Matthes v 2 Cheap Cars Limited - Reference No. MVD 354/2016 (Auckland) [2017] NZMVDT 19; [2017] NZMVT Auckland 19 (2 February 2017)

Last Updated: 21 March 2017

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

[2017] NZMVDT Auckland 19

Reference No. MVD 354/2016

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN PRESLEY MATTHES

Purchaser

AND 2 CHEAP CARS LIMITED

Trader

MEMBERS OF TRIBUNAL
Mr C H Cornwell, Barrister & Solicitor, Adjudicator

Mr S D Gregory, Assessor

HEARING at Auckland on 1 February 2017

DATE OF DECISION 2 February 2017
APPEARANCES

Mr P Matthes, the purchaser

Mrs K Matthes, wife and witness for the purchaser
Ms Z J Gordon, Claims Manager for the trader

DECISION

The purchaser’s application is dismissed.

REASONS

Background

[1] On 15 May 2016, Mr Matthes (“the purchaser”) bought a 2007 Honda Crossroad registration number JUK 939 (“the vehicle”) for $11,000 from 2 Cheap Cars Limited (“the trader”).

[2] The purchaser claims $1,105.15 from the trader for a shock absorber the purchaser had fitted to the vehicle to replace a faulty shock absorber in November 2016. The purchaser says the vehicle was not of acceptable quality in terms of the Consumer Guarantees Act 1993 (“the Act”) because the faulty shock absorber lacked durability and should not have failed.

[3] The trader says the shock absorber fitted to the vehicle at the time of sale lasted for five months and approximately 10,000kms and was as durable as a reasonable consumer would regard as acceptable. The trader denies that it is responsible for the purchaser’s repair cost and has declined to pay the purchaser’s repair costs.

[4] Pursuant to cl 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 cl 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

[5] The issues requiring consideration are:

(a) Whether the vehicle complied with the guarantee of acceptable quality in s 6 of the Act?
(b) If not, was the purchaser entitled to require the trader to pay the cost of the replacement shock absorber?

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

Relevant law

[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)-(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 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 is 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 primarily for Mrs Matthes’ use. The vehicle, a Japanese import was sold to the purchaser for $11,000 by the trader and its odometer at the time of sale was 106,336kms although the Consumer Information Notice signed by the parties shows the odometer as 106,298kms. I do not think the difference is material. The purchaser bought a mechanical breakdown insurance policy for the vehicle.

[11] The vehicle had been imported from Japan. As part of the compliance process two defects were identified by the compliance inspector; the right hand rear shock absorber was leaking and had to be replaced and the wiper rubbers had to be replaced.

[12] Mrs Matthes gave evidence that about two or three months after buying the vehicle she started to notice a knocking sound when braking the vehicle. She took the vehicle to her repairer, Candia Automotive Ltd (“Candia”) on 5 October for a service at 115,401kms. The technician noted on the invoice “shock absorber very weak”. When the purchaser had the front brake pads and the rotors machined on 14 October by Candia the technician again noted on the invoice for that work “Front shock absorbers worn, left front being the worst.” Candia quoted the purchaser $1,600 to replace the front shock absorbers.

[13] On 14 November 2016 when the vehicle’s odometer was 116,388kms the purchaser had Candia remove the front shock absorbers and send them away for reconditioning at a cost of $1,105.15. The purchaser commenced this application to recover that cost from the trader.

[14] The trader’s defence is that the purchaser has travelled about 10,000kms in the vehicle after buying and owning it for five months. The trader says it considers the shock absorbers to be in their present state as a result of wear and tear and outside the reasonable timeframe for the trader’s responsibility, having regard to the age and mileage of the vehicle.

[15] In deciding the first issue: whether the vehicle supplied by the trader complied with the guarantee of acceptable quality, I have had regard first, to the nature of the goods. In this case the goods are a used nine-year-old Japanese imported Honda Crossroad vehicle which had travelled 106,336kms at the time of sale and has since been driven a further 10,051kms. Second, to the vehicle’s sale price of $11,000. Third, to the nature of the complaint; that the front shock absorbers have been found to be worn in October 2016 after five months use over a little more than 10,051kms.

[16] A vehicle’s shock absorbers are a wear and tear item but of course they should still be reasonably durable when supplied. I think that for a nine year old Japanese import with 106,336kms sold for $11,000 that period of durability is, reasonably, shorter than five months and 10,051kms.

Conclusion on issue [a]

[17] I think I must dismiss the purchaser’s application because I do not consider the vehicle in this application failed to comply with the guarantee of acceptable quality.

DATED at AUCKLAND this 2nd day of February 2017

C. H. Cornwell
Adjudicator