Sweeney v Fuzhou Holding Co Limited Reference No. MVD 375/2017 [2018] NZMVDT 48 (12 March 2018)

Last Updated: 4 May 2018

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
		[2018] NZMVDT 048 Reference No. MVD 375/2017
	IN THE MATTER	of the Motor Vehicle Sales Act 2003
	AND
	IN THE MATTER	of a dispute
	BETWEEN	PHILIP ANTHONY SWEENEY
		Purchaser
	AND	FUZHOU HOLDING CO LIMITED
		Trader
MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Gregory, Assessor
HEARING at Auckland on 26 February 2018
DATE OF DECISION 12 March 2018
APPEARANCES
P A Sweeney, Purchaser
Q Ding, for the Trader

ORDERS

1. Philip Sweeney’s application is dismissed.

DECISION

[1] The vehicle had a fault with its fuel injectors that breached the acceptable quality guarantee in s 6 of the Consumer Guarantees Act 1993 (“the Act”). However, Philip Sweeney cannot recover the cost of repairing that fault because he did not first give Fuzhou Holding Co Limited a reasonable opportunity to perform the repair.

REASONS

Introduction

[2] On 30 July 2017, Mr Sweeney purchased a 2011 BMW 320i for $19,300 from Fuzhou Holding Co. The vehicle had an odometer reading of 51,700 kms at the time of sale.
[3] On about 19 September 2017, Mr Sweeney noticed that the engine warning light had illuminated. He had the vehicle assessed by Auckland City BMW Limited, who found a misfire caused by four failed fuel injectors.
[4] Mr Sweeney immediately contacted Fuzhou Holding Co, asking for an urgent response as to whether it would take any responsibility for the fault. The next day, having not received a response from Fuzhou Holding Co, Mr Sweeney instructed Auckland City BMW to repair the vehicle.
[5] Mr Sweeney now seeks to recover the cost of that repair. Fuzhou Holding Co says it has no liability to reimburse Mr Sweeney for that cost as he did not give it a reasonable opportunity to perform the repair.

The Issues

[6] The issues requiring consideration in this case are:

• (a) Did the fuel injector fault breach the acceptable quality guarantee of s 6 of the Act?
• (b) Did Mr Sweeney give Fuzhou Holding Co a reasonable opportunity to repair the fault.

Did the fuel injector fault breach 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 Sweeney’s subjective perspective.
[10] I am satisfied that the vehicle had a fuel injector fault that breached the acceptable quality guarantee in s 6 of the Act.
[11] Mr Sweeney paid $19,300 for a six-year-old vehicle that had travelled 51,700 kms at the time of sale. Less than two months after purchase, during which time Mr Sweeney drove only 1,048 kms in the vehicle, the vehicle’s fuel injectors failed. That fault cost $3,680.25 to repair.
[12] I am satisfied that a reasonable consumer would not find this vehicle to have been of acceptable quality because it has not been durable. A reasonable consumer would not expect the fuel injectors in a vehicle of this price, age and mileage to fail so shortly after purchase.

Did Mr Sweeney give Fuzhou Holding Co a reasonable opportunity to repair the fault?

[13] Although I have found that the vehicle was not of an acceptable quality, Mr Sweeney is not entitled to a remedy under the Act. That is because Mr Sweeney did not give Fuzhou Holding Co a reasonable opportunity to repair the vehicle.
[14] In Acquired Holdings Ltd v Turvey,[1] the High Court found that under s 18(2) of the Act, where goods have failed to comply with the acceptable quality guarantee in s 6 of the Act, the consumer must give the supplier an opportunity to remedy the failure before it can have the fault repaired elsewhere and recover the cost.
[15] Mr Sweeney submitted that he had given Fuzhou Holding Co a reasonable opportunity to repair the vehicle. He says that he had previously had unsatisfactory dealings with Fuzhou Holding Co, which caused him to have little trust in the company. He says that Fuzhou Holding Co had underhandedly attempted to force him into a loan from Fuzhou Holding Co’s preferred lender to purchase the vehicle. He also says that Fuzhou Holding Co failed to service the vehicle when it had earlier agreed to do so.
[16] Mr Sweeney says that, because he had little trust in the company, he took the vehicle to Auckland City BMW, rather than Fuzhou Holding Co to have it assessed. He says that at about 11 am on the 19 September 2017, he called Fuzhou Holding Co and told an unknown employee about the fault found by Auckland City BMW, and asked for an urgent response as to what action Fuzhou Holding Co intended to take to rectify the fault.
[17] On 20 September 2017, having not received a response from Fuzhou Holding Co, Mr Sweeney instructed Auckland City BMW to repair the vehicle. Mr Sweeney says that he needed the vehicle to be repaired urgently because his wife used the vehicle for work, and could not afford to delay the repair any longer.
[18] Although I have sympathy for Mr Sweeney’s position, and his desire to have the vehicle promptly repaired, I consider that, by making only one telephone call, and giving Fuzhou Holding Co only one day to respond before performing repairs on the vehicle, Mr Sweeney did not give Fuzhou Holding Co a reasonable opportunity to repair it.
[19] I consider that Mr Sweeney should have made further attempts to contact Fuzhou Holding Co and that he should have given Fuzhou Holding Co more than one day to respond before performing any repairs. He did not do that, instead choosing to repair the vehicle without giving Fuzhou Holding Co sufficient opportunity to perform the repair.
[20] Accordingly, applying Acquired Holdings Ltd v Turvey, Mr Sweeney is not entitled to recover the cost of the repairs, and I must dismiss Mr Sweeney’s application.
[21] Finally, after the hearing, Mr Sweeney presented evidence to suggest that the vehicle’s engine may have been swapped. That allegation did not form part of Mr Sweeney’s application, and Fuzhou Holding Co has not had a reasonable opportunity to provide any response. Accordingly, if Mr Sweeney wishes to pursue any claim in relation to the vehicle’s engine being swapped he will need to file a separate application to the Tribunal.

DATED at AUCKLAND this 12th day of March 2018

B.R. Carter
Adjudicator

---

[1] Acquired Holdings Ltd v Turvey [2007] NZHC 1251; (2007) 8 NZBLC 102,107.