Dansby-Scott v Mainly Cars (2014) Limited - Reference No. MVD 359/2019 [2019] NZMVDT 269 (9 December 2019)

Last Updated: 17 January 2020

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 359/2019
[2019] NZMVDT 269

BETWEEN TONI MAREE DANSBY-SCOTT

Purchaser

AND MAINLY CARS (2014) LIMITED

Trader

HEARING at Palmerston North on 13 November 2019
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

D Binding – Assessor
APPEARANCES

T M Dansby-Scott, Purchaser
K Dansby-Scott, Daughter of Purchaser (by phone)
R P Smith, Director of Master Tune Ltd (by phone)
M E King, Director of Trader

DATE OF DECISION 9 December 2019

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DECISION OF THE TRIBUNAL

___________________________________________________________________

Toni Dansby-Scott’s rejection of the vehicle is not upheld and her application to the Tribunal is dismissed.

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REASONS

Introduction

[1] Toni Dansby-Scott purchased a 2006 Holden Viva for her daughter’s first car. The car has overheated several times. Ms Dansby-Scott’s mechanic has advised that it needs a new head gasket at an estimated cost of $2,905.85. The car also has a seized left front brake and bald front tyres. Ms Dansby-Scott has rejected the car and asks the Tribunal to uphold her rejection, as she says the car is faulty, is not of acceptable quality and is not fit for purpose.
[2] Mainly Cars (2014) Ltd, which sold the car to Ms Dansby-Scott, argues that it is not liable to her. It says that Ms Dansby-Scott’s daughter continued to drive the car after it overheated and despite the fact that she knew it was running out of coolant. She even kept driving the car after she had been advised that it may have a head-gasket problem. This continued use of the car after it overheated is likely to have caused the failure of the head gasket and has potentially caused serious engine damage.
[3] The primary issue raised by this application is whether the car failed to comply with the guarantee of acceptable quality.

Did the car 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.

...

(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.

[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] Ms Dansby-Scott purchased the car from Mainly Cars (2014) Ltd on 15 June 2019 for $3,990. The car had a new warrant of fitness issued on 7 June 2019. The checksheet noted that the front tyres had low tread (at 3 mm and 2 mm respectively) and that the front brake pads were two thirds worn. However, the tyres and brakes were assessed as meeting warrant of fitness requirements. Nor was the car rejected for any other reason. The odometer reading at the time of sale was recorded on the sales documentation as 112,178 km.
[8] Ms Dansby-Scott reported that, for the next two months or so, the car appeared to be running fine. Ms Dansby-Scott’s daughter used the car each day to get to work.
[9] On 25 August 2019, Ms Dansby-Scott’s daughter was returning home from work when the car overheated. The temperature gauge went higher and higher until it reached hot. Ms Dansby-Scott’s daughter waited 10 minutes for the car to cool down then she put bottled water into the radiator.
[10] Ms Dansby-Scott and her daughter told the Tribunal that at no time prior to this overheating event had they checked the car’s coolant level.
[11] Ms Dansby-Scott’s daughter drove the car to and from work on 26 and 27 August 2019. Ms Dansby-Scott’s submissions to the Tribunal had indicated that it did not overheat again on those days. However, when we spoke with Ms Dansby-Scott’s daughter by telephone during the hearing, she said that the car produced steam from its engine compartment on three or four occasions after the first time it overheated on 25 August 2019, suggesting it may have overheated again on 26 and 27 August.
[12] On 28 August 2019, Ms Dansby-Scott’s daughter drove the car to work again. She said steam was again visible emerging from the engine compartment. Once at work, she checked the coolant level and found that it had completely run out of coolant. After letting the car cool down, Ms Dansby-Scott’s daughter replenished the coolant.
[13] On 29 August 2019, Ms Dansby-Scott’s daughter phoned Mainly Cars, which advised her to take the car to its mechanic, Automotive Design. Mainly Cars offered a loan car for Ms Dansby-Scott’s daughter to use. Ms Dansby-Scott’s daughter took the car to Automotive Design, which told her that the head gasket was about to blow. Instead of leaving the car with Automotive Design as recommended by Mainly Cars, Ms Dansby-Scott’s daughter drove home in the car again. Since then, the car has been parked up, apart from one or two visits to Master Tune, the mechanic used by Ms Dansby-Scott to assess the car.
[14] Master Tune produced a report in respect of the car, dated 21 September 2019, in which it stated that the engine appears to have had a serious coolant leak from the rear of the engine area over a period of time, which was evident by the build-up of staining on the engine. Master Tune produced photographs showing the staining to which it referred. On closer inspection, Master Tune said it appears an additive such as copper seal, or some other leak stop additive, had been used to mask the coolant leak.
[15] Master Tune also noted that the car’s left front brake disc had a lot of heat spots in it and that while trying to rotate the wheel, the technician noted that the left front brake was seized on and the brake discs themselves were badly worn, not allowing the disc pads to make full contact. In addition, Master Tune noted that both front tyres were in an unwarrantable condition. Master Tune questioned the condition of the brakes and tyres at the time of the warrant of fitness inspection. In its experience, it would have taken a substantial period for the brakes to get to the condition that they were found to be in.
[16] Based on Master Tune’s report, Ms Dansby-Scott rejected the car on or around 1 October 2019.
[17] The Tribunal asked Ms Dansby-Scott to obtain a report from an MTA-assured workshop on the exact cause of the overheating and a detailed quotation of the cost of repairs needed to bring the car to a usable standard.
[18] Ms Dansby-Scott produced a report from Master Tune reiterating its earlier advice that the car appears to have had a serious coolant leak from the rear of the engine over a period of time, which was evident by the buildup of staining on the engine, and that an additive such as copper seal or other stop leak additive had been used to mask the leak. Master Tune produced an estimate for replacing the head gasket and renewing the thermostat and top radiator hose in the sum of $2,905.85. In addition, Rodney Smith, Master Tune’s director and technician, who diagnosed Ms Dansby-Scott’s car, told the Tribunal that its head gasket had blown and that bubbles were observed in the coolant.
[19] On behalf of Mainly Cars, Ms King submitted as its primary position that it had no liability under the Act as the problems that have arisen are symptomatic of the car’s age, mileage and price. In the alternative, Mainly Cars submitted that as Ms Dansby-Scott’s daughter had continued to drive the car, despite the fact it was overheating and running out of water, she had contributed to the damage to the car.
[20] Mainly Cars submitted that, instead of continuing to drive the car, Ms Dansby-Scott’s daughter should have stopped driving it immediately upon noticing that it was overheating. Mainly Cars submitted that Ms Dansby-Scott’s daughter potentially caused more damage to the car’s engine by continuing to drive it while an obvious overheating issue was present.
[21] Mainly Cars has nevertheless offered to contribute half of the cost of repairs, as long as those repairs are carried out by a workshop that Mainly Cars deals with, so that the labour component and parts can be charged to it at wholesale rates. Mainly Cars has invited Ms Dansby-Scott to meet half of the cost of repair. Mainly Cars also points out that it offered Ms Dansby-Scott a loan vehicle while the repair was being undertaken.

Tribunal’s assessment

[22] The Tribunal’s Assessor, Mr Binding, did not consider that there was enough evidence to show that there was a pre-existing fault with the cooling system. The fact that a leak in the cooling system arose after Ms Dansby-Scott’s daughter had only driven about 4,000 km since acquiring the car, arguably indicates that it was insufficiently durable. However, if Ms Dansby-Scott’s daughter had taken the car for repairs immediately after the car overheated the first time, it is possible that it would only have been necessary to repair the leak, which is likely to have been much less expensive than the repair now required. Mainly Cars was responsive and cooperative as soon as Ms Dansby-Scott’s daughter indicated there was a problem with the vehicle. As soon as it was contacted, Mainly Cars asked Ms Dansby-Scott’s daughter to take the vehicle to its mechanic. This suggests that, if it had been contacted sooner, before more damage was done, Mainly Cars is likely to have assisted with a full repair to the car at its cost.
[23] There is insufficient evidence to indicate that the car would have needed its head gasket to be replaced after the first overheating event, reported by Ms Dansby-Scott as having occurred on 25 August 2019. Rather, I consider it more likely, based on the evidence, that it was Ms Dansby-Scott’s daughter’s continuing to use the vehicle after its first overheating event that has led to such expensive repairs being required.
[24] Ms Dansby-Scott’s daughter’s evidence was that she observed steam coming from the engine compartment on three or four occasions after the first time the car overheated. I do not consider that a reasonable consumer would have continued to drive the car in this manner after it overheated the first time. Moreover, it is certainly arguable that the car would have complied with the guarantee of acceptable quality if it had not been used in that manner or to that extent. I therefore conclude that the car has been misused by Ms Dansby-Scott’s daughter continuing to drive it after it overheated. Accordingly, I consider that Mainly Cars has a valid defence to Ms Dansby-Scott’s claim under s 7(4) of the Act and that Ms Dansby Scott has failed to establish a breach of the acceptable quality guarantee.

Other alleged defects

[25] In respect of the car’s brakes, there was insufficient evidence to assess whether they failed to comply with the guarantee of acceptable quality. Ms Dansby-Scott will need to allow Mainly Cars to have any opportunity to assess the brakes for itself. Once it has done so, it will be able to form a view as to whether it is prepared to assist with this repair as well. The bald tyres appear to be a matter of ordinary wear and tear. The evidence indicates the tyres were adequate to meet warrant of fitness requirements at the time of sale. A reasonable consumer ought to expect to have to replace their car’s tyres from time to time as part of maintaining their vehicle in safe condition.

Next steps

[26] I consider that the appropriate thing to occur next is for Ms Dansby-Scott to allow Mainly Cars to assess the extent of damage for itself and to make good on its offer to contribute half of the cost of repairs. This, in Mr Binding’s view, was a reasonable offer in light of Ms Dansby-Scott’s daughter continuing to use the car after it had overheated.
[27] I do not think Ms Dansby-Scott was entitled to reject the car without giving Mainly Cars an opportunity to assess the car’s defects for itself. Nor do I consider that Ms Dansby-Scott has established a failure to comply with the guarantee of acceptable quality. Rather, I consider that Ms Dansby-Scott has rejected the car without adequate consideration of Mainly Cars’ reasonable offer.
[28] Ms Dansby-Scott is not entitled to reject the car. If she wishes Mainly Cars to contribute to the costs of repairs, she should allow Mainly Cars to have the car repaired by its preferred workshop and give it the opportunity to repair the car’s head gasket and brakes with a contribution of 50 per cent of the repair costs.

Conclusion

[29] For the above reasons, Ms Dansby-Scott’s application is dismissed.

J S McHerron
Adjudicator