Powierza v Robert Allen Wholesale Ltd - Reference No. MVD 379/2019 [2019] NZMVDT 292 (24 December 2019)

Last Updated: 17 January 2020

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 379/2019 [2019] NZMVDT 292 BETWEEN MAREK POWIERZA Purchaser AND ROBERT ALLEN WHOLESALE LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 14 November and 19 December 2019

APPEARANCES

S Mitchell and M Powierza, Purchaser (by telephone) S Powierza, Witness for the Purchaser

S Goldingham and R Allen, for the Trade

DATE OF DECISION 24 December 2019

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DECISION OF THE TRIBUNAL

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1. Marek Powierza’s application to reject the vehicle is upheld.
2. Robert Allen Wholesale Ltd shall, within 10 working days of the date of this decision, pay $7,450 to the estate of Marek Powierza.

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REASONS

Introduction

[1] Marek Powierza purchased a Ford Transit van from Robert Allen Wholesale Ltd, trading as RAW Motors, for $7,450 on 25 June 2019. A little more than three weeks later, the vehicle was destroyed by fire. Mr Powierza then rejected the vehicle, alleging that the fire was caused by an electrical fault meaning the vehicle has not been of acceptable quality for the purposes of the Consumer Guarantees Act 1993 (the Act). Robert Allen Wholesale denies liability. It says that the cause of the fire has not been proven, so it cannot be attributed to a fault with the vehicle.
[2] Marek Powierza attended the first hearing by telephone but sadly passed away a few days later before this matter could be completed. With the consent of his estate, Mr Powierza’s claim was continued. Stuart Mitchell – Mr Powierza’s son-in-law – represented Mr Powierza’s estate.

The Issues

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

• (a) Issue 1: Did the vehicle have a fault that breached the acceptable quality guarantee in s 6 of the Act?
• (b) Issue 2: Is the fault a failure of a substantial character?
• (c) Issue 3: What remedy is Mr Powierza’s estate entitled to under the Act?

Issue 1: Did the vehicle have a fault that breached the acceptable quality guarantee?

[4] Section 6 of the Act imposes on suppliers and manufacturers of consumer goods "a guarantee that the goods are of acceptable quality." Section 2 of the Act 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 Act 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 Powierza’s subjective perspective.
[7] The vehicle caught fire on 17 July 2019 while parked at Mr Powierza’s home. Mr Powierza’s son Stefan was nearby and was able to extinguish the fire, but not before significant damage was done.
[8] The vehicle was subsequently assessed by Robert Watson, a Senior Fire Risk Management Officer with the New Zealand Fire Service and a report from Mr Watson was provided to the Tribunal. That report contains colour photographs that show that the front of vehicle, particularly the dashboard, has been damaged by the fire. Mr Watson considered that the fire was accidental and believed that the fire resulted from an undetermined fault in the electrical wiring behind the dashboard.
[9] Mr Mitchell and Stefan Powierza both allege that the fire was caused by an inherent defect within the vehicle, possibly caused by repairs to the vehicle’s A pillar before the vehicle was supplied to Mr Powierza. Stefan Powierza suggests that, while welding the A pillar, Robert Allen Wholesale may have inadvertently tampered with the wiring loom, causing an electrical fault that triggered the fire.
[10] Robert Allen Wholesale denies performing any repairs that could have interfered with the vehicle’s wiring. It says that, despite Stefan Powierza’s claims, it did not perform any welding on the vehicle and did not touch the vehicle’s wiring. It says that it performed only the work required to obtain a warrant of fitness, none of which required any interference with the vehicle’s wiring or electrical system.
[11] I accept Robert Allen Wholesale’s evidence on this point and am satisfied that the evidence does not show that the fire was caused by any work it performed on the vehicle before sale.
[12] In its defence, Robert Allen Wholesale suggested that the fire may have been caused by Stefan Powierza, or someone else, performing work on the vehicle — including by tampering with, or removing, the vehicle’s radio. It says that Stefan Powierza had expressed an intention to replace the vehicle’s radio, and it believes that the fire may have been caused by Stefan Powierza’s attempt to do so. Robert Allen Wholesale also suggested that the photographs provided by Mr Watson show that the radio had been removed before the fire, as its LED display was undamaged.
[13] I am not satisfied that the evidence shows that any such work was performed. Stefan Powierza denied performing any work on the radio, and I accept his evidence. Further, I am not satisfied that the undamaged LED display proves that the radio had been removed. The photographs show that most of the fire damage was caused to the area above the back of the radio, with little damage to the front of the dashboard where the radio’s face would have been located. I note, in particular, that there are air conditioning controls directly beneath the radio which have been largely unaffected by the fire, suggesting that the fire was not particularly intense in the part of the dashboard where the radio’s face was located. Additionally, there are clear scorch marks on the top rear of the radio, in precisely the location where the fire appears to have been most intense, suggesting the radio was in situ at the time of the fire. I am therefore satisfied that the radio was intact when the fire occurred and that it had not been removed or tampered with.
[14] There was also some suggestion that Stefan Powierza may have deliberately lit the fire. I am satisfied that he did not. Mr Watson’s report made no mention of any sign of the fire being intentionally lit, and I accept Stefan’s evidence that he did not start the fire.
[15] Accordingly, I consider it most likely that, as set out in Mr Watson’s report, the fire was caused by an unidentified fault in the vehicle’s wiring or electrical system that caused the vehicle to spontaneously ignite. The vehicle was therefore not of acceptable quality for the purposes of s 6 of the Act. A reasonable consumer would not expect a recently purchased vehicle to spontaneously ignite.

Issue 2: Is the fault a failure of a substantial character?

[16] Under s 18(3) of the Act, Mr Powierza may reject the vehicle if it has a fault that amounts to a failure of a substantial character. A failure of a substantial character is defined in s 21 of the Act:

21. 21 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.

[17] Section 21(a) of the Act applies to this case. The question I must answer is whether the faults that this vehicle has, are such that a reasonable consumer, fully acquainted with the true nature and extent of the faults, would not have purchased the vehicle.
[18] I am satisfied that the fault that caused the vehicle to spontaneously ignite is a failure of a substantial character. A reasonable consumer would not have purchased the vehicle if they had known that it had a fault that would cause it to set on fire.

Issue 3: What remedy is Mr Powierza now entitled to under the Act?

[19] The remedies relevant to this claim are set out in s 18 of the Act, 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.

[20] Having rejected the vehicle under s 18(3)(a) of the Act, under s 23(1)(a) of the Act, Mr Powierza’s estate is entitled to recover all amounts paid in respect of the vehicle. Accordingly, the Tribunal orders that Robert Allen Wholesale shall, within 10 working days of the date of this decision, pay $7,450 to Mr Powierza’s estate.
[21] During his evidence on the first day of the hearing, Marek Powierza says that he purchased the van to enable Stefan to move from Auckland to Whanganui. Mr Powierza’s estate now seeks to recover $1,800, being the cost it subsequently incurred in hiring a rental van to transport Stefan Powierza’s belongings to Whanganui in October 2019.
[22] Applying s 18(4) of the Act, I am not satisfied that it is entitled to recover that cost. Although the cost was incurred, I am not satisfied that it was a reasonably foreseeable consequence of the vehicle catching fire. Certainly, if Robert Allen Wholesale had been told that the vehicle was being purchased with the specific intention of transporting Stefan and his belongings to Whanganui, then this cost may have been reasonably foreseeable consequence of the vehicle becoming unusable because of the fire. However, Robert Allen Wholesale was not told of this intended purpose, and I am not satisfied that it should be obliged to compensate Mr Powierza’s estate in those circumstances.

DATED at AUCKLAND this 24th day of December 2019

B.R. Carter
Adjudicator