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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 17 January 2020
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IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
BETWEEN CHRISTINA JOY MITCHELL
Purchaser
AND TRADIN POST LTD
Trader
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MEMBERS OF TRIBUNAL
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B R Carter, Barrister – Adjudicator
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S Haynes, Assessor
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HEARING at Auckland on 9 and 19 December 2019
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APPEARANCES
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C J Mitchell, Purchaser
M Mitchell, G Clark, Witnesses for the Purchaser
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J Lambdin and C White, for the Trader
B Zino-Williams, Witness for the Trader
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DATE OF DECISION 24 December 2019
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_________________________________________________________________
DECISION OF THE TRIBUNAL
_________________________________________________________________
_________________________________________________________________
REASONS
Introduction
[1] Christina Mitchell wants to reject the 2010 Range Rover Sport she purchased for $31,000 from Tradin Post Ltd in May 2019. Mrs Mitchell says that the vehicle has not been of acceptable quality for the purposes of the Consumer Guarantees Act 1993 (the CGA) because it had several pre-existing faults, many of which Tradin Post has failed to rectify, and that further faults have arisen since Tradin Post’s last repair attempt.
[2] Tradin Post says that it has made genuine attempts to rectify the vehicle’s faults and remains willing to perform any further required repairs. It says that Mrs Mitchell should not therefore be entitled to reject the vehicle.
The issues
[3] Against this background, the issues requiring consideration are:
- (a) Issue 1: Does the vehicle have faults that breach the acceptable quality guarantee in s 6 of the CGA?
- (b) Issue 2: Has Tradin Post failed to repair the faults within a reasonable time?
- (c) Issue 3: Are the faults a failure of a substantial character?
- (d) Issue 4: What remedy is Mrs Mitchell entitled to under the CGA?
Issue 1: Does the vehicle have faults that breach the acceptable quality guarantee?
[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(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.
[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 Mrs Mitchell’s subjective perspective.
The pre-existing faults
[7] The vehicle had several pre-existing faults, including substandard tyres, split front wiper blades, a disconnected breather hose, a cracked passenger side rear indicator, a split CV boot, worn suspension components, and a faulty air suspension compressor.
[8] Mrs Mitchell (or rather her son Matthew Mitchell, who is the primary driver of the vehicle) did not discover many of these faults until it was taken to Matt’s Automotive Ltd in Taradale on 5 June 2019, after one of its tyres had blown two days earlier. Matt’s Automotive found several faults, including many that it considered would have caused the vehicle to fail a warrant of fitness inspection had one been performed in the month before sale as required by Land Transport Regulations.[1]
[9] The vehicle was then assessed by Bayswater European Ltd, a Napier based Land Rover franchise, which found many of the same faults identified by Matt’s Automotive.
[10] Mrs Mitchell then attempted to reject the vehicle, but after discussions with John Lambdin, a manager at Tradin Post, she agreed to give Tradin Post an opportunity to rectify the vehicle’s faults. The vehicle was then sent to Top of Range Automotive Ltd — an Auckland based repairer — in July 2019, with instructions from Tradin Post to perform all repairs required to bring the vehicle to an acceptable standard.
[11] I heard evidence from Brandon Zino-Williams, of Top of Range Automotive, who advised that the following components were replaced:
- front brake rotors, brake pads and brake wear sensors;
- front wiper blades;
- front right-hand CV boot and related components;
- left front inner CV boot clips;
- two rear toe arms;
- front sway bar bushes;
- the key battery and cover; and
- the air suspension compressor and mounting bracket;
[12] Mr Zino-Williams says that Top of Range Automotive performed an extensive assessment of the vehicle and rectified the faults that it thought required repair. Top of Range Automotive charged Tradin Post more than $4,000 for these repairs. The vehicle was returned to Mrs Mitchell on about 6 August 2019.
[13] I am satisfied that the faults found by Top of Range Automotive mean that the vehicle was not of acceptable quality for the purposes of s 6 of the CGA. A reasonable consumer would not expect a vehicle of this price, age and mileage to be supplied with such an extensive list of pre-existing issues.
The ongoing faults
[14] Mr Mitchell says that further faults then developed, so he took the vehicle to Taradale Kwik Fit Automotive in Taradale, which performed a diagnostic scan on the vehicle on 20 September 2019. The vehicle was then assessed again by Bayswater European. As a result of those assessments, Mr Mitchell claims that some of the pre-existing faults remain unrectified, and that further faults have now developed. In particular, he claims that:
- the vehicle’s battery is at the end of its life;
- the cracked rear indicator has not been replaced;
- the intake manifold is leaking;
- the vehicle is stuck in diesel particulate filter (DPF) regeneration mode, which restricts the vehicle’s engine performance;
- the rear stability bars are still leaking;
- the vehicle has a gearbox fault, which affects the operation of the ABS system; and
- various fault codes have been found, suggesting other undiagnosed faults are present.
The faulty battery
[15] I am satisfied that the vehicle’s battery is faulty and requires replacement. The diagnostic scans of the vehicle performed on 28 June 2019 (about one month after purchase) and on 20 September 2019 both contain fault codes relating to voltage issues within the vehicle. Mr Haynes, the Tribunal’s Assessor, advises that those voltage issues are usually caused by a defective battery.
[16] I am satisfied that the condition of the vehicle’s battery means that it has not been of acceptable quality for the purposes of s 6 of the CGA. Although a battery is a consumable item that a consumer can expect to replace from time to time, the evidence shows that the vehicle’s battery was causing voltage issues shortly after purchase, meaning that it was not as durable as a reasonable consumer would consider acceptable.
The cracked rear indicator
[17] The passenger side rear indicator remains cracked. Although Tradin Post initially claimed to have rectified this fault, Mr Zino-Williams advised that Top of Range Automotive had not replaced the cracked indicator and Bayswater European has confirmed the ongoing existence of the fault.
[18] I am satisfied that this fault means the vehicle has not been of acceptable quality because the vehicle was not as free of minor defects as a reasonable consumer would consider acceptable. The cracked indicator will cause the vehicle to fail a warrant of fitness inspection and is likely to have existed at the time of sale. A reasonable consumer would not expect a vehicle sold by a registered motor vehicle to be supplied with such a pre-existing warrant of fitness failure.
The leaking intake manifold
[19] The vehicle has also developed a leak from its intake manifold. This fault was not present when the vehicle was assessed by Bayswater European in June 2019 or when the vehicle was repaired by Top of Range in July and August 2019. However, I am satisfied that it developed shortly thereafter, as evidenced by the diagnostic scan performed by Taradale Kwik Fit, which found fault codes relating to the leaking manifold, and a subsequent diagnosis by Bayswater European. In that regard, I heard evidence from Matt Archer of Bayswater European, who confirmed the existence of a leaking manifold. Mr Zino-Williams also advised that a leaking manifold is a common fault in Land Rover’s of this age and mileage.
[20] That leaking manifold is also likely to be causing the vehicle to become stuck in DPF regeneration mode, restricting its performance. Diesel vehicles have a DPF, which is designed to remove diesel particulate matter from the vehicle’s exhaust gases. The vehicle is programmed to burn off the accumulated particulate when the DPF becomes full. That process is known as DPF regeneration.
[21] Mr Haynes advises that the leaking manifold can affect the DPF regeneration process because the leaking manifold can cause excessive carbon build up, which blocks the DPF, causing the DPF regeneration to fail. In turn, the engine goes into restricted performance mode, to prevent any damage occurring to the engine. Both Mr Archer and Mr Zino-Williams considered it likely that the DPF regeneration fault is being caused by the leaking intake manifold.
[22] I am therefore satisfied that the vehicle has a leaking manifold, which is causing the vehicle to be stuck in DPF regeneration mode, restricting its performance. This fault means that the vehicle has not been of acceptable quality for the purposes of s 6 of the CGA, because a reasonable consumer would not expect such a fault to arise in a vehicle of this price, age and mileage so shortly after purchase.
The leaking rear stability bars
[23] Mr Mitchell says that the vehicle has a pre-existing leak from its rear stability bars that will cause it to fail a warrant of fitness inspection. Mr Archer agrees and says that the leak will cause the vehicle to fail a warrant of fitness inspection.
[24] Mr Zino-Williams disagrees. He says that there is a minor seepage of fluid from the rear stability bars, which he considers to be a common attribute of Land Rovers of this age and mileage. Mr Zino-Williams considers that the seepage simply needs to be occasionally wiped away and does not amount to a warrant of fitness failure.
[25] As applicant, Mrs Mitchell must prove that it is more likely than not that the vehicle has leaking rear stability bars that would cause it to fail a warrant of fitness inspection. Mr Haynes advises that whether faults such as leaking rear stability bars will fail a warrant of fitness inspection depends to a great extent on the judgment of the particular warrant of fitness inspector. Given the conflicting evidence from two credible and qualified witnesses as to the nature and extent of this fault, and given the age and mileage of the vehicle, I am not satisfied that Mrs Mitchell has proven that the condition of the rear stability bars is unacceptable.
The gearbox fault and other fault codes
[26] Mr Mitchell also considers that the vehicle may have a gearbox fault and other faults consistent with the fault codes found by Taradale Kwik Fit. Other than the existence of these fault codes, and the accompanying warning messages on the dashboard display, Mr Mitchell presented no evidence to prove the existence of any underlying fault.
[27] Mr Haynes advises that it is highly likely that the gearbox fault and other fault codes complained of by Mr Mitchell have been caused by the defective battery. Mr Haynes advises that a defective battery can cause incorrect voltage to be sent to the vehicle’s electrical components, triggering precisely the type of fault codes being found in this vehicle. It is highly likely that replacing the battery will rectify these problems.
[28] Accordingly, I am not satisfied that the vehicle has any underlying fault with its gearbox or any other components to which the fault codes relate. Instead, its battery requires replacement.
Issue 2: Has Tradin Post failed to rectify the vehicle’s faults within a reasonable time?
[29] Mrs Mitchell claims that she is entitled to reject the vehicle under s 18(2)(b)(ii) of the CGA because Tradin Post has failed to rectify many of the vehicle’s faults. Section 18 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.
[30] Mrs Mitchell asked Tradin Post to rectify the list of faults initially found by Matt’s Automotive and Bayswater European. I am satisfied that Tradin Post then made a reasonable attempt at rectifying those faults and that most of those existing faults were rectified by Top of Range Automotive, at a cost to Tradin Post of more than $4,000.
[31] It did not replace the vehicle’s battery or cracked rear indicator as it should have, but I am not satisfied that those oversights mean that Tradin Post has failed to rectify the faults were present in the vehicle within a reasonable time. In that regard, I accept the evidence from Tradin Post that it sought to ensure that the vehicle was repaired to an acceptable standard, and that any failure to replace the battery or cracked indicator was an unintentional oversight.
[32] Considering its genuine efforts to otherwise rectify the vehicle’s faults, and the ease with which the overlooked faults can now be rectified, I consider that the company should be given a further opportunity to do so.
Issue 3: Are the faults a failure of a substantial character?
[33] Under s 18(3) of the CGA, Mrs Mitchell may also 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 CGA:
- 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.
[34] Section 21(a) of the CGA 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.
[35] I am not satisfied that any one of the faults that breaches the acceptable quality guarantee is such that a reasonable consumer would have declined to purchase the vehicle. Each of the faults that breaches the acceptable quality guarantee was, or can be, rectified and will not affect the ongoing performance of the vehicle. Further, given the vehicle’s price, age and mileage, and the realistic expectations that a consumer must have for the quality and durability of such a vehicle, I am not satisfied that any of the faults, when considered separately, are such that a reasonable consumer would have declined to purchase the vehicle.
[36] I also am not satisfied that the vehicle’s accumulated defects are a failure of a substantial character. In Cooper v Ashley & Johnson Motors Ltd, the District Court stated that a purchaser may also reject a vehicle where there has been an accumulation of defects, even when those defects may not amount to a failure of substantial character in their own right.[2] The Court noted that a point will eventually be reached where the purchaser could “say convincingly that he or she had no confidence in the reliability of the vehicle”.[3]
[37] Although the vehicle has had several faults, both Mr Zino-Williams and Mr Archer (the two qualified mechanics who inspected the vehicle and gave evidence) say that the vehicle’s condition is nonetheless consistent with its age and mileage. It seems that Land Rovers of this age are prone to mechanical and electrical defects and often require extensive, and expensive, ongoing maintenance.
[38] Because the condition of the vehicle is consistent with its age and mileage, and because the remaining faults can be quickly rectified, I am not satisfied that a reasonable consumer would have reached the point that it had no confidence in the ongoing reliability of the vehicle. Accordingly, Mrs Mitchell is not entitled to reject the vehicle.
[39] It is also worth noting, even if Mrs Mitchell was entitled to reject the vehicle, she has lost that right because the vehicle has been damaged. Section 20 of the CGA sets out the circumstances in which a purchaser loses the right to reject a vehicle. Relevant to this case, s 20(1)(c) of the CGA states:
20 Loss of right to reject goods
(1) The right to reject goods conferred by this Act shall not apply if—
...
(c) the goods were damaged after delivery to the consumer for reasons not related to their state or condition at the time of supply ...
[40] I am satisfied that the vehicle has been damaged since it was sold to Mrs Mitchell. As shown in photographs presented by Mr Mitchell, the vehicle has minor damage to its front bumper, which will cost $494.50 to rectify.
[41] Although Mrs Mitchell may be able to repair the damage easily and cheaply, the fact that the vehicle requires repair shows that it has been damaged and I am satisfied that the damage is sufficient to amount to damage for the purposes of s 20(1)(c) of the CGA and that Mrs Mitchell has lost the right to reject the vehicle.
[42] Mrs Mitchell will undoubtedly consider this conclusion to be harsh, given the relatively minor nature of the damage compared to the value of the vehicle. However, I have no discretion under s 20(1)(c) of the CGA. Once I am satisfied that the vehicle has been damaged while in Mrs Mitchell’s possession, I have no option but to conclude that she has lost the right to reject the vehicle.
Issue 4: What remedy is Mrs Mitchell now entitled to under the CGA?
[43] The remedies relevant to this claim are set out in s 18 of the CGA, 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.
[44] Under s 18(2)(a) of the CGA, Mrs Mitchell is entitled to have the outstanding faults that breach the acceptable quality guarantee rectified within a reasonable time. In that regard, the Tribunal orders that Tradin Post shall, within 15 working days of the date of this decision:
- (a) replace the cracked rear indicator;
- (b) repair the leaking intake manifold and rectify any ongoing fault with the DPF regeneration process; and
- (c) replace the vehicle’s battery.
[45] Mrs Mitchell is also entitled to recover $276.60, being the cost of having the vehicle’s defects assessed by Bayswater European on 28 June 2019.
[46] Mrs Mitchell is not entitled to recover the cost of replacing the vehicle’s tyres. In Acquired Holdings Ltd v Turvey, the High Court concluded that under s 18(2) of the CGA, a consumer must first give the supplier an opportunity to remedy a failure before having it rectified elsewhere and recovering the cost of repairs from the supplier.[4] Mrs Mitchell had the tyres replaced without first giving Tradin Post an opportunity to do so. Accordingly, she is not entitled to recover that cost.
DATED at AUCKLAND this 24th day of December 2019
B.R. Carter
Adjudicator
[1] Land Transport Rule: Vehicle Standards Compliance 2002, r 9.12(3).
[2] Cooper v Ashley & Johnson Motors Ltd (1996) 7 TCLR 407 (DC).
[3] At 417.
[4] Acquired Holdings Ltd v Turvey [2007] NZHC 1251; (2008) 8 NZBLC 102,107 (HC).
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URL: http://www.nzlii.org/nz/cases/NZMVDT/2019/293.html