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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 17 April 2019
IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA
MVD
473/2018
[2019] NZMVDT 056
BETWEEN GEORGE HARRY PASSMORE
Purchaser
AND CARHQ LIMITED
Trader
HEARING at Christchurch on 15 February 2019, further submissions
received on 21 February and 13, 14, 18 and 19 March 2019
MEMBERS OF
TRIBUNAL
J S McHerron, Barrister – Adjudicator
R C Dixon – Assessor
APPEARANCES (both by AVL)
G H Passmore, Purchaser
I J Luoni, Director of Trader
DATE OF DECISION 22 March 2019
___________________________________________________________________
DECISION OF THE TRIBUNAL
___________________________________________________________________
___________________________________________________________________
REASONS
Introduction
[1] Within days of purchasing a 2011 Volvo XC60, George Passmore noticed that the car had a persistent musty smell in its cabin. Mr Passmore sought help from CarHQ Ltd, which sold him the car, but it denied anything was wrong and refused to assist unless Mr Passmore established the vehicle to be faulty. Mr Passmore has rejected the vehicle and asks the Tribunal to uphold his rejection.
[2] The following issues arise for determination:
- (a) Did the vehicle fail to comply with the guarantee of acceptable quality?
- (b) If so, what, if any, is the appropriate remedy?
Issue one: Did the vehicle fail to comply with the guarantee of acceptable quality?
[3] 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.
[4] "Acceptable quality" is defined in s 7 of the Act (as far as is relevant) as follows:
- 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.
[5] 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.
What caused the smell?
[6] What is causing the smell in George Passmore’s car? Is it a fault amounting to a breach of the guarantee of acceptable quality? Or, is it something, as CarHQ suggests, caused by Mr Passmore himself?
[7] Mr Passmore purchased the car on 30 July 2018. The same day, Archibalds Motors gave it a pre-purchase appraisal and did not identify any abnormal odour. From Archibalds' Service Manager David Emms comment to Mr Passmore on 8 October 2018 that he should check the pollen filter, it appears that Archibalds did not check the pollen filter during its appraisal.[1] There was no record that Archibalds did check the pollen filter.
[8] Mr Passmore first noticed the musty smell four days after purchasing the car. He made various attempts to identify the cause of the smell.
[9] First, he checked the car throughout and found no sign of any cause.
[10] Next, Mr Passmore engaged SqueakyKleen, which professionally cleaned the carpets and mats on 15 and 21 August 2018. SqueakyKleen also ozone treated the car twice.
[11] Each time, the smell would clear temporarily, but would soon return.
[12] On 23 October 2018, Mr Passmore took the vehicle to Hansens Auto Services, the Volvo agent in Queenstown. It recorded “smell noted from vehicle” on its repair invoice. It removed trims and checked the pollen filter and found it was very dirty. Hansens Auto Services recommended replacement of the pollen filter before any further diagnosis was carried out. It installed a new pollen filter and reported that the smell seemed to clear from the vents but indicated that Mr Passmore would need to continue to monitor the vehicle to see if the smell cleared.
[13] Unfortunately, replacing the pollen filter did not solve the problem. On 5 November 2018, Queenstown Motor Group reported there was still a “strong odour coming from somewhere inside the cabin of the vehicle or engine bay”. It recommended further investigation.
[14] On 8 November 2018, Hansens Auto Services reported that parts of the vehicle may require dismantling to locate the source of the smell. Hansens Auto Services confirmed that when it investigated the vehicle in October there were no obvious signs of where the smell could be originating from, other than the “extremely dirty pollen filter”.
[15] On 26 November 2018, Mr Passmore took the vehicle back to Hansens Auto Services, which removed the new pollen filter and checked it. It observed that the pollen filter was still in new condition. Hansens Auto Services put air conditioning system evaporator cleaner through the climate control system and noted that the smell had reduced slightly, but that Mr Passmore should monitor it.
[16] On 28 November 2018, Mr Passmore returned to Hansens Auto Services complaining that the smell was still present in the vehicle. Hansens investigated further. It suspected the smell was either originating from somewhere behind the dashboard or was embedded in the air conditioning system. Hansens advised that to investigate either possible location would require removal of the dashboard and heater components. It recommended that this be done early in 2019. However, by the time of the hearing on 15 February 2019, this further investigation work had still not taken place.
[17] The Tribunal’s Assessor, Mr Dixon, advised that the pollen filter is designed to prevent dirt from getting into the air conditioning system. As such, it forms an important protective function. The fact that the pollen filter on Mr Passmore’s vehicle was so dirty suggested that it may not have been fulfilling its function of protecting the air conditioning system. Mr Dixon suspected that the smell noticed by Mr Passmore was likely to be embedded within the air conditioning system. Mr Dixon suggested that it was likely that the air conditioning evaporator itself may be covered in mould, which is causing the smell to be transmitted through the vehicle’s ventilation system and into the cabin. Mr Dixon said that this was not an uncommon problem and there was nothing to suggest that Mr Passmore had introduced the problem into the vehicle himself. Mr Dixon explained that it is understandable that Mr Passmore may not have noticed the smell when he initially purchased the vehicle. Neither did Archibalds when it carried out the pre-purchase inspection. That may be because the car is likely to have been sitting unused for some time before sale. Mr Dixon noted that dry mould does not smell. The mould only starts smelling when it is wet again, which is likely to have occurred after purchase when Mr Passmore began to use the air conditioning system.
[18] Consistent with Hansens Auto Services’ recommendation, Mr Dixon advised that if the evaporator cleaner had not worked, then the air conditioning system would need to be degassed, removed and cleaned.
[19] CarHQ did not accept that the vehicle was faulty at the time Mr Passmore purchased it. Indeed, it suggested that he may have introduced the smell into the vehicle himself. A former director of CarHQ, Mike Redmond, submitted to the Tribunal that “anything” could be causing the smell and that it was up to Mr Passmore to prove what the smell could be. Mr Redmond submitted that "CarHQ took no liability for a smell which has arisen after the purchase of the vehicle".
[20] Mr Redmond went further on 18 December 2018, alleging that Mr Passmore “most likely caused the smell” himself. Mr Redmond then restated CarHQ’s position as follows:
We are not taking liability for a smell in your car. God knows what could be causing it but it didn’t have it when you brought it [sic] and you have still not proven what it is ... For all we know [you] could have put the stink in there yourself.
[21] However, Mr Redmond adopted a slightly more conciliatory approach in his email two days later on 20 December 2018, in which he said:
As we have always said, if this is a mechanical issue we will rectify. This is a smell that has happened after you have taken ownership ...
[22] By the time of the hearing, Mr Redmond appears to have left CarHQ, which was represented by its director Mr Isaac Luoni. Mr Luoni maintained CarHQ’s position that Mr Passmore had not proved to its satisfaction the existence of a defect in the vehicle. Mr Luoni maintained, quite correctly, that Mr Passmore has to prove that his vehicle failed to comply with the guarantee of acceptable quality.
Adjournment of hearing
[23] In light of CarHQ’s position, I adjourned the hearing to allow Mr Passmore to obtain further information. I directed that Mr Passmore should take the vehicle to Hansens Auto Services as soon as convenient for further investigation as to the cause of the smell in the vehicle, when it is likely to have arisen and what repairs are needed. I asked Mr Passmore to request Hansens to provide a report and quote for repair costs, which he should provide to the Tribunal. I indicated that Mr Passmore would be liable for Hansens’ investigation costs in the first instance but that he could include them in his claim and the Tribunal would consider ordering CarHQ to pay them if Mr Passmore established a breach of the guarantee of acceptable quality.
Further information from Hansens Auto Services
[24] Mr Passmore provided a quote from Hansens Auto Services dated 21 February 2019, stating that the next stage of investigation and repairs would be to remove the dashboard to access the heater and evaporator and to clean out all heater channels and the heater matrix that could be causing the smell. Hansens Auto Services estimated the approximate cost of such repairs would be $2,000.
[25] Mr Passmore had this work carried out on or around 13 March 2019. Hansens Auto Services removed and cleaned out the heater system in the dashboard. It evacuated the air conditioning system, removed the steering wheel and air bag and stripped out the dashboard to access the heater box. It removed the heater box and stripped it apart. Hansens Auto Services inspected the air conditioning evaporator, found a smell in it and mould in its fins. Hansens Auto Services also found a smell coming through the heater vents. It cleaned the evaporator and sprayed disinfectant into the fins. Hansens disinfected the vents and cleaned them out. It reassembled the heater box, fitted it back into the vehicle and then reassembled all the dashboard and panels. It fitted another new pollen filter. Hansens Auto Services then refitted the steering wheel and air bags, regassed the air conditioning system and checked its operation. It confirmed that there was no remaining smell of mould. The total cost of these repairs was $2,333. Stuart Williams, Hansens’ Service Manager, could not be sure when the mould had started to form, but he indicated that the extremely dirty pollen filter that Hansens Auto Services first replaced looked like it had been in that state for a "decent amount of time".
Tribunal's assessment
[26] Mr Dixon and I consider that the fact that Mr Passmore experienced the smell within a few days of purchasing the vehicle, and indicated his concerns to CarHQ approximately three weeks after purchasing the vehicle, is a strong indication that the mould was present on the evaporator at the time of purchase. While this cannot be conclusively proven, it does not strictly matter. As is clear from the definition of “acceptable quality” in s 7 of the Act (above), the concept of “acceptable quality” includes a guarantee that goods are as durable as a reasonable consumer would regard as acceptable. The existence of the guarantee of reasonable durability, as incorporated within the guarantee of acceptable quality, confirms that a purchaser need not prove a pre-existing fault in order to establish a breach of the guarantee of acceptable quality.
[27] In the present case, Mr Dixon and I consider that Mr Passmore has established a pre-existing fault, on the balance of probabilities. Mr Dixon reviewed photographs supplied by Hansens Auto Services and observed that there was a large amount of dirt and mould on the evaporator. The fact that the pollen filter was reported to be in such bad condition indicated to Mr Dixon that the filter has not been able to contain the dirt and mould, but has allowed it to pass into the air-conditioning/ventilation system. The amount of dirt and mould and the fact that Mr Passmore reported his concerns so soon after purchase, suggest that this defect arose prior to purchase.
[28] However, even if we are wrong and the mould and smell developed after Mr Passmore purchased the vehicle, he still has established a breach of the guarantee of acceptable quality because there is no doubt that the smell arose very soon after he purchased the vehicle. We do not consider that a purchaser of a vehicle costing $26,390 that was seven years old at the date of purchase would expect to have to pay more than $2,000 to remove an unpleasant smell from the vehicle’s cabin arising within a few days of purchase. While Mr Passmore has now accumulated a considerable mileage on the vehicle since purchasing it, that fact is not relevant to his establishment of the breach of the guarantee of acceptable quality. As we have found, the evidence points to either a pre-existing fault or one that arose very soon after purchase.
[29] For these reasons, the Tribunal concludes that Mr Passmore has established that his vehicle failed to comply with the guarantee of acceptable quality as it was not free from minor defects, or as durable as a reasonable consumer would regard as acceptable in light of its age, mileage and price.
Issue two: What remedy, if any, is Mr Passmore entitled to?
[30] The options against suppliers where goods do not comply with the guarantees in the Act are set in s 18 of the Act, 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.
[31] The primary remedy available where there has been a breach of a guarantee is that the purchaser may require the trader to remedy the failure within a reasonable time.[2] Mr Passmore initially attempted to get CarHQ to help remedy the smell in his vehicle on 20 August 2018, three weeks after purchasing the vehicle. This attempt by Mr Passmore was met with what Mr Passmore accurately described as a rude reply dated 20 August 2018 from CarHQ’s business manager Jayden McQuade, who sent Mr Passmore an abusive email containing obscenities and concluding “your [sic] getting nothing”.
[32] When Mr Redmond took over the communications they became politer, but the situation did not greatly improve for Mr Passmore. As I have previously indicated, CarHQ’s approach was largely to accuse Mr Passmore of causing the smell himself.
[33] To its credit, CarHQ did pay for some of the early investigative work by Hansens Auto Services, but it has not agreed to pay for Hansens’ other costs until Mr Passmore provided adequate proof of a defect. The nature of the fault meant that most of the work required to repair the vehicle comprised the dismantling costs that were necessary to access the heater so it could be cleaned. Indeed, the invoice for Hansens’ repair work largely comprised labour — it took 20 hours to remedy the fault.
[34] It is unfortunate that it has taken so long to resolve this matter. However, as I said at the hearing, CarHQ was entitled to put Mr Passmore to the proof of his allegations. Accordingly, I do not think it is strictly correct to say that CarHQ has refused to remedy the failure. Indeed, Mr Redmond’s email of 20 December 2018 said, as quoted above, that if Mr Passmore is able to establish a mechanical issue CarHQ will rectify it.
[35] Accordingly, I do not consider that Mr Passmore is entitled to reject the vehicle under s 18(2)(b)(ii) of the Act (above).
[36] Mr Passmore is not entitled to recover the costs he incurred with SqueakyKleen, as these pre-dated his complaint to CarHQ. However, Mr Passmore is entitled to obtain from CarHQ all reasonable costs incurred in having the failure remedied, after the point at which he complained to CarHQ, under s 18(2)(a) of the Act.
[37] Mr Dixon has reviewed Hansens Auto Services’ invoices. While expensive, Mr Dixon agrees that they fairly and reasonably reflect the work that was required.
Conclusion
[38] Accordingly, I conclude that Mr Passmore is entitled to recover the cost of the two Hansens Auto Services invoices not paid by CarHQ, namely the invoice dated 23 October 2018 for replacement of the pollen filter in the sum of $205.90, as well as the invoice dated 13 March 2019 in the sum of $2,333 for cleaning the evaporator. In total, CarHQ Ltd must pay George Passmore $2,538.90 within 14 days of the date of this decision. If CarHQ fails to comply with this order within that timeframe, Mr Passmore should notify the Tribunal no later than 7 April 2019 and the Tribunal will consider notifying the Registrar of Motor Vehicle Traders.
J S McHerron
Adjudicator
[1] A pollen filter filters the external air entering the vehicle.
[2] Consumer Guarantees Act 1993, s 18(2)(a).
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URL: http://www.nzlii.org/nz/cases/NZMVDT/2019/56.html