Swinden v Jones t/a Jones Motors - Reference No. MVD 201/2022 [2022] NZMVDT 167 (11 August 2022)

Last Updated: 15 October 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 201/2022
[2022] NZMVDT 167

BETWEEN DANIEL PAUL SWINDEN

Purchaser

AND PETER CAMPBELL JONES T/A JONES MOTORS

Trader

HEARING on 20 July 2022
MEMBERS OF TRIBUNAL

J S McHerron, Barrister – Adjudicator
S D Gregory – Assessor

APPEARANCES (via Microsoft Teams)

D P Swinden, Purchaser
P C Jones, Trader

DATE OF DECISION 11 August 2022

___________________________________________________________________

INTERIM DECISION OF THE TRIBUNAL

___________________________________________________________________

1. Peter Jones has indicated that he is prepared to pay for repairs to the warrant of fitness items identified by VTNZ in respect of Daniel Swinden’s Holden Commodore SS. Mr Jones and Mr Swinden are to co-operate to ensure these repairs are carried out promptly.
2. In addition, Mr Swinden is to take the vehicle back to Anthony Motors for further assessment of its clutch to see whether the release bearing needs to be replaced. At the same time, he should get the vehicle diagnosed in respect of the alleged oil leak.

100. Once Anthony Motors has reached a clear view as to what repairs are needed and the estimated cost, Mr Swinden is to provide the Tribunal with a further report from Anthony Motors for the Tribunal’s consideration. The Tribunal will then make a final decision in respect of Mr Swinden’s application.

___________________________________________________________________

REASONS

Introduction

[1] Daniel Swinden has rejected the 2006 Holden Commodore SS that he purchased for $36,995 from Peter Jones (trading as Jones Motors).
[2] Mr Swinden purchased the vehicle in Tokoroa. While driving it back to Dunedin, he found he had some trouble getting the vehicle into gear. This caused him difficulties when he was about to drive the vehicle onto the interisland ferry.
[3] Mr Swinden also says the vehicle’s:

• (a) clutch does not “feel right” and it has a squealing sound;
• (b) gear box does not engage properly and there is a noise when he changes gears;
• (c) gears are harsh to engage at higher engine revolutions.

[4] Mr Swinden also became concerned that:

• (a) the vehicle was damaged when it was imported to New Zealand from Australia;
• (b) the vehicle may have been written off;
• (c) he has “financially lost out” because the vehicle is worth less than what he paid for it.

[5] The following issues arise out of Mr Swinden’s application, for the Tribunal to determine:

1. Did the vehicle fail to comply with its description?
2. Did the vehicle fail to comply with the guarantee of acceptable quality?

100. What, if anything, is the appropriate remedy?

Issue 1: Did the vehicle fail to comply with its description?

[6] Section 9 of the Consumer Guarantees Act 1993 (the Act) provides that where goods are supplied by description to a consumer there is a guarantee that the goods correspond with the description. According to s 2 of the Act, “goods” includes vehicles.
[7] Mr Swinden referred the Tribunal to the vehicle’s Trade Me listing. It expressly states that the vehicle is “not [a] damaged import”. Consistent with this information, the consumer information notice supplied with the vehicle has the “no” box ticked, under the heading “imported as damaged vehicle”.
[8] The information on the reverse of the consumer information notice states that the NZ Transport Agency records whether or not imported used vehicles have any obvious damage or deterioration that was identified at the time of importation.
[9] Prior to the hearing, the Tribunal asked Mr Swinden to obtain a CARJAM report to see whether the vehicle was recorded on the Waka Kotahi | NZ Transport Agency database as having been imported as damaged. The report produced by Mr Swinden indicates that there is no record on the database of the vehicle having been imported as damaged.
[10] However, the light vehicle repair record of certification for the vehicle, produced after it was imported to New Zealand in November 2020, refers to damage on the right-hand floor rail and right-hand sill edge.
[11] The vehicle’s entry certification check sheet refers to the need for a repair certificate in respect of damage to the right-hand sill and a tear to the right-hand side.
[12] Mr Swinden produced part of an invoice in relation to repairs that were carried out on the vehicle before he purchased it. The invoice shows that repairs were carried out on the right sill and frame and dents on the right chassis rail.
[13] According to the Tribunal’s Assessor, Mr Gregory, the absence of information on the Waka Kotahi | NZ Transport Agency database is likely to be because any border damage flag was removed. That is likely to have occurred because it was determined that the vehicle does not exceed the threshold for requiring repair certification. Mr Gregory considers it likely the repairs would have been deemed non-structural. That is a likely explanation for why any border damage flag has been removed. There was a lack of evidence to indicate when or how this occurred.
[14] A further suggestion was made by Mr Jones in the hearing in the effect that the damage may have occurred after the vehicle was imported to New Zealand. From the evidence, this seems possible.
[15] In any event, Mr Jones said that he did not import the vehicle himself and that, prior to Mr Swinden’s claim, he was not aware that repairs were carried out on the right sill, frame and chassis area as described.
[16] Mr Swinden also said that he thought the vehicle’s doors did not shut properly sometimes. This made him wonder whether the chassis had been taken out of alignment. However, Mr Swinden did not put forward any further evidence to support these concerns.
[17] Mr Swinden initially alleged that the vehicle may have been a statutory write off in Australia. However, when he checked the Australian Personal Property Securities Register, there was no evidence that the vehicle had previously been written off.

Tribunal’s assessment

[18] It is not clear from the evidence whether the vehicle was imported as a damaged vehicle. But it does seem likely that the damage present on the vehicle at the time of certification has been fully repaired. There is no evidence of it having any lasting impact on the vehicle’s value.
[19] Mr Swinden has not established that the vehicle was imported as a damaged vehicle. There is nothing to confirm whether the vehicle was damaged at or before the time of importation.
[20] In any event, and most significantly, the damage that was recorded on the entry certification documentation was not serious enough to require any damage flag to be retained on the Waka Kotahi | NZ Transport Agency database.

Conclusion

[21] Accordingly, I conclude that Mr Swinden has not established that the vehicle did not correspond with its description. No breach of s 9 of the Act has been established.

Issue 2: Did the vehicle fail to comply with the guarantee of acceptable quality?

[22] Section 6(1) of the Act provides that “where goods are supplied to a consumer there is a guarantee that the goods are of acceptable quality”.
[23] “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.

...

[24] 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.
[25] There was conflicting evidence as to the nature and the extent of any problems with the vehicle’s transmission and clutch.
[26] Mr Swinden did not provide any technical evidence to support his allegations that the vehicle’s gear box was not engaging properly.
[27] Mr Swinden took the vehicle to Anthony Motors on or around 9 May 2022. Its invoice states:

Check noise in clutch, road test vehicle and check operation, ok, find squeaking noise from inside bellhousing when opera[t]ing clutch, will need gear box removed and clutch etc inspected

[28] A further invoice was produced from GC Auto, reporting that after road testing for clutch issues, no problems were identified. GC Auto found a minor oil weep at the sump/bellhousing area. It carried out a regular service on the vehicle.
[29] On 9 June 2022, Mr Swinden took the vehicle for a warrant of fitness inspection at VTNZ. The vehicle failed its warrant of fitness inspection because of inadequate park brake performance on the right-hand side. In addition, the right seat belt was slow to operate, the front fog light alignment was too high and there is a rear reflector missing.

Tribunal’s assessment

[30] The four items identified as defective by VTNZ in its warrant of fitness inspection clearly amount to a failure to comply with the guarantee of acceptable quality. A reasonable consumer would not regard it as acceptable that the vehicle was unable to meet the warrant of fitness requirements after Mr Swinden has owned it for such a short time.
[31] These matters need to be rectified before the vehicle can be issued a warrant of fitness and be lawfully driven.
[32] The alleged clutch noise is less clearly a fault, or a breach of the guarantee of acceptable quality. However, Mr Gregory considers it may be related to a faulty release bearing in the clutch.
[33] Mr Jones said that the vehicle’s clutch was replaced in 2019. No invoices for this work were produced. Mr Gregory considers it is possible that the release bearing was not replaced when the clutch was replaced.
[34] This needs to be further assessed before the Tribunal can make a clear finding as to whether it was a further failure to comply with the guarantee of acceptable quality. At the same time this assessment is done, a further diagnosis should be made of the oil leak and a report prepared for the Tribunal’s consideration.

Issue 3: What is the appropriate remedy?

[35] 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:

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.

[36] 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.
[37] Mr Swinden has not established grounds for rejecting the vehicle at this stage. None of the issues identified are significant enough to justify that, either in terms of a failure of a substantial character or in terms of the trader’s unwillingness to carry out repairs. Mr Jones indicated that he would be willing to pay for repairs to the warrant of fitness items identified by VTNZ.
[38] In addition, Mr Swinden should take the vehicle back to Anthony Motors for further assessment of the clutch to see whether the release bearing needs to be replaced. At the same time, he should get the oil leak concerns diagnosed. Once Anthony Motors has reached a clear view as to what repairs are needed, Mr Swinden is to provide the Tribunal with a further report from Anthony Motors for the Tribunal’s consideration. The Tribunal will then make a final decision.

J S McHerron
Adjudicator