Kennedy v Storer Motors Limited - Reference No. MVD 429/2023 [2024] NZMVDT 55 (28 March 2024)

Last Updated: 25 April 2024

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 429/2023 [2024] NZMVDT 055 BETWEEN BRIAR KENNEDY Applicant AND STORER MOTORS LIMITED Respondent

HEARING at CHRISTCHURCH on February 2024 (by audio-visual link) MEMBERS OF TRIBUNAL

D M Jackson, Barrister – Adjudicator S Cousins – Assessor

APPEARANCES

B Kennedy, Applicant B Jeffries, Witness for the Applicant

R Storer, Director for the Respondent

DATE OF DECISION 28 March 2024

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DECISION OF THE TRIBUNAL

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A Within ten working days of the date of this decision Storer Motors Limited is to pay Ms Kennedy $439.62.

B The balance of Ms Kennedy’s application for reimbursement is dismissed.

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REASONS

Introduction

[1] On 22 September 2020 Ms Kennedy purchased a 2011 Volkswagen Golf TSI from Storer Motors Limited (SML) for $11,000.
[2] The vehicle’s odometer read 46,684 kms at the time of sale. On 25 October 2023 Ms Kennedy filed this application by which time the vehicle’s odometer read 70,778 kms.
[3] By her application, Ms Kennedy seeks the costs of repairs incurred by her in order to fix the vehicle’s transmission, which has failed.
[4] SML resists the application, and says it rebuilt the transmission and installed a new mechatronic unit in 2021 (at 53,480 kms). Ms Kennedy contributed to these repairs in the amount of $439.62. SML says it did not hear from Ms Kennedy further until June 2023 when she asked for documentary evidence of the 2021 repairs. It refused to provide this information.
[5] Ms Kennedy has since carried out further repairs to the transmission at 70,895 kms. She appears to have spent $3,400 in doing so. SML maintains the second fault is not associated with the 2021 fault or repair.

The issues

[6] 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) What remedy is Ms Kennedy entitled to under the CGA?

Issue 2: Has the vehicle been of acceptable quality?

[7] 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”.
[8] “Acceptable quality” is defined in s 7 of the CGA (as far as is relevant) as follows:

7. Meaning of acceptable quality

(1) For the purposes of section 6, goods are of acceptable quality if they are as—

(a) fit for all the purposes for which goods of the type in question are commonly supplied; and

(b) acceptable in appearance and finish; and

(c) free from minor defects; and

(d) safe; and

(e) durable,—

as a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects, would regard as acceptable, having regard to—

(f) the nature of the goods:

(g) the price (where relevant):

(h) any statements made about the goods on any packaging or label on the goods:

(ha) the nature of the supplier and the context in which the supplier supplies the goods:

(i) any representation made about the goods by the supplier or the manufacturer:

(j) all other relevant circumstances of the supply of the goods.

(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.

[9] 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.
[10] SML produced an invoice which described the 2021 repair as requiring the transmission to be disassembled, an inspection for failed shift fork shaft bearings, the replacement of bearings and reassembly of the transmission at a cost of $879.23. The transmission and mechatronic unit were not repaired or replaced at the time. SML produced an email from the first repairer, a transmission specialist, which says the second fault is unrelated to the 2021 repair, noting the clutch has failed in 2023 (which was not repaired earlier).
[11] The 2023 repair was carried out for Ms Kennedy by a different, but reputable, transmission specialist. The repair was focussed upon a clutch and flywheel replacement. The repairer has noted that the vehicle suffered clutch shudder, which is renowned in 7 speed vehicles using a direct-shift gearbox and can appear within 12 to 18 months of frequent city use due to the transmission struggling at low rpm and lower speed gear changing.
[12] Ms Kennedy’s evidence was based largely on the invoices provided to her and correspondence from a repairer involved in the second repair. That repairer described how the transmission specialist diagnosed a worn or faulty clutch and flywheel and the need for a software upgrade, which might reduce the risk of future transmission problems. The repairer was critical of some parts used during earlier work to the transmission but could not be definitive as to whether the use of second hand or after market parts had contributed to the clutch shudder experienced in 2023.
[13] Mr Cousins, the Tribunal’s Assessor, reviewed the evidence and considers the first repair, which involved the correction of an internal fault likely present at the time of purchase, was a breach of the guarantee of acceptable quality. The fork shaft bearings had failed amongst other things, which defect although hidden would not be acceptable to the reasonable consumer all things considered. I agree and find that the fork shaft bearing failure is a breach of the guarantee of acceptable quality.
[14] However, Mr Cousins does not consider the second repair to be anything other than an expected clutch failure in a dual clutch vehicle of 50,000 or so kms. The clutch was not repaired or replaced during the 2021 repairs and Mr Cousins can see no connection between the 2021 repair and the 2023 clutch failure. Clutches, especially in dual clutch systems, wear over time and in these particular systems can wear especially quickly as noted in the transmissions specialist’s repair notes. I agree with Mr Cousins and find that Ms Kennedy has not established that the clutch failure offends the guarantee of acceptable quality therefore. This aspect of her application is dismissed.

Issue 2: What remedy is Ms Kennedy entitled to under the CGA?

[15] 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.

[16] SML required Ms Kennedy to contribute to half of the 2021 repair costs incurred. I have found that the 2021 repairs were necessary to correct a breach of the guarantee of acceptable quality. Ms Kennedy should not have had to contribute to half of the repair costs to the failed fork shaft bearings. Accordingly, I order that within ten working days of the date of this decision SML is to pay Ms Kennedy $439.62.

D M Jackson
Adjudicator