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Hayes v You-Cars Limited - Reference No. MVD 389/2020 [2021] NZMVDT 62 (30 April 2021)

Last Updated: 23 May 2021

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 389/2020
[2021] NZMVDT 62

BETWEEN JESSIE JOHN HAYES

Purchaser

AND YOU-CARS LIMITED

Trader

HEARING at Palmerston North on 31 March 2021, further submissions received on 9 April 2021
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator

R C Dixon – Assessor
APPEARANCES

J J Hayes, Purchaser
Q Miller, Director of Trader

DATE OF DECISION 30 April 2021

___________________________________________________________________

DECISION OF THE TRIBUNAL

___________________________________________________________________


  1. You-Cars Ltd must pay Jessie Hayes $2,471.80 no later than 14 May 2021.
  2. Mr Hayes must provide the Tribunal with the invoice and receipt relating to the fuel tank repairs. A further order will be made against You-Cars when that invoice is received.
  1. Mr Hayes must return the wheel rims that are currently on the vehicle to You-Cars, no later than 31 May 2021.

___________________________________________________________________


REASONS

Introduction

[1] Jessie Hayes’ 2008 Mazda Atenza, which he purchased from You-Cars Ltd on 28 November 2019, was not supplied with a new warrant of fitness.[1] Rather, the vehicle’s most recent warrant of fitness was issued on or around 20 September 2019, about two months prior to delivery of the vehicle to Mr Hayes.
[2] When Mr Hayes took the vehicle to Warren Anderson Motors to get a new warrant of fitness on 10 September 2020, it failed. Mr Hayes is unhappy with the condition of the vehicle as it was sold to him. In his application to the Tribunal, he claims from You-Cars the cost of various repairs he says are needed so the vehicle can get a new warrant of fitness.
[3] Mr Hayes initially sought to reject the vehicle but he confirmed at the hearing that he now wants the vehicle to be repaired so that it is warrantable and drivable.
[4] The issues for the Tribunal to resolve on Mr Hayes’ application are as follows:

Issue 1: Did the vehicle fail to comply with the guarantee of acceptable quality?

[5] 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.
[6] Relevantly, “acceptable quality” is defined in s 7 of the Act as follows:
  1. 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.

[7] 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.
[8] The starting point for assessing whether Mr Hayes’ vehicle complied with the guarantee of acceptable quality is the warrant of fitness check sheet issued by Warren Anderson Motors on 10 September 2020. On inspection, the vehicle was rejected for the following reasons:

Fuel leak on top of tank

Rear tyres rubbing on guard

Rear lower + top arm bushes perished.

[9] The warrant of fitness check sheet also made two additional comments, though these were not listed as reasons why the vehicle was rejected:

RH inner CV boot split

Surface rust on rear subframe

[10] In a report provided with the warrant of fitness check sheet, Warren Anderson Motors identified the following issues, some of which were not itemised in the warrant of fitness check sheet itself:

Left hand damaged tyre rubbing on guard

Right hand damaged tyre rubbing on guard

Fuel leak and corrosion

Bottom rear lower control arm inner bushes right

Bottom rear lower control arm inner bushes left

Right hand shock corrosion

Exhaust flange left side badly corroded

Exhaust flange right side badly corroded

Left hand shock badly corroded

Corrosion around fuel tank

Rear subframe corrosion

Rear body/floor corrosion

Rust flaking chassis to fuel tank

[11] Mr Hayes also produced a VINZ pre-purchase inspection report dated 30 July 2020 which noted that the vehicle’s rear tyres were rubbing on the guards and that this was a warrant of fitness issue. The report also identified the vehicle has:
[12] Mr Hayes also produced a VTNZ inspection report dated 8 October 2020. This report indicated that the vehicle again failed a warrant of fitness inspection on that date because the left and right rear tyres were fouling against the vehicle body. This report also noted there was a brake imbalance in axle 2.
[13] Mr Hayes also supplied several black and white photographs. These allowed the Tribunal’s Assessor, Mr Dixon, to assess the vehicle’s alleged faults.
[14] Mr Hayes produced an estimate from Warren Anderson Motors for repairs to the vehicle, totalling $3,751.88.
[15] At the hearing, Mr Dixon and I asked Mr Hayes to provide more information from Warren Anderson Motors explaining the nature of the fuel leak identified in the warrant of fitness check sheet and exactly what repairs were required. We also asked if Warren Anderson Motors could provide more information about the wheel rims and tyres currently on the vehicle. In particular:

Wheels and tyres installed on vehicle prior to sale to Mr Hayes

[16] We also asked You-Cars to supply the receipts for the tyres and wheels that it installed on the vehicle prior to its sale to Mr Hayes.
[17] In response to our request, You-Cars produced an invoice dated 26 September 2019 from the Bling Company confirming that four Stance SF03 19x 8.5 5x114.3 35P DB F1 wheels and four Antares 235/35R19 91W Ingens A1 tyres were supplied for the vehicle at a cost of $1,546.

Why are the tyres rubbing?

[18] In a letter dated 1 April 2021, provided to the Tribunal on 9 April 2021, Warren Anderson stated that there are two reasons why the vehicle’s tyres are rubbing:
[19] Mr Anderson said that the correct wheel fitment for the vehicle requires rims that are 8 inches wide with a 19 inch diameter and a 42 mm offset.
[20] Mr Anderson disagreed with a suggestion by Mr Miller, who appeared on behalf of You-Cars at the hearing, that the rear tyres may have been rubbing because Mr Hayes had overloaded the vehicle. Mr Anderson said that the issue is that incorrect rims are fitted, not that the vehicle has been overloaded.
[21] Mr Anderson confirmed that the current rims are half an inch too wide, and the offset is wrong. That is why he has recommended replacement of the rims with 8 inch rims that have a 42 millimetre offset. Mr Anderson said that the current tyres will pass a warrant of fitness, however damage has been caused to them due to the fitment of rims that are too wide with an incorrect offset.
[22] You-Cars submitted that the tyre size is correct for the original wheels, as well as the wheels that were replaced prior to sale of the vehicle to Mr Hayes. I accept that the evidence from Mr Anderson indicates that the tyres will be able to be safely reused on the replacement rims.
[23] Accordingly, Mr Dixon and I consider the vehicle’s wheel rims should be replaced, as recommended by Warren Anderson Motors. A combination of the wrong rim size and the vehicle having had its suspension lowered, has caused the rear tyres to rub against the vehicle’s body. This has resulted in the vehicle failing its warrant of fitness.
[24] At the hearing, Mr Miller confirmed that the wheels were replaced after the vehicle was issued its warrant of fitness in September 2019. That suggests that if the vehicle had been properly issued a warrant of fitness within one month of sale, after the wheel rims and tyres had been replaced, then it would have failed the warrant of fitness inspection.
[25] I do not consider a reasonable consumer would find it acceptable for a vehicle to fail a warrant of fitness inspection because its tyres are fouling against the vehicle body. A reasonable consumer would expect that a vehicle’s wheels and tyres would remain clear from its body at all times.
[26] Accordingly, I conclude that Mr Hayes has established that his vehicle did not comply with the guarantee of acceptable quality in respect of the incorrect size of its wheel rims.

Suspension bushes

[27] The next reason why the vehicle failed its warrant of fitness was because the bottom rear lower control arm inner bushes on the right and left side of the vehicle are perished.
[28] Various photos were produced showing the poor state of the bushes. Mr Dixon agreed with the assessment by Warren Anderson Motors that these need to be replaced to enable the vehicle to pass its warrant of fitness inspection.
[29] I conclude that the rear lower and top control arm bushes have deteriorated to such an extent that the vehicle does not comply with the guarantee of acceptable quality in this regard either.

Leaking fuel tank

[30] The third matter identified in Warren Anderson Motors’ check sheet as a reason for rejection on the warrant of fitness inspection is the fuel leak at the top of the fuel tank.
[31] We asked for further information as to the location of this leak. Mr Anderson said that the vehicle appears to have a leak from the top of the tank around the sender unit. He could not give any more than an approximate cost of repairs without removing and inspecting the tank, but he estimates the cost will be about $345.
[32] Given that this is a further reason for rejecting the vehicle for renewal of its warrant of fitness, as well as potentially being a safety issue, I conclude that this fuel leak is also a failure to comply with the guarantee of acceptable quality.

Other matters

[33] I do not consider that any of the other matters identified by Mr Hayes are failures to comply with the guarantee of acceptable quality.
[34] In particular, these items were only identified more than a year after the date of purchase, and after Mr Hayes had driven more than 10,000 km in the vehicle. In light of that period of time and distance, I conclude that the vehicle has been reasonably durable and fit for purpose. By contrast, the three matters that I have found breached the acceptable quality guarantee are traceable back to the time of purchase for one or both of the following reasons:
[35] I do not consider that Mr Hayes has established that the vehicle has corrosion that is any more serious than what might be expected in a vehicle of this age, mileage and price.
[36] Moreover, Warren Anderson Motors estimates the cost to repair the surface rust that has been identified to be in the order of approximately only $250. This suggests that the corrosion is not a significant, or at least significantly costly, issue to fix.
[37] The other issues identified, including the shock absorber cover and CV boots, are minor wear and tear issues that a reasonable consumer would expect to find in a vehicle of this age and mileage.

Conclusion

[38] Accordingly, I conclude that the vehicle did not comply with the guarantee of acceptable quality in respect of the three matters identified by Warren Anderson Motors in its warrant of fitness assessment carried out on 10 September 2020, namely:

Issue 2: what is the appropriate remedy?

[39] The remedy applicable where a consumer has established a failure to comply with the guarantee of acceptable quality is provided for in s 18 of the Act:
  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.

[40] As Mr Miller pointed out on behalf of You-Cars, the primary remedy under s 18 is to allow the supplier of the vehicle to remedy the vehicle’s failure within a reasonable time.
[41] In my view You-Cars has forfeited its right to remedy these failures itself by disputing all of the matters raised by Mr Hayes. The time for You-Cars to remedy the failures was before this Tribunal proceeding.
[42] You-Cars did offer to supply replacement bushes, but only on the condition that Mr Hayes would pay to have them fitted.
[43] Overall therefore, I consider that You-Cars has refused to remedy any of the alleged failures in the vehicle.
[44] In disputing its liability to remedy the failures, You-Cars can be taken to have refused to do so. Under s 18(2)(b)(i) of the Act, Mr Hayes is now entitled to have the car fixed elsewhere and recover the reasonable costs of doing so from You-Cars.
[45] In Mr Dixon’s view the estimates outlined by Warren Anderson Motors are reasonable, namely:
[46] In addition, Mr Hayes is entitled to recover Wayne Anderson Motors’ diagnostic costs of $94.30.

Conclusion

[47] In total, I order You-Cars to pay Jessie Hayes $2,471.80, plus the cost of the fuel tank repairs when that is established.
[48] You-Cars Ltd must pay Mr Hayes $2,471.80 within 14 days. Mr Hayes must then provide the Tribunal with the invoice and receipt relating to the fuel tank repairs and I will make a further order against You-Cars when that is received.
[49] Finally, Mr Hayes must return the wheel rims that are currently on the vehicle to You-Cars within one month of the date of this decision.

J S McHerron
Adjudicator

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

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