Paul v Free to Sel=?ISO-8859-1?Q?l_=96_Northland_Ltd_?=- Reference No. MVD 349/2019 [2019] NZMVDT 264 (5 December 2019)

Last Updated: 17 January 2020

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 349/2019 [2019] NZMVDT 264 BETWEEN KENNEDY PAUL Purchaser AND FREE TO SELL – NORTHLAND LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S D Gregory, Assessor

HEARING at Whangarei on 29 November 2019

APPEARANCES

K Paul, Purchaser D Paul, Witness for the Purchaser

A Campi, for the Trader

DATE OF DECISION 5 December 2019

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DECISION OF THE TRIBUNAL

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1. Kennedy Paul’s application is dismissed.

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REASONS

Introduction

[1] Kennedy Paul wants to reject the 2008 Nissan Navara he purchased from Free to Sell – Northland Ltd for $13,995 in May 2019. Mr Paul says that the vehicle’s water pump developed a leak, which caused the vehicle to overheat, cracking the cylinder head. Mr Paul says that the vehicle has not been of acceptable quality for the purposes of the Consumer Guarantees Act 1993 (the CGA) and that the engine damage amounts to a failure of a substantial character, justifying rejection.
[2] Free to Sell says that the vehicle has been as durable as a reasonable consumer would consider acceptable. It also noted that Mr Paul continued to drive the vehicle after he became aware that it was using excessive amounts of water.

The issue

[3] The sole issue requiring consideration is whether the vehicle has been of acceptable quality for the purposes of s 6 of the CGA?

Has the vehicle been of acceptable quality?

[4] Section 6 of the CGA imposes on suppliers and manufacturers of consumer goods "a guarantee that the goods are of acceptable quality." Section 2 of the CGA 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 CGA 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 Paul’s subjective perspective.
[7] In about late August 2019, while Mr Paul was driving to work, the vehicle overheated, with steam or smoke coming from the engine bay. Mr Paul immediately pulled over and saw coolant fluid leaking from beneath the vehicle. He had the vehicle towed home, where he topped up the coolant fluid and tested the vehicle. The engine overheated almost immediately, with water leaking from the beneath the engine bay.
[8] The vehicle has since been assessed by Phil Birss Ltd, a Hamilton based automotive engineer, which considered that the vehicle had overheated due to a “major leak” from the water pump. Mr Paul advised that Phil Birss considered that the overhearing had caused the vehicle’s cylinder head to crack.
[9] Although I have reservations in accepting the evidence from Phil Birss Ltd, in that its report makes no mention of the vehicle having a cracked head, Mr Gregory, the Tribunal’s Assessor, advises that it is likely that the vehicle does have a cracked head. Mr Gregory says that evidence from Mr Paul is consistent with the vehicle overheating severely and that it is common for diesel Nissan Navara’s to develop a cracked head when they overheat to this extent. Accordingly, I am satisfied that it is likely that the vehicle’s engine has a cracked head and that the engine requires replacement or an expensive overhaul.
[10] Free to Sell does not dispute that the vehicle has a cracked head. However, it says that it should have no liability because the vehicle has been as durable as a reasonable consumer would consider acceptable and because Mr Paul has caused the engine damage by driving the vehicle after he knew that it was consuming an excessive amount of coolant fluid.
[11] Free to Sell’s submission that Mr Paul caused the engine damage by continuing to drive the vehicle is significant, because under s 7(4) of the CGA the vehicle will not fail to comply with the acceptable quality guarantee if the engine damage was caused by the vehicle being used in a manner inconsistent with the manner in which a reasonable consumer would use it.

Mr Paul caused the engine damage by driving the vehicle when he should not have

[12] The vehicle’s engine was replaced before purchase, with a reconditioned engine and new water pump installed. Mr Paul advises that after he purchased the vehicle he then regularly checked the vehicle’s coolant fluid levels, and for the first three months noticed no obvious signs of the vehicle consuming an excessive amount of coolant fluid. In his evidence he said that he put perhaps half a litre of coolant fluid into the vehicle each month.
[13] The vehicle was then serviced by Barry Wood Automotive Ltd on 22 August 2019, during which its coolant level was also assessed, with no signs of any coolant consumption noted. About three days later Mr Paul noticed that the vehicle had used approximately 500 ml of coolant fluid. At that stage, I consider a reasonable person would have been put on inquiry that the vehicle appeared to be using substantial amounts of coolant fluid. That suspicion should have been confirmed the following day when Mr Paul discovered that the vehicle had used an additional 500 ml to one litre of coolant fluid. That extent of fluid usage is highly unusual and should have led Mr Paul to understand that the vehicle had a fault that was causing it to use a substantial amount of coolant fluid. Given the high risk that a fault that causes a vehicle to consume coolant fluid can cause a vehicle to overheat and cause damage to its engine, I consider that a reasonable consumer would have stopped using the vehicle immediately until the cause of the coolant fluid consumption was diagnosed and rectified.
[14] Mr Paul did not do that, and instead chose to drive the vehicle to work (a journey of approximately 90 minutes). About 40 minutes into this journey, the vehicle overheated, causing the significant engine damage that is now present.
[15] Mr Paul says that he continued to use the vehicle because he did not consider that the coolant fluid consumption was too unusual, as other work vehicles he uses require topping up with one litre of coolant fluid daily. That may be the case but, ordinarily, this level of coolant consumption is a clear sign that a vehicle has a fault that can cause it to overheat, which can in turn cause significant engine damage.
[16] In those circumstances, by continuing to drive the vehicle after discovering that it was consuming excessive amounts of coolant fluid, which ultimately caused the engine to overheat and suffer significant damage, I am satisfied that Mr Paul has used the vehicle in a manner inconsistent with the manner in which a reasonable consumer would have used it.
[17] Accordingly, applying s 7(4) of the CGA, I am satisfied that the significant engine damage does not breach the acceptable quality guarantee in s 6 of the CGA, and Mr Paul’s application is dismissed.

DATED at AUCKLAND this 5th day of December 2019

B.R. Carter
Adjudicator