Rawiri-Walsh v Hazleton Grove Ltd - Reference No. MVD 077/2019 [2019] NZMVDT 96 (8 May 2019)

Last Updated: 20 June 2019

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 077/2019 [2019] NZMVDT 096 BETWEEN WARREN DONALD RAWIRI-WALSH Purchaser AND HAZLETON GROVE LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 2 May 2019

APPEARANCES

W D Rawiri-Walsh, Purchaser J Rawiri, Witness for the Purchaser

H Hiscock, for the Trader

DATE OF DECISION 8 May 2019

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DECISION OF THE TRIBUNAL

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1. Hazleton Grove Ltd shall, within five working days of the date of this decision, pay $1,820.20 to Warren Rawiri-Walsh.

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REASONS

Introduction

[1] On 19 November 2018, Warren Rawiri-Walsh purchased a 2006 Mercedes-Benz CLK350 for $10,880 from Hazleton Grove Ltd. The vehicle had an odometer reading of approximately 57,000 km at the time of sale. Mr Rawiri-Walsh also purchased a three-year Janssen Insurance extended warranty for $1,795.
[2] Mr Rawiri-Walsh claims that the vehicle developed a series of faults shortly after purchase, some of which Hazleton Grove has refused to rectify. Mr Rawiri-Walsh has now had the faults rectified using the Janssen Insurance extended warranty he purchased with the vehicle and seeks to recover the amounts he has had to pay towards the cost of the required repairs.
[3] Hazleton Grove says that Mr Rawiri-Walsh is not entitled to recover the amounts he seeks as Mr Rawiri-Walsh did not first give it an opportunity to rectify those faults.

The Issues

[4] The issues requiring consideration in this case are:

• (a) Did the vehicle have faults that breached the acceptable quality guarantee in s 6 of the Consumer Guarantees Act 1993 (the Act)?
• (b) Has Hazleton Grove refused to repair the faults within a reasonable time?
• (c) What remedy is Mr Rawiri-Walsh entitled to under the Act?

Did the vehicle have faults that breached the acceptable quality guarantee?

[5] 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.
[6] 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.

[7] 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 Rawiri-Walsh’s subjective perspective.
[8] In December 2018, while driving to Rotorua, Mr Rawiri-Walsh noticed the vehicle’s engine warning light illuminate and coolant level warning message appear on the dashboard display. The following day, the vehicle would not start. After speaking with a representative of Hazleton Grove, Mr Rawiri-Walsh arranged for the vehicle to be sent to Darryl Evans Ltd, trading as GB European (GB European) in Rotorua, which found an electrical fault that caused an intermittent loss of power to the vehicle’s fuel pump. It also found excessive carbon build up in the vehicle’s inlet manifold, which it considered required replacement.
[9] To rectify the intermittent fuel pump fault, GB European replaced the fuel pump relay and the SAM unit (which is the control module that operates the fuel pump). The cost of this repair was covered by the Janssen Insurance policy, with Hazleton Grove paying the insurance excess. To rectify the fault with the inlet manifold, GB European replaced the inlet manifold at a cost of $2,701.63. Hazleton Grove paid for this repair.
[10] The vehicle was returned to Mr Rawiri-Walsh on 17 January 2019. While returning to Auckland, the vehicle’s engine warning light illuminated and the coolant level warning message appeared. The vehicle was then assessed by Auto Avantgarde Ltd in Auckland. Auto Avantgarde found a fault with the vehicle’s engine control unit (ECU), which was affecting the operation of the vehicle’s fuel pump. It also found leaking vacuum lines and defective camshaft solenoids, both of which affected the performance of the vehicle’s engine. Auto Avantgarde has rectified these defects. Janssen Insurance contributed $1,303.09 towards that cost, and Mr Rawiri-Walsh has paid the balance of $1,820.20. The work performed by Auto Avantgarde appears to have rectified the vehicle’s defects.
[11] Although a reasonable consumer purchasing a 12-year-old Mercedes-Benz that has travelled approximately 57,000 km must have realistic expectations as to its quality and durability, I am satisfied that the evidence shows that this vehicle has not been of acceptable quality for the purposes of s 6 of the Act. Shortly after purchase it developed defects that affected the performance of its fuel pump, causing warning lights and messages to illuminate and making the vehicle difficult to start, which have required expensive repair. Further, its inlet manifold required replacement at a cost exceeding $2,700. I am satisfied that a reasonable consumer would not consider this vehicle to have been of acceptable quality.

Did Hazleton Grove refuse to repair the faults?

[12] Mr Rawiri-Walsh claims that he is entitled to recover the amount he paid to Auto Avantgarde for the for repairs relating to the ECU, vacuum lines and camshaft solenoids because Hazleton Grove refused to rectify those faults.
[13] Mr Rawiri-Walsh claims that, on 21 January 2018, he took the vehicle back to Hazleton Grove and spoke to an employee named Daniel about the ongoing problems with the vehicle. Mr Rawiri-Walsh advises that Daniel told him to contact GB European, who Daniel believed should have responsibility for any repair because it had failed to properly rectify the intermittent fuel pump fault. Mr Rawiri-Walsh contacted GB European, which advised him that the ongoing faults were new problems, for which it was not responsible.
[14] Mr Rawiri-Walsh then returned to Hazleton Grove the following day and again spoke to Daniel. He says that Daniel refused to assist him, saying that Hazleton Grove was “not paying one more cent” for repairs to the vehicle. Mr Rawiri-Walsh says that Daniel again told him to contact GB European. Mr Rawiri-Walsh says he interpreted Daniel’s response as being a refusal to repair the vehicle, so he then arranged for the faults to be rectified by Auto Avantgarde.
[15] I did not hear evidence from Daniel as to what was said during his discussions with Mr Rawiri-Walsh. Instead, I heard from Harry Hiscock, the General Manager at Hazleton Grove. Mr Hiscock was not a party to the discussions but spoke with Daniel shortly afterwards. Mr Hiscock disputes Mr Rawiri-Walsh’s version of events and says that Hazleton Grove never refused to assist. Instead, he says that Daniel advised Mr Rawiri-Walsh to contact GB European in the first instance, expecting Mr Rawiri-Walsh to then contact Hazleton Grove if there were any problems. Mr Rawiri-Walsh did not come back to Hazleton Grove after GB European refused to assist, but instead had the defects rectified by Auto Avantgarde without reference to Hazleton Grove.
[16] I prefer Mr Rawiri-Walsh’s account of what was said and conclude that Hazleton Grove did refuse to rectify the vehicle’s ongoing faults. I found Mr Rawiri-Walsh to be a credible witness, and although he had difficulty recalling certain dates and whether or not certain emails were sent to Hazleton Grove, I found his recollection of his discussions with Daniel to be clear and credible. Likewise, I found Mr Hiscock to be a credible witness, but because he was not involved in the discussions with Mr Rawiri-Walsh, he could only give evidence as to what he was told by Daniel. In the absence of any evidence from Daniel to contradict what I have been told by Mr Rawiri-Walsh, I accept what Mr Rawiri-Walsh told me about Daniel’s refusal to assist.
[17] Accordingly, although Hazleton Grove assisted Mr Rawiri-Walsh in having the earlier faults rectified and the evidence suggests that the ongoing fault with the fuel pump was the same fault that GB European had previously been paid to repair, I am satisfied that Hazleton Grove has refused to comply with its obligation to rectify the vehicle’s ongoing faults.

What remedy is Mr Rawiri-Walsh now entitled to under the Act?

[18] The remedies relevant to this claim are set out in s 18(2) of the Act, which provides:

18. Options against suppliers where goods do not comply with guarantees

...

(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.

[19] Under s 18(2)(b)(i) of the Act, Mr Rawiri-Walsh is entitled to recover $1,820.20 for the cost of the repairs performed by Auto Avantgarde because Hazleton Grove refused to remedy the ongoing faults despite being given a reasonable opportunity to do so. Hazleton Grove must pay this amount to Mr Rawiri-Walsh within five working days of the date of this decision.

DATED at AUCKLAND this 8th day of May 2019

B.R. Carter
Adjudicator