Williams v CMST Ltd t/a Moom Group Automotive - Reference No. MVD 193/2019 [2019] NZMVDT 150 (16 July 2019)

Last Updated: 23 August 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 193/2019 [2019] NZMVDT 150 BETWEEN BRENDEN WILLIAMS Purchaser AND CMST LTD T/A MOOM GROUP AUTOMOTIVE Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 11 July 2019

APPEARANCES

B Williams, Purchaser

J Liu, for the Trader

DATE OF DECISION 16 July 2019

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DECISION OF THE TRIBUNAL

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1. Brenden Williams’ application to reject the vehicle is dismissed.
2. CMST Ltd, trading as Moom Group Automotive shall, within 10 working days of the date of this decision, rectify the fault that causes the vehicle to vibrate and bounce, including by replacing the vehicle’s front shocks and the vehicle’s lower front in a CV joints.

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REASONS

Introduction

[1] On about 2 May 2019, Brenden Williams purchased a 2004 Honda Accord Euro-R for $8,000 from CMST Ltd, trading as Moom Group Automotive. Mr Williams rejected the vehicle shortly afterwards, alleging that it had pre-existing suspension faults. He has now applied to the Tribunal seeking a refund of the purchase price.
[2] CMST says that the vehicle was free of defects at the time it was sold to Mr Williams and that he is not entitled to reject the vehicle because he has damaged it.

The Issues

[3] Against this background, the issues requiring consideration are:

• (a) Does the vehicle have faults that breach the acceptable quality guarantee in s 6 of the Consumer Guarantees Act 1993 (the Act)?
• (b) Has Mr Williams lost the right to reject the vehicle?
• (c) What remedy is Mr Williams entitled to under the Act?

Does the vehicle have faults that breach the acceptable quality guarantee?

[4] 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.
[5] 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.

[6] 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 Williams’ subjective perspective.
[7] Mr Williams took possession of the vehicle on 2 May 2019. While returning home to Tauranga from Auckland he noticed that the vehicle’s wheels seemed out of alignment and that the vehicle would shake when driven at speeds between 80 km/h and 100 km/h. Mr Williams stopped in Huntly to have the wheels balanced, but that did not alleviate the symptoms.
[8] The following day he took the vehicle to 15th Ave Tyre & Suspension Centre in Tauranga, who test drove the vehicle and considered that its front shocks required replacement as they were causing the front of the vehicle to bounce when driven under normal conditions. It also considered that the vehicle had worn lower front inner CV joints that required replacement as they were causing the vehicle to vibrate.
[9] Mr Haynes, the Tribunal’s Assessor, advises that the symptoms experienced by Mr Williams, particularly the feeling that the vehicle was bouncing and the vibration from the front of the vehicle, are consistent with the diagnosis from 15th Ave Tyre & Suspension Centre.
[10] CMST says the vehicle had no defects when sold. It says the vehicle had recently been through compliance testing, and components such as the CV joints and front shocks would have been assessed during the testing.
[11] I consider that the evidence shows that the vehicle vibrated when driven at speeds between 80 km/h and 100 km/h and that it “bounced” when driven under normal conditions, which suggests that the vehicle has faulty front shock absorbers and CV joints.
[12] In reaching this conclusion, I acknowledge CMST’s submission that the vehicle passed compliance testing and a warrant of fitness inspection shortly before it was sold to Mr Williams, meaning the inspector deemed the vehicle to be in warrantable condition at that time. Regrettably, this Tribunal has heard many cases where vehicles have defects that make them unroadworthy despite recently passing compliance or warrant of fitness testing. Accordingly, the fact that the vehicle passed that testing is not conclusive evidence that it was free of the defects that should have been identified during that inspection, and in light of the evidence from Mr Williams and 15th Ave Tyre & Suspension Centre, I am satisfied that the vehicle had pre-existing defects with its front shocks and lower front inner CV joints.
[13] Accordingly, I am satisfied that the vehicle has not been of acceptable quality for the purposes of s 6 of the Act because it was not free of minor defects at the time of sale. Although a reasonable consumer should have realistic expectations as to the quality and durability of a vehicle of this price, age and mileage, I am satisfied that a reasonable consumer would not expect such a vehicle to be supplied with a fault that causes it to vibrate and bounce when driven under normal conditions, most likely caused by faulty front shocks and worn lower front inner CV joints.
[14] Mr Williams also says the vehicle has other faults, but that he has not yet had those faults diagnosed. I cannot address those faults in this decision, as Mr Williams provided no evidence in respect of those faults. He will need to bring separate proceedings before the Tribunal if he would like to take those matters further.

Has Mr Williams lost the right to reject the vehicle?

[15] Mr Williams seeks to reject the vehicle, alleging that its defects amount to a failure of the substantial character. Unfortunately for Mr Williams, he cannot do that because he has lost the right to reject the vehicle because it has been damaged.
[16] Section 20 of the Act sets out the circumstances in which a purchaser loses the right to reject a vehicle. Relevant to this case, s 20(1)(c) of the Act states:

20 Loss of right to reject goods

(1) The right to reject goods conferred by this Act shall not apply if—

...

(c) the goods were damaged after delivery to the consumer for reasons not related to their state or condition at the time of supply.

[17] Mr Williams says that, while returning the vehicle to Auckland to reject the vehicle, he inadvertently drove into road markers while attempting to overtake a truck in foggy conditions. Mr Williams provided photographs of the vehicle which show clear damage to front of the vehicle (with Mr Williams advising that the damage to the bumper cover was so serious that he has removed the bumper cover entirely), the vehicle’s carbon fibre guards and its carbon fibre bonnet. Mr Haynes advises that the cost of the repairs required to these components is likely to exceed $2,500.
[18] I am satisfied that the damage is sufficient to amount to damage for the purposes of s 20(1)(c) of the Act and that Mr Williams has lost the right to reject the vehicle. His application to reject the vehicle must therefore be dismissed.

What remedy is Mr Williams entitled to under the Act?

[19] 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.

[20] Under s 18(2)(a) of the Act, Mr Williams is entitled to have the faults that breach the acceptable quality guarantee rectified within a reasonable time. Accordingly, the Tribunal orders that CMST must, within 10 working days of the date of this decision, rectify the fault that causes the vehicle to vibrate and bounce, including by replacing the vehicle’s front shocks and lower front inner CV joints.
[21] For the avoidance of doubt, CMST is responsible for all costs relating to the required repairs, including the cost of transporting the vehicle to its chosen repairer.

DATED at AUCKLAND this 16th day of July 2019

B.R. Carter
Adjudicator