Kelly v Brent Smith t/a Motor Me - Reference No. MVD 357/2017 [2018] NZMVDT 16 (31 January 2018)

Last Updated: 20 February 2018

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
		[2018] NZMVDT 016 Reference No. MVD 357/2017
	IN THE MATTER	of the Motor Vehicle Sales Act 2003
	AND
	IN THE MATTER	of a dispute
	BETWEEN	ADAM THOMAS KELLY
		Purchaser
	AND	BRENT SMITH T/A MOTOR ME
		Trader
MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Haynes, Assessor
HEARING at Auckland on 16 January 2018
DATE OF DECISION 31 January 2018
APPEARANCES
A T Kelly, Purchaser
No appearance for the Trader

ORDERS

1. Brent Smith shall, within five working days of the date of this decision;
   1. pay $1,187.28 to Adam Kelly.
   2. pay costs of $650 to the Crown (payable to Ministry of Justice, Tribunals Unit, Level 1, Chorus House, 41 Federal Street, Auckland 1010).

DECISION

[1] The vehicle has a fault with its transmission that breaches the acceptable quality guarantee in s 6 of the Consumer Guarantees Act 1993 (“the Act”).
[2] Brent Smith has failed to repair the fault within a reasonable time. Accordingly, Adam Kelly is entitled to recover the cost of having the fault repaired.

REASONS

Introduction

[3] On 19 August 2017, Adam Kelly purchased a 2005 Subaru Legacy for $5,295 from Brent Smith, trading as Motor Me. The vehicle had an odometer reading of 121,620 kms at the time of sale.
[4] The vehicle had a pre-existing fault with a solenoid in its transmission. Brent Smith has failed to rectify the fault. Mr Kelly has had the fault repaired and has applied to the Tribunal to recover the cost of that repair.
[5] Despite receiving a Notice of Hearing, Brent Smith failed to appear at the hearing. The hearing proceeded in his absence.

The Issues

[6] 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 Brent Smith failed to repair the fault within a reasonable time?
• (c) What remedy is Mr Kelly entitled to under the Act?

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

[7] 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.
[8] 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.”

[9] 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 Mr Kelly’s subjective perspective.
[10] Mr Kelly noticed the vehicle vibrating the day he purchased it. He had the vehicle assessed by Pilky’s Auto Clinic in Marton on 24 August 2017. Pilky’s Auto Clinic diagnosed a fault in the solenoid in the transmission centre differential. Pilky’s Auto Clinic advised Mr Kelly that the fault required repair to avoid more significant damage to the transmission. Mr Kelly had the fault repaired by Pilky’s Auto Clinic on 14 September 2017 at a cost of $1,137.28.
[11] Mr Haynes, the Tribunal’s Assessor, advises that the vibration experienced by Mr Kelly on the day he purchased the vehicle is consistent with the faulty solenoid found by Pilky’s Auto Clinic.
[12] I am therefore satisfied that the vehicle had a fault with its transmission, which existed when Mr Kelly purchased the vehicle. That fault breaches the acceptable quality guarantee in s 6 of the Act. A reasonable consumer would not expect a vehicle, even one of the price, age and mileage of this vehicle, to have a pre-existing fault with its transmission that would cost more than $1,000 to repair.

Did Brent Smith fail to repair the fault within a reasonable time?

[13] Mr Kelly claims that he is entitled to recover the cost of repairing the fault under s 18(2)(b)(i) of the Act because Brent Smith has failed to repair the fault, despite being given a reasonable opportunity to do so.
[14] Section 18 of the Act 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.”

[15] Under s 18(2)(b)(i) of the Act, Mr Kelly is entitled to recover the cost of repairs if, having been required to remedy the fault, Brent Smith has not succeeded in doing so within a reasonable time.
[16] I am satisfied that Mr Kelly required Brent Smith to repair the fault. The email correspondence between the parties shows that on, 24 August 2017, Mr Kelly advised Brent Smith of the fault. Brent Smith offered to refund the purchase price if Mr Kelly returned the vehicle to him.
[17] Mr Kelly, as is his right under s 18(2) of the Act, chose not to return the vehicle for a refund. Instead, after receiving little in the way of further communication from Brent Smith, Mr Kelly advised Brent Smith in an email dated 5 September 2017, that if Mr Smith did not respond to his email with a proposal for rectifying the fault, Mr Kelly would have the vehicle repaired locally and recover the cost from Mr Smith.
[18] Mr Kelly received no reply to that email, and on 14 September 2017, Mr Kelly had the vehicle repaired.
[19] This evidence satisfies me that Brent Smith was required to rectify the fault, and failed to do so within a reasonable time.

What remedy is Mr Kelly entitled to under the Act?

[20] Under s 18(2)(b)(i) of the Act, Mr Kelly is entitled to recover the cost of having the fault repaired by Pilky’s Auto Clinic.
[21] Accordingly, I order that Brent Smith shall, within five working days of the date of this decision, pay $1,137.28 to Mr Kelly.

Costs

[22] Under cl 14(1)(b) of Sch 1 to the Motor Vehicle Sales Act 2003, the Tribunal may award costs against a party where that party, after receiving notice of the hearing, fails to attend without reasonable cause.
[23] I am satisfied that Brent Smith received notice of the hearing and failed to attend without reasonable cause. Brent Smith may have thought his attendance was not necessary because he had earlier emailed the Tribunal advising that he was prepared to pay the amount sought by Mr Kelly. However, Mr Kelly continued with his application because he has not received that payment. If this was Brent Smith’s explanation for failing to attend the hearing, it is not a reasonable one.
[24] Accordingly, under cl 14(2)(a)(i) of Sch 1 to the Motor Vehicle Sales Act , I order Brent Smith to pay $650 to the Crown, being the reasonable costs of the Tribunal hearing. Under cl 14(2)(b) of Sch 1 to the Motor Vehicle Sales Act , I also order that Brent Smith pay $50 to Mr Kelly, being the cost of filing his application before the Tribunal.

DATED at AUCKLAND this 31st day of January 2018

B.R. Carter
Adjudicator