NZLII Home | Databases | WorldLII | Search | Feedback

Motor Vehicles Disputes Tribunal of New Zealand
You are here:  NZLII >> Databases >> Motor Vehicles Disputes Tribunal of New Zealand >> 2020 >> [2020] NZMVDT 29

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

Lowe v Euromarque Holdings Limited - Reference No. MVD 449/2019 [2020] NZMVDT 29 (27 February 2020)

Last Updated: 27 March 2020

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 449/2019
[2020] NZMVDT 29

BETWEEN ASHLEIGH VICTORIA LOWE

Purchaser

AND EUROMARQUE HOLDINGS LIMITED

Trader

HEARING at Christchurch on 14 February 2020
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

R C Dixon – Assessor
APPEARANCES

A V Lowe, Purchaser
L Dennison, Purchaser’s Partner
M Pullan, After Sales Manager of Trader
T L Groves, Country Manager, Haval Motors New Zealand (by AVL)

DATE OF DECISION 27 February 2020

___________________________________________________________________

DECISION OF THE TRIBUNAL

___________________________________________________________________

Ashleigh Lowe’s application is dismissed.

___________________________________________________________________


REASONS

Introduction

[1] Ashleigh Lowe and her partner Luke Dennison are unhappy with the Haval H6 Lux that Ms Lowe purchased brand new from Euromarque Holdings Ltd on 7 May 2019 for $38,270.
[2] Three separate faults have needed to be repaired in the short period since Ms Lowe purchased the vehicle. Ms Lowe and Mr Dennison have been inconvenienced as both of them have had to take time off work to attend to repairs while juggling their childcare responsibilities. Buying a brand-new vehicle has not been the safe, reliable, trouble-free experience they expected it would be. Moreover, Ms Lowe says she was misled by Euromarque. She says she was told by the salesperson who sold her the Haval that this particular model had no known faults. Yet, subsequently, Mr Dennison and Ms Lowe say they were told by Euromarque that it had experienced a similar steering fault on other vehicles, contrary to the assurance given by the salesperson.
[3] From this background, the following issues arise for the Tribunal’s determination:

Issue one: Did the vehicle fail to comply with the guarantee of acceptable quality?

[4] Section 6(1) of the Consumer Guarantees Act 1993 (the CGA) 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.
[5] “Acceptable quality” is defined in s 7 of the CGA (as far as is relevant) as follows:
  1. 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.

...

[6] 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.
[7] The first issue that arose with the Haval occurred about two months after Ms Lowe purchased it, in or around July 2019. She and Mr Dennison noticed a knocking or clicking noise coming from the area of its steering wheel. The noise occurred when the steering wheel was being turned. The noise was audible both while the vehicle was in operation and when it was standing still with the engine off.
[8] Ms Lowe was nervous, particularly when driving the vehicle with her children in it, that the steering might fail and she would crash. However, apart from the noise, neither Ms Lowe nor Mr Dennison reported that the vehicle’s steering was affected in any way.
[9] Ms Lowe reported the knocking/clicking steering to Euromarque in or around the last week of July 2019. Around that time, Euromarque examined the steering. The technician’s workshop notes record that Euromarque confirmed the presence of a knock in the steering. Euromarque’s technician:
[10] After taking these steps, the technician observed that the noise had disappeared. The technician reassembled the steering column, road-tested the vehicle and “found all was okay with the noise gone”.
[11] However, because the steering column is an “unserviceable item,” according to Haval, the technician recommended it be replaced to ensure that the fault did not return. This recommendation was accepted by Haval New Zealand, which authorised the supply of a brand new steering column under warranty.
[12] Euromarque advised Ms Lowe and Mr Dennison that a replacement steering column would be ordered from China and would take approximately three weeks to arrive. In the meantime, Euromarque advised them that they could continue to use the vehicle. In that regard, when he collected the vehicle, Euromarque advised Mr Dennison that it was safe to operate. It was not clear to what extent (if any) Euromarque explained exactly what it had done to stop the noise (as described above). Any explanation would only have been oral. The technician’s written notes that were supplied to the Tribunal after the hearing, had not previously been provided to Ms Lowe and Mr Dennison. As I told Mr Pullan at the hearing, if Euromarque had provided these notes at the time the vehicle was handed back, it may have helped alleviate Ms Lowe’s and Mr Dennison’s concerns.
[13] Ms Lowe and Mr Dennison told the Tribunal that, after the interim repair carried out by Euromarque in or around July 2019, they did not experience any further knocking or clicking from the steering wheel.
[14] Three weeks passed, but Ms Lowe had not heard any more from Euromarque about the replacement steering column. She called Euromarque to ask if the replacement part had arrived. To her dismay, the replacement steering column had not even been ordered. On behalf of Euromarque, its aftersales manager Matthew Pullan accepted that this was Euromarque’s mistake.
[15] The replacement steering column eventually arrived on or around 24 November 2019 and was replaced on the vehicle. The vehicle was road tested and no abnormal noise was found.

Air conditioning fault

[16] The second problem that Ms Lowe and Mr Dennison had with the vehicle occurred towards the end of November 2019. The air conditioning/fan unit in the vehicle malfunctioned, blowing air on the maximum setting only. Again, Ms Lowe and Mr Dennison contacted Euromarque to get this issue fixed. Ms Lowe reported that she was told Euromarque would have to order another part from China, which could take four to five weeks. She was unhappy about this as it was coming into summer and so she was expecting to need to use the vehicle’s air conditioning. As a temporary fix, it seems that a replacement part was borrowed from a demonstration vehicle on the forecourt. However, this temporary repair failed after only a few days and, at the beginning of December 2019, the air conditioning unit and fan system stopped working altogether. Ms Lowe took the vehicle back to Euromarque, which kept the vehicle for four days, during which time it supplied her and Mr Dennison with a loan vehicle.
[17] The invoice records that loose terminals were found in a plug behind the dashboard. The plug and terminals were replaced. Mr Pullan explained that a replacement part was sourced locally to minimise the time that Mr Dennison and Ms Lowe would be without the vehicle.

Failure of LED bulbs in high stop brake lights

[18] The third problem identified by Ms Lowe related to a failure of some of the LED bulbs in the high stop brake light. It seems that a replacement part for this needed to be sourced from China and that there was a delay of approximately three weeks before this arrived and was replaced.

Were there undue delays in sourcing parts?

[19] Because of the concerns expressed by Ms Lowe in respect of the timeliness of the supply of parts to repair the problems in her vehicle, I joined Haval Motors Australia Pty Ltd, which trades as Haval Motors New Zealand, to the proceeding and requested the attendance at the hearing of Todd Groves, the Haval Motors New Zealand country manager. Section 12 of the CGA provides in respect of goods that are “first supplied to a consumer in New Zealand...there is a guarantee that the manufacturer will take reasonable action to ensure...supply of parts for the goods are reasonably available for a reasonable period after the goods are supplied.”
[20] I asked Mr Groves whether problems had been experienced generally in relation to the supply of replacement parts for Haval vehicles in New Zealand, or whether there were delays in supplying parts for this specific vehicle. Mr Groves denied there was any issue regarding the timeliness of the supply of parts. Mr Groves emphasised that it is not feasible to hold every part of a vehicle in Haval’s New Zealand inventory. It is purely guesswork as to which parts might be needed. Mr Groves said there is a Haval parts distribution centre in Auckland which stocks 10,000 line items. Mr Groves said that best endeavours are made to anticipate and store those parts that are most likely to be needed. Even so, it was still necessary to destroy up to $150,000 worth of parts every year because they were not required. Mr Groves added that, in addition to the New Zealand parts distribution centre, there is a further parts distribution centre in Australia. Parts not held in either of these facilities, such as the replacement steering column for Ms Lowe’s vehicle, are sourced from China.
[21] Mr Groves said that service agents identify whether a particular defect renders the vehicle unable to be used, in which case it is designated “vehicle off-road” (VOR). In such a case, freight is expedited and there is a maximum three week wait for the necessary parts. Mr Groves said that, in his understanding, the timeliness of supply of parts for Haval vehicles in New Zealand was comparable to that for other manufacturers. Mr Pullan agreed, adding that the supply of Haval parts is, if anything, quicker than for some of the other new vehicle brands carried by Euromarque.
[22] I was reassured by the evidence given by Mr Groves, which addressed my concerns about the supply of parts. I am not persuaded that there is any particular issue in terms of s 12 of the CGA in respect of the supply of parts for Haval vehicles in general, or this vehicle in particular (apart from Euromarque’s acknowledged mistake in failing to order the replacement steering column). In addition, I am satisfied from the evidence of Mr Groves and Mr Pullan that there are suitable arrangements for expediting the supply of a part without which a vehicle is inoperable. In such a case, Mr Pullan referred to an arrangement to source certain parts locally where appropriate. This system seemed to operate satisfactorily in relation to the electrical components used to fix the air conditioning, which Mr Pullan said had been sourced locally, notwithstanding that that fault did not render the vehicle inoperable.

Tribunal’s assessment

[23] Having regard to all of the evidence and the advice of the Tribunal’s Assessor, Mr Dixon, I agree that each of the matters identified by Ms Lowe amount to a failure of the vehicle to comply with the guarantee of acceptable quality. I consider the each of the faults identified were “minor defects” in the sense described in s 7(1)(c) of the CGA (above). I accept Ms Lowe and Mr Dennison had genuinely-held concerns about the vehicle’s safety. But I do not consider they have established that the safety of the steering of the vehicle was compromised in any way as a result of whatever was causing the knocking noise they experienced.
[24] While there has been no conclusive diagnosis of the fault, the examination by the Euromarque technician as described in the technician’s note appeared to Mr Dixon and me to indicate there was a fault in the calibration of the springs associated with the controls for adjusting the position of the steering column within the car’s cabin. Mr Dixon and I were satisfied that the technician carried out all necessary inspection of components of the steering and concluded that there were no safety concerns if the vehicle continued to be operated pending replacement of the steering column. This was then advised to Mr Dennison. While the noise from the steering column may have been alarming, I do not consider there was any evidence to establish the safety of the vehicle was compromised.
[25] In respect of the air conditioning malfunction, again, I consider that this was a minor defect that a reasonable consumer would not have regarded as acceptable in a new vehicle. However, it appears to have been readily diagnosed and fixed. While the repair process was no doubt inconvenient for Ms Lowe and Mr Dennison, I do not consider that Euromarque took an unreasonably long time to carry out this repair.
[26] Finally, in respect of the high stop brake light LED failure, from the photograph produced to the Tribunal it appears that less than 75 per cent of the high stop brake light was compromised. As Mr Pullan and Mr Groves submitted, because so much of the light was still working, the light was still clearly visible and continued to meet warrant of fitness requirements.[1] Mr Dixon and I are not persuaded that at any time the vehicle would have been rejected in a warrant of fitness inspection because its high stop brake light was not fully illuminated. It is clear from the photograph that the high stop brake light continued to function adequately and would have provided sufficient indication to following motorists that the vehicle was stopping. For that reason, I do not consider that Euromarque and Haval had any basis for triggering the VOR expedited part supply arrangement. Therefore, I am not satisfied that there was any justification for Ms Lowe to complain that this problem was not fixed in a reasonable time.

Issue two: Has Ms Lowe established a breach of the Fair Trading Act 1986?

[27] Prior to purchasing the vehicle, Ms Lowe asked the salesperson (identified by her as “Shannon”) whether the vehicle had any known faults. Ms Lowe said that Shannon told her that there were no known faults that she was aware of. Ms Lowe recalled this statement at a settlement meeting held at Euromarque on 16 January 2020, where Ms Lowe understood Mr Pullan to have admitted that the steering column knocking noise was a known issue with the vehicle.
[28] Mr Pullan clarified at the Tribunal hearing that he did not say that the fault experienced by Ms Lowe and Mr Dennison was a “known issue”. Rather, Mr Pullan said he had told Ms Lowe that Euromarque had previously replaced one other steering column in a Haval that it had sold. Mr Pullan said at the hearing that this steering column in the other vehicle was replaced because that vehicle had been in an accident, not because it had the knocking issue identified by Ms Lowe. Both Mr Pullan and Mr Groves confirmed that, to their knowledge, the knocking/clicking issue experienced by Ms Lowe and Mr Dennison was not a known issue with the model. Indeed, Mr Groves confirmed that the faulty steering column that had been returned to Haval was not further examined and so, to this point, there has been no confirmed diagnosis as to what the issue causing the knocking noise in fact was.
[29] Section 9 of the FTA provides;
  1. Misleading and deceptive conduct generally

No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

[30] The test for establishing a breach of s 9 was set out by the Supreme Court in Red Eagle Corp Ltd v Ellis: [2]

... The question to be answered in relation to s 9 ... is ... whether a reasonable person in the claimant’s situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely have been misled or deceived. If so, a breach of s 9 has been established. It is not necessary under s 9 to prove that the defendant’s conduct actually misled or deceived the particular plaintiff or anyone else. If the conduct objectively had the capacity to mislead or deceive a hypothetical reasonable person, there has been a breach of s 9. If it is likely to do so, it has the capacity to do so. Of course the fact that someone was actually misled or deceived may well be enough to show that the requisite capacity existed.

[31] I am satisfied, given the explanation of Mr Pullan and Mr Groves, that a reasonable person in Ms Lowe’s situation would not have been misled or deceived by the statements made by Shannon prior to Ms Lowe’s purchase of the vehicle. If Shannon (who did not give evidence) said that she was not aware of any known faults of the vehicle, then I do not consider that this was misleading or deceptive as there is no proof that any of the faults experienced by Ms Lowe or Mr Dennison with their vehicle are what can be described as “known faults” or that she was aware of them. Accordingly, Ms Lowe’s claim that Euromarque breached the FTA, by engaging in misleading and deceptive conduct, fails.

Issue three: What remedy, if any, is Ms Lowe entitled to?

[32] The remedies for breach of the guarantee of acceptable quality in the CGA are set out in s 18 of that Act, which provides:
  1. 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.

[33] The primary remedy available to a consumer where a vehicle fails to comply with the guarantee of acceptable quality is set out in s 18(2)(a), to require the trader to remedy the failure within a reasonable time. In my view, having regard to the evidence as set out above, Euromarque has remedied each of the faults identified by Ms Lowe within a reasonable time. In relation to the steering column issue, I regard the remedy to have been provided at the time of the interim repair, which removed the knocking noise, rather than when the steering column was replaced later. There was no evidence to justify a finding that the vehicle was unsafe to drive at any time.
[34] The only other basis for rejecting a vehicle would be if the faults identified were of a substantial character within the meaning of a s 21 of the CGA. I do not consider that any of the faults identified as described above, which were all relatively minor, amount to a failure of a substantial character, either alone or together.
[35] In particular, as I have already described, I do not consider that the steering fault was a safety issue, so s 21(d) of the CGA does not apply.
[36] Moreover, I do not think that the fact that Ms Lowe and Mr Dennison have experienced three separate faults within a relatively short time in a new vehicle amounts to any accumulation of faults that, together could be regarded as a failure of a substantial character.[3] Even for a new vehicle, it is not uncommon for consumers to experience faults. These were all minor matters and Euromarque was fully cooperative in arranging all necessary repairs. The only real glitch was its omission to order the replacement steering column. And I also think Euromarque could have improved its communication with Ms Lowe and Mr Dennison in respect of the repairs it carried out on the steering column. But these are not failings that warrant any further remedy, and they certainly do not justify rejection of the vehicle.
[37] I accept that Ms Lowe and Mr Dennison’s experience has been less enjoyable and trouble-free than they would have liked, and it is unfortunate for them that these faults have consumed their time and attention. However, I do not think in total the collection of three relatively minor matters are sufficiently serious to warrant a finding that the failure of the vehicle to comply with the guarantee of acceptable quality was of a substantial character.

Conclusion

[38] As explained above, I consider that Euromarque’s efforts to repair the vehicle met its obligations under s 18 of the Act. As there are no outstanding issues for which repairs have not been completed, and as Euromarque has complied with its obligations to repair all existing faults, Ms Lowe’s claim for further relief must fail and her application to the Tribunal is dismissed.

J S McHerron
Adjudicator

[1] New Zealand Transport Agency “VIRM In-service Certification (WOF and COF), General Vehicles, Lighting” at cl 4-11-13 (High-mounted stop lamps).

[2] Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].

[3] In accordance with Cooper v Ashley & Johnson Motors Ltd (1996) 7 TCLR 407 (DC).

NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.nzlii.org/nz/cases/NZMVDT/2020/29.html