Price v Courtesy Motors Limited - Reference No. MVD 444/2021 [2022] NZMVDT 47 (31 March 2022)

Last Updated: 25 April 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL

I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 444/2021
[2022] NZMVDT 47

BETWEEN KERRY-ANNE MARY PRICE

Purchaser

AND COURTESY MOTORS LIMITED

Trader

HEARING at Wellington on 10 March 2022, further submissions received on 15 March 2022
MEMBERS OF TRIBUNAL

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

APPEARANCES (via Microsoft Teams)

K-A M Price, Purchaser
M W Barr, General Manager of Trader
P J McCabe, Field Service Engineer, Ford Motor Company of New Zealand Ltd

DATE OF DECISION 31 March 2022

___________________________________________________________________

DECISION OF THE TRIBUNAL

___________________________________________________________________

Kerry-Anne Price’s application is dismissed.

___________________________________________________________________

REASONS

Introduction

[1] Kerry-Anne Price purchased her first ever new car, a Ford Focus, from Courtesy Motors Ltd on 3 December 2016 for $22,000. For four and a half years, Ms Price had no problems with the vehicle. But on 26 October 2021, as Ms Price was leaving Pak ‘n Save in Palmerston North, the car began jolting, vibrating and bunny-hopping.
[2] No warning lights or messages appeared on the dashboard. The temperature gauge needle remained at the midpoint where it normally sits.
[3] Ms Price took the vehicle straight to Courtesy Motors’ Palmerston North branch. She reported that the staff member who first looked at the car remarked that it was hot, and asked her if she had seen a warning light. But Ms Price said there was no warning light.
[4] Courtesy Motors has diagnosed that the engine requires major repairs. The expected repairs are at least a replacement short block, at an estimated cost of $11,509.96. However, if, on a full assessment, the cylinder head is not found to be serviceable, a complete engine replacement may be required at an estimated cost of $13,694.18.
[5] Ms Price expected her car to last longer than it has without requiring major repairs. Moreover, she is concerned at the lack of warning from her vehicle before it had a catastrophic engine failure. In a submission filed after the hearing, Ms Price contended there is an inherent fault with the Ford Ecoboost technology in her vehicle. She referred to a class action in the United Kingdom, various recalls, and a Facebook group with many members “all with the same stories repeating themselves: overheating, no warning lights, engine failure – even with a full service history and use of the correct oil grade”.
[6] Courtesy Motors is not willing to pay for the repairs to Ms Price’s vehicle. It has offered to pay for the engine to be stripped down to determine the root cause and extent of the failure, but Ms Price has not approved this further investigation work.
[7] Courtesy Motors’ initial assessment is that the engine has likely suffered low-speed pre-ignition, resulting in the failure of cylinder number 3. Courtesy Motors points to the period from 2017 to 2019, during which there is no evidence the vehicle was serviced.
[8] The issue the Tribunal needs to determine is whether Ms Price has established that her vehicle failed to comply with the guarantee of acceptable quality.

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

[9] 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.
[10] “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.

...

(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.

...

[11] 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.
[12] Section 7(4) of the Act (above) provides a defence against an allegation that a vehicle does not comply with the guarantee of acceptable quality where there has been contributory negligence in the form of unreasonable use of the vehicle by the consumer. Section 7(4) has two elements, both of which must be established for the defence to operate:

• (a) that the vehicle was used unreasonably; and
  • (b) that the vehicle would otherwise have complied with the guarantee of acceptable quality, if it had not been used unreasonably.

[13] Ms Price argues that a reasonable consumer would have expected the vehicle to be more durable than it has been. The vehicle had only travelled 123,417 km as at the time of the engine failure and was only just out of its five-year new vehicle manufacturer’s warranty. Therefore, Ms Price considers that Courtesy Motors is liable to address the vehicle’s failure and pay for repairs.
[14] Courtesy Motors invokes the defence in s 7(4) of the Act. It says that Ms Price failed to ensure that the vehicle was properly serviced in accordance with the manufacturer’s specified service interval. Courtesy Motors and Ford both say that, but for this lack of proper and regular servicing, the vehicle would otherwise have complied with the guarantee of acceptable quality.
[15] Given Courtesy Motors’ primary submission, and the defence that it is raising, it is necessary to outline in some detail the vehicle servicing interval and the actual servicing that took place.

Vehicle service history

[16] The specified service interval for this vehicle is every 12 months, or 20,000 km, whichever comes first.
[17] Courtesy Motors produced a copy of the vehicle’s service records. They show that the vehicle received a “peace of mind” inspection on 5 January 2017, when the vehicle had travelled 3,179 km. It appears that this inspection did not involve an oil change.
[18] The next service was due on 30 November 2017, or 20,000 km (whichever came first). The handwritten service records in the vehicle’s service book indicate that it was serviced on 28 August 2017, when the vehicle had travelled 20,395 km. This differs from Courtesy Ford’s submission that the vehicle was only serviced when the vehicle had travelled 28,395 km, and therefore that it was 8,395 km overdue for its first service. This submission appears to have been made based on a misreading of the handwritten odometer reading (the zero in 20,395 has been written with an unusual line within the circle of the zero that makes it look like an 8). However, it is clear from the way the zero is written in the date references (28.08.17), as well as the reference to when the next service is due (28.08.18, or 40,000), that the writer of this service record ordinarily writes their zeros with a line through them. No printed record of this service was provided by Courtesy Ford, but I am satisfied that this handwritten material indicates that the first scheduled service, which would have included a change of oil and oil filter, occurred when the vehicle had travelled 20,395 km.
[19] The next service of the vehicle for which the Tribunal was supplied a written record was not until 27 November 2019, at Beaurepaires Adelaide Road. By then, the vehicle had travelled 91,546 km. This was 71,151 km after the previous service for which a record was produced. Beaurepaires changed the engine oil, replacing it with Shell Helix Ultra ECT 5W-30. Paul McCabe, field service engineer for Ford New Zealand, advised that this was the incorrect grade of oil, which should have been 5W-20. The oil that should have been used becomes thinner once it reaches operating temperature. However, Mr McCabe also indicated that the bulk of Ford’s contention is not related to the wrong oil being used, but rather the long period during which the vehicle does not appear to have been serviced.
[20] Ms Price did not accept the vehicle had not been serviced in this period. She said that she had exhausted all avenues in attempting to locate what she described as missing servicing records. But Ms Price was not able to provide any other evidence that the vehicle was serviced, for example from bank statements or credit card records, or first-hand accounts from workshops or the person who might have taken the vehicle for servicing. Ms Price accepted that the lack of servicing records allowed the Tribunal to draw the inference invited by Courtesy Motors and Ford: that the vehicle was not serviced at all, between 20,395 km and 91,546 km. Ms Price also acknowledged that she was aware that on at least one occasion an “oil change required” warning was reset on the vehicle even though its engine oil was not changed.
[21] On behalf of Courtesy Motors, its managing director, Mr Barr, pointed out that between the 28 August 2017 service and the service by Beaurepaires on 27 November 2019, the vehicle ought to have been serviced three times: at 40,000 km, 60,000 km and 80,000 km. Mr McCabe also pointed out that all services require the replacement of engine oil and oil filter. In addition, the 60,000 km scheduled service includes the replacement of spark plugs and engine air filter. Mr McCabe pointed out that there is no record of these items having been replaced, even when the vehicle went to Beaurepaires at 91,546 km.
[22] Mr Barr and Mr McCabe also noted that the Beaurepaires invoice dated 27 November 2019, refers to an engine oil flush, suggesting the possible presence of deposits in the oil reservoir, which are sometimes removed by using an oil flush additive.
[23] The next record of service is also from Beaurepaires and dated 16 June 2020. Then, the vehicle’s odometer was recorded as being 99,919 km. This invoice also records that Shell Helix Ultra 5W-40 was used, which Courtesy Motors and Ford again says was the incorrect oil grade and specification.
[24] The vehicle was next serviced by Beaurepaires on 17 June 2021, when the odometer reading was 115,635 km. Again, Shell Helix Ultra 5W-40 was used.
[25] It was four months after this, on 26 October 2021, that the catastrophic engine failure occurred.
[26] Courtesy Motors provided a statement from its service manager and dealer principal, that when the vehicle was inspected its engine was found to be misfiring and a knocking noise could be heard. A scan returned diagnostic test code P0303:00-EC-PCM-cylinder 3 misfire detected. A compression test was performed which indicated low compression in cylinder number 3. A cylinder leak down test was then carried out and cylinder 3 was indicated to have 30% leaking past the piston and/or rings. The engine oil was low by approximately 500 mls and the engine coolant was also low by approximately 500 mls.
[27] Ms Price reported that when she brought the vehicle to Courtesy Motors on 26 October 2021, a Courtesy Motors employee expressed shock at how hot the vehicle was and pointed out that it had no coolant. This reaction had led Ms Price to the view that her vehicle had overheated. As mentioned at the beginning of this decision, she was surprised that there were no warnings given by the car itself that it was overheating.
[28] However, at the hearing Mr McCabe confirmed that the vehicle in fact did not overheat. Although the vehicle’s coolant was depleted by approximately 500 mls, which would have been apparent from a low volume of coolant in the header tank, sufficient coolant remained in the radiator to keep the vehicle at normal operating temperature.
[29] Mr Barr added that the staff member who allegedly made the comments about the vehicle being hot is not a qualified technician.
[30] Rather, Mr McCabe thinks that the two likely failure modes, based on the symptoms exhibited by the vehicle, were low-speed pre-ignition (LSPI) or stochastic pre-ignition (SPI) resulting in the failure of the piston in cylinder number 3.
[31] Mr McCabe said that LSPI is a well-known phenomenon that can occur in boosted (i.e. turbocharged), direct injection, spark ignition engines. Mr McCabe said that piston failures can occur where there have been greatly extended service intervals.
[32] As engine oil ages it collects by-products of combustion, substances such as carbon (soot), water from condensation and fuel, resulting in dilution. Acids will also form due to oxidation. This dilution will cause excessive oil misting, which will result in additional oil in the combustion chamber that could support LSPI.
[33] Mr McCabe said that prolonged periods without changing the oil contribute to the build up of oil and fuel-based deposits in the engine. These deposits, which also contain carbon, accumulate in the piston ring recesses. They can flake off and lead to pre-ignitions in the fuel around the deposit.
[34] The second possible failure mode involved number 3 piston “picking up” in the cylinder, which can occur when there is excessive friction between the piston rings and the cylinder walls. This can be caused by overheating, which does not appear to have happened with Ms Price’s vehicle. However it can also be the result of lack of lubrication due to poor oil quality or low oil level, both of which could be contributing factors from earlier in the vehicle’s life.
[35] Again, excessively aged engine oil can become diluted with water, fuel and acids. Direct injection engines, where the injector sprays directly into the cylinder, are susceptible to washing of the bores, particularly if the oil is diluted. Most of the oil additives get depleted the longer the oil remains in service and the remaining additives will be less effective in protecting the engine.
[36] Of these two scenarios, Mr McCabe thought that LSPI was more likely to have occurred in Ms Price’s vehicle. Mr McCabe thought that lack of engine oil and filter changes over approximately 70,000 km, is the main cause of the engine’s (otherwise) premature failure. Mr McCabe said he considered internal damage was likely to have been caused during this period which has ultimately reduced the life of the engine.
[37] The Tribunal’s Assessor, Mr Cate, explored also whether incorrect fuel may have contributed to this problem. However, this possibility was discounted by Mr McCabe, who confirmed that use of 91 Octane fuel would not have been detrimental.

Tribunal’s assessment

[38] Mr Cate agreed with Mr McCabe’s analysis of the problems that can be caused by inadequate servicing of vehicles, in particular failure to change the engine oil and filter according to the manufacturer’s specified service intervals. Furthermore, Mr Cate did not consider that there was other evidence indicating Ms Price’s vehicle had a manufacturing defect to explain the premature lack of durability of its engine. Moreover, Courtesy Motors gave Ms Price an opportunity to have a more detailed assessment of the cause of the engine failure carried out at its cost, but she has declined to take that opportunity.
[39] Ultimately, to succeed in establishing a manufacturing defect, it generally will not be enough to refer to internet research on problems other people have had with their vehicles. In this case, Ms Price would have had to put forward specific technical evidence from a qualified expert to establish that her vehicle had a manufacturing defect. She has not done so. Without such evidence, the Tribunal cannot make the findings Ms Price invites it to make.
[40] In light of the available evidence, and the technical assistance provided by Mr McCabe and Mr Cate, I accept the suggested analysis that LSPI is the most likely cause of the failure of Ms Price’s vehicle’s engine.
[41] I am sympathetic to Ms Price as, longevity-wise, the vehicle has not lived up to her expectations and now requires expensive repairs. However, I conclude that Ms Price’s inability to establish that the vehicle was serviced in accordance with the manufacturer’s specifications, and indeed appears to have gone without an oil and filter change for more than 70,000 km, is inconsistent with the reasonable use of this vehicle.
[42] Some vehicles may tolerate lack of regular maintenance better than others. But a consumer who fails to adequately maintain their vehicle will generally have to bear the risk of adverse consequences. In the present case, there is a reasonable likelihood that lack of maintenance has a direct causal link to the engine’s failure.

Conclusion

[43] Ms Price has not been able to establish that her vehicle failed to comply with the guarantee of acceptable quality and therefore her application must be dismissed.

J S McHerron
Adjudicator