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Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 8 July 2022
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BETWEEN SPICE KING WHOLESALE LTD
Applicant
AND LANDSEER MOTOR INVESTMENTS AUCKLAND LTD T/A ANDREW SIMMS
NEWMARKET
Respondent
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MEMBERS OF TRIBUNAL
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B R Carter, Barrister – Adjudicator
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S Haynes, Assessor
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HEARING at Auckland on 28 April 2022 (by audio-visual link)
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APPEARANCES
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M S Nagra and P Nagra for the Applicant
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J Spicer for the Respondent
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DATE OF DECISION 12 May 2022
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_________________________________________________________________
DECISION OF THE TRIBUNAL
_________________________________________________________________
REASONS
Introduction
[1] Spice King Wholesale Ltd purchased a 2021 Jeep Gladiator Rubicon for $110,740 from Landseer Motor Investments Auckland Ltd, trading as Andrew Simms Newmarket (Andrew Simms Newmarket) in September 2021. Included in that purchase price was the $5,000 cost of alloy wheels that Andrew Simms Newmarket was to install on the vehicle before it was delivered to Spice King Wholesale. Spice King Wholesale says that Andrew Simms Newmarket also agreed to supply the factory (or stock) wheels that were removed to install the aftermarket wheels and to return the personalised number plate attached to the Hyundai Genesis it traded in to purchase this vehicle.
[2] Spice King Wholesale applied to the Tribunal in February 2022, alleging that Andrew Simms Newmarket had failed to supply the stock wheels and personalised plate and that the vehicle’s tyre pressure sensors were missing. Spice King Wholesale wanted to reject the vehicle and obtain a refund of the purchase price.
[3] The Tribunal did not have jurisdiction to determine Spice King Wholesale’s claim for a refund of the purchase price, as the Tribunal can only determine claims for more than $100,000 if both parties agree in writing.[1] Andrew Simms Newmarket did not consent to the Tribunal determining the claim.
[4] Spice King Wholesale then amended its claim and added a further allegation that Andrew Simms Newmarket had failed to supply a spline key to remove the aftermarket wheels, meaning Spice King Wholesale had been unable to repair a slow leak in one of the vehicle’s tyres. Rather than attempting to reject the vehicle, Spice King Wholesale sought orders that Andrew Simms Newmarket supply the stock wheels, personalised plate and spline key, install tyre pressure sensors, replace the lock nuts that were damaged in an attempt to remove a wheel and pay $10,000 compensation for stress and “business opportunity losses” it claims to have suffered.
[5] Andrew Simms Newmarket agrees that there was a delay in supplying the stock wheels and personalised plate and that it failed to install tyre pressure sensors into the replacement wheels before the vehicle was delivered to Spice King Wholesale. It also accepts that it may not have supplied a spline key for the aftermarket wheels. It is prepared to remedy those shortcomings, and in that regard, it has since supplied the stock wheels and personalised plate to Spice King Wholesale. However, it says that Spice King Wholesale should not be entitled to compensation as it has had the unhindered use of the vehicle throughout its ownership.
The issues
[6] Because Andrew Simms Newmarket has supplied the stock wheels and personalised plate to Spice King Wholesale, I will consider those matters no further, as Spice King Wholesale has obtained the remedy it was entitled to. Consequently, regarding the other allegations made by Spice King Wholesale, 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 CGA?
- (b) What remedy is Spice King Wholesale entitled to under the CGA?
Issue 1: Has the vehicle been of acceptable quality?
[7] 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.
[8] 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.
[9] 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”.
[10] There was little dispute between the parties on this point. The vehicle has not been of acceptable quality because it did not have tyre pressure sensors installed and Andrew Simms Newmarket did not supply a spline key that could be used to remove the aftermarket wheels. Although each of these failures is minor and easily rectified, they are shortcomings that a reasonable consumer would not consider acceptable in a new $110,740 vehicle.
Issue 2: What remedy is Spice King Wholesale entitled to under the CGA?
[11] 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.
[12] As set out above, Spice King Wholesale does not seek to reject the vehicle, as the vehicle’s value exceeds the Tribunal’s jurisdictional limit. Instead, under s 18(2)(a) it is entitled to have the defects that breached the guarantee of acceptable quality rectified within a reasonable time.
Compensation
[13] Spice King Wholesale also seeks compensation of $10,000 for stress, financial loss and lost business opportunities.
[14] Spice King Wholesale is not entitled to compensation for stress. A company, which is not a living thing, cannot suffer from stress, so a company cannot recover stress damages. For completeness, even if a company could suffer stress, I consider that compensatory damages for stress are to be reserved for exceptional cases. Disputed claims such as this are inherently stressful and time consuming, and I have seen nothing in this case to distinguish it from many of the cases that come before the Tribunal where the successful party has spent significant time, effort and emotional energy attempting to resolve the issues it has with the vehicle and in pursuing its legal rights. I am not satisfied that this is an exceptional case justifying an award of compensatory damages for stress and time spent pursuing the application.
[15] Spice King Wholesale also says that it suffered financial loss and the loss of business opportunities. It says that it lost the opportunity to purchase a caravan from the South Island because it could not use the vehicle to tow the caravan back to Hastings. It provided no evidence to show what loss it suffered as a result, so I cannot be satisfied that any such loss was suffered.
[16] Spice King Wholesale also says that it suffered loss by using Weatherell Transport Ltd to ship products between Auckland, Hastings and Gisborne. It says that it would have used the vehicle for this shipping if it was roadworthy. It provided invoices from Weatherell Transport, showing transport costs of more than $900 between 10 October 2021 and 6 February 2022. Notwithstanding this evidence, I consider that Spice King Wholesale is not entitled to any compensation for loss of income or business opportunity resulting from the vehicle’s defects because the vehicle remained fit for use throughout and Spice King Wholesale has failed to mitigate any loss it may have suffered.
[17] Spice King Wholesale submitted that it did not use the vehicle for two reasons:
- (a) the absence of tyre pressure sensors made it unsafe; and
- (b) the missing spline key meant the wheels could not be removed.
[18] Mohinder and Pravinder Nagra, who appeared for the company, may have felt unsafe using the vehicle without tyre pressure sensors, but I am not satisfied that the absence of those sensors made the vehicle unsafe. The tyre pressure sensors do not affect the vehicle’s performance in any way or provide any safeguard against loss of tyre pressure. They simply measure the tyre pressure and trigger a warning if the tyre pressure becomes low or imbalanced. Most vehicles on the road in New Zealand do not have tyre pressure sensors and remain perfectly safe, and in that regard, I note that the evidence shows that Spice King Wholesale has travelled at least 7,000 km in the vehicle between the time it collected it and the date of this decision. That extent of driving is inconsistent with Spice King Wholesale’s submission that it considered the vehicle to be unsafe.
[19] Spice King Wholesale also says that it did not use the vehicle to the extent it would have liked because of the missing spline key, meaning the vehicle’s wheels could not be removed in the event of a puncture. I consider that Spice King Wholesale is not entitled to recover any losses it may have suffered (if any) because it did not take reasonable steps to mitigate those losses. For example, it did not notify Andrew Simms Newmarket of the missing spline key until after it had filed this claim and after it had suffered most of its alleged losses. Likewise, it could simply have removed the vehicle’s lock nuts and replaced them with standard sized nuts and a standard spline key, at a cost of no more than $200. It did not do that, and I am not satisfied that Andrew Simms Newmarket should be liable for the losses that resulted from that decision. I also note again that Spice King Wholesale has driven the vehicle at least 7,000 km since purchase, which is inconsistent with its submission that it has felt unable to use the vehicle.
[20] I therefore find that Spice King Wholesale is not entitled to any compensation for its decision to use the vehicle less because of the absence of tyre pressure sensors.
Outcome
[21] Spice King Wholesale’s application for compensation is declined and the Tribunal orders that Andrew Simms Newmarket shall, within a reasonable time from the date of this decision:
- (a) install tyre pressure sensors on all four wheels;
- (b) replace the lock nuts on all four wheels; and
- (c) supply a spline key that can be used to remove those lock nuts.
DATED at AUCKLAND this 12th day of May 2022
B.R. Carter
Adjudicator
[1] Motor Vehicle Sales Act 2003, s 90(1)(b) and (2).
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