DECISION 7 August 2017

APPEARANCES
Mr S Wyatt, Purchaser
Ms S Khandar, Witness for the Purchaser
Mr N Coe, for the Trader


ORDERS

  1. GB Initiatives Limited shall, within 10 working days of the date of this decision, pay Mr Wyatt $5,850.
  2. Mr Wyatt must then make the vehicle available to be uplifted by GB Initiatives Limited.

DECISION

[1] The vehicle has a number of faults that breach the acceptable quality guarantee in s 6 of the Consumer Guarantees Act 1993 (“the Act”).
[2] Those accumulated faults amount to a failure of a substantial character under s 21 of the Act.
[3] Mr Wyatt is entitled to reject the vehicle and obtain a refund of the purchase price.

REASONS

Introduction

[4] On or about 10 May 2017, Mr Wyatt and his partner Ms Khandar purchased a 2005 Toyota Caldina ZT, registration number HDT614, from GB Initiatives Limited, trading as Car Click. The vehicle had an odometer reading of 167,000kms at the time of sale.
[5] Mr Wyatt and Ms Khandar purchased the vehicle sight unseen. They had seen the vehicle listed on Trade Me and agreed to purchase the vehicle without inspecting it.
[6] Before paying for the vehicle, Car Click provided Mr Wyatt with an Inspection Report for the vehicle prepared by Car Inspection Services Limited. Relevantly, that report recorded that the vehicle had various scratches, marks and small dents and that the vehicle was missing a rear wiper blade and had a cracked reversing light lens. The report described the vehicle as being in keeping with its age and mileage.
[7] Having seen the Inspection Report, Mr Wyatt completed the purchase of the vehicle. When Mr Wyatt took possession of the vehicle he noticed that the vehicle’s temperature gauge did not work and the general condition of the vehicle was poor. Mr Wyatt then telephoned Mr Coe, a salesman and shareholder of Car Click, seeking to reject the vehicle.
[8] Car Click declined to accept Mr Wyatt’s rejection of the vehicle and arranged for Mr Wyatt to deliver the vehicle to Autoland North Shore Limited to have the faulty temperature gauge repaired. Mr Wyatt took the vehicle to Autoland, but on being told that no loan vehicle was available for his use while repairs were being conducted he elected not to have the fault repaired at that time.
[9] Mr Wyatt continued to notice various faults with the vehicle. He continued to seek rejection of the vehicle, and in response Car Click offered to repair the vehicle’s faults.
[10] Mr Wyatt then filed an application with the Tribunal seeking to reject the vehicle. In response to Directions from the Tribunal that he should have the vehicle assessed and its faults identified, Mr Wyatt obtained an AA Motoring Vehicle Inspection Report.
[11] The AA Report identified the following faults with the vehicle:
[12] Mr Wyatt also provided photographs of the appearance and finish of the vehicle. Those photographs show that the vehicle is in poor condition, with numerous dents and scratches. Most concerning is the damage to the vehicle’s front bumper, which is insecure (as identified by AA Motoring), and the rear bumper which has a small triangle shaped section cut out of it.
[13] At the hearing, Car Click reiterated its belief that the vehicle’s appearance and condition was in keeping with a vehicle of this age and mileage and considered that Mr Wyatt was not entitled to reject the vehicle.

The Issues

[14] The issues that require consideration in this case are:

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

[15] Section 6 of the Act imposes on suppliers and manufacturers of consumer goods "a guarantee that the goods are of acceptable quality." Section 2 of the Act defines "goods" as including vehicles.
[16] 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.”

[17] 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 Mr Wyatt’s subjective perspective.
[18] I am satisfied that each of the faults listed in paragraph [11] is a fault that breaches the acceptable quality guarantee.
[19] Mr Gregory, the Tribunal’s Assessor, advises that the faults with the right headlamp, the fuel cap, front guards and left hand front ball joint would all cause the vehicle to fail a warrant of fitness inspection.
[20] Car Click did not accept that the vehicle necessarily had each of these faults, or that the faults breached the acceptable quality guarantee. It noted that the vehicle had passed warrant of fitness inspections in March and May 2017, without these faults being detected.
[21] The vehicle does appear to have passed warrant of fitness inspections in March and May 2017. However, I am nonetheless satisfied that the vehicle has each of the faults described by Mr Wyatt and identified by AA Motoring. I am also satisfied that a reasonable consumer would not expect a vehicle of this price, age and mileage to have faults that would cause it to fail a warrant of fitness inspection so shortly after purchase.
[22] The noisy CV joints are also a breach of the acceptable quality guarantee. Mr Wyatt played a video at the hearing, which showed that the vehicle makes a noise while turning sharply. Mr Gregory advises that the noise is being made by worn front CV joints that require replacement. I am satisfied that a reasonable consumer would not expect this fault to arise so shortly after purchase.
[23] The vehicle’s temperature gauge does not work. The temperature gauge is essential to the safe operation of the vehicle. Without it a driver has no way of determining the temperature of the vehicle’s engine, meaning a driver could easily continue to drive with an overheating engine, causing potentially irreparable damage. I am satisfied that a reasonable consumer would not expect a vehicle of this age, price and mileage to have a temperature gauge that does not work.
[24] The fault with the air conditioning unit is a breach of the acceptable quality guarantee. That is particularly the case where the Trade Me listing for the vehicle described it as having air conditioning that is “nice and cold”.
[25] The rear window wiper is broken and requires replacement. A reasonable consumer would not expect a vehicle of this age to have a broken rear wiper unit so shortly after purchase.
[26] The vehicle’s key is also broken, meaning that the remote central locking function does not work. This is a breach of the acceptable quality guarantee. A reasonable consumer would expect a properly functioning key to be supplied with the vehicle.
[27] The vehicle’s appearance and finish is also poor. I acknowledge that the Trade Me listing noted that the vehicle had “some cosmetic imperfections” and that the Car Inspection Services Limited inspection report noted that the vehicle had various scratches and dents in keeping with its age and mileage. However, some of the defects with the vehicle’s appearance and finish are not in keeping with the description given by Car Click or with the age and mileage of the vehicle. In particular, the inner guards of the front bumper are damaged and insecure, and the rear bumper has had a small triangle shaped section cut out of it.
[28] I accept that vehicles of this age, price and mileage are not going to be free of dents, scratches and other cosmetic blemishes. However, I consider that the defects in this vehicle’s appearance and finish are such that the vehicle breaches the acceptable quality guarantee, even taking account of its age, price and mileage.

Are the accumulated faults a failure of a substantial character?

[29] Mr Wyatt seeks to reject the vehicle because its faults amount to a failure of a substantial character. A failure of a substantial character is defined in s 21 of the Act:

“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.”

[30] The question I must answer is whether the accumulated faults that this vehicle has are such that a reasonable consumer, fully acquainted with the true nature and extent of the faults, would not have purchased the vehicle.

The accumulated faults are a failure of a substantial character

[31] In Cooper v Ashley & Johnson Motors Limited,[1] the District Court stated that a purchaser may reject a vehicle where there had been an accumulation of minor defects, which in themselves could not be described as substantial. The Court noted that a point will eventually be reached where the purchaser could “say convincingly that he or she had no confidence in the reliability of the vehicle”.[2]
[32] This vehicle has had an accumulation of defects as discussed in paragraphs [18] to [28]. Four of those faults mean the vehicle would now, within three months of purchase, fail a warrant of fitness inspection. The remaining faults all breach the acceptable quality guarantee and require significant repairs. Mr Gregory estimates that the cost of repairs required to bring this vehicle to an acceptable standard would exceed $2,500.
[33] In the circumstances of this case, I consider that these faults are such that a reasonable consumer would not have purchased this vehicle had they been fully acquainted with the nature and extent of the faults. Applying Cooper v Ashley & Johnson Motors Limited, I consider that the point has been reached where Mr Wyatt can convincingly say that he has no confidence in the reliability of this vehicle. The accumulated faults with this vehicle are therefore a failure of a substantial character for the purposes of s 21 of the Act.

What remedy is available to Mr Wyatt?

[34] Section 18 of the Act sets out the remedies under the Act. 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), he 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.”

[35] Mr Wyatt is entitled to reject the vehicle under s 18(3) of the Act. The vehicle’s accumulated faults are a failure of a substantial character.
[36] Under s 23(1)(a) of the Act, Mr Wyatt is entitled to a refund of all money paid in respect of the vehicle. Accordingly, I order that GB Initiatives Limited must, within 10 working days of the date of this decision, pay Mr Wyatt $5,850. Mr Wyatt must then make the vehicle available to be uplifted by GB Initiatives Limited.

DATED at AUCKLAND this 7th day of August 2017

B.R. Carter
Adjudicator


[1] Cooper v Ashley & Johnson Motors Limited [1996] 7 TCLR 407.

[2] Ibid, at 417.

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