Plush Carpets Fitting Ltd v Armstrong Greenlane Ltd t/a Armstrong Peugeot - Reference No. MVD 165/2024 [2024] NZMVDT 333 (18 December 2024)

Last Updated: 22 January 2025

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 165/2024 [2024] NZMVDT 333 BETWEEN PLUSH CARPET FITTING LIMITED Applicant AND ARMSTRONG GREENLANE LIMITED (T/A ARMSTRONG PEUGEOT) Respondent

HEARING at AUCKLAND on 7 October 2024 (by audio-visual link) MEMBERS OF TRIBUNAL

G M Taylor – Adjudicator

S Haynes – Assessor

APPEARANCES

J Bounsall, Applicant A Tansey, for the Respondent C Robins, for the Respondent

DATE OF DECISION 18 December 2024

_________________________________________________________________

DECISION OF THE TRIBUNAL

_________________________________________________________________

1. The application by Plush Carpet Fitting Limited to reject the 2021 Peugeot Expert MWB Moduwork Hatch is dismissed.
2. Armstrong Greenlane Limited (T/A Armstrong Peugeot) is to remedy the fault causing the windows to make a noise, within a reasonable date of this order.

_________________________________________________________________

REASONS

Introduction

• [1] On 22 June 2021 Plush Carpet Fitting Limited (the Applicant) purchased a new 2021 Peugeot Expert MWB Moduwork Hatch (the vehicle) from Armstrong Greenlane Limited trading as Armstrong Peugeot (the Trader). The total price including accessories and on road costs was $54,772.50. According to the Applicant the vehicle was purchased to carry rolls of standard length carpet of 3.66 m. The Applicant claims that it told the Trader what the length of a roll of carpet was and the Trader assured him this would be no problem. The Applicant claims the interior dimensions are inadequate to do so, and that the cargo area is less than the 3,674 mm listed on the specification sheet.
• [2] The Applicant also claims that the Trader has failed after three attempts to remedy an issue with windows making a squealing noise and that there were faults with the spare tyre and the vehicle’s headlights. At the hearing, the Applicant acknowledged the Trader’s position that the spare tyre was damaged as a result of a screw that was associated with cabinetry the Applicant had installed when it modified the vehicle. The Applicant also raised issues about the window wipers and that the vehicle had “high revs” when going downhill.
• [3] The Applicant wants to reject the vehicle, which it claims does not match its description and that it is not fit for purpose. It also seeks compensation for lost income of $10,500, which it says is based on the Applicant’s daily rate of $1,500.
• [4] The Trader’s position is that the Applicant contracted out of the Consumer Guarantees Act 1993 (the CGA), but that if it applies, the Applicant was not given any assurance that it would carry a roll of carpet. In any case, it says that the maximum length capability is indeed 3.674 m long.
• [5] The Trader says that the Applicant has lost its right to reject the vehicle because too much time has passed since purchase, the vehicle has been modified, the Applicant damaged the tyre when he modified the vehicle, the modification impacted on the available space in the rear cabin, the Applicant has failed to regularly service the vehicle, the vehicle is in poor condition, and that the window squealing can be remedied by removing the aftermarket window tints.

The issues

• [6] The issues requiring the Tribunal’s consideration are:

(a) Did the parties validly agree to contract out of the CGA?

(b) If not, was there a failure of the guarantees under the CGA of:

1. Complying with description, for the purposes of s 9?
2. Fitness for a particular purpose, under s 8?
3. Acceptable quality, under s 6?

(c) What, if any, remedy is the Applicant entitled to under the CGA and has it lost the right to reject the vehicle?

(d) Did the Trader engage in misleading or deceptive conduct in breach of s 9 of the Fair Trading Act 1986 (FTA)?

Relevant background

• [7] Mr Bounsall, the Director of the Applicant, gave oral evidence at the hearing. For the Trader, evidence was given by Mr Tansey, the Service Manager, and Mr Robins, the Sales Manager.
• [8] In December 2020, Mr Bounsall made enquiries about the vehicle. He claims he told “Dino”, an employee of the Trader, before the sale that the cargo hold needed to be long enough to carry a standard roll of carpet, which he claims he verbally said was 3.66 m long. He said he told the Trader this verbally and without any “shadow of a doubt in his mind”. He also says that he told the Trader this in writing. On 27 December 2020 he messaged the Trader:

  At 16:05

  ... We also just need to inspect the vehicle and see if its suitable for us

  Can you confirm what the cargo length is for the long wheel base ...

  At 19:21

  ... we’ll need to have a look over it to see if we can fit a roll of carpet through to the front of the vehicle.

• [9] On 27 December 2020, Dino Damiani sent a message stating in part:

  Thanks for your enquiry on our Expert Van

  I attach some additional images about the size of the van

  The LWB expert with the moduwork can reach a total of 4,026 mt. The hole that the moduwork allows is not massive but I believe a rolled carpet should fit easily.

  The divider between the cabin and the back can be removed and is composed of two parts, a bottom, and an upper divider.

  Any chance for you to come over to see the van and what we can offer?

• [10] Mr Bounsall then viewed a demonstrator model, which was the long wheelbase vehicle with the load length of 4,024mm. However, in March 2021 he decided to purchase the medium length vehicle and paid a deposit. On 4 March 2021, Dino sent him the specification sheet which recorded that the medium length vehicle had a “max load length” of 3,674 mm, including the modular system. This system was a hatch behind the passenger seat which increased the length capacity.

	MEDIUM Length	LONG Length
	2.0L HDi, 150 EAT8	2.0L HDi, 150 EAT8
Maximum Retail Price•	$59,990	$63,990
...
INTERIOR DIMENSIONS
Max load length (mm) – Moduwork* excluded/included	2512 / 3674	2862 / 4024
Max load width / height (mm)	1628 / 1397	1628 / 1397
Load width between wheel arches (mm)	1258	1258
Load volume (m3) – Moduwork* excluded/included	5.3 / 5.8	6.1 / 6.6
Euro pallet (number)	3	3

• [11] The Applicant did not receive the vehicle until late June 2021 taking possession shortly after signing the Vehicle Offer and Sale Agreement (the VOSA) on 22 June 2021.
• [12] In July 2021, the Applicant installed a modular system (cabinetry) in the back of the vehicle. This was a system specific for his business. In order to do this there is at least one screw which passes down through the deck of the vehicle. He said that he did not check that the vehicle could carry a roll of carpet before the installation but after doing so, he had difficulty closing the boot.
• [13] In his application he wrote that because he was using a trailer for a while to carry carpet and was managing a disability at the time, he did not immediately have any need to put a roll of carpet in the cargo hold. He said it was not until around 2022 when he returned to work that he discovered the van was too short for a roll of carpet and says that in May 2022 he bought this to the attention of the Trader when he raised the window issue.
• [14] In September 2022, the Applicant says that a staff member named ‘Abraham’ would try to find a long wheel base model of the vehicle.
• [15] He said there was no resolution from the Trader on this issue at that time.
• [16] In the meantime, the Applicant had the following additional issues with the vehicle:

(a) He sustained a flat tyre around January 2022 and when he changed the tyre, he noticed that the spare was completely flat. He had the van towed to a tyre dealer. When he asked the Trader for compensation, it told him that it was likely a stone had flipped up and punctured the spare tyre. He was not offered any compensation for the spare tyre and he believes there should have been. However, he is not seeking compensation for the recovery of the cost of a new tyre.

(b) After a couple of months of ownership, Mr Bounsall claims that the window regulators were faulty because the windows began screeching when he was rolling them up and down. He contacted the Trader about this issue and the Trader arranged for the regulators to be changed three times, but the issue has kept returning. Mr Bounsall also claims that after each change of regulator there has been glue dripping down the window and it might since have been broken.

(c) The window wipers would scratch the bonnet when pulled back for cleaning. Mr Bounsall then learned that the way to avoid this was to start the engine, turn the wipers and synchronise the window wipers with the shutting off of the engine so that they landed at the correct place. He considers this is a fault, but he did not raise this as an issue at the hearing.

(d) The vehicle does not move out of gear when in descent and revs at about 3,000 revolutions per minute. Mr Bounsall claims that he has been told there is a button he needs to push prior to each journey to avoid this, which he does not believe to be correct. Again, this was not a focus at the hearing.

(e) During the past years, Mr Bounsall has noticed that the headlights flicker. He has complained about this issue to the Trader. He took the vehicle to the Trader who replaced the bulbs. Then in October 2023, both lights went again. The Trader then changed the bulbs again. The right bulb has now blown again. During the hearing, the evidence indicated that this issue was raised for the first time after the vehicle had driven over 40,000 kms.

• [17] Other than taking the vehicle into the Trader for remedial action, the Applicant has not had the ongoing issue of the window screeching diagnosed. Mr Bounsall says that in September 2023 he again complained about this issue to the Trader and this time rejected the vehicle.
• [18] On 6 May 2024, after the claim in the Tribunal had been filed, the Trader again sent the Applicant the vehicle specifications. In response Mr Bounsall states in part:

  ... And also thanks for the specs ! That actually clears a bit up my end so thank you.

• [19] On 7 May 2024 Mr Bounsall replied again:

  Hi again Clyv,

  Thanks for the spec sheet, I totally missed that when I looked at Dino’s paperwork!

  Did you happen to do a double check with one of the vans in the yard ?

  My measurements are coming up short of 3600 which is consistent with the fact a standard roll of carpet in NZ which is 3.66 does not fit.

  If the internal length as per the specs was indeed 3674 I wouldn’t be having this problem, or least you’d think not.

  Perhaps when I come in tomorrow we can run a tape through the back of my van together and see where I might be going wrong.

• [20] Mr Bounsall stated that he had measured the cargo hold and that it is less than 3.674 metres, but he did not produce evidence to support his claim or that it is only 3.5 metres. He also pointed to a new specification sheet for the vehicle which he says has been adjusted to 3.6 metres.
• [21] The Applicant is also asking for compensation in the sum of $10,500. He claims that this was its loss of profits for all of the time the vehicle could not be used in its business but instead was having repairs for the regulators and the spare tyre.
• [22] No financial information was provided by the Applicant explaining how that profit was calculated, whether there were any specific jobs that were lost through the Applicant not having the vehicle and whether it made any attempt to use any alternative method of transportation such as the trailer in order to complete the work.
• [23] The Applicant claims that the vehicle has been damaged in the boot area and there are two scratches on the left hand side of the vehicle, the bumper is scratched and the rims have been scratched as well.
• [24] The Applicant produced no evidence as to the difference in value of the vehicle between the date of purchase and what he considered its actual value at that time.

The Trader’s position

• [25] Mr Robins for the Trader said that it never received any actual measurement of the length of a roll of carpet from Mr Bounsall. He says that Mr Bounsall is the expert on carpet and it is not to know that the hatch which opens into the front passenger seat and extends the cargo hold capacity would not accommodate a roll of carpet.
• [26] It says that Mr Bounsall made multiple visits to the dealership ahead of his commitment to this purchase, and inspected a demonstration vehicle, and could have seen for himself through his own measurements, what could be accommodated in the cargo hold.
• [27] Mr Robins said that the modifications which Mr Bounsall has done were not mentioned at any time and these hinder the cargo hold opportunity.
• [28] The Trader supplied a copy of the specifications for the vehicle. This showed the cargo length for this vehicle is 3,674 mm. It claims there is now a new facelift model available and its specification may have changed slightly.
• [29] Its response to this aspect of the claim is that the vehicle does have the capacity of 3,674 mm. Its position is that the measurement can also be taken diagonally and it produced a photograph showing a measuring tape reaching diagonally across the cargo hold to produce a measurement of just under 3.7 metres.
• [30] After the Applicant took possession of the vehicle in 2021, the Trader did not hear from the Applicant again until it performed a service on the vehicle on 11 May 2022 and a windscreen replacement. The vehicle was then 6,570 km overdue for its 15,000 km service, as it is recorded as having driven 21,570 km at that time.
• [31] Regarding the issue with the spare tyre, the Trader says it checked the tyres at the time of that service and noted that the rear tyre had 8 mm of tread. It says that the spare tyre is housed under the vehicle and is exposed to the elements. It initially said that given the vehicle had travelled over 20,000 km of driving at this point, a flat tyre could have been easily caused by a stone chip.
• [32] Having inspected the vehicle after the application was filed it discovered screws drilled through the floor of the van and it believes that this will have impacted the spare tyre because it is positioned in such a way that it is close to where the spare tyre is positioned.
• [33] It says that two of the three window regulator replacements took place when other issues were being attended to. It says that they took far less time to complete than what is now claimed by the Applicant. It says that it has no record of any dripping glue, a sensor issue or the controls not being installed correctly.
• [34] It now claims that the window screeching is caused by the aftermarket window tints which the Applicant had installed in the vehicle.
• [35] Regarding the windscreen wipers, it says that the vehicle is manufactured with the wiper blades sitting below the bonnet of the vehicle when in a resting position. It says that if someone is wanting to lift the wiper blades, without making contact with the bonnet of the vehicle, they need to be midway up the windscreen. It says that this only takes a matter of seconds.
• [36] Regarding the issue about the high revs it says that the vehicle’s transmission is designed to increase revolutions per minute or drop down a gear when on a descent and that this is normal.
• [37] It produced service records regarding the 2022 service and other work done on 26 May 2023. By that point the odometer reading was 45,132 kilometres.
• [38] It produced an invoice dated 12 September 2022 which recorded that the window regulators were noisy and that it had inspected them.
• [39] It also produced an invoice dated 14 February 2023 regarding the window lifter. The invoice records that the right front window regulator was “still noisy”. The invoice records that it removed and replaced the right front window regulator under a warranty claim.
• [40] The 26 May 2023 invoice records that the driver door was making a noise and that it had recommended replacing the regulator again on advice from the Peugeot technical team.

Did the parties validly agree to contract out of the CGA?

• [41] The circumstances in which parties are permitted to contract out of the guarantees in the CGA are set out in s 43. The general rule is that contracting out is prohibited. However, a limited exception is offered where the requirements of subss (2) and (2A) are met:
  43. No contracting out except for business transactions

(1) Subject to this section and to sections 40, 41, and 43A, the provisions of this Act shall have effect notwithstanding any provision to the contrary in any agreement.

(2) However, despite subsection (1), parties to an agreement may include a provision in their agreement to the effect that the provisions of this Act will not apply to that agreement, provided that—

(a) the agreement is in writing; and

(b) the goods or services are, or (in connection only with the guarantee of acceptable quality in section 7A) the gas or electricity is, supplied and acquired in trade; and

(c) all parties to the agreement—

(i) are in trade; and

(ii) agree to contract out of the provisions of this Act; and

(d) it is fair and reasonable that the parties are bound by the provision in the agreement.

(2A) If, in any case, a court is required to decide what is fair and reasonable for the purposes of subsection (2)(d), the court must take account of all the circumstances of the agreement, including—

(a) the subject matter of the agreement; and

(b) the value of the goods, services, gas, or electricity (as relevant); and

(c) the respective bargaining power of the parties, including—

(i) the extent to which a party was able to negotiate the terms of the agreement; and

(ii) whether a party was required to either accept or reject the agreement on the terms and conditions presented by another party; and

(d) whether all or any of the parties received advice from, or were represented by, a lawyer, either at the time of the negotiations leading to the agreement or at any other relevant time.

• [42] Subsections (2) and (2A) of s 43 were substituted for the former s 43(2), when it was repealed on 17 June 2014, to mirror the equivalent provision in the FTA.^[1] The repealed former provision allowed a supplier to contract out of the provisions of the CGA in respect of “a consumer who acquires, or holds himself or herself out as acquiring...goods or services for the purposes of a business...”. The main differences between the pre and post-2014 amendment versions of s 43 are that, in the current provisions (as applied to motor vehicles):

(a) The focus is now on whether the contracting parties are in trade and the vehicle was supplied and acquired in trade, rather than the old focus on whether the consumer acquired (or held itself out as acquiring) the vehicle for business purposes.

(b) The agreement must always be in writing and the Tribunal needs to specifically consider whether the parties agreed to contract out of the CGA.

(c) The Tribunal has to assess whether it is fair and reasonable that the parties are bound by the contracting out provision in the agreement, taking into account the factors in subs (2A).

• [43] There was no dispute that both parties are in trade and the Applicant acquired the vehicle in trade and claimed GST and depreciation on the vehicle. It was also not disputed that the agreement was in writing and the Applicant acknowledged he signed the VOSA and ticked the box acknowledging that the Trader (the supplier) was contracting out of the CGA. On this basis, the Trader’s position is that the CGA should not apply. But the Applicant’s position was that he did not appreciate that it would impact on his rights.
• [44] Next, I turn to consider, in terms of s 43(2)(d), whether it is fair and reasonable that the parties be bound by their written agreement to contract out of the CGA. I will refer to each of the factors set out in subs (2A) (above).

The subject matter of the agreement

• [45] The subject matter of this agreement is the purchase of a vehicle. I find that the vehicle is one which is ordinarily acquired for personal, domestic or household use and may also be acquired for commercial use.

The value of the goods

• [46] The purchaser paid $54,772.50 for the new vehicle. I find that this price is not insignificant and is a relevant factor in determining whether it is fair and reasonable that the CGA is excluded.

Respective bargaining power of the parties

• [47] There was no evidence given regarding the bargaining positions of the parties. However, in this case, I accept that it was open to the Applicant to proceed with the purchase or find an alternative vehicle elsewhere. So, on balance, I find that each party had an equal bargaining power.

Whether the parties received legal advice or were represented by a lawyer

• [48] Neither party was represented by a lawyer, and nor was legal advice received on the particular sale. However, the Trader produced the VOSA, and I find it more likely than not that it would have received some legal advice on this clause, and so had the greater obligation to fully explain its implications.

Other relevant circumstances

• [49] The list of matters in subs (2A) is not exclusive. It is open to the Tribunal to consider additional relevant factors, consistent with the consumer protection purpose of the CGA, in determining whether it is fair and reasonable that the parties are bound by the exclusion clauses.

Conclusion

• [50] On balance, I conclude that it is not fair and reasonable that the parties are bound by the contracting out provisions in the VOSA. This is a high bar, and in the circumstances I am not satisfied that the full implications of the contracting out clause were explained to the Applicant. Consequently I find that the CGA applies.

If not, did the vehicle fail the statutory guarantees under the CGA?

The vehicle length

• [51] The Applicant says that the vehicle failed to comply with the description provided by the Trader because it did not meet the length dimension and so was not long enough to carry a roll of carpet. Accordingly he also claims that the vehicle was not fit for its particular purpose.
• [52] Section 9 of the CGA provides a guarantee that goods comply with their description. It provides:
  9. Guarantee that goods comply with description

(1) Subject to section 41, where goods are supplied by description to a consumer, there is a guarantee that the goods correspond with the description.

(2) A supply of goods is not prevented from being a supply by description by reason only that, being exposed for sale or hire, they are selected by a consumer.

(3) If the goods are supplied by reference to a sample or demonstration model as well as by description, the guarantees in this section and in section 10 will both apply.

(4) Where the goods fail to comply with the guarantee in this section,—

(a) Part 2 gives the consumer a right of redress against the supplier; and

(b) Part 3 may give the consumer a right of redress against the manufacturer.

• [53] To comply with this guarantee, the vehicle must correspond with its description. The “description” is the identification of the goods by reference to the class of things to which they belong.^[2] As stated in s 9(2) of the CGA, a supply of goods is not prevented from being a supply by description by reason only that, being exposed for sale or hire, they are selected by a consumer.
• [54] Section 8 of the CGA is also relevant. It provides there is a guarantee as to fitness for particular purpose:

8 Guarantees as to fitness for particular purpose

(1) Subject to section 41, the following guarantees apply where goods are supplied to a consumer:

(a) that the goods are reasonably fit for any particular purpose that the consumer makes known, expressly or by implication, to the supplier as the purpose for which the goods are being acquired by the consumer; and
(b) that the goods are reasonably fit for any particular purpose for which the supplier represents that they are or will be fit.

(2) Those guarantees do not apply where the circumstances show that—

(a) the consumer does not rely on the supplier’s skill or judgment; or
(b) it is unreasonable for the consumer to rely on the supplier’s skill or judgment.

(3) This section applies whether or not the purpose is a purpose for which the goods are commonly supplied.

(4) Part 2 gives the consumer a right of redress against the supplier where the goods fail to comply with any guarantee in this section.

• [55] I accept that any minor deviation from the length specified would be a failure of the goods to comply with their description. However, the Applicant did not produce clear evidence to prove that the vehicle did fall short of the maximum load length of 3,674 mm as specified in the specification sheet. That is his evidential burden.
• [56] So, on balance, I find that the Applicant has not proven that the vehicle is incapable of carrying a maximum load length of 3,674 mm and has failed to prove the vehicle does not match the description in the specification sheet. I also say this as the Trader’s position is that the measurement is correct, and notwithstanding my view that the “max load length” should not be measured diagonally as shown in the Trader’s photograph. I also gave less weight to the Applicant’s position that the updated specification sheet more accurately reflects the length, when I accept that it is for an upgraded model, and so is not identical.
• [57] I also find that the Applicant has failed to prove on the balance of probabilities that the vehicle he purchased was not fit for the particular purpose he says he made known, namely to carry a standard roll of carpet. In making this finding I accept that this was discussed as recorded in the message with Dino. However, this communication was at the very preliminary stage of Mr Bounsall’s enquiries, and concerned the longer length model which had a length of 4,024 mm. This context is important. It was three months later that the Applicant then committed to purchase the shorter medium length vehicle which naturally cost less and was provided with the specification sheet. No evidence was presented of any discussions in the intervening period. On balance, I find it more likely that he failed to note the difference in the cargo hold length, which is consistent with his 7 May 2024 response to the Trader ‘Thanks for the spec sheet, I totally missed that when I looked at Dino’s paperwork!’. Alternatively, the Applicant chose to purchase the vehicle with the intention to use a trailer to supplement its capacity. I say that as this is consistent with his subsequent actions.
• [58] I also found many of the Applicant’s explanations unreliable and inconsistent. I do not accept that a reasonable person purchasing a vehicle for a specific purpose would have installed cabinetry one month after purchase without first checking it was fit for the particular purpose made known. The claim on behalf of the Applicant, that Mr Bounsall did not use the vehicle for six months because of his health and COVID-19, and then after that did not notice it was not fit for its purpose because Mr Bounsall was using his trailer, is also inconsistent with the extent of use as shown in the odometer readings. Finally, even if this was the case, the further six month delay in reporting this issue casts doubt on the reliability of this position.

The squealing windows, flat tyre, window wipers, headlights

• [59] 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”.
• [60] “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.

• [61] 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.
• [62] The Applicant did not provide a diagnosis to show what the fault is that is causing the windows to squeal. I also gave some weight to the Trader’s recent position that it has been caused by the Applicant’s installation of aftermarket tints. However, on balance I find that there has been a failure of acceptable quality in relation to the squealing windows. I say this as a reasonable consumer purchasing a new vehicle at this price would not expect the windows to be making this noise so soon after purchase. Also the Trader had acknowledged the presence of this fault in September 2022, as reflected in its service invoices, and this was consistent with its actions repeatedly replacing the window regulators under warranty.
• [63] For completion, I do not accept that there was a fault with the spare tyre, and the Applicant acknowledged that it was likely caused when he installed the cabinetry. I also saw no fault in the operation of the windscreen wipers. Additionally, I accept the Trader’s evidence which was consistent with the advice from Mr Haynes, the Tribunal’s Assessor that this type of vehicle operates with increased revs in the circumstances as described regarding the vehicle travelling downhill.
• [64] It was not disputed and I accept that the bulb in the headlights had blown on two occasions in May 2023. This minor issue arose two years after purchase. In these circumstances and where the Applicant had failed to properly maintain the vehicle by ensuring it was serviced regularly, I am not satisfied that this issue is a failure of the guarantee of acceptable quality. But in any case, the Trader remedied it at no cost.
• [65] So, in conclusion I find that the only failure of the statutory guarantees is one of acceptable quality relating to the squealing windows.

Is the Applicant entitled to reject the vehicle, and if not, what, if any remedy is the Applicant entitled to under the CGA?

• [66] Section 18 of the CGA prescribes the available remedies where there has been a failure of the statutory guarantee concerning the vehicle.
• [67] Where the fault is capable of being remedied, a consumer can only reject the vehicle where a failure is of a substantial character as defined in s 21 of the CGA, or the supplier has refused, neglected, or failed to remedy a fault with a reasonable period of time.
• [68] In this case, I do not accept that the window faults are a failure of a substantial character as defined in s 21 of the CGA. But I do accept that the Trader has been unsuccessful in remedying the fault within a reasonable time, despite three attempts.
• [69] However, I find that under s 20(1)(a) and (c) of the CGA, the Applicant has lost any right to reject the vehicle because it has not taken this action within a reasonable period of time, and it has also damaged the vehicle significantly, as shown by the Trader’s vehicle assessment and supporting photographs.
• [70] Section 20 states in part:

20 Loss of right to reject goods

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

(a) the right is not exercised within a reasonable time within the meaning of subsection (2); or

...

(c) the goods were damaged after delivery to the consumer for reasons not related to their state or condition at the time of supply; or

...

(2) In subsection (1)(a), the term reasonable time means a period from the time of supply of the goods in which it would be reasonable to expect the defect to become apparent having regard to—

(a) the type of goods:

(b) the use to which a consumer is likely to put them:

(c) the length of time for which it is reasonable for them to be used:

(d) the amount of use to which it is reasonable for them to be put before the defect becomes apparent.

• [71] For the purposes of s 20(1)(a) of the CGA, a "reasonable time" is a period from the time of supply of the goods in which it would be reasonable for the defect to become apparent, having regard to the factors set out in s 20(2)(a)–(d) of the CGA.
• [72] In Nesbit v Porter, the Court of Appeal shed some light on the statutory words in s 20(2) of the CGA.^[3] The Court observed that:^[4]

  ... A reasonable time under s 20 must accordingly be one which suffices to enable the consumer to become fully acquainted with the nature of the defect, which, where the cause of a breakage or malfunction is not apparent, the consumer can be expected to do by taking the goods to someone, usually and preferably the supplier, for inspection.

• [73] There is no doubt that the Applicant lost its right to reject the vehicle because it took too long to do so.

Damage

• [74] In Joden Finance Ltd v Prerssilp,^[5] Judge Harrison found that in order to qualify as “damage”, for the purposes of s 20(1)(c) of the CGA, the damage had to amount to some loss in value of the vehicle or reasonably significant cost of repair, justifying a finding that damage greater than wear and tear has occurred.^[6]
• [75] I find that the Applicant significantly damaged the integrity of the vehicle when Mr Bounsall performed the modifications. I also accept the Trader’s evidence that the condition of the vehicle has deteriorated to such a significant extent that the vehicle has been significantly devalued.
• [76] So, I find that the Applicant has lost his right to reject the vehicle.
• [77] Instead, I find that the Trader must now remedy the fault with the squealing windows within a reasonable date of this decision. This may require removal of the vehicle’s window tints.
• [78] Finally, section 18(4) of the CGA provides that compensation can be awarded for reasonably foreseeable consequential losses. In this case the Applicant claims $10,500 for lost income at a daily rate of $1,500 comprising:

  First regulator 1 x day

  Second Window regulator 2 x days.

  Third regulator 3 days

  Spare tyre half day.

  $10,500.00 plus gst.

• [79] However, as stated in [22] the Applicant did not provide any evidence to support this loss, so I find that it is not entitled to this sum.

Has the Trader engaged in conduct that breached s 9 of the FTA and if so what remedy, if any, is the Applicant entitled to?

• [80] For completion I address the issue of whether the Trader mislead the Applicant, either by representing that the vehicle could carry a roll of carpet or because the vehicle does not match the length set out in the specifications. 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.

• [81] The test for establishing a breach of s 9 was set out by the Supreme Court in Red Eagle Corp Ltd v Ellis:^[7]

  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.

• [82] I do not accept that the Trader has engaged in misleading or deceptive conduct, and this finding is reliant on my findings of fact in [55] to [58] above that the Applicant has not established that the vehicle is shorter than the length specified or that a reasonable consumer would be misled by the opinion given by the Trader’s employee in December 2020 concerning the longer length vehicle.

Outcome

• [83] The Applicant’s claim to reject the vehicle is dismissed.

• [84] The Trader is to remedy the fault causing the windows to make a noise, within a reasonable date of this order.

G M Taylor
Adjudicator

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^[1] Consumer Guarantees Amendment Act 2013, s 13.

^[2] Laws of New Zealand Consumer Protection: Statutory Consumer Guarantees (online ed) at 21 (Guarantee that goods comply with description). Insofar as description goes beyond identification and relates to quality, the state, or other non-essential characteristics of the goods, it will not be considered a description that gives rise to the implied conditions as to description or mercantile quality under the Contract and Commercial Law Act 2017: Taylor v Combined Buyers Ltd [1923] NZGazLawRp 133; [1924] NZLR 627 (SC), affirmed Finch Motors Ltd v Quin (no 2) [1980] 2 NZLR 519 (HC).

^[3] Nesbit v Porter [2000] NZCA 288; [2000] 2 NZLR 465 (CA).

^[4] At [39].

^[5] Joden Finance Ltd v Prerssilp [2020] NZDC 12239.

^[6] On appeal, Katz J held that the District Court was right to find that minor damage to goods, such as that associated with fair wear and tear, would not result in the purchaser losing their right to reject.

^[7] Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28].