Kohler v Horizon Cars Limited - Reference No. MVD 258/2019 [2019] NZMVDT 204 (26 September 2019)

Last Updated: 1 November 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 258/2019
[2019] NZMVDT 204

BETWEEN MICHAEL KOHLER

Purchaser

AND HORIZON CARS LIMITED

Trader

HEARING at Christchurch on 13 September 2019
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

R C Dixon – Assessor
APPEARANCES

M Kohler, Purchaser
J Helm, Partner of Purchaser
R F Marlow, Director of Trader

DATE OF DECISION 26 September 2019

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DECISION OF THE TRIBUNAL

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Mr Kohler’s rejection of his Subaru Outback is not upheld. However, Horizon Cars Ltd must make all necessary repairs to its coolant system and replace both of the vehicle’s front lower control arm rear bushes, all at its expense. These repairs are to be completed no later than 24 October 2019.

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REASONS

Introduction

[1] Michael Kohler has applied to reject the 2004 Subaru Outback he purchased from Horizon Cars Ltd on 9 April 2019 for $4,300. Mr Kohler says the vehicle has had a number of faults, only some of which have been repaired.
[2] Mr Kohler seeks a full refund of the vehicle’s purchase price, plus damages for costs he has incurred in relation to the vehicle, loss of earnings, a reasonable refund for his investment of time and a refund for the costs of his claim in the Tribunal, including his printing and postage costs.
[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 Mr Kohler 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:

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] 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.
[7] It is important to note at the outset that this is a high-mileage vehicle, having travelled 202,169 km at the date of purchase. It is a 2004 model, so it is now 15 years old. And it was sold to Mr Kohler for the relatively modest price of $4,300.
[8] Any consideration of whether the vehicle failed to comply with the guarantee of acceptable quality must have regard to these factors. An old, high-mileage vehicle is inherently likely to have ongoing maintenance needs beyond those of a newer vehicle. A reasonable purchaser of such a vehicle needs to be realistic as to the likelihood of such repairs being required.
[9] That said, where defects are not merely attributable to a vehicle’s age and mileage, but rather they are defects that a reasonable consumer would not regard as acceptable, then a purchaser will nevertheless be entitled to the usual range of remedies available under s 18 of the Act.
[10] Before purchasing the vehicle, Mr Kohler agreed with Horizon Cars that its left inner CV boot would be replaced, along with its top radiator hose. These repairs were completed immediately before Mr Kohler agreed to purchase the vehicle on 9 April 2019.
[11] In addition, immediately before purchase, the vehicle’s timing belt and radiator were replaced. There was some dispute as to the cost of these repairs, and Mr Kohler drew the Tribunal’s attention to two invoices with varying prices. However, Mr Marlow, the trader’s director, explained that the two versions of the invoice contained trade and non-trade prices respectively. The repairer, Lichfield Motors, produced a retail invoice because it did not want its trade pricing to be widely publicised.

Flashing sport light

[12] The first problem identified by Mr Kohler after purchasing the vehicle was that its sport light was flashing on the dashboard. Mr Kohler first noticed this appearing on or around 20 April 2019. He drew the matter to Horizon Cars’ attention. Horizon Cars took two attempts to diagnose and fix the problem. Mr Marlow explained that diagnosing the fault involved driving the vehicle for a full day. This explained why a large amount of the vehicle’s petrol was used by Horizon Cars in the process of diagnosing the fault. Eventually, Horizon Cars determined that the fault was caused by a defective speed sensor, which it replaced with a second-hand part, that was supplied at no cost to Horizon Cars. Fortunately, this repair was successful and the sport light is no longer flashing on the vehicle’s dashboard.

Shuddering while steering

[13] Mr Kohler also referred to the vehicle shuddering while he was steering it. He first began to notice this problem about the same time as the sport light appeared on or around 20 April 2019. The replacement of the speed sensor seems to have fixed this shuddering as well and Mr Kohler reported that the vehicle is no longer exhibiting this fault.

Growling noise while steering

[14] Mr Kohler also noticed the vehicle making a “growling noise” while it is turning. Mr Kohler first noticed this noise also on or around 20 April 2019. Mr Kohler produced a video of this noise. It was possible to hear a faint noise in the background of the video but it was certainly not a particularly loud noise. Nor, according to Mr Kohler, did this “growling” have any effect on the steering of the vehicle or any other aspect of its functionality.
[15] Mr Kohler asked High Street Motors, Rangiora, to investigate this issue. It found on 27 June 2019 that the power steering pump was noisy under certain conditions and that it appeared to have been previously dismantled. In a subsequent report dated 16 July 2019, High Street Motors reported that there is a “slight leak” from the power steering pump. It has quoted approximately $400 to $500 for a replacement second-hand power steering pump to be fitted to the vehicle.

Loss of coolant/coolant leak

[16] Mr Kohler says that the vehicle has had three coolant leaks. The first was the coolant leak identified prior to purchase, which was repaired before Mr Kohler took delivery of the vehicle. The second coolant leak was addressed by Horizon Cars and Lichfield Motors on 18 May 2019 by resealing the thermostat gasket and replacing a hose clamp. However, Mr Kohler says that there is a third coolant leak that is still present in the vehicle.
[17] This further leak was diagnosed by High Street Motors on 27 June 2019. It described “coolant leaking passenger side vehicle”. High Street Motors said that this will require further investigation to determine the source of the leaks and the cost of repairs.
[18] In its further reports dated 16 and 17 July 2019, High Street Motors stated there was coolant leaking around the left side of the cylinder head area, and the coolant level was low. High Street Motors indicated this was potentially indicative of a blown head gasket. High Street Motors also referred to the vehicle’s heater blowing cold air on the passenger when the heater was set on hot, and a gushing noise from the heater when the vehicle is accelerating. High Street Motors considered there may be a heater core issue which would require the dashboard to be disassembled to assess further.
[19] Mr Kohler said that he had recently driven the vehicle from Christchurch to Mount Cook and return. During the journey, Mr Kohler paid close attention to the coolant level in the vehicle and said he had to add about 100 ml of coolant.
[20] In the Tribunal’s Assessor Mr Dixon’s view, the fact that Mr Kohler was able to drive the vehicle from Christchurch to Mount Cook return, a distance of approximately 660 km, without any apparent overheating problems, and that he only had to add 100 ml of coolant to the vehicle over that journey, strongly suggests that the vehicle does not have a current problem in respect of its head gasket.

Oil leaks

[21] High Street Motors also reported that engine oil is leaking on both sides of the rocker cover gaskets and in the oil filter area. Mr Kohler also produced photos of the vehicle which showed oil seepage in these areas.

Front lower control arm bushes and anti-sway bar link

[22] High Street Motors also reported that the vehicle has torn front lower control arm rear bushes on both sides of the vehicle and that there is “slight play” on the right hand front anti-sway bar link.

Tribunal’s assessment

[23] The vehicle has certainly had a number of relatively minor faults since Mr Kohler purchased it in April 2019. That, however, is not particularly surprising given its age, high-mileage and relatively low price. Standing back, Mr Dixon and I do not think that the vehicle's faults, whether looked at individually or together, signal a substantial departure from the standard of acceptable quality contained in the Act. Moreover, some of the faults, in particular the growling noise identified whilst steering and the oil seepage coming from the rocker cover gasket area and the oil filter area, are the kinds of minor faults that a reasonable consumer would regard as being acceptable in a vehicle of this age and mileage. None of these faults impact the normal operation of the vehicle or affect its ability to be used.
[24] Putting to one side the matters that have been addressed successfully, in particular the flashing sport light and the shuddering while steering, the two matters that I consider amount to a failure of this vehicle to comply with the guarantee of acceptable quality are the coolant leak and the torn front lower control arm bushes which, as Mr Kohler points out, are potentially a warrant of fitness issue.

Conclusion

[25] Accordingly, I conclude that the vehicle failed to comply with the guarantee of acceptable quality in respect of its coolant leak and the torn front lower control arm bushes. Without further investigation it is not possible to ascertain whether the problem identified with the heater blowing cold air on the passenger when set to hot is related to the coolant leak issue. Mr Barlow, on behalf of Horizon Cars, certainly thought that it was likely to be the case.
[26] Both of these matters are relatively minor and do not warrant a finding that the vehicle’s failure to comply with the guarantee of acceptable quality is of a substantial character.

Issue two: What remedy (if any) is Mr Kohler entitled to?

[27] The remedies available to a purchaser of a vehicle that fails to comply with a guarantee in the Act are set out in s 18, 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.

[28] The primary remedy set out in s 18(2)(a) is that the purchaser is entitled to require the supplier of the vehicle to remedy the failure. The only exceptions to that are, as provided, if the supplier refuses, neglects or does not succeed in remedying the failure, or if the failure is of a substantial character. I have found that the failure in this case is not of a substantial character.
[29] Horizon Cars has, at all times, signalled its willingness to remedy the vehicle’s outstanding faults, in particular the coolant leak. It has also signalled its willingness to investigate the other matters identified by High Street Motors. Mr Kohler, however, has refused to allow Horizon Motors to have a further opportunity to assess the vehicle. Rather, he rejected the vehicle on 28 June 2019 and seeks a full refund of the purchase price.
[30] Mr Dixon and I consider that the appropriate remedy in the present case is to invite Mr Kohler to send the vehicle back to Horizon Cars to fix the coolant leak and to replace both front lower control arm rear bushes. Horizon Cars should also make sure that whatever repairs are needed in respect of the coolant leak also address the problem with the heater blowing cold air.
[31] Horizon Cars indicated that if it is given a further opportunity to effect repairs on the vehicle, it will provide Mr Kohler with a loan vehicle for the period while he is without his own vehicle.

Conclusion

[32] Accordingly, Mr Kohler’s rejection of the vehicle is not upheld. Nor, in my view, is he entitled to reimbursement of any of his other expenses. In particular he is not entitled to any reimbursement for the petrol used by Horizon Cars when diagnosing the sport light fault. This was a fault which required the car to be driven extensively to give an opportunity to observe the fault, which was intermittent. Mr Barlow said that, for the period when this diagnosis and repair was being carried out, Horizon Cars provided Mr Kohler with a loan vehicle.
[33] Nor is Mr Kohler entitled to any damages in respect of his lost time or earnings. Unfortunately it is one of the inevitable costs of vehicle ownership that some time will need to be spent on ensuring maintenance and any repairs can be carried out. This is not a matter for which the Tribunal ordinarily compensates people. Furthermore, I consider that Mr Kohler has adopted a fairly inflexible attitude with Horizon Cars in relation to its attempts to help him to fix his vehicle’s problems. That is despite Horizon Cars’ willingness to assist Mr Kohler to rectify the vehicle’s problems.
[34] Mr Kohler’s expectations of the vehicle have been unrealistically high, in view of its age, mileage and price, and he has not given Horizon Cars adequate opportunity to assist him in remedying the vehicle’s faults. Accordingly, the only remedy that the Tribunal is prepared to give Mr Kohler is the opportunity to have his vehicle repaired, as Horizon Cars has already offered him.

J S McHerron
Adjudicator