Tapa'atoutai v True Value Vehicles Ltd - Reference No. MVD 297/2023 [2023] NZMVDT 207 (16 October 2023)

Last Updated: 29 November 2023

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 297/2023 [2023] NZMVDT 207 BETWEEN PAEA TAPA’ATOUTAI & SOANA TAPA’ATOUTAI Applicants AND TRUE VALUE VEHICLES LTD Respondent

HEARING at AUCKLAND on 10 October 2023 (by audio-visual link) MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator S Cousins – Assessor

APPEARANCES

P Tapa’atoutai and S Tapa’atoutai, Applicants

V Kumar and D Lendrum for the Respondent

DATE OF DECISION 16 October 2023

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DECISION OF THE TRIBUNAL

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Paea and Soana Tapa’atoutai’s application is dismissed.

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REASONS

Introduction

[1] Paea & Soana Tapa’atoutai (the Applicants) were looking for a suitable vehicle for their growing family. They considered the seven seater 2013 Ford Territory that they purchased for $25,625 from True Value Vehicles Ltd (TVV Ltd) on 2 December 2020 to be perfect for their needs. However, the vehicle has since had numerous faults that have been costly to repair, so the Applicants now seek to reject the vehicle.
[2] TVV Ltd says that the Applicants should not be entitled to reject the vehicle. It says that it has fixed the issues that arose shortly after purchase and the remaining issues have occurred too long after purchase and/or were caused by the way in which the Applicants have used and maintained the vehicle.

The issues

[3] The sole issue requiring determination in this case is whether the vehicle has been of acceptable quality for the purposes of s 6 of the Consumer Guarantees Act 1993 (the CGA).

Relevant background

[4] The vehicle had a flat tyre the day after purchase, and by late February 2021 a headlight bulb had blown, and the driver’s window regulator was faulty. TVV Ltd replaced the flat tyre and Mac’s Auto Clinic replaced the headlight bulb and window regulator at TVV Ltd’s expense.
[5] The Applicants also say that an airbag fault warning light had illuminated by that time but Mac’s Auto Clinic and TVV Ltd told them that there was no fault with the airbag system. The Applicants say that the airbag fault warning light continued to appear intermittently throughout their ownership until the ignition switch was replaced in June 2023.
[6] Despite their concerns about the airbag fault warning light, the Applicants continued to use the vehicle until May 2021, when it would not start. The Applicants then contacted TVV Ltd, which suggested that they should arrange to have the vehicle repaired by the Quest Insurance mechanical breakdown insurance policy (the MBI policy) that was provided with the vehicle. Spillman Automotive Ltd then found a faulty starter relay, which it replaced at a cost of $180.90. That cost was less than the MBI policy premium, so the Applicants paid the repair cost themselves. The vehicle’s odometer reading at that time was 139,116 km.
[7] The vehicle was then serviced by Alishas Automotive on about 5 June 2021. Alishas Automotive also found that the cambelt required replacement at the next service. It also considered that the rear differential bushing was worn out, there was surface rust and all tyres required replacement. The Applicants continued to use the vehicle, and on 5 January 2022, they had the vehicle serviced and a warrant of fitness inspection performed by Tyreworx & Automotive. Tyreworx & Automotive replaced all four tyres and the vehicle passed the warrant of fitness inspection.
[8] By July 2022, the Applicants say that the vehicle was not starting properly. The vehicle was then assessed by Simms Diesel & Turbocharger Service Ltd. An invoiced dated 15 July 2022 records that it found that the fuel pump was not operating, so it proceeded to “wiggle wiring connections” and the vehicle started. The Applicants paid $540 for this assessment and towing costs.
[9] The vehicle continued to have starting problems. An invoice dated 5 September 2022 records that South Auckland Motors Ltd performed a diagnostic scan and found fault codes relating to the in-tank fuel pump. It removed and replaced the fuel pump, at a cost of $1,399.17. The vehicle’s odometer reading at that time was 155,437 km.
[10] The Applicants say that they then barely used the vehicle until May 2023, when the starting issues returned. They took the vehicle to Dr Diesel Ltd and an invoice dated 12 May 2023 states that Dr Diesel found fault codes relating to the ABS and SRS control modules. After further assessment, it found that the SRS module was “ant infested”, with food scraps lying around the floor. It then replaced the ABS and SRS modules. The Applicants paid $2,222.85 for this repair.
[11] Dr Diesel then serviced the vehicle and performed a warrant of fitness inspection. The odometer reading at that time was 157,546 km. The vehicle failed that inspection for numerous reasons. In June 2023, Dr Diesel then replaced the rear brake pads, left hand rear door strap, a ball joint and the driveshaft, machined brake disc rotors and installed a suspension kit. The Applicants paid $4,452 for those repairs.
[12] That was not the end of their problems. The vehicle remained hard to start, so they returned the vehicle to Dr Diesel on about 27 June 2023. Dr Diesel found that the ignition switch was faulty. It replaced the switch, and the Applicants say the vehicle now starts properly. They also say that the airbag fault warning light no longer illuminates.

Has the vehicle been of acceptable quality?

[13] 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.

[14] 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 the Applicants’ subjective perspective.
[15] The vehicle was seven years old and had an odometer reading of 131,437 km at the time of sale. A reasonable consumer should understand that motor vehicles of this price, age and mileage can develop defects and may require ongoing maintenance that can sometimes be expensive to repair or perform. They should also understand that a supplier’s obligations under s 6 of the CGA 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.
[16] TVV Ltd repaired several issues that arose shortly after purchase. By late February 2021, it had replaced a flat tyre, headlight bulb and faulty driver’s window regulator. Those were all minor faults and have been remedied by TVV Ltd, so the Applicants are entitled to no further remedy for those issues under the CGA.
[17] The next fault – the starter relay fault – occurred in May 2021, about five months after purchase by which time the Applicants had travelled about 7,500 km in the vehicle. That fault was not pre-existing, was easily remedied and given the length of the Applicants’ ownership and the distance driven since purchase, I find that this fault occurred too long (in time and distance) after purchase for the protections in s 6 of the CGA to apply.
[18] By the time the starting fault returned in July 2022, the Applicants had owned the vehicle for about 18 months and had driven about 20,000 km in the vehicle. Again, considering the factors in s 7(1)(f) to (j) of the CGA, that issue occurred too long after purchase for the CGA to continue to apply to a fault of this nature in a vehicle of this price, age and mileage.
[19] The evidence shows that the SRS and ABS module faults then found by Dr Diesel in May 2023 were most likely caused by an ant infestation due to food scraps being left in the vehicle. TVV Ltd cannot be liable for those faults.
[20] Dr Diesel then found several issues that caused the vehicle to fail a warrant of fitness inspection and then replaced an ignition switch. By that time, the Applicants had owned the vehicle for about two and a half years and had driven about 26,000 km in the vehicle. The faults found by Dr Diesel are all generally consistent with ordinary wear and tear in a vehicle of this age and mileage and are the kind of maintenance cost that a consumer can reasonably expect to incur. Again, applying the factors in s 7(1)(f) to (j), given the length of time since purchase and the distance travelled by the Applicants, those issues were identified too long after purchase for the CGA to continue to apply.
[21] Finally, regarding the airbag fault warning light, the evidence does not show that the vehicle had any fault that required repair. The Applicants say that the warning light illuminated regularly, but none of the many inspectors who have assessed the vehicle mentioned an airbag fault warning light in their reports. Further, the vehicle has been through at least two warrant of fitness inspections. If the airbag fault warning light was illuminated, the vehicle would have failed those inspections.

Outcome

[22] The vehicle has been of acceptable quality. TVV Ltd has remedied the relatively minor issues that occurred shortly after purchase and the faults that have since arisen, although numerous and expensive to repair, do not breach the guarantee of acceptable quality for the reasons set out above.
[23] Mr and Mrs Tapa’atoutai’s application is therefore dismissed.

B R Carter
Adjudicator