Larrington v 2 Cheap Cars Ltd - Reference No. MVD 293/2024 [2024] NZMVDT 280 (3 December 2024)

Last Updated: 26 January 2025

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 293/2024 [2024] NZMVDT 280 BETWEEN DAVID LARRINGTON Applicant AND 2 CHEAP CARS LIMITED Respondent

HEARING at Auckland on 27 September 2024 (via MS Teams) MEMBERS OF TRIBUNAL

Shaurya Malaviya, Barrister – Adjudicator

A Cate – Assessor

APPEARANCES

David Larrington, Applicant

Sina Tuimauga, for the Respondent

DATE OF DECISION 3 December 2024

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DECISION OF THE TRIBUNAL

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1. 2 Cheap Cars Limited will within 10 working days of the date of this decision pay Mr Larrington a sum of $1,320.07.

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REASONS

Relevant background

• [1] Mr Larrington purchased a 2012 Nissan Serena (“the vehicle”) from 2 Cheap Cars (“2CC”) on 8 May 2024 in Palmerston North. He paid $9,597.24 for the vehicle which had done 102,035 km at the time of purchase. The vehicle was sold with Quest mechanical insurance and a new warrant of fitness (“WOF”) that was issued on the day of purchase.
• [2] A few days later Mr Larrington started hearing “a rattle in the boot” and a “squeak underneath”. He took the vehicle to 2CC’s Palmerston North yard where he was asked to submit a claim form which he did.
• [3] 2CC responded on 15 May 2024 asking him to take the vehicle to an MTA approved Mechanic to get an inspection, quotation and also send a photo of the odometer reading. He was advised that 2CC may refuse to pay for repairs that have not been approved by its Operations Manager.
• [4] Mr Larrington took the vehicle to Steve’s Tyre Auto Care (“STAC”) on 17 May 2024 for an assessment. STAC did not detect a squeak underneath but found a different set of faults as follows:
  1. Front left inner rack end had developed play and needed replacing;
  2. Front sway bar links and D bushes were worn out;
  3. Front lower control arm rear bushes were split;
  4. Front subframe rear bushes were cracked and had excessive movement.
• [5] It quoted a repair of $2,234 and charged an assessment fee of $55. Mr Larrington submitted this quote to 2CC and asked that it pay for these repairs on 17 May 2024. 2CC said it would review the claim and get back to Mr Larrington.
• [6] Unhappy with this response, he rejected the vehicle and asked for a refund in light of the issues identified by STAC. 2CC said it could not offer a refund but would review the claim and get back to him.
• [7] Mr Larrington went ahead and carried out the repairs recommended by STAC.
• [8] He also took the vehicle to Mike’s Panel Shop (“MPS”) on or about 12 June 2024 in order to investigate the rattle from the tailgate area. Upon inspection, MPS found that the boot catch was worn and needed replacement. The inspection involved removing the re-fitting the tailgate rear trim and he was charged $411.13 for this. He was quoted $1,095.73 plus GST for a new boot catch unit.
• [9] I understand that Mr Larrington had the boot catch replaced in late June 2024. He now seeks compensation for all the repairs he has carried out from 2CC.
• [10] Mr Larrington also complained that the vehicle did not have a vehicle identification number (“VIN”) plate.
• [11] 2CC says it was not given a reasonable opportunity to carry out the repairs. It submits that if Mr Larrington allowed it to carry out its claim review it would have carried out the repairs at its cost which would be well below what Mr Larrington has paid.
• [12] Ms Tuimauga, appearing on behalf of 2CC also said that Mr Larrington replaced the boot catch with a new item. She claims this has led to a betterment considering the vehicle purchased was over 12 years old and some wear and tear can be expected.

Issues

• [13] 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) Was 2CC given a reasonable opportunity to repair any faults with the vehicle?

(c) What remedy, if any, is Mr Larrington entitled to under the CGA?

Has the vehicle been of acceptable quality for the purposes of s 6 of the CGA?

• [14] 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”.
• [15] "Acceptable quality" is defined in s 7 of the CGA 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.

• [16] 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.
• [17] I accept the issues outlined in the diagnosis provided by STAC and MPS. While some wear and tear is to be expected, the opinion from STAC was that the car should not be warranted. I accept its opinion and find that the vehicle was not of acceptable quality.
• [18] In my view, although a reasonable consumer should understand that there is some wear and tear with a vehicle with this age and mileage, I am satisfied that the vehicle was sold in a condition that it was not free from minor defects nor was it durable.
• [19] However, I do not find the missing VIN to be a matter of concern. Mr Cate, the Tribunal’s assessor believes that it is likely that the VIN plate was hidden in a less obvious location. Without the VIN the vehicle cannot go through the compliance process and obtain a WOF which this vehicle did at the time of sale.
• [20] The issues are not of a substantial character and have now been repaired. Mr Larrington is claiming repair costs and I turn to consider what he is entitled to claim his repair costs.

What remedy is Mr Larrington entitled to under the CGA?

• [21] The relevant remedies are set out in s 18 of the CGA, which provides:
  18. Options against suppliers where goods do not comply with the 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 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.

• [22] The High Court confirmed in Acquired Holdings Ltd v Turvey,^[1] that a consumer must follow a particular sequence of steps in order to be eligible to obtain a remedy under s 18 of the CGA. In that case, the Court held that a purchaser must first follow the requirement in s 18(2)(a) to allow the supplier an opportunity to remedy a failure within a reasonable time. The subsequent self-help remedy in s 18(2)(b), in which a consumer may have the failure remedied elsewhere and obtain from the supplier all reasonable costs in doing so, is exercisable only if the supplier refuses or fails to remedy the failure under s 18(2)(a).
• [23] The reason why a consumer must provide the supplier with an opportunity to repair or replace before commissioning repairs themselves is to allow the supplier to assess whether the goods have been subjected to unreasonable use, whether the defect has caused the problem and, in particular, to control the quality of the remedy, which would not necessarily be the case if repairs are carried out by an unauthorised repairer.
• [24] When Mr Larrington first communicated with 2CC regarding the issues, it did not inspect the vehicle. Instead, it asked Mr Larrington to get the vehicle diagnosed by an MTA approved mechanic.
• [25] Mr Larrington approached two different mechanics regarding the noise and was provided with two different quotations for different issues.
• [26] The diagnosis from STAC was very comprehensive and although it was unable to identify the squeak, it identified numerous other issues with the vehicle. It provided a quote on 17 May 2024 where it recommended repairs to the front inner rack end, front suspension and subframe bushes at a cost of $2,234. Mr Larrington shared this quote with 2CC on 17 May 2024.
• [27] 2CC advised that it needed to review the quote through its claim process and that it would be in touch with Mr Larrington. The next day Mr Larrington wrote to 2CC saying that he wanted to reject the vehicle. He stated:

As far as I’m concerned there is that many faults with vehicle I would expect a full refund of purchase price as well as the $650 we paid to have radio fitted, it should never have passed a warrant.

• [28] 2CC replied the same day, refusing Mr Larrington’s claim for rejection and said its Operations Manager would need to review the claim. Mr Larrington responded that the vehicle was sold in an unfit condition and that he was going to file a claim with the Tribunal.
• [29] On 21 May 2024, 2CC responded that the Operations Manager will be contacting them soon. Mr Larrington was unhappy with this lack of clarity from 2CC and decided to have the repairs carried out with STAC at its quoted price.

Was 2CC given an opportunity to remedy the vehicle?

• [30] The CGA does not define what a “reasonable time” for repair is but in this case, I find that Mr Larrington has carried out the repair prematurely.
• [31] The issue that he had identified, being the rattle, was not detected by STAC. In STAC’s opinion, the vehicle needed these repairs to be warrantable. But the vehicle was still driveable and had a valid warrant of fitness issued just a few weeks prior. There was no apparent urgency in carrying out the repairs without allowing 2CC at least three to four working days to come up with a solution.
• [32] Mr Larrington advised 2CC of STAC’s quotation on a Friday and received acknowledgment at 2:38 pm the same day. The repairs have been carried out by Tuesday 21 May 2024 which is less than two working days after informing 2CC. That does not amount to a reasonable time especially considering that the issue experienced by Mr Larrington, the rattle from the tailgate, was not a serious issue.
• [33] Had 2CC refused to assist or not acknowledged Mr Larrington’s emails, the situation would be different.
• [34] After repairs by STAC, MPS was also authorised to remove and re-fit the tailgate catch and squirted the area with WD40 as a temporary measure. Mr Larrington also accepts its recommendation that the boot catch be replaced at a cost of $1,095.73 plus GST as a more permanent repair. A new unit was ordered and the replacement was completed mid to late June 2024.
• [35] Again, 2CC was not informed of this repair at the time as Mr Larrington had formed the view that 2CC was unwilling to assist.
• [36] However, the lack of a reasonable opportunity may not absolve 2CC of all liability in this case, it only limits its liability for repairs. This is because 2CC did ask Mr Larrington to obtain quotes from elsewhere which would indicate it was considering having the repairs carried out with external providers. Furthermore, 2CC does not dispute that the issues identified did exist with the vehicle which means repairs were required. The only disputes element is the cost of repair.
• [37] Mr Cate believes that the diagnostic labour and fitting time charged by MPS is excessive. The cost of repair by STAC is also at the higher end.
• [38] He agrees that a proportion of the charges should be payable by 2CC as this balances the fact that the vehicle was not sold in an acceptable condition against the fact that 2CC has not been given a reasonable opportunity to carry out he repairs.
• [39] The total cost to Mr Larrington is $3,960.22. There are some further costs that are not quantified in the claim in relation to the labour for the installation of the new boot catch.
• [40] I find that 2CC must pay a third of this cost which amounts to $1,320.07. This contribution is above 2CC’s own estimate of the repair cost at approximately $516 which seems low and does not account for the boot catch.
• [41] I also note that Mr Larrington did obtain a new boot catch for his 12-year-old vehicle and my assessment of 2CC’s contribution adjusts for betterment as submitted by Ms Tuimauga.
• [42] Therefore, 2CC is ordered to pay Mr Larrington a sum of $1,320.07.

S Malaviya
Adjudicator

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^[1] Acquired Holdings Ltd v Turvey [2007] NZHC 1251; (2008) 8 NZBLC 102,107 (HC).