Villanueva v Kiwicheapcars Ltd - Reference No. MVD 468/2023 [2024] NZMVDT 10 (24 January 2024)

Last Updated: 27 February 2024

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 468 / 2023 [2024] NZMVDT 010 BETWEEN MARCIAL VILLANUEVA Applicant AND KIWICHEAPCARS LTD Respondent

MEMBERS OF TRIBUNAL

D Watson, Adjudicator

S Gregory, Assessor

HEARING at Auckland on 16 January 2024 (Mr Villanueva in person and Mr Ahmad by audio-visual link)

APPEARANCES

M Villanueva, Applicant R Ahmad, for the Respondent

DATE OF DECISION 24 January 2024

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DECISION OF THE TRIBUNAL

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The claim of Marcial Villanueva for rejection of his vehicle is dismissed.

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REASONS

Introduction

[1] Marcial Villanueva purchased a 2013 Subaru XV vehicle on 15 October 2023 from Kiwicheapcars Ltd (KL) for $25,000. The vehicle had then travelled 118,091 km. He wants to reject the vehicle because he says it has suffered from a number of faults which have not been rectified by Kiwicheapcars.
[2] Kiwicheapcars says that it has repaired all faults with the vehicle.

The issues

[3] 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 Kiwicheapcars failed to repair the faults within a reasonable time?

[4] During the hearing, I heard evidence from Mr Villanueva and Rafay Ahmad, the General Manager of KL.

Relevant background

[4] Mr Villanueva claims that the vehicle developed a number of faults very early on in his ownership of the vehicle. He noted on his application that these included:

1. faulty wheel bearings,
2. noisy engine (repaired)
3. broken air conditioning,
4. faulty handbrake lever,
5. vehicle suddenly stalled in the middle of traffic,
6. blasting grit located on the bonnet,
7. the vehicle had no coolant, the oil filter had not been replaced and the oil had not been topped up as at the date of purchase.

[5] In exploring the question of the vehicle’s faults in more detail with Mr Villanueva during the hearing, he revealed more information about the relevant sequence of events.
[6] He claims that the day he began driving the vehicle, he heard a very loud noise coming from the car. He therefore took the vehicle back to KL the day after purchase for repairs.
[7] The fault that was causing the noise was fixed three days later and he uplifted the vehicle on or about 20 October 2023.
[8] Unfortunately, the next day, the vehicle stalled at a traffic light. Further, he noticed that the air conditioning was not working and was making a very loud noise.
[9] There were additional alleged faults as well. These were that it was apparent there had been no recent service on the vehicle. The vehicle needed coolant, the oil filter had not been replaced and the oil had not been topped up at the date of purchase.
[10] Mr Villanueva stated that at the time of sale, he was told that there had recently been a full service. There was, however, no service sticker on the vehicle.
[11] Further, Mr Villanueva claims there was a fault with the handbrake.
[12] Mr Villanueva claims that, once again, he took the vehicle back to KL, where it has remained ever since. This was on or just after 22 October 2023.
[13] His evidence was that on a date sometime in December, after the application was filed, he turned up unannounced at the premises of KL and he there met Mr Ahmad.
[14] Mr Villanueva told Mr Ahmad that he wanted his money back. He claims that Mr Ahmad replied that he could not get a refund because the registration had now been paid. Mr Villanueva said that on the day he turned up unannounced, he saw the vehicle that day being driven from the premises of KL to its mechanic.
[15] Subsequently, he received a communication from KL to say that his vehicle had now been repaired but he has not uplifted the vehicle because he considers that he had rejected it.

KL’s position

[16] KL maintains that it did not tell Mr Villanueva that the vehicle would be sold with a full service. Mr Ahmad said that it would not do so unless there was a service sticker on the vehicle.
[17] Mr Ahmad’s evidence is that KL has now repaired the vehicle on two occasions. Repairs have been undertaken through its mechanic, Kelston Tyres & Car Repairs (Kelston Tyres). The first time was just after purchase. On that occasion, a wheel bearing was replaced. Four tyres that KL had already agreed to provide as part of the sale were also supplied at that time.
[18] KL produced an invoice from Kelston Tyres which verified that repair.
[19] Mr Ahmad then said that about a week after the vehicle was uplifted, it was brought back in again. According to Mr Ahmad this was therefore around 22 October 2023. Mr Villanueva was complaining of a broken air conditioning unit, very loud noises (which KL believed to be coming from the faulty air conditioning unit), and about the vehicle having stalled. The other faults mentioned above including the handbrake and the lack of a service appear not to have been raised.
[20] Mr Ahmad said that a few days later, Mr Villanueva turned up at the premises unannounced and said he wanted to reject the vehicle. This was early November 2023. The vehicle was then undergoing repairs. He denies that he told Mr Villanueva that KL could not allow a refund because the registration had been paid. He said that he told Mr Villanueva that KL would not allow the refund because it was entitled to repair the vehicle and that those repairs were taking place.
[21] Mr Ahmad accepted during the hearing that the faults that were allegedly repaired were all faults for which KL has responsibility of repair under the CGA.
[22] He says that within two weeks of Mr Villanueva bringing the vehicle in, it had been repaired and that an email dated 8 November 2023 was sent to him asking him to uplift his vehicle. When Mr Villanueva said he was rejecting the car, it went into storage.
[23] KL was requested to provide the invoice relating to the second set of repairs but it failed to do so.
[24] On 20 November 2023, a representative of KL emailed the Tribunal to advise that the vehicle had now been repaired but that Mr Villanueva had refused to uplift the vehicle. KL advised that it was nevertheless happy to offer Mr Villanueva the option of another vehicle, in good faith.
[25] Before I go on to consider the issues, I record that it is for Mr Villanueva to prove his case on the balance of probabilities. He must prove that it is more probable than not that the facts he alleges took place. Bare oral assertions without any form of proof can often be insufficient evidence. Corroborating documents such as invoices, videos, photographs and reports are often useful evidence to assist the Tribunal in determining what the relevant facts are, what the necessary diagnosis might be, whether repairs have been undertaken and what took place.

Issue 1: Was the vehicle of acceptable quality?

[26] Section 6 of the CGA imposes on suppliers and manufacturers of consumer goods a guarantee that the goods are of acceptable quality. Section 2 of the CGA defines “goods” as including vehicles.
[27] The expression "acceptable quality" is defined in s 7 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.

(4) Goods will not fail to comply with the guarantee of acceptable quality if—

(a) the goods have been used in a manner, or to an extent which is inconsistent with the manner or extent of use that a reasonable consumer would expect to obtain from the goods; and

(b) the goods would have complied with the guarantee of acceptable quality if they had not been used in that manner or to that extent.

(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.

[28] In considering whether or not goods meet the guarantee of acceptable quality, the Tribunal must consider the quality elements as set out in s 7(1)(a)-(e) of the CGA as modified by the factors set out in s 7(1)(f)-(j), from the perspective of a “reasonable consumer”. The test is an objective one; it is not a view of those factors from a purchaser’s subjective perspective.
[29] I now turn to deal with each of the alleged faults.

The faulty wheel bearing, faulty and noisy air conditioning unit and the fault that caused the vehicle to stall

[30] These were all accepted by KL to be faults for which it had the responsibility of repair.
[31] I find that these were all faults present in the vehicle at or closely to the time of sale. A reasonable consumer should expect a car to be free of such faults. A reasonable consumer of a second hand vehicle would have realistic expectations about its condition and the need for ongoing maintenance and repairs, but all of these faults have occurred too soon after purchase. The vehicle has not been as free from minor defects or as durable as would be expected by a reasonable consumer of a vehicle of this age, price and mileage.
[32] I therefore find the faulty wheel bearing, faulty and noisy air conditioning unit and the fault that was causing the vehicle to stall all amounted to a failure of the guarantee of acceptable quality.

The lack of a service

[33] The fact that there was no service of the vehicle at the time of purchase does not amount to a failure of the guarantee of acceptable quality. It is not uncommon for vehicles to be sold without a service.
[34] Mr Villanueva claims that he was told this vehicle would be supplied with a service. If he was indeed told this, then the failure to service the vehicle could amount to a breach of s 9 of the Fair Trading Act 1986. However, as noted above, the obligation is on Mr Villanueva to prove he was told the vehicle would come with a service. It is denied by KL and he has no corroborating evidence of that allegation, other than his own oral evidence. I therefore find that he has not proven on the balance of probabilities that it is more probable than not that KL told him the vehicle would come with a full service.
[35] The claim in relation to the lack of a service is declined.

The handbrake, blasting grit located on the bonnet, no coolant, oil filter needed replacement and the oil not topped up.

[36] Mr Villanueva has provided no evidence corroborating any of these issues or providing any diagnosis.
[37] I find that he has not proven on the balance of probabilities that there are any faults here.

Issue 2: Did KL fail to repair the faults within a reasonable time?

[38] Mr Villanueva will be entitled to reject the vehicle under s 18(2)(b)(ii) of the CGA if he can prove that KL failed to repair the faults within a reasonable time.
[39] It is Mr Villanueva’s case that KL failed to repair the faults having been given a reasonable opportunity to do so.
[40] 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.

[41] KL was asked to repair the initial fault with the wheel bearing and did so within a reasonable period of time. I find that no remedy lies with respect to the faulty wheel bearing issue.
[42] KL was asked to repair the faulty and noisy air conditioning unit and the fault that was causing the vehicle to stall on 22 October 2023. The vehicle was ready for pick up on 8 November 2023.
[43] In terms of the time taken to remedy these additional faults, I am satisfied that if the faults have indeed been repaired, then that was certainly a reasonable period of time. Mr Villanueva has, however, provided no corroborating evidence that the faults have not been repaired. This is because he has not uplifted his vehicle, mistakenly believing that he had a right to reject the vehicle when he did not.
[44] I find that no remedy lies here because Mr Villanueva has not provided evidence that the additional repairs were not undertaken. Mr Villanueva is reminded that he has the obligation of proving his case on the balance of probabilities.
[45] For completion I mention that had the vehicle’s defects amounted, either individually or collectively, to a failure of a substantial character, then Mr Villanueva would also have had the right to reject. 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.

[46] Section 21(a) is the provision that arises. I am not satisfied that a reasonable consumer fully acquainted with the true nature and extent of the faults would have declined to purchase the vehicle. Not all pre-existing defects are a failure of a substantial character. The Tribunal regularly encounters cases where vehicles are supplied with pre-existing defects. A common feature of those cases is that the purchasers are often prepared to allow the supplier to rectify those defects, particularly where the repairs are straightforward, and the defect is unlikely to return once repairs are affected.
[47] Also for completion, I mention that in the event Mr Villanueva discovers that the repairs have indeed not been undertaken, he is protected by the guarantee in s 28 of the CGA that services are carried out with reasonable care and skill. Further, any fresh issues could be the subject of a further application.

Outcome

[48] Mr Villanueva’s claim for rejection of the vehicle at this time is dismissed.

DATED at AUCKLAND this 24th day of January 2024

D Watson
Adjudicator