Jensen v Max Motors Limited Reference No. MVD 162/2018 [2018] NZMVDT 141 (20 June 2018)

Last Updated: 16 July 2018

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

[2018] NZMVDT 141
Reference No. MVD 162/2018

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN DARRELL GRANT JENSEN

Purchaser

AND MAX MOTORS 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

D G Jensen, Purchaser
J R Croxford, Director of Trader

DECISION

Mr Jensen's application is dismissed.

REASONS

Introduction

[1] Darrell Jensen’s Ford Ranger has suffered serious engine damage. He blames earlier repairs carried out under the supervision of Max Motors Limited, which sold him the vehicle in early 2016. Max Motors does not accept any liability for the vehicle’s latest problems. It points out that the vehicle has been driven without any issues for approximately 33,000 km since the repairs in question took place. Max Motors also raises doubts about whether Mr Jensen has adequately maintained his vehicle.
[2] The primary issue raised in Mr Jensen’s application is whether the vehicle failed to comply with the guarantee of acceptable quality in s 6 of the Consumer Guarantees Act 1993 (the Act).

Did the vehicle fail to comply with the guarantee of acceptable quality?

[3] Section 6(1) of 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.

...

(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] 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] Mr Jensen purchased his 2008 Ford Ranger from Max Motors on 11 January 2016. The vehicle was sold with 196,399 km on the odometer, for a purchase price of $23,980.

Damage to the engine in 2016

[7] Within two weeks of purchase, the vehicle’s engine overheated just south of Napier after Mr Jensen had driven it from Foxton. He had, by then, travelled just over 2,000 km in the vehicle since purchasing it. The vehicle was towed back to Max Motors which sent it to Diesel and Turbo in Petone. Diesel and Turbo reported a water leakage noise but found no visible leaks. It turned the engine over by hand to find it had hydrauliced. Diesel and Turbo removed the EGR cooler[1] to find an internal leakage that was causing water to enter the intake manifold from the EGR pipe. Diesel and Turbo "blanked off" the EGR cooler leak and removed the remaining water from the engine, before delivering the vehicle to Nelson Street Motors in Petone for inspection of the head gasket.
[8] Nelson Street Motors fitted a complete new cylinder head and also replaced the cam belt and EGR cooler. These repairs were carried out at Max Motors’ expense. The total cost was approximately $5,000. Mr Jensen was left without his vehicle for some time while these repairs were being carried out. However, Max Motors supplied him with a loan vehicle during this period.
[9] The first time Mr Jensen drove the vehicle uphill after receiving it back, it started overheating again. This time, Mr Jensen asked if the repairs could be carried out by Courtesy Ford in Levin, which is closer to where he lives.
[10] Courtesy Ford’s report dated 2 March 2016 criticises Nelson Street Motors for apparently not considering a thermostat replacement or undertaking a radiator inspection. Courtesy Ford found the radiator was blocked with what appeared to be “stop leak” and was unserviceable. Courtesy Ford refitted a replacement radiator and replaced the thermostat. It leak tested the engine and tested the head gasket. It test drove the vehicle and attempted to "load the engine up", concluding that all appeared to be “normal”. These repairs were also paid for by Max Motors and totalled $753.65.

No issues: March 2016 – March 2018

[11] The vehicle operated without any problems for almost exactly two years from 2 March 2016 to 6 March 2018. Over that period, Mr Jensen reported the vehicle was running “okay” and was not consuming oil or water.
[12] Mr Jensen told the Tribunal that he did his own periodic maintenance on the vehicle, including replacing air and oil filters and the engine oil itself. He reported that the last time he replaced the oil and oil filter was in November 2017. Mr Jensen told the Tribunal that he changed the oil approximately every 10,000 km or earlier. He also reported that he kept a close eye on the radiator, and that he did not “thrash” the ute or subject it to excessive loads. At times, Mr Jensen felt the vehicle lacked power, but this was not of sufficient concern for him to get it checked.

Damage to the engine in 2018

[13] On 6 March 2018, while Mr Jensen was driving the vehicle in Dannevirke, he noticed that it appeared to be running on three cylinders. Mr Jensen was adamant that, on this occasion, unlike in 2016, the vehicle did not overheat. The temperature gauge needle did not rise and the vehicle produced no steam.
[14] Mr Jensen continued to drive the vehicle in this condition for approximately another 100 km to his home address in Foxton. State Insurance Roadside Rescue was then called to tow the vehicle from this address to Motex Motors. The Roadside Rescue report describes the fault as “mechanical – not firing on all cylinders”.
[15] Motex Motors reported that the vehicle was presented to its workshop to check out “rough running”. It ran a diagnostic check and several faults were noted. Motex Motors observes that it was “obvious” that the engine was running on three cylinders. It removed the fuel pipes and cam cover and found "mislocated and broken cam rockers, loose and missing rocker adjuster nuts and washers".

Reports obtained by Mr Jensen

[16] Motex Motors undertook further assessment of the engine. It removed:

• (a) the seized carboned number 2 diesel injector;
• (b) the manifolds and accessories; and
• (c) the cylinder head.

[17] Motex found excessive carbon in the number 2 cylinder and scoring marks in the bore. It ran a feeler gauge around the rings in the number 2 cylinder and found little or no tension in the top ring. Motex Motors ventured that the cylinder bore and piston had been damaged from the previous overheat in 2016. It recommended that Mr Jensen obtain further independent engine assessment from an engine reconditioner.
[18] Mr Jensen next obtained a report on the engine from Motor Machinists (2015) Ltd in Palmerston North. It confirmed the same findings as Motex and, in addition, found that the cam shaft lobes are worn and that there are several broken cam shaft rockers. It also reported several loose and missing rocker adjuster nuts and washers, as well as excessive carbon around the number 1 injector. Motor Machinists concluded that the engine appeared not to have had its cam shaft rocker adjuster nuts tightened correctly, causing them to come loose and displace, and consequently causing damage. It also noted that it appears the engine has been overheated at some stage previously. This has caused bore, piston and ring damage and excessive carbon buildup from oil leaking past rings. Motor Machinists concluded that the engine would require complete dismantling to confirm the extent of the damage and the cost of repairs.
[19] Mr Jensen obtained a further report from Collier Motor Engineers in Levin. This report was based on reading the other reports and studying photos of the engine parts. Collier Motor Engineers stated that “there is no doubt that the over-heating of the engine has compromised its long-term reliability and eventually [caused] its failure”. It reported that the overheating was significant enough to collapse and deform the valve springs, which led to the demise of the engine. Collier Motor Engineers considered that the deformation of the valve springs would have led to the valves themselves not sealing correctly, causing carbon to build up on them and on the valve stems. The lack of efficiency of the engine would have caused fuel to leak past the rings and end up in the oil, causing a sludge build up.

Reports obtained by Max Motors

[20] In response to the three reports obtained by Mr Jensen, Max Motors obtained two reports of its own.
[21] The first report obtained by Max Motors was from Rossco’s Engine Services (Rossco's), which inspected the cylinder head that had been removed by Motex Motors.
[22] Rossco’s observed that the cylinder head had damage to several of its cam lobes and that it also had three broken rockers, two of which had loose and stretched threads. Rossco’s noted that some of the rockers had excessive wear on the pivot balls. Rossco’s assumed that these worn pivot balls matched up with the worn cam lobes.
[23] Rossco’s cleaned the face of the cylinder head and observed that the head gasket had been fretting on the head’s surface, indicating a (more recent) overheat. Rossco’s noted that this finding was supported by the fact that the heat tab in the rear frost plug had melted.
[24] Rossco’s disassembled the rest of the head and noted that the oil on the cylinder head was extremely dirty and sludgy. It also observed that the valve springs on five of the cylinders had collapsed and were unserviceable. Rossco’s noted that four of the exhaust valves were stuck in their guides. It found sludge in the valve guides and on the valve stems. It found that all of the valves had the same residue on the stems.
[25] Rossco’s summarised its findings from the condition of the cylinder head and components, as follows:

• (a) the melted heat tab, head gasket fretting and the deformed valve springs suggested a severe overheat;
• (b) the overheat occurred “not too long ago”;
• (c) the wear on the rocker balls and camshaft and the build up of sludge on the valve stems points to a lack of servicing;
• (d) the rockers being flicked out or broken was most likely caused by the tappet clearance being too great from the valve spring collapsing and not closing the valve, which also suggested an overheat; and
• (e) Mr Jensen did not report increased oil consumption since the new head was fitted but he reported that the vehicle had lost power over time and had developed a rattle that had been getting worse. This also suggested any overheat was relatively recent. Rossco's considers these engines do not deal well with overheating and their heads are very prone to failure. It is therefore very unlikely an engine would survive more than a few months after an overheat occurs.

[26] The second report obtained by Max Motors was prepared by Auto Assess. The report's author, Karl Pemberton, is a qualified automotive engineer and independent loss adjustor. Mr Pemberton’s report was prepared after he reviewed the reports of Motex Motors, Motor Machinists and Rossco’s, as well as reviewing pictures of the disassembled engine.
[27] Mr Pemberton noted that it is “irregular” that some of the repairers who had provided reports had commented on the previous overheating event in 2016. This was because, in his view, it is not possible to state with any accuracy that damage to a cylinder or piston that has suffered thermal expansion damage, as occurred in Mr Jensen’s Ford Ranger, is attributable to a previous engine overheat. In Mr Pemberton’s view, any thermal expansion of a piston causing damage to the cylinder bore and piston would present issues in a very short timeframe. In his view, the engine would have started to produce excessive smoke, or would have exhibited a rough or uneven idle due to lowered compression. If there was any evidence of cylinder piston damage, these symptoms would have shown themselves very quickly.
[28] Mr Pemberton did not consider that a vehicle with cylinder bore damage as a result of earlier engine overheating could have travelled a further 33,684 km, as Mr Jensen's vehicle did, before presenting a permanent defect.
[29] The reported defects in the vehicle’s engine, namely damaged valve springs and valve guides, can all, in Mr Pemberton’s view, be attributed to severe engine overheating. In his assessment, overheating of such magnitude has occurred that severe engine damage has resulted. The damage to the cylinder bore and piston suggests to Mr Pemberton that the engine damage occurred recently, as a result of this overheating.
[30] In Mr Pemberton's view, several factors could possibly have led to the onset of the engine overheating, including oil loss, coolant leaks, a misplaced radiator cap or expansion bottle cap, a leaking radiator from impact, or “many other factors”. Mr Pemberton also noted the results of an oil sample carried out by Max Motors indicating increased oil viscosity, which may have contributed to the problem. Mr Pemberton concluded that engine overheating has led to the onset of thermal expansion to the pistons and cylinder bore. Prolonged driving of the vehicle, after the engine misfire was identified, has contributed to the severity of the engine damage experienced. Mr Pemberton states “[t]here is a high probability that the vehicle has been driven to destruction as a result of continued driving once [the] significant fault presented”.

The Tribunal’s assessment

[31] The Tribunal’s Assessor, Mr Binding, carefully reviewed all of the evidence, including the various reports presented by Mr Jensen and Max Motors. In Mr Binding's view, it is possible that the cylinder head replacement carried out by Nelson Street Motors in 2016 may not have been carried out adequately. However, it has not been demonstrated that even if the repairs in 2016 were defective, they led to the damage that occurred in 2018.
[32] In fact, the evidence suggests otherwise.
[33] Mr Binding agrees with Mr Pemberton’s assessment that the fact that the vehicle operated without any observable problems for over 33,000 km after the 2016 repairs, makes it implausible to link the 2018 damage to the 2016 damage and repairs. Mr Jensen has not provided any other evidence that the vehicle was not fixed properly in 2016, other than by suggesting such a link between the two occasions of engine damage.
[34] As no such link can be reliably established, it follows as a matter of logic, in Mr Binding's assessment, that Mr Jensen has failed to show that there was any failure to fix the vehicle properly in 2016, or that any such failure has led to the engine damage now requiring repair.
[35] Accordingly, whether the vehicle was of acceptable quality needs to be assessed in light of the usual factors that are relevant under s 7 of the Act (above). In particular, the vehicle’s age, mileage and price are relevant, as is the distance travelled by Mr Jensen in the vehicle since he purchased it, as well as the duration of his ownership. The vehicle is now 10 years old and has travelled a relatively high mileage of 232,657 km. Over 36,000 km of that distance has been accumulated while the vehicle has been in Mr Jensen’s ownership. It is also relevant that he has now owned the vehicle for more than two years before the engine damage that is at issue occurred.
[36] Neither Mr Binding nor I consider that a reasonable owner of a vehicle of this age and mileage could argue that an engine failure occurring so long after purchase, and after such a high distance has been travelled since purchase, should be attributable to the trader. In other words, a reasonable consumer would not regard this vehicle as being of unacceptable quality, having regard to its age, mileage and price.
[37] We also share Mr Pemberton’s concerns that Mr Jensen appears to have continued to drive the vehicle for a considerable distance after first noticing that it was misfiring. We think it would have been prudent for him to stop the vehicle sooner to have its engine assessed.

Conclusion

[38] From our findings above, while Mr Jensen unfortunately now faces expensive repairs to his vehicle, we conclude that Max Motors is not liable to meet the cost of those repairs. Mr Jensen's application must be dismissed.

J S McHerron
Adjudicator

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[1] The EGR cooler is a device that is used to lower the temperature of the exhaust gases that are recirculated by the exhaust gas recirculation system.