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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 23 November 2020
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IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
BETWEEN GRAHAM HENRY BEIRNE
Purchaser
AND WEBB FINE ART 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 23 September 2020
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APPEARANCES
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G Beirne, Purchaser
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C McAleer and I Nott, for the Trader
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DATE OF DECISION 13 October 2020
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_________________________________________________________________
DECISION OF THE TRIBUNAL
_________________________________________________________________
_________________________________________________________________
REASONS
Introduction
[1] Graham Beirne wants to reject the 1966 MGB GT vehicle he purchased for $30,485 from Webb Fine Art Ltd (Webbs) in July 2020. Despite pre-purchase representations that vehicle had been carefully restored, Mr Beirne says that the condition of parts of the vehicle was “shoddy” and the vehicle has gearbox and engine faults that mean it is not of acceptable quality.
The issues
[2] The issues requiring the Tribunal’s consideration in this case are:
- (a) Has the vehicle been of acceptable quality for the purposes of s 6 of the Consumer Guarantees Act 1993 (the CGA)?
- (b) Are the vehicle’s defects a failure of a substantial character?
- (c) What remedy is Mr Beirne entitled to under the CGA?
Issue 1: Has the vehicle been of acceptable quality?
[3] 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.
[4] 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.
[5] 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 Beirne’s subjective perspective.
Mr Beirne’s evidence
[6] Mr Beirne saw the vheicle advertised on Webbs’ website and was interested in purchasing it as a gift for his wife. Mr Beirne says that he was particularly attracted to the vehicle by representations made in a “Condition Report” published on the Webbs website as to the quality and condition of the vehicle, which led him to believe that the vehicle had carefully restored and in excellent condition. Those representations included:
- Despite it being a straight and sound example, a full bare metal restoration including new paint, interior along with a reconditioned engine was pursued in 2008. It is noted that the engine work was significant in nature including being bored to 1860cc.
- As an example of the MGB genre, it would be hard to find one better and more sorted than MI66MG, only serving to enhance the driving experience of one of the world’s finest and best-loved sports cars;
- The restoration is of good quality with fine door fit and lustrous paint.
- A gentleman who viewed the vehicle earlier in the week and who has owned 3 of this model commented on the high class of the workmanship.
- A hardtop accompanies the automobile as too does a tonneau cover and soft top. All are in fine order.
- Early examples in this condition do not turn up very often.
[7] Mr Beirne says that the vehicle is not in the condition represented in the Condition Report because:
- (a) there a several large (up to eight inches long) scratches on the hard-top roof;
- (b) the passenger’s door handle was missing;
- (c) both interior door panels are attached with visible PK screws (rather than the original internal clips);
- (d) the vehicle had not been serviced and would not start;
- (e) there is an unusual growling noise from the gearbox, which Mr Beirne believes is due to a worn gearbox that now requires repair; and
- (f) the vehicle’s engine is faulty and is “pinking”.[1]
The cosmetic defects
[8] Mr Beirne produced photographs showing the condition of the vehicle’s roof, passenger door handle and the interior door panels. He relies on that evidence in alleging that the cosmetic appearance of the vehicle is unacceptable.
The lack of servicing and starting fault
[9] After purchase, the vehicle was transported from Auckland to Christchurch, where Mr Beirne lives. The vehicle would not start, so Mr Beirne had it assessed by Rocky Auto in Christchurch. Rocky Auto found that the engine was not cranking over, which it suspected was caused by a burnt out starter motor. Rocky Auto then removed the starter motor and found it to be seized and that the engine would not turn over by hand. It also removed the spark plugs and recommended that those be changed. When it was able to restart and drive the vehicle, Rocky Auto also considered that the vehicle required a “comprehensive tune-up” as it drove poorly.
[10] After discussions between Mr Beirne and Webbs, the parties agreed that Webbs would pay for the cost of the work performed by Mr Beirne, upon the condition that Mr Beirne withdraw the claim that he had by that stage filed with the Tribunal.
The alleged gearbox and engine faults
[11] Mr Beirne was able to drive the vehicle once it was repaired and serviced by Rocky Auto. Mr Beirne says that he then noticed an unusual growling sound from the gearbox and that the engine was pinking
[12] Mr Beirne has had the vehicle assessed by Rocky Auto. Its conclusions are set out in a report dated 31 August 2020, which relevantly says:
- (a) After road testing the vehicle, Rocky Auto considered that the first gear did sound louder than expected for a “straight cut gear”. It thought the growling noise reported by Mr Beirne might be caused by a bearing in the main or lay shaft of the gearbox.
- (b) The oil in the rear differential and gearbox was at the correct level and clean.
- (c) In an attempt to diagnose the pinking complained of by Mr Beirne, Rocky Auto found seepage from the head gasket area and checked the vehicle’s ignition timing and tune, which was satisfactory. It recommended that engine compression and leak down tests be performed to confirm the engine’s compression and general health before any major engine work was carried out.
[13] Mr Beirne has also had the vehicle assessed by Steve Sinclair of R E Sinclair Ltd who, in a brief written report advised:
“REPORT”
Test drive vehicle.
Vehicle very noisey in first gear & reverse gear.
All other gears are stiff to change.
Vehicle is pinking badly under load.
Runs rough on idle.
[14] After the hearing, at the Tribunal’s request, Mr Beirne also provided videos to show the alleged growling noise from the gearbox and the pinking noise from the engine.
Webbs’ response
The cosmetic defects
[15] Webbs says that the vehicle is in acceptable cosmetic condition. I heard evidence from Ian Nott, who works as a “Cars, Motorcycles & Automobilia Specialist” at Webbs. Mr Nott says that he inspected the vehicle before it was sold. He says that the quality of the vehicle’s restoration was “pretty damn good” and although the PK screws used to attach the inner door panel “were not exactly as it was when it came out of the factory”, the screws were nonetheless an appropriate way to attach the inner panel to the door.
The lack of servicing and starting fault
[16] Webbs did not appear to dispute that the starter motor had seized by the time the vehicle was delivered to Mr Beirne. However, it did note that the vehicle started when it was assessed before sale, meaning that this was not a fault that it could reasonably have discovered before sale. Webbs also did not dispute that the vehicle required servicing and replacement spark plugs.
The alleged gearbox and engine faults
[17] Webbs says that there was no sign of any unusual engine or gearbox noise before sale and it disputes the existence of these alleged faults. Following the assessment performed by Rocky Auto in August 2020, Webbs then had the vehicle assessed by Autothority, a Christchurch based repairer, which describes itself as an “Independent Porsche & European Service and Repair Specialist”.
[18] Autothority considered that the vehicle had no gearbox fault. It thought that the noise complained of by Mr Beirne in first gear and reverse was normal for straight cut gears and it found no excessive noise from the other gears. Autothority also performed engine compression and cylinder leak down tests, as recommended by Rocky Auto. It found that the engine compression was within appropriate tolerances and that the cylinder leakage per cylinder, which was less than 20 per cent, was acceptable. It also found no signs of the seepage from the head gasket observed by Rocky Auto and considered the engine to be in “great condition”.
The Tribunal’s assessment
The cosmetic defects
[19] A reasonable consumer who read the Condition Report before purchasing this vehicle would have had high expectations as to the cosmetic condition of the vehicle.
[20] The photographs provided by Mr Beirne show that the condition of the vehicle’s hard-top does not meet those expectations. It has several scratches (up to eight inches in length) that are inconsistent with the claim in the Condition Report that the hard-top that accompanied the vehicle was in fine order. Likewise, the missing door handle is inconsistent with the Condition Report representations as to the condition of the vehicle. I am therefore satisfied that the condition of the hard-top and the missing door handle means the vehicle does not comply with the guarantee of acceptable quality in s 6 of the CGA.
[21] I am not satisfied that the condition of the interior door panels is unacceptable. Although the PK screws used to attach the door panels are not an original item, they are not cosmetically shoddy as alleged by Mr Beirne and I am not satisfied that the use and appearance of the PK screws breaches the guarantee of acceptable quality.
The lack of servicing and starting fault
[22] Given the representations in the Condition Report about the vehicle’s condition, a reasonable consumer would not have expected to need to replace the starter motor and spark plugs and service the vehicle before it could be driven. I am satisfied that the vehicle was not in acceptable mechanical condition when it was supplied to Mr Beirne, in breach of the guarantee of acceptable quality in s 6 of the CGA.
The alleged gearbox fault
[23] The vehicle’s reverse and first gear are straight cut gears. Straight cut gears make a characteristic whining sound, caused by rapid repetitive contact between metal square-cut gear teeth in the gear box. Mr Beirne says that the noise from this vehicle’s gearbox is different from that characteristic whine.
[24] As the applicant, Mr Beirne bears the onus of proving, on the balance of probabilities, that the vehicle has a defective gearbox. He has presented evidence from Rocky Auto and R E Sinclair Ltd in support of his claim that the vehicle has a defective gearbox. That evidence is contested by Webbs because Autothority, which has also inspected the vehicle, considers there to be no gearbox fault.
[25] Given this conflicting evidence from the technicians who have inspected the vehicle, I asked Mr Beirne to provide a video showing the noise made by the gearbox.
[26] Mr Haynes, the Tribunal’s Assessor, advises that the noise from the gearbox shown in the brief video is not unusual and is consistent with the characteristic whining noise from a straight cut gearbox. Mr Haynes considers that the noise present in the video is not evidence of any fault with the vehicle’s gearbox.
[27] Given conflicting evidence from the technicians who have inspected the vehicle and the absence of any detectable gearbox fault in the video provided by Mr Beirne, I am not satisfied that Mr Beirne has proven that the vehicle has any fault with its gearbox that would breach the guarantee of acceptable quality. Instead, I consider it more likely that the noise he complains of is normal in a 54-year-old MGB.
The alleged engine fault
[28] As with the alleged gearbox fault, there is conflicting evidence as to the existence of any engine fault. Mr Beirne’s allegation of an engine fault is supported by R E Sinclair Ltd, which considered that the vehicle is “pinking badly under load”. On the other hand, Webbs’ contention that there is no engine fault was supported by Autothority, which considered the engine to be in great condition.
[29] Due to this conflicting evidence, I also asked Mr Beirne to provide a video showing the alleged pinking noise from the engine. Mr Haynes advises that the brief video provided does not show any unacceptable pinking from the engine, but the engine is “running on”, with the engine continuing to run for a short period after being turned off.[2] Running on occurs when the fuel/air mixture in the cylinders continues to ignite without spark. In a petrol vehicle such as this, running on is usually caused by a hot spot in the engine (often due to carbon build up), a faulty carburettor or incorrect engine timing. Because this vehicle has already been tuned by Rocky Auto (which should have eliminated any timing issues), I consider it most likely that the vehicle has a hot spot in the engine or a carburetor fault.
[30] Again, given the conflicting evidence presented by the parties and the absence of any obvious pinking in the video provided, I am not satisfied that Mr Beirne has proven that the vehicle is pinking. However, the evidence is clear that the vehicle has a fault that is causing its engine to run on. Considering the representations in the Condition Report as to the vehicle’s quality and condition, I am satisfied that a reasonable consumer would not consider such a fault to be acceptable in a vehicle described in such terms.
Issue 2: Are the vehicle’s defects a failure of a substantial character?
[31] Under s 18(3) of the CGA, Mr Beirne may reject the vehicle if its defects are a failure of a substantial character as 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.
[32] Section 21(a) of the CGA is relevant to this case, and I am satisfied that the defects that breach the guarantee of acceptable quality are not, either separately or cumulatively, such that a reasonable consumer, fully acquainted with the true nature and extent of the faults, would not have purchased the vehicle. The missing door handle, scratched hard-top, lack of servicing and faulty starter motor are all minor and easily rectified faults. Further, because the underlying cause of the running on fault remains undiagnosed, I cannot be satisfied that the fault is such that a reasonable consumer would not have purchased the vehicle or have lost confidence in the vehicle’s ongoing reliability.
[33] Mr Beirne is therefore not entitled to reject the vehicle.
Issue 3: What remedy is Mr Beirne entitled to under the CGA?
[34] 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.
[35] Under s 18(2)(a) of the CGA, Mr Beirne is entitled to have the defects that breach the guarantee of acceptable quality rectified within a reasonable time. The Tribunal therefore orders that Webbs shall, within 15 working days of the date of this decision, repaint the vehicle’s hard-top roof, replace the missing passenger’s door handle and rectify the fault that is causing the engine to run on. I have been advised that Webbs has now paid for the vehicle’s servicing and replacement starter motor, so no orders are required in that regard.
DATED at AUCKLAND this 13th day of October 2020
B.R. Carter
Adjudicator
[1] The air/fuel mixture in a vehicle’s combustion chamber will ordinarily ignite simultaneously when the spark plug fires. Pinking occurs when some of the air/fuel mixture in the combustion chamber ignites after the spark plug fires, causing an audible knocking or pinging sound. Pinking is generally caused by excessive heat, excessive cylinder pressure, improper ignition timing, inadequate fuel octane or a combination of these factors.
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URL: http://www.nzlii.org/nz/cases/NZMVDT/2020/169.html