O'Donnell v Spot One Limited Reference No. MVD 339/2017 [2017] NZMVDT 218 (21 December 2017)

Last Updated: 16 January 2018

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
		[2017] NZMVDT 218 Reference No. MVD 339/2017
	IN THE MATTER	of the Motor Vehicle Sales Act 2003
	AND
	IN THE MATTER	of a dispute
	BETWEEN	RUBY HANNAH O’DONNELL
		Purchaser
	AND	SPOT ONE LIMITED
		Trader
MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Gregory, Assessor
HEARING at Auckland on 13 December 2017
DATE OF DECISION 21 December 2017
APPEARANCES
Ms R H O’Donnell, Purchaser
Mr P Tweedie, for the Trader

ORDERS

1. Spot One Limited shall, within 10 working days of the date of this decision, pay $14,617.45 to Ruby O’Donnell.

DECISION

[1] The vehicle has excessive carbon build up in its engine, a fault that breaches the acceptable quality guarantee in s 6 of the Consumer Guarantees Act 1993 (“the Act”).
[2] Spot One Limited has had four opportunities to repair the fault, and has not succeeded in doing so.
[3] Under s 18(2)(b)(ii) of the Act, Ms O’Donnell is now entitled to reject the vehicle and recover all amounts paid in respect of it.

REASONS

Introduction

[4] On 21 April 2017, Ruby O’Donnell purchased a 2008 Mini Cooper S from Spot One Limited for $14,200. The vehicle had an odometer reading of 84,400 kms at the time of sale.
[5] Ms O’Donnell immediately experienced problems with the vehicle, which have continued throughout her ownership. Spot One has had four opportunities to repair the vehicle, and despite performing repairs, has not rectified the fault with the vehicle.
[6] Ms O’Donnell has now rejected the vehicle, claiming that Spot One has failed to repair the vehicle’s fault within a reasonable time. Spot One has not accepted the rejection. It says that the vehicle’s fault has been difficult to diagnose and repair and that it should be entitled to one further chance to repair the vehicle.

The Issues

[7] 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) Has Spot One failed to repair the fault within a reasonable time?
• (c) What remedy is Ms O’Donnell entitled to under the Act?

Does the vehicle have a fault that breaches the acceptable quality guarantee?

[8] 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.
[9] The expression "acceptable quality" is defined in s 7(1) of the Act 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.”

[10] 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 O’Donnell’s subjective perspective.
[11] Ms O’Donnell alleges that the vehicle has a fault that causes it to jump forward at low speed, stutter under deceleration and intermittently stall when cold.
[12] When Ms O’Donnell first returned the vehicle to Spot One in May 2017, it found that the vehicle had excessive carbon in its engine. It advised Ms O’Donnell that it had identified contamination in the combustion chamber. It cleaned the intake tract and replaced the vehicle’s timing chain in an attempt to fix the fault.
[13] When BM Workshop Limited assessed the vehicle in June 2017, it found “super knocking” fault codes, and recommended a carbon clean, which is the process of removing the carbon build up within the engine’s intake system. A “super knocking” fault code occurs when the engine’s computer detects detonation within the combustion chamber.
[14] Spot One performed a carbon clean in June 2017, although it appears that this was only a partial clean, as Spot One did not have the equipment to thoroughly clean the accumulated carbon from the head ports and valves.
[15] When the vehicle was assessed by BM Workshop in October 2017, it again found super knocking fault codes, noted carbon build up and again recommended a carbon clean.
[16] Mr Tweedie now says that the symptoms experienced by Ms O’Donnell are likely to be related to a faulty fuel pump causing low fuel pressure. He says that Ms O’Donnell’s evidence as to the vehicle stalling when cold suggests a faulty fuel pump.
[17] Mr Gregory, the Tribunal’s Assessor advises that the symptoms described by Ms O’Donnell and the observations of BM Workshop and Mr Tweedie are consistent with significant carbon build up in the engine. Mr Gregory says that the engine in this vehicle is fitted with direct injection and does not have the benefit of the incoming fuel charge to keep the valves and intake ports clean. The fumes from the combustion process that bypass the piston rings are scavenged from the sump and build up as carbon behind the intake valves, which restricts the air flow into the engine and prevents the valves from sealing properly. The carbon build up can also cause detonation by creating hotspots in the combustion chamber.
[18] Mr Gregory advises that it is unlikely that the symptoms experienced by Ms O’Donnell are caused by a faulty fuel pump. The poor running, super knock code and jolting symptoms are more indicative of excessive carbon build up within the cylinder head. I also note that Mr Tweedie told the Tribunal that he had previously checked the fuel pressure, and confirmed that it was fine.
[19] I am therefore satisfied that the vehicle has excessive carbon build up in its engine, which causes it to jump forward at low speed, stutter under deceleration and intermittently stall when cold. This is a fault that breaches the acceptable quality guarantee in s 6 of the Act. A reasonable consumer would not expect a $14,200, nine-year-old Cooper Mini S, with an odometer reading of 84,400 kms to have such a pre-existing fault.

Did Spot One fail to repair the fault within a reasonable time?

[20] Ms O’Donnell claims that she is entitled to reject the vehicle under s 18(2)(b)(ii) of the Act because Spot One has failed to repair the vehicle’s fault within a reasonable time. Ms O’Donnell says that she has given Spot One a reasonable opportunity to diagnose and repair the fault.
[21] 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] Under s 18(2)(b)(ii) of the Act, Ms O’Donnell is entitled to reject the vehicle if, having been required to remedy the fault, Spot One has not succeeded in doing so within a reasonable time.
[23] I am satisfied that Spot One has been required to repair the fault and has been given ample opportunity to do so. Ms O’Donnell has returned the vehicle to Spot One on at least four occasions to have the fault assessed and repaired. The fault has not been repaired.
[24] Despite Spot One’s submission that the fault has been difficult to diagnose and repair, I am satisfied that Spot One knew the cause of the likely fault as early as May 2017, but has failed to perform the necessary repairs.
[25] In May 2017, Spot One found excessive carbon build up in the engine. Mr Gregory advises that the excessive carbon build up identified by Spot One is the cause of the fault with the vehicle. Spot One cleaned the intake tract and replaced the vehicle’s timing chain, but this did not fix the fault.
[26] In June 2017, Spot One was advised that BM Workshop had found super knocking fault codes and recommended a carbon clean. Spot One then performed a partial carbon clean but failed to adequately remove all the carbon. A walnut clean or cylinder head removal would have been more appropriate. The vehicle has been returned to Spot One on two other occasions, without the fault being repaired.
[27] Spot One now says that the symptoms described by Ms O’Donnell during the hearing leads it to believe that the vehicle has a faulty fuel pump causing low fuel pressure. It says it only became aware of these symptoms during the hearing, so has not had an adequate opportunity to repair this fault.
[28] As set out above, I do not consider that the vehicle has a fault with its fuel pump. The fault is caused by excessive carbon build up in the engine, which Spot One has known about since May 2017 and has failed to rectify, despite having four opportunities to do so. I am satisfied that Spot One has had sufficient opportunity to repair the fault with the vehicle, and it has failed to do so.

What remedy is Ms O’Donnell entitled to under the Act?

[29] Under s 18(2)(b)(ii) of the Act, Ms O’Donnell is entitled to reject the vehicle because Spot One has failed to repair the fault within a reasonable time.
[30] Under s 23(1)(a) of the Act, Ms O’Donnell is entitled to recover all amounts paid in respect of the vehicle. Accordingly, Ms O’Donnell is entitled to recover the purchase price of $14,200.
[31] Further, under s 18(4) of the Act, Ms O’Donnell is entitled to recover the cost of having the vehicle assessed by BM Workshop. She was charged $162.15 by BM Workshop on 2 June 2017 and $255.30 on 5 October 2017. Ms O’Donnell is now entitled to recover those amounts.

Conclusion

[32] The vehicle has a fault caused by excessive carbon build up in its engine that breaches the acceptable quality guarantee in s 6 of the Act.
[33] Spot One Limited has had four opportunities to repair the fault, and has not succeeded in doing so. Under s 18(2)(b)(ii) of the Act, Ms O’Donnell is now entitled to reject the vehicle and recover all amounts paid in respect of it.
[34] The Tribunal therefore orders that Spot One Limited shall, within 10 working days of the date of this decision, pay $14,617.45 to Ruby O’Donnell.

DATED at AUCKLAND this 21st day of December 2017

B.R. Carter
Adjudicator