Chubb v McEwin Motor Group Limited t/a McEwin Motor Group - Reference No. MVD 194/2017 [2017] NZMVDT 124 (11 August 2017)

Last Updated: 15 September 2017

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
		[2017] NZMVDT 124 Reference No. MVD 194/2017
	IN THE MATTER	of the Motor Vehicle Sales Act 2003
	AND
	IN THE MATTER	of a dispute
	BETWEEN	MARIA CHUBB
		Purchaser
	AND	MCEWIN MOTOR GROUP LIMITED TRADING AS MCEWIN MOTOR GROUP
		Trader
MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Haynes, Assessor
HEARING at Auckland on 9 August 2017
DATE OF DECISION 11 August 2017
APPEARANCES
Ms M J Chubb, Purchaser
Mr I B Campbell, Witness for the Purchaser Mr B McEwin, for the Trader Mr J Lourens, Witness for the Trader

ORDERS

A. McEwin Motor Group Limited shall, within five working days of the date of this decision, pay $1,555.36 to Ms Chubb

DECISION

[1] The vehicle has had two separate faults with its convertible roof that breach the acceptable quality guarantee in s 6 of the Consumer Guarantees Act 1993 (“the Act”).
[2] Ms Chubb is not entitled to reject the vehicle because of these faults. The faults are not a failure of a substantial character for the purposes of s 21 of the Act, and although McEwin Motor Group has refused to repair the second fault, Ms Chubb chose to repair the fault rather than to reject the vehicle.
[3] Ms Chubb is entitled to recover all costs incurred in diagnosing and fixing the second fault under s 18(2)(b)(i) of the Act.

REASONS

Introduction

[4] On 28 November 2016, Maria Chubb purchased a 2008 Audi TT Roadster 3.2S, registration number TTQTRO, for $33,990 from McEwin Motor Group Limited, trading as McEwin Motor Group. The vehicle had an odometer reading of 22,356kms at the time of sale.
[5] On 27 January 2017 the vehicle’s convertible roof would not close. McEwin Motor Group repaired the fault, using its own repairer Midas Grey Lynn. Midas Grey Lynn replaced a faulty switch. McEwin Motor Group paid for this repair.
[6] On about 10 April 2017 the vehicle again developed a fault that meant its convertible roof failed to close. McEwin Motor Group refused to repair this fault. Ms Chubb has subsequently had the vehicle repaired by Midas Grey Lynn and Giltrap Audi.
[7] On about 15 May 2017 Ms Chubb rejected the vehicle. McEwin Motor Group refused to accept the rejection.
[8] Ms Chubb has now applied to the Tribunal seeking an order upholding her rejection of the vehicle and a refund of all amounts paid for the vehicle.

The Issues

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

• (a) Did the two convertible roof faults breach the acceptable quality guarantee in s 6 of the Act?
• (b) Is Ms Chubb entitled to reject the vehicle because:
  • (i) The faults amount to a failure of a substantial character under s 21 of the Act; or
  • (ii) McEwin Motor Group has refused to repair the fault after being required to do so.
• (c) What remedy is Ms Chubb entitled to under the Act?

Did the faults breach the acceptable quality guarantee in s 6 of the Act?

[10] 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.
[11] 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.”

[12] 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 Ms Chubb’s subjective perspective.

The convertible roof faults breach the acceptable quality guarantee

[13] I am satisfied that the two faults with the vehicle’s convertible roof breach the acceptable quality guarantee.
[14] The first fault was caused by a defective switch, which required replacement. The convertible roof is an essential component of a convertible vehicle. I am satisfied that a reasonable consumer would not expect a vehicle of this age, price and mileage to develop a fault within two months of purchase that caused the roof to malfunction.
[15] The second convertible roof fault is a different fault from the first. The second fault appears to have arisen due to a combination of faulty flap motors and the roof being misaligned. Midas Grey Lynn replaced the right flap motor, which had mechanical damage. Giltrap Audi replaced the left flap motor, which was faulty and then realigned the roof. These repairs cost Ms Chubb $1,555.36.
[16] This fault arose within four and a half months of purchase. McEwin Motor Group submitted that the fault occurred too long after purchase to be covered by the protections of the Act. I disagree. Ms Chubb paid $33,990 for an eight year old vehicle with an odometer reading of 22,356kms. Taking account of the age, price and mileage of this vehicle, I am satisfied that a reasonable consumer would not find this vehicle to have been of acceptable quality. A reasonable consumer would expect the vehicle’s convertible roof to have been far more durable than this one has been.
[17] McEwin Motor Group also submitted that the second fault occurred because Ms Chubb left the roof down while it was raining, causing water damage to key components. McEwin Motor Group also alleged that Ms Chubb damaged the roof when manually closing it in January 2017.
[18] The fault was not caused by water damage. The event McEwin Motor Group complains of occurred after the second fault became apparent. Further, Mr Haynes, the Tribunal’s Assessor, advises that the faults discovered by Midas Grey Lynn and Giltrap Audi could not have been caused by water damage.
[19] I am also satisfied that the fault was not caused when Ms Chubb manually closed the roof in January 2017. Mr Lourens, a manager at Midas Grey Lynn, gave evidence that the tool used for closing the roof showed signs of damage. McEwin Motor Group extrapolated from that evidence that the tool was damaged when Ms Chubb forced the roof closed, damaging the roof.
[20] Unfortunately for McEwin Motor Group, there is just no evidence to show that Ms Chubb has ever forced the roof closed or used the tool in an improper way. This theory is speculative and must be disregarded. I am satisfied that Ms Chubb has not contributed in any way to the second fault.

Is Ms Chubb entitled to reject the vehicle?

[21] Section 18 of the Act sets out the remedies under the Act. Section 18 provides:

“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.”

[22] Relevant to the facts of this case, Ms Chubb may reject the vehicle if:

• (a) The vehicle has a failure of a substantial character (s 18(3)(a)); or
• (b) McEwin Motor Group, having been required to repair the vehicle, refuses to do so (s 18(2)(b)(ii).

Are the faults a failure of a substantial character?

[23] 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.”

[24] Section 21(a) of the Act applies to this case. The question I must answer is whether the 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 faults, when considered separately, are not a failure of a substantial character

[25] I am not satisfied that either of the faults with the convertible roof, when considered separately, is a failure of a substantial character.
[26] Mr Haynes advises that the first fault was minor and easily and quickly repaired. The second fault was also minor and should also have been easily and quickly remedied. However that fault took some time to diagnose and repair because the repairers did not check the roof’s alignment until they had exhausted all other possible causes of the fault.
[27] The fact that the repairers took some time in performing the repair does not turn a minor fault into a failure of a substantial character. I am therefore not satisfied that a reasonable consumer would not have purchased the vehicle if it was aware of the nature and extent of each of the faults.

The accumulated faults are not a failure of a substantial character

[28] Ms Chubb may also seek to reject the vehicle if the accumulation of defects with the vehicle amount to a failure of a substantial character for the purposes of s 18(3)(a) of the Act.
[29] 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]
[30] Ms Chubb claims to have lost faith in the reliability of this vehicle. That may well be the case, but I am not satisfied that the accumulated faults with this vehicle amount to a failure of a substantial character. As noted above, these are not serious faults and should have been repaired easily and quickly. I do not consider that they are the kind of faults that would cause a reasonable consumer to lose all confidence in the reliability of the vehicle.

Can Ms Chubb reject the vehicle because McEwin Motor Group refused to repair the second fault?

[31] Ms Chubb may also reject the vehicle if McEwin Motor Group has refused to repair the second fault, after being required to do so.
[32] McEwin Motor Group was required to fix the fault. Ms Chubb telephoned Mr McEwin on 10 April 2017 asking the company to repair the fault. McEwin Motor Group refused to repair the fault. Mr McEwin agreed that the company declined to repair the fault and told Ms Chubb that too much time had passed since she purchased the vehicle for the company to be responsible for repairing the vehicle’s faults.
[33] Ms Chubb would therefore have been entitled to reject the vehicle had she chosen to do so.
[34] However, Ms Chubb is no longer entitled to reject the vehicle. That is because Ms Chubb chose to repair the vehicle rather than to reject it. Under s 18(2) of the Act, where a trader refuses to repair a fault, the purchaser can elect to have the vehicle repaired elsewhere at the trader’s expense under s 18(2)(b)(i), or to reject the vehicle under s 18(2)(b)(ii). The purchaser must make an election as to which of those remedies it chooses.
[35] Ms Chubb’s election was to have the vehicle repaired. In April 2017 she sent the vehicle to Midas Grey Lynn to have the fault repaired. Midas Grey Lynn then recommended that Ms Chubb send the vehicle to an auto electrician, and then to Giltrap Audi to continue diagnosis and repairs. Ms Chubb agreed with those recommendations and the vehicle was sent to both the auto electrician and Giltrap Audi on 15 May 2017. Ms Chubb then rejected the vehicle on 15 May 2017, by which time significant repairs had already been performed on the vehicle.
[36] I consider that by electing to have the vehicle repaired, and then having repairs performed before rejecting the vehicle, Ms Chubb has lost her right to reject the vehicle under s 18(2)(b)(ii) of the Act.

What remedy is Ms Chubb entitled to under the Act?

[37] Although she is not entitled to reject the vehicle, Ms Chubb is entitled to a remedy. Under s 18(2)(b)(i) of the Act, Ms Chubb is entitled to recover the costs she has incurred in having the vehicle’s faults assessed and repaired.
[38] I therefore order that McEwin Motor Group Limited must, within five working days of the date of this decision, pay $1,555.36 to Ms Chubb.

DATED at AUCKLAND this 11th day of August 2017

B.R. Carter
Adjudicator

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

[2] Ibid, at 417.