Barrett v 2 Cheap Cars Ltd - Reference No. 054/2020 MVD [2020] NZMVDT 67 (4 June 2020)

Last Updated: 20 July 2020

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 054/2020 [2020] NZMVDT 067 BETWEEN SIMON PAUL BARRETT Purchaser AND 2 CHEAP CARS LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 28 May 2020

APPEARANCES

S P Barrett, Purchaser K Barrett, Witness for the Purchaser

S Dufty, for the Trader M Prasad, Witness for the Trader

DATE OF DECISION 4 June 2020

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DECISION OF THE TRIBUNAL

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1. Simon Barrett’s application is dismissed.

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REASONS

Introduction

[1] Simon Barrett wants to recover $6,138.64 for repairs performed on the 2006 Mercedes-Benz C55 AMG he purchased for $14,274 from 2 Cheap Cars Ltd in June 2019. Mr Barrett says that the vehicle was not supplied with a recently issued warrant of fitness as required by law and needed extensive and expensive repairs within six months of purchase, which he has paid for. He now wants to recover the cost of those repairs and compensation for the time he has spent dealing with the vehicle’s problems.
[2] 2 Cheap Cars says that Mr Barrett should not be entitled to the remedy he seeks because he did not give it a reasonable opportunity to rectify the vehicle’s faults before having the repairs done elsewhere.

Relevant background

[3] A motor vehicle supplied to a consumer must have a warrant of fitness issued within the previous month,[1] unless the consumer is advised to the contrary. In this case, the vehicle’s warrant of fitness was issued in November 2018, more than six months before it was sold to Mr Barrett. Mr Barrett was not advised of the aged warrant of fitness.
[4] In late November 2019, Mr Barrett took the vehicle to Mercedes-Benz Botany for a warrant of fitness inspection. The vehicle failed that inspection due to worn front control arm bushes, worn front upper suspension mount bushes and faulty HID headlight control units. Mercedes-Benz Botany also considered that the vehicle had oil leaks from the engine oil cooler and rear main seal.
[5] Mr Barrett contacted 2 Cheap Cars about those defects and 2 Cheap Cars asked to inspect the vehicle. The vehicle was then taken to Marshall Automotive, who advised 2 Cheap Cars as to the vehicle’s defects. 2 Cheap Cars then sourced replacement parts and advised Mr Barrett that they were ready for installation.
[6] Mr Barrett did not let 2 Cheap Cars perform the required repairs. Instead he had the suspension faults and oil leaks rectified by Mercedes-Benz Botany, at a cost of $6,278.90. He then had the HID control units replaced by Papatoetoe Auto Electricians at a cost of $1,333.80.

The issues

[7] Against this background, the issues requiring consideration are:

• (a) Has the vehicle been of acceptable quality for the purposes of the Consumer Guarantees Act 1993 (the CGA)?
• (b) What remedy is Mr Barrett entitled to under the CGA?

Issue 1: Has the vehicle been of acceptable quality?

[8] 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.
[9] The expression "acceptable quality" is defined in s 7(1) of the CGA 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.

[10] 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 Barrett’s subjective perspective.

The oil leaks and headlight faults mean the vehicle not of acceptable quality

[11] I am satisfied that Mr Barrett has proven that the vehicle was not of acceptable quality because it had unacceptable oil leaks and defective headlights that were not as durable as a reasonable consumer would consider acceptable.
[12] Although a 13-year-old Mercedes-Benz C55 with an odometer reading of 61,673 km at the time of sale will almost inevitably consume some oil, I accept Mr Barrett’s evidence that this vehicle developed a significant oil leak within one month of purchase, which caused the vehicle to consume about one litre of oil for every 1,000 km driven. That is excessive oil consumption.
[13] I also accept Mr Barrett’s evidence that the vehicle’s headlights began to flicker shortly after purchase, with that fault worsening during his ownership. That evidence satisfies me that the HID control unit fault was present shortly after purchase and that it means the vehicle has not been as durable as a reasonable consumer would consider acceptable. It is also possible that this defect would have been identified if 2 Cheap Cars had performed a pre-purchase warrant of fitness inspection as required by Land Transport regulations.

The worn suspension components do not breach the acceptable quality guarantee

[14] I am satisfied that the worn suspension components do not breach the guarantee as to acceptable quality.
[15] The protections in the CGA are not indefinite and last only as long as is reasonable considering the factors in s 7(1)(f) to (j) of the CGA, and in this case the worn suspension components were first identified on 29 November 2019, more than six months after purchase, by which time Mr Barrett had travelled nearly 10,000 km in the vehicle.
[16] Mr Haynes, the Tribunal’s Assessor, advises that it is not unusual for the control arm bushes and suspension mount bushes to require replacement in a 13-year-old vehicle that has travelled more than 70,000 km. Mr Haynes advises that those components will often wear out over time as the vehicle is used.
[17] Given the nature of the defect, the price, age and mileage of the vehicle at the time of sale, the length of time before this fault became apparent, and the distance travelled in that time, I am satisfied that the suspension components have been as durable as a reasonable consumer would consider acceptable.

Issue 2: What remedy is Mr Barrett entitled to under the CGA?

[18] The remedies relevant to this claim are set out in s 18 of the CGA, 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.

[19] Mr Barrett wants to recover a reasonable contribution towards the cost he has incurred in rectifying the vehicle’s faults. He is not entitled to do so.
[20] In Acquired Holdings Ltd v Turvey, the High Court found that, under s 18(2) of the CGA, a consumer must first give the supplier an opportunity to remedy a failure before having it rectified elsewhere and recovering the cost of repairs from the supplier.[2]
[21] Although Mr Barrett submitted that he gave 2 Cheap Cars an opportunity to rectify the fault and that it failed to do so in a timely manner, the evidence shows otherwise.
[22] The vehicle’s defects were first diagnosed on 29 November 2019. The following day, Mr Barrett lodged a complaint with 2 Cheap Cars. On 2 December 2019, before he had received any response from 2 Cheap Cars, Mr Barrett paid Mercedes-Benz Botany $2,969.80 to purchase the parts required to rectify the oil leaks and suspension faults. Mr Barrett did not ask 2 Cheap Cars to purchase those items.
[23] 2 Cheap Cars then responded on 2 December 2019, asking Mr Barrett to take the car to Marshall Automotive — its preferred repairer — for inspection. That occurred, and the vehicle was returned to Mr Barrett. At that time Mr Barrett did not ask 2 Cheap Cars to rectify the vehicle’s faults or tell it that he had purchased replacement parts. Indeed, Mr Barrett emphasised in later correspondence that he only allowed the vehicle to be taken to Marshall Automotive for inspection purposes.
[24] On 14 December 2019, 2 Cheap Cars contacted Mr Barrett advising him that it had sourced parts for his vehicle and asking him to take the vehicle to Marshall Automotive for the required repairs to be performed. Mr Barrett declined this offer and advised that the oil leak and suspension faults were to be rectified by Mercedes-Benz Botany on 16 December 2019. Mr Barrett noted that, on the advice of Mercedes-Benz Botany, he wanted only genuine manufacturers parts to be used, rather than the aftermarket parts preferred by 2 Cheap Cars.
[25] 2 Cheap Cars told Mr Barrett that it could not guarantee that it would reimburse him for any expense he incurred in repairing the vehicle himself. In an email of 16 December 2019 at 9.29 am, an employee of 2 Cheap Cars advised Mr Barrett that he or she would need to “speak with higher management around this as this has all been done without our knowledge or prior approval”. The employee also advised Mr Barrett that “I would suggest not having repairs completed until after higher management have come back to me with an outcome”.
[26] Mr Barrett nonetheless proceeded to have the oil leaks and suspension components replaced by Mercedes-Benz Botany. In January 2020, the HID control units were then replaced by Papatoetoe Auto Electricians 1998 Ltd. There is no evidence to show that Mr Barrett asked 2 Cheap Cars to perform this repair before having it done elsewhere.
[27] Mr Barrett submitted that he has acted fairly and reasonably throughout. He says that he needed to have the vehicle repaired quickly and that he has been prepared throughout to reach a compromise with 2 Cheap Cars.
[28] On the evidence I have seen and heard, I have no doubt that Mr Barrett did what he thought was the right thing. Despite his best intentions, Mr Barrett has nonetheless failed to comply with a basic CGA obligation. Mr Barrett was required to ask 2 Cheap Cars to rectify the vehicle’s defects and give it a reasonable opportunity to do so before having the work done elsewhere. He did not do that, so he is not entitled to recover any costs relating to those repairs.
[29] Mr Barrett also seeks to recover the cost of his time spent dealing with the vehicle’s defects and pursuing this matter. Considering my finding that he did not follow the correct procedure and allow 2 Cheap Cars a reasonable opportunity to rectify the vehicle’s faults, it is not appropriate to compensate Mr Barrett for time spent.
[30] Mr Barrett’s application is therefore dismissed.

DATED at AUCKLAND this 4th day of June 2020

B.R. Carter
Adjudicator

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[1] Land Transport Rule: Vehicle Standards Compliance 2002, r 9.12(3).

[2] Acquired Holdings Ltd v Turvey [2007] NZHC 1251; (2008) 8 NZBLC 102,107 (HC).