Jimenez v The Cheap Car Place Ltd - Reference No. MVD 144/2022 [2022] NZMVDT 124 (30 June 2022)

Last Updated: 28 July 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 144/2022 [2022] NZMVDT 124 BETWEEN MAIRA FERNANDA TORRES JIMENEZ Purchaser AND THE CHEAP CAR PLACE LTD Trader

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor (by audio-visual link)

HEARING at Auckland on 20 June 2022

APPEARANCES

M F Torres Jimenez, the Purchaser

J Haitana for the Trader

DATE OF DECISION 30 June 2022

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DECISION OF THE TRIBUNAL

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Maira Torres Jimenez’s application is dismissed.

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REASONS

Introduction

[1] Maira Torres Jimenez purchased a 2006 Holden Astra from The Cheap Car Place Ltd for $6,995 on 21 September 2021. Ms Torres Jimenez now seeks to reject the vehicle, alleging that it had a door lock fault, a fuel leak and a fault that caused the engine to set on fire.
[2] In response, The Cheap Car Place advises that it has rectified the door lock fault and replaced leaking fuel injectors. It also assessed the vehicle and found no fault or any smoke or fire damage. The Cheap Car Place also advises that the vehicle has been repossessed because Ms Torres Jimenez failed to make repayments under a loan she entered into with Thorn Group Financial Services Ltd to purchase the vehicle.

Relevant background

The Thorn Group Financial Services loan

[3] Ms Torres Jimenez paid a deposit of $500 to purchase the vehicle. The balance of the purchase price was funded by the loan with Thorn Group Financial Services. Ms Torres Jimenez says that she did not realise she was borrowing money from Thorn Group Financial Services and that she did not sign any loan contract with that company. She says that she thought she was borrowing money directly from The Cheap Car Place. After the hearing, The Cheap Car Place provided a copy of a loan contract between Ms Torres Jimenez and Thorn Group Financial Services dated 22 September 2021, signed by Ms Torres Jimenez.

The fuel injector fault

[4] Shortly after purchasing the vehicle, Ms Torres Jimenez says she noticed the smell of fuel while driving. She returned the vehicle to The Cheap Car Place for assessment. Ms Torres Jimenez says that The Cheap Car Place found a fuel leak. Jamie Haitana, who appeared for The Cheap Car Place, says that there was no fuel leak. Instead, The Cheap Car Place found that the vehicle’s fuel injectors were faulty. It replaced those injectors.

The door lock fault

[5] Shortly afterwards, Ms Torres Jimenez says that three of the doors would not lock properly. She contacted Mr Haitana, who assessed the vehicle. Mr Haitana discovered that the ignition was staying in “accessory mode”[1] when the key was removed. Mr Haitana arranged to have the vehicle assessed by Auto Super Shoppe in Hamilton. It could not rectify the fault, so it arranged to have the vehicle assessed by Hamilton Auto Locksmiths, which discovered a fault with the ignition. Hamilton Auto Locksmiths could not replace that part and suggested that the vehicle should then be assessed by a local Holden franchise.
[6] There was then a delay due to the Christmas/New Year period and difficulty in obtaining an appointment with the local Holden franchise. Mr Haitana says that The Cheap Car Place provided Ms Torres Jimenez with a courtesy car and she agreed to allow it to repair the door lock fault. In late January 2022, the vehicle was then assessed by Ebbett Holden in Hamilton. It replaced the ignition barrel and recoded the vehicle’s software. The vehicle was then returned to Ms Torres Jimenez.

The burning/smoke from the engine bay

[7] Shortly thereafter, Ms Torres Jimenez says that she noticed flames and smoke from the engine bay. She says that she contacted The Cheap Car Place and was told that she would have to pay $600 to tow the vehicle to its premises. She then drove the vehicle across Hamilton to The Cheap Car Place’s yard, where she met Mr Haitana.
[8] Mr Haitana says that Ms Torres Jimenez told him that she had seen flames and smoke from the engine bay. He says that he then inspected the vehicle and saw no sign of any fire or smoke damage. Mr Haitana says that it is possible that Ms Torres Jimenez saw steam from the engine bay, as it was a very wet day and water could have splashed off the road on to the exhaust, causing steam.

Abandonment of the vehicle

[9] Ms Torres Jimenez says that she then rejected the vehicle. She says that she felt cheated by The Cheap Car Place and that she no longer wanted the vehicle. She then left the vehicle parked at a café near The Cheap Car Place’s premises, with the keys on the front seat.
[10] Mr Haitana says that he tried to talk with Ms Torres Jimenez to understand what problem the vehicle may have but she became aggressive and abusive, so he walked away. He says that a fellow employee then approached Ms Torres Jimenez and gave her a verbal trespass warning due to her behaviour. Mr Haitana says that Ms Torres Jimenez then walked to the vehicle, opened all the doors, the boot and the bonnet (it was raining heavily at the time) and left.
[11] Mr Haitana says that The Cheap Car Place made sure that the vehicle was secure and it then sat outside the nearby café for several weeks. He says that The Cheap Car Place tried to contact Ms Torres Jimenez on several occasions to ask her to collect the vehicle, but she did not answer its calls.
[12] The owner of the café then asked The Cheap Car Place to remove the vehicle from outside its premises. Mr Haitana then contacted Thorn Group Financial Services to advise it that the vehicle had been abandoned. Mr Haitana says that Thorn Group Financial Services told him that it had been looking for the vehicle as Ms Torres Jimenez had stopped making loan repayments. Mr Haitana says that Thorn Group Financial Services then repossessed the vehicle. It has since been sold.

The repossession

[13] Ms Torres Jimenez says that she knew nothing of the repossession of the vehicle. She says that she received no notifications or correspondence from Thorn Group Financial Services about the repossession or sale of the vehicle.
[14] After the hearing, at the request of the Tribunal, The Cheap Car Place obtained correspondence relating to the repossession of the vehicle from Thorn Group Financial Services. Those documents included a Repossession Warning Notice dated 15 March 2022 and a Post Repossession Notice dated 30 March 2022. Both were addressed to Ms Torres Jimenez.

The issue

[15] The sole issue requiring consideration is whether Ms Torres Jimenez is entitled to any remedy under the Consumer Guarantees Act 1993 (CGA).

Is Ms Torres entitled to any remedy under the CGA?

[16] Ms Torres Jimenez has not proven that the vehicle had any defect that would justify rejecting the vehicle. She has proven that the vehicle had leaking fuel injectors and faulty door locks, but The Cheap Car Place rectified those faults within a reasonable time, so Ms Torres Jimenez cannot reject the vehicle due to those defects. Further, Ms Torres Jimenez has not proven that the vehicle had any fault that caused smoke and flames from the engine bay. She has not provided any independent diagnosis of such a fault, and Mr Haitana – who I found to be a clear and credible witness – says that he saw no sign of smoke or flame damage when he assessed the vehicle. Given The Cheap Car Place’s prompt rectification of the earlier faults, I consider it likely that it would have assumed responsibility for any fault that had caused the vehicle to emit smoke and flames if it thought such a fault existed.
[17] I therefore find that Ms Torres Jimenez was not entitled to reject the vehicle because she has not proven that the vehicle had any existing defects that would justify rejection. Ms Torres Jimenez’s application is therefore dismissed.
[18] Even if I am wrong on this point, Ms Torres Jimenez has lost any right she had to reject the vehicle because it has been disposed of.
[19] Relevantly, s 20(1)(b) of the CGA states:

20 Loss of right to reject goods

(1) The right to reject goods conferred by this Act shall not apply if—

...

(b) the goods have been disposed of by the consumer, or have been lost or destroyed while in the possession of a person other than the supplier or an agent of the supplier; or

[20] I find that the vehicle has been disposed of by Ms Torres Jimenez. Ms Torres Jimenez stopped repaying the loan with Thorn Group Financial Services. She was not entitled to do so. Although she had concerns about the condition of the vehicle, she had a contractual obligation to continue to make payments under the loan.
[21] The vehicle was then repossessed and sold by Thorn Group Financial Services because Ms Torres Jimenez had defaulted on payments due under the loan. I consider that the repossession and sale of the vehicle means that Ms Torres Jimenez no longer has possession or control of the vehicle because she defaulted on payments due under the loan.
[22] Ms Torres Jimenez says that she did not realise that she had borrowed money from Thorn Group Financial Services. She says that she thought that she had borrowed money from The Cheap Car Place. Nonetheless, the loan agreement signed by Ms Torres Jimenez on 22 September 2021 is clear that she was borrowing money from Thorn Group Financial Services and that she was contractually obliged to continue to make payments under that loan, regardless of any issue she was having with the vehicle.
[23] I therefore find that Ms Torres Jimenez has lost any right she had to reject the vehicle under s 20(1)(b) of the CGA because the vehicle has been disposed of.
[24] Having lost the right to reject the vehicle, the only other remedy potentially available to Ms Torres Jimenez under the CGA would be an order requiring The Cheap Car Place to rectify the alleged faults. Even if the vehicle had existing faults, any such order in favour of Ms Torres Jimenez would be pointless as the vehicle is no longer in Ms Torres Jimenez’s possession and control.
[25] If Ms Torres Jimenez has any concerns regarding the repossession and sale of the vehicle, including whether the required notices were sent to her, she should contact the Commerce Commission, which has the jurisdiction to consider repossession of consumer goods such as this motor vehicle.

DATED at AUCKLAND this 30th day of June 2022

B.R. Carter
Adjudicator

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[1] Accessory mode allows the occupants to use the vehicle’s accessories (radio, wipers, air conditioning etc) while the engine is off.