|
|
Home
| Databases
| WorldLII
| Search
| Feedback
Motor Vehicles Disputes Tribunal of New Zealand |
Last Updated: 24 April 2024
IN THE MOTOR VEHICLE DISPUTES TRIBUNAL
I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA
MVD
462/2023
[2024] NZMVDT 036
BETWEEN SHAUN RAYMOND KELLY
Purchaser
AND SUNDAY LIMITED TA SUNDAY DRIVE
Trader
HEARING at AUCKLAND on 14 February 2024
MEMBERS OF
TRIBUNAL
J S McHerron, Barrister – Adjudicator
S Haynes – Assessor
APPEARANCES (VIA MICROSOFT TEAMS)
S R Kelly, Purchaser
No appearance by Trader
DATE OF DECISION 8 March 2024
___________________________________________________________________
DECISION OF THE TRIBUNAL
___________________________________________________________________
A Sunday Ltd must pay Shaun Kelly $1,391 no later than 22 March 2024.
___________________________________________________________________
REASONS
Introduction
[1] Shaun Kelly’s Mazda CX-5 needs new diesel injectors. In this proceeding, Mr Kelly seeks to recover the cost of this repair from Sunday Ltd, which sold him the vehicle.
[2] No one from Sunday Ltd attended the hearing. Sunday Ltd was properly notified of the hearing and was given the opportunity to attend remotely over Microsoft Teams. However, the night before the hearing, after the close of business, Sunday Ltd’s director Taylor Campbell emailed the case manager seeking an adjournment. The only reason Mr Campbell gave was “sudden staff shortage”. The email was referred to me the next morning, about an hour before the hearing was scheduled to start.
[3] The Tribunal’s Practice Direction relating to adjournments states that an application for an adjournment made less than five working days prior to the hearing date will not be granted unless there are extraordinary and compelling reasons for the matter to be adjourned.[1]
[4] The case manager emailed my decision declining the adjournment application to Mr Campbell at 8:10 am of the morning of the hearing and attempted to speak with him by phone but he did not pick up his phone. The case manager left a message with Mr Campbell’s message service indicating that the hearing would proceed with or without him.
[5] “Sudden staff shortage” is not a good reason to justify an adjournment, let alone an extraordinary or compelling reason. Rostering of staff to manage the business is something for Sunday Ltd to arrange compatibly with its obligations to attend the hearings of Tribunal claims against it.
[6] The Tribunal had already permitted Mr Campbell to appear at the hearing over Microsoft Teams. This would have allowed him to attend the hearing with minimal disruption to Sunday’s Ltd’s business. His decision not to attend the hearing without obtaining prior permission was unprofessional and discourteous to Mr Kelly and the Tribunal.
[7] I was satisfied that:
- (a) Sunday Ltd advanced no good reason for an adjournment; and
- (b) the decision declining the adjournment was adequately communicated to Sunday Ltd.
[8] I therefore decided to proceed to hear and determine the proceeding in the absence of a representative from Sunday Ltd.
The issues
[9] From this background, the following issues arise for the Tribunal to determine:
- (a) Did the vehicle fail to comply with the guarantee of acceptable quality?
- (b) If so, did Sunday Ltd refuse or neglect to remedy the failure within a reasonable time?
- (c) What, if anything, is the appropriate remedy?
Issue 1: Has the vehicle been of acceptable quality?
[10] Section 6(1) of the Consumer Guarantees Act 1993 (CGA) provides that “where goods are supplied to a consumer there is a guarantee that the goods are of acceptable quality”. According to s 2 of the CGA, “goods” includes vehicles.
[11] “Acceptable quality” is defined in s 7 of the CGA (as far as is relevant) as follows:
- 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.
...
[12] 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.
[13] Mr Kelly purchased the vehicle on 27 October 2022. The purchase price, including the cost of transporting the vehicle from Auckland to Queenstown, was $27,553.70. The odometer reading at the time of sale was 57,688 km. Mr Kelly took delivery of the vehicle on 23 November 2022.
[14] Mr Kelly’s evidence was that, within two days of taking delivery of the vehicle, after he had driven it less than 100 km, a warning appeared on the dashboard indicating a problem with the diesel particulate filter (DPF). Mr Kelly contacted Sunday Ltd, who suggested he take the vehicle to a Ford/Mazda service agent. Mr Kelly took the vehicle to Macaulay Motors in Queenstown.
[15] Macaulay Motors attended to the vehicle on four occasions:
- (a) On or around 8 December 2022, when the odometer reading was 58,877 km, Macaulay Motors carried out an injection amount correction procedure and static regeneration. The cost of this work, $236.30, was met by Sunday Ltd.
- (b) On or around 10 January 2023, after the DPF malfunction light had come back on, Macaulay Motors checked for a mechanical issue that was hindering the regeneration process but none was found. It found a broken turbo boost clamp which it replaced and then carried out a further static DPF regeneration. The cost of this work, $236.30, was also met by Sunday Ltd. The vehicle’s odometer reading at the time of this repair was 59,213 km.
- (c) On or around 11 May 2023, after the DPF malfunction light had returned on or around 27 April 2023. This time, Macaulay Motors noted that the engine oil had deteriorated. It recommended changing the engine oil and filter, carrying out a static DPF regeneration and oil pressure test as well as DPF sensor checks. Mr Kelly paid for the cost of this repair, $561.10, as Sunday Ltd had told him on 28 April 2023 that it would no longer be assisting with the vehicle as it was outside the “six month warranty”. Further, Mr Kelly said that the Sunday Ltd representative had told him that the issue was a “serviceable item” and thus not covered under warranty.
- (d) On or around 12 October 2023, after the DPF malfunction light had returned (for the fourth time) on or around 29 August 2023. This time, Macaulay Motors consulted with Mazda New Zealand, which directed it to complete pinpoint testing and follow the Mazda workshop manual flowchart. After taking these steps, Macaulay Motors concluded that the DPF issue was being caused by faulty diesel fuel injectors. It recommended that the injectors be removed and replaced with new units and the system reset. The vehicle’s odometer reading recorded at the time of this diagnosis was 66,141 km.
[16] Macaulay Motors has provided a quote for replacing the vehicle’s diesel injectors: $5,888.60.
Tribunal’s assessment
[17] The evidence strongly indicates that Sunday Ltd sold Mr Kelly a vehicle with faulty diesel injectors. It is unfortunate that Macaulay Motors’ diagnostic process does not seem to have identified this fault until the fourth occasion that the DPF malfunction warning appeared. But there is little doubt that the injectors were the underlying cause of the DPF problems all along. For that reason, it was wrong of Sunday Ltd to suggest that the CGA’s protections no longer applied to Mr Kelly by the time the fault was properly diagnosed, because it was too long after the date of purchase. Rather, the evidence suggests that the vehicle was faulty as at the date of purchase. Even if it was not faulty from the very beginning, the fault first arose after Mr Kelly had only driven the vehicle approximately 100 km. On any assessment, the vehicle lacked durability. For a vehicle to comply with the guarantee of acceptable quality it must be reasonably durable.[2]
[18] I do not consider that a reasonable consumer would consider it acceptable to face a repair bill approaching $6,000 in relation to an issue that was present at or very shortly after the date of purchase in respect of a vehicle that:
- (a) by the time the delivery charge was added, cost nearly $30,000;
- (b) had only travelled less than 58,000 km by the date of purchase; and
- (c) was only five years old.
Conclusion
[19] I conclude that the vehicle failed to comply with the guarantee of acceptable quality due to its faulty diesel injectors.
Issue 2: Did Sunday Ltd refuse or neglect to remedy the failure, or not succeed in doing so within a reasonable time?
[20] The evidence was clear that Sunday Ltd refused to pay for the full costs of replacing the diesel injectors. In addition, Sunday Ltd refused to meet the cost of repairs that were needed after the third time that the DPF malfunction light returned in or around April 2023.
Conclusion
[21] I conclude that Sunday Ltd refused to remedy the vehicle’s failure.
Issue 3: What is the appropriate remedy?
[22] The remedies available to a consumer where a vehicle does not comply with the guarantee of acceptable quality are set out in s 18 of the CGA, which provides:
- 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.
[23] The primary remedy available to a consumer where a vehicle fails to comply with the guarantee of acceptable quality is set out in s 18(2)(a) and allows the consumer to require the supplier to remedy the failure within a reasonable time.
[24] Where a supplier refuses to remedy the failure, the purchaser has the option to reject the vehicle, or have the failure remedied elsewhere and obtain from the supplier reasonable costs incurred in having it remedied.[3]
[25] Mr Kelly has elected to have the vehicle repaired and recover the costs of the repair from Sunday Ltd. Unless (in light of this decision) Sunday Ltd offers to pay, Mr Kelly will need to incur the repair costs upfront and then return to the Tribunal for an order for the reimbursement of the reasonable costs. Mr Kelly confirmed that he was comfortable with that approach.
[26] In addition, I consider that Mr Kelly is entitled to recover the costs of the repairs and diagnosis that he has already incurred after Sunday Ltd refused to assist him further after about April 2023. These costs include:
- (a) Macaulay Motors’ repair and diagnostic costs in May 2023: $561.10. Some of these costs related to replacement of the engine oil and filter, which would normally be regarded as non-recoverable servicing expenses. However, I note from the invoice that the vehicle was not due to be serviced again until November 2023. This can therefore be regarded as an additional service that was part of Macaulay Motors’ attempts to repair the vehicle’s fault.
- (b) Macaulay Motors’ diagnosis of the vehicle in October 2023: $79.90.
“Hardship payment” is not recoverable
[27] Mr Kelly also sought to recover $3,500 as a “hardship payment”. As I explained in the hearing, stress, inconvenience and time wasted is burdensome. But it can be an ordinary feature of vehicle ownership. Claims involving defective motor vehicles such as this are inherently stressful and time consuming. The Tribunal lacks jurisdiction to award general damages reflecting stress, inconvenience, or similar. The Tribunal instead has jurisdiction to award damages for reasonably foreseeable losses arising from the vehicle’s failure under s 18(4) of the CGA (above).
[28] Because of this limit to the Tribunal’s jurisdiction to award damages reflecting reasonably foreseeable losses arising from the vehicle’s failure, compensatory damages for stress and inconvenience are reserved for exceptional cases. The circumstances of the present case are similar to many of the cases that come before the Tribunal where a consumer spends time, effort and emotional energy attempting to resolve the issues they have with a vehicle and dealing with the inconvenience caused. I am not satisfied that this is an exceptional case justifying an award of compensatory damages.
[29] However, in the circumstances of the present case, Mr Kelly is entitled to recover a financial contribution to his costs of bringing his application in the Tribunal.
[30] The Tribunal’s power to award costs is triggered by:
- (a) the fact that Sunday Ltd did not appear at the hearing; and
- (b) the fact that this is a matter which in my view ought to have been straightforward enough for a settlement to be reached. I will discuss this aspect further below in the section headed “costs”.
Costs
[31] The Tribunal may award costs against a party where that party, after receiving notice of the hearing, fails to attend without reasonable cause.[4]
[32] As discussed above, I am satisfied that Sunday Ltd received notice of the hearing and failed to attend without reasonable cause.
[33] I order Sunday Ltd to pay $750 to Mr Kelly, to reflect his reasonable costs in connection with the Tribunal proceeding, including the application fee.
Result
[34] Sunday Ltd must pay Shaun Kelly $1,391 no later than 22 March 2024.
[35] Shaun Kelly may proceed to have the diesel injectors in his vehicle replaced as in Macaulay Motors’ quotation dated 12 October 2023.
[36] Once Mr Kelly has had the repair completed and has paid for the repairs, he is to present the invoice to the Tribunal and Sunday Ltd. Seven days will be allowed for Sunday Ltd to make any comments.
[37] Following that, the Tribunal will make a further order as to the additional amount that Sunday Ltd is required to reimburse Mr Kelly.
J S McHerron
Adjudicator
[1] Motor Vehicles Disputes Tribunal “Practice direction 1/07 Adjournments” (16 April 2018) Ministry of Justice <www.justice.govt.nz>.
[2] Consumer Guarantees Act 1993, s 7(1)(e).
[3] Consumer Guarantee Act 1993, s 18(2)(b).
[4] Motor Vehicle Sales Act 2003, sch 1, cl 14(1)(b).
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZMVDT/2024/36.html