Love v Auto Imports & Wholesale Ltd - Reference No. MVD 262/2020 [2020] NZMVDT 244 (22 December 2020)

Last Updated: 1 February 2021

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 262/2020
[2020] NZMVDT 244

BETWEEN WI TAMAHOU WI HAPI LOVE

Purchaser

AND AUTO IMPORTS & WHOLESALE LTD TA CHAPEL STREET CAR COURT

Trader

HEARING on 9 December 2020
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

R C Dixon – Assessor
APPEARANCES (all by VMR)

W T W H Love, Purchaser
L I Hoggard, Director of Trader
G Dodd, Salesperson for Trader

DATE OF DECISION 22 December 2020

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DECISION OF THE TRIBUNAL

___________________________________________________________________

Wi Tamahou Love’s application is dismissed.

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REASONS

Introduction

[1] Wi Tamahou Love wishes to reject the 2005 Mercedes Benz E500 that he purchased from Auto Imports & Wholesale Ltd on 2 June 2020 for $14,000. Mr Love says that the vehicle has had mechanical issues since the day he picked it up, including with its heater, wheel bearings and air suspension.[1]
[2] Mr Love’s application raises the following issues for the Tribunal to determine:

• (a) Did the vehicle fail to comply with the guarantee of acceptable quality?
• (b) If so, what (if anything) 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] Relevantly, “acceptable quality” is defined in s 7 of the Act 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] 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.

Heater and related faults

[6] Very soon after purchasing the Mercedes, Mr Love noticed that its heater was not working. While Auto Imports & Wholesale was repairing this fault, it disconnected the vehicle’s battery, a step which the Tribunal’s Assessor, Mr Dixon, said was entirely appropriate given the nature of the repair required. However, disconnecting the battery appears to have caused further temporary electrical failures affecting the vehicle’s electric windows, clock and sunroof. Mr Love needed to return the vehicle to Auto Imports & Wholesale to enable it to reset the electrical system so that these systems could resume functioning.

Ball joints

[7] On 1 July 2020, the month following purchase, the vehicle was inspected for a warrant of fitness, apparently on Auto Imports & Wholesale’s initiative, which it passed, but the VTNZ warrant of fitness check sheet identified that both front lower suspension ball joints were developing play. These ball joints were later replaced at Auto Imports & Wholesale’s expense.

Air suspension

[8] Then, in August 2020, Mr Love started to experience problems with the vehicle’s air suspension system, which was raising and lowering itself erratically. Auto Imports & Wholesale replaced the right rear suspension airbag at its expense. However, there was an additional air leak from the suspension system which caused a further fault and Mr Love had to bring the vehicle back for further attention. This fault was eventually traced to a leaking pipe at the accumulator, which was fixed by replacing a hose clamp.

Tribunal’s assessment

[9] It is clear from the above summary that Mr Love has experienced several defects in his vehicle, which occurred relatively soon after he purchased it. I accept Mr Love’s submission that the defects and the need for him to make several return visits to Auto Imports & Wholesale for the defects to be repaired has caused him considerable inconvenience.
[10] I also accept Mr Love’s submission that the vehicle did not comply with the guarantee of acceptable quality in respect of the malfunctioning heater and subsequent electrical faults, the defective ball joints and the problems with the airbag suspension.
[11] Although Mr Love has established that his vehicle did not comply with the guarantee of acceptable quality, it is necessary to recognise that a purchaser of a 15-year-old luxury European car with a mileage in the vicinity of 100,000 km would reasonably expect it to be likely that the vehicle may experience one or more faults. Indeed, a purchaser of such a vehicle takes on a degree of risk because repairs to faults that may arise are likely to be particularly expensive, given the prestige nature of this ageing vehicle.
[12] As Mr Hoggard pointed out, when new this vehicle would have been vastly more expensive, costing perhaps 10 or 11 times as much, than the price paid by Mr Love. The devaluation that occurs to luxury European vehicles as they age and accumulate mileage partly factors in the realty that expensive faults are reasonably likely to occur with such vehicles. That does not take away from Mr Love’s consumer remedies under the Act. However, it is important to inject a note of realism into a reasonable consumer’s expectations of such a vehicle.
[13] The faults experienced by Mr Love, while undoubtedly inconvenient, do not reach the level where the Tribunal would regard them as failures of a substantial character,[2] whether seen as individual faults or in combination. This finding will be reflected in the remedy that is available to Mr Love, which I will describe in more detail shortly.

Issue two: What (if any) remedy is available to Mr Love in respect of the defects identified in his vehicle?

[14] The remedies available to a consumer in respect of a breach of a guarantee under the Act are set out in s 18, which provides:

18. 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.

[15] Auto Imports & Wholesale has rectified at its expense all the faults that have been identified with the vehicle. Mr Love is unhappy about the fact that he has had to make several visits to Auto Imports to ensure that the faults were rectified. In addition, Mr Love complains that some of these visits were occasioned by incompetent mechanical work carried out by the technical staff of Auto Imports & Wholesale.
[16] On behalf of Auto Imports & Wholesale, Mr Hoggard responded by apologising for the inconvenience experienced by Mr Love and for any additional visits for repairs that were required due to the fact that the work was not initially completed to his satisfaction.
[17] This Tribunal cannot deal with complaints about the quality of mechanical work. Its jurisdiction in a case like this is limited to assessing whether the vehicle complied with the guarantee of acceptable quality and then what, if any, remedy is available under s 18 of the Act.[3] For disputes about the quality of repair work, Mr Love would need to bring a claim in the Disputes Tribunal, rather than the Motor Vehicle Disputes Tribunal, which only deals with complaints in respect of the sale of any motor vehicle.
[18] The primary remedy available to a consumer whose vehicle does not comply with the guarantee of acceptable quality is to have repairs completed by the trader at the trader’s expense. The Tribunal will, if justified, allow a trader to have more than one chance to correct a failure. Only if the trader’s repair work has been unsuccessful or has taken an unreasonably long time will the consumer’s right to reject the vehicle be triggered. That did not occur in the present case.
[19] Despite the fact that the electrical fault required a further visit and so did the suspension fault, the evidence is that these defects have now been rectified and that the vehicle is functioning normally.
[20] Overall, in Mr Dixon’s and my view, the problems that Mr Love has experienced with his vehicle are relatively minor and were relatively easily fixed.
[21] Apart from this, Mr Love’s continuing use of the vehicle, after his attempt to reject it in August 2020, can be seen as a waiver of any right to reject the vehicle that he would otherwise have. Indeed, it appears that Mr Love has now travelled approximately 14,000 km in the vehicle since purchasing it in the middle of 2020.

Conclusion

[22] Accordingly, Mr Love has established no basis for rejecting his vehicle. Nor did he establish that there were any out of pocket expenses related to the vehicle’s failures for which he should be reimbursed.
[23] It follows that Mr Love’s application must be dismissed.

J S McHerron
Adjudicator

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[1] Mr Love traded in a Mazda as part of the purchase arrangement for the Mercedes. At the hearing, he also raised concerns regarding the Mazda and repair work carried out on that vehicle by Auto Imports & Wholesale. However, the Tribunal is unable to enquire into issues relating to Mr Love’s Mazda. This decision concerns the Mercedes Benz only, which was the subject of Mr Love’s application to the Tribunal.

[2] Consumer Guarantees Act 1993, s 21.

[3] Motor Vehicle Sales Act 2003, s 89.