Letalu v XT Group Ltd - Reference No. MVD 023/2022 [2022] NZMVDT 53 (5 April 2022)

Last Updated: 21 May 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 023/2022 [2022] NZMVDT 053 BETWEEN TUAMAFA LETALU Applicant AND XT GROUP LTD Respondent

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 31 March 2022 (by audio-visual link)

APPEARANCES

M Kirk for the Applicant

X Zhao for the Respondent

DATE OF DECISION 5 April 2022

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DECISION OF THE TRIBUNAL

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Tuamafa Letalu’s application is dismissed.

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REASONS

Introduction

[1] Tuamafa Letalu purchased a 2007 Subaru Impreza for $12,500 from XT Group Ltd on 17 March 2021. Ms Letalu believes that its engine is now damaged and requires replacement or expensive overhaul. Ms Letalu has applied to the Tribunal for orders that XT Group perform that repair.
[2] XT Group denies liability. It says that the vehicle was free of defects when it was sold, and the engine damage may have been caused by Ms Letalu having the vehicle serviced.

Relevant background

[3] The vehicle’s odometer reading at the time of sale was 159,700 km. Ms Letalu and her partner Matthew Kirk used the vehicle without incident until late May 2021.
[4] On 22 May 2021, Mr Kirk had the vehicle serviced by Oil Changers Botany Ltd when the vehicle’s odometer reading was 162,929 km. Mr Kirk says that shortly afterwards he noticed a rattling/knocking noise from the vehicle when the engine was at about 2,500 RPM and higher while in neutral gear. There were no unusual noises while the vehicle was driving.
[5] Ms Letalu and Mr Kirk have continued to use the vehicle and the noise has remained. Mr Kirk contacted XT Group in June 2021, but it denied any liability. Mr Kirk says that Xintao (Simon) Zhao of XT Group suggested that the noise may have been caused by the vehicle being serviced incorrectly.
[6] In October 2021, Mr Kirk then had the vehicle assessed by Mattchanics Performance Automotive, which confirmed that the noise is coming from inside the short block area of the engine. It considered that this type of engine damage would not have been caused by the oil used in the vehicle. It considered that the engine should be removed and rebuilt, at a cost of about $6,000. The vehicle’s odometer reading at that time was 168,154 km.
[7] The vehicle was assessed by Manukau Subaroo Specialists on 24 November 2021. It removed and replaced the hydraulic timing chain tensioner, but the knocking noise remained. It considers that the knocking noise is inside the engine and could possibly be caused by a worn big end bearing or piston. The vehicle’s odometer reading at that time was 172,037 km.
[8] Mr Kirk and Ms Letalu have continued to use the vehicle. The noise has not worsened. The vehicle’s current odometer reading is 179,191 km. Mr Kirk says that he has twice serviced the vehicle himself since it was last serviced by Oil Changers Botany in May 2021. Mr Kirk says that he has also checked the oil for metal filings (which is evidence of internal engine damage). He has seen no sign of any filings.

The issues

[9] Against this background, the only issue requiring the Tribunal’s consideration in this case is whether the vehicle has been of acceptable quality for the purposes of s 6 of the Consumer Guarantees Act 1993 (the CGA).

Has the vehicle been of acceptable quality?

[10] Section 6 of the CGA imposes on suppliers and manufacturers of consumer goods a guarantee that the goods are of acceptable quality. Section 2 of the CGA defines “goods” as including vehicles.
[11] The expression "acceptable quality" is defined in s 7 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.

[12] 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 Letalu’s subjective perspective.

The Tribunal’s assessment

[13] The vehicle clearly has a noise from its engine as described by Mr Kirk. That noise has been identified by Mattchanics Performance Automotive and Manukau Subaroo Specialists. Mr Kirk has also supplied a short video, which demonstrates the existence of the noise.
[14] Mr Haynes, the Tribunal’s Assessor, advises that the noise is most likely caused by “piston slap” within the engine. Piston slap occurs where the clearance between the piston and the cylinder wall enlarges, allowing the piston to rock slightly, causing the bottom of the piston (the piston skirt) to contact the cylinder wall when the engine is revving with little load. Mr Haynes advises that piston slap occurs due to normal wear and tear and is relatively common in the boxer type engine used in this model of Subaru Impreza.
[15] Mr Haynes advises that the piston slap present in this vehicle is not a cause for concern and does not require repair. Mr Haynes says that the fact that the noise is not present when the vehicle is under load is evidence that there is no big end bearing damage. Likewise, the absence of metal filings from the oil is evidence that there is no premature wear occurring to the pistons or cylinder wall.
[16] Instead, Mr Haynes advises that it is likely that the piston slap is not causing any damage to the engine and the vehicle can be driven for many tens of thousands of kilometres without any further issues arising. The fact that Ms Letalu and Mr Kirk have driven this vehicle more than 20,000 km since purchase – most of that time with the noise present – bears that out.
[17] Consequently, although Ms Letalu and Mr Kirk have proven the existence of a noise from the engine, given Mr Haynes’ advice that the engine does not require repair, and given the realistic expectations that a consumer should have for a vehicle of this price, age and mileage, I am satisfied that the vehicle is of acceptable quality for the purposes of s 6 of the CGA.
[18] Ms Letalu’s application is therefore dismissed.

DATED at AUCKLAND this 5th day of April 2022

B.R. Carter
Adjudicator