Hann v Bush - Reference No. MVD 132/2022 [2022] NZMVDT 147 (15 July 2022)

Last Updated: 9 October 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVDT 132/2022 [2022] NZMVDT 147 BETWEEN KAREN PATRICIA HANN Applicant AND JAMES BRIAN BUSH Respondent

MEMBERS OF TRIBUNAL

D Watson, Barrister – Adjudicator

S Gregory, Assessor

HEARING at Auckland on 7 June 2022 (by audio-visual link)

APPEARANCES

Karen Patricia Hann, Applicant Aubrey Cecil Hann, witness for Applicant James Brian Bush, Respondent

DATE OF DECISION 15 July 2022

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

A. James Bush must supply a boot cover for a Volvo C30 vehicle to Karen Hann within a reasonable time from the date of this decision. This obligation may be satisfied by the supply of a second-hand boot cover in reasonable condition.

B James Bush must repair the harsh scratching and paint imperfections to both doors, door handles, rear quarter panels and rear bumper by having those panels professionally painted and any adjacent panels appropriately blended. This must be undertaken within a reasonable period of time from the date of this decision.

C. If James Bush chooses to use a panel beater in Auckland to complete these repairs, then he must bear the cost of transporting the vehicle to and from Auckland for that purpose.

_________________________________________________________________

REASONS

Introduction

[1] Karen Hann purchased a 2011 Volvo C 30 motor vehicle from James Bush[1] for $7,640.00 on 30 October 2021. Mrs Hann claims that Mr Bush described the vehicle as including a boot cover and being a Japanese auction grade 4.5 vehicle. She claims that the vehicle was misdescribed in that it did not come with a boot cover and was not a grade 4.5 vehicle. The vehicle has a large number of scratches and other damage to the exterior of the vehicle that she says are not consistent with it being a grade 4.5.
[2] Mrs Hann is wanting to claim damages for the estimated cost of a replacement boot cover and the estimated cost of panel beating to repair the damage to the exterior of the vehicle.
[3] Mr Bush denies describing the vehicle as an auction grade 4.5. He says that in any event the damage to the exterior of the vehicle is minor. He also wants to have the opportunity to repair this damage. In relation to the boot cover, he claims that this was not a standard accessory with this vehicle and that he has therefore not described the vehicle as including a boot cover.

Relevant background

[4] Mrs Hann purchased the vehicle by way of a successful Trade Me bid. The vehicle was a freshly Japanese imported car that Mr Bush had purchased at auction in Japan.
[5] Before placing her bid, Mrs Hann read the Trade Me advertisement, including the questions and answers listed on the advertisement. She also looked at the photographs provided. A copy of this material was provided to the Tribunal.
[6] One of the photographs is a shot of the rear seats of the vehicle. A boot cover is shown perched behind those seats. Other photographs show the exterior of the vehicle. There are no visible scratches, dents or chips apparent on the exterior of the vehicle from these photographs.
[7] The question and answer section of the advertisement includes the following question and answers:

Question: “is it anything wrong with the car?”
Answer: “no issues this is grade 4.5 car”
Question: “what is grade 4 car and what are the on-road charges to be paid”

Answer: “we don’t charge orc it’s free grade 4.5 is best grade for used car grade 5 is brand-new”

[8] Mrs Hann did not ask these questions herself, but she nevertheless read them before bidding. Mr Bush confirmed that he was the author of the responses.
[9] Mrs Hann and her husband, Mr Hann, who also gave evidence, were familiar with the grading system of vehicles purchased at auction in Japan. They had previously owned two Japanese imported vehicles which were grade 4.5. They were aware that a grade 4.5 vehicle was the best grade for used vehicles and that the only level higher was a grade 5 which was a brand new vehicle. They believed that a grade 4.5 vehicle would have minimal, if any, exterior damage.
[10] Mrs Hann therefore relied on the Trade Me information before placing her successful bid. It assured her that the quality of the vehicle would be very high.
[11] Auckland was still in Covid lockdown at this time and the vehicle took some time to arrive with Mrs Hann, who resides in Wellington. Mr and Mrs Hann’s daughter resigns in Auckland. She uplifted the vehicle on 19 November 2021. From there, it was transported to Mr and Mrs Hann. Mr and Mrs Hann believe they took possession of the vehicle sometime in December 2021.
[12] Although Mr and Mrs Hann did not receive the vehicle until December 2021, their daughter telephoned them as soon as she received the vehicle about the lack of a boot cover and a faulty taillight. Their daughter also told them about severe scratching down the left hand side of the vehicle and several other damaged parts of the exterior, including the bumper and around the driver’s door.

Communications between the parties

[13] Mr and Mrs Hann were not happy with these issues and they contacted Mr Bush. They decided not to raise all of the issues straight away but instead thought that they would only initially raise the taillight issue and the lack of a boot cover. They formed the view that they would try and get these issues sorted first before raising other issues.
[14] The issue of the taillight was resolved reasonably quickly with Mr Bush accepting responsibility to source and pay for one.
[15] In relation to the boot cover, the text exchanges show that on 19 November 2021 Mr Hann requested a replacement boot cover. He then repeated that request on other occasions, including on 24 November 2021. Mr Bush responded saying that the boot cover was not supplied with the vehicle and was merely an accessory. He offered to source a replacement boot cover. This offer did not extend to meeting the cost of the boot cover. He was only offering to source a replacement boot cover.
[16] The communications also show that Mr Hann requested the Japanese auction condition report on several occasions. He wanted this document so that he could verify that the vehicle was in fact described in the auction condition report as a grade 4.5.
[17] The auction grade report eventually arrived with Mr and Mrs Hann sometime in early February 2022. The body of the report records that the auction grade was only a 4. The diagram included in the report shows scratching down the left side of the vehicle and indicates areas where there is other scratching and denting on the vehicle. The left hand side of the report includes a summary of key aspects of the vehicle. It records its year, odometer, colour, vehicle type and “scores”. There is a reference under “scores” to “4.5”. The font size and type of that “4.5” is however different to the other font used in the same document. It seems likely to have been added later or in error.
[18] After reviewing the auction document, Mr Hann texted Mr Bush. This was on 13 February 2022. For the first time, he raised the failure to disclose the severe scratching on the left side of the vehicle and the fact that it was only an auction grade 4. He also once again raised the lack of a boot cover. He asked Mr Bush to immediately supply a replacement boot cover and to agree to accept the cost for the paint damage. He said if Mr Bush did not agree to this, the Hanns would be happy for him to take the car back and refund the purchase price.
[19] There was no reply to that text. On 16 March 2022, Mrs Hann sent another text to Mr Bush asking him to get back to her so that all issues could be resolved.
[20] By 24 March 2022, there was still no response and Mr Hann sent a text saying that that offer of settlement was now withdrawn. On the same day, Mrs Hann filed the application.
[21] Mr and Mrs Hann have obtained three quotes for the repair of what they say is significant scratching, denting and chipping on the exterior of the vehicle. One quote, from Blair Wright Group, is for $2,059.71. The second quote is from Airflowe Collision Repair and is for $2,392.00. A third quote is from Arlington Motors Ltd and is for $3,158.61. Mr and Mrs Hann have not yet incurred the cost of these repairs. They are awaiting the outcome of the Tribunal hearing first.
[22] Mr Bush’s case is that the damage to the exterior of the vehicle is only minor and can easily be waxed out. His evidence was that these quotes are for “way too much”. He wants the opportunity to repair this damage.
[23] In relation to the boot cover, Mr and Mrs Hann say the cost of a new replacement boot cover will be approximately $500 plus GST. Once again, they have not purchased a replacement boot cover because they are awaiting the outcome of the Tribunal hearing first.
[24] Mr Bush claims that a replacement boot cover is hard to source but will cost closer to $200 plus GST. He claims that a second-hand boot cover will suffice.
[25] For completion, I mention that when Mrs Hann filed her application, she was also initially raising an issue to do with a vibration on start-up of the vehicle. She now no longer wishes to pursue that aspect of the application.

The issues

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

• (a) Was there a failure of the guarantee of acceptable quality pursuant to s 6 of the Consumer Guarantees Act 1993 (“CGA”).
• (b) Was there a failure of the guarantee that goods comply with their description pursuant to s 9 of the CGA?
• (c) What remedy is Mrs Hann entitled to under the CGA?

Issue 1: Was there a failure of the guarantee of acceptable quality?

[27] 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.
[28] The expression "acceptable quality" is defined in s 7 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.

(2) Where any defects in goods have been specifically drawn to the consumer's attention before he or she agreed to the supply, then notwithstanding that a reasonable consumer may not have regarded the goods as acceptable with those defects, the goods will not fail to comply with the guarantee as to acceptable quality by reason only of those defects.

(3) Where goods are displayed for sale or hire, the defects that are to be treated as having been specifically drawn to the consumer's attention for the purposes of subsection (2) are those disclosed on a written notice displayed with the goods.

(4) Goods will not fail to comply with the guarantee of acceptable quality if—

(a) the goods have been used in a manner, or to an extent which is inconsistent with the manner or extent of use that a reasonable consumer would expect to obtain from the goods; and

(b) the goods would have complied with the guarantee of acceptable quality if they had not been used in that manner or to that extent.

(5) A reference in subsections (2) and (3) to a defect means any failure of the goods to comply with the guarantee of acceptable quality.

[29] 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 Mrs Hann’s subjective perspective.
[30] The vehicle was described as an auction grade 4.5. The evidence of the description of the vehicle is derived from the Trade Me advertisement, the photographs included in the Trade Me advertisement and the questions and answers that I have referred to above. The questions and answers form part of the description of the vehicle because they are likely to be read and relied upon by prospective purchasers.
[31] As was correctly noted by Mr Bush, the reference to an auction grade 4.5 in relation to a vehicle purchased from a Japanese auction is commonly understood to mean a reference to the highest possible grade that is given to used vehicles, with the possibility of only small marks on the exterior but in otherwise excellent condition.
[32] A reasonable consumer would take such a reference to mean that the vehicle may come with small marks to the exterior but would be in otherwise excellent condition.
[33] Mr Bush’s defence is that the damage to the exterior of the vehicle is very minor and is not in the state that has been described by Mr and Mrs Hann.
[34] Mr Gregory, the Tribunal’s assessor, advises that the photographs of the vehicle provided by Mr and Mrs Hann show that there are heavy scratches to both front doors, rear guards and the rear bumper.
[35] I find that the external condition of the vehicle has meant that there was a failure of the guarantee of acceptable quality. A reasonable consumer of this vehicle would not consider that it has been as acceptable in appearance and finish, given the representation in the questions and answers section of the Trade Me advertisement that the vehicle was a grade 4.5.

Issue 2: Was there a failure of the guarantee that goods must comply with their description?

[36] Mrs Hann claims that the vehicle was described as including a boot cover.
[37] Section 9 (1) of the CGA provides:

Subject to section 41, where goods are supplied by description to a consumer, there is a guarantee that the goods correspond with the description.

[38] In Cooper v Ashley and Johnson Motors Ltd,[2] the Court considered, obiter, that the description of the numbers of owners of a vehicle, the stated odometer reading and the oral statement that the vehicle was a “good one”, were all elements of the vehicle’s description. In Mikitasov v Lee,[3] an appeal from the Disputes Tribunal, Judge Moran referred with approval to the Tribunal’s finding that the supply via Trade Me of an “Apple MacBook” that was not genuine amounted to a breach of the guarantee of correspondence with description.
[39] In assessing whether there has been a breach of the guarantee that goods comply with their description, step one is determining what was the description of the vehicle when it was being marketed for sale by Mr Bush, and step two is determining whether or not the vehicle corresponded with that description.

Step one: What was the description of the vehicle when it was being marketed for sale?

[40] The Trade Me photographs include a photograph of a boot cover. The photographs form part of the description of the vehicle and would be understood by any reasonable consumer as such.
[41] Any reasonable consumer viewing the photographs would conclude the vehicle included a boot cover.
[42] I find that the vehicle was described as including a boot cover when it was being marketed for sale. It does not matter that this item was only an accessory, as contended by Mr Bush.

Step two: Did the vehicle comply with its description?

Reference to the boot cover

[43] It was common ground that the vehicle was not supplied with a boot cover.
[44] I find that there was a breach of the guarantee of correspondence with description contained in s 9 of the CGA with respect to the boot cover.

Issue 3: What remedy is Mrs Hann entitled to under the CGA?

[45] Mrs Hann is entitled to a remedy under s 18 of the CGA where there has been a failure of any of the guarantees contained within the CGA. Section 18 of the CGA provides:

18. 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.

[46] I have found that there was a failure of the guarantee of acceptable quality in relation to the external condition of the vehicle and that there was a failure of the guarantee that the vehicle comply with its description in relation to the lack of a boot cover.
[47] Under s 18(2)(b)(i) of the CGA, Mrs Hann is entitled to have the failures remedied elsewhere and to obtain from Mr Bush all reasonable costs incurred in doing so where:

(a) she has first required Mr Bush to remedy the failures within a reasonable period of time, and

(b) Mr Bush has failed, refused or neglected to remedy the failures within a reasonable period of time; and

(c) she has incurred the costs of remedying the failures and those costs are reasonable.

[48] I now deal with each failure separately.

Repairs to the exterior of the vehicle

[49] As noted above, the CGA expressly provides that a trader must be given a reasonable opportunity to remedy a failure before a purchaser can go on to either exercise a right to reject or have the failure remedied themselves.
[50] Mr and Mrs Hann waited until 13 February 2022 before raising the issue of the severe scratching on the vehicle with Mr Bush. In the message sent to Mr Bush on that date, the request they make is for him to accept the cost of the paint damage.
[51] There was then only one further text before the application was filed. Mr Bush maintains he wants to have the opportunity to repair the damage.
[52] I am not satisfied that Mrs Hann has provided Mr Bush with an adequate opportunity to remedy the failure. In the circumstances of this case, demanding that he accept the costs of the paint damage is not the same thing as requesting the failure to be remedied.
[53] However, even if she had supplied Mr Bush with an adequate opportunity to remedy the failure, I am unable to award her the “costs” she is seeking for the repair. As discussed during the hearing, pursuant to s 18(2)(b)(i) of the CGA, her remedy is to have the failure remedied elsewhere and obtain all reasonable costs incurred in doing so. She has not incurred any costs as yet; she has only obtained quotes for repairs.

The boot cover

[54] In relation to the boot cover, I am satisfied that Mrs Hann requested this failure to be remedied on several occasions. Mr and Mrs Hann sent a number of texts to Mr Bush asking him to supply a boot cover.
[55] As with the repairs to the exterior of the vehicle however, Mrs Hann has not yet incurred any costs to remedy the failure; she has only obtained an estimate of the likely price.
[56] It follows that both in relation to the boot cover and the repairs to the vehicle, Mrs Hann is not entitled to the judgment she is seeking for the cost of the repairs and a boot cover.

What other remedy is Mrs Hann entitled to under the CGA?

[57] I have found that in two respects, the vehicle has failed guarantees under the CGA.
[58] Mrs Hann is entitled to have a replacement boot cover supplied by Mr Bush and to have the repairs on the exterior of the vehicle completed by Mr Bush.
[59] In relation to the boot cover, I find that in the circumstances of this case, Mrs Hann is not entitled to a brand-new boot cover. Mr Gregory advises that a second-hand boot cover in good condition should be available. Such a second-hand boot cover would suffice, in this case, to satisfy Mr Bush’s obligations to remedy the failure.
[60] I therefore find that Mr Bush must supply a second-hand boot cover in reasonable condition to Mrs Hann within a reasonable period of time from the date of this decision.
[61] In relation to the damage to the exterior of the vehicle, Mr Gregory advises that this damage is not minor. He advises that the damage cannot be rectified by cutting or buffing out. Mr Gregory is of the view that the quote for $2,059.71 is reasonable for the sort of work that will be required to remedy the failure.
[62] I find that Mr Bush must repair the harsh scratching and paint imperfections to both doors, door handles, rear quarter panels and rear bumper by having those panels professionally painted and any adjacent panels appropriately blended. This must be undertaken within a reasonable period of time from the date of this decision.
[63] It must be remembered that the CGA protections will still apply in relation to the repairs that I have ordered above. In the event any of the repairs are unsatisfactory, then Mrs Hann will have all of the same protections available to her in relation to those repairs.
[64] For completion I mention that Mrs Hann may have had an alternative claim under the Fair Trading Act 1986 (FTA) for misleading or deceptive conduct. I am of the view that I do not need to consider an alternative claim under the FTA because I have already provided an adequate remedy under the CGA.

Outcome

[65] Mr Bush is to supply a boot cover for a Volvo C 30 vehicle to Mrs Hann within a reasonable time from the date of this decision. This obligation may be satisfied by the supply of a second-hand boot cover in reasonable condition.
[66] Mr Bush must repair the harsh scratching and paint imperfections to both doors, door handles, rear quarter panels and rear bumper by having those panels professionally painted and any adjacent panels appropriately blended. This must be undertaken within a reasonable period of time from the date of this decision.
[67] If Mr Bush chooses to use a panel beater in Auckland for the foregoing repairs, then he must bear the cost of transporting the vehicle to and from Auckland for that purpose.

DATED at AUCKLAND this 15th day of July 2022

D A Watson
Adjudicator

---

[1] Mr Bush is a registered Motor Vehicle Dealer

[2] [1997] DCR 170, (1996) 7 TCLR 407 (DC), at [180], [415].

[3] DC Kaikohe CIV-2010-027-331, 4 July 2011.