Pike v Kiwicheapcars Ltd - Reference No. MVD 439/2022 [2023] NZMVDT 22 (16 February 2023)

Last Updated: 23 March 2023

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 439/2022 [2023] NZMVDT 022 BETWEEN BEVAN PIKE Applicant AND KIWCHEAPCARS LTD Respondent

HEARING at AUCKLAND on 2 February 2023 (by audio-visual link) MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator S Haynes – Assessor

APPEARANCES

B Pike, Applicant

A Hafeez for the Respondent

DATE OF DECISION 16 February 2023

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DECISION OF THE TRIBUNAL

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Kiwicheapcars Ltd shall, within 10 working days of the date of this decision, rectify the fault that is causing the vehicle’s ABS and VSA warning lights to illuminate. _________________________________________________________________

REASONS

Introduction

[1] Bevan Pike purchased a 2010 Honda CR-Z for $9,970 from Kiwicheapcars Ltd on 3 February 2022. Kiwicheapcars was obliged to ensure that the vehicle had a warrant of fitness issued within one month of the vehicle being supplied to Mr Pike, unless Mr Pike acknowledged in writing that the warrant of fitness was older.[1] The vehicle’s warrant of fitness was issued on 22 November 2021,[2] and no such written consent was obtained from Mr Pike.
[2] The vehicle had a pre-existing fault. Its vehicle stability assistance (VSA) and anti-lock braking system (ABS) warning lights were illuminated when Mr Pike test drove the vehicle, but Mr Pike was reassured by Kiwicheapcars that this was a minor issue with a sensor, which Kiwicheapcars said it would fix before the vehicle was supplied to him. The lights returned shortly after purchase, but Mr Pike continued to drive the vehicle because he had been reassured that this was a minor issue. He has since discovered that the warning lights mean the ABS system is disabled and that the vehicle will fail a warrant of fitness with this fault present.
[3] Mr Pike has therefore applied to the Tribunal seeking orders that Kiwicheapcars rectify the ABS fault and obtain a warrant of fitness for the vehicle. Kiwicheapcars says that the vehicle had passed entry certification and compliance testing in November 2021 and was in good condition when it was sold. It also says that Mr Pike did not notify it of any problem until late 2022.

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 Pike entitled to under the CGA?

Issue 1: Has the vehicle been 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.

[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.

The vehicle had a pre-existing ABS fault

[8] The vehicle has an ABS fault. Mr Pike took the vehicle to KW Motors for assessment and an invoice dated 21 December 2022 states that KW Motors found a fault with the vehicle’s ABS pump motor, which it considers requires replacement at a cost of between $1,500 and $2,000. Mr Haynes, the Tribunal’s Assessor advises that the ABS and VSA warning lights will be triggered by a faulty ABS pump motor. Mr Haynes also advises that the vehicle will fail a warrant of fitness if the VSA light is illuminated.[3]
[9] That fault was present from the time of sale. Mr Pike says that the vehicle’s VSA and ABS warning lights have illuminated throughout his ownership. I accept Mr Pike’s evidence and found him to be a straightforward and clear witness.
[10] Kiwicheapcars submitted that the vehicle was roadworthy at the time of sale, but given Kiwicheapcars’ failure to provide an updated warrant of fitness as required by Land Transport Regulations, that submission is not supported by any corroborative evidence, and I prefer Mr Pike’s evidence that the vehicle was faulty at the time of sale.

The vehicle is not of acceptable quality

[11] I find that this vehicle has not been of acceptable quality for the purposes of s 6 of the CGA. Despite the vehicle’s price, age and mileage[4] the pre-existing ABS fault, which is a warrant of fitness failure, means the vehicle was not as free of minor defects as a reasonable consumer would consider acceptable.

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

[12] 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.

[13] Under s 18(2)(a) of the CGA, Mr Pike is entitled to have the ABS fault rectified within a reasonable time. Although he has now owned the vehicle for 12 months and has travelled nearly 30,000 km in that time, the fact that this fault was pre-existing means he is entitled to have it rectified.
[14] Mr Pike also sought orders requiring Kiwicheapcars to provide a new warrant of fitness for the vehicle. I decline to make those orders. Given the length of Mr Pike’s ownership and the distance travelled, the vehicle could well have developed other wear and tear issues that will cause it to fail a warrant of fitness. It would be unfair to require Kiwicheapcars to incur the cost of performing such repairs when it would otherwise have no liability for those issues under the CGA.

Outcome

[15] Kiwicheapcars shall, within 10 working days of the date of this decision, rectify the fault that is causing the vehicle’s ABS and VSA warning lights to illuminate.

B R Carter
Adjudicator

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[1] Land Transport Rule: Vehicle Standards Compliance 2002, r 9.12(3).

[2] See https://www.carjam.co.nz/car/?plate=PBD357

[3] See Part 8-1.30 of the Vehicle Inspection Requirements Manual: In-service certification (WoF and CoF).

[4] The stated odometer reading at the time of sale was 101,782 km.