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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 19 March 2022
IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA
MVD
357/2020
[2021] NZMVDT 16
BETWEEN BRAIDY JOHN WORKMAN
Purchaser
AND WHOLESALE MOTORS CHRISTCHURCH LTD
Trader
HEARING at Christchurch on 5 February 2021
MEMBERS OF
TRIBUNAL
J S McHerron, Barrister – Adjudicator
R C Dixon – Assessor
APPEARANCES
B J Workman, Purchaser
D Workman, Purchaser’s father
No
appearance for trader
DATE OF DECISION 17 February 2021
___________________________________________________________________
DECISION OF THE TRIBUNAL
___________________________________________________________________
___________________________________________________________________
REASONS
Introduction
[1] Braidy Workman purchased a 2000 Mitsubishi Pajero from Wholesale Motors Christchurch Ltd on 20 July 2020. At the time of purchase, the vehicle had 228,934 km on its odometer. The purchase price was $6,990, which included a two-year Janssen mechanical breakdown insurance policy.
[2] In the few months since Mr Workman purchased the vehicle, it has had several faults. Because of these faults, Mr Workman has rejected the vehicle on more than one occasion. He asks the Tribunal to uphold his rejection of the vehicle and to order Wholesale Motors to refund him the purchase price, as well as the costs of attempting to diagnose the vehicle’s faults.
[3] The following issues arise for the Tribunal to determine:
- (a) Did the vehicle fail to comply with the guarantee of acceptable quality?
- (b) What, if anything, is the appropriate remedy?
Issue 1: 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] Relevantly, “acceptable quality” is defined in s 7 of the Act as follows:
- 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] Although the vehicle was purchased in Braidy Workman’s name, his father, Dave Workman, negotiated the purchase. He collected the vehicle from Wholesale Motors on 20 July 2020 and drove it from Christchurch to Methven. Dave Workman told the Tribunal that, when collecting the vehicle, he had checked its fluids, observing that the coolant was green. It is normal for coolant to be green in colour as this is commonly the colour of antifreeze. On arrival in Methven, Mr Workman thought the vehicle was smelling hot, so he checked its coolant again. This time, however, Mr Workman noticed that the coolant was rusty brown and sludgy, and he also noticed signs of coolant leaks.
[8] Dave Workman took the vehicle to Malcolm Lovett Automotive in Ashburton. It tightened the hose clamp on the heater hose and found a possible water leak from the water pump. It tried to scan the vehicle for fault codes but was unable to get the scanner to communicate with the vehicle’s ECU as the vehicle’s dashboard display screen was “unplugged”. Mr Workman told the Tribunal that Malcolm Lovett Automotive quoted $500 to remove, clean and replace if necessary, the radiator.
[9] During the journey to Methven, Mr Workman also noticed that the vehicle’s centre differential warning light began flashing, signifying a possible problem with the 4WD system. Malcolm Lovett Automotive diagnosed a faulty solenoid and quoted $444.07 to replace it.
[10] When he drove the vehicle back to Methven from Malcolm Lovett Automotive, Dave Workman noted that the vehicle’s speedometer stopped working correctly. It would not indicate speeds over 80 kph and at times it would not register the vehicle’s speed at all.
[11] Dave Workman also noticed the vehicle had an aftermarket switch mounted on the steering column. He became suspicious that this might indicate its odometer had been tampered with.
[12] Mr Workman contacted Wholesale Motors, first by phone then by email. On 31 July 2020, about a week and a half after collecting the vehicle, he emailed Wholesale Motors Christchurch requesting a refund of the purchase price because of the faults that had been identified with the centre differential warning light, the rusty sludgy cooling system, the speedometer and the aftermarket switch mounted on the steering column.
[13] The following day, 1 August 2020, Tyson Adams, Wholesale Motors’ managing director, emailed Mr Workman to say that he was happy to fix the differential light. Mr Adams explained that the vehicle’s heater core had been replaced a couple of weeks earlier and the cooling system had been flushed to remove some of the rusty sludge. Mr Adams closed his email with the following advice:
You have a mechanical warranty we have gifted to you for any future issues past our three months. Contact Jordan for a ti[m]e to fix LSD [centre differential] light.
[14] Dave Workman repeated his request for a refund of the purchase price on 4 August 2020. Mr Adams refused to refund the purchase price, but offered to make repairs to the speedometer, the differential light, to remove the aftermarket switch on the steering column, and to flush the rusty water out of the cooling system. He said:
I am happy to come to the party and make sure everything works as it should and in a timely manner, your extended warranty will cover any potential future issues. We only refund in the case of major mechanical failure in the warranty period, your issues are minor and quick to resolve.
If this is not the result you are after please lodge a complaint with the Motor Vehicle Disputes Tribunal and they can come to a solution.
[15] Mr Adams also stated in a further email on 4 August 2020 that:
The only grounds I would offer a refund is if there were a Speedo tamper in the past and to know that properly it needs to be checked by my auto electricians. Can you drop the vehicle in today or tomorrow?
[16] Braidy Workman explained that he needed to use the vehicle for work. Therefore, he agreed to Wholesale Motors carrying out the repairs as offered by Mr Adams. These repairs occurred in August 2020. Mr Workman explained that Wholesale Motors gave him a courtesy vehicle, which itself broke down between Christchurch and Methven. Mr Workman said that it took over two weeks for Wholesale Motors to fix his vehicle. The centre differential warning light and speedo appear to have been fixed (though no evidence of the work that was done was provided to the Tribunal, despite Wholesale Motors being requested to provide it).
[17] Shortly after collecting the vehicle, after Wholesale Motors had carried out repairs, Mr Workman experienced further problems with it. On 11 September 2020, the engine warning light illuminated, and Mr Workman said that the vehicle’s engine sounded like “an old diesel engine on startup”. He emailed Mr Adams to repeat his request for a refund of the purchase price. Mr Adams responded to him on 14 September 2020 as follows:
use your Janssen warranty 0800JANSSEN and your local mechanic, sounds like an injector. We are happy to cover the claim excess. If it’s a major fault we will look at a refund for you while in our 3 month period, small teething issues are to be expected of a Pajero of age and kms.
[18] Since then, Mr Workman has taken the vehicle to three different workshops in an attempt to find out what is wrong with it:
- (a) First, he took the vehicle to Malcolm Lovett Automotive. It was unable to ascertain the cause of the engine warning light for the same reason identified in July 2020, namely that its scanning equipment was unable to communicate with the vehicle’s computer because the dashboard head unit display had been replaced with an after-market screen.
- (b) Next, Twizel Auto & Marine Centre noted that the engine and transmission lights were on. But, despite having the correct adaptor plug for this model of vehicle, they were unable to communicate with the modules in the vehicle to retrieve any fault codes or data to solve the issue with the vehicle. This was for the same reason as identified by Malcolm Lovett Automotive, namely that the dashboard display unit had been replaced. Twizel Auto & Marine Centre recommended taking the vehicle to a Mitsubishi dealer.
- (c) Lastly, Christchurch Mitsubishi also attempted to check the vehicle to find out why it was running rough. However, it too could not scan the vehicle for fault codes because of the fact that an aftermarket stereo had been fitted and the display screen was not properly hooked up. It nevertheless pulled the spark plugs off the coils to determine which cylinders were not firing and found that number 1 and number 2 cylinders were not firing. It also noted that the stalk was broken and corroded on the number 2 coil and that all coils and plugs needed to be pulled out to be checked. Christchurch Mitsubishi quoted $850 plus GST to replace the spark plugs and spark plug tubes.
[19] All three of the workshops that have attempted to diagnose the vehicle’s faults have concluded that it cannot properly be scanned because it does not have its original stereo/computer system/dashboard display. The consequence of this, Mr Workman has been advised, is that the engine warning light can never be turned off and nor can the reason why it is illuminated be properly diagnosed.
[20] Mr Workman says that the engine/drive train is now whining. This has developed into a vibration affecting the whole vehicle. He says the vehicle has lost power and he regards it as being unsafe to drive. He says he has not driven the vehicle since he received it back from Christchurch Mitsubishi in January 2021.
Wholesale Motors’ submissions
[21] On behalf of Wholesale Motors Christchurch, Tyson Adams submitted a short written statement on the day before the hearing. However, neither Mr Adams, nor any other representative of Wholesale Motors attended the hearing. Wholesale Motors did not explain why it did not attend the hearing. Nor did it request an adjournment.
[22] Moreover, Wholesale Motors failed to provide the Tribunal with the invoices for the repair work carried out by it in or around August 2020. Nor was there any evidence that Wholesale Motors discussed Mr Workman’s application with him prior to the hearing, as no report on any such discussions was made to the Tribunal.[1]
[23] Mr Adams’ statement was as follows:
From what I can recall this vehicle came back to us two times with issues, which we resolved quickly as possible. A fault then occurred with check engine light. The customer’s mechanic could not fix the issue. The customer subsequently rejected the vehicle. I asked if my auto electrician could look at the vehicle first. The customer refused, which has led us to this point.
[24] Apart from Mr Adams’ statement, Wholesale Motors completely failed to engage with the Tribunal’s process to resolve the dispute with Mr Workman. This was at odds with Wholesale Motors’ encouragement to Mr Workman to apply to the Tribunal to resolve the dispute and shows a lack of good faith.
[25] Braidy and Dave Workman took issue with the contents of Mr Adams’ statement. First, they said that Wholesale Motors only took the vehicle back for repairs once, not twice. Secondly, the evidence suggests that the only time Wholesale Motors asked if its auto electrician could look at the vehicle was on 4 August 2020 in relation to the aftermarket switch on the steering column. This was when Mr Adams offered to have the vehicle checked by his auto electricians to ascertain whether there had been a speedo tamper in the past. This was before Wholesale Motors took the vehicle back for the repairs that it apparently carried out. Therefore it has had ample opportunity to have the vehicle checked by its auto electricians if that is what it wanted to do. Unfortunately, I could not tell whether Wholesale Motors actually did take the vehicle to an auto electrician, as it failed to provide any receipts for the work carried out on the vehicle, notwithstanding the Tribunal’s request for that information.
Tribunal’s assessment
[26] The current faults are that the engine is running rough and has a significant vibration, the engine and/or transmission lights are on, and the vehicle has been diagnosed as needing new spark plugs and spark plug tubes. Perhaps most concerning of all, however, is the fact that none of the three workshops that have attempted to diagnose the vehicle’s faults can scan the vehicle to determine the reason why the engine/transmission light is currently on. As is apparent from Malcolm Lovett Automotive’s invoice from July 2020, this is a fault that has been present on the vehicle since the time of purchase. It results from the vehicle’s stereo/head unit having been replaced at some time in the past.
[27] As Braidy Workman explained, not only is it impossible to diagnose what is causing the warning light to appear, it is also impossible to turn the light off. This means that if a further fault were to arise with the vehicle’s engine, Mr Workman would have no way of knowing, because the engine warning light would already be on.
[28] Mr Workman has now travelled nearly 8,000 km since purchasing the vehicle. This distance has been mainly covered on his trips between Twizel where he works, and Methven where his father’s business is. Some of these trips were connected with attempts to diagnose and resolve the vehicle’s faults. But despite this post-purchase distance, the evidence is clear that the underlying issue of the replaced head unit causing difficulties with diagnosing faults was a pre-existing issue, which has been present in the vehicle since the time of purchase.
[29] A reasonable consumer would not find it acceptable that their vehicle is incapable of being diagnosed when a warning light illuminates. For this reason, I conclude that this defect amounts to a failure to comply with the guarantee of acceptable quality in s 6 of the Act.
Issue 2: What is the appropriate remedy?
[30] The remedies available to a consumer where a vehicle fails to comply with the guarantee of acceptable quality are set out in s 18 of the Act, which provides:
- 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.
[31] In the present case, s 18(3) applies because the inability to scan the vehicle and diagnose its faults is a failure that cannot be remedied. Mr Workman has attempted to reject the vehicle on several occasions. The initial rejection related to matters which were apparently addressed by Wholesale Motors when it repaired the vehicle in or around August 2020. However Mr Workman rejected the vehicle again on 14 September 2020 in relation to the engine warning light that illuminated on 11 September. This was less than two months after Mr Workman purchased the vehicle.
[32] I therefore conclude that Mr Workman is entitled to reject the vehicle and obtain a full refund of the purchase price.
[33] In addition, Mr Workman is entitled to recover the costs of the attempts to diagnose the vehicle’s faults carried out by Twizel Auto & Marine Centre and Christchurch Mitsubishi in the sum of $45.75 and $140.30 respectively under s 18(4) of the Act.
[34] As indicated at the hearing, I do not consider that Mr Workman is entitled to recover the cost of repairs and attempts to diagnose by Malcolm Lovett Automotive because this work was carried out on Mr Workman’s initiative without clearing it with Wholesale Motors first, contrary to the expectations underlying s 18(2)(a) of the Act.
Costs
[35] The Tribunal may award costs against the party where, after receiving notice of the hearing, that party fails to attend without good cause.[2] In addition, costs are payable where a matter ought to have been settled but a party refuses without reasonable excuse to take part in settlement discussions.[3]
[36] Both of these justifications for a costs award apply in the present case. Wholesale Cars, after receiving notice of the hearing, failed to attend without reasonable cause. It provided no excuse for its non-attendance. It just did not turn up.
[37] Accordingly, I also order Wholesale Cars Christchurch Ltd to pay $750 to the Crown, being the reasonable costs of the Tribunal hearing, within 14 days of the date of this decision.
[38] In addition, I also order Wholesale Cars Christchurch Ltd to pay Mr Workman a further $50, being the filing fee for his application to the Tribunal.
J S McHerron
Adjudicator
[1] Contrary to Motor Vehicle Sales Act 2003, sch 1, cl 5.
[2] Motor Vehicle Sales Act 2003, sch 1, cl 14(1)(b).
[3] Clause 14(1)(a)(ii).
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