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Vaiangina v A1 Cars 2014 Ltd - Reference No. MVD 156/2019 [2019] NZMVDT 127 (24 June 2019)

Last Updated: 16 July 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 156/2019
[2019] NZMVDT 127

BETWEEN LUPE LEONARD MONIER VAIANGINA & JUNIOR PULIUVEA

Purchaser

AND A1 CARS 2014 LTD
Trader

MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S D Gregory, Assessor

HEARING at Auckland on 18 June 2019



APPEARANCES
LLM Vaiangina and J Puliuvea, Purchaser
S Nath, for the Trader

DATE OF DECISION 24 June 2019

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

  1. A1 Cars 2014 Ltd shall, within 10 working days of the date of this decision, rectify the faults that cause the vehicle’s bonnet warning light and tyre pressure warning light to illuminate.

_________________________________________________________________

REASONS

Introduction

[1] On 22 February 2017, Lupe Vaiangina and Junior Puliuvea purchased a 2004 BMW 730i for $8,995 from A1 Cars 2014 Ltd (A1 Cars). The vehicle had an odometer reading of 118,118 km at the time of sale.
[2] Mrs Vaiangina and Mr Puliuvea say they were reassured by A1 Cars that the vehicle was well maintained and in good condition at the time of sale, but the vehicle had pre-existing defects and has continued to develop faults during Mrs Vaiangina and Mr Puliuvea’s ownership, including significant engine damage. Mrs Vaiangina and Mr Puliuvea say the faults mean that the vehicle has not been of acceptable quality for the purposes of the Consumer Guarantees Act 1993 (the Act). They have applied to the Tribunal for relief, saying that the vehicle’s ongoing problems have caused them significant financial and emotional stress.
[3] A1 Cars says that the vehicle has been of acceptable quality. It says that the vehicle was in good condition at the time of sale, and that the problems that have occurred since are consistent with the age and mileage of the vehicle or were caused by Mrs Vaiangina and Mr Puliuvea failing to adequately maintain the vehicle.

The Issues

[4] Against this background, the issues requiring consideration in this case are:

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

[5] 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.
[6] The expression "acceptable quality" is defined in s 7(1) 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.

[7] 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 Mrs Vaiangina and Mr Puliuvea’s subjective perspective.

The pre-existing faults

[8] Mrs Vaiangina and Mr Puliuvea’s application was carefully presented by Mr Puliuvea, who alleged that the vehicle had the following defects at the time of sale:
[9] Mr Puliuvea says that A1 Cars rectified the defective wing mirrors and washer jets but performed no further repairs.
[10] A1 Cars disputes whether these faults were all present at the time of sale. Sunil Nath, a director of A1 Cars, alleged that Mr Puliuvea only complained about the defective wing mirror and mentioned none of the other alleged faults at the time.
[11] I prefer Mr Puliuvea’s evidence as to the existence of faults at the time of sale. Mr Puliuvea’s evidence was clear and consistent, and I accept it. Mr Nath’s evidence was inconsistent with the contemporaneous evidence. For example, although Mr Nath was adamant that Mr Puliuvea had complained about the wing mirrors only, I was shown an invoice from Motor Services Ltd (A1 Cars’ repairer) stating that Mr Puliuvea had also raised concerns regarding the vehicle’s washer jets and bonnet warning light. Given the inconsistency between Mr Nath’s evidence and the contemporaneous documents, I prefer Mr Puliuvea’s version of events.

Do those faults breach the acceptable quality guarantee?

[12] I am not satisfied that the loose interior roof lining breached the acceptable quality guarantee. That was a minor, easily repaired fault consistent with the age and mileage of the vehicle.
[13] I am, however, satisfied that the evidence presented by Mrs Vaiangina and Mr Puliuvea shows that the vehicle had pre-existing faults with its wing mirrors, bonnet warning light, tyre pressure sensor, left front indicator and washer jets, which mean that it was not of acceptable quality for the purposes of s 6 of the Act.
[14] Mr Gregory, the Tribunal’s Assessor, advises that the faulty wing mirrors, left front indicator and washer jets should have caused the vehicle to fail a pre-purchase warrant of fitness inspection if one had been conducted. In that regard, I note that A1 Cars did not comply with its obligation to ensure that the vehicle had a warrant of fitness issued within one month of the sale as required by the Land Transport Regulations.[1] The vehicle’s warrant of fitness was issued in June 2016, about eight months before the vehicle was purchased.
[15] Although a reasonable consumer purchasing a vehicle of this price, age and mileage must have realistic expectations as to its quality and durability, I am satisfied that they would not expect such a vehicle to have these pre-existing faults. That is particularly the case where A1 Cars advised Mr Puliuvea that the vehicle was well maintained and in good condition.

Faults identified in April 2018

[16] On 18 April 2018, Mrs Vaiangina and Mr Puliuvea then had the vehicle assessed by Continental Cars BMW in Takapuna, who found the following defects:
[17] Other than the condensation in the left front indicator, which I am satisfied existed at the time of sale, none of these faults breach the acceptable quality guarantee because Mrs Vaiangina and Mr Puliuvea had owned the vehicle for too long and had travelled too far in the vehicle for the acceptable quality guarantee to continue to apply.
[18] The protections in the Act are not indefinite, and last only for as long as is reasonable taking account of factors listed in s 7(1) of the Act that are relevant to the case, such as the price, age and mileage of the vehicle at the time of sale, the period of time before the fault became apparent and the distance travelled in that time.
[19] Mrs Vaiangina and Mr Puliuvea paid $8,990 for a 13-year-old vehicle that had travelled a little more than 118,000 km at the time of sale. The new faults found by Continental Cars BMW in April 2018 were identified nearly 14 months after purchase, by which time Mrs Vaiangina and Mr Puliuvea had travelled nearly 19,000 km in the vehicle. Taking account of the factors listed in s 7(1) of the Act, I am satisfied that, in respect of the new faults identified by Continental Cars BMW in April 2018, the vehicle has been as durable as a reasonable consumer would consider acceptable.

The subsequent faults identified by Continental Cars BMW

[20] Continental Cars BMW conducted further inspections in August 2018, November 2018 and March 2019, and found faults including:
[21] Continental Cars BMW has performed several different repairs, including replacing the camshaft sensor, crank angle sensor and thermostat and installing a replacement engine.
[22] Although I am satisfied that the vehicle has had the defects described by Continental Cars BMW, and that many of those defects are significant, for the reasons set out in respect of the faults found in April 2018, I am not satisfied that any of these faults mean the vehicle has not been of acceptable quality. These faults were identified between August 2018 and March 2018, by which time Mrs Vaiangina and Mr Puliuvea had owned the vehicle for too long, and had driven it too far, for the acceptable quality guarantee to continue to apply.

Are the faults a failure of a substantial character?

[23] Under s 18(3) of the Act, Mrs Vaiangina and Mr Puliuvea may reject the vehicle if it has a fault that amounts to a failure of a substantial character. A failure of a substantial character is defined in s 21 of the Act:
  1. 21 Failure of substantial character

For the purposes of section 18(3), a failure to comply with a guarantee is of a substantial character in any case where—

(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b) the goods depart in 1 or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model; or

(c) the goods are substantially unfit for a purpose for which goods of the type in question are commonly supplied or, where section 8(1) applies, the goods are unfit for a particular purpose made known to the supplier or represented by the supplier to be a purpose for which the goods would be fit, and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or

(d) the goods are not of acceptable quality within the meaning of section 7 because they are unsafe.

[24] As set out above, many of the faults alleged by Mrs Vaiangina and Mr Puliuvea do not breach the acceptable quality guarantee. Accordingly, I cannot take account of those alleged faults in determining whether the vehicle’s defects amount to a failure of a substantial character.
[25] Further, I am not satisfied that the faults that breach the acceptable quality guarantee — the faults with the wing mirrors, bonnet warning light, tyre pressure sensor, left front indicator and washer jets — amount to a failure of a substantial character. A reasonable consumer purchasing a 13-year-old BMW should understand that such vehicles will almost inevitably have defects consistent with their age and mileage and that other faults, which may be costly to rectify, may arise from time to time.
[26] Given the relatively minor nature of the faults that breach the acceptable quality guarantee, I am not satisfied that a reasonable consumer would have been deterred from purchasing the vehicle if they had been fully acquainted with the nature and extent of the defects at the time of sale. Certainly, a consumer would expect those faults to be rectified, but I am not satisfied that a reasonable consumer would have declined to purchase the vehicle.

What remedy are Mrs Vaiangina and Mr Puliuvea entitled to under the Act?

[27] The remedies relevant to this claim are set out in s 18 of the Act, which provides:
  1. 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.

[28] Mrs Vaiangina and Mr Puliuvea are not entitled to reject the vehicle, because the vehicle’s faults do not amount to a failure of a substantial character. Further, Mrs Vaiangina and Mr Puliuvea are not entitled to any remedy in respect of the faults that do not breach the acceptable quality guarantee. In reaching this conclusion, I recognise that some of those faults are significant and have been expensive to repair, and that Mrs Vaiangina and Mr Puliuvea have faced financial and emotional hardship in dealing with the vehicle’s faults. Mr Puliuvea made a sincere and strong submission for assistance from the Tribunal to lessen that ongoing financial and emotional strain, but the Tribunal simply cannot grant a remedy for defects that do not breach any of the Act’s guarantees.

[29] Mrs Vaiangina and Mr Puliuvea are, however, entitled to have the unrectified faults that breach the acceptable quality guarantee repaired within a reasonable time. In that regard, I order that A1 Cars shall, within 10 working days of the date of this decision, diagnose and repair the faults that cause the bonnet warning light and tyre pressure warning light to illuminate.

DATED at AUCKLAND this 24th day of June 2019

B.R. Carter
Adjudicator


[1] Land Transport Rule: Vehicle Standards Compliance 2002, r 9.12(3).

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