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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 23 March 2018
BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
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Reference No. MVD 311/2017
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IN THE MATTER
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of the Motor Vehicle Sales Act 2003
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AND
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IN THE MATTER
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of a dispute
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BETWEEN
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MOLLY ELIZABETH TILBY
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Purchaser
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AND
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MARS MOTORS LIMITED T/A ALLSTAR CARS
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Trader
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MEMBERS OF TRIBUNAL
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B R Carter, Barrister – Adjudicator
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S Haynes, Assessor
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HEARING at Auckland on 14 November 2017
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DATE OF DECISION 24 November 2017
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APPEARANCES
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Ms M E Tilby, Purchaser
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Mr Z Cao, for the Trader
Mr Z Yu, Witness for the Trader
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ORDERS
DECISION
[1] The vehicle has a fault that causes its door locking mechanisms to malfunction. That fault breaches the acceptable quality guarantee in s 6 of the Consumer Guarantees Act 1993 (“the Act”).
[2] Ms Tilby is not entitled to reject the vehicle. Mars Motors has not failed to repair the fault within a reasonable time for the purposes of s 18(2)(b)(ii) of the Act and the fault is not a failure of a substantial character within the meaning of s 21 of the Act.
[3] Under s 18(2)(a) of the Act, Ms Tilby is entitled to have the fault diagnosed and repaired.
REASONS
Introduction
[4] On 5 March 2017, Molly Tilby purchased a 2008 Audi A4 for $19,500 from Mars Motors Limited, trading as Allstar Cars. The vehicle had an odometer reading of 54,731 kms at the time of sale.
[5] The vehicle has had a recurring fault with its locking mechanisms, which has progressively worsened during Ms Tilby’s ownership.
[6] Mars Motors has twice attempted to repair the fault, without success. Ms Tilby now seeks to reject the vehicle, saying that the fault is a failure of a substantial character and that Mars Motors has failed to repair the fault within a reasonable time.
[7] Mars Motors seeks one further opportunity to perform the repair. It says the fault is minor and is fixable. It is prepared to have the vehicle repaired by a repairer of Ms Tilby’s choice.
The Issues
[8] The issues requiring consideration in this case are:
- (a) Does the vehicle have a fault that breaches the acceptable quality guarantee in s 6 of the Act?
- (b) Did Mars Motors fail to repair the fault within a reasonable time as required by s 18(2)(b)(ii) of the Act?
- (c) Does the fault amount to a failure of a substantial character within the meaning of s 21 of the Act?
- (d) What remedy is Ms Tilby entitled to under the Act?
Does the vehicle have a fault that breaches the acceptable quality guarantee?
[9] 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.
[10] 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.”
[11] 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 Tilby’s subjective perspective.
The locking mechanism fault breaches the acceptable quality guarantee
[12] I am satisfied that the vehicle has a fault that causes the locking mechanism to malfunction.
[13] About two months after purchasing the vehicle, Ms Tilby noticed that the vehicle’s door locks would only work intermittently, meaning Ms Tilby had difficulty unlocking and entering the vehicle.
[14] On about 31 May 2017, the vehicle was assessed by Kiwi Motor Services, who found that the left front and right front actuators were not working. Kiwi Motor Services replaced both actuators. The fault recurred in early July 2017. Kiwi Motor Services again replaced the door actuators.
[15] The fault has continued, and Ms Tilby has now had the vehicle assessed by A&H Auto Electrical Ltd and Rodney Auto Centre, who have both identified faults with the vehicle’s locking actuators.
[16] Mr Haynes, the Tribunal’s Assessor, advises that the evidence shows that the vehicle clearly has a fault, which causes the vehicle’s locking mechanisms to malfunction. However, Mr Haynes is not convinced that the fault lies with the locking actuators as identified by the repairers who have looked at the vehicle. Based on the information provided by the parties, Mr Haynes considers that the vehicle may have an undiagnosed fault with its body control module, which is causing the locking mechanisms to malfunction.
[17] Irrespective of the cause of the fault, I am satisfied that the vehicle has a fault that breaches the acceptable quality guarantee in s 6 of the Act. Ms Tilby paid $19,500 for a nine-year-old vehicle that had travelled a little less than 55,000 kms. Although the precise cause of the fault is not known, within two months of purchase the vehicle had developed a fault which causes its locking mechanisms to malfunction. I am satisfied that a reasonable consumer would not expect a vehicle of this price, age and mileage to develop this type of fault within two months of purchase.
Did Mars Motors fail to repair the fault within a reasonable time?
[18] Ms Tilby claims that she is entitled to reject the vehicle under s 18(2)(b)(ii) of the Act because Mars Motors has failed to repair the undiagnosed fault within a reasonable time. She says that she has given Mars Motors a reasonable opportunity to diagnose and repair the fault.
[19] 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.”
[20] Under s 18(2)(b)(ii) of the Act, Ms Tilby is entitled to reject the vehicle if, having been required to remedy the fault, Mars Motors has not succeeded in doing so within a reasonable time.
[21] Ms Tilby first raised concerns about the locking mechanism fault in late May 2017. Mars Motors instructed its repairer, Kiwi Motor Services to perform repairs. Those repairs were unsuccessful, and Kiwi Motor Services again attempted to repair the fault in mid-July 2017. That repair was unsuccessful, and the fault has returned.
[22] While acknowledging that Mars Motors has had two opportunities to repair the fault, I consider that it has not failed to repair the fault within a reasonable time.
[23] In reaching this conclusion I am persuaded by Mr Haynes’ advice that electronic faults like this can be difficult to successfully diagnose and repair. Mr Haynes considers that faults of this nature can often take multiple attempts to successfully diagnose. In this case, although all three repairers who have inspected the vehicle consider that it has a fault with its locking actuators, Mr Haynes considers that the evidence points to a potential fault with the body control module rather than in the locking actuators. This difference of opinion shows that it is not an easy fault to diagnose.
[24] In those circumstances, I am not satisfied that Mars Motors has been given sufficient opportunity to diagnose and repair the fault with the vehicle. I consider Mars Motors should be given one last chance to repair the fault. Accordingly, Ms Tilby is not entitled to reject the vehicle because Mars Motors has failed to repair the locking mechanism fault.
Is the fault a failure of a substantial character?
[25] Under s 18(3) of the Act, Ms Tilby may reject the vehicle if it has a fault that amounts 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.”
[26] Section 21(a) of the Act applies to this case. The question I must answer is whether the locking mechanism fault is such that a reasonable consumer, fully acquainted with the true nature and extent of the fault, would not have purchased the vehicle.
[27] The locking mechanism fault is not a failure of a substantial character. Once the cause of the fault has been identified it should be quickly, and inexpensively, remedied. Accordingly, Ms Tilby is not entitled to reject the vehicle.
What remedy is Ms Tilby entitled to under the Act?
[28] Under s 18(2)(a) of the Act, Ms Tilby is entitled to have the locking mechanism fault repaired.
[29] Mars Motors has indicated that it is prepared to have the fault repaired by Ms Tilby’s chosen repairer. I therefore order that Mars Motors must, within 15 working days of the date of this decision, have the locking mechanism fault repaired by an Audi franchise repairer.
[30] If requested, Mars Motors Limited shall provide Ms Tilby with a suitable loan vehicle while her vehicle is being assessed.
DATED at AUCKLAND this 24th day of November 2017
B.R. Carter
Adjudicator
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URL: http://www.nzlii.org/nz/cases/NZMVDT/2017/192.html