Kirby v Turners Group NZ Limited - Reference No. MVD 206/2023 [2023] NZMVDT 213 (19 October 2023)

Last Updated: 4 December 2023

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 206/2023 [2023] NZMVDT 213 BETWEEN ELLIOT KIRBY Applicant AND TURNERS GROUP NZ LIMITED Respondent

HEARING at CHRISTCHURCH on 23 August 2023 (by audio-visual link) MEMBERS OF TRIBUNAL

D M Jackson, Barrister – Adjudicator S Cousins – Assessor

APPEARANCES

E Kirby, Applicant H Belt, for the Respondent

DATE OF DECISION 19 October 2023

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

A Within ten working days of the date of this decision Turners Group NZ Limited is to pay Mr Kirby $517.98.

_________________________________________________________________

REASONS

Introduction

[1] On 28 March 2023 Mr Kirby purchased a 2005 BMW 118i from Turners Group NZ Limited (TGNZ) for $3,700. The vehicle’s odometer was 125,315 kms at the time of sale. Mr Kirby was aware when he purchased the vehicle of the need for some minor repairs to be carried out. On 30 March 2023 he took the vehicle for a service and for those repairs to be carried out.
[2] However, during the repairer’s inspection of the vehicle further defects were identified. These included a radiator hose, which was leaking. Mr Kirby complains that the pre-purchase inspection report provided by TGNZ, as part of the auction pack, “passed” a visual inspection of the radiator hose. Further, Mr Kirby complains that the starter motor is faulty, which ought to have been obvious to TGNZ during its own inspection processes and the sale of the vehicle. He seeks reimbursement for his expenditure in carrying out repairs to these items. It transpired during the hearing that Mr Kirby sought recompense for other items repaired by him.
[3] TGNZ opposes Mr Kirby’s application. It says Mr Kirby carried out repairs without reference to TGNZ and, to the extent that he did engage with TGNZ, that its offers to assist or consider repair options were ignored. TGNZ’s primary argument was that it offered Mr Kirby a full refund of the purchase price on 3 April 2023, which he ignored, and that to the extent that he went on to carry out various repairs himself, he did so at his own risk. TGNZ says it is not liable to pay Mr Kirby anything, him having made that choice.

The issues

[4] 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 Mr Kirby entitled to under the CGA?

Issue 1: Did the vehicle fail to comply with the guarantee of acceptable quality?

[5] 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”.
[6] “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.

...

(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.

[7] 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.
[8] Mr Kirby produced documentary evidence in the form of invoices and estimates from the repairer to prove his claim. TGNZ took the position that the vehicle was sold with those minor defects or maintenance items to be expected of a vehicle of this age and mileage and at the price paid by Mr Kirby. It submitted that its pre-purchase inspection report is designed to identify only those issues which might be immediately obvious on a quick visual inspection of the vehicle. Further, its report and its sales material recommend prospective purchasers undertake their own due diligence.
[9] The Tribunal’s Assessor, Mr Cousins, has reviewed the material filed by Mr Kirby and questioned Mr Kirby during the hearing.
[10] Mr Cousins reviewed the 30 March 2023 invoice incurred by Mr Kirby. He considers the oil and filter and coolant to be service items. These are consumable items, which require regular maintenance during the life of the vehicle. There is no evidence to suggest that the original coolant could not have been retained and reused when replacing the radiator hose. Otherwise, the coolant should be renewed routinely as part of the good service and maintenance of the vehicle during its life.
[11] Mr Cousins considers the replacement radiator hose to fall into the same category. In the invoice the radiator hose was described as “coolant fitting leaking/broken”. From the evidence it appears that the issue was identified during the service of the vehicle and was not visible or discernible by way of a coolant leak under the vehicle or through the vehicle’s on board notification systems. This lack of evidential detail causes Mr Cousins to advise that it is not clear that this issue would have been identifiable to a pre-purchase inspector carrying out a basic visual inspection. Further, Mr Cousins considers the specific nature of the leak to be unclear from the evidence but is likely consistent with a vehicle of this age and mileage, which may have perished joints and fittings, o-rings or similar worn consumables.
[12] Finally, Mr Cousins notes that these items were repaired without reference to TGNZ.
[13] Mr Cousins has also reviewed the invoice dated 21 April 2023 for repairs carried out pursuant to an estimate dated 4 April (which estimate was provided to TGNZ for comment before the works were carried out). Of those repairs, Mr Cousins considers the brake fluid, washer pump and rear window washer repairs to be service items to be expected of a vehicle of this age and mileage. The rear window issues were identified in the pre-purchase inspection report too.
[14] The bump stops were replaced during the repairs. Mr Cousins agrees that failing or failed bump stops are a warrant of fitness (WOF) inspection fail item. He explains that these usually fail over time and then separate from the suspension for various reasons. They are however a minor concern, which would have had to be replaced before the next WOF, which was due on 20 September 2023. That is, Mr Cousins considers a vehicle of this age and mileage may have perished or possibly missing bump stops.
[15] The final item claimed by Mr Kirby is the cost of a replacement starter motor. In his evidence, Mr Kirby described how on the day he picked the vehicle up from TGNZ, he found it to be hard starting; it would start slowly and struggle to start. He did not notice this immediately when he picked the vehicle up as the TGNZ representative started the vehicle and drove it to him at the collection point.
[16] Mr Cousins explains that Mr Kirby’s description of the starting concern is consistent with a high voltage drop to the starter windings. This can eventuate through a number of causes such as poor connections, a poor battery and as most likely in this case, high resistance across the starter solenoid contacts. The 2005 118i BMW has a pre-engaged starter, which by design has an externally mounted solenoid that can be replaced separately from the complete starter motor assembly. Mr Cousins advises that the parts cost for the solenoid is around $50–$70 inclusive of GST and the part is readily available locally.
[17] Further, Mr Cousins considers that whilst it is true that the starter motor on a vehicle of this age and mileage will be worn and may require replacement or repair, it is also fair to say a reasonable consumer would expect their vehicle to start correctly at the time of purchase. It is also reasonable to expect a concern of this nature to be identified on a basic vehicle condition report, of which a person with very little mechanical knowledge can identify a vehicle which is hard to start.
[18] Mr Kirby’s evidence was that he returned to TGNZ and demonstrated the starting concern prior to incurring the cost of repair. Turners requested a quote to repair/replace the starter and then later declined to proceed with repairs, instead offering a refund for the return of the vehicle.
[19] In replacing the entire starter motor as opposed to just the solenoid, Mr Kirby chose to seek a higher level of repair than what would otherwise have been required to rectify his specific concern. This is understandable given the age and mileage of the vehicle and accepting the other starter components will have worn at a similar rate to the solenoid. There is little difference in labour to replace the entire starter versus just the solenoid, although Mr Cousins believes the repairer observed best industry practise in advising replacement of the full starter assembly based on their own warranty and the age and mileage of the vehicle. That aside, Mr Cousins considers there is an element of betterment arising from this repair in parts alone.
[20] I accept Mr Cousins’ opinion and find that all but the starter motor problem are minor defects or maintenance items, which are to be expected of a vehicle of this age and mileage. Likewise, I accept Mr Cousins’ opinion on the starter motor. I find that the starter motor fault was caused by a faulty solenoid, which breaches the guarantee of acceptable quality. I do so on the basis that a reasonable consumer purchasing a vehicle of this age and mileage for $3,700 can at the least expect that the vehicle will start without delay or stutter. It is a basic functional necessity of any vehicle.

Issue 2: What remedy is Mr Kirby entitled to under the CGA?

[21] 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.

[22] Mr Kirby wanted the vehicle to be repaired. He asked TGNZ to repair it and provided it with his repairer’s estimate. TGNZ made a commercial decision to decline to repair but offered Mr Kirby a refund of his purchase price in full. That offer to refund the purchase price does not abrogate or trump Mr Kirby’s rights as a consumer to the repair of the vehicle (to the extent that repair is necessary to correct a breach of the guarantee of acceptable quality). Mr Kirby insisted on repair but TGNZ would not accommodate his request.
[23] TGNZ was given an opportunity to repair but refused to do so. This entitled Mr Kirby to have the vehicle repaired elsewhere and to recover the cost of same from TGNZ. It may be that, as Mr Cousins advises, TGNZ might have secured a cheaper repair by the replacement of the solenoid only. However, it courted the risk that Mr Kirby would accept the advice of his own repairer and replace the full starter motor unit. Mr Cousins confirms that that advice from the repairer was sound or prudent in all the circumstances.
[24] I find TGNZ is liable to pay Mr Kirby for the cost of the replacement of the starter motor. I fix the amount to be paid as $416.20 for the unit plus GST ($62.40) and $39.38 for labour. I am not going to split hairs over the extent to which the labour amount fixed might work in Mr Kirby’s favour. TGNZ courted the risk and must accept the consequences, even if on a commercial basis, having regard to the outcome of this decision overall.
[25] I order that within ten working days TGNZ is to pay Mr Kirby $517.98.

D M Jackson
Adjudicator