Hooper v Motor Direct Ltd - Reference No. MVD 062/2022 [2022] NZMVDT 97 (27 May 2022)

Last Updated: 19 July 2022

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 062/2022 [2022] NZMVDT 097 BETWEEN ROCHELLE HOOPER Applicant AND MOTOR DIRECT LTD Respondent

MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator

S Haynes, Assessor

HEARING at Auckland on 19 May 2022 (by audio-visual link)

APPEARANCES

R Hooper, Applicant

A Sood for the Respondent

DATE OF DECISION 27 May 2022

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DECISION OF THE TRIBUNAL

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A Motor Direct Ltd shall:

(a) within 20 working days from the date of this decision, rectify the damage to the passenger side rear panel; and
(b) within 10 working days from the date of this decision, pay $800 to Rochelle Hooper.

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REASONS

Introduction

[1] Rochelle Hooper purchased a 2016 Subaru Impreza for $20,700 from Motor Direct Ltd in July 2021. Ms Hooper says that the vehicle had pre-existing defects – the reversing camera did not work, and the driver side rear wheel and a rear panel were damaged. Ms Hooper says that Motor Direct agreed to rectify each of these defects, but then failed to do so.
[2] Other issues have arisen. Ms Hooper has also replaced the vehicle’s 12 volt and “stop/start” batteries along with the brake lights and says that the vehicle was not supplied with a spare key. Ms Hooper has now applied to the Tribunal seeking orders that Motor Direct compensate her for costs in diagnosing the vehicle, rectify the vehicle’s defects, rectify the panel and wheel damage, and supply a spare key.
[3] Motor Direct Ltd has already compensated Ms Hooper for the cost of replacing the vehicle’s reversing camera and batteries and says that it is prepared to rectify the dent to the rear panel. It otherwise denies liability. Because Motor Direct has paid to replace the reversing camera and batteries, I consider those items no further in this decision, as Ms Hooper has already obtained the remedies she sought for those items.

Relevant background

[4] Ms Hooper purchased the vehicle sight unseen and the vehicle was delivered to her home in Wellington in early August 2021. Ms Hooper says that she immediately noticed that the driver side rear wheel was scuffed and there was a dent in the passenger side rear panel. Ms Hooper provided photographs of this damage and a receipt from Auto Despatch, the company that transported the vehicle, confirming that the dent and wheel damage was present when the vehicle was delivered to her.
[5] Ms Hooper contacted Amit Sood of Motor Direct and says that Mr Sood agreed to rectify the panel and wheel damage. Ms Hooper then had the damage assessed by Blair Wright Group, a Wellington panelbeater, which has provided an estimate of $1,619.78 for the required repairs. Motor Direct was surprised at this estimate and declined to pay that amount for the repair.
[6] Ms Hooper says that she also noticed that the vehicle did not have a spare key. She spoke with Mr Sood, and Mr Sood advised that he would look for a spare key and supply it to Ms Hooper if he found one. Mr Sood says that he could not locate a spare key and that Motor Direct has no responsibility to supply a spare key to Ms Hooper. Mr Sood says the vehicle was not advertised as having a spare key and a consumer purchasing an imported secondhand vehicle should understand that the vehicle may not have a spare key. Ms Hooper has obtained an estimate of $800.66 for a replacement key.
[7] On about 29 October 2021, Ms Hooper noticed that the rear brake lights were defective. She says one of the lights did not work at all and the other was flashing. She had the vehicle assessed by Armstrong’s Lower Hutt, which found that “both rear tail light have lighting issues”. Ms Hooper then contacted Mr Sood, and Motor Direct declined to replace the tail lights, claiming that the vehicle passed a warrant of fitness inspection before sale, that the tail lights were working at that time and the fault occurred too long after purchase for it to have liability. Ms Hooper has since paid $1,213.91 to have the lights replaced by Armstrong’s Lower Hutt.

The issues

[8] 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) What remedy is Ms Hooper entitled to under the CGA?

Issue 1: Has the vehicle been of acceptable quality?

[9] 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.
[10] 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.

[11] 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 Hooper’s subjective perspective.

The panel damage

[12] The damage to the passenger side rear panel breaches the guarantee of acceptable quality. The dent is significant and means the vehicle is not as acceptable in appearance and finish as a reasonable consumer would consider acceptable. The dent requires repair to bring the vehicle to an acceptable standard.

The brake lights

[13] The faulty brake lights also breach the guarantee of acceptable quality. I acknowledge that the brake lights were working when the vehicle was supplied to Ms Hooper, but the brake lights are an important safety feature in a motor vehicle and I am satisfied that the brake lights were not as durable as a reasonable consumer would consider acceptable in a vehicle of this price, age and mileage.

The wheel damage

[14] A reasonable consumer purchasing a vehicle of this price, age and mileage can expect the vehicle to be free of significant defects. However, they should also understand that the vehicle will have pre-existing wear and tear and minor defects consistent with its age and mileage and that defects, that might be expensive to repair, can arise as the vehicle is used.
[15] In this case, the wheel scuffing does not breach the guarantee of acceptable quality. The scuffing is minor and consistent with the type of cosmetic imperfection that a reasonable consumer can expect when purchasing a vehicle of this age and mileage. The wheel scuffing will also be easy to repair, and Mr Haynes advises that the repair can be performed for less than $300.

The spare key

[16] The absence of a spare key does not mean the vehicle breaches the guarantee of acceptable quality. It is standard for new vehicles to come with two keys and a reasonable consumer can expect a new or a near new vehicle to be supplied with two keys. However, this was not a new or near new vehicle. It was a five-year-old vehicle that had recently been imported from Japan. I consider that a reasonable consumer purchasing a five-year-old recently imported vehicle would understand that the vehicle may not have a second key. A consumer who wanted or expected a second key for such a vehicle should make express enquiries of the seller before purchase to determine whether such a key existed.

Issue 2: What remedy is Ms Hooper entitled to under the CGA?

[17] The relevant remedies are set out in s 18 of the CGA, which 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.

[18] Under s 18(2)(a), Ms Hooper is entitled to have the damage to the passenger side rear panel of the vehicle repaired within a reasonable time. Under s 18(2)(b)(i), Ms Hooper is entitled to recover the reasonable cost of replacing the brake lights. Ms Hooper asked Motor Direct to rectify that defect, and it declined to do so. She was therefore entitled to have the brake lights replaced and recover the reasonable cost of that repair from Motor Direct.
[19] Ms Hooper paid $1,213.91 to have the lights replaced by Armstrong’s Lower Hutt, which used new manufacturer’s parts. Mr Haynes, the Tribunal’s Assessor, advises that the amount paid by Ms Hooper was at the higher end of the range for a repair of this nature and more economic and equally suitable repair options were available, such as replacing the brake lights with aftermarket parts. Mr Haynes says that it would have been entirely suitable to use aftermarket brake lights and the cost of purchasing and installing aftermarket brake lights would have been no more than $800. Consequently, I will reduce the amount awarded to Ms Hooper to $800 so as to reflect the fact that the repair cost she incurred exceeded other reasonable options.

Outcome

[20] Motor Direct Ltd shall:

• (a) within 20 working days from the date of this decision, rectify the damage to the passenger side rear panel; and
  • (b) within 10 working days from the date of this decision, pay $800 to Ms Hooper.
    

DATED at AUCKLAND this 27th day of May 2022

B.R. Carter
Adjudicator