Kay v Auto Connect Limited - Reference No. MVD 013/2021 [2021] NZMVDT 71 (7 May 2021)

Last Updated: 21 June 2021

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 013/2021
[2021] NZMVDT 71

BETWEEN DANNY HAROLD KAY

Purchaser

AND AUTO CONNECT LIMITED

Trader

HEARING at Christchurch on 1 March 2021, further information provided on 18 March and 20 April 2021, telephone conference on 5 May 2021
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator
R C Dixon – Assessor

APPEARANCES

D H Kay, Purchaser
M L Purver, Director of Trader
H R Corbett, technician at MDS (2013) Ltd (5 May 2021 telephone conference only)
M A Cromwell, technician at New Brighton Automotive (5 May 2021 telephone conference only)

DATE OF DECISION 7 May 2021

___________________________________________________________________

DECISION OF THE TRIBUNAL

___________________________________________________________________

Danny Kay’s application is dismissed.

___________________________________________________________________

REASONS

Introduction

[1] The engine of Danny Kay’s 2009 Nissan Navara is going to need to be rebuilt or replaced due to one or more of the following problems: a blown head gasket, cracked cylinder head or possibly a cracked block.
[2] Mr Kay has applied to the Tribunal for a remedy against Auto Connect Ltd, from which he purchased the vehicle on 7 September 2019 for $19,990.
[3] Auto Connect denies that it is liable to assist Mr Kay, given the time that has passed since Mr Kay purchased the vehicle, and the distance he has travelled in it since he purchased it. Moreover, Auto Connect argues that Mr Kay has failed to maintain his vehicle adequately, in particular by failing to have it serviced during his ownership.
[4] Mr Kay also said in his application that the vehicle was sold to him with 95,000 km on its “window ticket”. This suggested Mr Kay thought he had been misled as to the vehicle’s true mileage. However, the consumer information notice and vehicle offer and sale agreement both clearly state that the vehicle’s mileage at time of sale was 88,200 miles. Mr Purver also referred to the Trade Me listing for the vehicle which stated that its odometer reading at time of sale was 143,000 km, which equates to 88,000 miles as per the vehicle offer and sale agreement and consumer information notice. In light of this evidence, at the telephone conference on 5 May 2021 Mr Kay confirmed he was withdrawing this aspect of his claim.
[5] The issue for the Tribunal to determine is whether the vehicle failed to comply with the guarantee of acceptable quality.

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

[6] 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.
[7] “Acceptable quality” is defined in s 7 of the Act (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.

...

[8] 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.
[9] Mr Kay said in his Tribunal application form that the vehicle had “extensive motor work done but now has the same motor problem”. At the hearing, Mr Kay elaborated that the vehicle starts, “revs”, but has no power and produces “white smoke like a train”. Mr Kay says the vehicle has been parked up and has not been used since August 2020. He argues the vehicle is not fit for use at all and that he has wasted $1,200 installing a flat deck on it. He is seeking the cost of repairs to the vehicle or a refund of the purchase price.
[10] When he was returning home on or around 10 August 2020 (about 11 months after he purchased the vehicle), Mr Kay said he noticed it was producing white smoke. He said that he stopped the vehicle as soon as he noticed smoke coming out of it.
[11] Very little information was supplied by the parties before the hearing. Some more information was supplied at the hearing and then I gave the parties an opportunity to supply further information after the hearing. Then, I convened a telephone conference on 5 May 2021, at which the parties’ respective technicians spoke to the written reports they had prepared following their assessments of the vehicle.
[12] At the initial hearing, the trader’s director, Milton Purver, produced three invoices relating to work that had been carried out on the vehicle since Mr Kay had owned it, by New Brighton Automotive, at Auto Connect’s expense:

• (a) The first invoice was for a warrant of fitness inspection that was carried out just after the vehicle was purchased on 9 September 2019.
• (b) The second invoice, dated 4 October 2019, describes fault codes relating to the vehicle’s fuel pump and air flow meter. The throttle body and air flow meter were cleaned and a new fuel filter was fitted to the vehicle at a cost of $201.14.
• (c) The third invoice records that, shortly afterwards, on 18 October 2019, the vehicle was assessed for a “knocking noise”. New Brighton Automotive found the bottom control arm rear bush was pushed out of the arm and was hitting the body. This was removed and the bush was pressed in. The arm was then refitted and greased and was road tested and found to be operating satisfactorily. Around the same time a diesel leak was found and the vehicle’s ABS warning light was on. New Brighton Automotive’s invoice records that it cleaned up the fitting that goes into the bleeder body and it “cleared” the ABS light. These repairs were completed at a cost of $129.38.

[13] At the initial hearing, Mr Kay said the vehicle had a problem with its heater. And, at the telephone conference, Mr Kay said that a new head and a new radiator had been installed in the vehicle before he owned it. But no invoices were produced relating to this or any other work carried out on the vehicle (apart from the invoices referred to at [12] above).
[14] Mr Purver informed the Tribunal that no repairs were carried out on the vehicle by Auto Connect prior to its sale to Mr Kay. However, Mr Purver he said he thought that the vehicle’s previous owner had done some work on its heater and some other repairs. Mr Purver said that the paperwork relating to these repairs was given to Mr Kay when he purchased the vehicle. However, Mr Kay advised that he had misplaced any paperwork regarding what had been done to the vehicle.
[15] Mr Purver said he was interested to know whether the vehicle had been serviced since Mr Kay purchased it, and if so by whom and on what dates. Mr Purver said this was important because common rail diesel vehicles such as the Nissan need to be serviced with appropriate products and technicians who are qualified and experienced in working with these engines.
[16] Mr Kay acknowledged that he had not taken the vehicle to a workshop to be serviced during the time he had owned it, despite having travelled approximately 16,000 km in it. However, Mr Kay said that he had changed the vehicle’s oil and filter himself at around 10,000 km since purchase. He said he used 5W-40 oil. However, no evidence of any receipts for the oil or filter used were produced making it difficult to verify that the vehicle had been serviced as Mr Kay claimed.
[17] Mr Purver submitted that Mr Kay had not looked after his ute. He said that Mr Kay has overheated the engine and he now wants Auto Connect to pay for repairs. Mr Purver denied that Auto Connect had any legal responsibility to pay for repairs as Mr Kay has owned this vehicle for some 19 months and has not treated it as well as a reasonable consumer would have done.
[18] As mentioned, I adjourned the initial hearing to allow the parties time to provide more information as neither the Tribunal’s Assessor Mr Dixon, nor I, considered that Mr Kay had supplied enough information to allow proper consideration of his application. In addition, it seems Mr Kay does not generally use email, so I needed to be satisfied that he had been given an adequate opportunity to consider Auto Connect’s response to his application. As well, there appeared to have been some animosity between the parties which had prompted Mr Purver to block phone calls from Mr Kay. At the hearing, Mr Purver agreed to adjust his phone’s settings to allow texts from Mr Kay and Mr Kay agreed to take his vehicle to New Brighton Automotive for an assessment. The assessment would be carried out at Auto Connect’s expense. Then, Mr Kay took the opportunity to get a second opinion from another workshop.
[19] Michael Cromwell, of New Brighton Automotive, assessed the vehicle on or around 15 March 2021. Mr Cromwell reported that the vehicle’s engine oil was very black and dirty, burnt smelling and seemed old. He noted that a service sticker he had affixed to the windscreen was still there, recording that the vehicle’s last oil and filter change was about 10,000 miles (approximately 16,000 km) earlier. At the telephone conference, Mr Cromwell said the recommended service interval for this model is an oil change every 5,000 km and an oil filter change every 10,000 km.
[20] Mr Cromwell observed that the vehicle was “smoking bad and not getting up in the speed”. He found the truck was jammed in 4WD low range, placing further stress on the engine, and that the water level was very low. He added water and pressure tested the cooling system. Mr Cromwell found a slow leak at the lower part of the radiator and said it looked like something had flicked up and hit the radiator. When he started up the vehicle it was “really smoky”. Mr Cromwell considered that the vehicle had overheated and is likely to need an engine rebuild or replacement engine. At the telephone conference, Mr Cromwell said he doubted that the vehicle would have lasted for 16,000 km if it had problems with its head gasket or radiator at the time of purchase.
[21] Mr Kay took the vehicle to MDS Diesel Specialists (2013) for a second opinion. Its technician, Hayden Corbett, found the EGR (exhaust gas recirculation) valve foot had fallen off, putting exhaust gases back into the intake, and explaining the lack of power experienced by Mr Kay. Mr Corbett found the radiator was leaking but noted that it was in good visual condition with no visible impact damage. He considered the leak appeared to be coming from where the radiator core is attached to the bottom tank in the radiator. He fitted a temporary replacement radiator and ran up the engine, finding that it began to push water out when it got warm.
[22] Mr Corbett also noted that the vehicle was stuck in low range 4WD. He carried out a Tee-Kay test which confirmed the cooling system had combustion gases present. He concluded that this was coming either from a blown head gasket, cracked cylinder head or possibly a cracked block.
[23] Mr Corbett advised the cylinder head would need to be removed to inspect and diagnose the fault, but he concluded that the radiator had either failed through a slow coolant leak causing the head gasket to be damaged through the engine overheating, or that the head gasket/head has been leaking and pressurized the cooling system and blown the radiator suddenly.
[24] At the telephone conference, Mr Corbett accepted that, in the case of a slowly leaking radiator, more regular servicing of the vehicle may have provided an opportunity to identify the leak and take steps to avoid more serious damage. However, more regular servicing may not have averted the alternative scenario involving sudden radiator failure.
[25] Mr Corbett also noted that the turbo vanes are sticking and not pulling to the closed position properly, affecting the turbo boost.

Tribunal’s assessment

[26] Mr Dixon concisely summarised the main problem: the vehicle has lost coolant and has overheated. The cause of the overheating is less clear – Mr Dixon thinks there may have been several possible causes, including a faulty radiator and that the faulty EGR valve and 4WD low range fault may have contributed to the vehicle overheating.
[27] But while I am sympathetic to Mr Kay in respect of the problems he has had with his vehicle, in my view, Mr Kay has not established that Auto Connect Ltd is liable to remedy those problems.
[28] The protections the Act affords to a consumer are not indefinite. They last only as long as is reasonable in the circumstances of each case, taking account of factors such as the age, price and mileage of the vehicle, and the use it has been put to during the purchaser’s ownership.
[29] In the present case the initial problems that Mr Kay experienced with the vehicle were remedied at Auto Connect’s cost. However, there is no evidence that the current faults Mr Kay is experiencing are related to those earlier faults. The current faults seem to have arisen for the first time some 11 months after the date of purchase, and after Mr Kay has driven the vehicle approximately 16,000 km.
[30] In my view, Mr Kay has been unable to establish that the faults he is currently experiencing with the vehicle have their origin in some earlier failure that occurred closer to the time he purchased. Rather, Mr Kay’s own evidence was that the vehicle was operating well around the time he says he changed its oil. In my view, having considered all of the evidence and the parties’ submissions, this vehicle has been as durable as a reasonable consumer would consider acceptable, in light of all relevant factors including the age and mileage of the vehicle and the extent of use to which Mr Kay has put it.
[31] Furthermore, in failing to have his vehicle adequately serviced, Mr Kay has potentially missed an opportunity to spot the current problems and stop them getting worse. If indeed there were problems arising earlier (for example a leaking radiator), that suggests that if Mr Kay had the vehicle serviced by a competent workshop when it was due for servicing, then it is possible that any such faults may have been identified.

Conclusion

[32] For the foregoing reasons, I conclude that Mr Kay has not established that his vehicle failed to comply with the guarantee of acceptable quality. His application is dismissed.

J S McHerron
Adjudicator