Kumar v Vehicle Logistics Ltd - Reference No. MVD 019/2023 [2023] NZMVDT 35 (9 March 2023)

Last Updated: 25 April 2023

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 019/2023 [2023] NZMVDT 035 BETWEEN SHAYAL KUMAR Applicant AND VEHICLE LOGISTICS LTD Respondent

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

B R Carter, Barrister – Adjudicator S Haynes – Assessor

APPEARANCES

S Kumar, Applicant

T McCartney and R Martin for the Respondent J Stokes, Witness for the Respondent

DATE OF DECISION 9 March 2023

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DECISION OF THE TRIBUNAL

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Shayal Kumar’s application is dismissed.

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REASONS

Introduction

[1] Shayal Kumar purchased a 2016 SsangYong Korando for $18,990 from Vehicle Logistics Ltd on 21 December 2022. Ms Kumar was almost immediately unhappy with the vehicle’s fuel consumption. Believing that she was entitled to return the vehicle, Ms Kumar then contacted Vehicle Logistics and advised it that she was returning the vehicle and wanted a refund of the purchase price. Vehicle Logistics has declined to refund the purchase price.

Relevant background

[2] Before purchasing the vehicle, Ms Kumar says that she spoke with Jack Stokes, a salesperson at Vehicle Logistics, who told her that she would be able to return the vehicle if she was unhappy with it. Ms Kumar says that Mr Stokes told her that she would not have to pay anything if she returned the vehicle.
[3] I heard evidence from Mr Stokes. Mr Stokes says that Ms Kumar did ask about trading in the vehicle in about 12 months’ time, but there was no discussion otherwise about her returning the vehicle if she was unhappy with it. He also says that he does not recall telling Ms Kumar that she would not have to pay anything if she returned the vehicle.
[4] On about 2 January 2023, Ms Kumar drove from Papakura to Blue Spring, near Putaruru and then back to Papakura – a round journey of about 320 km. She says that the vehicle used an excessive amount of fuel during that journey, and she had to refuel about halfway through the return journey. Ms Kumar provided information that shows she purchased 40.72 litres of 91 octane fuel on the evening of 2 January 2023. The following day she purchased a further 26.98 litres of 91 octane fuel. Ms Kumar considered this fuel consumption to be excessive, so she then contacted Vehicle Logistics and asked to return the vehicle.
[5] Vehicle Logistics declined to accept the return of the vehicle for a full refund of the purchase price. It offered to pay Ms Kumar $10,000 for the vehicle, provided she purchase another vehicle from it. Ms Kumar declined that offer and then brought this claim.
[6] Vehicle Logistics says that it has since tested the vehicle’s fuel consumption and it is normal. After the hearing it provided photographs of the vehicle’s dashboard display, which show recent fuel consumption of 8.3 litres per 100 km before the hearing. Tom McCartney, the Sales Manager at Vehicle Logistics, also drove the vehicle for 50 km after the hearing and provided photographs to show that the fuel consumption was 8.0 litres per 100 km during that drive.

The issues

[7] Against this background, the issues requiring the Tribunal’s consideration in this case are:

• (a) Did Ms Kumar have a legal right to return the vehicle within five days?
• (b) Has the vehicle been of acceptable quality for the purposes of s 6 of the Consumer Guarantees Act 1993 (the CGA)?
• (c) Did Vehicle Logistics nonetheless agree that Ms Kumar could return the vehicle for a full refund of the purchase price?

Issue 1: Did Ms Kumar have a legal right to return the vehicle within five days?

[8] Ms Kumar believed that there may be a law that allows for a form of cooling off period, during which a purchaser can change its mind and seek a refund of the purchase price already paid within five days of purchase.
[9] Ms Kumar borrowed money to purchase the vehicle, and the Credit Contracts and Consumer Finance Act 2003 (the CCCFA) does provide the right to cancel a consumer credit contract within five working days of the date that disclosure of the contract is made.[1] Ms Kumar was therefore entitled to cancel the loan she entered into to purchase the vehicle. However, that cancellation right extends to the consumer credit contract only, not to the contract to purchase the motor vehicle. With respect to the purchase of a motor vehicle, there is no such law.
[10] Ms Kumar therefore had no legal entitlement to seek a refund of the purchase price simply because she had changed her mind.
[11] Some laws, such as the Fair Trading Act 1986 or the Contract and Commercial Law Act 2017, do give the purchaser of a motor vehicle the right to attempt to cancel a contract to purchase a motor vehicle and obtain a refund of the purchase price if they have been induced into purchasing the vehicle by misleading or deceptive conduct or if the other party has breached an important term of that contract. However, Vehicle Logistics has not engaged in misleading or deceptive conduct or breached any terms of the contract to purchase the vehicle.

Issue 2: Has the vehicle been of acceptable quality?

[12] Under s 6(1) of the CGA, Ms Kumar may be entitled to return the vehicle for a refund of the purchase price if it is not of acceptable quality and its defects are a failure of a substantial character.
[13] “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] 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.
[15] Mr Haynes, the Tribunal’s Assessor, advises that the vehicle’s usual fuel consumption should be approximately 8 to 9.5 litres per 100 km – depending on factors like the way the vehicle is driven, the terrain over which it is driven and loading.
[16] As the Applicant, Ms Kumar bears the onus of proving that the vehicle is using an excessive amount of fuel. Ms Kumar’s evidence on the vehicle’s fuel consumption is inconclusive. The fuel receipts show the amount of fuel purchased, but the evidence does not prove the distance that was travelled between fuel purchases or the vehicle’s actual fuel consumption. Ms Kumar has also not had the vehicle assessed by a suitably qualified technician to prove any excessive fuel consumption.
[17] The evidence provided by Vehicle Logistics is more conclusive. The photographs of the dashboard display show that the current fuel consumption is between 8 and 8.3 litres per 100 km. That is normal fuel consumption.
[18] In light of the evidence presented by Vehicle Logistics, which shows normal fuel consumption, I find that Ms Kumar has not proven that the vehicle is consuming an excessive amount of fuel. Ms Kumar’s claim under the CGA is therefore dismissed.

Issue 3: Did Vehicle Logistics agree that Ms Kumar could return the vehicle?

[19] Mr Stokes denies that he agreed that Ms Kumar could return the vehicle at any time for a full refund of the purchase price. He says that he only discussed the possibility of trading the vehicle in at a later date if Ms Kumar wanted to upgrade her vehicle.
[20] It is Ms Kumar who must prove on the balance of probabilities that Vehicle Logistics agreed that she could return the vehicle if she was unhappy with it. Given the conflicting evidence from Ms Kumar and Mr Stokes, and the high unlikelihood that any motor vehicle trader will agree to accept the return of a vehicle for a full refund at any time if the purchaser changes their mind, I cannot be satisfied that she has done so.
[21] Instead, I consider that there was a real possibility that the discussion between Mr Stokes and Ms Kumar was about the potential to trade in the vehicle at a future date, and that Ms Kumar has misunderstood that discussion as meaning that she could return the vehicle at any time for a full refund of the purchase price.
[22] I therefore find that Vehicle Logistics did not agree that Ms Kumar could return the vehicle at any time for a full refund of the purchase price. Ms Kumar’s claim is therefore dismissed.

B R Carter
Adjudicator

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[1] Credit Contracts and Consumer Finance Act 2003, s 27(1).