Basabe v Kiwicheapcars Limited - Reference No. MVD 463/2024 [2024] NZMVDT 256 (21 November 2024)

Last Updated: 29 December 2024

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 463/2024 [2024] NZMVDT 256 BETWEEN NIDA BASABE Applicant AND KIWICHEAPCARS LIMITED Respondent

HEARING at AUCKLAND on 19 November 2024 MEMBERS OF TRIBUNAL

C Euden – Adjudicator S Gregory – Assessor (by audio-visual link)

APPEARANCES

N Basabe, Applicant E Basabe, Witness for the Applicant

R Ahmed, for the Respondent

DATE OF DECISION 21 November 2024

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DECISION OF THE TRIBUNAL

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A Ms Basabe’s claim is dismissed.

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REASONS

Introduction

• [1] Ms Basabe purchased a 2013 Nissan Serena hybrid for $17,300 from Kiwicheapcars Limited (Kiwicheapcars) on 20 January 2024.
• [2] Ms Basabe says the vehicle had faults and she wishes to reject it.
• [3] Kiwicheapcars says it repaired the vehicle and Ms Basabe should not be able to reject it. It also says that Ms Basabe failed to collect the repaired vehicle and it has since been repossessed because Ms Basabe failed to make repayments under her loan with UDC Finance Limited (UDC Finance) to purchase the vehicle.

The issues

• [4] 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 refused, neglected, or failed to rectify the vehicle’s defects within a reasonable time?

(c) Are the vehicle’s defects a failure of a substantial character?

Relevant background

• [5] Ms Basabe purchased the 2013 vehicle for $17,300 on 20 January 2024. The vehicle had travelled 114,890 km when it was purchased. Ms Basabe funded the purchase via a loan with UDC Finance.
• [6] Ms Basabe says that Kiwicheapcars’ salesperson said the following issues would be fixed before the vehicle was delivered to her (together, the four issues):

(a) a worn seatbelt would be replaced;

(b) worn tyres would be replaced;

(c) a large scratch along the side of the body would be buffed out;^[1] and

(d) the engine oil would be replaced.

• [7] For Kiwicheapcars, Mr Ahmed noted that the vehicle Ms Basabe purchased was over ten years old with high mileage. In those circumstances, Kiwicheapcars disagrees that its salesperson would have agreed to any of the repairs at [6] above. Instead, Mr Ahmed says the salesperson specifically said the tyres would not be replaced as they had just passed a warrant of fitness (WOF) and would likely pass the next one as well. Mr Ahmed said given the age of the vehicle, it is to be expected to have scratches and Kiwicheapcars’ salesperson would not have agreed to buffing the vehicle. Kiwicheapcars also has no records, prior to 4 June 2024, of any discussion with Ms Basabe regarding the seatbelt or engine oil.
• [8] Ms Basabe says the vehicle was delivered to her on the day she purchased it. When it was delivered, she says she noticed that the four issues at [6] above had not been fixed. She said she did not follow up with Kiwicheapcars to have the four issues fixed.
• [9] Around three months later, on 5 May 2024, Ms Basabe went to drive the vehicle, but the vehicle would not start. On or about 7 May 2024, Ms Basabe went to Kiwicheapcars’ premises and told Mr Ahmed that the vehicle would not start. Mr Ahmed asked her to bring in the vehicle, but Ms Basabe wanted a technician to inspect the vehicle at her property.
• [10] Kiwicheapcars was only able to send a technician to Ms Basabe’s property a week or two later. Mr Ahmed says that the technician determined that the battery voltage was low but was unable to fix the issue as he did not have a jump start pack or spare battery with him. Kiwicheapcars says the vehicle was not able to start because the starter battery was low due to not having been started for a while. Ms Basabe was asked to return the vehicle to Kiwicheapcars’ premises so it could replace the battery.
• [11] Ms Basabe did not immediately arrange for the vehicle to be returned to Kiwicheapcars’ premises. It was not until she received advice from the Citizens Advice Bureau on 4 June 2024 that she arranged for the vehicle to be towed to Kiwicheapcars. By that time, Ms Basabe had cancelled her vehicle insurance as she saw no reason to continue insuring the vehicle when she was unable to drive it.
• [12] When Ms Basabe had the vehicle towed to Kiwicheapcars on 4 June 2024, she told Mr Ahmed that she wanted the four issues at [6] above fixed. She repeated her request in an email to Kiwicheapcars on 11 June 2024 and advised Kiwicheapcars by separate email that day that it should make sure the vehicle could pass a WOF before it returned the vehicle to her.
• [13] Kiwicheapcars fixed the issue with the vehicle not starting by replacing the vehicle’s starter battery and notified Ms Basabe that the vehicle was ready for collection on 14 June 2024.
• [14] Ms Basabe went to collect the vehicle on 14 June 2024 but saw that the four issues had not been fixed and that the vehicle did not have a new WOF. Ms Basabe refused to take the vehicle back and insisted on the four issues being resolved, together with a new WOF.
• [15] Although Kiwicheapcars did not consider it was required to do so, in an attempt to resolve the matter and have Ms Basabe collect the vehicle, it:

(a) carried out an engine oil service on the vehicle;

(b) changed two of the vehicle’s tyres;

(c) replaced the seatbelt; and

(d) arranged for a new WOF inspection.

• [16] Mr Ahmed says that when Kiwicheapcars took the vehicle for its WOF inspection on 20 June 2024, Ms Basabe had already had the vehicle deregistered. As a result, the new WOF was unable to be applied to the vehicle. In correspondence prior to the hearing, he said:

The customer visited NZTA Agent and decided to cancel the registration of the vehicle and hence a new wof could not be put on. She can however get a Re Compliance done at any NZTA Agent to make the vehicle the roadworthy.

• [17] At the hearing, Ms Basabe was asked why she had deregistered the vehicle. She said she had done so because the vehicle was not running and was no longer in her possession. I am advised by Mr Gregory, the Tribunal’s assessor, that the vehicle will now need to go through an entry compliance inspection before it can be re-registered.
• [18] Mr Ahmed told Ms Basabe that the vehicle was ready for collection on 20 June 2024. He also told her that as she had deregistered the vehicle, she would have to re-register it for the WOF to be applied. She did not collect the vehicle.
• [19] In the following weeks, Mr Ahmed attempted to contact Ms Basabe to tell her that she needed to collect the vehicle; eventually he advised her that as Kiwicheapcars had limited storage space it would need to start charging her a storage fee. Ms Basabe never collected the vehicle.
• [20] From 5 July 2024 Ms Basabe also stopped making her loan repayments. UDC Finance subsequently repossessed the vehicle on or after 24 September 2024.^[2]

Issue 1: Has the vehicle been of acceptable quality?

• [21] Ms Basabe has applied to this Tribunal to reject the vehicle. In the circumstances, s 18 of the CGA will allow her to do so if:

(a) the vehicle did not comply with the guarantee of acceptable quality; and

(b) Kiwicheapcars refused, neglected or failed to rectify that failure within a reasonable time.

• [22] 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”.
• [23] “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.

• [24] 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 price, age and mileage of the vehicle are relevant considerations when determining whether a vehicle is of acceptable quality. A reasonable consumer should also understand that vehicles can develop defects as they are used and may require ongoing maintenance that can sometimes be expensive to repair or perform.
• [25] I have considered whether the four issues at [6] above, as well as the vehicle’s starter battery fault, breach the guarantee of acceptable quality.
• [26] I accept that the worn seatbelt and battery fault breach the guarantee of acceptable quality. I am advised by Mr Gregory that the worn seatbelt would likely not pass a WOF inspection. Further, the battery fault occurred only a few months after the vehicle was purchased. In the circumstances, I consider a reasonable consumer would not find those faults acceptable given the price paid for the vehicle ($17,300).
• [27] I find the remaining alleged faults, being the worn tyres, dirty oil, and scratch alongside the vehicle, do not breach the guarantee of acceptable quality.
• [28] Ms Basabe provided no evidence of the worn tyres, so I am unable to determine whether they breached the guarantee of acceptable quality.
• [29] Ms Basabe provided a single photo of the engine oil dip stick with some dirty oil on it; she gave evidence at the hearing that the photo was taken on 30 July 2024 (six months after she purchased the vehicle). Mr Gregory advises me that a vehicle’s engine oil can become dirty within a week of the oil being replaced, particularly for older vehicles. In those circumstances, I am not persuaded that the vehicle oil was dirty when Ms Basabe purchased the vehicle.
• [30] Finally, Ms Basabe provided insufficient evidence of the alleged large scratch. For Kiwicheapcars, Mr Ahmed said the vehicle had a few scratches, consistent with its age. In the absence of evidence, I am unable to find that the vehicle has a scratch which is a breach of acceptable quality.

Issue 2: Has Kiwicheapcars refused, neglected, or failed to rectify the vehicle’s defects within a reasonable time?

• [31] As I have found that the worn seatbelt and battery fault breach the guarantee of acceptable quality, I must consider whether Kiwicheapcars refused, neglected, or failed to rectify the failures within a reasonable time.
• [32] 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.
• [33] 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.

• [34] I find that Kiwicheapcars was made aware of the vehicle’s:

(a) starter battery fault on 7 May 2024; and

(b) worn seatbelt on 4 June 2024.^[3]

• [35] Kiwicheapcars repaired both issues after Ms Basabe returned the vehicle to it on 4 June 2024. The vehicle was available for collection with both faults remedied on 20 June 2024, meaning Kiwicheapcars had repaired the faults within three weeks. In those circumstances, I find that Kiwicheapcars remedied the faults within a reasonable time. Ms Basabe is therefore not able to reject the vehicle under s 18 of the CGA.

Issue 3: Are the vehicle’s defects a failure of a substantial character?

• [36] Section 21 of the CGA will allow Ms Basabe to reject the vehicle if the vehicle’s failures of acceptable quality are a failure of a substantial character.
• [37] A failure of a substantial character is defined in s 21 of the CGA:

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.

• [38] Although the worn seatbelt and battery fault are breaches of the guarantee of acceptable quality, together they are not a failure of substantial character. The battery fault was easily remedied by Kiwicheapcars replacing the starter battery; similarly, the worn seatbelt was easily remedied by Kiwicheapcars replacing it. In those circumstances, I am not satisfied that, given its age and mileage, a reasonable consumer would have refused to purchase the vehicle or otherwise considered the two faults together to be a failure of a substantial character. I therefore find that Ms Basabe is not able to reject the vehicle under s 21 of the CGA.

Regardless, Ms Basabe has lost the right to reject the vehicle

• [39] Even if I had found that the two faults were a failure of a substantial character, Ms Basabe would still not have been able to reject the vehicle because she has lost the right to do so.
• [40] The law relating to the loss of the right to reject goods is set out in s 20 of the CGA, which relevantly states:

20 Loss of right to reject goods

(1) The right to reject goods conferred by this Act shall not apply if—

...

(b) the goods have been disposed of by the consumer, or have been lost or destroyed while in the possession of a person other than the supplier or an agent of the supplier; or

• [41] Ms Basabe stopped repaying her loan with UDC Finance in circumstances where she was not entitled to do so. Although she had concerns about the vehicle, she had a contractual obligation to continue to make payments under the loan. The vehicle was then repossessed by UDC Finance because Ms Basabe had defaulted on payments due under the loan.
• [42] I consider that the repossession of the vehicle means that Ms Basabe no longer has possession or control of the vehicle. I therefore find that, even if there had been a failure of a substantial character, Ms Basabe would have lost any right she had to reject the vehicle under s 20(1)(b) of the CGA because the vehicle has been disposed of.

Outcome

• [43] Ms Basabe had her remedy under the CGA when the battery fault and worn seatbelt were remedied by Kiwicheapcars within a reasonable time; her claim is therefore dismissed.

C Euden
Adjudicator

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^[1] Buffing is a technique that involves the use of a machine with a rotating pad that applies a compound to the car's surface. This compound is typically abrasive and helps to remove deeper scratches, oxidation, and other imperfections from the paintwork.
^[2] The evidence from the parties is unclear as to the date of the repossession, but I accept the vehicle was repossessed on or after this date.
^[3] I accept the evidence of Mr Ahmed that Kiwicheapcars has no records of any discussion with Ms Basabe regarding the seatbelt prior to 4 June 2024. Ms Basabe has provided no evidence to suggest otherwise, apart from her own recollection of events which I did not find reliable.