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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 5 December 2019
IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA
MVD
248/2019
[2019] NZMVDT 216
BETWEEN KEVIN BRADLEY WINDER
Purchaser
AND SHANE GEOFFREY ROBERT SYMES
Trader
HEARING at Christchurch on 1 October 2019
MEMBERS OF
TRIBUNAL
J S McHerron, Barrister – Adjudicator
S D Gregory – Assessor
APPEARANCES
K B Winder, Purchaser
S G R Symes, Trader
DATE OF DECISION 11 October 2019
___________________________________________________________________
DECISION OF THE TRIBUNAL
___________________________________________________________________
___________________________________________________________________
REASONS
Introduction
[1] Kevin Winder has rejected the 2000 Subaru Legacy he purchased on 8 June 2019 for $2,999. The main problem with the vehicle is that it has a failing transmission, as well as engine oil and coolant leaks. Repairs are estimated to cost almost the same amount as the vehicle’s purchase price.
[2] Mr Winder named Cambelt King Ltd as respondent to his Tribunal application. Shane Symes is the director of that company. However, there was nothing in writing to confirm that Cambelt King sold the vehicle to Mr Winder. Moreover, at the hearing, Mr Symes asserted that he had sold the vehicle to Mr Winder in his personal capacity. Mr Winder did not dispute this. Accordingly, I consider that the correct respondent to Mr Winder’s application is Mr Symes himself.
[3] As at the date of sale of the vehicle, 8 June 2019, neither Mr Symes nor Cambelt King was a registered motor vehicle trader under the Motor Vehicle Sales Act 2003. Cambelt King has subsequently renewed its registration as a motor vehicle trader, with the trader number of M389258. Cambelt King was also previously a registered motor vehicle trader under the trader number M347716, but it let its registration expire on 14 July 2018.
[4] Mr Winder found the Subaru that he purchased through a listing on Facebook Marketplace under Shane Symes’ personal account. Mr Winder produced for the Tribunal a number of other listings of vehicles for sale under Mr Symes’ personal account on Facebook Marketplace as at 14 June 2019, six days after he purchased the Subaru. Unfortunately, Mr Winder was unable to produce the listing for the Subaru, but he said that it was similar to the listings for the other vehicles.
[5] As at 14 June 2019, Mr Symes had nine vehicles listed for sale on Facebook Marketplace. Two further vehicles were listed for sale on 17 June and 19 June 2019 respectively. Many, if not all, of the listings concluded with words such as “this is a secondhand vehicle [and] it is sold as is where is so buyer beware”. Mr Winder confirmed that similar words were used on the listing for the Subaru that he purchased.
[6] Before purchasing the Subaru, Mr Winder inspected it at 7 Malachy Grove in Halswell, which was the address listed on Cambelt King Ltd’s former entry on the Register of Motor Vehicle Traders. Mr Winder said that when he went to inspect the vehicle, he observed about five other vehicles at the same address, some of which had signs on them indicating they were for sale. Mr Winder said that, among the other vehicles he saw at 7 Malachy Grove, he recognised two of the vehicles from Mr Symes’ Facebook Marketplace listings.
[7] Mr Winder told the Tribunal that he asked Mr Symes if he had a motor vehicle dealer’s licence. Mr Symes told Mr Winder that he did. Mr Winder also reported that Mr Symes told him that the Subaru had no mechanical faults. Mr Winder said that he took the vehicle for a test drive and found it had “no real issues”. In particular, Mr Winder said that the vehicle’s gearbox seemed to operate satisfactorily when he drove the vehicle on the test drive.
[8] Feeling reassured by Mr Symes’ statement that he had a dealer’s licence, Mr Winder paid him the full purchase price, $2,999. No sales agreement or consumer information notice was provided in respect of the sale of the car. Mr Symes handed Mr Winder the car keys and he took the vehicle home.
[9] At the hearing, Mr Symes did not deny that he was carrying on the business of motor vehicle trading at the time he sold the Subaru to Mr Winder. He appropriately accepted that he ought to have been registered as a motor vehicle trader but was not.[1]
[10] Section 8 of the Motor Vehicle Sales Act 2003 provides as follows:
8 Who is treated as motor vehicle trader
(1) A person is treated as carrying on the business of motor vehicle trading for the purposes of this Act if—
(a) the person holds out that the person is carrying on the business of motor vehicle trading; or
(b) in any specified period, the person sells more than 6 motor vehicles, unless that person proves that those motor vehicles were not sold for the primary purpose of gain; or
(c) in any specified period, the person imports more than 3 motor vehicles, unless that person proves that those motor vehicles were not imported to be sold for the primary purpose of gain.
(2) For the purposes of subsection (1)(a), a person holds out that the person is carrying on the business of motor vehicle trading if that person—
(a) advertises or notifies or states that the person carries on the business of motor vehicle trading; or
(b) in any way represents that the person is ready to carry, or is carrying, on the business of motor vehicle trading.
(3) Subsection (1)(b) does not apply to any trustee corporation (within the meaning of section 2(1) of the Trustee Act 1956) acting in the capacity of executor, administrator, trustee, guardian, committee, manager, agent, attorney, or liquidator, or in any fiduciary capacity, unless the trustee corporation is acting on behalf of the same person or estate.
[11] At the time he sold the Subaru to Mr Winder, Mr Symes was holding himself out as carrying on the business of motor vehicle trading. The evidence produced by Mr Winder demonstrates that, through Facebook Marketplace, Mr Symes advertised that he was carrying on the business of motor vehicle trading. There was insufficient evidence to determine whether Mr Symes had sold more than six motor vehicles in the 12 months leading up to the sale of the Subaru to Mr Winder. However, in light of the number of vehicles listed on Facebook Marketplace and the number of vehicles apparently for sale at Mr Symes’ residence, as observed by Mr Winder, Mr Symes may also have satisfied the alternative limb of s 8, in s 8(1)(b).
[12] Accordingly, Mr Symes is to be treated as a motor vehicle trader under s 8(1)(a) even though he was not registered as a trader.
[13] A consequence of the fact that Mr Symes is to be treated as a motor vehicle trader is that not only was he required to be registered under s 10 of the Motor Vehicle Sales Act 2003, he was also required to ensure that every vehicle he offered or displayed for sale had a consumer information notice attached to it in a prominent position.[2] Moreover, Mr Symes was required to obtain written acknowledgement from Mr Winder that he had received a copy of the consumer information notice.[3]
[14] Furthermore, Mr Symes was obliged to keep a record of each contract for the sale of any motor vehicle that he entered into as a party.[4] It appears that none of these requirements were met. There was no sale agreement for the vehicle nor was any consumer information notice produced.
[15] This is not the first time that the Tribunal has found that Mr Symes’ and Cambelt King’s vehicle sales practices do not comply with legal requirements.[5] I intend to refer a copy of my decision to the Registrar of Motor Vehicle Traders and the Commerce Commission, to investigate whether further action should be taken against Mr Symes.
[16] Mr Symes submitted that Mr Winder is himself a motor vehicle trader. If correct, that would mean the Tribunal has no jurisdiction to hear and determine the proceeding.[6] But when pressed to provide evidence of Mr Winder’s alleged trading in motor vehicles, Mr Symes offered nothing apart from a comment Mr Winder had allegedly made when considering purchasing the Subaru, to the effect that he was also considering buying and reselling his friend’s Toyota Estima. Mr Winder denied he is a motor vehicle trader and said that he had sold one car in the last 12 months. Given the lack of evidence to support his allegation, I conclude that Mr Symes has failed to show that Mr Winder is a motor vehicle trader.
[17] Having determined that the appropriate respondent to Mr Winder’s application is Mr Symes personally, that he is properly regarded as a motor vehicle trader, and that there was insufficient evidence to suggest Mr Winder is himself a motor vehicle trader, I will proceed to consider the relevant issues in this case, which are as follows:
- (a) Did the vehicle fail to comply with the guarantee of acceptable quality?
- (b) If so, was the failure of a substantial character?
- (c) Is Mr Winder entitled to reject the vehicle?
Issue one: Did the vehicle fail to comply with the guarantee of acceptable quality?
[18] 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.
[19] “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.
[20] 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.
[21] While driving home, immediately after he purchased the Subaru, Mr Winder noticed that it took a second or two for Drive to engage after he moved the gearshift, but he did not think too much more about this. When he drove to work the following Monday, again, Drive took a while to engage. This started to concern Mr Winder, especially when the same problem occurred on his drive home.
[22] The next day, and the day after that, the vehicle needed to be revved a bit to engage Drive. While driving home from work, Mr Winder slowed down for a roundabout and when he accelerated again a large harsh shock was transmitted through the car, as if he was driving through a large pothole. This sent a big shudder through the drivetrain. Mr Winder reported that this has happened to him two or three times since he purchased the vehicle. It is important to indicate at this stage that Mr Winder has only driven the vehicle just over 300 km since purchasing it.
[23] Mr Winder took the vehicle to a mechanic, The Autoshop 2014 Ltd (The Autoshop), and left it there for several days to be assessed.
[24] The Autoshop advised Mr Winder that the vehicle’s transmission was failing and needed immediate attention to prevent further damage occurring. The specific problem was identified by The Autoshop as “low clutch bypassing” and Mr Winder was quoted $1,837.16 to repair the transmission.
[25] In addition, The Autoshop identified that the vehicle’s CV boots were leaking, that it had a coolant leak from the radiator and engine oil was leaking from the rocker cover gasket.
[26] Mr Winder produced photographs of the engine oil and coolant leaks, which were relatively serious. In total, The Autoshop estimated repair costs of $2,967.66 for the transmission, CV boots, rocker cover gasket, and radiator. This is almost the same as the purchase price for the vehicle itself. The Autoshop described its estimate as reflecting the cost of repairs required to bring the vehicle up to a serviceable standard.
Tribunal’s assessment
[27] It was clear to the Tribunal’s Assessor, Mr Gregory, and me that the vehicle failed to comply with the guarantee of acceptable quality. The combination of faults identified by The Autoshop were such that we do not consider a reasonable consumer would have regarded this vehicle as acceptable, even in light of its advanced age, high mileage and relatively low price.
[28] In addition, the warrant of fitness that came with the vehicle expires on 15 February 2020. That indicates that the warrant of fitness was nearly four months old at the time of sale. In selling the vehicle with an old warrant of fitness, Mr Symes has further contravened the legal requirements associated with selling motor vehicles. Mr Symes is required to ensure that any vehicle he sold was supplied with a warrant of fitness that was obtained no more than one month prior to the date of delivery of the vehicle.[7]
Issue two: Was the failure of a substantial character?
[29] A failure to comply with a guarantee in the Act will amount to a failure of a substantial character in the circumstances set out in s 21, which provides:
- Failure of substantial character
For the purposes of section 18(3), a failure to comply with a guarantee is of a substantial character in any case where—
(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or
(b) the goods depart in 1 or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model; or
(c) the goods are substantially unfit for a purpose for which goods of the type in question are commonly supplied or, where section 8(1) applies, the goods are unfit for a particular purpose made known to the supplier or represented by the supplier to be a purpose for which the goods would be fit, and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or
(d) the goods are not of acceptable quality within the meaning of section 7 because they are unsafe.
[30] Neither Mr Gregory nor I consider that this vehicle would have been acquired by a reasonable consumer fully acquainted with the nature and extent of its transmission failure. The fact that the transmission has failed so soon after purchase, and that Mr Winder has been advised by The Autoshop that he should cease driving the vehicle to avoid causing further damage, indicates that the vehicle is not fit to be driven. As such, it is substantially unfit for the primary purpose for which vehicles are commonly supplied.
[31] In addition, Mr Winder has established a failure of a substantial character on account of the accumulation of faults that were identified by The Autoshop, including a coolant leak requiring replacement of the radiator, the leaking rocker cover gasket and leaking CV boots.[8]
[32] In total, the estimated cost of repairs amounts to nearly the full price of the vehicle. Mr Gregory and I do not think that a reasonable consumer, having paid $3,000 for a vehicle, would expect to have to pay the same amount again in repairs almost immediately after purchase, unless the matters requiring repair were fully disclosed and accepted by the purchaser.
[33] For these reasons, I conclude that the vehicle’s failure to comply with the guarantee of acceptable quality was of a substantial character.
Issue three: Is Mr Winder entitled to reject the vehicle?
[34] On 14 June 2019, Mr Winder messaged Mr Symes on Facebook to see if he could do anything about the problems with the car. The parties had the following exchange over Facebook Messenger:
Mr Winder:
Hi Shane, bought this Subaru for [sic] you. It’s slow to engage gears. Sometimes you have to hold your foot on the brake to get it to engage forward. I’ve had it taken to an auto transmission specialist and they think the low clutch piston seal needs replacing which is a gearbox out job. Radiator also is leaking. What are your thoughts on this?
Mr Symes:
Mate it was a cheap car [sold] “as is where is”. It was fine when you test drove it. All I can do is recommend someone to look at it for you.
Mr Winder:
Hi Shane. At the time you told me it was mechanically fine, as a mechanic so I trusted your opinion. You also told me you were also a dealer.
Mr Symes:
Mate it was sold “as is where is”.
Mr Winder:
So when you told me you were a dealer what did that mean?
My understanding was, that you purchased this from a customer. And then sold it to me. You also have multiple cars for sale.
Mr Symes:
I never told you I was a dealer?
Mr Winder:
Yes you told me you had a seller’s licence.
[35] Mr Winder then sent an email to Mr Symes asking for him to refund his money, following which he would give the car back to Mr Symes. Mr Winder followed this up with a letter dated 20 June 2019 which he delivered by hand to Mr Symes at 7 Malachy Grove. In the letter, Mr Winder referred to the problems identified by The Autoshop, and the quote for repairs, and stated that he was rejecting the vehicle because of the serious faults, particularly with the transmission, due to the estimated repair costs nearly equalling the price of the vehicle.
[36] Mr Winder did not receive any response from Mr Symes to his email or letter until after he had filed an application in the Tribunal.
[37] Mr Symes initially offered to inspect the vehicle if Mr Winder brought it back. Mr Symes also claimed to have offered to refund the purchase price. At the hearing, Mr Symes repeated his offer to refund the purchase price, but said that this was conditional on being offered the opportunity to inspect the vehicle first.
[38] The remedies to which a consumer is entitled when the consumer has established a breach of a guarantee under the Act are set out in s 18, 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.
[39] Section 18(3) provides that where a consumer has established a failure of a substantial character, the consumer is entitled to reject the vehicle. This has to be done within a reasonable time and, according to the requirements of s 22 of the Act, by notifying the supplier of the decision to reject the vehicle and of the ground or grounds. Mr Winder has complied with these requirements in his email of 16 June 2019, and his follow up letter of 20 June 2019. He is therefore entitled to reject the vehicle.
[40] The Act does not provide that a supplier is entitled to inspect rejected goods before the rejection is upheld. In any event I consider that Mr Symes has forfeited any opportunity to inspect the vehicle because of the dismissive way in which he responded when Mr Winder attempted to message him over Facebook, denying any liability because the vehicle was sold “as is where is”.
[41] In Boyd v Cambelt King Ltd, I found that Mr Symes’ conduct in describing a vehicle for sale as a “private sale”, a “wholesale deal” and “as is where is” was an attempt to exclude the application of the Act which was a false and misleading representation under s 13(i) of the Fair Trading Act 1986.[9] This finding was not disturbed by the District Court on Cambelt King’s unsuccessful appeal.[10] In the present case, Mr Symes’ conduct in attempting to avoid liability to Mr Winder in respect of the Subaru also amounts to an attempt to exclude the application of the Act, in breach of s 13(i).
[42] Mr Gregory and I are satisfied that the evidence produced by Mr Winder in this case, in particular the report from The Autoshop, shows that there is a significant fault with the transmission which, in combination with the other faults will cost nearly the purchase price of the vehicle in repairs.
[43] There is no evidence the vehicle has been damaged since Mr Winder purchased it. Mr Winder said he had taken the wheels off the car, but has since replaced them. I do not consider that Mr Winder has lost the right to reject the vehicle according to any of the grounds in s 20 of the Act.
[44] Accordingly, I conclude that Mr Winder is entitled to reject the vehicle and that he is entitled to a refund of the full purchase price of $2,999, plus the cost of the inspection of the vehicle that he had carried out by The Autoshop, $184.
Conclusion
[45] Shane Symes must pay Kevin Winder $3,183 within 14 days of the date of this decision. Once this amount has been received by Mr Winder in full, he must make the vehicle available for Mr Symes to collect at Mr Symes’ expense (if any).
Referral of decision to Registrar of Motor Vehicle Traders and Commerce Commission
[46] As stated above, I have concerns about the way in which Mr Symes has been selling vehicles as an unregistered trader without the documentation required by law, and his selling of vehicles on an “as is where is” basis in breach of s 13(i) of the Fair Trading Act 1986. To allow these concerns to be further investigated, I intend to refer this decision to the Registrar of Motor Vehicle Traders and to the Commerce Commission.
J S McHerron
Adjudicator
[1] Motor Vehicle Sales Act 2003, s 10.
[2] Motor Vehicle Sales Act 2003, s 14; Consumer Information Standards (Used Motor Vehicles) Regulations 2008, reg 6(1); Fair Trading Act 1986, s 28(1).
[3] Motor Vehicle Sales Act 2003, s 16; Consumer Information Standards (Used Motor Vehicles) Regulations 2008, reg 8(2)(a).
[4] Motor Vehicle Sales Act 2003, s 21.
[5] See Boyd v Cambelt King Ltd MVD 138/2017 (30 June 2017).
[6] Motor Vehicle Sales Act 2003, s 90(1)(a).
[7] Land Transport Rule: Vehicle Standards Compliance 2002, r 9.12(3).
[8] Cooper v Ashley & Johnson Motors Ltd (1996) 7 TCLR 407 (DC).
[9] Boyd v Cambelt King Ltd MVD 138/2017 (30 June 2017) at [14].
[10] Cambelt King Ltd (S Symes) v Boyd [2018] NZDC 7786 at [26].
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URL: http://www.nzlii.org/nz/cases/NZMVDT/2019/216.html