Preet v JD Motors Limited - Reference No. MVD 327/2022 [2022] NZMVDT 235 (26 October 2022)

Last Updated: 23 November 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 327/2022 [2022] NZMVDT 235

BETWEEN NITIN PREET

Applicant

AND JD MOTORS LTD

Respondent

HEARING at AUCKLAND on 20 October 2022 (by audio-visual link)

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Gregory – Assessor

APPEARANCES

N Preet, Applicant

H Singh and D Salot, for the Respondent

_{DATE OF DECISION 26 October 2022}

_{DECISION OF THE TRIBUNAL}

A Nitin Preet’s application to reject the vehicle is dismissed.

B JD Motors Ltd shall, within 15 working days:

(a) install a new stereo (including fitting kit); and

(b) make all reasonable attempts to install an aftermarket rain sensor wiper kit. If that repair attempt is unsuccessful, JD Motors Ltd shall pay

$300 to Mr Preet.

_REASONS

Introduction

[1] Nitin Preet purchased a 2016 Toyota Camry for $24,000 from JD Motors Ltd on 25 May 2022. Mr Preet also purchased a three year mechanical breakdown insurance policy for $800.

[2] Mr Preet says that JD Motors has failed to install an aftermarket stereo as agreed and that the vehicle does not have rain sensing windscreen wipers as represented by JD Motors.

[3] JD Motors says that it agreed to install an aftermarket stereo and remains prepared to do so at its cost. Although there was some debate between the parties as to who should pay for the stereo fitting kit, JD Motors now says that it is prepared to purchase and install an aftermarket stereo (including fitting kit) at its expense.

[4] JD Motors also agrees that it represented that the vehicle had rain sensing wipers when it does not. It says that this was a genuine mistake. JD Motors has offered to install an aftermarket rain sensor wiper kit but says that it cannot guarantee that the aftermarket kit will work in this vehicle, and if the aftermarket kit does not work, it is happy to pay $300 in compensation to Mr Preet.

[5] Mr Preet wants JD Motors to either repair the vehicle or refund the purchase price. In support of his claim to reject the vehicle, Mr Preet says that JD Motors agreed to accept the return of the vehicle, on the condition that Mr Preet obtained a warrant of fitness for it. Mr Preet says that he has obtained the warrant of fitness and returned the vehicle, but JD Motors have not refunded the purchase price. JD Motors says that it never agreed to accept the return of the vehicle.

The issues

[6] Against this background, the issues requiring the Tribunal’s consideration in this case are:

(a) Did the vehicle comply with its description for the purposes of s 9 of the Consumer Guarantees Act 1993 (the CGA)?

(b) Is the vehicle of acceptable quality for the purposes of s 6 of the CGA?

(c) Is the failure to comply with description a failure of a substantial character?

(d) What remedy is Mr Preet entitled to under the CGA?

(e) Has JD Motors engaged in misleading conduct in breach of s 9 of the

Fair Trading Act 1986 (the FTA)?

(f) What remedy is Mr Preet entitled to under the FTA?

Issue 1: Did the vehicle comply with its description?

[7] The guarantee that goods comply with their description is found in s 9 of the

CGA, which provides:

9 Guarantee that goods comply with description

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

(2) A supply of goods is not prevented from being a supply by description by reason only that, being exposed for sale or hire, they are selected by a consumer.

(3) If the goods are supplied by reference to a sample or demonstration model as well as by description, the guarantees in this section and in section 10 will both apply.

(4) Where the goods fail to comply with the guarantee in this section,—

(a) Part 2 gives the consumer a right of redress against the supplier; and

(b) Part 3 may give the consumer a right of redress against the manufacturer.

[8] To comply with this guarantee, the vehicle must correspond with its description. The Shorter Oxford English Dictionary defines “correspond” as being “similar to”.1 “Similar” is defined as “having a marked resemblance or likeness to”.

1 Shorter Oxford English Dictionary (3rd ed, Oxford University Press, Oxford, 1973).

[9] I consider that the absence of rain sensing wipers does not breach this guarantee. The rain sensing wipers are a minor feature, and the absence of this function does not materially affect the vehicle’s value, functionality, or safety. In that regard, I note that there are many vehicles on the road that do not have the rain sensing wiper feature.

[10] I therefore find that absence of the rain sensing wiper feature is not material and does not make the vehicle sufficiently dissimilar to the vehicle described by JD Motors to breach the guarantee in s 9 of the CGA.

Issue 2: Is the vehicle of acceptable quality?

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

[12] “Acceptable quality” is defined in s 7 of the CGA (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.

[13] 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.

[14] A reasonable consumer would expect a vehicle of this age and price to have a functioning stereo, and this vehicle’s stereo requires replacement. JD Motors agreed to perform that repair and it has not yet done so. I am therefore satisfied that the vehicle is not of acceptable quality for the purposes of s 6 of the CGA because of the absence of the replacement stereo.

[15] The absence of the rain sensing wipers does not breach the guarantee of acceptable quality. The absence of that function is not a defect and does not affect the vehicle’s fitness for purpose, appearance, durability, or safety.

Issue 3: Is the failure of comply with the guarantee of acceptable quality a failure of a substantial character?

[16] A failure of a substantial character is defined in s 21 of the CGA:

21 Failure of substantial character

For the purposes of section 18(3), a failure to comply with a guarantee is of a substantial character in any case where—

(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b) the goods depart in 1 or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model; or

(c) the goods are substantially unfit for a purpose for which goods of the type in question are commonly supplied or, where section

8(1) applies, the goods are unfit for a particular purpose made known to the supplier or represented by the supplier to be a purpose for which the goods would be fit, and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or

(d) the goods are not of acceptable quality within the meaning of section 7 because they are unsafe.

[17] Mr Preet wants to reject the vehicle. He cannot do so because of the absence of the rain sensing wipers, as that absence is not a breach of any of the CGA guarantees. Likewise, he cannot reject the vehicle due to the absence of the replacement stereo. That is a minor and easily rectified fault and does not meet any of the criteria for rejection in s 21 of the CGA.

Issue 4: What remedy is Mr Preet entitled to under the CGA?

[18] The relevant remedies are set out in s 18 of the CGA, 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.

[19] For the reasons set out above, Mr Preet is not entitled to reject the vehicle. Instead, under s 18(2)(a), he is entitled to have a replacement stereo installed within a reasonable time.

Issue 5: Has JD Motors engaged in conduct that breached s 9 of the FTA?

[20] Section 9 of the FTA provides:

9 Misleading and deceptive conduct generally

No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

[21] The test for establishing a breach of s 9 was set out by the Supreme Court in

Red Eagle Corp Ltd v Ellis:2

The question to be answered in relation to s 9 ... is ... whether a reasonable person in the claimant’s situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely have been misled or deceived. If so, a breach of s 9 has been established.

[22] JD Motors represented that the vehicle had rain sensing wipers. That representation was misleading, as the vehicle does not have that function. Notwithstanding the relatively minor nature of this misleading conduct, in the sense that the rain sensing wiper function does not materially affect the vehicle’s value, functionality or safety, the representation that the vehicle had this function was nonetheless misleading for the purposes of s 9 of the FTA.

Issue 6: What remedy is Mr Preet entitled to under the FTA

[23] The remedies available for a breach of the FTA are set out in s 43 of the

FTA which is as follows:

43 Other orders

...

(3) The orders are as follows:

(a) an order declaring all or part of a contract made between person A and person B, or a collateral arrangement (for example, a collateral credit agreement) relating to such a contract,—

(i) to be void; and

(ii) if the court or the Disputes Tribunal thinks fit, to have been void at all times on and after a date specified in the order, which may be before the date on which the order is made:

2 Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].

(b) if an order described in paragraph (a) is made in respect of a contract that is associated with a collateral credit agreement, an order vesting in person B all or any of the rights and obligations of person A under the collateral credit agreement:

(c) an order in respect of a contract made between person A and person B, or a collateral arrangement (for example, a collateral credit agreement) relating to such a contract,—

(i) varying the contract or the arrangement in the manner specified in the order; and

(ii) if the court or the Disputes Tribunal thinks fit, declaring the varied contract or arrangement to have had effect on and after a date specified in the order, which may be before the date on which the order is made:

(d) if an order described in paragraph (c) is made in respect of a contract that is associated with a collateral credit agreement, and if that order results in person A no longer having property in the goods that are the subject of the contract, an order vesting in person B the rights and obligations of person A under the collateral credit agreement:

(e) an order directing person B to refund money or return property to person A:

(f) an order directing person B to pay to person A the amount of the loss or damage:

(g) an order directing person B, at person B’s own expense, to repair, or to provide parts for, goods that have been supplied by person B to person A:

(h) an order directing person B, at person B’s own expense, to

_{supply specified goods or services to person A.}

...

[24] The remedies in s 43(3) of the FTA are discretionary, and the discretion is to be exercised so as to give effect to the policy of the FTA, which includes to protect the interests of consumers. The object of the remedies in s 43(3) of the FTA is to do justice to the parties in the particular circumstances of the case.3

[25] In the circumstances of this case, given the minor nature of the missing rain sensing wiper function, I consider that the remedy that best does justice to the parties is an order under s 43(3)(g) that JD Motors make all reasonable efforts to install an aftermarket rain sensing wiper unit. To be clear, and acknowledging its

_{submission that it cannot be certain that the aftermarket kit will be compatible with}

3 Red Eagle Corp Ltd v Ellis, above n 2 at [31].

this vehicle, JD Motors is simply required to make reasonable efforts to install that unit. If that repair is unsuccessful, then under s 43(3)(f) of the FTA, I order that JD Motors should pay $300 to Mr Preet, which in my view is a fair approximation of the loss or damage caused to Mr Preet by the absence of that function.

Outcome

[26] Mr Preet’s application to reject the vehicle is dismissed, and JD Motors shall, within 15 working days of the date of this decision:

(a) install a new stereo (including fitting kit); and

(b) make all reasonable attempts to install an aftermarket rain sensor wiper kit. If that repair attempt is unsuccessful, JD Motors shall pay

$300 to Mr Preet.

B R Carter

Adjudicator