Young v Market Cars Limited - Reference No. MVD 327/2016 (Auckland) [2017] NZMVDT 2; [2017] NZMVT Auckland 2 (13 January 2017)

Last Updated: 28 February 2017

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

[2017] NZMVT Auckland 2

Reference No. MVD 327/2016

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN LAURA ANN YOUNG

Purchaser

AND MARKET CARS LIMITED

Trader

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

Mr S D Gregory, Assessor

HEARING at Auckland on 9 January 2017

DATE OF DECISION 13 January 2017
APPEARANCES

Mrs L A Young, the purchaser

Mr G A Young, purchaser’s husband and witness
Mr A Cassin, Sales Manager for the trader

DECISION

The trader shall pay the purchaser $948.90 immediately.

REASONS

Background

[1] On 3 April 2016, Mrs Young (“the purchaser”) agreed to buy a 2014 Hyundai i30 vehicle registration number JSU51 (“the vehicle”) for $24,000 from Market Cars Limited. The vehicle, an Australian import, had 17,000kms on its odometer at the time of sale.

[2] The purchaser’s husband discovered, upon inspecting the vehicle on 3 April, that its spare wheel was missing. Mr Young says that the trader, represented by its Sales Manager, Mr Cassin, told Mr Young that he knew where the spare wheel was, and that he would obtain it and supply it to the purchaser when the purchaser collected and paid for the vehicle. On 5 April when the purchaser went to collect the vehicle Mr Cassin said that he had forgotten to obtain the spare wheel but that he would get it and provide it to the purchaser. The trader failed for more than five months to do so after repeated requests to do so. Finally in September and October 2016 the purchaser incurred $948.90 for a new spare wheel for the vehicle, the tyre for the wheel, and wheel caps. The purchaser claims this amount from the trader.

[3] The trader’s sales manager, Mr Cassin, says he has no recollection of promising the purchaser that he would obtain the spare wheel for the vehicle. The trader says it tendered a 17 inch alloy spare wheel to the purchaser but the wheel did not match the other wheels on the vehicle and it was refused by the purchaser. The trader claims that it did not promise to provide a spare wheel that matched the other wheels on the vehicle.

[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, has the trader been required to remedy the fault and been given a reasonable time within which to do so and if so, is the purchaser entitled to recover the cost of a replacement wheel from the trader?

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/her right to reject the vehicle within a reasonable time.

Application of law to facts

[10] The purchaser agreed to buy the vehicle from the trader for $24,000 on 3 April 2016. The vehicle, which the trader apparently failed to disclose had been a statutory write-off in Australia before being imported, repaired and complied by Henderson Parts World, did not have a spare wheel. The purchaser’s husband Mr Young noticed the spare wheel was missing when he inspected the vehicle. Mr Young says he asked Mr Cassin about the spare wheel and Mr Cassin said that he knew where the spare wheel was and that he would obtain it and supply it with the vehicle to the purchaser when she paid for and collected it.

[11] On 5 April 2016, Mr Young went to the trader’s premises and paid for the vehicle and completed the sales documentation. As he was leaving the trader’s premises Mr Young says he asked Mr Cassin if he had put the spare wheel in the boot. Mr Cassin said he had forgotten to do so but promised Mr Young that he would get the spare wheel and provide it to the purchaser.

[12] The following week Mr Cassin provided a spare wheel to the purchaser but it was the wrong size for the vehicle, was old, and would not fit in the spare wheel well. It was returned to the trader. On 15 April 2016 the purchaser contacted Mr Cassin about the spare wheel and says Mr Cassin promised her that the importer had one coming in the next week and he would get it and contact her. The trader failed to supply the spare wheel and ignored emails from the purchaser sent to him on 29 April and 13 June.

[13] On 27 June Mr Cassin contacted the purchaser and told her he had a spare wheel but this wheel did not match the other wheels on the vehicle and it was rejected by the purchaser.

[14] On 9 September 2016 the purchaser says she sent an email to the trader advising that she had a quote of $1,340 plus GST for a spare wheel which would match the other Hyundai wheels and the tyre would have to be sourced separately. The trader did not respond.

[15] On 20 September the purchaser obtained a price of $828.24 for a wheel and tyre from Winger Motors Ltd t/a Winger Pukekohe who are the Hyundai dealers in Pukekohe. Before accepting the quote the purchaser sent an email to the trader on 21 September 2016 but again received no response. The purchaser sent Mr Cassin a text message to ask him to confirm that he was receiving her emails. Mr Cassin confirmed that Mrs Heather Smith-Cassin, the director of the trader, was handling the matter. Finally, on 28 September 2016, after driving the vehicle for more than five months without a spare wheel, the purchaser bought a spare wheel, a tyre and the wheel caps from Winger Motors for a total of $948.90. The purchaser sent copies of the receipted invoices for these purchases to the trader on 7 October and asked for reimbursement. She received no response from the trader and sent follow up requests on 14 and 25 October.

[16] The trader represented by Mr Cassin says he has no recollection of promising to obtain the spare wheel for the vehicle. He says he has offered the purchaser another 17 inch alloy Hyundai wheel but this has been refused by the purchaser because it does not match the other wheels on the vehicle. Mr Cassin says he has also offered to contribute $500 towards the cost of the wheel but that offer was refused by the purchaser.

[17] In determining 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 a 2014 Hyundai i30 with only 17,000kms on its odometer sold for $24,000. I do not consider that any reasonable consumer would regard such a near new, low mileage, expensive vehicle as acceptable without a spare wheel which matched the other wheels on the vehicle and I do not consider the vehicle supplied to the purchasers was acceptable in appearance and finish without a spare wheel which matched, in its appearance, the other wheels on the vehicle.

[18] I did not find Mr Cassin to be a credible witness particularly when he sought to argue that he had no recollection of promising Mr Young on 3 April 2016 that he knew where the spare wheel was for the vehicle and would obtain it and supply it when the sale was completed. On the other hand Mr Young’s evidence of the conversation he had with Mr Cassin on 3 April and in particular Mr Cassin’s promise to obtain the spare wheel rang true and seemed to me to be far more likely than not to have occurred.

Conclusion on issue [a]

[19] I therefore find as a fact that this vehicle did not comply with the guarantee of acceptable quality in s 6 of the Act because it was not of acceptable appearance and finish with a missing matching spare wheel as a reasonable consumer would regard as acceptable.

Issue [b]: Has the trader been required to remedy the faults and been given a reasonable time within which to do so and if so, is the purchaser entitled to recover the cost of a replacement wheel from the trader?

[20] 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.”

Application of law to facts

[21] There was ample evidence, which was not challenged by Mr Cassin, that the purchaser had over a five month period from April to September 2016, asked the trader for the spare wheel. I am satisfied that the trader was given far more than a reasonable time in which to remedy the fault and supply the spare wheel. It failed to do so.

Conclusion on issue [b]

[22] I consider that the trader was given a reasonable time and opportunity in which to rectify the fault and that as a result the purchaser became entitled to exercise one of her options under s 18(2)(b) of the Act. Instead of rejecting the vehicle, as she might have chosen to do under s 18(2)(b)(i), she elected, under s 18(2)(b)(ii), to have the trader’s failure to supply the spare wheel remedied by purchasing a spare wheel and tyre at a cost of $948.90 which I consider to be a reasonable cost. I will therefore order the trader to reimburse the purchaser with that amount immediately.

DATED at AUCKLAND this 13th day of January 2017

C. H. Cornwell
Adjudicator