NZLII Home | Databases | WorldLII | Search | Feedback

Motor Vehicles Disputes Tribunal of New Zealand
You are here:  NZLII >> Databases >> Motor Vehicles Disputes Tribunal of New Zealand >> 2023 >> [2023] NZMVDT 170

Database Search | Name Search | Recent Decisions | Noteup | LawCite | Download | Help

Pohatu v Auckland Auto Collection Ltd - Reference No. MVD 201/2023 [2023] NZMVDT 170 (16 August 2023)

Last Updated: 29 September 2023

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA

MVD 201/2023
[2023] NZMVDT 170

BETWEEN AROHA POHATU

Applicant

AND AUCKLAND AUTO COLLECTION LTD
Respondent





HEARING at AUCKLAND on 25 July and 10 August 2023 (by audio-visual link)

MEMBERS OF TRIBUNAL
B R Carter, Barrister – Adjudicator
S Gregory – Assessor




APPEARANCES
A Pohatu, Applicant
B Cording for the Respondent

DATE OF DECISION 16 August 2023

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

Aroha Pohatu’s application is dismissed.

_________________________________________________________________

REASONS

Introduction

[1] Aroha Pohatu is unhappy with the 2015 Holden Trax she purchased for $12,868 from Auckland Auto Collection Ltd trading as Easy123 Auto (AAC Ltd) in October 2022. Ms Pohatu says that she has had concerns about the vehicle’s safety since she purchased it. She says that AAC Ltd did not provide a “100 point check” document with the vehicle and failed to update the wheel alignment sticker on the windscreen. Ms Pohatu also says that the vehicle’s transmission has been faulty since purchase and the brakes were squeaky and that AAC Ltd has failed to cancel the mechanical breakdown insurance policy (the MBI policy) she purchased with the vehicle.
[2] Ms Pohatu is a learner driver and has a medical condition, so she was concerned about the safety of the vehicle. She feels that she has been poorly treated by AAC Ltd and she has now lost faith with the vehicle and wants to return it for a refund of the purchase price and the cost of the MBI policy.
[3] AAC Ltd says that Ms Pohatu should not be entitled to reject the vehicle. It says that it performed a 100 point check and wheel alignment before the vehicle was sold to Ms Pohatu. It also says that Ms Pohatu was not entitled to cancel the MBI policy and it has assessed the vehicle and found none of the significant faults complained of by Ms Pohatu.

The issues

[4] The issues requiring the Tribunal’s consideration in this case are:

Relevant background

The transmission issues

[5] An employee from AAC Ltd drove Ms Pohatu home on the day she collected the vehicle. Ms Pohatu says that during that drive she noticed that the transmission was changing gears on its own and that there was an unusual noise from the transmission and the vehicle jerked when the gears changed. She says that the employee told her that the symptoms were due to the vehicle’s lack of recent use and would go away as the vehicle was driven. Ms Pohatu says that the transmission issues have remained throughout her ownership.

The 100 point check

[6] Ms Pohatu had purchased the vehicle online, where she saw a representation that the vehicle had been through a 100 point check. Ms Pohatu asked for a copy of the 100 point check documents. Ms Pohatu says that the AAC Ltd employee told her that the 100 point check documents were in the glovebox. Ms Pohatu says that the 100 point check documents were not in the glovebox, so she contacted AAC Ltd and asked for those documents. Ms Pohatu says that no documents were provided and that AAC Ltd ignored her requests for that information.
[7] AAC Ltd says that it did perform a 100 point check on the vehicle. AAC Ltd has provided a repair order from 9 August 2022, which states that a 100 point check was performed on the vehicle. AAC Ltd says that the checklist that is normally placed inside its vehicles may have been removed from this vehicle before it was sold to Ms Pohatu.

The MBI policy

[8] Ms Pohatu says that she tried to cancel the MBI policy a few days after she purchased the vehicle because she is an AA member and feels that she did not need the MBI policy. She says that the left a voice message on the phone of a finance employee of AAC Ltd but received no response. A few weeks later, Ms Pohatu again advised AAC Ltd that she wanted to cancel the MBI policy. She says that AAC Ltd told her that she could not cancel the policy.

The wheel alignment

[9] Ms Pohatu also noticed a wheel alignment sticker in the windscreen, which stated that the vehicle was due for a wheel alignment in September 2022. She purchased the vehicle in October 2022. Ms Pohatu then asked AAC Ltd to perform a wheel alignment and to service the vehicle.

The three month health check

[10] Ms Pohatu says that an employee from AAC Ltd had also told her that AAC Ltd would check the vehicle after three months. Ms Pohatu says that she also considered that AAC Ltd should service the vehicle, for free, after three months.
[11] AAC Ltd says that it provides a “three month health check” for the vehicle’s it sells, which involves an assessment of the vehicle and a fluid check. Blair Cording, who appeared for AAC Ltd, says that this is a free check provided to customers, and does not involve AAC Ltd servicing the vehicle. In that regard, Mr Cording says that AAC Ltd did not agree to provide a free service after three months.

The squeaking brakes

[12] Ms Pohatu says that the brakes were squeaking, which she first noticed about one month after purchase. Ms Pohatu says that the transmission continued to change gears on its own, the transmission was noisy, and the vehicle continued to jerk.

The John Andrew Mazda assessment

[13] Ms Pohatu then returned the vehicle to AAC Ltd in early December 2022 for the three month health check to be performed. Ms Pohatu also advised AAC Ltd of her concerns regarding the brakes and transmission.
[14] AAC Ltd then had the vehicle assessed by John Andrew Mazda on about 6 December 2022. An invoice dated 8 December 2022 states that John Andrew Mazda:
[15] Ms Pohatu was unhappy about how long it took to have the vehicle assessed. She says that AAC Ltd had promised to take the vehicle to John Andrew Mazda on 6 December 2022, but it did not do so until 8 December 2022. Ms Pohatu says that AAC Ltd did provide her with a courtesy vehicle. Ms Pohatu says that the brakes were no longer noisy when the vehicle was returned to her, but the transmission continued to jerk and make unusual noises.

The AA Auto Centre service

[16] AAC Ltd did not service the vehicle during the three month health check, so Ms Pohatu then had the vehicle serviced by AA Auto Centre on 31 January 2023. No issues were found with the vehicle at that time, although Ms Pohatu says that AA Auto Centre did not assess the vehicle for any defects.

The further 100 point check and assessment by John Andrew Mazda

[17] Ms Pohatu then returned the vehicle to John Andrew Mazda. Ms Pohatu continued to express concern about the performance of the transmission and about the absence of any document confirming that a 100 point check had been confirmed. An invoice dated 22 May 2023 states that John Andrew Mazda performed a new 100 point check and wheel alignment and replaced the driver side headlight bulb. It also checked the performance of the transmission and found no faults. AAC Ltd then offered to send the vehicle to Holden to have the transmission assessed further, including to have the software updates performed if any were required.

The Holden assessment

[18] Mr Cording says that he then made an appointment at Holden for the vehicle to be assessed on 6 June 2023, but Ms Pohatu did not take the vehicle to Holden for that assessment. During the hearing on 10 August 2023, Ms Pohatu also declined AAC Ltd’s further offer to have the vehicle assessed by Holden.

Issue 1: Is Ms Pohatu entitled to cancel the MBI policy?

[19] The MBI policy is an extended warranty agreement for the purposes of s 36T of the FTA because:
[20] Ms Pohatu wants to cancel the MBI policy. Section 36V(1) of the FTA sets out the circumstances in which a consumer can cancel an extended warranty and the process that a consumer must follow to do so:

36V Cancellation of extended warranty agreement

(1) A consumer may cancel an extended warranty agreement by giving notice of the cancellation to the warrantor—

(a) within 5 working days after the date on which the consumer receives a copy of the agreement; or
(b) if the warrantor has failed to comply with section 36U (except to the extent provided for in subsection (2)(b)), at any time.

(2) However,—

(a) subsection (1) does not apply in relation to an extended warranty agreement that has been entered into as a condition of a consumer credit contract (as defined in section 11 of the Credit Contracts and Consumer Finance Act 2003); and
(b) subsection (1)(b) does not apply if the failure to comply with section 36U is minor (for example, where a warrantor has provided an agreement at a time later than the time specified in section 36U(1)(b)) and does not materially prejudice the consumer.

(3) Notice of cancellation may be expressed in any way (including oral or written) that shows the intention of the consumer to cancel or withdraw from the agreement.

(4) For the purposes of subsection (3), the consumer must communicate with the warrantor—

(a) by way of the contact details provided in accordance with section 36U(2)(a)(iv); or
(b) in any other way agreed to by the consumer and the warrantor.

(5) On cancellation of an agreement in accordance with subsections (1) to (3), the supplier must immediately repay all additional consideration, in full and without any deductions, to the consumer.

(6) To avoid doubt, nothing in this section entitles a consumer to cancel any other agreement relating to the goods or services that are the subject of the extended warranty agreement.

[21] Section 36V creates a right to cancel an extended warranty in two situations only.
[22] First, under s 36V(1)(a) of the FTA, Ms Pohatu was entitled to cancel the MBI policy within five working days of receiving a copy of the policy. Ms Pohatu says that she did so by leaving a message on the phone of an AAC Ltd employee. Under s 36V(3) and (4) of the CGA, a notice of cancellation must be communicated by way of the contact details provided in the MBI policy documents. Ms Pohatu has not shown that she communicated her cancellation of the MBI policy in accordance with that obligation as she has not provided a copy of the MBI policy documents, despite those documents being requested by the Tribunal. Ms Pohatu therefore has no right to cancel the MBI policy under s36(v)(1)(a), as she has not shown that she properly communicated that cancellation.
[23] Second, under s 36V(1)(b), Ms Pohatu may cancel the MBI policy if the warrantor failed to comply with its disclosure obligations in s 36U of the FTA. There is no evidence to show that the warrantor failed to comply with those obligations. Ms Pohatu therefore has no right to cancel the MBI policy due to any disclosure failings.
[24] There is also no evidence to show that AAC Ltd misled Ms Pohatu about the MBI policy. Ms Pohatu says that she did not need the policy as she already had AA insurance, but Ms Pohatu provided no evidence to show that AAC Ltd misled her about the need for the MBI policy or its coverage. Although Ms Pohatu changed her mind and considers that she no longer needs the MBI policy, Ms Pohatu has no legal grounds for cancelling the policy.

Issue 2: Has the vehicle been of acceptable quality?

[25] 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:
  1. 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.

[26] 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.
[27] Ms Pohatu must prove that the vehicle is not of acceptable quality, on the balance of probabilities. That means that Ms Pohatu must produce evidence to show that it is more probable than not that the alleged faults exist. Bare oral assertions may be insufficient evidence. Corroborating documents such as invoices, videos, photographs and reports are often useful evidence to assist the Tribunal in determining what the relevant facts are.
[28] The only assessments on this vehicle have been performed by John Andrew Mazda. It cleaned the brakes, and there are no ongoing brake issues. It also replaced a headlight bulb in May 2023, and there are no ongoing headlight issues. Ms Pohatu also complained about a light flickering intermittently on the dashboard display, but there is no evidence to show the existence of any fault that would cause a warning light to flicker in that manner. That warning light also appears to have gone away.
[29] John Andrew Mazda has also found no fault with the transmission and Ms Pohatu has not had the transmission diagnosed by any other suitably qualified technician to determine what, if any, transmission faults may exist. Ms Pohatu has also declined AAC Ltd’s offer to have the transmission assessed by a Holden service centre to determine whether any transmission fault exists. Consequently, despite Ms Pohatu’s oral evidence as to the performance of the transmission, I cannot be satisfied that the vehicle has any issue with the transmission that would breach the guarantee of acceptable quality.
[30] Ms Pohatu also raised concerns about AAC Ltd’s failure to update the wheel alignment sticker, its failure to provide the 100 point check documents and failure to service the vehicle. None of those issues breach the guarantee of acceptable as Ms Pohatu has not proven that the vehicle has any wheel alignment issue or any fault that would have been identified by the 100 point check process, if such a check had not been performed.
[31] I therefore find that Ms Pohatu has not proven that the vehicle has any defect that breaches the guarantee of acceptable quality in s 6 of the CGA.

Issue 3: Has AAC Ltd engaged in misleading conduct in breach of s 9 of the FTA?

[32] Section 9 of the FTA provides:
  1. Misleading and deceptive conduct generally

No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

[33] The test for establishing a breach of s 9 was set out by the Supreme Court in Red Eagle Corp Ltd v Ellis:[1]

The question to be answered in relation to s 9 ... is ... whether a reasonable person in the claimant’s situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely have been misled or deceived. If so, a breach of s 9 has been established.

[34] I understood Ms Pohatu to allege that AAC Ltd engaged in misleading conduct by failing to provide a copy of the 100 point check and in relation to the vehicle’s servicing, condition and wheel alignment.

The 100 point check

[35] I find that Ms Pohatu was not misled about the 100 point check. The evidence shows that the vehicle did pass a 100 point check in August 2022. AAC Ltd did not provide a copy of the checklist at that time, but that failure did not make the representation that the vehicle had passed the 100 point check misleading. Further, Ms Pohatu has not proven that the vehicle has any defect that would have been brought to her attention by the checksheet, so I cannot conclude that she has suffered any loss or damage due to the absence of the checklist.

Servicing

[36] The vehicle was also serviced on 8 August 2022, when the vehicle’s odometer reading was 120,599 km. The vehicle was not due to be serviced again for 12 months or 10,000 km, whichever occurred first. I therefore find that Ms Pohatu was not misled about the status of the vehicle’s servicing at the time of sale.
[37] I also understood Ms Pohatu to say that she thought AAC Ltd would service the vehicle after sale, at its cost. There is no evidence to show that Ms Pohatu was told that AAC Ltd would service the vehicle after sale. She was told that AAC Ltd would perform a “health check”. Ms Pohatu may have interpreted that to mean that AAC Ltd would service the vehicle, but I do not consider that a reasonable consumer would have understood that a health check would include a full service.

The vehicle’s condition

[38] For the reasons set out in the assessment of Issue 2 above, I find that the vehicle was of acceptable quality and that Ms Pohatu was not misled about its condition.

The wheel alignment

[39] The vehicle passed a wheel alignment assessment on 8 August 2022. AAC Ltd had no legal obligation to perform another wheel alignment when the vehicle was sold and it has not engaged in misleading conduct by failing to do so.

Outcome

[40] I find that Ms Pohatu was not entitled to cancel the MBI policy, the vehicle is of acceptable quality and AAC Ltd has not engaged in misleading conduct. Ms Pohatu’s claim is therefore dismissed.

B R Carter
Adjudicator


[1] Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].

NZLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback
URL: http://www.nzlii.org/nz/cases/NZMVDT/2023/170.html