Al Imran v DW&T Motor Ltd t/a DT Importer - Reference No. MVD 172/2019 [2019] NZMVDT 151 (18 July 2019)

Last Updated: 23 August 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 172/2019 [2019] NZMVDT 151 BETWEEN MOHAMMED AL IMRAN Purchaser AND DW&T MOTOR LTD T/A DT IMPORTER Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S D Gregory, Assessor

HEARING at Auckland on 9 July 2019

APPEARANCES

M Al Islam, Purchaser

W Dong, for the Trader X Xu and D Bishop, Witnesses for the Trader

DATE OF DECISION 18 July 2019

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DECISION OF THE TRIBUNAL

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1. Mohammed Al Imran’s application is dismissed.

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REASONS

Introduction

[1] On 9 July 2017, Mohammed Al Imran purchased a 2006 BMW 320i for $10,290 from DW&T Motor Ltd, trading as DT Importer. The vehicle had an odometer reading of 68,753 km at the time of sale.
[2] Mr Al Imran has now rejected the vehicle, claiming that the vehicle has not been of acceptable quality for the purposes of s 6 of the Consumer Guarantees Act 1993 (the Act) because it had pre-existing oil leaks and a subsequent coolant leak. Mr Al Imran seeks a refund of the purchase price, together with all costs he has incurred in respect of the diagnosis and repair of the vehicle’s defects.

The Issues

[3] The sole issue requiring consideration in this case is whether the vehicle has faults that breach the acceptable quality guarantee in s 6 of 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 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.

[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 Al Imran’s subjective perspective.

The oil consumption

[7] Mr Al Imran says the vehicle has consumed oil since purchase. He says that within one week of purchase the vehicle’s engine oil and engine warning lights illuminated. Mr Al Imran returned the vehicle to Car World (which sold the vehicle on behalf of DT Importer), who he says added engine oil. Mr Al Imran says he then took the vehicle to DT Importer, who cleared the engine warning light. Approximately one week later, Mr Al Imran says the engine oil and engine warning lights illuminated again. Mr Al Imran put more oil in the engine. He does not remember precisely how much oil he put in, but estimates two litres.
[8] The vehicle continued to consume oil. On about 4 August 2017, Mr Al Imran says the engine oil and engine warning lights illuminated again and the vehicle would not start. Mr Al Imran says that DT Importer then refused to take any responsibility for the vehicle’s faults because it alleged that Mr Al Imran had put too much oil into the vehicle. Mr Al Imran then took the vehicle to Continental Cars BMW, which drained 6.5 litres of oil from the vehicle (its sump capacity is only 4.5 litres) and serviced the vehicle. The vehicle’s odometer reading was 69,939 km at that time.
[9] On 28 October 2017, the engine oil warning light illuminated again. The vehicle was returned to Continental Cars BMW, who considered that the vehicle had leaks from the rocker cover, shaft seal, vacuum pump seals, spark plug tubes, valve stem seals and sump gasket. It also found that the oil sensor gasket was worn and the transmission sump and seal should be changed. The vehicle’s odometer reading at the time was 72,936 km.
[10] Mr Al Imran says the vehicle has continued to consume oil and in preparation for this hearing, Mr Al Imran had the vehicle assessed again by Continental Cars BMW on 5 July 2019. Continental Cars BMW confirmed that the vehicle had oil leaks from the oil filter housing and rocker cover, and suspected that it also had an oil leak from its sump.
[11] Mr Al Imran has not provided any conclusive evidence as to the extent of the vehicle’s oil consumption, such as an oil consumption test. However, Mr Al Imran’s evidence does enable me to approximate the extent of the vehicle’s oil consumption.
[12] Invoices from Continental Cars BMW show that the vehicle has driven a little more than 16,000 km in the 20 months since it was assessed by Continental Cars BMW on 28 October 2017. During that time, Mr Al Imran says that he has topped up the oil levels with about half a litre of oil once every five months. On the basis of that information, I am satisfied that the vehicle is consuming approximately half a litre of oil for every 4,000 km driven.
[13] I am not satisfied that the evidence presented by Mr Al Imran shows that the oil consumption is excessive or unacceptable. Mr Al Imran paid $10,290 for an 11-year-old BMW that had travelled a little more than 68,000 km at the time of sale. I consider that an 11-year-old BMW 320i will almost inevitably use some oil, whether due to oil leaks or leaking valve stem seals, which can cause oil to be consumed in the combustion process. Mr Al Imran’s evidence shows that the vehicle is consuming approximately half a litre of oil for every 4,000 km driven. That is not excessive oil consumption for a BMW 320i of this age and mileage and Mr Gregory, the Tribunal’s Assessor, advises that the vehicle can safely be driven with this level of oil consumption.
[14] Accordingly, I am satisfied that, in respect of the extent of oil consumption, the vehicle has been as free of minor defects and as durable as a reasonable consumer would consider acceptable. Although it is consuming oil, the extent of that oil consumption is not unusual for a BMW 320i of this age and mileage.

The coolant leak

[15] On 9 July 2018, when the vehicle’s odometer reading was approximately 80,000 km, the vehicle’s coolant level warning light illuminated. Mr Al Imran took the vehicle to The Toy Shop, which found rust marks on the pistons in cylinders two and three, consistent with a coolant leak.
[16] Despite this coolant leak, Mr Al Imran has continued to use the vehicle. On 5 July 2019, the vehicle was again assessed by Continental Cars BMW, who found a coolant leak from the rear coolant backing plate. Continental Cars BMW considers that the backing plate and radiator, and other associated components require replacement at cost exceeding $1,800.
[17] I am not satisfied that Mr Al Imran has proven that the coolant leak breaches the acceptable quality guarantee.
[18] The protections in the Act are not indefinite, and last only 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 ownership before the defect became apparent and the distance travelled in that time.
[19] The coolant leak first became apparent on 9 July 2018, more than 12 months after Mr Al Imran purchased the vehicle, during which time he had travelled more than 11,000 km in the vehicle. Taking account of the finite nature of the acceptable quality guarantee and the realistic expectations that a reasonable consumer should have of a vehicle of this price, age and mileage, I am satisfied that, in respect of the coolant leak, the vehicle has been as durable as a reasonable consumer would consider acceptable.

The vehicle has not been unsafe

[20] Mr Al Imran also alleges that the vehicle has been of unacceptable quality because the oil consumption and coolant leaks make the vehicle unsafe. Mr Al Imran says that the vehicle is unsafe because it might breakdown in a dangerous place. He also says that he has been told by mechanics that the vehicle is unsafe.
[21] I am not satisfied that Mr Al Imran has proven that the vehicle is unsafe. The oil consumption is not serious enough to cause the vehicle to break down or create a safety risk for the occupants of the vehicle or other road users. Likewise, although the vehicle may break down if it runs out of coolant fluid and overheats causing damage to the engine, I am not satisfied that this makes the vehicle unsafe. In the absence of any other evidence to show why the safety of the vehicle’s occupants or other road users may be at risk, I do not accept the proposition that a vehicle is unsafe simply because it may break down.

Mr Al Imran’s application is dismissed

[22] Because the vehicle has no defects that breach the acceptable quality guarantee, Mr Al Imran’s application is dismissed.

DATED at AUCKLAND this 18th day of July 2019

B.R. Carter
Adjudicator