MVD [2020] NZMVDT 46 (12 June 2020)

Last Updated: 20 July 2020

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 046/2020
[2020] NZMVDT 75

BETWEEN DAVID DERRALL CARTER

Purchaser

AND ENERGY CITY MOTORS LIMITED

Trader

HEARING at Wellington on 2 June 2020
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

D Binding – Assessor
APPEARANCES

D D Carter, Purchaser (by VMR)
R S Dempster, CEO of Trader (by phone)
R Reade, Sales Manager of Trader (by phone)

DATE OF DECISION 12 June 2020

___________________________________________________________________

DECISION OF THE TRIBUNAL

___________________________________________________________________

David Carter’s application is dismissed.

___________________________________________________________________

REASONS

Introduction

[1] David Carter is disappointed with the 2011 Ford Territory he purchased from Energy City Motors Ltd in 2015. Mr Carter says the Territory has never been a trustworthy, reliable family car and it is not fit for purpose. In the five years he has owned the car, it has had a number of faults, including leaks and electrical faults.
[2] According to Mr Carter, the vehicle has recently failed a warrant of fitness inspection because of a faulty driveshaft hanger bearing and a worn ball joint. Mr Carter seeks $11,000 compensation from Energy City Motors, plus $6,000 as a contribution towards his outlay on a replacement vehicle.
[3] From this background, the following issues arise for the Tribunal’s determination:

• (a) Did the vehicle fail to comply with the guarantee of acceptable quality?
• (b) If so, what remedy (if any) is Mr Carter entitled to?

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 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.
[5] “Acceptable quality” is defined in s 7 of the Act (as far as is relevant) 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.

...

[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.

Leaks in rear of vehicle

[7] The first significant problem that Mr Carter experienced with the vehicle was a water leak in its boot area. This was first noticed by Mr Carter in the second month that he owned the vehicle, but he did not refer the problem to Energy City Motors until October 2015, some four months later.
[8] The Energy City Motors workshop summary states that the vehicle was water tested and that water was found to be entering at the top right rear corner of the boot. Energy City Motors found the top window weather seal was very dirty. It cleaned the seal and refitted it. However, it then found that the seal had shrunk, so it replaced the seal with new rubber. After making some further adjustments, Energy City Motors checked the vehicle by water testing it again and found it to be watertight. The cost of these repairs, $376.06, was covered under the used vehicle warranty so there was no expense for Mr Carter.
[9] Unfortunately, the repair did not fix the problem and the vehicle continued to leak, so Mr Carter took it back to Energy City Motors on or around April 2016. This time, Energy City Motors found water entering on the left hand side of the glass area at the rear of the vehicle. It found the trim was broken inside. After cleaning the area thoroughly, it applied sealant to the leaking area. Following this repair, it retested the rear of the vehicle for leaks and found that the problem had been fixed. This repair was also covered under the used vehicle warranty and so did not result in any further expense incurred by Mr Carter.

EGR valve replacement

[10] The next issue identified was in or around October 2015. Mr Carter reported the dynamic stability control (DSC) warning light illuminated while the vehicle was rounding a corner. The light went off again after a further cycle of the ignition key. It appears Energy City Motors was not able to identify the problem. However, around the same time it appears the vehicle went into limp mode and Energy City Motors attended a breakdown at Mr Carter’s address. It recovered the vehicle and found that an exhaust gas recirculation (EGR) valve required replacement. It carried out this repair at no expense to Mr Carter.

Rust on tailgate

[11] The third issue identified was the appearance of rust on the vehicle’s tailgate in or around December 2015. It appears that Energy City Motors submitted this complaint to the manufacturer as a warranty claim but this was rejected as it was found that the issue had been caused by paint wearing away due to a “fitment issue” rather than a manufacturing defect. Nevertheless, it appears that Energy City Motors covered the cost of this repair and so there was no expense incurred by Mr Carter.

ICC replacement and other faults in 2016

[12] Further faults were identified in 2016, when various repairs were carried out, including the further leak repair described already. Other repairs carried out at this time included replacing the master switch for the electric windows, following Mr Carter’s report that the windows were slow to operate. Apart from other minor matters, the interior command centre (ICC) was replaced to address a problem with the air conditioning in which it randomly blew full speed and at different temperatures. These repairs were all covered under warranty at no expense to Mr Carter.

Leaks, flat battery and electrical problems in 2017

[13] In 2017, Mr Carter referred to the vehicle having continuous random leaks and random flat batteries. Once when the vehicle failed to start, it was recovered and brought to Energy City Motors in or around late July 2017. Energy City Motors checked the battery, found it to be faulty and replaced it. It also found the vehicle’s fusible link, the main fuse between the battery and the vehicle’s fuse box, had blown and it replaced this part and tested the vehicle. This appears to have been the first repair for which Mr Carter was required to pay himself. He was invoiced $621.35 on 2 August 2017, some two years and two months after he had purchased the vehicle. This invoice included the cost of the replacement battery.
[14] Energy City Motors submitted that the failure of the fusible link was likely to have been caused by the vehicle having been jump started. Mr Carter acknowledged that he did have to jump start the vehicle on several occasions when its battery was flat.
[15] A battery is a consumable item which a reasonable consumer would expect to need to replace from time to time. As this fault occurred more than two years after Mr Carter purchased the vehicle it is not a failure to comply with the guarantee of acceptable quality. Rather it is attributable to ordinary vehicle maintenance which a reasonable consumer would expect to have to undertake. At the hearing, Mr Carter confirmed that the replacement battery that was installed in August 2017 is still operating satisfactorily.

Further leak and electrical issues in 2019

[16] No further issues appear to have been identified for the next approximately two years until June 2019, when the vehicle was pushed into Energy City Motors’ workshop unable to be started, with a transmission fault warning appearing on the dashboard. Mr Carter reported that he had identified rusted and broken wires under the front passenger seat, and various diagnostic tasks and repairs were made in or around June 2019. As part of its diagnosis of this fault in June 2019, Energy City Motors identified a water leak in the area of the left front passenger area. Mr Carter did not ask Energy City Motors to carry out repairs for that leak and so its invoice dated 7 June 2019, in the sum of $1,106.65, identifies that the water leak remained in the vehicle and so the repair would not last. The invoice records that Mr Carter was made aware of this. I also note that this new leak was in a completely different area from the original leaks that affected the vehicle in 2015 and 2016.
[17] This new leak in the left front passenger area was further investigated in August 2019 by Energy City Motors, but a dispute arose between Mr Carter and Energy City Motors about the repair work that would need to be carried out. Mr Carter did not want Energy City Motors to proceed with the repair. He has since had the vehicle’s leak repaired by a panelbeater. No invoice was produced to the Tribunal in respect of this work but Mr Carter told us at the hearing that the cost of the repair was around $300.

Current faults

[18] Before the hearing, Mr Carter was asked to provide a description of the vehicle’s current faults (if any) plus technical reports from qualified repairers outlining what is wrong with the vehicle and the estimated cost of any repairs that are needed. Mr Carter did not supply any further information in response to this request. However, at the hearing he advised that the vehicle had recently failed a warrant of fitness inspection (the first that it has failed since he owned the car) and that a ball joint needs to be replaced, along with the driveshaft hanger bearing.
[19] No:

• (a) evidence of the warrant of fitness failure;
• (b) evidence that these repairs were required;
• (c) quote for the cost of those repairs;

was produced to the Tribunal, despite the pre-hearing direction to Mr Carter to do so.

[20] Energy City Motors advised that it had not seen the vehicle since October 2019, and nor did it have any information about what was currently wrong with the vehicle or what repairs were required.
[21] Accordingly, the Tribunal is unable to reach any findings as to the vehicle’s current faults.

Tribunal’s assessment

[22] It is clear that this vehicle has had a number of troublesome faults over the five years since Mr Carter purchased it. To some extent that is to be expected in a high mileage vehicle of this nature (the vehicle’s odometer reading as at 9 February 2020 was reported as 203,103km). Nevertheless, I find that the vehicle failed to comply with the guarantee of acceptable quality in respect of the original leaks experienced by Mr Carter in 2015 and 2016, as well as the various other faults experienced by Mr Carter in 2016 as described above.
[23] However as has been emphasised by this Tribunal on numerous occasions, the protections in the Act do not last indefinitely. They last only as long as is reasonable in the circumstances of each case, taking into account factors such as the price, age and mileage of the vehicle at the time of sale, the use that the vehicle has been put to, the length of ownership before the defect becomes apparent and the distance travelled in that time.
[24] In the present case, taking into account these factors, I am satisfied that Mr Carter’s vehicle has been as fit for purpose, free of minor defects and durable as a reasonable consumer would consider acceptable, putting to one side the faults experienced up to 2016, all of which have been repaired by Energy City Motors at its expense. The recent faults experienced by Mr Carter, including relating to leaks identified in 2019, have occurred four years after Mr Carter purchased the vehicle and after he has travelled between 30-35,000 km in it. The more recent faults he has alleged (in respect of which no evidence was provided) are well beyond the scope of the acceptable quality guarantee. In short, Mr Carter has now owned the vehicle for too long for there to be any remaining protection under the Act.

Issue two: What remedy (if any) is Mr Carter entitled to?

[25] The remedies available to a consumer in respect of a breach of a guarantee in 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.

[26] It will be apparent from my reasons set out above that I do not consider that Mr Carter is entitled to any further remedy in respect of his vehicle, other than relates to repairs for defects experienced in 2016 and earlier. As is set out in the chronological history of the vehicle as I have described above, all of these repairs were met at the cost of Energy City Motors rather than at Mr Carter’s cost. Mr Carter did not provide any evidence of expenses incurred by him in that 2015-2016 period that have not been met by the trader.

Conclusion

[27] Accordingly, although this will be a disappointing outcome for Mr Carter, I conclude that he is not entitled to any further reimbursement or compensation in respect of his vehicle. His application must be dismissed.

J S McHerron
Adjudicator