Brownie v Trade In Clearance Limited Reference No. MVD 156/2018 [2018] NZMVDT 140 (20 June 2018)

Last Updated: 16 July 2018

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

[2018] NZMVDT 140
Reference No. MVD 156/2018

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN CAROLYN ANNE BROWNIE

Purchaser

AND TRADE IN CLEARANCE LIMITED

Trader

MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

D Binding – Assessor

HEARING at Wellington on 29 May 2018

DATE OF DECISION 20 June 2018
APPEARANCES

C A Brownie, Purchaser
P Jennings, Support Person for Purchaser
N Van Der Velde, Manager of Trader

DECISION

Carolyn Brownie's application is dismissed.

REASONS

Introduction

[1] In May 2017, Carolyn Brownie purchased a 2005 Holden Commodore Executive from Trade In Clearance Limited. The vehicle has not lived up to Ms Brownie’s expectations. She has had problems with it overheating, its oxygen and oil sensors have had to be replaced and now it cannot be started because the ignition barrel is faulty. Ms Brownie says the car was not sold to her in a "fit for purpose state". She just wants her car to go, or to receive her money back.
[2] The following issues arise for determination:

• (a) Did the vehicle fail to comply with the guarantee of acceptable quality?
• (b) What remedy (if any) is Ms Brownie entitled to?

Issue one: 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] "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] Whether a vehicle is of acceptable quality is considered from the point of view of a hypothetical "reasonable consumer" who is fully acquainted with the state and condition of the vehicle, including any hidden defects.
[6] The vehicle's purchase price was $6,995. In addition, Ms Brownie paid $1,180 for a 24 month Protecta Optimum Mechanical Breakdown Insurance policy. She also paid various fees associated with obtaining vehicle finance. When Ms Brownie purchased the vehicle, its odometer reading was 183,342 km.
[7] Under the Protecta policy, Ms Brownie was obliged to have the vehicle serviced by an approved service facility within 5,000 km of the policy's start date. Ms Brownie had the first service carried out by Tuffy Auto Centre on 21 July 2017. This was a basic service involving an oil change and replacement of the oil filter, other fluid top ups, brake checks and an engine and body inspection. Trade In Clearance paid for the Tuffy service apart from $27 to replace a lightbulb, which Ms Brownie paid. No problems with the cooling system were identified on Tuffy’s invoice.
[8] Ms Brownie reported that, in October 2017, her vehicle began using a lot of water. She said she checked the water levels every day and topped them up as necessary. This problem continued and so, on or around 13 November 2017, Ms Brownie took the vehicle to Porirua 2009 Auto & Tyres. It diagnosed that the radiator was leaking and needed to be replaced, along with the thermostat. A claim was made to Protecta, which paid $285.95, leaving the remainder of the repair costs of $495.65 (including a $350 excess) to be paid by Ms Brownie. The vehicle’s odometer at the time of this repair was 202,960 km (almost 20,000 km more than at the date of purchase).
[9] About a week later, the vehicle’s “check engine” light came on. Ms Brownie returned the vehicle to Porirua 2009 Auto & Tyres, which replaced its oxygen and oil sensors, spark plugs, front disc pads and rear disc rotors. Porirua 2009 Auto & Tyres also serviced the vehicle. Porirua 2009 Auto & Tyres invoiced Ms Brownie $1,360.16 for this work.
[10] Ms Brownie claims that Porirua 2009 Auto & Tyres told her the vehicle still had its “original parts”, by which she meant its original oil filter, fuel filter and spark plugs. Ms Brownie submitted, based on this information, that the vehicle had not previously been serviced, despite having travelled more than 200,000 km by the time Porirua Auto & Tyres serviced it. However, there was no written or photographic evidence confirming this assertion. The Tribunal's Assessor, Mr Binding, also wondered how it was possible to tell that they were the original parts. Ms Brownie and Mr Jennings referred to the Holden markings that were visible on the parts. But Mr Binding advises that Holden branding could also have been visible if factory parts were used when the vehicle was serviced, so the presence of Holden markings would not necessarily imply the parts were "original" in the sense that they had been fitted on the vehicle since it was new. It is not possible for the Tribunal to take this allegation any further, due to insufficient evidence.
[11] Ms Brownie told the Tribunal that she took these alleged “original parts” to Trade In Clearance and complained to it about the high costs of repairs she was facing in relation to the vehicle. Without accepting liability, Trade In Clearance agreed to contribute $500 towards her servicing and repair costs. However, it questioned Ms Brownie's evidence that the vehicle still had its “original parts”, especially in light of the evidence (which it had no cause to doubt) that Tuffy Auto Centre replaced the oil filter in July 2017.
[12] Ms Brownie's vehicle continued overheating, especially while in traffic. She reported that the vehicle broke down on the motorway and required towing, twice, to Porirua 2009 Auto & Tyres. The first time, Porirua 2009 Auto & Tyres traced the fault to the fan relays. It repaired the fault and tested the fans, which it found were “all okay”. The cost of this repair was $386.19, which Ms Brownie paid on 23 January 2018.
[13] The second time the vehicle had to be towed to Porirua 2009 Auto & Tyres was on 20 February 2018. By this time, the vehicle's ignition barrel had begun to malfunction, making starting the engine difficult, and the vehicle was still overheating.
[14] Porirua 2009 Auto & Tyres found the vehicle’s heater tap was leaking. It replaced the tap at a cost of $165.90. Porirua 2009 Auto & Tyres also quoted Ms Brownie $460 to have the ignition barrel replaced and a new key cut. Ms Brownie told the Tribunal she was concerned the final cost of this proposed repair might eventually be much higher, although the possibility of a higher cost was not mentioned on the estimate itself.
[15] Trade In Clearance correctly points out that secondhand cars of this age and mileage are likely to require ongoing repairs and maintenance. This vehicle was 12 years old at the time of purchase and had travelled a moderately high mileage of 183,342 km. I agree with Trade In Clearance that the fact the vehicle has now travelled a further 25,000 km since purchase suggests it has been reasonably fit for its purpose.
[16] However, a consumer is still entitled to expect that a vehicle will be durable. In other words, they can expect a vehicle to be reliable and usable for a reasonable period after the date of purchase. The durability aspect of the guarantee of acceptable quality is a means by which consumers can make claims against traders in respect of faults that may not be present at the time they purchased the vehicle, but which arise afterwards. The guarantee of durability is also a means by which consumers can claim for items that might ordinarily be regarded as relating to wear and tear, if they arise very soon after purchase.
[17] I have some concerns that the vehicle was beginning to show signs of having a faulty cooling system within about five months of purchase. Ordinarily, this could suggest the vehicle lacked durability. However, it needs to be noted that this fault was not identified by Tuffy Auto Centre at the initial service and that Ms Brownie had driven the vehicle nearly 20,000 km before radiator repairs were required. If these repairs had been required at an earlier stage in Ms Brownie's ownership of the vehicle, or before she had driven so far in it, the Tribunal may have more readily found a breach of the guarantee of acceptable quality. While I am sympathetic to Ms Brownie's situation, I do not find a breach of the guarantee in relation to her vehicle. For a high mileage, relatively old and low price vehicle, she has obtained a considerable amount of use from it within a relatively short period without any significant repair work being required.

Issue two: Is Ms Brownie entitled to any remedy?

[18] As I have found that the vehicle did not fail to comply with the guarantee of acceptable quality in s 6 of the Act, Ms Brownie is not entitled to any remedy under the Act. She may wish to make a further claim under her Protecta policy in relation to the repairs that are now required (including to replace the ignition barrel). Mr Van Der Velde said he would be able to help Ms Brownie to get a better price for this work through his preferred repairer, if she wishes.
[19] Ms Brownie expressed doubts about whether Protecta would allow further claims, given her concerns about the vehicle's lack of servicing before she purchased it. My reading of the policy wording suggests that Ms Brownie's concerns are unfounded, as the servicing requirements under the Protecta policy only apply in respect of the servicing that is carried out after the policy's start date.[1] And, as indicated, I am by no means persuaded that the vehicle has not been serviced throughout its life.
[20] Ms Brownie also expressed concerns about the cost of the Protecta excess and says that this was not disclosed to her when she purchased the vehicle. There was a lack of evidence of any non-disclosure that might be regarded as misleading. In particular, I note the normal practice for the certificate of insurance to indicate the excess that is payable under the policy. As the certificate of insurance was not produced in evidence, and this issue was only raised at the hearing itself, I decline to make any finding in relation to it.
[21] Finally, I record that even if Ms Brownie had established that the vehicle failed to comply with the guarantee of acceptable quality, she did not give Trade In Clearance an opportunity to remedy any failure, as is required under s 18(2) of the Act. Rather, the evidence was Ms Brownie instructed Porirua 2009 Auto & Tyres to carry out the various cooling system repairs without seeking prior authorisation from Trade In Clearance or giving it any opportunity to assess and repair the vehicle itself first.
[22] For these reasons, I conclude that Ms Brownie is not entitled to any remedy under the Act and her claim must be dismissed.

J S McHerron
Adjudicator

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[1] Protecta Insurance "Optimum Mechanical Breakdown Insurance Policy" (1 March 2017): https://www.protecta.co.nz/S?Action=View&S_id=1311.