Li v Sunday Limited - Reference No. MVD 118/2023 [2023] NZMVDT 101 (30 May 2023)

Last Updated: 17 July 2023

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 118/2023 [2023] NZMVDT 101 BETWEEN XIN LI Applicant AND SUNDAY LTD Respondent

HEARING at AUCKLAND on 16 May 2023 MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator S Gregory – Assessor (by audio-visual link)

APPEARANCES

X Li, Applicant S Zhang, Witnesses for the Applicant

T Campbell for the Respondent (by audio-visual link)

DATE OF DECISION 30 May 2023

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

A Xin Li’s application to reject the vehicle is dismissed.

2. Sunday Limited shall, within 10 working days of the date of this decision, perform all repairs necessary to ensure that the multimedia unit controls on the steering wheel are functional.

_________________________________________________________________

REASONS

Introduction

[1] Xin Li wants to reject the 2022 Honda Vezel she purchased for $47,680 from Sunday Ltd on 26 February 2023. Ms Li says that the vehicle’s Apple Car Play function and various controls on the steering wheel did not work. Ms Li says that she has given Sunday Ltd a reasonable opportunity to remedy the vehicle’s defects and it has failed to do so. She therefore seeks a refund of the purchase price.
[2] Sunday Ltd says that Ms Li should not be entitled to reject the vehicle. It says that the Apple Car Play function is not faulty and works as it should. It agrees that various buttons on the steering wheel do not work but says that this is because it installed an aftermarket stereo in the vehicle before it was sold to Ms Li, which cannot be controlled from the steering wheel. It says that it is prepared to remedy that issue, but Ms Li rejected the vehicle before it had completed the required repair.

Relevant background

[3] Ms Li saw the vehicle advertised on Trade Me, which relevant to this claim, stated that the vehicle was “BRAND NEW” and had Apple Car Play. Ms Li says that she spoke to a salesperson from Sunday Ltd before purchasing the vehicle, who confirmed that the vehicle had Apple Car Play.
[4] On the day she collected the vehicle, Ms Li says that her Apple I-Phone would not connect to Apple Car Play. She says that a friend who was present was also unable to connect their mobile phone to Apple Car Play. Ms Li says that her friend was able to connect her phone to the vehicle’s media centre using the Bluetooth function, but Ms Li then discovered that the volume control and other controls on the bottom left of the steering wheel did not work.
[5] Ms Li returned the vehicle to Sunday Ltd on 13 March 2023 for it to assess and repair the vehicle. Ms Li has provided emails and text messages with Sunday Ltd, which show that she asked for updates on the progress of the assessment and repair. The relevant text messages from 28 March 2023 are set out below, as they provide a detailed record of the correspondence between the parties that resulted in Ms Li rejecting the vehice.
[6] On 28 March 2023, Mr Campbell sent two text messages stating:

[7] Ms Li responded saying:

[8] The following day, Mr Campbell advised Ms Li that a part had just arrived and was being tested. Ms Li responded saying:

[9] On 30 March 2023, Mr Campbell sent the following message to Ms Li:

[10] Ms Li was unhappy with this offer and advised Mr Campbell that she was not going to pay any extra. The following day, Mr Campbell responded saying:

[11] Ms Li replied as follows:

[12] Mr Campbell responded on 1 April 2023 saying:

[13] Ms Li replied stating:

[14] Mr Campbell then replied:

[15] Despite saying that she considered 5 April 2023 to be a deadline for a “reasonable time frame” Ms Li then rejected the vehicle on 1 April 2023 and then filed this claim on 4 April 2023. Ms Li says that she rejected the vehicle because she interpreted Mr Campbell’s message “I don’t have to buy you a new stereo. You bought the vehicle the way this is” as being a refusal to repair the vehicle.
[16] Mr Campbell appeared for Sunday Ltd. He says that Sunday Ltd did not refuse to repair the vehicle. He says that he told Ms Li that Sunday Ltd did not have to buy a new stereo because he considered that Sunday Ltd had no liability for the inoperative steering wheel controls, but it was nonetheless willing to replace the vehicle’s stereo at its cost to rectify the problem.
[17] Mr Campbell also says that Sunday Ltd employees tested the Apple Car Play function and could find no fault. Mr Campbell also says that the Apple Car Play function was also assessed by ProTect Auto Auckland Ltd, an Auckland based car audio specialist, which also found that the Apple Car Play function worked as it should. Mr Campbell therefore submits that the problems experienced by Ms Li were due to user error.
[18] After the hearing, Sunday Ltd provided an invoice from ProTect Auto, which shows that it installed the vehicle’s stereo and tested the “Apply Car Play” and considered that “all works ok”. Sunday Ltd also provided a video showing an employee successfully using the Apple Car Play function in the vehicle.
[19] Sunday Ltd does accept that the buttons on the bottom left of the steering wheel that control the multimedia unit do not work. Mr Campbell says that this is because the vehicle was imported from Japan and the Japanese multimedia unit has been replaced with an aftermarket model, that cannot be controlled from the steering wheel. Mr Campbell says that Sunday Ltd was prepared to replace the multimedia unit with one that could be controlled from the steering wheel, but when Ms Li rejected the vehicle on 1 April 2023 and filed this claim, it has held off doing so until this claim was resolved.

The issues

[20] Against this background, 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) Has Sunday Ltd refused or failed to rectify the vehicle’s defects within a reasonable time?
• (c) Are the vehicle’s defects a failure of a substantial character?
• (d) What remedy is Ms Li entitled to under the CGA?

Issue 1: Has the vehicle been of acceptable quality?

[21] 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”. “Acceptable quality” is defined in s 7 of the CGA (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.

[22] Relevant to this claim, the vehicle cost $47,680, was one year old, had an odometer reading of 13 km, had no previous registered owners and was described by Sunday Ltd as being “BRAND NEW”. A reasonable consumer purchasing such a vehicle would have high expectations as to its quality and fitness for purpose and would expect that all of the vehicle’s components and accessories would work.
[23] Ms Li has not proven that the Apple Car Play function does not work. The only evidence she presented was her oral evidence and the evidence of her friend Ms Zhang of the difficulties they experienced when they tried to connect to the Apple Car Play function shortly after purchase. In the absence of any conclusive evidence from Ms Li, I accept Sunday Ltd’s evidence that the Apple Car Play function works.
[24] However, Ms Li has proven that the multimedia buttons on the steering wheel do not work. That is a breach of the guarantee of acceptable quality, because the vehicle is not as free of minor defects or as fit for purpose as a reasonable consumer would consider acceptable.
[25] Sunday Ltd says that a reasonable consumer should know that a vehicle imported from Japan may have an aftermarket stereo that cannot be controlled from the steering wheel. I do not accept that submission for two reasons. First, Sunday Ltd did not disclose that the vehicle was imported from Japan or that it had an aftermarket stereo installed. Second, even if it had disclosed those facts, I am not satisfied that a reasonable consumer would have understood that the steering wheel controls would not work, particularly given the representation that the vehicle was “BRAND NEW”.

Issue 2: Has Sunday Ltd refused or failed to rectify the vehicle’s defects within a reasonable time?

[26] Section 18(2)(b)(ii) of the CGA enables a consumer to reject goods where a supplier has been required to remedy a failure but refuses, fails or does not succeed in doing so within a reasonable time.
[27] Section 18 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.

[28] Ms Li returned the vehicle to Sunday Ltd on 13 March 2023. She rejected it on 1 April 2023, when she considered that Mr Campbell refused to repair the vehicle.
[29] I find that Sunday Ltd did not refuse to repair the vehicle. I accept Mr Campbell’s submission that, although he considered that Sunday Ltd had no liability for the inoperative steering wheel controls, it was nonetheless willing to replace the vehicle’s stereo at its cost to rectify the problem. Ms Li says that she interpreted Mr Campbell’s message that he “did not have to buy you a new stereo” as a refusal to repair. It was not, as the other evidence clearly shows that Sunday Ltd had already ordered a replacement unit by that stage and was intending to replace the stereo, even if it thought it had no legal responsibility to do so.
[30] Further, by a slim margin, I am not satisfied that Sunday Ltd failed to remedy that fault within a reasonable time before Ms Li rejected the vehicle. The evidence shows that Sunday Ltd had the vehicle for about 17 days before Ms Li rejected it. Ordinarily, one would expect defects relating to a multimedia unit to be remedied in that time. However, the evidence shows that at least some of that time was spent trying to find a fault with the Apple Car Play function that did not exist, meaning Sunday Ltd was distracted from rectifying the fault that affected the operation of the steering wheel controls.
[31] Consequently, I find that Sunday Ltd has not failed to remedy the vehicle’s defects within a reasonable time and I consider that it should be given a further opportunity to rectify the fault that affected the operation of the steering wheel controls.

Issue 3: Are the vehicle’s defects a failure of a substantial character?

[32] A failure of a substantial character is defined in s 21 of the CGA:

21. 21 Failure of substantial character

For the purposes of section 18(3), a failure to comply with a guarantee is of a substantial character in any case where—

(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b) the goods depart in 1 or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model; or

(c) the goods are substantially unfit for a purpose for which goods of the type in question are commonly supplied or, where section 8(1) applies, the goods are unfit for a particular purpose made known to the supplier or represented by the supplier to be a purpose for which the goods would be fit, and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or

(d) the goods are not of acceptable quality within the meaning of section 7 because they are unsafe.

[33] The fault that affects the operation of the steering wheel controls is not a failure of a substantial character. It is a minor fault that does not affect the operation of the vehicle and can be easily remedied, and I am not satisfied that a reasonable consumer would have declined to purchase the vehicle because of the existence of that fault.

Issue 4: What remedy is Ms Li entitled to under the CGA?

[34] The relevant remedies are contained in s 18 of the CGA. For the reasons explained above, Ms Li is not entitled to reject the vehicle because Sunday Ltd has not refused or unreasonably failed to rectify the steering wheel control fault and that fault is not a failure of a substantial character. Instead, under s 18(2)(a), Ms Li is entitled to have that fault remedied within a reasonable time.

Outcome

[35] Ms Li’s application to reject the vehicle is dismissed and Sunday Ltd shall, within 10 working days of the date of this decision, perform all repairs necessary to ensure that the multimedia unit controls on the steering wheel are functional.

B R Carter
Adjudicator