Pau v Auto Kings Ltd - Reference No. MVD 012/2019 [2019] NZMVDT 145 (11 July 2019)

Last Updated: 18 August 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 012/2019 [2019] NZMVDT 145 BETWEEN DANIEL PAU Purchaser AND AUTO KINGS LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S D Gregory, Assessor

HEARING at Auckland on 19 February 2019 and 10 July 2019

APPEARANCES

D Pau, Purchaser

R Crichton, for the Trader

DATE OF DECISION 11 July 2019

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DECISION OF THE TRIBUNAL

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1. Auto Kings Ltd shall, within 10 working days of the date of this decision, rectify the air conditioning fault and ensure that the vehicle’s air conditioning is functioning.

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REASONS

Introduction

[1] On 31 August 2018, Daniel Pau purchased a 2008 Toyota Mark X for $12,000 from Auto Kings Ltd. The vehicle had an odometer reading of approximately 123,000 km at the time of purchase.
[2] Within one month Mr Pau noticed that the vehicle’s air conditioning was not blowing cold air. Mr Pau wants Auto Kings to repair that fault, alleging that the vehicle has not been of acceptable quality for the purposes of s 6 of the Consumer Guarantees Act 1993 (the Act).
[3] Auto Kings Ltd agrees that the vehicle has an air conditioning fault that requires repair. However, it says that it has not yet rectified the fault because it has not been able to agree on an appropriate repair with Mr Pau.

The Issues

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

• (a) Does the vehicle have faults that breach the acceptable quality guarantee in s 6 of the Act?
• (b) What remedy is Mr Pau entitled to under the Act?

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 Mr Pau’s subjective perspective.
[8] Within one month of purchase, Mr Pau noticed that the vehicle’s air conditioning was faulty, in that it would not blow cold air.
[9] Mr Pau has had the vehicle assessed by three repairers — CoolCar Air-conditioning Centre, Ebbett Toyota and CW Motors Ltd — who each considered that the vehicle’s air conditioning compressor has failed, and that the air conditioning compressor, condenser and associated components require replacement. CoolCar and Ebbett Toyota considered that the required repairs will cost more than $3,000.
[10] Auto Kings accepts that the air conditioning system requires repair. It says that it has not yet performed those repairs because the estimates provided by Mr Pau are too high and that its relationship with Mr Pau has now deteriorated to the point where there is no ongoing communication between the parties.
[11] I am satisfied that the evidence presented by Mr Pau shows that the vehicle has not been of acceptable quality because its air conditioning failed within one month of purchase. A reasonable consumer purchasing a vehicle of this price, age and mileage would not expect a fault of this nature to develop so shortly after purchase.

What remedy is Mr Pau now entitled to under the Act?

[12] The remedies relevant to this claim 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.

[13] Under s 18(2)(a) of the Act, Mr Pau is entitled to have the air conditioning fault rectified within a reasonable time. Accordingly, the Tribunal orders that Auto Kings must, within 10 working days of the date of this decision, rectify the air conditioning fault and ensure that the vehicle’s air conditioning is functioning.

DATED at AUCKLAND this 11th day of July 2019

B.R. Carter
Adjudicator