Sosich v G J and SR Johnstone Limited t/a Grant Johnstone Suzuki - Reference No. MVD 243/2024 [2024] NZMVDT 340 (19 December 2024)

Last Updated: 22 January 2025

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 243/2024 [2024] NZMVDT 340 BETWEEN PETER GAVIN SOSICH Applicant AND G.J. AND S.R. JOHNSTONE LIMITED trading as GRANT JOHNSTONE SUZUKI Respondent

HEARING at AUCKLAND on 14 November 2024 (by audio-visual link), further submissions provided by the parties after the hearing MEMBERS OF TRIBUNAL

D Watson, Adjudicator

S Haynes, Assessor

APPEARANCES

P Sosich, Applicant

S Johnstone, for the Respondent T Simon, Witness for the Respondent

DATE OF DECISION 19 December 2024

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DECISION OF THE TRIBUNAL

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1. GJ and SR Johnstone Ltd, trading as Grant Johnstone Suzuki, must uplift the vehicle at a time and date convenient to Peter Sosich and at its cost and repair the following faults within a reasonable time from the date of this decision:

   a) the fault that is causing the current headlight condition and alignment to fail a WOF

   b) the faulty right hand windscreen washer

   c) the fault that is causing excessive play in the front driveshaft

   d) the leaking power steering pump

   e) the faulty parking brake

   f) the fault that is causing the Speedo illumination to disappear.

2. Once these repairs are completed, GJ and SR Johnstone Ltd must return the vehicle to Peter Sosich, at its cost and at a time and date convenient to him.

100. GJ and SR Johnstone Ltd must pay the sum of $236.25 to Peter Sosich within 10 working days of the date of this decision.

4. The parties have leave to apply to the tribunal further if there is any difficulty or clarity required in connection with implementation of this order.

_________________________________________________________________

REASONS

Introduction

• [1] Peter Sosich purchased a 2011 SsangYong Rexton for $11,250 from GJ and SR Johnstone Limited, trading as Grant Johnstone Suzuki (GJS) on 27 November 2023. The vehicle had then travelled 213,104 km. He wants to reject the vehicle because he claims it has suffered from a range of faults and that GJS has refused to repair them.
• [2] GJS submits that it has not been proven that this vehicle is suffering from any faults. It says that the vehicle was supplied with a current warrant of fitness (WOF) at the time of sale and that any wear and tear or additional faults that have since emerged are not its responsibility.

Evidence

• [3] Evidence was given at the hearing by Mr Sosich. For GJS, Suzanne Johnstone, Director, gave evidence. Timi Simon, its service manager, also gave evidence.

The issues

• [4] The issues requiring my 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) Are the vehicle’s faults a failure of a substantial character?

(c) What remedy is Mr Sosich entitled to under the CGA?

Relevant background

• [5] When Mr Sosich first inspected the vehicle, he noticed that the headlamps seemed perished and yellow. The windscreen was hard to see through as well. Before the vehicle was to be delivered to him it was agreed by GJS that these items would be fixed.
• [6] When Mr Sosich took possession of the vehicle he noticed that the headlamps were still yellowish and perishing. He also thought that the windscreen was still difficult to see through, even though a new one had been fitted.
• [7] He began to drive the vehicle and had not driven very far when he noticed the windscreen wipers were seized and the auto transmission felt slow on acceleration.
• [8] He took the vehicle to Driveline Automotive Ltd, a transmission specialist.
• [9] Mr Sosich informed the Driveline technician of the lagging acceleration and obtained a quote for rebuilding the transmission of between $4,000–$6,000 including GST. It appears that no diagnosis of the transmission was undertaken by Driveline at this time.
• [10] Mr Sosich next took the vehicle back to GJS and spoke to Mr Simon. Mr Simon put the vehicle on a hoist and Mr Sosich claims he told him there was a badly worn spline in the driveline. According to Mr Sosich, Mr Simon said he would order a new one, but subsequently did not.
• [11] Mr Sosich felt that he had by now experienced a number of faults and claims that he prepared a handwritten list of those faults which he left with GJS for repair. These additional faults included the following:

  a) the windscreen was still faulty as it was difficult to see through

  b) the auto transmission was faulty

  c) the radio had no display or illumination and it only worked intermittently

  d) there were noises coming from the power steering

  e) the front shocks were soft

  f) the handbrake was loose

  g) the wiper arms had been seized but were filled with rust

  h) the speedo backlight was faint

  9. the drivers seat could not be correctly programmed.
• [12] Mr Sosich claims that none of these faults were repaired.
• [13] Mr Sosich then decided to remove and examine the driveshaft of the vehicle himself. He is a mechanic by trade so he felt qualified to do this.
• [14] He obtained information about a driveshaft from a Land Rover service manual which noted that the maximum permissible movement between the sleeve splines on Land Rover vehicle was recorded at 0.10 mm. He performed his own measurement of the play for the sleeve splines on his vehicle and produced a measurement of 1.9 mm of play (or movement).
• [15] He told me that he used a dial test indicator (DTI) gauge to undertake that measurement. He also told me that there was lateral movement as well as this vertical play on the driveshaft.
• [16] Mr Sosich took photographs of the driveshaft and relevant components and produced this for me, to illustrate his point.
• [17] In the meantime, Mr Sosich claims he discovered an additional fault which was that the brake pedal would float to the floor.
• [18] In addition, the ignition key master lock was not functional in that the doors would intermittently lock without being signalled to do so. Mr Sosich spent $450 to purchase two new ignition keys. He paid cash and did not produce any invoice for this expense.
• [19] Mr Sosich decided to pay a visit to GJS and there spoke to Mrs Johnstone. He told her in no uncertain terms he wanted to reject the vehicle, given all its faults. She would not agree.
• [20] On 30 April 2024, Mr Sosich took the vehicle to AA Auto Centre Rotorua (AA) for a diagnosis. Its report concluded:

Checked over features customer has highlighted with concern

We do not believe any of the highlighted notes are a safety concern:

Drive shaft has very slight movement however it is not enough for us to fail a WOF. We believe this still falls within safety specs.

Front shocks and suspension: Unable to fault at this stage and

Checked the brake operation: Brakes are ok. Brakes do fade slightly however, in the past we have had Ssangyong acknowledge this is common for some Ssangyong manufactured vehicles and still fall under manufacture safety specifications

Road tested vehicle - did not notice dashboard fading out during test drive or during inspection.

Radio screen was ok and illuminating as it should during inspection.

Unable to rule out any complications with the motherboard,

however we were unable to fault this while vehicle was here

Checked power steering belt – ok

Checked brake rotors – appear to be okay, would not fail a WOF in current condition. Customer

can arrange to have rotors machined but not a necessity.

From what we have inspected, for a 2nd-hand vehicle that has done 214,524 km, we can

summarise that the vehicle is in a fair condition.

• [21] The AA report recorded the then odometer reading at 214,524 kms.
• [22] Mr Sosich is unhappy with that report; he does not accept its contents. His submissions about it were to the effect that AA Auto Centre Rotorua has some form of relationship with GJS. Mr Sosich referred to Mrs Johnston several times as a “liar and a thief” during the course of the hearing.
• [23] Mr Sosich filed this application on 22 May 2024. He claims that the vehicle has the following faults:

  a) the windscreen remains faulty

  b) the auto transmission is slow to respond on acceleration and has a drive lag on overrun to accelerate and it is not constant

  c) the headlamp is yellowing and needs to be replaced

  d) the radio will not display and is only operational intermittently

  e) after 30 seconds the speed needle’s backlight fades out

  f) the power steering belt needs replacing

  g) the front shocks are too soft

  h) the handbrake will not hold on a slope

  9. the wiper arm blade holders are rusty and seizing

  j) the brake pedal floats to the floor

  k) there were noises coming from the power steering.

  12. the driveshaft has play due to worn splines, meaning the driveshaft will fail a WOF
• [24] He claims he has not been driving the vehicle.
• [25] After the hearing, he was given the opportunity to file independent evidence corroborating the faults that he alleged the vehicle has.
• [26] Pursuant to that request, he took the vehicle to Alpha Automotive and Electrical. It carried out a transmission diagnostic and found no electronic faults. It found the transmission operation to be “ok”. On its invoice, it commented “no faults found in operation, Turbo lag on takeoff normal in modern diesel vehicles”. It noted that there was a harsh driveline engagement present. It charged Mr Sosich $146.25 for that diagnosis.
• [27] Ms Sosich took the vehicle for a WOF check, at a cost of $90. The checksheet records the odometer reading on the vehicle was then 214,623 km and that the reasons for rejection are:

  a) headlight condition is poor and alignment (meaning beam direction will need adjusting)

  b) right-hand windscreen washer “no go”

  c) play excessive in the front driveshaft

  d) the power steering pump is leaking

  e) improve parking brake performance

  f) the speedometer illumination disappears

The response of GJS

• [28] Mrs Johnstone says that before the vehicle was supplied to Mr Sosich, GJS performed a full service and obtained a WOF. It also arranged for a new windscreen to be fitted, to address Mr Sosich’s complaint about visibility, and it polished up the headlamps in order to remove some of the yellowing, as best it could.
• [29] It performed a number of checks on the vehicle, including road testing in order to detect any noises or faults, raising the vehicle on a hoist to carry out a full underbody inspection, checking steering suspension wheels, body exhaust brakes, and checking and inspecting the driveline components and topping up fluids. It carried out underbody rust repairs replaced the left right wheel bearing, it replaced both lower suspension bushes to the rear and replace the left front upper ball joint.
• [30] The cost of that work was $1,947.09 and it produced an invoice recording that amount and the work was done.
• [31] One week after sale, Mrs Johnston said that Mr Sosich returned with the vehicle and said that he was not happy with the windscreen visibility and headlamps, which he is considered were still dull. She gave him a price for new headlights.
• [32] Some two months later, Mr Sosich returned and spoke to Mr Simon. Mr Simon gave evidence that Mr Sosich’s concern this time was the transmission was lagging on acceleration. He said that Mr Sosich did not bring any handwritten list of faults or raise any other issues, as he alleges.
• [33] Mr Simon says that he and two other mechanics all test drove the vehicle and noticed no fault with the transmission or any unusual lagging in the acceleration. They checked the vehicle and found no fault codes.
• [34] Mrs Johnstone said that in June 2024, Mr Sosich returned and simply “threw” the driveshaft at her, demanding a refund.
• [35] In response to the additional information Mr Sosich provided after the hearing GJS says it does not accept that any of these are a failure of the guarantee of acceptable quality. It says these issues were not present when the vehicle was sold to Mr Sosich and that twelve months has now passed since he bought the vehicle.
• [36] Mrs Johnstone submits that GJS has honoured all of its obligations to Mr Sosich.
• [37] It essentially says that this is an older second-hand vehicle that any consumer would expect to encounter the need for ongoing maintenance and repairs.

Issue 1: Was the vehicle of acceptable quality?

• [38] 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.
• [39] 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.

[40] 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.

• [41] I begin by noting that as with any claim before the Tribunal, the Tribunal applies the usual civil law standards and expectations. That means that it is for the party bringing the application to establish their claims “on the balance of probabilities”. They must establish that what they are claiming is more likely than not.
• [42] This is referred to as the “burden of proof”. Independent witnesses, corroborating documents and photographs may be an important part of discharging this burden. Ultimately however, it is for the party making the application to obtain and put that evidence before the Tribunal.
• [43] As noted in Kaipo v Clarke,^[1] in practical terms this means that:

... [L]ike anyone who brings an application before a Tribunal or Court, it is incumbent upon the applicant to provide the evidence necessary to prove the case. If the applicant fails to do that, then their application will be dismissed whether it has merit or not because it is up to the applicant to provide the necessary evidence. It is not up to the other parties, and it is certainly not up to the Tribunal to extract evidence.

The transmission and driveshaft

• [44] A central part of Mr Sosich’s case was that the driveshaft and transmission are faulty.
• [45] Mr Sosich has now provided evidence corroborating his allegation that there is excessive play in the front driveshaft. It has been identified in the recent WOF check.
• [46] This was an older vehicle with very high mileage at the time of sale. A reasonable consumer would understand that vehicles of this price, age and mileage can develop defects and require ongoing maintenance that can sometimes be expensive to repair or perform. They would expect that the vehicle’s components would be subject to wear and tear and require replacement. They would also understand that a supplier’s obligations under s 6 of the CGA are finite and, at some point, the risk of the vehicle developing defects must transfer from the supplier to the purchaser. The point in time at which that risk transfers is determined with reference to the factors in s 7(1)(f) to (j) of the CGA.
• [47] Even though this was an older vehicle with high mileage at the time of sale, I am satisfied that a reasonable consumer would not find this fault acceptable, given its symptoms have emerged so soon after purchase. The excessive play in the front driveshaft has meant that the vehicle fails the guarantee of acceptable quality. I consider it probable that this fault was pre-existing, given Mr Sosich’s early complaints about it.
• [48] I am not satisfied that any wider fault with the transmission has been proven. No corroborating evidence has been produced of it.

The headlight condition and alignment, the right-hand windscreen washer, the power steering pump, the parking brake performance and the speedo illumination

• [49] I accept that faults have been proven with respect to each of the above items. Mr Sosich’s recent WOF check has identified that these faults exist and I find them to be proven.
• [50] These are the sorts of faults that a reasonable consumer would expect to encounter over time, especially in an older vehicle with high mileage at the time of sale.
• [51] I am satisfied that a reasonable consumer would not however expect to encounter these faults so soon in their ownership of the vehicle. Mr Sosich has driven approximately 1,000 km during his ownership of the vehicle. This is very little driving and the faults with the vehicle were most likely present either at the time of sale or shortly thereafter.
• [52] I am satisfied that these faults have meant that the vehicle failed the guarantee of acceptable quality. The vehicle has not been as free from minor defects or as durable as would be expected by a reasonable consumer.
• [53] Mr Sosich has not proven the existence of any other faults.

Issue 2: Are the vehicle’s defects a failure of a substantial character?

• [54] Mr Sosich to reject the vehicle. Under s 18(3) of the CGA, he may reject the vehicle if its defects amount to a failure of a substantial character. 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.

• [55] Likewise, I am not satisfied that a reasonable consumer fully acquainted with the true nature and extent of the fault 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.
• [56] I consider that none of the faults that have been proven, nor the cumulative effect of these faults, amounts to a failure of a substantial character. I also consider that the faults do not make the vehicle unsafe.
• [57] It follows that there is no grounds to reject the vehicle on the basis that it is faults amount to a failure of a substantial character.

Issue 3: What remedy is Mr Sosich entitled to under the CGA?

• [58] The relevant remedies are set out in s 18 of the CGA, which 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.

• [59] Mr Sosich is entitled to reject the vehicle where he can prove that he has given GJS a reasonable opportunity of repair and it has failed to do so.
• [60] The question is whether he has given GJS an opportunity to repair these recently diagnosed faults.
• [61] Generally, the obligation of a supplier to remedy a fault with a motor vehicle is triggered once there is sufficient diagnostic or other information to prove the existence of a fault. Often, the cause of a fault will be readily obvious once a diagnostic assessment is undertaken by a suitably qualified mechanic. Sometimes, however, a vehicle might display symptoms of a fault but the precise cause of those symptoms is difficult to diagnose. In cases such as that, the question is whether a purchaser has done enough to prove the existence of some sort of fault to trigger the obligation that a supplier has to repair. In those sorts of cases, mechanical evidence as to what may be wrong with the vehicle may not conclusively point to the reason for the fault but will nevertheless corroborate the existence of the symptoms that the vehicle is experiencing.
• [62] I consider that the obligation on GJS to repair these faults did not arise until Mr Sosich attained the diagnostic evidence that was requested and thereby triggered the supplier’s obligation of repair.
• [63] It follows that he does not currently have the right to reject the vehicle because GJS has not been given the opportunity to repair in the light of the faults I have found above.
• [64] GJS must uplift the vehicle at a time and date convenient to Mr Sosich and at its cost and repair the following faults within a reasonable time from the date of this decision:

  a) the fault that is causing the current headlight condition and alignment to fail a WOF

  b) the faulty right hand windscreen washer

  c) the fault that is causing excessive play in the front driveshaft

  d) the leaking power steering pump

  e) the faulty parking brake

  f) the fault that is causing the Speedo elimination to disappear.

• [65] Once these repairs are completed it must return the vehicle to Mr Sosich, at its cost and at a time and date convenient to him.
• [66] Pursuant to s 18(4) of the CGA, Mr Sosich entitled to be reimbursed for the cost of the WOF check, being the sum of $90. He is also entitled to be reimbursed the cost of the diagnostic invoice of Alpha Automotive and Electrical in the sum of $146.25. I consider both of these costs to be reasonably foreseeable as liable to result from the failures. The sums must be paid by GJS to Mr Sosich within 10 working days of the date of this decision.

DATED at AUCKLAND this 19^th day of December 2024

D Watson
Adjudicator

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^[1] Kaipo v Clarke DC Waitakere 233/02, 12 April 2002 at [7].