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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 16 January 2023
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BETWEEN JACQUELINE HURST
Applicant
AND MARS MOTORS LTD
Respondent
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HEARING at AUCKLAND on 8 November 2022 (by audio-visual
link)
MEMBERS OF TRIBUNAL
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B R Carter, Barrister – Adjudicator
S Gregory – Assessor
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APPEARANCES
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J Hurst, Applicant
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Z Jian for the Respondent
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DATE OF DECISION 1 December 2022
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_________________________________________________________________
DECISION OF THE TRIBUNAL
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A Jacqueline Hurst’s application to reject the vehicle is dismissed.
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REASONS
Introduction
[1] Jacqueline Hurst purchased a 2005 Nissan Fuga for $6,980 on 30 April 2021. Ms Hurst says that she purchased the vehicle from Mars Motors Ltd. Mars Motors denies selling the vehicle. It says that the vehicle was sold by one of its employees, so the transaction was a private sale.
[2] The identity of the seller has taken on some significance. Ms Hurst says that the vehicle is now defective – it has an intermittent starting fault – and Mars Motors has refused to rectify that defect, claiming that it did not sell the vehicle. Ms Hurst has therefore applied to the Tribunal seeking to reject the vehicle, obtain a refund of all amounts paid and be relieved of her ongoing obligations under the loan she entered into with Community Financial Services Ltd to purchase the vehicle (the collateral credit agreement).
Relevant background
[3] Ms Hurst saw the vehicle advertised on Facebook in April 2021. Ms Hurst contacted Melody Xia, who had placed the advertisement. Ms Hurst says that she noticed that Ms Xia worked for Mars Motors, so she believed that she was purchasing the vehicle from a motor vehicle trader. Ms Hurst also says that Ms Xia prepared the vehicle offer and sale agreement and Vincent Ning, who also worked for Mars Motors, arranged the collateral credit agreement.
[4] About six to eight weeks after purchasing the vehicle, the vehicle failed to start. Ms Hurst contacted Ms Xia who said she could not help, as the transaction was a private sale, and that the vehicle was “sold on behalf”. Ms Xia also advised Ms Hurst to use the mechanical breakdown insurance policy that she had purchased with the vehicle. On 6 August 2021, Ms Hurst then sent a Facebook Messenger message to Ms Xia advising that she was returning the vehicle.
[5] Ms Hurst did not return the vehicle. Instead, she says that the vehicle then started again about two or three weeks later, so she had the vehicle assessed by Autometix Automotive in Henderson, which found no mechanical faults.
[6] Ms Hurst continued to use the vehicle. She says that the vehicle would fail to start intermittently, but she was still able to regularly drive it. In that regard, by 25 November 2021, when the vehicle passed a warrant of fitness inspection, its odometer reading was 81,479 km, meaning Ms Hurst had driven about 7,000 km during the first six months of her ownership.
[7] In early July 2022, the vehicle failed to start when parked outside Taylors Laundromat in Auckland. Ms Hurst says that by this time she had lost all patience with the vehicle’s unreliability, so she simply left it parked outside Taylors Laundromat, returned the key to Mars Motors and told it that she was rejecting the vehicle. She then filed this claim.
[8] Before returning the keys to Mars Motors, Ms Hurst says that she had the vehicle assessed by a mobile mechanic. Ms Hurst has been unable to provide any information about this assessment as the paperwork is inside the vehicle and she has been unable to access the vehicle as she says that Mars Motors cannot find the key. Ms Hurst says that she tried to collect the keys from Mars Motors after the hearing to provide the mobile mechanics report to the Tribunal, but she says that Mars Motors could not provide the key to her.
The issues
[9] The issues requiring the Tribunal’s consideration in this case are:
- (a) Did Mars Motors sell the vehicle?
- (b) Has the vehicle been of acceptable quality for the purposes of s 6 of the Consumer Guarantees Act 1993 (the CGA)?
- (c) Has Ms Hurst lost the right to reject the vehicle?
- (d) What remedy is Ms Hurst entitled to under the CGA?
Issue 1: Did Mars Motors sell the vehicle?
[10] Mars Motors denies selling the vehicle. It says that the vehicle was sold by Melody Xia (an ex-employee). That explanation is inconsistent with the evidence presented by Ms Hurst, which shows that Mars Motors was the registered owner and seller of this vehicle.
[11] Ms Hurst has provided a report from the www.carjam.co.nz website (the Carjam Report), which shows the vehicle’s ownership history. The Carjam Report shows that Mars Motors Ltd was the owner of the vehicle when it was sold to Ms Hurst, having owned the vehicle since 3 March 2021.
[12] Zhaoran Jian, who appeared for Mars Motors, says that the vehicle was only transferred into Mar Motors’ name to enable it to arrange finance for Ms Hurst. I find that explanation unlikely, as Ms Hurst did not enquire about the vehicle until late April 2021, more than six weeks after it was transferred into Mars Motors’ name. Instead, I find it much more likely that the vehicle was transferred into Mar Motors’ name because it was the owner of the vehicle.
[13] Other facts point to the vehicle being sold by Mars Motors. The photographs of the vehicle on the Facebook advertisement were taken at Mars Motors’ premises. Ms Hurst also inspected the vehicle at Mars Motors’ premises, and an employee of Mars Motors arranged the collateral credit agreement, which is inconsistent with this being a private sale.
[14] I therefore find that this vehicle was sold by Mars Motors, and it has liability under the CGA.
Issue 2: Has the vehicle been of acceptable quality?
[15] 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”.
[16] “Acceptable quality” is defined in s 7 of the CGA (as far as is relevant) as follows:
- 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.
[17] 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.
[18] I accept Ms Hurst’s evidence as to the issues she has experienced with the vehicle during her ownership and that the vehicle has had an intermittent starting fault that first became apparent between six and eight weeks after purchase. Mr Gregory, the Tribunal’s Assessor, advises that the symptoms described by Ms Hurst are consistent with an intermittent electrical fault with the vehicle’s body control module and/or engine control unit, which can cause precisely the type of starting issues experienced by Ms Hurst.
[19] I therefore find that the vehicle has not been of acceptable quality for the purposes of s 6 of the CGA as it has an intermittent starting fault, which first became apparent no more than eight weeks after purchase. That defect means the vehicle has not been as free of minor defects or as durable as a reasonable consumer would consider acceptable.
Issue 3: Has Ms Hurst lost the right to reject the vehicle?
[20] The law relating to the loss of the right to reject goods is set out in s 20 of the CGA, which states:
20 Loss of right to reject goods
(1) The right to reject goods conferred by this Act shall not apply if—
(a) the right is not exercised within a reasonable time within the meaning of subsection (2); or
(b) the goods have been disposed of by the consumer, or have been lost or destroyed while in the possession of a person other than the supplier or an agent of the supplier; or
(c) the goods were damaged after delivery to the consumer for reasons not related to their state or condition at the time of supply; or
(d) the goods have been attached to or incorporated in any real or personal property and they cannot be detached or isolated without damaging them.
(2) In subsection (1)(a), the term reasonable time means a period from the time of supply of the goods in which it would be reasonable to expect the defect to become apparent having regard to—
(a) the type of goods:
(b) the use to which a consumer is likely to put them:
(c) the length of time for which it is reasonable for them to be used:
(d) the amount of use to which it is reasonable for them to be put before the defect becomes apparent.
(3) This section applies notwithstanding section 170 of the Contract and Commercial Law Act 2017.
Delay
[21] Ms Hurst wants to reject the vehicle because Mars Motors has refused to repair it. However, under s 20(1)(a) of the CGA, Ms Hurst will lose any right to reject the vehicle if she did not exercise that right within a reasonable time. For the purposes of s 20(1)(a), a "reasonable time" is a period from the time of supply of the goods in which it would be reasonable for the defect to become apparent, having regard to the factors set out in s 20(2)(a)–(d) of the CGA.
[22] In Nesbit v Porter, the Court of Appeal shed some light on the statutory words in s 20(2) of the CGA.[1] The Court observed that:[2]
... A reasonable time under s 20 must accordingly be one which suffices to enable the consumer to become fully acquainted with the nature of the defect, which, where the cause of a breakage or malfunction is not apparent, the consumer can be expected to do by taking the goods to someone, usually and preferably the supplier, for inspection.
[23] Ms Hurst first became aware of a starting fault in about June 2021. She contacted Mars Motors about this fault but then continued to use the vehicle, with the starting fault recurring intermittently.
[24] Ms Hurst did not then unequivocally reject the vehicle until July 2022, more than 12 months after the intermittent fault first occurred. By that time Ms Hurst had driven at least 7,000 km in the vehicle. That is much longer than the time required for Ms Hurst to become fully acquainted with the nature of the starting fault and exercise her right to reject the vehicle. By waiting so long, I am satisfied that Ms Hurst has lost any right she had to reject the vehicle
Issue 4: What remedy is Ms Hurst entitled to under the CGA?
[25] The relevant remedies are set out in s 18 of the CGA, which provides:
- 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.
[26] Ms Hurst cannot reject the vehicle as she has lost the right to do so. But under s 18(2)(a) of the CGA, she is still entitled to have the intermittent starting fault repaired within a reasonable time. The Tribunal therefore orders that Mars Motors shall, within 10 working days of the date of this decision, collect the vehicle from outside Taylors Laundromat and rectify the vehicle’s intermittent starting fault.
[27] Because Ms Hurst returned the vehicle’s key to Mars Motors when she purported to reject the vehicle in July 2022, the Tribunal expects that Mars Motors will be able to use that key to access the vehicle for repairs to be performed. If Mars Motors has lost the key, it must replace that key at its own cost and ensure that the ordered repairs are performed in a timely way and provide Ms Hurst with that new key.
B R Carter
Adjudicator
[1] Nesbit v Porter [2000] NZCA 288; [2000] 2 NZLR 465 (CA).
[2] At [39].
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URL: http://www.nzlii.org/nz/cases/NZMVDT/2022/261.html