Gribble v Z Motors Ltd - Reference No. MVD 287/2019 [2019] NZMVDT 265 (6 December 2019)

Last Updated: 17 January 2020

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 287/2019 [2019] NZMVDT 265 BETWEEN JONATHAN GRIBBLE Purchaser AND Z MOTORS LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 26 November 2019

APPEARANCES

J Gribble, Purchaser

J Zhang and J Shih, for the Trader

DATE OF DECISION 6 December 2019

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

1. Jonathan Gribble’s application is dismissed.

_________________________________________________________________

REASONS

Introduction

[1] On 10 June 2019, Jonathan Gribble purchased a 2012 Nissan Leaf electric vehicle for $10,080 from Z Motors Ltd. Mr Gribble now seeks to return the vehicle and obtain a refund of the purchase price. He considers that Z Motors engaged in misleading conduct in breach of the Fair Trading Act 1986 (the FTA) by overstating the vehicle’s range at the time of sale. He is also concerned that the vehicle has not been of acceptable quality for the purposes of the Consumer Guarantees Act 1993 (the CGA) because its range is inadequate.
[2] Z Motors Cars says that Mr Gribble is not entitled to the remedy he seeks. It says that it provided accurate information to Mr Gribble about the vehicle’s range and battery state of health (SOH) and that the vehicle’s range is consistent with its age and SOH.

The issues

[3] Against this background, the issues requiring consideration in this case are:

• (a) Issue 1: Has Z Motors engaged in misleading conduct in breach of s 9 of the FTA by making misleading representations regarding the vehicle’s range?
• (b) Issue 2: Does the vehicle have a fault that breaches the acceptable quality guarantee in s 6 of the CGA?

Issue 1: Has Z Motors engaged in conduct that breached s 9 of the FTA?

[4] The batteries in electric vehicles degrade over time, affecting the vehicle’s range (ie the distance the vehicle can be driven before its batteries require charging).
[5] Mr Gribble says that he was attracted to this vehicle because of representations made by Z Motors as to its range. Mr Gribble says that he was told by Eric, an ex-employee of Z Motors, that the vehicle had a range of 115 km when its battery was fully charged. He says that this representation was misleading because the vehicle’s range is much less than that.

The law

[6] Section 9 of the FTA provides;

9. Misleading and deceptive conduct generally

No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

[7] The test for establishing a breach of s 9 was set out by the Supreme Court in Red Eagle Corp Ltd v Ellis:[1]

The question to be answered in relation to s 9 ... is ... whether a reasonable person in the claimant’s situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely have been misled or deceived. If so, a breach of s 9 has been established. It is not necessary under s 9 to prove that the defendant’s conduct actually misled or deceived the particular plaintiff or anyone else. If the conduct objectively had the capacity to mislead or deceive a hypothetical reasonable person, there has been a breach of s 9. If it is likely to do so, it has the capacity to do so. Of course the fact that someone was actually misled or deceived may well be enough to show that the requisite capacity existed.

Z Motors has not engaged in false or misleading conduct

[8] I am satisfied that Z Motors has not engaged in misleading or deceptive conduct for the following reasons:

• (a) the representation that the vehicle’s dashboard display showed that its range was 115km was true;
• (b) any potentially misleading impression that could be taken from that representation was immediately qualified with information that the vehicle’s range could vary depending on several external factors;
• (c) Z Motors provided further information that notified Mr Gribble about the vehicle’s battery capacity and SOH before he purchased the vehicle; and
• (d) Mr Gribble has not proven that the vehicle’s range is less than a reasonable person would have expected given the representations made and information supplied by Z Motors.
  

The dashboard display representation was true

[9] The vehicle was listed on the Trade Me website, and Mr Gribble contacted Z Motors through the Trade Me website on 1 May 2019, asking how far the vehicle will go “on full charge on ECO drive”. Eric replied in an email dated 2 May 2019 advising that the vehicle had just been charged to 100 per cent, and the dashboard showed the range as 115 km.
[10] That reading on the dashboard display is consistent with the reading of 114 km reported by Mr Gribble on 27 June 2019 and in the absence of any evidence from Mr Gribble to prove that the dashboard display representation was false, I am satisfied that Z Motors’ representation that the dashboard showed that the range was 115 km was true.

Z Motors immediately qualified the dashboard display representation

[11] In the email to Mr Gribble on 2 May 2019, Eric went on to note:

However, the exact range of full charge really depends on the driver’s driving style, road conditions, average car’s speed, temperature, the air conditioner’s working situation, and many other factors.

[12] That information is correct, because the battery capacity and SOH (and therefore the range) of an electric vehicle is dependent on such factors — and others, including the way in which the battery is charged. In that regard, I consider that a reasonable person reading the email from Eric dated 2 May 2019 would have understood that, although the dashboard display indicated that the vehicle’s range was 115 km, the range that could be obtained by the driver was ultimately dependant on many unquantifiable external factors.
[13] Accordingly, by providing this qualifying information, I consider that Z Motors ensured that a reasonable consumer would not have been misled into believing that the vehicle’s range would always be 115 km, or that the 115 km range would ever be attainable once factors such as the particular purchaser’s driving style, the road conditions and battery charging habits are taken into account.

Z Motors notified Mr Gribble about the vehicle’s battery capacity and SOH

[14] Even if the information provided by Eric on 2 May 2019 led to a misapprehension as to the state of the vehicle’s battery and its range, any misapprehension that a reasonable consumer may have been under would then have been cured by subsequent information provided by Z Motors before Mr Gribble decided to purchase the vehicle.
[15] On 9 May 2019, Eric sent Mr Gribble a report on the vehicle’s SOH obtained using the Leafspy application (which is a common tool used to measure battery SOH in Nissan Leafs). That report showed that the SOH was 72.15 per cent. I consider that this report would have put a reasonable consumer on notice that the vehicle’s battery capacity (as demonstrated by the SOH reading) was reduced and that the vehicle’s range may therefore be diminished.
[16] That appears to be the meaning that Mr Gribble took from this information, because he then raised concerns with Z Motors about the condition of the vehicle’s battery and that the battery’s condition could mean that he obtained less range than he may have anticipated. Most relevantly, on 18 May 2019, Mr Gribble sent an email to Eric stating:

Hi Eric,

I’m a bit concerned about the battery. I not prepared to make any further payments until I have found out why the battery is deteriorating so quickly. I can buy a Leaf in Auckland with more k’s but more bars for similar money. In the meantime I won’t be makings fu(remainder of word obscured) payments.

Thank you

[17] Eric responded on 18 May 2019, saying that the battery will degrade over time, expressing hope that the transaction could be completed and advising Mr Gribble that Z Motors would refund his deposit if he chose not to purchase the vehicle. Mr Gribble then responded on 18 May 2019, advising that he would feel more confident purchasing a 2013 Nissan Leaf “that would go the extra miles”. Eric responded asking if Mr Gribble wanted him to refund the deposit that same day.
[18] Despite having concerns about the battery “deteriorating so quickly” and expressing a desire to purchase a vehicle “that would go the extra miles” Mr Gribble then decided to purchase the vehicle, with the transaction completed on 10 June 2019.
[19] This email correspondence suggests that Mr Gribble knew about the state of the vehicle’s battery and that the reduced SOH could lead to a reduced range. Mr Gribble nonetheless decided to purchase the vehicle. In that regard, I do not accept Mr Gribble’s evidence that he did not know about the state of the vehicle’s battery before he purchased it and that he simply concocted concerns about the vehicle’s battery health to use as a bargaining chip to drive the price down. Instead, I consider it likely that the information provided by Z Motors led Mr Gribble to understand the true state of the vehicle’s battery capacity and that he may not obtain the range he considered ideal. He nonetheless decided to purchase the vehicle.

Mr Gribble has not proven that the vehicle’s range is less than a reasonable consumer would expect

[20] Finally, and somewhat fatally for his claim, Mr Gribble has not proven that the vehicle’s range is less than a reasonable person would have expected given the representations made by Z Motors.
[21] Mr Gribble has not had the vehicle assessed by a suitably qualified technician to determine the extent of its range or whether its range could reasonably be expected to be less in light of the representations made by Z Motors. Mr Gribble has had the vehicle assessed by David Jones Nissan in Whanganui, who conducted a basic battery assessment, which suggested that the battery was in good condition. However, Mr Gribble advises that David Jones Nissan does not have the technical expertise to provide the level of diagnosis required, meaning its report does not assist in determining the extent that the vehicle’s range is inconsistent with the representations made by Z Motors.
[22] Mr Gribble did seek to rely on an email from HVS Motors, a Christchurch based car dealer, in support of his allegation that the vehicle’s range was substandard. I do not feel able to rely on that email because the email is not a diagnosis of the vehicle. Instead, it was sent by HVS Motors in response to a Trade Me enquiry made by Mr Gribble. The enquiry was in respect of a 2011 Nissan Leaf HVS Motors was offering for sale, and there is no evidence to show that HVS Motors knew that its response would be relied upon by Mr Gribble as evidence in support of a claim before the Tribunal. Further, I am not satisfied that HVS Motors has sufficient expertise to give expert opinion on the expected range of a 2012 Nissan Leaf, or whether the range of this vehicle is deficient. Mr Gribble did not provide enough evidence to qualify HVS Motors as an expert, but instead simply asked me to accept that it was a frequent seller of electric vehicles so must know what it is talking about. In the absence of evidence proving that the author of the response from HVS Motors is expert in the range of a 2012 Nissan Leaf, I do not feel able to do that.
[23] Even if I accepted what HVS Motors said as to the vehicle’s expected range, it does not show that this vehicle’s range is inconsistent with the representations made by Z Motors.
[24] Mr Gribble’s own evidence as to the deficiencies in the vehicle’s range is not robust enough for me to be able to rely on it. For example, Mr Gribble stated in his application that “the best I can get from this car is around 75 km around town”. However, in his oral testimony Mr Gribble stated that, on the occasion he drove 75 km before recharging the battery, the vehicle’s battery capacity indicator showed that the battery still had 20 per cent charge remaining, meaning that the vehicle’s range on that day was much higher than 75 km, and potentially as high as 90 km. Given the unscientific manner in which Mr Gribble has conducted this testing, I do not feel able to rely on this evidence in determining the extent of, or any inadequacies with, the vehicle’s range.
[25] Further, it could well be that Mr Gribble’s own use of the vehicle is a significant contributing factor to the vehicle’s range being much less than he may have anticipated. Mr Gribble gave evidence that he fast charges the battery about half of the time. Mr Haynes, the Tribunal’s Assessor advises that fast charging to this extent will inevitably reduce the vehicle’s battery capacity and range. Likewise, Mr Haynes advises that Mr Gribble’s habit of frequent fast charging of the battery when it is not fully depleted will also lead to a deterioration of the battery health and reduction in the vehicle’s range. Further, Mr Gribble gave evidence that he frequently switches between the eco and normal driving modes. Mr Haynes advises that this frequent switching between modes will also negatively affect the vehicle’s battery capacity and range. Finally, Mr Gribble gave evidence that he frequently drives over hilly terrain. Again, Mr Haynes advises that driving over hills will inevitably reduce an electric vehicle’s range.
[26] Consequently, I am not satisfied that the evidence presented by Mr Gribble shows that the vehicle’s range is less than what was represented by Z Motors. Mr Gribble has not proven what the vehicle’s range is, and if it does have a reduced range, what the cause of that reduction is. Further, his evidence suggests that any reduction in range may well be caused by the manner in which he is using and charging the vehicle.
[27] Mr Gribble’s application under the FTA is therefore dismissed.

Issue 2: Does the vehicle have a fault that breaches the acceptable quality guarantee?

[28] 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.
[29] The expression "acceptable quality" is defined in s 7(1) 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.

[30] 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 Gribble’s subjective perspective.
[31] For the reasons set out above, I am not satisfied that the vehicle is of unacceptable quality. The evidence presented by Mr Gribble does not show that the vehicle’s range is unacceptable or less than a reasonable consumer could have expected given the pre-purchase representations made by Z Motors.
[32] Mr Gribble’s application also suggested that the vehicle was defective because its SOH had dropped from 72.16 per cent shortly before purchase to 68.28 per cent in September 2019.
[33] I am not satisfied that this reduction in SOH is indicative of any defect with the vehicle. Instead, I consider that it is within the normal parameters in which batteries can deteriorate in electric vehicles. I also note that the vehicle’s SOH has stabilised and the vehicle’s battery is depleting at a rate consistent with a Nissan Leaf of this age and mileage, meaning that there appears to be no underlying fault with the vehicle’s battery.
[34] Accordingly, I am not satisfied that Mr Gribble has proven that the vehicle has any defect that breaches the acceptable quality guarantee in s 6 of the CGA, and Mr Gribble’s application under the CGA is also dismissed.

DATED at AUCKLAND this 6th day of December 2019

B.R. Carter
Adjudicator

---

[1] Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].