Kandamby v Brent Smith T/A Motor Me Reference No. MVD 151/2017 [2017] NZMVDT 155 (12 October 2017)

Last Updated: 16 November 2017

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
		[2017] NZMVDT 155 Reference No. MVD 151/2017
	IN THE MATTER	of the Motor Vehicle Sales Act 2003
	AND
	IN THE MATTER	of a dispute
	BETWEEN	KANISHKA ARAVINDA HEWA KANDAMBY
		Purchaser
	AND	BRENT SMITH T/A MOTOR ME
		Trader
MEMBERS OF TRIBUNAL
J S McHerron, Barrister – Adjudicator
S D Gregory, Assessor
HEARING at Auckland on 7 September 2017
DATE OF DECISION 12 October 2017
APPEARANCES
K A Hewa Kandamby, Purchaser (by AVL)
No appearance by Trader

DECISION

1. Brent Smith must pay Kanishka Hewa Kandamby $2,374.30 no later than 19 October 2017.
2. Brent Smith must, no later than 19 October 2017, pay costs of $650 to the Crown (Ministry of Justice, Tribunals Unit, Level 1, Chorus House, 41 Federal Street, Auckland 1010).

100. Mr Hewa Kandamby has leave to seek a telephone conference if Mr Smith fails to comply with the order of the Tribunal and he requires additional orders to be made.
     

REASONS

Introduction

[1] Immediately after purchasing a 2011 Mazda Atenza from Brent Smith trading as Motor Me, Kanishka Hewa Kandamby found the vehicle was vibrating and difficult to turn left. Upon investigation, an engine mount and the steering rack required replacing. Mr Hewa Kandamby seeks to recover the costs of the repair work from Mr Smith/Motor Me.
[2] From this background, the following issues arise:

(a) Did the vehicle fail to comply with the guarantee of acceptable quality?

(b) If so, did Mr Hewa Kandamby require Motor Me to remedy the failure?

(c) Did Motor Me neglect, refuse or fail to remedy the failure?

(d) What remedy (if any) is Mr Hewa Kandamby entitled to?

Issue 1: Did the vehicle fail to comply with the guarantee of acceptable quality?

[3] Section 6(1) of the Consumer Guarantees Act 1993 (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.
[4] 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.

[5] 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.
[6] Mr Hewa Kandamby made enquiries about purchasing the vehicle from Motor Me after he had seen an advertisement for it on Trade Me. He contacted the Motor Me salesman, "AJ", and made a deposit of $500.
[7] On 4 March 2017, Mr Hewa Kandamby flew from Tauranga to Auckland to collect the vehicle. He paid the balance of the purchase price, $9,500, and took delivery of the vehicle. Immediately on taking delivery, he noticed the vehicle’s engine was vibrating and that it was very difficult to turn left. He informed Motor Me and was told by its mechanic and the salesman that it would be fine for him to drive the vehicle back to Tauranga. He was assured by Motor Me that, if he needed to, he could get the vehicle checked by a mechanic and that Motor Me would assist.
[8] After returning to Tauranga, Mr Hewa Kandamby took the vehicle to the Ultimate Motor Group, a Mazda franchise dealer. After investigation, Ultimate Motor Group confirmed the vehicle required urgent replacement of an engine mount and replacement of its steering rack.
[9] At Motor Me's request, Mr Hewa Kandamby took the vehicle to The Lakes Automotive, for a second opinion. The Lakes Automotive also confirmed that an engine mount and the steering rack needed to be replaced.
[10] Following these recommendations, Mr Hewa Kandamby became concerned that the vehicle ought not to have been issued with a warrant of fitness. (When he purchased the vehicle, it came with a warrant of fitness, valid until 14 February 2018, that was issued by VTNZ Sylvia Park on 14 February 2017.) Mr Hewa Kandamby made a complaint to the New Zealand Transport Agency (NZTA), and a Regional Certification Officer began an investigation.
[11] The NZTA upheld Mr Hewa Kandamby's complaint and reported to him as follows:

At the time of our investigation we concluded that the vehicle failed to comply with the requirements for the issue of a warrant of fitness.

Specifically, after inspecting the vehicle we identified the following fault that we believe was likely to have been present, and should have been identified when the vehicle was inspected by VTNZ Sylvia Park:

• With the engine running there is no power assist to the steering when turning the steering wheel to the left. The steering is very heavy and requires reasonable force/pressure to turn the steering to the left, at both low and open road speeds the steering is heavy when turning to the left, however the vehicle does self-centre. VIRM Reference 9-1-16(b)(c).

[12] The Tribunal’s Assessor, Mr Gregory, and I consider that a reasonable consumer would not have regarded either of these defects, the faulty engine mount resulting in excessive engine vibration and the faulty steering rack resulting in heavy steering when turning to the left, as being acceptable, especially as both faults appear to have been present on the date of purchase. As is clear from the NZTA findings, the vehicle was not fit to be sold, as it was not eligible for a warrant of fitness due to the steering defect. It is particularly concerning that this defect was apparent at the time the vehicle was handed over to Mr Hewa Kandamby on Motor Me’s yard. Yet, according to Mr Hewa Kandamby, Motor Me’s staff encouraged him to drive away in the vehicle, knowing it was defective. If this is correct (and Motor Me did not attempt to dispute it), it is hardly the action of a responsible motor vehicle trader.
[13] It follows that Mr Hewa Kandamby has succeeded in establishing that the vehicle failed to comply with the guarantee of acceptable quality.

Issue 2: Did Mr Hewa Kandamby require Motor Me to remedy the failure?

[14] Step one for a consumer wishing to exercise a right of redress against the supplier of a vehicle that fails to comply with a guarantee under the Act, is for the consumer to "require the supplier to remedy the failure within a reasonable time": s 18(2)(a).
[15] Mr Hewa Kandamby complied with his obligation under s 18(2)(a) by texting and phoning Motor Me to ask it to make the repairs to the vehicle that were necessary. He forwarded Ultimate Motor Group's estimate for the replacement of the steering rack assembly and engine mount. He also arranged for The Lakes Automotive to provide a second opinion, as requested by Motor Me.
[16] Accordingly, I conclude that Mr Hewa Kandamby complied with his obligations in s 18(2)(a) of the Act to require Motor Me to remedy the failure.

Issue 3: Did Motor Me neglect, refuse or fail to remedy the failure?

[17] Motor Me supplied a replacement engine mount and authorised The Lakes Automotive to replace it. However, Motor Me did not reimburse Mr Hewa Kandamby for The Lakes Automotive's labour charge for replacing the engine mount: $60. And Motor Me failed to respond to Mr Hewa Kandamby's attempts to communicate with it about the costs of these repairs.
[18] In relation to the steering rack, Motor Me emailed Mr Hewa Kandamby on 14 March to say “we have order [sic] the parts and it should be [with] you by Friday and you can get it fix by your mechanic and we would pay for the labour”.
[19] When the replacement steering rack supplied by Motor Me arrived, The Lakes Automotive attempted to install it in the vehicle, but found that the rack sent by Motor Me was faulty. The Lakes Automotive reported to Mr Hewa Kandamby that the steering rack would need to be replaced again. Motor Me did not respond to Mr Hewa Kandamby’s efforts to communicate with it to arrange for completion of the repair work on the vehicle.
[20] There was no evidence that Motor Me made any effort to discuss Mr Hewa Kandamby's application to the Tribunal with him. Motor Me did not submit a trader's report, contrary to the Tribunal's direction and the requirements in the Motor Vehicle Sales Act 2003.[1] Nor did anyone from Motor Me attend the hearing. Accordingly, the Tribunal has received no explanation from Motor Me as to why it did not provide any further assistance to Mr Hewa Kandamby to complete the repairs on his vehicle.
[21] It follows that Mr Hewa Kandamby has established that Motor Me was required to remedy the failure but has ultimately neglected, refused and/or not succeeded in doing so within a reasonable time.

Issue 4: What remedy is Mr Hewa Kandamby entitled to?

[22] Section 18(2)(b) of the Act provides:

18. Options against suppliers where goods do not comply with guarantees

...

(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.

[23] As set out in the preceding section of this decision, I have found that Motor Me has neglected, refused and/or failed to remedy the vehicle's failure to comply with the guarantee of acceptable quality. Accordingly, Mr Hewa Kandamby was entitled to have the failures remedied elsewhere and obtain from Motor Me all reasonable costs incurred in doing so.
[24] Mr Hewa Kandamby supplied receipts for the work he has had carried out on the vehicle. Mr Gregory has reviewed those receipts and advises that, in his view, the costs Mr Hewa Kandamby has incurred are reasonable in terms of s 18(2)(b)(i) of the Act. I agree. Accordingly, I conclude that Mr Hewa Kandamby is entitled to recover the following costs:

(a) $60 for the fitting of a new engine mount by The Lakes Automotive.

(b) $421 for the fitting, by The Lakes Automotive, of a second hand steering rack supplied by Motor Me. This part was found to be faulty, so the work needed to be re-done.

(c) $1,784.30 for the supply of a steering rack and labour to install it, plus a wheel alignment, carried out by the Ultimate Motor Group.

(d) $59 for the new warrant of fitness Mr Hewa Kandamby needed to obtain to replace the one that was void following NZTA’s investigation.

[25] In total, the reasonable costs which Mr Hewa Kandamby is entitled to be reimbursed under s 18(2)(b)(i) amount to $2,324.30.

Costs

[26] The Tribunal has a limited jurisdiction to award costs, as set out in cl 14 of Schedule 1 of the Motor Vehicle Sales Act 2003:

14. Disputes Tribunal may award costs in certain circumstances

(1) The Disputes Tribunal may award costs to or against a party to any proceedings before it only if,—

(a) in the opinion of the Disputes Tribunal,—

(i) the proceedings are frivolous or vexatious or ought not to have been brought:

(ii) the matter ought reasonably to have been settled before proceeding to a hearing but that the party against whom an award of costs is to be made refused, without reasonable excuse, to take part in the discussions referred to in clause 5(1)(b) or acted in a contemptuous or improper manner during those discussions; or

(b) any party, after receiving notice of a hearing, fails to attend the hearing without good cause.

(2) In any case to which subclause (1) applies, the Disputes Tribunal may order a party to pay—

(a) to the Crown all, or any part of, either or both of the following:

(i) the reasonable costs of the Disputes Tribunal hearing:

(ii) the fees and expenses of any witness that have been paid or are payable by the Crown; or

(b) to another party all, or any part of, the reasonable costs of that other party in connection with the proceedings.

[27] Neither Mr Smith, nor anyone else from his business, attended the hearing. Mr Smith had been provided with a notice of the hearing and received a reminder of the date and time by email. No request for an adjournment was received by the Tribunal.
[28] Accordingly, no “good cause” was established by Mr Smith for his failure to attend the hearing in terms of cl 14 (above).
[29] Moreover, as mentioned above Mr Smith, did not provide any trader’s report. Nor did he make any effort to undertake settlement discussions, as required by cl 5(1)(b) of Schedule 1 to the Motor Vehicle Sales Act.
[30] Accordingly, I order Mr Smith to pay the Tribunal’s reasonable costs in the sum of $650 under cl 14(2)(a)(i) and to pay Mr Hewa Kandamby’s costs in the sum of $50, reflecting the cost of his application to the Tribunal under cl 14(2)(b).
[31] Mr Hewa Kandamby has leave to seek a telephone conference if Mr Smith fails to comply with any of the orders of the Tribunal and he requires additional orders to be made.

J S McHerron
Adjudicator

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[1] Motor Vehicle Sales Act 2003, Schedule 1, cl 5.