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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 17 September 2019
IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA
MVD
168/2019
[2019] NZMVDT 175
BETWEEN NATASHA MAREE BELL
Purchaser
AND PEACH CARS LIMITED
Trader
HEARING at Christchurch on 24 July 2019
MEMBERS OF
TRIBUNAL
J S McHerron, Barrister – Adjudicator (by AVL)
R C Dixon – Assessor
APPEARANCES
N M Bell, Purchaser
No appearance for Trader
DATE OF DECISION 9 August 2019
___________________________________________________________________
DECISION OF THE TRIBUNAL
___________________________________________________________________
___________________________________________________________________
REASONS
Introduction
[1] Natasha Bell purchased a 2006 Mazda Axela from Peach Cars Ltd in September 2018 for $8,610. The purchase price included a 36-month mechanical breakdown insurance policy. Since purchasing the car, Ms Bell has had to spend more than $2,500 on repairs. As well as these repairs, Ms Bell says the vehicle has a bad vibration. She wishes to reject the vehicle.
[2] Peach Cars denies that Ms Bell is entitled to reject the vehicle or that it should be required to pay for the cost of the repairs. It says the vehicle was of acceptable quality when it was sold to Ms Bell, taking into account its age and price, as well as its mileage at the time of sale, 109,862 km.
[3] The following issues arise for the Tribunal’s determination:
- (a) Did the vehicle fail to comply with the guarantee of acceptable quality?
- (b) If so, what remedy (if any) is Ms Bell entitled to?
Issue one: Did the vehicle fail to comply with the guarantee of acceptable quality?
[4] Section 6(1) of the Consumer Guarantees Act 1993 (the Act) provides that “where goods are supplied to a consumer there is a guarantee that the goods are of acceptable quality”. According to s 2 of the Act, “goods” includes vehicles.
[5] “Acceptable quality” is defined in s 7 of the Act (as far as is relevant) as follows:
- 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] Whether a vehicle is of acceptable quality is considered from the point of view of a reasonable consumer who is fully acquainted with the state and condition of the vehicle, including any hidden defects.
Vibration and tyres
[7] Ms Bell reports that she noticed immediately after purchasing the vehicle that it had a vibration “that feels like it’s coming through the floor especially at about 80 to 90 kph”. She also noticed at the time of purchase that the tyres appeared to be perishing and deflated. Ms Bell pointed these concerns out to Peach Cars, which assured her that nothing was wrong with the vehicle.
[8] Ms Bell provided no technical report diagnosing the cause of the alleged vibration or recommending any specific repairs. That prevents the Tribunal from concluding that the alleged vibration amounts to a failure to comply with the guarantee of acceptable quality. The vibration does not appear to be interfering with the operation of the vehicle, as is clear from the fact that Ms Bell and her son (who is the main driver of the vehicle) have now driven it for more than 20,000 km since the purchase. Ms Bell also confirmed that her son is not particularly concerned about the vibration. It is therefore difficult to conclude at this point that the vibration is anything more than an annoyance. It is not possible to pinpoint its cause or to know what if any repairs may be needed.
[9] Peach Cars produced the car’s compliance certification check sheet dated 6 July 2018. The check sheet identifies that the vehicle’s right front tyre had sidewall damage and had to be replaced. Presumably Peach Cars then arranged for the tyre to be replaced, as the vehicle passed its compliance certification on a recheck on 20 July 2018. Ms Bell and her son then appear to have driven the vehicle nearly 8,000 km post-purchase before replacing the two front tyres. They did so because the tread depth had, by then, reduced below the legal minimum of 1.5 mm.
[10] Tyres are ordinarily regarded as a wear and tear item. A reasonable consumer would expect to have to replace them from time to time. Moreover, in the present case, there is no evidence to suggest that the tyres on the vehicle did not conform with relevant legal requirements on the purchase date. It was not for 8,000 km before the front tyres needed to be replaced. As such, this is attributable to ordinary wear and tear and does not constitute a failure to comply with the guarantee of acceptable quality.
Lack of spare key
[11] The vehicle was only supplied with one key. Ms Bell asked Peach Cars at the time of sale whether it could supply her with a second key. Peach Cars told Ms Bell that it was possible that another key might be sent out from Japan but it does not appear to have made any promises to her.
[12] The Tribunal’s Assessor, Mr Dixon, said that in his experience it is very common for vehicles imported from Japan to be supplied with only one key. As it does not appear that Peach Cars promised Ms Bell a second key with the vehicle, it is not a breach of the guarantee that goods must comply with their description, under s 9 of the Act. Nor is the fact that a vehicle is supplied with only one key something that a reasonable consumer would generally find unacceptable in respect of a secondhand vehicle.
Band expander
[13] The consumer information notice for the vehicle discloses that it cannot receive radio frequencies between 88 and 108 MHz without the use of a band expander. There have been some discussions between Ms Bell and Peach Cars in relation to the supply of a band expander. Peach Cars claims never to have offered to supply a band expander free of charge for the vehicle. However, Ms Bell considers it should have done so. Correspondence from Peach Cars in the lead up to the Tribunal hearing indicates that Peach Cars now agrees that it will supply a band expander for the vehicle at its cost. Ms Bell will need to make arrangements with Peach Cars to have it installed.
Matters identified in March 2019 as needing repair
[14] Ms Bell reports that in early February 2019, approximately four and a half months after purchasing the vehicle, the vehicle started to “clunk”. Ms Bell sought advice from her regular mechanic, Rangiora Mazda, which told her that the right engine mount was worn out and needed to be replaced. She went back to Peach Cars and was asked to get a full mechanical report on the vehicle. Rangiora Mazda produced a report dated 26 March 2019 which described the following items as requiring attention:
- Fuel lines under vehicle are loose, broken mounts;
- needs wheel alignment;
- Both rear tail lights have been very hot now show white light (wof fail);
- Brake fluid due;
- R/F and rear lower engine mounts are worn out;
- Lower engine cover damaged;
- Front and rear brake pads need replacing;
- Left rear diff seal leaking;
- Front lower suspension arms rear bushes are worn out; and
- Washers not going just needs fluid.
[15] Ms Bell showed Rangiora Mazda’s report to Peach Cars and allowed it to inspect the vehicle. Peach Cars offered to sell Ms Bell replacement parts at cost price, apart from the tail light, and it offered to carry out repairs on the vehicle, also at cost price. However, it appears that Peach Cars withdrew this offer after it realised that, by the time Ms Bell raised her concerns, she and her son had already driven approximately 18,000 km since purchasing the car. Peach Cars considered that, given the time since the purchase and the distance travelled, the car was of acceptable quality when purchased and that the faults identified by Rangiora Mazda were attributable to reasonable wear and tear.
[16] The compliance certification check sheet for the car noted that the right hand top engine mount needed to be replaced before it would pass its compliance inspection. Peach Cars produced a job card from Fast Track Automotive Compliance dated 6 June 2018 which states that it replaced the right hand engine mount. It also produced a receipt from John Andrew Ford & Mazda dated 18 July 2018 for the replacement mount. In light of this evidence, it is surprising that the same engine mount apparently needed to be replaced only nine months later and after the vehicle had only travelled another 18,000 km. This is a matter that Peach Cars may wish to raise with Fast Track Automotive Compliance, as it is possible that the part that it replaced in 2018 was faulty.
[17] The compliance certification check sheet also contained the following notes in respect of the vehicle:
- LHS rear diff seal leaking.
- Front brake pads wearing.
- Both rear trailing arm forward bushes poor.
[18] These notes are significant because all three of these matters were also identified by Rangiora Mazda as requiring repairs in March 2019.
Tribunal’s assessment
[19] Mr Dixon carefully reviewed Rangiora Mazda’s estimate and invoice for the repair work it carried out. In his view, a number of the matters identified by Rangiora Mazda as requiring repair can be considered as part of the ordinary maintenance requirements for the vehicle that a reasonable consumer would find acceptable, especially after having used the vehicle for approximately 18,000 km. In this category of ordinary maintenance/reasonable wear and tear, Mr Dixon places:
- (a) the front and rear brake pads, which are a consumable item and which were obviously satisfactory to meet legal requirements at the time the vehicle was certified for compliance;
- (b) the windscreen washers;
- (c) the replacement brake fluid;
- (d) the wheel alignment; and
- (e) the replacement engine under-cover. This item cannot be regarded as a matter of acceptable quality. It is recorded as having been damaged and, given the use of the vehicle since purchase (it having travelled approximately 18,000 km) it is not possible to conclude that this damage occurred prior to the vehicle being sold to Ms Bell.
[20] All the other matters identified by Rangiora Mazda, namely the leaking rear diff seal, faulty fuel line (and mountings), faulty bulb holder and tail lights, and worn lower engine mount and right front engine mount, and the front lower suspension rear arm bushes are, in Mr Dixon’s view, matters that are likely to have been defective at, or soon after, the time of purchase of the vehicle. This was clearly the case in respect of the diff seal and trailing arm forward bushes which were issues identified on the compliance certification check sheet. Moreover, as I have mentioned, there is a concern that the engine mount that was replaced may have been defective, as it should not ordinarily have needed replacing again so soon. I accept Mr Dixon’s assessment of these matters.
Conclusion
[21] Accordingly, I conclude that the vehicle failed to comply with the guarantee of acceptable quality in respect of the matters identified in [20].
Issue two: What remedy (if any) is Ms Bell entitled to?
[22] The remedies that are available where a vehicle fails to comply with the guarantee of acceptable quality are set out in s 18 of the Act, which provides:
- 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.
[23] Ms Bell asked Peach Cars to remedy the vehicle’s failures. In doing so, she acted appropriately according to 18(2)(a) of the Act.
[24] As outlined above, Peach Cars refused to remedy at its cost the failures identified in the Rangiora Mazda report dated 26 March 2019. Peach Cars’ refusal to remedy the failure left Ms Bell with the options in s 18(2)(b), namely to have the failures remedied elsewhere and recover her reasonable costs incurred in having the failures remedied herself, or to reject the vehicle.
[25] As I explained to Ms Bell in the hearing, the right to have the failure remedied or to reject the vehicle are alternative options. It is not possible for a consumer to arrange repairs and then to reject the vehicle once those repairs have been carried out.[1]
[26] Accordingly, Ms Bell is entitled to recover the reasonable costs she has incurred in having the vehicle’s failures remedied by Rangiora Mazda. Having regard to the itemised estimate of repairs prepared by Rangiora Mazda and the invoice amount that Ms Bell has been charged, it appears that she was invoiced for $481.97 (including GST) for labour for repairs to the items that I have found breached the guarantee of acceptable quality, and $980.95 for parts (including GST) for those matters. I will also allow Ms Bell to recover $156.98 for the cost of the report that she obtained from Rangiora Motors at Peach Cars’ request, under s 18(4) of the Act.
[27] In addition, as the vehicle was not supplied with a warrant of fitness issued within one month before the date of the delivery of the vehicle to her, she is also entitled to recover $49 for the warrant of fitness that she had to obtain (prematurely) on 20 July 2019.[2] For the reasons explained at [29]-[32], Peach Cars must also reimburse Ms Bell for the costs of her application to the Tribunal, $50.
Conclusion
[28] In total, Peach Cars Ltd must pay Ms Bell $1,718.90 within 14 days of the date of this decision. Ms Bell will need to make her own arrangements to have the band expander installed by Peach Cars at its expense.
Costs
[29] The Tribunal has jurisdiction to award costs against a party if that “party, after receiving notice of a hearing, fails to attend the hearing without good cause”.[3] The costs payable to the Crown include the reasonable costs of the Tribunal hearing.[4] Costs payable to another party include all, or any part of, the reasonable costs of that other party in connection with the proceedings.[5]
[30] Peach Cars was duly notified of the date of the hearing. The day before the hearing, Zheng Liu, one of Peach Cars’ directors, notified the case manager that Peach Cars would not attend the hearing. The reasons it gave for not attending were essentially that it had provided sufficient information to allow the Tribunal to determine the dispute in its absence.
[31] I asked the case manager to inform Peach Cars that Zheng Liu’s note did not appear to establish any “good cause” for non-attendance at the hearing and that in the absence of good cause, the Tribunal may order a party to pay costs. Despite this warning, no representative from Peach Cars attended the hearing.
[32] Because of its failure to attend the hearing without good cause, I order Peach Cars to pay (to the Crown) the Tribunal’s reasonable costs in the sum of $650, plus, Ms Bell’s application fee to the Tribunal in the sum of $50. For the avoidance of doubt, this $50 is included in the total amount payable to Ms Bell as stated in [28].
J S McHerron
Adjudicator
[1] Stephens v Chevron Motor Court Ltd [1996] DCR 1 at 5.
[2] Contrary to Land Transport Rule: Vehicle Standards Compliance 2002, r 9.12(3). The vehicle’s warrant of fitness was issued on 20 July 2018, nearly two months before the vehicle was sold to Ms Bell.
[3] Motor Vehicle Sales Act 2003, sch 1, cl 14(1)(b).
[4] Clause 14(2)(a)(i).
[5] Clause 14(2)(b).
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URL: http://www.nzlii.org/nz/cases/NZMVDT/2019/175.html