Joyce v Wastney t/a Cars That Go Reference No. MVD 368/2018 [2018] NZMVDT 276 (23 November 2018)

Last Updated: 17 December 2018

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL

[2018] NZMVDT 276
Reference No. MVD 368/2018

IN THE MATTER of the Motor Vehicle Sales Act 2003

AND

IN THE MATTER of a dispute

BETWEEN MICHAEL DOUGLAS JOYCE

Purchaser

AND DAVID EDWARD WASTNEY T/A CARS THAT GO

Trader

MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

D Binding – Assessor

HEARING at Palmerston North on 31 October 2018

DATE OF DECISION 23 November 2018
APPEARANCES

M D Joyce, Purchaser
D E Wastney, Trader
A R Hollis, Witness for Trader

DECISION

1. Michael Joyce's rejection of his vehicle is upheld.
2. David Wastney must pay Mr Joyce $5,800 no later than 7 December 2018.

100. Once that payment has been made in full, Mr Wastney must make arrangements to collect the vehicle from Mr Joyce at Mr Wastney’s cost.

4. Mr Joyce may request a telephone conference no later than 10 December 2018 if Mr Wastney fails to comply with these orders.
   

REASONS

Introduction

[1] Michael Joyce’s 1996 Mitsubishi Delica overheated on a family trip to Ashley Clinton. The vehicle has been diagnosed as having a blown head gasket and suspected cracked head. Repairs are likely to cost between $3,000 and $4,000. Mr Joyce considers this cost is disproportionate to the purchase price of the vehicle, which was $5,800. For this reason, and because he has only driven the vehicle 190 km since purchasing it, Mr Joyce has rejected the vehicle. He seeks an order requiring David Wastney (trading as Cars That Go), who sold him the vehicle, to reimburse him the full purchase price.
[2] Mr Wastney has offered to reimburse Mr Joyce for approximately half of the cost of the repairs, but does not consider he is obligated to do so.
[3] From this background, the following issues arise:

• (a) Did the vehicle fail to comply with the guarantee of acceptable quality?
• (b) If so, is Mr Joyce entitled to reject the vehicle?

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

[4] 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.
[5] "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.

[6] Whether a vehicle is of acceptable quality is considered from the point of view of a reasonable consumer who is fully acquainted with the state and condition of the vehicle, including any hidden defects.
[7] Mr Joyce purchased the vehicle on 5 May 2018. Mr Wastney discounted the purchase price by $200 to enable Mr Joyce to carry out repairs to the air conditioning and turbo. In addition, on 28 June 2018, repairs were made to the glow plug timer by Mike Murphy Auto Electrical. These repairs were paid for by Mr Wastney.
[8] On 8 July 2018, Mr Joyce planned to take the vehicle on its first long journey since he had purchased it. That morning, Mr Joyce checked the vehicle’s oil and water and set off at about 9.45 am with his wife and two young children. They set off from Linton Camp and proceeded up the Pahiatua track. About 15 kilometres into the journey, at the first hairpin bend, Mr Joyce noticed a large puff of steam from under the bonnet and he observed that the vehicle’s temperature gauge was rapidly climbing.
[9] It was unsafe to stop immediately when this occurred, as the road at this location is narrow with steep sides. So Mr Joyce continued driving for 70 to 100 metres to the nearest safe stopping place, where he turned the engine off.
[10] On inspection, Mr Joyce noticed that the vehicle had no water in its cooling system. He did not attempt to add any water. Mr Joyce immediately telephoned Mr Wastney and told him what had just happened. Mr Joyce called a tow truck. Mr Joyce relayed to the Tribunal that the tow truck operator had observed that the radiator hose had become disconnected from the radiator. Mr Joyce took a picture, which he produced for the Tribunal, showing the clip connecting the hose to the radiator was not in its correct position, allowing the hose to become disconnected.
[11] The tow truck operator proposed to charge $2,000 to tow the vehicle back to Palmerston North, so Mr Joyce made his own arrangements to tow the vehicle back to Linton Camp. Subsequently, Mr Wastney arranged for the vehicle to be taken to Pit Stop and then to JRM Automotive Ltd.
[12] On 15 July 2018, Pit Stop reported to Mr Joyce:

Your engine is not good, compression from the engine is pressurising the cooling system and causing overheating – it will be either a cracked cylinder head or blown head gasket. We are currently awaiting Cars That Go’s approval to go ahead with the job – will let you know the outcome.

[13] Pit Stop produced an estimate of the cost of repairs in the sum of $3,919.94. Pit Stop’s estimate also contained the following report:

Call out to vehicle, start engine, (starter motor has dead segment), drive for a short distance, overheating badly, tow back to workshop. Check cooling system, found engine compression pressurising cooling system. Likely head cracked or head gasket blown at best – will need strip down to verify, crack test head etc.

Have priced assuming Head has cracked as this is usually the case. Note head price includes gasket top set and new bolts.

If cylinder head proves ok we estimate a saving of around $1,000.

[14] JRM Automotive also prepared a quote for repairs in the sum of $3,777.70. Both Pit Stop’s and JRM Automotive’s quotes also include the cost of replacing a faulty starter motor.
[15] The Tribunal’s Assessor, Mr Binding, advised that the photograph showing the radiator hose clip in the wrong position indicates that someone has worked on the car and has removed the hose, but has failed to put the clip back the way it should be. We asked Mr Joyce in the hearing whether he had flushed the radiator or asked anyone else to do that. Mr Joyce said that he had not. Mr Binding did not think the repairs that were carried out after the vehicle’s purchase would have required the radiator hose to have been removed.
[16] Mr Wastney did not accuse Mr Joyce of moving the clip, describing it as a “mystery”. But nor did he accept responsibility for what happened. Mr Binding found no evidence that Mr Joyce was responsible for moving the clip.
[17] Mr Binding asked Mr Wastney about the pre-sale service on the vehicle, which included a TeeKay test for combustion gases in the cooling system. Mr Binding observed that it is unusual for a TeeKay test to be performed on a vehicle prior to its sale, unless there were previous problems with its cooling system.
[18] Mr Wastney denied that there had been any problems with the vehicle’s cooling system pre-sale and said that he had obtained the TeeKay test for peace of mind, given that the vehicle had a relatively high mileage (220,706 km) and because it was an out-of-town sale.
[19] Mr Binding said that, in his experience, radiator hoses ordinarily lock onto the radiator quite tightly. Sometimes it is necessary to use a spike to remove the hose even if the clip has been taken off. In his view, it is possible for the vehicle to have been driven 190 km with the clip off before the loss of coolant that caused the engine to overheat.
[20] As the Tribunal cannot establish that Mr Joyce contributed to or caused the damage himself, it is a simple matter to reach the conclusion that this vehicle did not comply with the guarantee of acceptable quality. Even for a high mileage vehicle such as this, a purchaser is entitled to expect the vehicle to be reasonably durable. On any assessment, the fact that this vehicle only lasted two months and could be driven only 190 km before overheating and suffering a potentially catastrophic engine failure demonstrates that it was not as durable as a reasonable consumer would expect.
[21] Accordingly, I conclude that the vehicle did not comply with the guarantee of acceptable quality in s 6 of the Act.

Issue two: Is Mr Joyce entitled to reject the vehicle?

[22] Mr Joyce wrote to Mr Wastney on 27 July 2018 to reject the vehicle. I consider that he was entitled to do so, for the following reasons.

Failure of substantial character

[23] In terms of s 21(a) of the Act, I consider that this vehicle would not have been acquired by a reasonable consumer who was fully acquainted with the fact that it would overheat, causing a blown head gasket and possible cracked head, within two months and 190 km of the date of purchase.

Trader refused to remedy failure

[24] Although Mr Wastney has agreed to supply the parts to JRM Automotive for it to carry out repairs, he has not agreed to pay for the labour for the repairs to be completed. I consider that a partial refusal to remedy a failure, as this is, also amounts to a refusal for the purposes of s 18(2)(b) of the Act.
[25] For both of these reasons, Mr Joyce is entitled to reject the vehicle.[1]
[26] I do not consider there to be any basis for suggesting Mr Joyce has lost his right to reject the vehicle under s 20 of the Act. In particular, he rejected the vehicle promptly, within three weeks of its failure. This was still within three months of the purchase date and, as previously discussed, Mr Joyce had travelled less than 200 km in the vehicle.
[27] Although this incident may well have been beyond the control of Mr Wastney, that does not remove his liability as the trader. The vehicle was not of acceptable quality and Mr Wastney has not demonstrated that Mr Joyce contributed to the vehicle's failure by the way in which he used it.[2] In particular, he has not established that Mr Joyce caused the clip to become removed from the radiator hose. Nor has Mr Wastney established that Mr Joyce behaved irresponsibly in continuing to drive the vehicle for a short distance after it began to overheat. As Mr Joyce explained, he was on a dangerous piece of road and I am satisfied that he stopped as soon as he could.
[28] Mr Binding explained that, in his personal experience with this type of engine, an overheating event involving sudden loss of coolant can cause rapid and serious damage. Mr Binding considered that the spring loaded clamp affixing the hose to the radiator has been worked backwards at some point, loosening the hose, but that it was not possible to pinpoint exactly when this occurred, or to conclude that it occurred after the sale of the vehicle.
[29] Accordingly, I conclude that Mr Joyce is entitled to reject the vehicle. David Wastney must pay him $5,800 within 14 days of the date of this decision. Once that payment has been made in full, Mr Wastney must make arrangements to collect the vehicle from Mr Joyce at Mr Wastney’s cost.

J S McHerron
Adjudicator

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[1] Consumer Guarantees Act 1993, ss 18(2)(b)(ii) and 18(3)(a).

[2] Section 7(4).