Lockwood v Cartown Limited - Reference No. MVD 222/2021 [2021] NZMVDT 151 (13 August 2021)

Last Updated: 27 September 2021

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 222/2021
[2021] NZMVDT 151

BETWEEN LATHAM MARK LOCKWOOD

Purchaser

AND CARTOWN LIMITED

Trader

HEARING at Palmerston North on 19 July 2021
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator
A B Cate – Assessor

APPEARANCES

L M Lockwood, Purchaser
G C Theobald, Shareholder and Sales Manager of Trader (by VMR)

DATE OF DECISION 13 August 2021

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DECISION OF THE TRIBUNAL

___________________________________________________________________

Latham Lockwood’s rejection of his MG HS is not upheld, and his application is dismissed.

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REASONS

Introduction

[1] Latham Lockwood has rejected the 2021 MG HS Essence Anfield that he purchased new on 3 February 2021 from Cartown Ltd for $40,490. Mr Lockwood alleges that:

• (a) Cartown misrepresented some of the features of the car; and
• (b) the car has had a range of faults affecting its reliability and safety which, in combination, have caused Mr Lockwood to lose faith in it.

[2] The issues for the Tribunal to determine, arising from Mr Lockwood’s application, are as follows:

• (a) Did Cartown misrepresent the vehicle to Mr Lockwood?
• (b) Did the vehicle fail to comply with the guarantee of acceptable quality?
• (c) If the answer to either of these questions is yes, what, if anything, is the appropriate remedy?

Issue 1: Did Cartown misrepresent the features of the vehicle when selling it to Mr Lockwood?

[3] If Mr Lockwood establishes that Cartown misrepresented the features of the vehicle when selling it to him, this could amount to a breach of s 9 of the Consumer Guarantees Act 1993 (“the CGA”), which is a guarantee that goods comply with their description.[1] Or it could be a breach of s 9 of the Fair Trading Act 1986, which provides that “no person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive”.
[4] Mr Lockwood alleged that Glynn Theobald, Cartown’s Sales Manager, made various statements while he was encouraging Mr Lockwood to purchase the vehicle. These statements were to the effect that the car would be reliable and would have no problems. Mr Theobald is alleged to have said that, if there were any issues with the car, Cartown would “sort them” out and, if it could not, MG would just replace the car. In short, Mr Lockwood said that he was encouraged by Cartown to believe that he was purchasing a good, safe, reliable car. But his experience with the vehicle is that it has not lived up to this promise.
[5] In particular, Mr Lockwood said that he wanted to ensure that the vehicle he was purchasing had all of the features that his previous vehicle, a Subaru, had. He says he made this wish very clear to Mr Theobald.
[6] One of the features Mr Lockwood wanted was automatic collision avoidance braking operating both when the vehicle was travelling forwards as well as in reverse. In correspondence with Cartown, Mr Lockwood alleged that Mr Theobald told him that the MG had reverse automatic collision avoidance braking. In fact, the vehicle only has automatic forward braking.
[7] Mr Theobald denied that he told Mr Lockwood that the vehicle had automatic reverse braking. At the hearing, Mr Lockwood retracted his allegation that Mr Theobald had told him the vehicle had automatic reverse braking. He confirmed that he did not mention this specifically in his discussions with Mr Theobald, and nor did Mr Theobald.
[8] Nevertheless, Mr Lockwood maintained that, in the context of a discussion about whether the MG had equivalent features to his Subaru, he understood that he was told that it did have such features. However, at the hearing, Mr Lockwood admitted that he had no reasonable basis for expecting that Mr Theobald would have known all of the features of his Subaru.
[9] Mr Lockwood also alleged that Mr Theobald misrepresented the manner in which the doors of the vehicle are locked and unlocked. Mr Theobald denied that he had misrepresented the working of the doors to Mr Lockwood. Mr Theobald said that any such misrepresentation is highly unlikely to have occurred, as he himself owns the same model vehicle and knows how to lock and unlock its doors.

Tribunal’s assessment

[10] I do not consider that Mr Lockwood has established Cartown made any specific misrepresentations in respect of the vehicle’s features. Indeed, by his own admission, Mr Lockwood overstated the extent to which Cartown represented aspects of the vehicle about which Mr Lockwood now complains. I acknowledge that Mr Lockwood has had reliability concerns with some features of the vehicle, which I will go on to describe further under the next issue. However, it is important to repeat that Cartown did not make an unqualified representation that the vehicle would be reliable. As Mr Lockwood himself acknowledges, Cartown told him that if the vehicle had any issues Cartown would “sort them” out. As I will go on to describe, I consider that Cartown has been involved in doing exactly this – sorting out problems as they arise. When Mr Lockwood has found a problem with the car and has given Cartown the opportunity to remedy that problem, Cartown has not shied away from its obligations to sort the problem out.
[11] To the extent that the vehicle has not measured up to Mr Lockwood’s expectation that it would be a “good, safe, reliable car”, I have reached the conclusion that Cartown should be given a further opportunity to bring the car up to the standard that a reasonable consumer would expect to find in a new vehicle. I will describe this further in the remainder of this decision.

Conclusion

[12] Overall, I conclude that Mr Lockwood has not established that Cartown misrepresented the features of the vehicle when selling it to Mr Lockwood.

Issue 2: Did the vehicle fail to comply with the guarantee of acceptable quality?

[13] Section 6(1) of the CGA provides that “where goods are supplied to a consumer there is a guarantee that the goods are of acceptable quality”.
[14] “Acceptable quality” is defined in s 7 of the CGA (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.

...

[15] 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.
[16] Mr Lockwood has had a number of concerns about the car’s safety and reliability going back to the first day he owned it. Overall, he says he feels unsafe driving the car and that a number of its electronic user interfaces on its main dashboard screen are “quite buggy”.
[17] On the first day he drove away in the car after purchasing it, a battery problem occurred. A warning appeared on the dashboard indicating “low battery” when the car was parked and was idling.
[18] Initially, Cartown’s service manager told Mr Lockwood that this was normal and resulted from the car being left on too long without the engine running. Cartown charged the battery, and the warning has not come back since. Nevertheless, Mr Lockwood wanted to raise the issue as he believed it showed that Cartown was blaming him for some of the vehicle’s problems, rather than properly acknowledging them to be faults with the car itself.
[19] Mr Lockwood has had problems with the reversing camera overlapping the screens on the car’s main display. Cartown replaced the vehicle’s reversing camera, and this issue has now been resolved.
[20] Mr Lockwood has had problems with the automatic boot closer. One time this only closed part of the way down. Mr Lockwood has now been advised that this is only designed to work for up to two minutes after being opened and is not a fault.
[21] Mr Lockwood also had problems with the clock in the car running slow and the GPS time being set to an overseas time zone. These issues have now been addressed.
[22] Mr Lockwood also expressed concerns about the cruise control, which he said is actively braking the vehicle when it went around a corner. Cartown has explained that this is a feature called adaptive cruise control. It has a safety rationale: to ensure that the vehicle does not go around corners too fast.
[23] The original floor mats that were supplied were defective because the glue became unstuck, and parts of the mats lifted. A replacement set of mats has been supplied. However, these do not have MG branding, to Mr Lockwood’s dissatisfaction.
[24] The most significant issue from Mr Lockwood’s perspective is that, while he is driving, the vehicle’s main screen cuts out and goes blank. He has to stop to turn off the car and restart it. Cartown has replaced the vehicle’s screen, but this fault is still occurring. A related fault is that Mr Lockwood has difficulty changing the radio settings using the input controls on the vehicle. A further replacement screen, which has modifications designed to deal with this fault, is on order but has been delayed. Mr Theobald said it was expected to arrive in late July, but there have been several delays associated with the COVID-19 pandemic that have meant that Cartown has experienced various difficulties in sourcing parts from its suppliers.
[25] Mr Lockwood also mentioned various anomalies with the automatic speed limit recognition system in the vehicle. Sometimes it displays inaccurate speed limits, including implausible speed limits such as 130 kph. Mr Theobald said that he is happy to check whether this system is working as intended. However, he pointed out that, because it relies on an image from a camera, the speed limit identification system can be affected by weather conditions or blurred signs.
[26] Finally, Mr Lockwood said that there has been a warning appearing on the dashboard relating to the tyre pressure monitoring system. This has not been investigated by Cartown, but Mr Theobald encouraged Mr Lockwood to bring the vehicle in to have it assessed.

Tribunal’s assessment

[27] I certainly accept that Mr Lockwood has experienced a number of minor defects in his vehicle which have been very frustrating for him. I also accept that a reasonable consumer would not expect to experience such minor defects in a new vehicle, especially one costing more than $40,000. However, I do not accept that Mr Lockwood has established that the vehicle is unsafe. Rather, the evidence showed that, at times, the fault, especially with the main screen, has distracted Mr Lockwood to the point where he has not driven his vehicle safely.
[28] I also accept that Mr Lockwood has established that the problems with the reversing camera, and the vehicle’s floor mats, amount to failures to comply with the guarantee of acceptable quality.
[29] I do not consider that Mr Lockwood has yet established the problems he experienced with the low battery warning, the adaptive cruise control, the rear door closer or the speed identifying system, amount to failures to comply with the guarantee of acceptable quality. Rather, at this stage, the evidence suggests that these amount to normal operating characteristics of the vehicle.
[30] In respect of the speed identifying system and tyre pressure monitoring system issues, Cartown has offered to investigate these and remedy any faults that exist.
[31] The major outstanding fault appears to be the issues with the main screen dying and needing to be rebooted. This is an outstanding fault that Cartown has already attempted to fix, but has been unsuccessful.

Conclusion

[32] I conclude that Mr Lockwood has established that his vehicle failed to comply with the guarantee of acceptable quality in respect of its reversing camera and mats, which have now been fixed, and in respect of the faults with the main screen and inputs to the entertainment system, which is an outstanding fault.
[33] However, I do not consider that the vehicle’s accumulated faults are sufficiently serious that, when considered together, they amount to a failure of a substantial character under s 21 of the CGA. I do not consider that Mr Lockwood has established that his car has reached the point where a reasonable consumer could say convincingly that they had no confidence in the reliability of the vehicle.[2]

Issue 3: What is the appropriate remedy?

[34] The remedies available to a consumer who has established that their vehicle does not comply with the guarantee of acceptable quality 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.

[35] The primary remedy available to a consumer whose vehicle fails to comply with the guarantee of acceptable quality is to require the supplier to remedy the failure within a reasonable time. If the supplier is unable to remedy the failure within a reasonable time, then the consumer is entitled to reject the vehicle.[3] A consumer is also entitled to reject the vehicle if they have established a failure of a substantial character.[4] As mentioned, I do not consider that any of the faults alleged by Mr Lockwood amount to a failure of a substantial character, either singly or in combination. However, there is a question whether Cartown has been unsuccessful in remedying the vehicle’s fault with its main screen which, despite the screen having been replaced already, has not been fixed.
[36] It is not unusual for the Tribunal to allow a trader more than one opportunity to fix a fault, particularly one that is difficult to diagnose and remedy. I agree with Mr Lockwood’s description of the systems underlying the screen functionality as “quite buggy”. The jury is currently out as to whether the replacement screen will remedy the faults outlined by Mr Lockwood in the operation of these systems, but I consider that Cartown should be given another opportunity to remedy this fault.
[37] I accept Cartown’s submission that the minor issues Mr Lockwood has had with the car have been resolved or are in the process of being resolved. However, I also agree with Mr Theobald that communications from Cartown have not been as good as they could have been. Mr Theobald also acknowledged that Mr Lockwood has experienced more than an acceptable amount of inconvenience in relation to his new vehicle. To provide some redress for this, Mr Theobald said that Cartown is going to provide Mr Lockwood with three years’ worth of free servicing for the vehicle.

Conclusion

[38] I dismiss Mr Lockwood’s application to reject his vehicle. I do not consider he has yet established that Cartown is unable to remedy the vehicle’s faults. However, Mr Lockwood may apply again to the Tribunal if the replacement screen that is on order does not fix the faults experienced by him. He would be entitled to apply to the Tribunal again to reject his vehicle at that point. If this is necessary, Mr Lockwood may wish to seek a remedy, not only against Cartown but also against the manufacturer of the vehicle, which is also subject to the CGA. It would also be useful to have evidence directly from MG, and an opportunity for the Tribunal’s Assessor to ask it questions, at the hearing of any future application by Mr Lockwood in respect of this vehicle.

J S McHerron
Adjudicator

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[1] According to s 2 of the CGA, “goods” includes vehicles.

[2] Cooper v Ashley & Johnson Motors Ltd (1996) 7 TCLR 407 (DC).

[3] Consumer Guarantees Act 1993, s 18(3)(a).

[4] As defined in s 21.