Hussainmiya v Autolink Cars Ltd - Reference No. MVD 472/2022 [2023] NZMVDT 55 (4 April 2023)

Last Updated: 25 May 2023

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 472/2022 [2023] NZMVDT 055 BETWEEN DILSHAN HUSSAINMIYA Applicant AND AUTOLINK CARS LTD Respondent

HEARING at AUCKLAND on 23 March 2023 MEMBERS OF TRIBUNAL

B R Carter, Barrister – Adjudicator S Haynes – Assessor

APPEARANCES

D Hussainmiya, Applicant Dr A Raj, Witness for the Applicant

S Ryan and H Schmidt, for the Respondent

DATE OF DECISION 4 April 2023

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

A Dilshan Hussainmiya’s application to reject the vehicle is dismissed.

B Autolink Cars Ltd shall, within 10 working days of the date of this decision:

(a) remove all mould and surface corrosion from the interior of the vehicle
(b) repair the faulty DC charge port indicator
(c) perform all repairs required to return the roof to an acceptable standard; and
(d) properly refit the driver’s door seal.

_________________________________________________________________

REASONS

Introduction

[1] Dilshan Hussainmiya wants to reject the 2015 BMWi3 REX electric vehicle he purchased for $35,995 from Autolink Cars Ltd (which trades as Autolink EV) on 7 October 2022. Mr Hussainmiya says the vehicle had a pre-existing water leak, which has caused mould to form inside the vehicle and corrosion to form on metal components, and a faulty DC charge port indicator. Mr Hussainmiya also says that Autolink EV has resurfaced the roof after fixing the water leak and the quality of the paintwork is poor and has failed to properly reinstall a driver’s door seal when it repaired the vehicle. Mr Hussainmiya wants to return the vehicle for a refund of the purchase price.
[2] Autolink EV says that Mr Hussainmiya should not be entitled to reject the vehicle. Autolink EV says that it has repaired the water leak and is prepared to repair the faulty DC charge port indicator, remedy any mould, and remove any surface corrosion present on metal fixtures, mounts or components. It also says that it is prepared to perform any remediation work required to bring the roof to an acceptable standard.

Relevant background

The water leak and DC charge port indicator

[3] Mr Hussainmiya first noticed water leaking into the vehicle on about 25 October 2022, less than three weeks after purchase. He says that his son could smell dampness in the vehicle and his wife commented on an unpleasant odour.
[4] The following day Mr Hussainmiya noticed that the outside of his computer bag, which had been stored in the boot, was damp. Mr Hussainmiya initially thought that the dampness was caused by a water spill, so he continued to use the vehicle.
[5] On 12 November 2022 he noticed a damp smell again. Mr Hussainmiya then noticed water leaking into the right-hand side of the boot and water on the 12-volt power socket. Mr Hussainmiya returned the vehicle to Autolink EV for inspection. He says that he was advised by Henry Schmidt, a director and owner of Autolink EV, to take the vehicle home and run water from a hose over the exterior to see where the water was coming from.
[6] Mr Hussainmiya did this but was unable to find any leak. Mr Hussainmiya continued to use the vehicle and again noticed water in the rear of the vehicle whenever it rained. Mr Hussainmiya became increasingly concerned that a water leak into an electric vehicle could be a significant safety issue as he was worried that water might leak into the high voltage batteries beneath the vehicle.
[7] On 18 November 2022 Mr Hussainmiya sent photographs to Autolink EV showing water leaking into the vehicle. Mr Hussainmiya returned the vehicle to Autolink EV on 23 November 2022 and says that Mr Schmidt removed a rear internal panel and found mould forming. Mr Hussainmiya says that Mr Schmidt immediately agreed that the leak needed to be addressed. Mr Hussainmiya says that Mr Schmidt then discovered that the water was leaking through the sunroof. Mr Schmidt then asked Mr Hussainmiya to follow him to a workshop in Newmarket, where Mr Schmidt used an air compressor to clean the sunroof channels. Mr Hussainmiya says that Mr Schmidt advised him that the compressed air should clear any blockage that was causing the leak.
[8] The leak continued and, on 24 November 2022, Autolink EV told Mr Hussainmiya to take the vehicle to BM Workshop in Grey Lynn for assessment. By this time, Mr Hussainmiya had also noticed that the DC charge port indicator was faulty, because it would not flash while the vehicle’s electric batteries were being charged. Autolink EV agreed to assess and remedy that issue as well. On 28 November 2022, Sarah Ryan, of Autolink EV, advised Mr Hussainmiya that BM Workshop had found the cause of the leak, but it did not perform leak repairs, so the vehicle was being sent to Auto Interior Ltd.
[9] On 29 November 2022, Mr Hussainmiya attempted to reject the vehicle. Autolink EV declined to accept that rejection, so Mr Hussainmiya insisted that the vehicle should be repaired by a “certified repairer”. Mr Hussainmiya also asked Autolink EV to provide evidence that the vehicle was repaired by a certified repairer and to provide the “Auction grade sheet” and “compliance certificate details” for the vehicle.
[10] On 5 December 2022, Mr Hussainmiya contacted Autolink EV and asked for an update on the repairs. After some delay, the vehicle was ready to be collected by 14 December 2022, although Mr Hussainmiya was advised that the faulty DC charge port indicator would not be fixed until after Christmas, as BM Workshop (which could perform that repair) had no vacancies until after Christmas. Mr Hussainmiya was happy to wait for that repair to be performed.
[11] However, Mr Hussainmiya was not happy with the condition of the vehicle when it was returned to him. Although the leak appears to have been fixed, he discovered mould under the rear seats and surface corrosion on metal mountings beneath the seats. Mr Hussainmiya then emailed Autolink EV on 16 December 2022 and rejected the vehicle.
[12] Mr Hussainmiya is also concerned about the vehicle’s structural integrity. The vehicle is a carbon fibre composite frame, with the structural components bonded together by adhesives. I understood Mr Hussainmiya to be concerned that water may have leaked through the joint between the roof and the structure and that he was concerned that the structural integrity of the vehicle had been compromised.
[13] Autolink EV says that the vehicle’s structural integrity is intact. It says that the water leak was from the corner of the sunroof frame, which is not structural, and was easily remedied with a polyurethane seal once discovered. It provided invoices from BM Workshop, Brett Schmidt (who repaired the sunroof leak) and Auto Interiors Ltd relating to the diagnosis and remediation of the water leak and damage to the internal upholstery

The roof laminate

[14] Mr Hussainmiya was also unhappy with the condition of the vehicle’s roof. It seems that Autolink EV had noticed that the laminate on the roof was bubbling and lifting, so it resurfaced the roof. Autolink EV says that the replacement topcoat was then affected by rain before it had fully cured, and it agrees that the appearance is not acceptable. Autolink EV says that it resurfaced the roof as a goodwill gesture to Mr Hussainmiya and it is happy to resurface the roof again to bring it to an acceptable standard.

The driver’s door seal

[15] Mr Hussainmiya also says that, following the water leak repair, the seal between the roof and driver’s door is now loose and allows air into the vehicle. He says that the vehicle now makes a howling noise while driving. Autolink EV says that this noise is most likely caused by two damaged clips, which it is prepared to replace.

The issues

[16] 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 Autolink EV failed to use reasonable care and skill when providing a service to Mr Hussainmiya, in breach of s 28 of the CGA?
• (c) Has Autolink EV failed to rectify the vehicle’s defects within a reasonable time?
• (d) Are the vehicle’s defects a failure of a substantial character?
• (e) What remedy is Mr Hussainmiya entitled to under the CGA?

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.

The water leak, mould, surface corrosion and DC charge port indicator

[19] The vehicle has not been of acceptable quality for the purposes of s 6 of the CGA because it had a pre-existing water leak through the sunroof frame that has damaged upholstery in the rear of the vehicle and caused mould to form on the floor carpet and surface corrosion to some metal components. The DC charge port indicator is also faulty. A reasonable consumer would not expect such issues to be present in a seven-year-old $35,995 vehicle.

The roof laminate and loose driver’s door seal

[20] The condition of the roof and the loose driver’s door seal do not breach the guarantee of acceptable quality. The evidence shows that the roof was in acceptable condition at the time of sale and its current condition was caused by work performed on the vehicle by Autolink EV after sale. Likewise, the driver’s door seal was not loose at the time of sale and appears to have been caused by the leak repairs.
[21] Defects caused solely by post-sale repairs do not breach the guarantee of acceptable quality in s 6 of the CGA. Instead, because those issues were caused by post-sale repairs, s 28 of the CGA applies.

Issue 2: Has Autolink AV failed to use reasonable care and skill?

[22] Section 28 of the CGA requires that, where services (including repair services) are supplied to a consumer, there is a guarantee that the service will be carried out with reasonable care and skill.
[23] Autolink EV provided a repair service to Mr Hussainmiya – it repaired the water leak and resurfaced the roof after discovering that the laminate was bubbling and lifting. That service was not performed with reasonable care and skill. The condition of the roof and the driver’s door seal are not acceptable for a vehicle of this age and price. I therefore find a breach of s 28 of the CGA.

Issue 3: Has Autolink EV 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 to comply with the guarantee of acceptable quality in s 6 of the CGA (but not a breach of s 28) 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] Mr Hussainmiya alleges that Autolink EV has taken too long to rectify the water leak, mould and corrosion. By a small margin, I disagree. Water leaks of this nature can be difficult to identify and rectify and I am satisfied that the efforts made by Autolink EV were reasonable and timely in the circumstances.
[27] In reaching this conclusion, I acknowledge that Autolink EV has not fully completed the job. There is still mould on the carpet beneath the rear seats and surface corrosion on some metal parts that requires removal. Those outstanding issues are minor, and peripheral to the most significant issue – the water leak – and I consider that Autolink EV should be given one last opportunity to complete the repair.

Issue 4: Are the vehicle’s defects a failure of a substantial character?

[28] A failure of a substantial character is defined in s 21 of the CGA:

21. 21 Failure of substantial character

For the purposes of section 18(3), a failure to comply with a guarantee is of a substantial character in any case where—

(a) the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of the failure; or

(b) the goods depart in 1 or more significant respects from the description by which they were supplied or, where they were supplied by reference to a sample or demonstration model, from the sample or demonstration model; or

(c) the goods are substantially unfit for a purpose for which goods of the type in question are commonly supplied or, where section 8(1) applies, the goods are unfit for a particular purpose made known to the supplier or represented by the supplier to be a purpose for which the goods would be fit, and the goods cannot easily and within a reasonable time be remedied to make them fit for such purpose; or

(d) the goods are not of acceptable quality within the meaning of section 7 because they are unsafe.

[29] The vehicle’s defects are not a failure of a substantial character for the following reasons:

• (a) The evidence does not show that the vehicle is unsafe. Mr Haynes, the Tribunal’s Assessor, advises that a water leak into the rear of the vehicle will not damage the vehicle’s high voltage batteries, which are encased in a sealed unit and will not be affected by a water leak.
• (b) The water leak, mould, surface corrosion and DC charge port indicator fault have all been, or can be, remedied and once repaired, should not result in any ongoing issues. In that regard, Mr Haynes advises that there is no evidence to show that the vehicle’s structural integrity has been compromised in any way by the water leak or any repair performed by Autolink EV.
• (c) The vehicle is seven years old, and a reasonable consumer should understand that a vehicle of that age may have issues that require repair. Certainly, a reasonable purchaser would expect the supplier to remedy the water leak, mould, surface corrosion and DC charge port indicator fault. However, given nature of the issues present in this vehicle, I am not satisfied that a reasonable consumer would have declined to purchase this vehicle if they had known of the issues before purchasing the vehicle.

Issue 5: What remedy is Mr Hussainmiya entitled to under the CGA?

[30] The relevant remedies for the breach of the guarantee of acceptable quality are contained in s 18 of the CGA, as set out above. For the reasons explained earlier in this decision, Mr Hussainmiya is not entitled to reject the vehicle. Instead, under s 18(2)(a), he is entitled to have the outstanding breaches of the acceptable quality guarantee – the DC charge port indicator fault, mould beneath the seats and surface corrosion on interior metal surfaces - remedied within a reasonable time.
[31] Mr Hussainmiya is also entitled to a remedy under s 32 of the CGA for Autolink EV’s failure to perform repair services with reasonable care and skill when repairing the roof and refitting the driver’s door seal.

Outcome

[32] Mr Hussainmiya’s application to reject the vehicle is dismissed, and Autolink EV shall, within 10 working days of the date of this decision:

• (a) remove all mould and surface corrosion from the interior of the vehicle
• (b) rectify the faulty DC charge port indicator
• (c) perform all repairs required to return the roof to an acceptable standard; and
  
• (d) properly refit the driver’s door seal.
  

B R Carter
Adjudicator