Kumar v Patel Motors (NZ) Ltd - Reference No. MVD 361/2022 [2022] NZMVDT 257 (22 November 2022)

Last Updated: 26 December 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 361/2022 [2022] NZMVDT 257 BETWEEN RAJINA DEVI KUMAR Applicant AND PATEL MOTORS (NZ) LTD Respondent

HEARING at AUCKLAND on 15 November 2022 (by audio-visual link) MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator S Gregory – Assessor

APPEARANCES

R D Kumar, Applicant S Prasad, Witness for the Applicant

B Patel for the Respondent D Loku, Witness for the Respondent

DATE OF DECISION 22 November 2022

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DECISION OF THE TRIBUNAL

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A Rajina Kumar’s application to reject the vehicle is dismissed.

2. Patel Motors (NZ) Ltd shall, within 10 working days of the date of this decision, rectify the cause of the water leak into the boot.

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REASONS

Introduction

[1] Rajina Kumar wants to reject the 2010 Toyota Prius she purchased for $14,200 from Patel Motors (NZ) Ltd on 30 June 2022. Ms Kumar says that the vehicle has had several defects since purchase, and although Patel Motors has rectified some of those defects, others remain, including a water leak into the boot.

Relevant background

[2] The vehicle passed a warrant of fitness inspection performed by VTNZ on 2 June 2022. Ms Kumar inspected the vehicle on 30 June 2022 and says that Bhavesh Patel, a director of Patel Motors, reassured her that the vehicle was a “quality vehicle” and a “good purchase” and that he could replace the vehicle if there were any problems. Ms Kumar says she trusted Mr Patel, so performed no pre-purchase assessments on the vehicle. Based on Mr Patel’s reassurances, Ms Kumar also says that she believed that she would not have to perform any repairs or maintenance on the vehicle for one-to-two years.

The spare key

[3] The vehicle came with only one key. In her application, Ms Kumar stated that she asked about a spare key and Mr Patel advised her that “the company he is dealing with might send with the next month end stock”. During the hearing, Ms Kumar claimed that Mr Patel had told her that Patel Motors would provide a spare key and has now failed to do so. Mr Patel says that he never promised to supply a spare key and simply advised Ms Kumar that he would provide one to her if the supplier sent one to Patel Motors, which sometimes happens.

The wing mirror

[4] Shortly after purchasing the vehicle, Ms Kumar noticed that one of the side mirrors did not automatically retract when the ignition was turned off. Ms Kumar then returned the vehicle to Patel Motors for the wing mirror to be repaired on 6 July 2022. Patel Motors replaced the wing mirror.

The sluggish acceleration

[5] Ms Kumar then noticed that the vehicle would not accelerate properly. Mr Patel advised her to have the vehicle assessed by Otahuhu Tyre Centre, so Ms Kumar took the vehicle to that company on 26 July 2022. Otahuhu Tyre Centre seems to have found that the acceleration issues were caused by a floor mat obstructing the accelerator pedal. The mechanic refitted the mat. Patel Motors believes that this fixed the issue, but Ms Kumar says that the vehicle continues to have sluggish acceleration.

The stained seat and discovery of a water leak

[6] While she was at Otahuhu Tyre Centre, Ms Kumar says that she also told the mechanic about a stain on the rear seat. She says the mechanic then found a small pool of water in the boot, which he cleaned out. Ms Kumar says that the mechanic told her to return the vehicle on another day for further repairs.
[7] Ms Kumar says that she returned the vehicle to Otahuhu Tyre Centre on 28 July 2022. She says that the mechanic again found a small amount of water in the boot. He removed the water and told Ms Kumar that, because the groomer who was going to clean the rear seat was away for two weeks, she should return in two weeks’ time and any ongoing leak could be repaired.
[8] Ms Kumar says that on both 26 and 28 July the mechanic phoned Patel Motors in her presence and told Patel Motors about the water in the boot. Patel Motors says that it was told about water in the boot on 26 July 2022 but not on 28 July 2022.
[9] Ms Kumar says that she again noticed a pool of water in the boot on about 7 August 2022. She called Patel Motors on 9 August, and it asked to assess the vehicle. Ms Kumar says that she asked Patel Motors to provide a courtesy car, but when she had not received a response the following day, she had the vehicle assessed by AA Motoring.

The AA Motoring report

[10] A Vehicle Inspection report dated 10 August 2022 states that AA Motoring Centre found:

• (a) the transmission oil levels could not be assessed as it is a sealed unit
• (b) the windscreen has minor stone chips
• (c) the interior upholstery, including dashboard and headlining, is showing signs of general wear and tear
• (d) a minor dent in a body panel
• (e) minor stone chips
• (f) poor paint finish on the bumper
• (g) the air filter was dirty
• (h) the boot floor was wet
• (i) both front shock absorber dust boots were torn; and
• (j) there is a knocking noise from the front of the vehicle.

[11] The vehicle was then returned to Patel Motors and it cleaned the air filter, replaced both dust boots and replaced the left taillight, which it considered to be the cause of the water leak into the boot. Patel Motors also says that it found no knocking noise from the vehicle after the dust boots were replaced, so it suspected that this repair had rectified the cause of any knocking noise. Regarding Ms Kumar’s concerns about the oil levels, stone chips and interior and exterior condition, Patel Motors says that the vehicle’s oil levels were fine, it found no evidence of significant stone chips and the vehicle’s condition was consistent with its age.

The radio and window malfunction

[12] Ms Kumar also says that the radio started to malfunction, and she could only operate the radio from the steering wheel controls. It seems that issue then resolved itself. Ms Kumar says that there was also a problem with a window, that wound down instead of winding up. Again, that problem has not returned.

The ongoing water leak

[13] On 25 August 2022, Ms Kumar returned the vehicle to Patel Motors for the stain on the rear seat to be removed. Ms Kumar also says that there was water in the boot, and she asked Patel Motors to again assess and rectify that leak on 25 August. Patel Motors says that it found no leak at that time.
[14] Ms Kumar then emailed Patel Motors on 1 September 2022 saying that the water leak remained and that she would return the vehicle one last time. That same day, Dilushka Loku, a sales manager at Patel Motors, advised Ms Kumar that Patel Motors had inspected the vehicle on 25 August 2022 and found no water leak, but it remained prepared to resolve any ongoing leak.

The flashing traction control light

[15] By this time, Ms Kumar was also complaining about a flashing traction control light, which appeared when the brake pedal was pushed while the vehicle was at a standstill. Mr Patel says that he saw that the traction control light was flashing when the brake pedal was pushed while the vehicle was stopped. Patel Motors then had the vehicle assessed by an auto electrician. Mr Patel says that the auto electrician told him that the light was flashing because the brake was pressed hard, which is normal and is not a fault.

The electric shocks

[16] Ms Kumar also says that she has received an electric shock from the vehicle on three or four occasions. A family member also reports feeling similar shocks.

Rejection of the vehicle

[17] On 3 September 2022, Ms Kumar then had the vehicle assessed by North Shore Toyota, which found water leaking into the boot from the right-hand side weather strip. Ms Kumar then rejected the vehicle.

Patel Motors’ response

[18] Patel Motors says that Ms Kumar should not be entitled to reject the vehicle. It says:

• (a) it never promised to provide a spare key
• (b) it has fixed the wing mirror fault and replaced the torn dust boots and cleaned the air filter and stain on the rear seat
• (c) it has made a reasonable attempt to fix the water leak and should be given another chance to rectify the underlying cause of the leak
• (d) the vehicle has no traction control fault or any fault that causes an electric shock. Patel Motors says that any shock experienced by Ms Kumar is likely to be caused by static electricity; and
• (e) the other issues identified by AA Motoring and complained of by Ms Kumar are consistent with the vehicle’s age and it should have no liability for those issues.

The issues

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

• (a) Has the vehicle been of acceptable quality for the purposes of s 6 of the Consumer Guarantees Act 1993 (the CGA)?
• (b) Has Patel Motors failed to rectify the vehicle’s defects within a reasonable time?
• (c) Are the vehicle’s defects a failure of a substantial character?
• (d) What remedy is Ms Kumar entitled to under the CGA?

Issue 1: Has the vehicle been of acceptable quality?

[20] 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”.
[21] “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.

[22] 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 Ms Kumar’s subjective perspective.

The wing mirror

[23] The wing mirror was faulty and required replacement shortly after purchase, which is a breach of the guarantee of acceptable quality as the vehicle was not as free of minor defects as a reasonable consumer would consider acceptable.

The water leak

[24] I am satisfied that Ms Kumar has proven that the vehicle has an ongoing water leak, which is allowing water to leak into the boot. In that regard, I accept the diagnosis of North Shore Toyota, which is consistent with Ms Kumar’s evidence. That water leak means the vehicle is not of acceptable quality for the purposes of s 6 of the CGA, because it means that the vehicle has not been as free of minor defects as a reasonable consumer would consider acceptable.

The other complaints

[25] The remaining issues raised by Ms Kumar do not breach the guarantee of acceptable quality for the following reasons:

• (a) The spare key: I find that Patel Motors never agreed to provide a spare key, so its failure to do so does not breach any of the guarantees in the CGA. In that regard, I accept Mr Patel’s evidence that he only offered to supply a spare key if his supplier sent one to him. That explanation is consistent with Ms Kumar’s application, which states that she was told that the supplier might send a key.
• (b) The items identified by AA Motoring: The AA Motoring report contains a list of items (see paragraph [10] above) that Ms Kumar considers to be unacceptable. Ms Kumar purchased a ten-year-old vehicle with an odometer reading of 83,125 km. She should understand that such a vehicle will have wear and tear consistent with its age and mileage and that the vehicle will require ongoing maintenance and may develop minor issues as it is used. Other than the water leak in the boot, the items identified by AA Motoring are all consistent with the vehicle’s price, age and mileage, did not make the vehicle unfit for purpose or unsafe and did not require immediate repair.
• (c) The sluggish acceleration, radio and window faults: Ms Kumar has provided no evidence (other than her uncorroborated testimony) as to the existence of any ongoing fault that would affect the vehicle’s acceleration, radio or windows. I therefore cannot be satisfied that any such faults exist.
• (d) The electric shocks: Ms Kumar has not had the vehicle assessed to determine whether there is any fault that might cause electric shocks. In the absence of any such evidence, I consider it likely that the electric shocks complained of by Ms Kumar are minor and caused by static electricity, rather than any fault with the vehicle.
• (e) The flashing traction control light: The traction control light does flash when the brake is engaged at a standstill, but I am not satisfied that this is evidence of any fault. Mr Gregory, the Tribunal’s Assessor, advises that the flashing control light is a feature of the vehicle and is an indication that the hill control or hold function has been engaged because the brakes have been pushed hard while the vehicle was stationary. Mr Gregory advises that this is not a fault.

Issue 2: Has Patel Motors failed to rectify the vehicle’s defects within a reasonable time?

[26] Section 18(2)(b)(ii) of the CGA enables a consumer to reject goods where a supplier has been required to remedy a failure but does not succeed in doing so within a reasonable time.
[27] Section 18 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.

[28] Ms Kumar says that she has given Patel Motors ample opportunity to repair the water leak and it has failed to do so.
[29] There is some dispute between the parties as to the precise sequence of events and the opportunities given to Patel Motors to repair the water leak. Considering the evidence presented, I find that Patel Motors has only had one meaningful opportunity to repair the vehicle and that it made reasonable attempts to do so by replacing the taillight. In that regard, I make the following findings:

• (a) Ms Kumar first discovered a possible water leak on 26 July 2022, when the vehicle was assessed by Otahuhu Tyre Centre. Patel Motors was told of a possible water leak on that day but was not asked to rectify any leak.
• (b) The water leak was confirmed on 28 July 2022, when Otahuhu Tyre Centre found more water in the boot. Patel Motors was not advised of, or asked to fix, the ongoing water leak on that day. Ms Kumar says that Patel Motors should have known about the ongoing water leak and taken steps to fix it at that time as Otahuhu Tyre Centre is its mechanic. I am not satisfied that Otahuhu Tyre Centre’s knowledge of the ongoing water leak on 28 July 2022 can be attributed to Patel Motors. Patel Motors referred Ms Kumar to Otahuhu Tyre Centre to have the cause of the sluggish acceleration assessed, not to diagnose or fix any water leak. Because it was not told about any ongoing leak on 28 July, I cannot be satisfied that Patel Motors knew or ought to have known about that ongoing leak or taken any steps to fix it at that time.
• (c) Ms Kumar again noticed a pool of water in the boot on about 7 August 2022 and advised Patel Motors of the ongoing leak on 9 August 2022. Following the AA Motoring assessment, Ms Kumar returned the vehicle to Patel Motors and it replaced the left taillight, which it thought was the cause of the water leak.
• (d) Patel Motors assessed the vehicle again on 25 August 2022 and found no evidence of water in the boot. It was therefore reasonable for Patel Motors to perform no further repairs at that time.
• (e) Ms Kumar discovered more water in the boot on 1 September 2022. Mr Loku advised Ms Kumar that Patel Motors remained prepared to fix any ongoing leak, but Ms Kumar rejected the vehicle without giving Patel Motors any further opportunity to remedy the leak.

[30] Because it has had only one reasonable opportunity to repair the water leak, I am not satisfied that Patel Motors has failed or refused to remedy that defect within a reasonable time. Water leaks can be tricky to find and often take more than one attempt to successfully rectify. In this case I find that Patel Motors made a reasonable first attempt by replacing the left taillight, and I consider that it should be given another opportunity.

Issue 3: Are the vehicle’s defects a failure of a substantial character?

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

21. 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.

[32] The water leak and faulty wing mirrors (the only defects that breach the guarantee of acceptable quality) are not a failure of a substantial character. The wing mirror was promptly replaced and the water leak can be easily and inexpensively fixed and does not make the vehicle unsafe or unfit for purpose and is not so serious that a reasonable consumer would have declined to purchase the vehicle.

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

[33] The relevant remedies are contained in s 18 of the CGA, as set out above. For the reasons set out above, Ms Kumar is not entitled to reject the vehicle because its defects are not a failure of a substantial character and Patel Motors has not failed to rectify the water leak within a reasonable time. Instead, under s 18(2)(a) of the CGA, Ms Kumar is entitled to have the water leak rectified by Patel Motors within a reasonable time.

Outcome

[34] Ms Kumar’s application to reject the vehicle is dismissed and Patel Motors shall, within 10 working days of the date of this decision, rectify the cause of the water leak into the boot.

B R Carter
Adjudicator