Si'itia v Rides 2 Go Limited Reference No. MVD 101/2018 [2018] NZMVDT 96 (1 May 2018)

Last Updated: 18 June 2018

BEFORE THE MOTOR VEHICLE DISPUTES TRIBUNAL
		[2018] NZMVDT 096 Reference No. MVD 101/2018
	IN THE MATTER	of the Motor Vehicle Sales Act 2003
	AND
	IN THE MATTER	of a dispute
	BETWEEN	MEMA SI’ITIA
		Purchaser
	AND	RIDES 2 GO LIMITED
		Trader
MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Gregory, Assessor
HEARING at Auckland on 10 April 2018
DATE OF DECISION 1 May 2018
APPEARANCES
M Si’itia, Purchaser S Falelua, Witness for the Purchaser
J S Kim, for the Trader R M Ibrahim, Witness for the Trader

ORDERS

1. Rides 2 Go Limited shall, within 10 working days of the date of this decision, pay $1,041 to Mema Si’itia.

DECISION

[1] The vehicle has had a cracked radiator and worn tyres, both faults that caused the vehicle to breach the acceptable quality guarantee in s 6 of the Consumer Guarantees Act 1993 (the Act). The gearbox and steering rack faults do not breach the acceptable quality guarantee. The vehicle’s gearbox was as durable as a reasonable consumer would expect, and the faulty steering rack was unlikely to have been caused by any defect with the vehicle.
[2] Under s 18(2)(b)(i) of the Act, Mema Si’itia is entitled to recover the cost of the radiator repairs and replacement tyres, totalling $1,041.

REASONS

Introduction

[3] On about 28 November 2016, Ms Si’itia purchased a 2005 Nissan Murano for $11,000 from Rides 2 Go Limited. The vehicle had an odometer reading of 124,848 kms at the time of sale.
[4] During her ownership, the vehicle has had a cracked radiator, worn tyres, a faulty gearbox and a fault with its steering rack. Rides 2 Go paid a little more than half of the cost of replacing the cracked radiator but has otherwise declined to contribute towards the repair of the remaining faults.
[5] To date, Ms Si’itia has incurred costs exceeding $4,900 and expects to incur at least $1,500 more in having the steering rack fault rectified. Ms Si’itia has applied to the Tribunal seeking to recover the cost of repairs to date, and an order that Rides 2 Go rectify the steering rack fault.
[6] Rides 2 Go says it has no liability under the Act.

The Issues

[7] 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) If so, what remedy is Ms Si’itia entitled to under the Act?

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

[8] 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.
[9] 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.”

[10] 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 Ms Si’itia’s subjective perspective.
[11] Ms Si’itia alleges that the vehicle has, or has had, the following faults that breach the acceptable quality guarantee in s 6 of the Act:

• (a) A cracked radiator.
• (b) Worn tyres.
• (c) A faulty gearbox.
• (d) A faulty steering rack.

The cracked radiator

[12] In February 2017, Ms Si’itia noticed that the vehicle was overheating. The vehicle was diagnosed as having a cracked radiator and the radiator was replaced.
[13] I am satisfied that this fault breaches the acceptable quality guarantee in s 6 of the Act because it has not been as durable as a reasonable consumer would expect. Ms Si’itia paid $11,000 for a 10-year-old vehicle that had travelled a little over 124,000 kms at the time of sale. Although a reasonable consumer would have realistic expectations about the durability of a vehicle of this price, age and mileage, I am satisfied that a reasonable consumer would not expect the vehicle’s radiator to crack so shortly after purchase.
[14] Ms Si’itia says she contributed $305 towards this repair, with Rides 2 Go paying the remainder. Rides 2 Go stated that it paid the whole amount. Neither party presented evidence of any payment made, and I am inclined to accept the evidence of Ms Si’itia, who I found to be an honest and straightforward witness, that she paid $305 towards the cost of this repair.

The worn tyres

[15] The vehicle subsequently failed a warrant of fitness inspection in November 2017 because the vehicle’s tyres were worn. Ms Si’itia spent $736 replacing the tyres.
[16] The vehicle was sold with mud and snow tyres. The vehicle had passed a warrant of fitness inspection on the day Ms Si’itia purchased the vehicle. The inspector noted that all four tyres were “borderline” with each having 4 mm of tread, which is the minimum tread depth for mud and snow tyres.
[17] Rides 2 Go says that it has no liability under the Act for the tyres. It says that tyres are a consumable item, that the tyres were legal when the vehicle was sold, and have been as durable as a reasonable consumer would expect.
[18] Although I accept that tyres are a consumable item that consumers should reasonably expect to replace from time to time, I am nonetheless satisfied that this vehicle’s tyres were not as durable as a reasonable consumer would expect. The tyres were “borderline” when the vehicle was sold to Ms Si’itia, and Mr Gregory, the Tribunal’s Assessor, advises that the tyres tread level would quickly have worn below the minimum level required to comply with New Zealand Transport Agency (NZTA) requirements.
[19] I am therefore satisfied that the tyres required replacement shortly after Ms Si’itia purchased the vehicle to comply with NZTA safety requirements. I do note that Ms Si’itia did not replace the tyres until November 2017, by which time the tread is likely to have been significantly lower than the NZTA thresholds, and probably at dangerously low levels. The fact that Ms Si’itia took so long to replace the tyres, although unwise, does not change the fact that the tyres were borderline when sold to Ms Si’itia and were not as durable as should be expected, in breach of s 6 of the Act.

The gearbox failure

[20] In October 2017, the vehicle’s gearbox failed. Ms Si’itia contacted Rides 2 Go, who declined to rectify the fault, so she had the gearbox reconditioned and rebuilt by Toso Brothers Workshop Limited, at a cost exceeding $3,500.
[21] The protections in the Act are not indefinite, and apply only for as long as is reasonable in the circumstances of each case, taking account of factors such as the price, age and mileage of the vehicle, the length of time since purchase, and the distance driven during that time.
[22] Taking account of all those factors, I am not satisfied that the gearbox failure is a fault that breaches the acceptable quality guarantee. As noted above, I consider that a reasonable consumer would have realistic expectations about the durability of an $11,000, 10-year-old vehicle that had travelled a little over 124,000 kms at the time of sale. The gearbox failed at the end of October 2017, 11 months after Ms Si’itia purchased the vehicle. During that time Ms Si’itia had driven approximately 27,500 kms in the vehicle. That is a significant amount of use over an 11 month period. In this instance, taking account of the length of Ms Si’itia’s ownership and the distance she has travelled in the vehicle, I consider that the vehicle’s gearbox has been as durable as a reasonable consumer could expect.
[23] Accordingly, I am not satisfied that the gearbox failure breaches the acceptable quality guarantee in s 6 of the Act.

The faulty steering rack

[24] In March or April 2018, the vehicle’s steering failed. Ms Si’itia says she attempted to turn right at a roundabout, but the vehicle drove straight ahead. Ms Si’itia has had the vehicle assessed by Mike Reddy Vehicle Inspections, who considers that the steering rack requires replacement.
[25] Although the vehicle clearly has a fault with its steering rack that significantly affects the safety of the vehicle, I am not satisfied that it is a fault that breaches the acceptable quality guarantee.
[26] That is because Mr Gregory advises that the fault was most likely caused by an external factor, such as the repairs performed by Toso Brothers Workshop in November 2017, rather than any underlying defect with the vehicle. Mr Gregory says that faults of the nature described by Ms Si’itia are highly unlikely to develop due to any fault with the vehicle. Mr Gregory says that such faults are most likely caused by an external factor, such as components in the steering rack being left loose following a repair. Mr Gregory notes that Toso Brothers Workshop performed a wheel alignment when it replaced the tyres in November 2017, and it is possible that Toso Brothers Workshop loosened a steering rack end to perform the alignment, and then overlooked to tighten it properly.
[27] Mr Gregory is careful to note that the evidence does not conclusively show what caused this fault. He is, however, confident that the fault was not caused by an underlying fault with the vehicle. Accordingly, relying on Mr Gregory’s advice, I cannot be satisfied that the steering rack fault was caused by a fault with the vehicle that breached the acceptable quality guarantee. Instead, it is more likely that the fault was caused by an external factor.
[28] I also note, for completeness, that even if the fault had occurred because of an underlying fault with the vehicle, for the same reasons as set out above in relation to the gearbox fault, it is likely that the guarantees in the Act would no longer apply given the length of Ms Si’itia’s ownership and the distance she has travelled in the vehicle since purchase.

What remedy is Ms Si’itia entitled to under the Act?

[29] The remedies relevant to this case are set out in s 18 of the Act, which 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), the 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.”

[30] Under s 18(2)(b)(i) of the Act, Ms Si’itia is entitled to recover the costs she incurred in repairing the cracked radiator and replacing the vehicle’s tyres. In that regard she can recover $305, which was her contribution towards the cost of the cracked radiator and $736, being the cost of the replacement tyres. She is not entitled to recover any amounts in relation to the gearbox or steering rack faults, as those faults do not breach the Act’s guarantees.
[31] Accordingly, the Tribunal orders that Ride 2 Go shall, within 10 working days of the date of this decision, pay $1,041 to Ms Si’itia.

DATED at AUCKLAND this 1st day of May 2018

B.R. Carter
Adjudicator