Susser v AKL Wholesale Limited Reference No. MVD 317/2023 [2023] NZMVDT 270 (13 December 2023)

Last Updated: 26 January 2024

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 317/2023 [2023] NZMVDT 270 BETWEEN CATRIN SUSSER Applicant AND AKL WHOLESALE LTD Respondent

HEARING at AUCKLAND on 23 November 2023 (by audio-visual link) MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator S Gregory – Assessor

APPEARANCES

C Susser, Applicant A Susser for the Applicant S McHugh, Witness for the Applicant

A Griffin and V Foster for the Respondent

DATE OF DECISION 13 December 2023

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DECISION OF THE TRIBUNAL

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A Catrin Susser’s application to reject the vehicle is allowed.

2. AKL Wholesale Ltd shall, within 10 working days of the date of this decision, pay $5,900 to Ms Susser.

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REASONS

Introduction

[1] Catrin Susser purchased a 2008 Volkswagen Polo[1] for $5,900 from AKL Wholesale Ltd on 14 January 2023. Catrin Susser now seeks to reject the vehicle, alleging that the vehicle has a water leak through the windscreen and a power steering fault that AKL Wholesale has failed to remedy. AKL Wholesale says that it has performed repairs and that Catrin Susser has not given it a reasonable opportunity to inspect the vehicle since.

The issues

[2] 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) Has AKL Wholesale failed to rectify the vehicle’s defects within a reasonable time?
• (c) What remedy is Catrin Susser entitled to under the CGA?

Relevant background

[3] Catrin Susser purchased the vehicle to be used by her daughter Maija. On about 6 February 2023, Catrin Susser’s wife Andrea noticed that the carpet in the front passenger footwell and behind the front passenger seat was wet. The carpet was wet again on 13 February 2023, and about this time, Andrea Susser says that the power steering failed.
[4] The symptoms of that power steering failure have been consistent throughout Catrin Susser’s ownership of the vehicle. Andrea Susser and Sean McHugh, who is Maija’s father, both gave evidence that the fault causes the steering to go heavy and only occurs at low speeds while turning. The steering returns to normal when the ignition is cycled.
[5] Catrin Susser contacted AKL Wholesale and advised it of the power steering failure and the water ingress. She says that AKL Wholesale agreed to remedy both issues, focussing on the steering fault. Andrew Griffin from AKL Wholesale then collected the vehicle on 20 February 2023.
[6] Mr Griffin says that he noticed that the power steering was heavy. He says that the vehicle was then assessed by NT Autobody. Mr Griffin says that NT Autobody found that the 12 volt battery was “shot”, which it considered to be the likely cause of the steering fault. AKL Wholesale replaced the 12 volt battery following this diagnosis, Mr Griffin says. For reasons explained below, I consider that Mr Griffin is mistaken in his belief that the battery was replaced at this time. Instead, I consider that AKL Wholesale focussed solely on the water ingress during this assessment.
[7] An invoice dated 21 February 2023 records that NT Autobody performed a water leak test. That invoice makes no mention of any assessment or replacement of the vehicle’s battery. Based on the content of that invoice, it seems that the water leak test focussed on the rear of the vehicle and no external leaks were found from the rear passenger door, tailgate or tail lamp areas. NT Autobody did find a loose drain plug beneath the front passenger footwell carpet. It replaced the plug, and the vehicle was returned to Catrin Susser.
[8] Catrin Susser collected the vehicle on 22 February 2023. She says that the power steering fault returned on 25 February 2023, so the vehicle was returned to AKL Wholesale on 28 February 2023. There is no evidence to show that AKL Wholesale was asked to assess or repair any water leak when the vehicle was returned on 28 February 2023. Instead, the evidence shows that, at this time, Catrin Susser was complaining of the ongoing power steering problem, rather than the water leak.
[9] Although Mr Griffin gave evidence that the battery was replaced by NT Autobody on about 21 February 2023, I consider that he was mistaken as to the timing of that repair. Documents provided by Catrin Susser show that the battery was replaced in early March 2023. One of those documents shows that the vehicle was assessed by Car Inspection Services in early March 2023, and it found fault codes relating to the power steering system caused by low battery voltage. Catrin Susser also provided an invoice to AKL Wholesale from Buddy Autoparts dated 2 March 2023, which states that AKL Wholesale then paid $228.85 for a replacement DIN60 EFB battery. Those documents are consistent with AKL Wholesale replacing the 12 volt battery during the second repair attempt in early March 2023, rather than February 2023 as stated by Mr Griffin.
[10] Catrin Susser then collected the vehicle on 4 March 2023 and says that AKL Wholesale advised her that the steering fault and leak had been remedied. Catrin Susser says that AKL Wholesale advised her the that the steering fault was most likely caused by Maija draining the battery by listening to the car radio and charging her phone. As noted above, I am not satisfied that AKL Wholesale was asked to remedy the water leak at this time, so I do not accept her evidence that she was told on 4 March 2023 that the water leak was remedied.
[11] Catrin Susser says that the vehicle was not used much between late March and early May 2023 because she was overseas. On 12 May 2023, Catrin Susser says that she noticed the carpet in front of the rear passenger side seat was wet. The power steering fault had also returned. Catrin Susser than contacted AKL Wholesale and advised it of the ongoing issues.
[12] Sean McHugh, who is Maija’s father, then returned the vehicle to AKL Wholesale on 2 June 2023. AKL Wholesale had the vehicle until 26 June 2023. An invoice dated 17 June 2023 states that NT Autobody assessed the vehicle again. This time it found a leak from the right rear door, and it sealed the door frame and flange. It also tested and charged the battery.
[13] Mr McHugh collected the vehicle on 26 June 2023 and says that carpet was still soaking wet. Mr McHugh says that he took the vehicle to Drury Auto Services, which confirmed that the passenger side front carpet was wet. Mr McHugh then contacted AKL Wholesale, which asked to assess the vehicle again. Andrew Griffin of AKL Wholesale then offered to pay to have the vehicle transported to its premises for further assessment. Catrin Susser declined that offer and then rejected the vehicle.
[14] Catrin Susser has since had the vehicle assessed by PS Automotive on 22 September 2023, which found a fault code relating to the power steering assistance operation. PS Automotive then assessed the vehicle on 10 October 2023 and found the same fault code. It assessed the operation of the power steering pump, which it considered to be normal. It then found that the terminals on the power steering pump were “excessively dirty”. It cleaned those terminals and tested the vehicle. The fault code did not return.
[15] Andrea Susser and Mr McHugh also say that the vehicle has been assessed by panelbeaters, who have advised that it is likely that the water ingress is caused by water leaking through the windscreen seal.
[16] AKL Wholesale says that it has not had the opportunity to assess the vehicle recently, so it does not know whether the vehicle has the alleged ongoing issues. It says that it will refund the purchase price if the faults exist and the vehicle is not otherwise damaged, but it has not been given the opportunity to assess the vehicle.

Issue 1: Has the vehicle been of acceptable quality?

[17] 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.

[18] 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.
[19] The evidence presented by both parties shows that the vehicle had two faults – a water leak that is allowing water into the passenger side of the vehicle, and a fault that affected the operation of the power steering.
[20] The ongoing power steering fault was confirmed by RS Automotive. I am therefore satisfied that this was an ongoing fault that had not been rectified by AKL Wholesale.
[21] The cause of the water ingress also continues and has not been properly diagnosed. Although Catrin Susser says that panelbeaters believe that there is a leak through the windscreen, the Tribunal has not seen any written report from any qualified person setting out the cause of the ongoing water leak, so I am not satisfied that Catrin Susser has proven that the vehicle has a leak through the windscreen.
[22] However, I am satisfied that the vehicle has an ongoing water leak, and in that regard, I accept the evidence from Mr McHugh as to the ongoing water leak, which is corroborated by Drury Auto Services’ confirmation that the carpet in the vehicle remained wet when the vehicle was collected by Mr McHugh on 26 June 2023.
[23] Although a reasonable consumer must have realistic expectations as to the quality and durability of a vehicle of this price, age and mileage, I am satisfied that these faults mean the vehicle has not been of acceptable quality for the purposes of s 6 of the CGA because it was not as free of minor defects or as durable as a reasonable consumer would consider acceptable. A reasonable consumer would not expect such a vehicle to have a water leak and a fault that affects the operation of the power steering.

Issue 2: Has AKL Wholesale failed to rectify the vehicle’s defects within a reasonable time?

[24] Section 18(2)(b)(ii) of the CGA enables a consumer to reject goods where a supplier has been required to remedy a failure but refuses, fails or does not succeed in doing so within a reasonable time.
[25] Section 18 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.

[26] AKL Wholesale has had two opportunities to remedy the water ingress into the vehicle and has failed to do so. Although the cause of the water leak has not been diagnosed, I am satisfied that the evidence clearly shows that the vehicle is leaking, and that water is continuing to pool in the passenger side of the vehicle.
[27] AKL Wholesale also had three opportunities to remedy the power steering fault and failed to do so. On the first occasion, it appears to have made no meaningful attempt at finding any fault. On the second occasion, it concluded that the power steering fault was likely to be caused by the vehicle’s battery. On the third occasion, it appears to have simply recharged the battery and the power steering fault remained.
[28] Against this background, I am satisfied that Catrin Susser gave AKL Wholesale a reasonable opportunity to remedy both defects. It failed to do so. Catrin Susser is therefore entitled to reject the vehicle.

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

[29] Applying s 18(2)(b)(ii) of the CGA, Catrin Susser is entitled to reject the vehicle because AKL Wholesale has failed to remedy the vehicle’s defects within a reasonable time. Under s 23(1)(a), she is therefore entitled to a full refund of the purchase price.
[30] AKL Wholesale submits that Catrin Susser should not be entitled to reject the vehicle because it has not had a further opportunity to assess the vehicle and the vehicle may now be damaged. As set out above, AKL Wholesale has already had a reasonable opportunity to assess the vehicle and has failed to remedy its defects. Further, because AKL Wholesale has not accepted Catrin Susser’s rejection of the vehicle, she has no obligation to return the vehicle under s 22(2) of the CGA.
[31] Although s 22(2) is silent as to when the obligation to return rejected goods is triggered, I consider that the interpretation most consistent with the language of the section and the purpose of the CGA is that the obligation is only triggered if the supplier agrees to accept that rejection.[2] Where, as in this case, the supplier disputes the rejection, the consumer has no obligation to return the goods.[3]
[32] Catrin Susser has also provided several videos and photographs that show, aside from a small amount of mould due to water ingress, the vehicle has no damage that would affect her right to reject the vehicle.

Outcome

[33] Catrin Susser’s application to reject the vehicle is allowed and AKL Wholesale shall, within 10 working days of the date of this decision, pay $5,900 to Catrin Susser. Once that payment is made, the vehicle belongs to AKL Wholesale and Catrin Susser must make the vehicle available to be collected by AKL Wholesale.

B R Carter
Adjudicator

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[1] Registration plate MCD59.

[2] See Ian Gault and others (eds) Gault on Commercial Law (online ed, Thomson Reuters) at [CG22.03].

[3] In support of this finding, I note that in Cooper v Ashley & Johnson Motors Ltd [1997] DCR 170 (DC) at 184 the Court held that a consumer’s obligation to return the goods is a continuing one, and it would not be unreasonable for a consumer to hold on to rejected goods until such time as the purchase price is in fact refunded.