NZLII Home | Databases | WorldLII | Search | Feedback

Motor Vehicles Disputes Tribunal of New Zealand
You are here:  NZLII >> Databases >> Motor Vehicles Disputes Tribunal of New Zealand >> 2022 >> [2022] NZMVDT 153

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

Hohipa v Value Motors Lower Hutt Limited - Reference No. MVD 185/2022 [2022] NZMVDT 153 (20 July 2022)

Last Updated: 11 October 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 185/2022
[2022] NZMVDT 153

BETWEEN MEREANNA HOHIPA

Purchaser

AND VALUE MOTORS LOWER HUTT LIMITED

Trader

HEARING at WELLINGTON on 28 June 2022
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator
A B Cate – Assessor

APPEARANCES

M Hohipa, Purchaser
R O’Riley, Purchaser’s Partner
S van Niekerk, Manager of Trader

DATE OF DECISION 20 July 2022

___________________________________________________________________

DECISION OF THE TRIBUNAL

___________________________________________________________________


  1. Mereanna Hohipa’s application to reject her BMW X3 is dismissed.
  2. No later than 17 August 2022, or within any longer period approved by the Tribunal before expiry of this deadline, Value Motors Lower Hutt Ltd must:

:

(i) obtain and install a replacement insert for the console, repair the loose driver door card, and must investigate and repair the electrical issue causing the rear light bulbs to blow;
(ii) remove the rear window tints in order to get the vehicle warranted and, if requested and if possible and if requested, replace the tint to a standard acceptable to Ms Hohipa and consistent with warrant of fitness requirements;
(iii) replace the vehicle’s front shock absorbers;
(iv) obtain a new warrant of fitness for the vehicle at its expense at an inspection facility of Ms Hohipa’s choosing;
(v) pay Mr O’Riley and Ms Hohipa $190.43 in respect of the window washer repair in March 2021.

___________________________________________________________________


REASONS

Introduction

[1] Mereanna Hohipa and Richard O’Riley have rejected the 2007 BMW X3 they purchased in Ms Hohipa’s name on 15 August 2020 for $12,995 (including a two-year mechanical breakdown insurance policy). The vehicle has had many faults since purchase and has spent much time in the workshop (Mr O’Riley says about twenty weeks). Mr O’Riley has been very patient as he has sought Value Motors Lower Hutt Ltd’s assistance to resolve the car’s many issues.
[2] The following issues arise for the Tribunal to determine:

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

[3] 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.
[4] “Acceptable quality” is defined in s 7 of the Act (as far as is relevant) 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.

...

(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] 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.

Problems identified at or soon after the date of purchase

[6] The vehicle offer and sale agreement was accompanied by a document headed “Promises Sheet/Insurance Acceptance Form”. One of the items listed as a condition of sale was “Centre Console inside part to be sorted”. At the hearing, Mr O’Riley explained that this is a plastic insert that is missing from the centre console between the driver and passenger seat in the front of the cabin. Despite the promise that this would be sorted, it still has not been, despite at least two reminders in January 2021.
[7] In addition, Mr O’Riley alleged that the door card on the driver door is loose. He said that he had asked Value Motors on several occasions to fix it, but it has still not been repaired. Finally, Mr O’Riley referred to a problem with the taillight bulbs continually blowing, causing a warning light to appear on the dash. According to Mr O’Riley, simply replacing the bulbs has not fixed this problem. It appears the vehicle needs to go to an auto electrician for further diagnosis and repairs. At the hearing, Mr van Niekerk, the trader’s manager, denied that the trader had been told about this problem prior to Mr O’Riley’s application. Nevertheless, he indicated that Value Motors is willing to get this matter addressed by sending the vehicle to a specialist auto electrician (at the hearing, Mr van Niekerk suggested Capital Auto Electrics).

Washer bottle pump

[8] The vehicle’s washer bottle pump was replaced by Tuffy Auto Centre in September 2020 at Value Motors’ expense ($201.01). In addition, a further invoice from March 2021 records that Tuffy Auto Centre also supplied and fitted a window washer pump at a cost of $190.43 which was paid by Mr O’Riley. It is not clear whether this was the same pump needing to be replaced twice or a different pump. There is evidence that Mr O’Riley asked Value Motors to assist with the second repair before having it carried out in March 2021. However, no evidence was produced of Value Motors’ response to that request.

VANOS and camshaft issues

[9] In September 2020, Mr O’Riley reported that the vehicle’s check engine light came on while he was driving back home from Levin. Tuffy Auto Centre scanned the vehicle for faults and replaced the right rear brake light. Tuffy Auto Centre noted that the engine light may come back on. It thought the problem could be a rear oxygen sensor or electronic thermostat at fault. Tuffy’s invoice records the vehicle was sent to AJ Auto however there were no invoices produced to indicate what if any work was carried out there.
[10] Tuffy Auto Centre’s invoice dated 24 December 2020 records that the vehicle’s VANOS[1] actuator was replaced along with its eccentric shaft[2] and needle bearings.[3] The invoice states that this work was completed at a cost of $3,188.46, which was paid by Protecta Insurance under the mechanical breakdown insurance policy supplied with the vehicle, apart from the excess of $495.
[11] It appears that further VANOS repairs were needed in March 2021, after the vehicle went into limp mode. Motor Tech’s invoice dated 30 March 2021 records that the vehicle’s timing was checked and it was found that pick up wheels were out by 3mm and they needed to be reset and reassembled. In addition, Motor Tech removed the VANOS filter and found that the intake was blocked. It cleaned and reassembled the intake. Value Motors was invoiced $897 for this work.

Replacement key

[12] In April 2021, a new key was supplied to Mr O’Riley and Ms Hohipa because the existing key had been found to be damaged. The cost of this replacement, $320.62 was paid by Value Motors.

Significant engine repairs in 2021

[13] On or around 25 May 2021, the vehicle’s check engine light came on while Mr O’Riley was driving around Turangi. On Mr O’Riley’s return to Lower Hutt, Value Motors made arrangements for the vehicle to be towed to Motor Tech. Motor Tech diagnosed that the vehicle’s cylinder head needed to be repaired and the exhaust valves needed to be replaced as they were burnt out. This work was carried out by Motor Tech at a cost of $5,760.93, most of which was paid by Protecta, but $1,255.93 of which was paid by Value Motors.
[14] Value Motors alleges that, by continuing to use the vehicle, Mr O’Riley contributed to this fault and the extent of the repairs needed. It says that the fault arose because of an ignition coil failure leading to significant engine damage after Mr O’Riley kept driving the vehicle despite it misfiring. Mr O’Riley denies he contributed to the extent of repairs required. I do not need to resolve the dispute between the parties on this point, but the Tribunal’s Assessor, Mr Cate, was not persuaded there was sufficient evidence to establish Mr O’Riley was at fault.
[15] After these repairs were carried out, Mr O’Riley reported that the engine light came on again. This time, another coil needed replacing which was carried out by Motor Tech at Value Motors’ expense.

Failed warrant of fitness, October 2021

[16] In October 2021, Mr O’Riley took the vehicle to VTNZ to renew its warrant of fitness. The vehicle failed the inspection because of the rear window tints which VTNZ found did not comply with legal requirements. In addition, VTNZ found the right front suspension shock absorber was leaking, the left front suspension shock absorber was worn and that the manufacturer’s specifications needed to be checked in respect of the rear suspension shock absorbers.
[17] Value Motors disputes that there is anything wrong with the rear shock absorbers but is willing to replace the front shock absorbers and remove the window tints.

Tribunal’s assessment

[18] It is not disputed that the vehicle has had several faults which, separately and in combination, amount to a failure to comply with the guarantee of acceptable quality. Indeed the cost of repairs that have been required and are still required is likely to exceed the vehicle’s purchase price.
[19] The only real dispute in relation to acceptable quality involves whether Mr O’Riley can be said to have contributed to the fault that required significant engine repairs in June 2021. However, as indicated above, Mr Cate did not consider that there was sufficient basis to establish his contributory negligence in terms of s 7(4) of the Act (above).
[20] I conclude that the vehicle failed to comply with the guarantee of acceptable quality. Most of the faults have been repaired. However, outstanding failures to comply include in relation to the matters identified as being problems at the date of purchase, namely the missing plastic insert from the centre console, the loose driver door card and the problems with the taillight bulbs blowing, causing a warning on the dash.
[21] In addition, there are the problems identified by the VTNZ warrant of fitness inspection in relation to the front shock absorbers and the window tints. I consider there is disputed information relating to the rear shock absorbers. Therefore, I am unable to uphold any complaint in respect of those, as Mr O’Riley has not provided any evidence to refute Value Motors’ claim that the rear shock absorbers are in acceptable condition.

Issue 2: Was the failure of a substantial character?

[22] Section 21(a) of the Act provides that a failure to comply with a guarantee is of a substantial character where the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure. I consider that this ground applies in the present case. The vehicle has been the subject of a myriad of complaints, well and truly justifying Mr O’Riley’s intense frustration. A reasonable consumer would not have acquired this vehicle if they had known in advance what problems would arise.
[23] Accordingly, I conclude that the vehicle’s failure to comply with the guarantee of acceptable quality was of a substantial character.

Issue 3: What is the appropriate remedy?

[24] The remedies available to a consumer where a vehicle does not comply with the guarantee of acceptable quality are set out in s 18 of the Act, 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.

[25] The primary remedy available to a consumer where a vehicle fails to comply with the guarantee of acceptable quality is set out in s 18(2)(a) and allows the consumer to require the supplier to remedy the failure within a reasonable time.
[26] In the present case, Ms Hohipa and Mr O’Riley seek to go further than just requiring Value Motors to remedy the failure. They seek to have their rejection of the vehicle upheld.
[27] A significant issue in relation to whether the rejection should be upheld, is whether Mr O’Riley rejected the vehicle within a reasonable period after the date of purchase. He says he rejected the vehicle several times dating back to approximately September 2020. Value Motors denies Mr O’Riley attempted to reject the vehicle until much later, around October 2021. I will review the relevant evidence on that point and assess whether any rejection occurred within a reasonable time.
[28] In respect of the most serious and costly of the vehicle’s failures, namely those relating to the vehicle’s VANOS, its camshaft and the engine’s cylinder head and exhaust valve repairs, these have been fixed mainly under the mechanical breakdown insurance policy and partly at Value Motors’ expense.
[29] Mr O’Riley raised a concern that the insurance policy had been used by Value Motors without adequate consent or consultation with him or his partner. This is an all too common complaint in the Tribunal. The Tribunal takes a dim view of motor vehicle traders who treat mechanical breakdown insurance policies as being for their benefit rather than for the benefit of the holder of the policy. However, it is not part of the Tribunal’s jurisdiction to police this form of misappropriation of the policy holder’s rights. As much as anything, it is the responsibility of the insurance company to ensure proper consent is given before work is done in respect of a claim.
[30] In the present case, an email was supplied from Protecta Insurance to Ms Hohipa on 4 November 2021. The email notes that in respect of the two claims on her policy, for the VANOS system on 5 November 2020 and for the engine cylinder head at Motor Tech on 3 June 2021, Protecta’s claims officers advised the workshop in question to proceed on Ms Hohipa’s authorisation only. Protecta offered its apologies if that was not what actually occurred. However, there was insufficient evidence presented to the Tribunal to allow me to conclude that any abuse of this arrangement occurred. In any event, in terms of what is relevant, I record that the evidence does not indicate any outstanding repairs are required in respect of those matters.
[31] Rather, the outstanding matters needing to be repaired include the three matters identified from early on Ms Hohipa’s ownership of the vehicle, namely the console insert, the loose door card and the problem causing the taillights to keep blowing, as well as the repairs required to ensure warrant of fitness compliance namely the tinted rear windows and the front shock absorbers.
[32] In my view, Ms Hohipa would have had two grounds for rejecting the vehicle:
[33] However, any right to reject a vehicle must be exercised within a reasonable time.[4] “Reasonable time” is defined as running from the time of supply of the goods up to the time at which it would be reasonable to expect the defect to become apparent.[5]
[34] In the present case, Mr O’Riley alleges that he rejected the vehicle several times orally to various personnel at Value Motors, including in September 2020, November 2020, February 2021, October 2021 and November 2021.
[35] Unfortunately, the only written evidence of any of these rejections relates to the October 2021 and November 2021 rejections, after which the substantive repairs to the vehicle had been carried out. I consider that by this time, Ms Hohipa’s right to reject the vehicle had been lost because it was not exercised within a reasonable time.
[36] Probably the latest I would have considered to be reasonable in terms of s 20 would have been before the major engine repairs were done around the middle of 2021. By the time of the October 2021 rejection the bulk of the repairs had been carried out and the only outstanding matters are those matters that remain outstanding now, none of which Value Motors has refused to address.
[37] There is another reason why, in the present case, I would be reluctant to uphold Ms Hohipa’s rejection of the vehicle. That is because on at least two occasions after the vehicle failed its warrant of fitness in October 2021, Ms Hohipa agreed to accept repairs to the vehicle offered by Value Motors as settlement of her dispute with it. Section 43(7) of the Act expressly recognises the ability of consumers to agree to settle or compromise their claims and the dispute resolution provisions in the Motor Vehicle Sales Act 2003 are also premised on the desirability of parties resolving their disputes by agreement.[6]
[38] The first of these agreements was on 5 November 2021, when Mr O’Riley emailed Value Motors as follows:

In the essence of getting to a resolution we have decided to accept the offer of Value Motors to bring the vehicle up to WOF standards. And we will deal with the BMW after that point Jimmy [of Star Moto] said he would be able to do this.


[39] Mr van Niekerk said that, on the strength of that agreement, Value Motors purchased parts valued at approximately $1,000 in order to carry out these repairs. It still has those parts, ready to be installed in Ms Hohipa’s vehicle.
[40] The second agreement was on 15 March 2022 in which a lawyer acting for Ms Hohipa advised Value Motors as follows:

Mere has advised that she wishes to have the vehicle brought up to warrantable standard and warranted. An independent garage with which we have had a relationship since the 1970’s has inspected the car for us and has confirmed the approach taken by VTNZ that it should not have been given a warrant in the first place by Star Moto Vehicle Service, with the aftermarket tinting alone being unwarrantable.

The garage has also advised that the state of the shock absorbers is such that they could not have been warrantable at the time of sale and could not have deteriorated to their present state during the intervening period with the mileage travelled.

The tinting of the windows was one of the features which originally attracted our clients to the vehicle.

It will not be a satisfactory solution simply to remove the coatings. A level of tint coating which will be accepted by NZTA as warrantable will be required by way of replacement.

In addition to this work, our clients will want the warrant issuing organisation to be VTNZ as entirely independent of any workshop operator.

Please confirm that you will carry out this work on these terms.


[41] At the hearing, Mr van Niekerk accepted on behalf of Value Motors that it would accept these conditions, in particular that a warrant of fitness could be obtained at a place of Ms Hohipa’s choosing including VTNZ if she wanted. Moreover, Mr van Niekerk confirmed that, once the window tints were removed, if the level of tinting as on the vehicle as manufactured was insufficient then Value Motors would be prepared to pay for the windows to be tinted again to a level that was acceptable according to warrant of fitness requirements. However, Mr van Niekerk rightly pointed to the risks of such an approach given, in his view, the apparent subjectivity of the application of the rules relating to tinting depending on who does the warrant of fitness inspection.
[42] Accordingly, I have concluded that, through delay, Ms Hohipa lost her right to reject the vehicle.
[43] Instead, she is entitled to the following remedy in accordance with s 18 of the Act.
[44] Value Motors Lower Hutt Ltd must, within the next 4 weeks after the date of this decision, or any longer period approved by the Tribunal before expiry of the deadline:

J S McHerron
Adjudicator

[1] VANOS is BMW’s proprietary valve timing system.

[2] The eccentric shaft is part of the variable intake valve lifting system.

[3] The needle bearings are associated with the eccentric shaft.

[4] Consumer Guarantees Act 1993, s 20(1)(a).

[5] Section 20(2).

[6] Motor Vehicle Sales Act 2003, sch 1, cls 5, 14(1)(a)(ii).

NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.nzlii.org/nz/cases/NZMVDT/2022/153.html