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Bhamani v Turners Group NZ Ltd - Reference No. MVD 009/2021 [2021] NZMVDT 27 (1 March 2021)

Last Updated: 21 April 2021

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 009/2021
[2021] NZMVDT 27

BETWEEN RAFIQ BHAMANI

Applicant

AND TURNERS GROUP NZ LTD
Respondent





MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Gregory, Assessor

HEARING at Auckland on 23 February 2021



APPEARANCES
R Bhamani, Applicant
W Connor, for the Respondent

DATE OF DECISION 1 March 2021

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

  1. Rafiq Bhamani’s application is dismissed.

_________________________________________________________________

REASONS

Introduction

[1] Rafiq Bhamani wants to reject the 2008 BMW X5 he purchased for $19,450 from Turners Group NZ Ltd in July 2020. Mr Bhamani says that the vehicle’s numerous defects mean it has not been of acceptable quality or fit for purpose and he wants to return the vehicle and receive a refund of the purchase price. Turners says that it has rectified all the vehicle’s faults, so Mr Bhamani should not be entitled to reject it.

The issues

[2] The issues requiring the Tribunal’s consideration in this case are:

Issue 1: Has the vehicle been of acceptable quality?

[3] 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.
[4] The expression "acceptable quality" is defined in s 7(1) 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.

[5] 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 Bhamani’s subjective perspective.

Mr Bhamani’s evidence

The misfire, fault codes and broken protective shield

[6] The vehicle failed to start on 9 September 2020. Mr Bhamani had the vehicle assessed by Continental Cars BMW, which found:
[7] Mr Bhamani says that Turners has rectified the engine misfire and broken protective shields at its cost. Mr Bhamani says that a warning light relating to the FRM continues to intermittently illuminate, but that ongoing issue does not greatly concern him and does not form part of this claim.
[8] Mr Bhamani says that there was also an oil leak present at that time, but the information from Continental Cars BMW contains no mention of any oil leak and Mr Bhamani presented no other evidence to prove the existence of any oil leak at that time.

The warrant of fitness

[9] Mr Bhamani then noticed that the warrant of fitness sticker on the windscreen stated that the vehicle’s warrant of fitness was due to expire in January 2021. Mr Bhamani had thought that Turners had put a new warrant of fitness on the vehicle shortly before purchase, so he was surprised the warrant of fitness was due to expire less than six months later.[2] Mr Bhamani had a warrant of fitness inspection performed in December 2020. The vehicle passed that inspection, but Mr Bhamani was advised that the passenger side headlight was discoloured and would require replacement in the future.

The fuel delivery pump and oil leaks

[10] On 22 December 2020, Mr Bhamani then noticed the vehicle was making an unusual sound on start up. The vehicle was then assessed by Continental Cars BMW, which found that the left-hand fuel delivery pump was faulty, affecting the fuel supply to the engine, with evidence to show that the fuel pump had previously been crudely repaired. Continental Cars BMW also found oil leaks from the rocket cover and oil filter housing gaskets.
[11] Mr Bhamani then rejected the vehicle on 7 January 2021.

Turners’ response

[12] Turners agrees that the vehicle has had most of the defects alleged by Mr Bhamani and says that it has replaced:

The Tribunal’s assessment

[13] The evidence shows that the vehicle has had the following defects that mean it has not been of acceptable quality for the purposes of s 6 of the CGA:
[14] A reasonable consumer purchasing a 12-year-old BMW X5 for $19,500 would not consider such defects to be acceptable in a vehicle of that price and age so shortly after purchase.
[15] The remaining faults alleged by Mr Bhamani ― an ongoing oil leak from the sump seal and the discoloured headlight ― do not breach the guarantee of acceptable quality.
[16] The ongoing oil leak from the sump seal appears minor and was identified more than five months after purchase. Mr Bhamani alleged that the ongoing oil leak has been present since purchase, but the evidence shows otherwise. Continental Cars BMW, which has inspected the vehicle twice in September and December 2020, found no sign of an oil leak from the sump seal during those inspections, suggesting that this is not an historic oil leak. The protections in s 6 of the CGA are not indefinite, and I am satisfied that this oil leak became apparent too long after purchase for the guarantees in s 6 of the CGA to apply.
[17] With respect to the discoloured headlight, the vehicle passed the warrant of fitness inspection in December 2020, which it would have failed if the headlight was not in satisfactory condition. That headlight may require replacement or repair in the future, but for present purposes I am satisfied that the headlight remains of acceptable quality and that it has been and will be as durable as a reasonable consumer would consider acceptable in a 12-year-old, $19,500 BMW X5.

Issue 2: Are the vehicle’s defects a failure of a substantial character?

[18] Under s 18(3) of the CGA, Mr Bhamani may reject the vehicle if its defects are a failure of a substantial character. A failure of a substantial character is defined in s 21 of the CGA:
  1. 21 Failure of substantial character

For the purposes of section 18(3), a failure to comply with a guarantee is of a substantial character in any case where—

(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b) the goods depart in 1 or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model; or

(c) the goods are substantially unfit for a purpose for which goods of the type in question are commonly supplied or, where section 8(1) applies, the goods are unfit for a particular purpose made known to the supplier or represented by the supplier to be a purpose for which the goods would be fit, and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or

(d) the goods are not of acceptable quality within the meaning of section 7 because they are unsafe.

[19] Section 21(a) of the CGA applies to this case, and the question I must consider is whether the faults that this vehicle has, are such that a reasonable consumer, fully acquainted with the true nature and extent of the faults, would not have purchased the vehicle.
[20] None of the defects that breached the guarantee of acceptable quality as set out in paragraph [13] above, when considered separately, is so significant that a reasonable consumer would have declined to purchase the vehicle. Each of those defects was swiftly diagnosed and, once parts became available, repaired.
[21] Likewise, when considered together, those defects do not amount to a failure of a substantial character. In Cooper v Ashley & Johnson Motors Ltd, the District Court stated that a purchaser may also reject a vehicle where there has been an accumulation of defects, even when those defects may not amount to a failure of substantial character in their own right.[3] The Court noted that a point will eventually be reached where the purchaser could “say convincingly that he or she had no ‘confidence in the reliability of the vehicle”.[4]
[22] The purchaser of a 12-year-old BMW X5 with an odometer reading of approximately 124,000 km should understand that such vehicles may develop faults due to their age and mileage that can be expensive to repair. Certainly, where those defects breach the guarantee of acceptable quality, a reasonable consumer can expect the supplier to rectify those defects within a reasonable time, but I am not satisfied that the defects that have arisen in this vehicle are such that a reasonable consumer would have lost all confidence in its ongoing reliability. Consequently, I am not satisfied that the vehicle’s accumulated defects are a failure of a substantial character.

Issue 3: What remedy is Mr Bhamani entitled to under the CGA?

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

[24] Mr Bhamani is not entitled to reject the vehicle, because its defects are not a failure of the substantial character. Turners has also rectified all the defects that breached the guarantee of acceptable quality, so Mr Bhamani is not entitled to any orders requiring Turners to perform repairs under s 18(2)(a).
[25] Further, although Mr Bhamani spent $50 obtaining a warrant of fitness because Turners (or the warrant of fitness inspector who performed the pre-purchase warrant of fitness inspection) had overlooked to put a warrant of fitness sticker on the vehicle before it was supplied to him, Mr Bhamani is not entitled to recover that cost. Mr Bhamani did not tell Turners that he thought the warrant of fitness had expired earlier than he expected, and he did not ask Turners to update the warrant of fitness before he incurred that cost. If he had done so, he would likely have discovered that the vehicle did have an updated warrant of fitness at the time of sale and that a new sticker simply needed to be attached to the windscreen.
[26] Mr Bhamani is therefore entitled to no further remedy under the CGA and his claim is dismissed.

DATED at AUCKLAND this 1st day of March 2021

B.R. Carter
Adjudicator


[1] A control module in the driver’s footwell that detects signals from the doors and controls the vehicle’s lighting.

[2] The evidence considered during the hearing shows that Turners did obtain a warrant of fitness for the vehicle before it was supplied to Mr Bhamani, but it appears that the warrant of fitness sticker was never put on the vehicle’s windscreen.

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

[4] At 417.

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