Just v Terry Darby Autos Ltd - Reference No. MVD 101/2023 [2023] NZMVDT 140 (5 July 2023)

Last Updated: 26 August 2023

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 101/2023 [2023] NZMVDT 140 BETWEEN DANIEL HENDRIK JUST Applicant AND TERRY DARBY AUTOS LTD Respondent

HEARING at AUCKLAND on 2 May and 20 June 2023 (by audio-visual link) MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator S Gregory – Assessor

APPEARANCES

D H Just, Applicant

N Darby for the Respondent

DATE OF DECISION 5 July 2023

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

A Daniel Just’s application to reject the vehicle is allowed.

2. Terry Darby Autos Ltd shall, within 10 working days of the date of this decision, pay $18,051.41 to Mr Just.

_________________________________________________________________

REASONS

Introduction

[1] Daniel Just wants to reject the 2008 BMW X5[1] he purchased for $13,000 from Terry Darby Autos Ltd on 19 November 2022. He says that Terry Darby Autos made misleading representations regarding the vehicle’s condition and that the vehicle is not of acceptable quality. Mr Just wants to obtain a refund of the purchase price and recover nearly $10,000 in other costs and losses he claims to have incurred.
[2] Terry Darby Autos says that Mr Just should not be entitled to reject the vehicle. It says that it adequately disclosed the vehicle’s history to Mr Just and that the vehicle was in acceptable condition at the time of sale because it had passed compliance testing and a warrant of fitness shortly before it was sold to Mr Just. It considers that many of the vehicle’s alleged defects are wear and tear that has occurred during Mr Just’s ownership, although it remains prepared to assess and remedy any issue that it should have responsibility for if it is given that opportunity. Terry Darby Autos also questions the fairness of this claim as Mr Just has declined to allow it to have the vehicle assessed by its preferred workshop.

Relevant background

Pre-purchase events

[3] The vehicle was first registered in New Zealand in September 2018. It seems that sometime between that date and early 2022 the vehicle was repossessed by Falcon Advances Ltd, due to the previous owner’s failure to repay a loan entered into with Falcon Advances Ltd. Falcon Advances Ltd then instructed Terry Darby Autos to sell the vehicle on its behalf.
[4] By April 2022, the vehicle had been de-registered. Terry Darby Autos says that this occurred because the previous owner of the vehicle had failed to renew its registration. The vehicle therefore had to pass compliance testing, before it could be re-registered, which it did on 4 April 2022. The vehicle also passed a further warrant of fitness inspection on 18 November 2022, when its odometer reading was 134,489 km. Terry Darby Autos also arranged for repairs to be performed, including to have the handbrake wiring repaired by Milford Auto Electrical.
[5] Before purchasing the vehicle, Mr Just spoke with Nigel Darby of Terry Darby Autos. During that discussion, Mr Just was told that the vehicle has been repossessed and was being sold on behalf of Falcon Advances Ltd. He was also told that the vehicle had passed compliance testing, a warrant of fitness inspection, had been freshly serviced and the suspension had been repaired.
[6] Mr Just then obtained a pre-purchase inspection report from My Auto Shop, a vehicle inspection company. Mr Just says that My Auto Shop found some cosmetic wear and tear but considered that the vehicle was free from mechanical faults or significant wear. Mr Just then decided to purchase the vehicle.

The vehicle’s faults

[7] Mr Just says that he immediately noticed faults, including a faulty heater, faulty central locking, a power steering fault and the key fob and window washer system did not work. Mr Just contacted My Auto Shop and complained about the quality of the pre-purchase inspection. Although it seems that My Auto Shop may have accepted that it missed some issues during the pre-purchase inspection, no repairs were performed at that time.
[8] In late January 2023 – at about the same time as a significant weather event affected Auckland – Mr Just says that he noticed water in the rear of the vehicle near the battery (which is in the boot). Mr Just says that the vehicle had been stored in a garage and was not exposed to the worst of the heavy rain.
[9] Mr Just says that he initially thought that the water was caused by water being spilled in that area, but he then noticed stagnant water in the boot and rust on metal components. Mr Just says that he then noticed knocking sounds, worn rear suspension components and oil leaks from the engine. He again contacted My Auto Shop and says that My Auto Shop told him that it could not be liable for the latest issues.
[10] On 16 February 2023, Mr Just sent a text message to Nigel Darby of Terry Darby Autos advising Mr Darby that he had identified “significant faults” with the vehicle, which he felt had “crossed the line of acceptable quality””. Mr Just advised Mr Darby that he was “looking to resolve these directly with you, amicably if possible”.
[11] Mr Darby responded saying:

[12] Mr Just replied, stating:

[13] Mr Darby responded:

[14] Mr Just interpreted that response as Terry Darby Autos denying that it had any responsibility under the CGA. Mr Just then sent a formal rejection letter to Terry Darby Autos on 17 February 2023. Terry Darby Autos declined to accept that rejection. Instead, it asked Mr Just to take the vehicle to Milford Auto Electrical for assessment. Mr Just chose not to. Instead, he had the vehicle assessed by Continental Cars BMW.

The Continental Cars assessment

[15] Mr Just had provided two reports from Continental Cars dated 1 and 17 March 2023. Those reports state that Continental Cars considered:

• (a) the left front CV boots were leaking and required replacement at a cost of $988.06
• (b) the GWS (the gear selector switch for the transmission) was failing and should be replaced, at a cost of $2,774.93
• (c) the rear battery compartment was full of water, with further assessment required at an estimated cost of $319.13
• (d) there was a water leak from the sunroof and the sunroof hood liner was sagging. It suspected that the water was leaking due to blocked sunroof drains, but further assessment was required at a cost of $851
• (e) the heater was faulty, most likely due to the failure of a dual water valve, which would cost $883.23 to repair
• (f) an exhaust bracket bolt was missing, which would cost $62.25 to replace
• (g) both front shock absorber top mounts were worn out, there was play in both front stabiliser links, the left side lower arm ball joint had play. It recommended replacing each of those items at a cost of $2,324.13
• (h) the cooling pump had failed and the pump thermostat and coolant pipe should be replaced at a cost of $2,732.91
• (i) oil was leaking from the engine, and the valve cover gasket, eccentric shaft gasket, servo motor gasket, VANOS solenoid gaskets, oil filter module gasket, heat exchanger gasket, oil filter neck pads and fluids should be replaced at a cost of $1,956.62
• (j) the vehicle was overdue for a service, which would cost $638.25
• (k) the wiring to the parking brake had been poorly repaired and further diagnosis at a cost of $319.13 was required
• (l) the central locking function was not working from the key, and further diagnosis was required at a cost of $420.72
• (m) the right rear fog light was faulty and required replacement at a cost of $74.28; and
• (n) both rear tyres required replacement.

[16] Terry Darby Autos has provided a copy of the Continental Cars assessment to Milford Auto Electrical. Milford Auto Electrical considers that many of the issues are ordinary wear and tear, including the worn CV boots, suspension issues and oil leaks. It also believes that further diagnosis is required to confirm the true nature and extent of other faults (such as the GWS failure, water ingress, heater failure and handbrake fault) and repairs can be performed for less than the amounts estimated by Continental Cars.
[17] Terry Darby Autos also submitted that Mr Just had driven more than 11,000 km in the vehicle before the suite of faults was found by Continental Cars. It says that this is extensive use given the short period of Mr Just’s ownership, and given the extent of this use, the vehicle has been as durable as a reasonable consumer would consider acceptable.
[18] During the hearing on 2 May 2023, the Tribunal advised the parties that the reports from Continental Cars, which at that time were not supported by clear colour photographs or the video of the water leaks, may not be as conclusive as to the extent of the vehicle’s faults as Mr Just submitted. The Tribunal was also mindful of Terry Darby Autos’ concerns that further diagnosis was required to confirm the true nature and extent of any issues that may be present. The Tribunal therefore indicated that it was prepared to allow Mr Just to seek further information from Continental Cars or another source, including oral evidence from the technician who assessed the vehicle.
[19] Terry Darby Auto again indicated that it was prepared to have the vehicle assessed by Milford Auto Electrical, but Mr Darby insisted that any further assessment should be performed by a workshop that he considered to be independent. The Tribunal then issued a direction asking Mr Just to provide any:

• (a) further assessment of the vehicle’s alleged defects he would like to provide
• (b) further information from Continental Cars that he would like to provide; and/or
• (c) any application for a witness summons he seeks.[2]

[20] Both parties were also invited to provide any further written submissions they would like to make.
[21] Mr Just then chose to have the vehicle assessed by Euro Lab. A report dated 23 May 2023 states that Euro Lab found thirty issues with the vehicle, which Mr Just says is conclusive proof that the vehicle is not of acceptable quality. Those issues include:

• (a) the coolant pump has failed
• (b) the GWS switch is faulty
• (c) there is water in the boot, a water leak through the roof and/or sunroof and mould inside the vehicle
• (d) the park brake is faulty
• (e) there is excessive play in the steering rack
• (f) there is water in both sides of the boot, where the electronics and fuseboxes are housed
• (g) the water pump is leaking
• (h) the firewall cowling is broken and lying on the engine
• (i) the rear exhaust bracket is disconnected
• (j) the engine has an occasional misfire
• (k) the key fob does not lock or unlock the vehicle and requires replacement
• (l) the vehicle had the following electronic faults:
  • (i) the engine intake vanos “has issues”
  • (ii) the ABS module has an internal fault
    • (iii) numerous control modules that control CD player, navigation system, bluetooth and reversing camera are “completely dead”

[22] Mr Just also provided numerous photographs taken by Euro Lab of those alleged issues.
[23] Terry Darby Autos then provided further submissions, including submissions that:

• (a) the vehicle has been a subject of the severe weather events in Auckland which has caused water entry into the cabin and caused most of the electrical faults
• (b) Terry Darby Autos has never been allowed to have the vehicle inspected, which is suspicious in nature and Mr Just has been given two time extensions to have the vehicle inspected by whoever he wants and in his favour
• (c) Mr Just has “travelled a huge mileage (11,000km) in this vehicle in the three months of ownership”; and
• (d) Terry Darby Autos denied misleading Mr Just about the vehicle’s history.

[24] In light of the further evidence and submissions, the Tribunal decided to have a further hearing, which occurred on 20 June 2023. Mr Just presented evidence regarding the Euro Lab assessment. Mr Just also advised that the vehicle is continuing to leak and that he has tried to remove moisture from the vehicle on numerous occasions during his ownership. Following the hearing on 20 June 2023, Mr Just also provided a video taken by Continental Cars when it assessed the vehicle, which shows water leaking into the vehicle.
[25] Mr Darby responded on behalf of Terry Darby Autos. Mr Darby reiterated that he feels that Terry Darby Autos has not been given an opportunity to assess the vehicle, so it is difficult for it to comment on the vehicle’s alleged issues. Mr Darby considered that, if Mr Just had allowed it to assess the vehicle, his concerns could have been addressed by now.
[26] Mr Darby also reiterated that the vehicle had no significant issues when it was sold to Mr Just. He says that the vehicle had recently passed compliance testing and there was no evidence of any water ingress or electrical issues at that time and the vehicle then passed a warrant of fitness shortly before sale. Mr Darby repeated his view that the vehicle’s water ingress was caused by the heavy rain in late January 2023 and that there is otherwise no underlying fault that is allowing water into the vehicle.

Mr Just’s refusal to allow Milford Auto Electrical to assess the vehicle

[27] After the hearing on 20 June 2023, Terry Darby Autos again advised the Tribunal that it considered that the process followed in this case has been unfair because it has not been given an opportunity to assess the vehicle, because Mr Just has refused to allow its preferred technicians at Milford Auto Electrical to assess the vehicle. Because that submission raises issues of natural justice, I deal with this submission in detail as follows.
[28] The Tribunal does not have the power to require that Mr Just give Terry Darby Autos an opportunity to have the vehicle assessed by Milford Auto Electrical. Given Mr Just’s refusal of that request, the Tribunal has proceeded to make its decision based upon the evidence provided. In proceeding this way, the Tribunal notes that Mr Just had agreed to allow Terry Darby Autos to have the vehicle assessed by an agreed third party, but Terry Darby Autos has declined that offer.
[29] Mr Just says that he has been prepared to allow Terry Darby Autos to assess the vehicle, but only if that assessment is done by someone other than Milford Auto Electrical. Mr Just believes that Milford Auto Electrical had previously performed poor quality repairs on the vehicle, so he wanted the vehicle to be assessed by an independent party. Terry Darby Autos has insisted that the assessment should be performed by Milford Auto Electrical.

The video of the water leak provided after the 20 June 2023 hearing

[30] Mr Just has provided a further video of water leaking into the vehicle, which he says was taken on 23 June 2023. That video shows that the vehicle is parked outside in the rain and a significant amount of water is leaking into the rear of the vehicle. Terry Darby Autos considers the amount of water leaking into the vehicle to be suspicious, and that a water leak to that extent would have been noticeable at the time of sale.

The issues

[31] 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) Are the vehicle’s defects a failure of a substantial character?
• (c) What remedy is Mr Just entitled to under the CGA?

[32] Mr Just also made various allegations that Terry Darby Autos engaged in misleading conduct in breach of the Fair Trading Act 1986. Given my finding that Mr Just is entitled to reject the vehicle and obtain compensation under the CGA, I do not need to consider his Fair Trading Act claim further, as he would have been entitled to no additional remedy and none of the potential defences available to Terry Darby Autos under the Fair Trading Act are relevant to my assessment of the issues that arise under the CGA.

Issue 1: Has the vehicle been of acceptable quality?

[33] 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.

(2) Where any defects in goods have been specifically drawn to the consumer’s attention before he or she agreed to the supply, then notwithstanding that a reasonable consumer may not have regarded the goods as acceptable with those defects, the goods will not fail to comply with the guarantee as to acceptable quality by reason only of those defects.

(3) Where goods are displayed for sale or hire, the defects that are to be treated as having been specifically drawn to the consumer’s attention for the purposes of subsection (2) are those disclosed on a written notice displayed with 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.

(5) A reference in subsections (2) and (3) to a defect means any failure of the goods to comply with the guarantee of acceptable quality.

[34] 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.

The vehicle has numerous faults that mean it is not of acceptable quality

[35] Mr Just paid $13,000 for a 14-year-old BMW X5 with an odometer reading of about 134,500 km. A purchaser of such a vehicle can expect the vehicle to be of a warrant of fitness standard and free of any significant undisclosed defects but must also have realistic expectations as to its quality and durability and should understand that the vehicle may have wear and tear consistent with its age and mileage and that ongoing maintenance will be required.
[36] A reasonable consumer should also understand that the protections in s 6 are finite and, at some point, the risk of the vehicle developing defects must transfer from the supplier to the purchaser. The point in time at which that risk transfers is determined with reference to the factors in s 7(1)(f) to (j) of the CGA. In that regard, Terry Darby Autos emphasised that Mr Just has driven about 11,000 km since purchase, which I understood to be a submission that the protections in the CGA should not apply given the distance Mr Just has driven.
[37] Despite the length of Mr Just’s ownership, the distance he has driven and the realistic expectations he must have for a vehicle of this price, age and mileage, I find that the vehicle has not been of acceptable quality because the following defects mean the vehicle was not as free of minor defects or as durable as a reasonable consumer would consider acceptable:

• water is leaking though the roof or sunroof, which is allowing water to enter the boot and the leak is more serious than submitted by Terry Darby Autos. Although the vehicle might have leaked during the rain events in January and early February 2023, those rain events were not the cause of the leak, and I am satisfied that there is an unacceptable leak into the rear of the vehicle. The video from Continental Cars shows a significant amount of water entering the rear of the vehicle in March 2023. The evidence also shows that the water ingress is not recent. Mr Gregory, the Tribunal’s Assessor, advises that the rust on mild steel components in the boot area, as shown in the photographs provided by Euro Lab taken in May 2023, suggests that water had been entering the boot for at least six months.
• the roof lining is sagging, probably due to damage caused by the water leak through the roof
• the coolant pump is faulty and requires replacement
• the firewall cowling is damaged and sitting on the engine
• the engine intake vanos has a fault, which is the probable cause of the misfire complained of by Mr Just
• the electronic handbrake is faulty, most likely due to poor quality repairs performed before the vehicle was purchased by Mr Just
• the vehicle has an undiagnosed fault that has affected the operation of the anti-lock braking system (ABS) electronic stability control (ESC) functions
• the gear selector switch (GWS) is faulty
• various control modules in the boot, which control the vehicle’s navigation system, reversing camera and multimedia unit are not working
• an exhaust bracket is missing, which is a warrant of fitness failure
• the steering rack is faulty, which is a warrant of fitness failure
• the central locking function is not working due to the key fob, which has been faulty throughout Mr Just’s ownership; and
• the heater is faulty, most likely due to the failure of a dual water valve.

[38] At least some of those defects – including the water leak, faulty heater, faulty central locking, a power steering fault and the key fob – were present at the time of sale or shortly thereafter. Although it is not clear precisely when the other faults reached that point that they were unacceptable, I am satisfied that the existence of those defects mean the vehicle has not been as free of minor defects or as durable as a reasonable consumer would consider acceptable.
[39] The remaining alleged defects do not breach the guarantee of acceptable quality because those further faults are either not as serious as Mr Just has been led to believe or they are generally consistent with the age and mileage of the vehicle.
[40] Terry Darby Autos has emphasised on many occasions that it has not assessed the vehicle. Ideally, it would have had that opportunity, as I am confident that this claim would not have persisted for as long as it has if Terry Darby Autos had assessed the vehicle and discovered the true extent of the vehicle’s faults for itself. However, in terms of my assessment as to whether this vehicle has been of acceptable quality, I am satisfied that the evidence that Mr Just has presented, particularly the assessments from Continental Cars and Euro Lab, which are largely consistent with each other, clearly establishes that the vehicle has not been of acceptable quality.

Issue 2: Are the vehicle’s defects a failure of a substantial character?

[41] 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.

[42] In Cooper v Ashley & Johnson Motors Ltd, the District Court found that a purchaser may reject a vehicle where there had been an accumulation of defects, even if those defects could not in themselves be described as substantial.[3] The Court noted that a point will eventually be reached where the purchaser could “say convincingly that he or she had no confidence in the reliability of the vehicle”.[4]
[43] Considering the list of defects that breach the guarantee of acceptable quality, particularly the water ingress, the faulty GWS, the faulty steering rack and the numerous electrical issues present (which may well be caused by water ingress); I am satisfied that the vehicle’s accumulated faults amount to a failure of a substantial character. I am satisfied that the frequency and extent of those faults is such that a reasonable consumer would have lost confidence in the ongoing reliability of the vehicle.

Issue 3: What remedy is Mr Just entitled to under the CGA?

[44] 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.

[45] Mr Just is entitled to reject the vehicle under s 18(3)(a) of the CGA because its defects are a failure of a substantial character. As a result, he is entitled to a full refund of the purchase price of $13,000.[5]
[46] Under s 18(4) of the CGA, Mr Just is also entitled to recover any loss or damage resulting from the vehicle’s failure to comply with the guarantee of acceptable quality that was reasonably foreseeable as liable to result from the failure. Mr Just seeks to recover the following:

• $1,914.70 – the cost of the inspection performed by Continental Cars
• $523.11 – the cost of the Euro Lab inspection
• $6,286.60 – the cost of hiring rental cars because he had been advised not to drive his vehicle
• 304.75 – the cost of hiring carpet cleaners to clean moisture and mould from the vehicle; and
• The Tribunal filing fee of $50.

[47] Mr Just says that, in incurring these costs “all attempts have been made to minimise expenditure to the benefit of Terry Darby Autos and to reduce total claim amount”.

The Continental Cars and Euro Lab assessment costs

[48] Mr Just was entitled to have the vehicle diagnosed and, given the long list of the vehicle’s defects and the dispute raised by Terry Darby Autos as to the nature and extent of those defects, it was reasonable for Mr Just to have the vehicle assessed by two separate workshops.
[49] The Euro Lab assessment was thorough, and the $523.11 cost was reasonable. I therefore find that Mr Just is entitled to recover that cost.
[50] I find that Mr Just is not entitled to recover the total cost of the Continental Cars assessment because the cost incurred was much more than was reasonable to identify the vehicle’s defects. As demonstrated by Euro Lab, the vehicle’s defects could have been identified for much less.
[51] The Continental Cars assessment also extends beyond identifying defects and includes consideration of matters including whether the numberplate surround bears its name and the condition of the tyres. It is also noteworthy that the Continental Cars assessment was not entirely useful in determining the true nature and extent of the vehicle’s defects, as the photographs provided with the report were too small to see clearly, the video showing the water leak was not provided with the report and the commentary in the report did not enable the Tribunal to form a clear view on the true nature and extent of the vehicle’s defects.
[52] I therefore find that Mr Just is entitled to recover only $850 for the Continental Cars report as I consider that to be the reasonable cost of such an assessment, and given the deficiencies in that report, I do not consider that Terry Darby Autos should be liable for the entire cost.

Rental car costs

[53] Mr Just seeks to recover the following costs incurred in renting vehicles while he has been unable to use his vehicle:

• (a) $3,404.15 – the cost of hiring vehicles from Cityhop in March, April and May 2023
• (b) $1,776.75 – the cost of renting a vehicle from Hertz New Zealand Ltd between 28 May and 13 June 2023; and
• (c) $1,115.70 – the cost of renting a further vehicle from Hertz New Zealand Ltd.

[54] Despite requests from the Tribunal that he provide evidence to prove the costs incurred, Mr Just has not provided evidence to show that he has paid $1,115.70 to Hertz New Zealand Ltd. He has provided a booking confirmation document, but no evidence that the cost was incurred. I therefore decline to award that amount to Mr Just.
[55] Mr Just has provided sufficient evidence to prove the other rental costs, which total $5,180.90. He is entitled to recover the reasonable cost of hiring a vehicle under s 18(4) of the CGA, because I am satisfied that his vehicle is unusable in its current condition, and it was a reasonably foreseeable consequence of the vehicle’s failures that Mr Just would hire rental vehicles.
[56] However, I intend to reduce the amount awarded to Mr Just to reflect his contribution to the delay in resolving this dispute. I am influenced by Terry Darby Autos’ submission that resolution of this matter has been delayed by Mr Just declining to allow Terry Darby Autos to have the vehicle assessed by Milford Auto Electrical.
[57] It was reasonable for Terry Darby Autos to make this request and, given the numerous and obvious defects present in this vehicle as found by Continental Cars and Euro Lab, I accept Mr Darby’s submission that the matter would likely have been resolved much sooner if Mr Just had allowed that assessment to occur. I therefore reduce the amount awarded by $1,500 to reflect Mr Just’s contribution to the delay in bringing this matter to a resolution and find that Mr Just is entitled to recover $3,680.90 for the cost of hiring rental vehicles.

The carpet cleaning costs

[58] Mr Just seeks to recover $304.75 for the cost of carpet cleaners from The Warehouse, which he says were used to clean moisture and mould from the vehicle. The only evidence provided to prove this cost are unspecific bank account transactions on 24 April and 30 April 2023. In my view, that evidence is not sufficient to prove that these costs are recoverable under s 18 of the CGA, so I decline to award these costs.

Tribunal filing fee

[59] Mr Just also seeks to recover the $50 filing fee. Any entitlement to costs of this nature needs to be considered under sch 1 cl 14(1) of the Motor Vehicle Sales Act 2023, which relevantly states that the Tribunal may only award such costs against a party where:

• (a) the matter ought reasonably to have been settled before a hearing, but that party refused, without reasonable excuse, to participate in pre-hearing settlement discussions ordered by the Tribunal or acted in a contemptuous or improper manner during those discussion;[6] or
• (b) the party fails to attend the hearing without reasonable cause.[7]

[60] Terry Darby Autos attended the hearing, so Mr Just is not entitled to recover this cost on that basis. Further, I am not satisfied that this matter was so straightforward or clear cut that it should have been settled before a hearing, so Mr Just is not entitled to costs on that basis and his claim to recover the filing fee is dismissed.

Outcome

[61] Mr Just’s application to reject the vehicle is allowed, and Terry Darby Autos shall, within 10 working days of the date of this decision, pay $18,051.41 to Mr Just. Terry Darby Autos should then arrange to collect the vehicle from Mr Just, at its cost.

B R Carter
Adjudicator

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[1] Registration plate PPR22

[2] Mr Just had indicated that the Continental Cars technician who assessed the vehicle may be reluctant to give evidence, so the Tribunal suggested that Mr Just could seek to summons the technician as a witness if he wanted the technician to appear before the Tribunal.

[3] Cooper v Ashley & Johnson Motors Ltd (1996) 7 TCLR 407 (DC).

[4] At 417.

[5] Consumer Guarantees Act 1993, s 23(1)(a).

[6] Sch 1 cl 14(1)(a)(ii).

[7] Sch 1 cl 14(1)(b).