Page v Crown Auto Ltd - Reference No. MVD 411/2024 [2024] NZMVDT 221 (1 November 2024)

Last Updated: 31 December 2024

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 411/2024 [2024] NZMVDT 221 BETWEEN CLEMENTINE ROSA PAGE Applicant AND CROWN AUTO LIMITED Respondent

HEARING at Christchurch on 16 October 2024 (by audio-visual link) MEMBERS OF TRIBUNAL

M Orange, Barrister – Adjudicator S Gregory S Haynes A Cate S Cousins – Assessor

APPEARANCES

Clementine Rosa Page, Applicant Lisa Elizabeth Robin, Witness for the Applicant

Neeja Arora, for the Respondent

DATE OF DECISION 1 November 2024

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DECISION OF THE TRIBUNAL

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A The claim for rejection is dismissed.

B Within 10 working days, Crown Auto is to:

1. undertake and satisfactorily complete the required repairs to stop the EPS warning light from displaying; and
2. pay Ms Park the sum of $97.50 for costs incurred in obtaining a diagnostic report.

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REASONS

Introduction

• [1] Ms Page purchased a 2005 Suzuki Swift (the Vehicle) for $3,600 on 21 June 2024. She has made a claim of a breach of the guarantee of acceptable quality in s 6 of the Consumer Guarantees Act 1993 (the CGA) and has sought remedies, including the rejection of the Vehicle.
• [2] Ms Page claims she made the purchase from Crown Auto Limited (Crown Auto). Crown Auto states the Vehicle was sold on behalf of Daman Preetsingh and that the sale was not made under the Motor Vehicle Sales Act 2003 (the MVSA) and is not subject to the provisions of the CGA.
• [3] Ms Page also claims that there was a misrepresentation made at the time of sale with regard to the condition of the tyres, a claim Crown Auto denies.

The issues

• [4] The issues requiring the Tribunal's consideration in this case are:

(a) Was the Vehicle purchased from a trader as defined in the MVSA and/or a supplier as defined in the CGA?

(b) If it was, was the Vehicle of acceptable quality for the purposes of s 6 of the CGA?

(c) If there has been a breach of s 6, what remedy is Ms Page entitled to under the CGA?

(d) Has Crown Auto engaged in misleading or deceptive conduct in breach of s 9 of the Fair Trading Act 1986 (the FTA)?

(e) If there has been a breach of s 9 of the FTA, what remedy is Ms Page entitled to?

Relevant background

• [5] The Vehicle was advertised for sale on Facebook Marketplace. The advert identified Neeraj Arora as the seller. Mr Arora described himself as the manager of Crown Auto, the sole shareholder and director of which is Sheenam Arora, Mr Arora's life partner. The Vehicle was described as having "near new tyres", "no issues", "drives good", "priced to sell", and "selling on behalf". The advert did not disclose on whose behalf the Vehicle was being sold. The viewing location given was Crown Auto's premises.
• [6] Ms Page viewed the Vehicle at Crown Auto. She was shown it by a female whom Mr Arora described as a Crown Auto employee. Ms Page stated that when she viewed the Vehicle, she was not informed that it was being sold on behalf of a third party. Her belief was that she was purchasing the Vehicle from Crown Auto. The Vehicle did not have a Consumer Information Notice (CIN), and the parties did not enter into a written vehicle offer of sale agreement (VOSA).
• [7] Ms Page decided to purchase the Vehicle. She paid a deposit of $200, with the balance to be paid when the Vehicle had a new warrant of fitness. The balance was then paid on 21 June 2024, and Ms Page took possession. Both the deposit and the balance were paid to Crown Auto's bank account.
• [8] On 11 August 2024, Ms Page experienced an electrical issue with the Vehicle. On 14 August 2024, she took the Vehicle to Automotive Aspects, who carried out a diagnostic assessment, for which Ms Page was charged $97.50. Automotive Aspects also noted: "Front tyres wearing, advise rotation/balance and alignment".
• [9] On 15 August 2024, she took the Vehicle to Vantage Auto Diagnostics, who advised that the spark plugs, coils, and leads should be replaced with genuine Suzuki parts. They provided a price to carry out the work.
• [10] On 17 August 2024, the Vehicle was taken to Crown Auto. Mr Arora agreed to carry out repairs using Crown Auto's mechanic. Ms Page informed him that genuine Suzuki parts should be used.
• [11] On 23 August 2024, following the repair carried out by Crown Auto, Ms Page took the Vehicle back to Vantage Auto Diagnostics to have it reassessed. They identified that genuine Suzuki parts had not been used and that the EPS system needed to be reset to record the change of coils. Soon thereafter, an issue with the EPS (electronic power steering) light started. Mr Cate, the Tribunal's Assessor, noted that without genuine Suzuki parts, even if the EPS was reset, it was likely that the EPS would, over time, continue to light up.
• [12] Ms Page informed Mr Arora of Vantage Auto Diagnostics findings. She advised Mr Arora that she wanted Vantage Auto Diagnostics to repair the car. Mr Arora responded, noting that his mechanic would have to look at the issue and reset the EPS. At this point, Ms Page rejected the Vehicle. She now seeks reimbursement of the $97.50 paid to Automotive Aspects, a further $121.93 paid to Vantage Auto Diagnostics for the diagnostic report completed on 23 August 2024, damages for a misrepresentation as to the condition of the tyres, or the rejection of the Vehicle.
• [13] Crown Auto takes the position that it is prepared to repair the Vehicle but that it should not have to pay the diagnostic costs incurred by Ms Page.

Was the Vehicle purchased from a trader and/or supplier?

• [14] The Tribunal has jurisdiction over a claim between a motor vehicle trader and a purchaser,^[1] and the Tribunal can inquire into any application or claim under the CGA “in respect of the sale of any motor vehicle” where one party is a motor vehicle trader.
• [15] I am satisfied that Crown Auto is a trader as defined in s 8 of the MVSA and that the transaction came within the definition of sale as defined in s 6 of the MVSA given the Vehicle was displayed and viewed at Crown Auto’s premises and that payment was made to Crown Auto.
• [16] I also note that the CGA applies to goods acquired from a supplier. The term supplier is defined in s 2 of the Act. The definition states that a supplier: "includes a person who, in trade, is acting as an agent for another, whether or not that other is supplying in trade". Crown Auto also comes within that definition.^[2] Again, as the Vehicle was viewed at Crown Auto's business premises, all engagement before and after the sale was with Crown Auto, and payment was made to its bank account, it is clear that Crown Auto was acting as agent and that it was the supplier for the purposes of the CGA.
• [17] On the basis of the above, I am satisfied that this is a sale of a motor vehicle by a motor vehicle trader and that I have jurisdiction.

Was the Vehicle of acceptable quality for the purposes of s 6 of the CGA?

• [18] 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.

(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.

[19] 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.

• [20] The advertisement stated "no issues", "drives good", "priced to sell". Those statements give the impression that the Vehicle was in good working order. At the same time, the Vehicle was first registered in 2005, has done 193,200 km, and the advert stated it was "priced to sell". The first two factors are relevant and need to be considered. The third, when read in conjunction with the other two, is not a statement about the condition of the Vehicle.
• [21] A little over seven weeks after Ms Page's purchase of the Vehicle, she experienced issues with the electronics, which she had diagnosed at her expense.
• [22] Taking the above factors into consideration, on balance, given the positive affirmations made about the Vehicle, I find, notwithstanding its age and mileage, that the Vehicle was not of acceptable quality and that there has been a breach of s 6 of the CGA.

What remedy is Ms Page entitled to under the CGA?

• [23] Ms Page seeks an order confirming a rejection of the Vehicle. Alternatively, she seeks an order for the Vehicle to be repaired by a repairer of her choice and for Crown Auto to pay for those repairs. She also asks the Tribunal to reimburse her for the two diagnostic reports she paid for.
• [24] To succeed with her claim that she is entitled to reject the Vehicle, Ms Page must establish that either the failure to comply with the guarantee is of a substantial character^[3] or that Crown Auto has refused, neglected or not succeeded in a reasonable period of time to remedy the failure.^[4]
• [25] I do not find that any of those requirements have been established. Firstly, the failure is not of a substantial character in that the issues are capable of being rectified. Secondly, Crown Auto has not refused to provide a remedy and has been attempting to do so. Finally, whilst a stalemate has now been reached regarding the repair of the Vehicle, that came about as a result of a claim being filed with the Tribunal and Ms Page's insistence that the repair of her choice be used.
• [26] Because Ms Page cannot reject the Vehicle, she asks that an order be made to allow her to have it repaired at a repairer of her choice at Crown Auto's expense. Under s 18 of the CGA, Crown Auto has the right to remedy the failure by repairing the Vehicle. It has attempted to do so and continues to offer to repair the Vehicle. Crown Auto has not taken an unreasonable position, and there has not been any undue delay. It follows that if a remedy is to be provided, it should, in accordance with ss 18 and 19 of the CGA, be an order that Crown Auto repair the Vehicle. Accordingly, an order to that effect will be made.
• [27] I note that the Tribunal's Aeessor and an independent diagnostic report have both stated that the EPS issue will not be resolved unless genuine Suzuki parts are used and that resetting the system will not be a permanent fix. As such, Crown Auto should consider using genuine parts to avoid any future or further claims.
• [28] Turning to the diagnostic reports Ms Page has paid for, the first was obtained to diagnose the issue. That report resulted in Crown Auto undertaking repairs. The second report was obtained by Ms Page to confirm that the repairs had been carried out using genuine Suzuki parts.
• [29] Under s 18(4) of the CGA, a consumer may obtain from the supplier damages for any loss or damage to the consumer resulting from a failure of a good to comply with a guarantee which was reasonably foreseeable as liable to result from the failure.
• [30] Ms Page obtained the first diagnosis report to establish the case of a fault that was a failure of the guarantee of acceptable quality provided. I find that the cost of the diagnosis report was reasonably foreseeable and that Ms Park should be reimbursed.
• [31] The second report was obtained for Ms Page's comfort. When it was obtained, the EPS issue had not reasserted itself, although it did soon thereafter. Had she returned to Crown Auto and requested that they carry out further repairs when it did, and if Crown Auto had then refused to investigate the issue, then obtaining a further assessment would have been reasonable. That was not the case, and, as such, I find that Ms Page should not be reimbursed for the second report.

Has Crown Auto engaged in misleading conduct?

• [32] The final issue for consideration is whether or not Crown Auto engaged in misleading or deceptive conduct. Section 9 of the FTA provides:
  9. Misleading and deceptive conduct generally

No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

• [33] The test for establishing a breach of s 9 was set out by the Supreme Court in Red Eagle Corp Ltd v Ellis:^[5]

The question to be answered in relation to s 9 ... is ... whether a reasonable person in the claimant's situation – that is, with the characteristics known to the defendant or of which the defendant ought to have been aware – would likely have been misled or deceived. If so, a breach of s 9 has been established.

• [34] The claim relates to the state and condition of the tyres. The advertisement represented the tyres as being "near new". The evidence put forward by Ms Page regarding the tyres comes from an assessment carried out by Automotive Aspects, which noted the front tyres were wearing. They advised rotation, balancing and alignment. They did not recommend replacement or make any statement as to the depth of tread, overall condition of the tyres, or how they were wearing.
• [35] For there to have been misleading or deceptive conduct, Ms Page has to establish on the balance of probabilities that Crown Auto made a misleading or deceptive statement at the time of purchase. The evidence before the Tribunal does not establish that. The comments made by Automotive Aspects were general in nature and do not establish that the tyres were not "near new" as represented.

Outcome

• [36] The claim for rejection is dismissed.
• [37] Within 10 working days, Crown Auto is to:

(a) undertake and satisfactorily complete the required repairs to stop the EPS warning light from displaying; and

(b) pay Ms Park the sum of $97.50 for costs incurred in obtaining a diagnostic report.

M Orange
Adjudicator

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^[1] Motor Vehicle Sales Act 2003, ss 89 and 90.

^[2] See also Walters v Taylor Marine Ltd HC Auckland CIV-2006-404-2772, 19 October 2009.

^[3] Consumer Guarantees Act 1989, s 21.

^[4] Consumer Guarantees Act 1989, s 18(2)(b)(ii).

^[5] Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].