Henare v Railside Ave Ltd - Reference No. MVD 417/2019(Auckland) [2020] NZMVDT 11 (4 February 2020)

Last Updated: 27 March 2020

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 417/2019 [2020] NZMVDT 11 BETWEEN TAMATEHURA HENARE Purchaser AND RAILSIDE AVE LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 28 January 2020

APPEARANCES

T Henare, Purchaser

J Choi, for the Trader

DATE OF DECISION 4 February 2020

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

1. Tamatehura Henare’s application is dismissed.

_________________________________________________________________

REASONS

Introduction

[1] Tamatehura Henare wants to reject the 2008 Toyota Hiace van he purchased from Railside Ave Ltd on 31 October 2018. He says that the vehicle had, or has developed, several faults that mean that it is not of acceptable quality for the purposes of the Consumer Guarantees Act 1993 (the CGA).
[2] Railside Ave says that it should have no liability under the CGA because Mr Henare has used the vehicle as a courier van, so it thinks that the CGA should not apply. It also says that Mr Henare has failed to service the vehicle, contributing to its faults.

The issue

[3] The sole issue requiring consideration is whether the vehicle has been of acceptable quality for the purposes of s 6 of the CGA.

Has the vehicle been of acceptable quality?

[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 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 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 Mr Henare’s subjective perspective.
[7] Mr Henare alleges that the vehicle has the following faults that mean it is not of acceptable quality:

• rust in the driver’s footwell;
• rust on the ABS pump, front brake shields, brake pads and rotors;
• extensive underbody corrosion that has concealed using underseal;
• a broken gearshift cable;
• damage to the driver and passenger seatbelts;
• damaged front sway bar end bushes; and
• a damaged turbo charger and/or engine, which require replacement.
  

The vehicle’s rust

[8] Shaft Automotive of Waikanae assessed the vehicle on 29 January 2019. It considered that the vehicle had unacceptable rust in its driver’s footwell (which had been poorly repaired), rust on the ABS pump, front brake shields, brake pads and rotors and extensive underbody corrosion that has been concealed using underseal. It considered that the rust was such that the vehicle should fail a warrant of fitness inspection.
[9] The vehicle was then assessed by Rutherford and Bond Ltd (Rutherford & Bond), a Paraparaumu based Toyota franchise, which did not share Shaft Automotive’s concerns about the extent of the vehicle’s rust. Rutherford & Bond considered that there was “no major rust mechanically”, and that the rust under the vehicle was “slight surface rust” only. It did consider that the driver’s door sill and an area around the rear door seal required repair.
[10] Mr Henare also produced photographs of the vehicle’s rust. Mr Haynes, the Tribunal’s Assessor, advises that the photographs show surface rust, but no evidence of any structural corrosion that would cause the vehicle to fail a warrant of fitness inspection.
[11] Railside Ave submitted that the rust is minor and does not affect the safety or performance of the vehicle. It also says that the vehicle had recently passed a warrant of fitness inspection, which it would have failed if any structural corrosion was present.
[12] Section 6 of the CGA does not provide a guarantee that an $18,465, 10-year-old Toyota Hiace that has an odometer reading exceeding 195,000 km at the time of sale will be free of all defects. Instead, s 6 of the CGA provides a guarantee that such a vehicle will be as free of defects and as durable as a reasonable consumer would consider acceptable, taking account of the factors set out in s 7(1)(f)–(j) of the CGA.
[13] A reasonable consumer should understand that a 10-year-old commercial vehicle will likely have some surface corrosion, as this vehicle does. Because that corrosion does not affect the safety or performance of the vehicle, and because it is not sufficient to cause the vehicle to fail a warrant of fitness inspection, I am satisfied that the corrosion does not mean that the vehicle is of unacceptable quality for the purposes of s 6 of the CGA.

The broken gearshift cable

[14] The vehicle also has a faulty gearshift cable, which is likely to be the cause of the trouble in selecting gear that Mr Henare experienced in January 2019. Mr Henare says that he could only select first, third and fifth gear. This fault was confirmed by both Shaft Automotive and Rutherford & Bond, with the latter considering that the cable requires replacement at a cost of $1,200.
[15] Mr Haynes advises that a loose or stretched gearshift cable could well be causing the gearbox problems experienced by Mr Henare. He says that a loose or stretched cable can restrict the movement of the gear selector, limiting the range of gears available to the driver as described by Mr Henare.
[16] Mr Henare travelled a significant distance in the vehicle in the two and a half months of his ownership before this fault arose. Mr Henare used the vehicle in his courier business and also frequently drove himself and family members long distances for sporting events, family gatherings and other recreational purposes. On the evidence available to me, I am satisfied that Mr Henare drove at least 15,200 km between 5 November 2018 and 21 January 2019.
[17] Taking account of the price, age and mileage of the vehicle at the time of sale, and the extensive use to which the vehicle was put before this fault arose, I am satisfied that, in respect of the gearshift cable, the vehicle has been as durable as a reasonable consumer would consider acceptable.
[18] In reaching this conclusion I note that a reasonable consumer must have realistic expectations as to the quality and durability of a vehicle of this age and mileage and should understand that faults consistent with that age and mileage may develop from time to time. Further, a reasonable consumer driving a vehicle with a manual gearbox to this extent must have reduced expectations as to the durability of the gearbox components and should understand that components such as a gearshift cable, which is engaged during every gearshift, will wear prematurely because of this extent of usage.

The seatbelt damage

[19] Shaft Automotive also thought that the condition of the passenger and driver’s seatbelts did not meet warrant of fitness standards. Shaft Automotive considered that the passenger seatbelt was damaged and that the driver’s seatbelt was frayed and slow to retract.
[20] The vehicle passed a warrant of fitness inspection before sale, during which the condition of its seatbelts would have been assessed (as inspection of the seatbelts is a mandatory requirement of a warrant of fitness inspection). Further, the photographs provided by Mr Henare do not show that the seatbelts are in unacceptable condition. The photographs show that the seatbelts are starting to show signs of wear, but not to the extent that they require replacement or should fail a warrant of fitness inspection.
[21] Accordingly, although the vehicle’s seatbelts are starting to wear, I am not satisfied that Mr Henare has proven that the condition of the seatbelts has deteriorated to the point that they are of unacceptable quality in a vehicle of this age and mileage, particularly given the distance that Mr Henare has used the vehicle since purchase.

Front sway bar end bushes

[22] Likewise, although I am prepared to accept that the vehicle’s front sway bar end bushes now require replacement, I am not satisfied that they have been of unacceptable quality.
[23] The evidence does not show that the worn sway bar ends were present at the time of sale. The vehicle would not have passed its pre-purchase warrant of fitness inspection if this fault had been present at the time of sale. Further, Mr Haynes advises that sway bar end bushes are a rubberised component and do require replacement from time to time — every 80,000 km or so. Given the extent to which Mr Henare has driven the vehicle since purchase, I consider it highly likely that the fault has developed during his ownership.
[24] I acknowledge that Mr Henare owned the vehicle for only a short period of time before this fault occurred. However, the distance he has travelled in that time is such that the ordinary wear and tear of consumable items such as the sway bar end bushes has been accelerated, and I am not satisfied that the current condition of the sway bar end bushes mean that the vehicle has been of unacceptable quality.

The damaged turbo and faulty EGR valve

[25] Shaft Automotive says that the turbo is noisy and suspects that the turbo has a collapsed centre bearing, which is causing the impeller blades to contact the intake housing. Rutherford & Bond found fault codes relating to the step motor, which controls the movements of the variable vanes inside the turbo housing. It considered that the turbo fault may be caused by a blocked EGR valve, which is part of the vehicle’s emission control system. It considered that the turbo and EGR valve both required replacement at a cost exceeding $4,400.
[26] Mr Henare submits that this fault was present at the time of purchase. He says that the vehicle made an intermittent whistling (or purging) noise, which he first noticed on 5 November 2018. Mr Henare submits that this fault has now worsened, to the extent that the vehicle now requires expensive repair.
[27] Although I am satisfied that Mr Henare has proven that the vehicle now has a damaged turbo and that it may have a faulty EGR valve, I am not satisfied that he has proven that those faults were present at the time of sale, or that the faults mean the vehicle has been of unacceptable quality.
[28] The evidence indicates that the initial intermittent whistling (or purging) sound that Mr Henare described is most likely to have been caused by the vehicle performing an automatic diesel particulate filter (DPF) regeneration, rather than there being any underlying fault with the turbo charger or EGR valve. In that regard, I note that Mr Henare says that he noticed a warning symbol on the dashboard display consistent with the symbol that would display during a DPF regeneration process.
[29] Mr Haynes advises that it is common for a diesel van of this age and mileage to have a buildup of soot (or unburnt fuel) within the exhaust system, which will then cause the vehicle to perform DPF regeneration in an attempt to burn off that accumulated soot. A side effect of the DPF regeneration process is that the vehicle’s oil can become diluted by diesel, reducing its lubricating properties. It is therefore incumbent on the owner of such a vehicle to ensure that it is regularly serviced, because the reduced lubrication of the oil can lead to premature failure of significant engine components (such as the turbo or the engine) if the oil and oil filter are not regularly changed.
[30] Mr Henare says that he frequently checked the vehicle’s oil levels and noticed that the oil levels were increasing. Mr Haynes advises that such high oil levels are a classic sign of the vehicle’s oil becoming contaminated with diesel and losing its lubricating properties.
[31] Nonetheless, Mr Henare did not service the vehicle as required. The manufacturer recommends that diesel Toyota Hiaces should be serviced every 6 months or 10,000 kms, whichever occurs first. Mr Henare drove the vehicle for 16,000km in less than three months without servicing it, while experiencing symptoms that should have been of concern. Indeed, Mr Henare says that he was advised by Bowler Motors in mid-November 2018 to have the vehicle checked to determine the underlying cause of the whistling noise (which Bowler Motors thought may be caused by a problem with the vehicle’s EGR valve). He did not do so.
[32] I consider that there is a real likelihood that if Mr Henare had taken reasonable steps to have the whistling/purging noise assessed and that if he had serviced the vehicle every 10,000 km as recommended by the manufacturer, the damage to the turbo would have been avoided. Instead, he continued to use the vehicle after he was aware that its oil levels were high, that it was making an intermittent whistling or purging noise, that warning lights were intermittently illuminating on the dashboard display and after he had been told to have the symptoms assessed. By doing so, and by not servicing the vehicle as required, I am satisfied that Mr Henare has used the vehicle in a manner inconsistent with the manner in which a reasonable consumer would have used it, causing the damage to the turbo. Accordingly, applying s 7(4) of the CGA, I am satisfied that the damage to the turbo does not mean that the vehicle has been of unacceptable quality.
[33] I also consider it likely that any fault that the vehicle may now have with its EGR valve was caused by Mr Henare’s continued use and failure to service the vehicle. Another side effect of driving a vehicle with excessive and diluted oil, is that carbon can build up within the vehicle’s exhaust system, which can affect the operation of the EGR valve in the manner suspected by Rutherford & Bond. Accordingly, I am not satisfied that the vehicle has any fault with its EGR valve that would breach the acceptable quality guarantee in s 6 of the CGA.

Conclusion

[34] Because Mr Henare has not proven that any of the alleged faults mean the vehicle has been of unacceptable quality, his application is dismissed.

DATED at AUCKLAND this 4th day of February 2020

B.R. Carter
Adjudicator