Saju v Quay Cars 2008 Limited [2025] NZMVDT 7 (16 January 2025)

Last Updated: 20 February 2025

IN THE MOTOR VEHICLE DISPUTES TRIBUNAL I TE RŌPŪ TAKE TAUTOHENGA Ā-WAKA MVD 193/2024 [2025] NZMVDT 007 BETWEEN PRIYANKA KONAMPURATH SAJU Applicant AND QUAY CARS 2008 LIMITED Respondent

HEARING at CHRISTCHURCH on 12 September 2024 and 18 December 2024 (by audio-visual link) MEMBERS OF TRIBUNAL

D M Jackson, Barrister – Adjudicator

S Cousins – Assessor

APPEARANCES

B Eldhose, Husband of Applicant

No Appearance for the Respondent (18 December 2024 only)

DATE OF DECISION 16 January 2025

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DECISION OF THE TRIBUNAL

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1. Within ten working days of the date of this decision Quay Cars 2008 Limited is to refund Mrs Saju $16,500.
2. Further, within ten working days of the date of this decision Quay Cars 2008 Limited is to pay the Applicant $145 plus GST for her consequential losses incurred in proving her application.

100. Upon receipt of both payments A and B Mrs Saju is to make the vehicle available for collection by Quay Cars 2008 Limited at its cost (if any).

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REASONS

Introduction

• [1] On 31 August 2023 Mrs Saju purchased a 2011 Toyota Estima Hybrid from Quay Cars 2008 Limited trading as Quay Cars (the Trader) for $16,500. The vehicle’s mileage was 123,000 kms at the time of sale and 137,107 kms by 29 November 2024. Mrs Saju did not receive the vehicle until 11 October 2023.
• [2] Mrs Saju complains that the vehicle has a steering fault, which the Trader has agreed to repair, but has failed to do so successfully.
• [3] The repairs occurred during the proceeding. That is, the parties agreed to the repairs before the Tribunal and the proceeding was adjourned pending the completion of those repairs.
• [4] Unfortunately, the Trader did not appear at the hearing on 18 December 2024, and I determined to proceed in its absence. Before me, Mr Eldhose for Mrs Saju renewed her application to have her rejection of the vehicle upheld. She produced – for the first time and despite directions made earlier in the proceeding – comprehensive evidence of excessive free play on the left-hand side steering rack, which caused a knocking noise during driving, and which reverberated through the steering wheel.
• [5] It was the knocking noise and play in the vehicle’s steering which Mrs Saju had complained of from the outset of her application. Her application referred to this complaint but did not provide definitive evidence of it until much later in the proceeding.

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) Has the Trader refused or failed to rectify the vehicle’s defects within a reasonable time?

(c) Are the vehicle’s defects a failure of a substantial character?

(d) What remedy is Mrs Saju entitled to under the CGA?

Issue 1: 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] Before I go on to consider what faults this vehicle has had, I begin by noting that 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 probable than not.
• [11] This is referred to as the “burden of proof”. Independent witnesses, corroborating documents and reports and photographs can be an important part of discharging this burden. Ultimately however, it is for the party making the application to decide what evidence to put before the Tribunal.
• [12] As noted in Kaipo v Clarke, in practical terms this means that:^[1]

  ...[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.

• [13] Mr Cousins, the Tribunal’s Assessor,^[2] has reviewed the photographic and video evidence filed by Mrs Saju. Again, this evidence was lacking earlier in the proceeding, which prompted the parties to agree for the Trader to repair whatever was causing the symptoms complained of. The Trader paid for a repairer local to Mrs Saju to investigate and repair the vehicle. It would appear that that investigation and repair was substandard for reasons which I shall explain.
• [14] Mrs Saju’s technician explained her findings in an email, which confirms excessive sideways movement of the steering rack shaft, which rendered the vehicle unroadworthy (that is, it would fail a warrant of fitness inspection for this reason).
• [15] Mr Cousins agrees with the technical assessment and says the steering rack requires replacement. Mr Cousins is critical of the earlier repair noting that this issue ought to have been obvious to any competent repairer and that the repair, whatever it entailed, has not addressed the root cause of the steering play. The repairer appears to have identified the excessive play but rather than replace the steering rack has advised, and proceeded to, replace the left-hand inner rack end joint to start with. The repairer did not go further however.
• [16] I am satisfied and find that the reasonable consumer would not consider the faulty steering rack and its excessive play acceptable all things considered and that the steering rack breaches the guarantee of acceptable quality, therefore.

Issue 2: Has the Trader refused or failed to rectify the vehicle’s defects within a reasonable time?

• [17] Section 18(2)(b)(ii) of the CGA enables a consumer to reject goods where a supplier has been required to remedy a failure but refuses, fails or does not succeed in doing so within a reasonable time.
• [18] Section 18 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.

• [19] As outlined above, the Trader agreed to repair whatever was causing the steering play early on in this proceeding. Because the Trader is based in Nelson and Mrs Saju lives in Wellington, a local repairer was identified the Trader to carry out a repair, which Mrs Saju agreed to, and the Trader paid for. Mr Cousins advises me that the repair was poor and did not identify the key problem, being the excessive play in the steering rack.
• [20] The repairer, for all intents and purposes, was the Trader’s agent noting that it paid for the repair. I am mindful that Mrs Saju wants to reject the vehicle for the Trader’s failure to repair the steering rack play within a reasonable time. However, the Trader was led to believe by its repairer that the repair was simpler than in fact was required. This uncertainty in part stems from Mrs Saju’s failure to comply with earlier directions of the Tribunal to produce evidence from a technician as to the diagnosis and repair of the vehicle. This only came to the Tribunal’s attention much later in the proceeding.
• [21] I am not prepared to find therefore that the Trader failed or refused to repair the vehicle within a reasonable time. The Trader acted honestly and took the approach that whatever the local repairer identified, it would pay for its repair. I note that the later technician employed by Mrs Saju advised Mrs Saju of its diagnosis as early as 1 March 2024 in an invoice recommending replacement of the complete steering rack (noting free play on the left-hand side). However, evidence explaining that recommendation was not presented to the Tribunal earlier in this proceeding. Rather, the invoice was produced by Mrs Saju which refers a recommendation that the steering rack be replaced (and no more than that). On 5 June 2024 the Tribunal directed Mrs Saju to provide a “more comprehensive written diagnosis regarding steering rack defect. Please reference the diagnosis to the section 9-1 of the Vehicle Inspection Requirements Manual. Include a video which verifies any movement, if this cannot be observed easily in a video, please record the video alone with a dial gauge to portray the extent of the play”.
• [22] This information was not supplied by Mrs Saju until 4 December 2024. In the meantime, the vehicle was “repaired”, which Mr Cousins advises me meant accessing the very area, which has – in fact – failed. Moreover, the vehicle has since obtained a further warrant of fitness, which Mr Cousins describes as incomprehensible given the obvious defect identified in the video evidence supplied on 4 December 2024.

Issue 3: Are the vehicle’s defects a failure of a substantial character?

• [23] A failure of a substantial character is defined in s 21 of the CGA:
  21. 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.

• [24] Mr Cousins advises me that a faulty steering rack with excessive play is relatively straightforward to diagnose and repair. It is a warrant of fitness failure item and is a safety concern in its current condition. The vehicle should not be driven until it is repaired.
• [25] The play was identified as early as February 2024 and should not have passed, I am advised, a warrant of fitness inspection in October 2024. The play ought to have been obvious to the repairer during the rack end repair carried out in August 2024. The play ought to have been obvious during the subsequent wheel alignment carried out at the conclusion of the repair.
• [26] While the fault is something that one might expect in a vehicle of this age and mileage, and the repair is straightforward, the consequences of the steering rack failing during operation are a safety concern and the vehicle is unsafe to drive.
• [27] I am satisfied that the failure here is one of substantial character therefore, even if it has been missed by multiple industry participants.

Issue 4: What remedy is Mrs Saju entitled to under the CGA?

• [28] 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.

• [29] In light of my findings above, Mrs Saju is entitled to reject the vehicle for a failure of substantial character. Mrs Saju has continued to use the vehicle and has travelled approximately 13,000 kms since purchase. However, she has done so under the mistaken belief that the vehicle was roadworthy and/or repaired. The same defect has persisted throughout however, and she has never changed her case for rejection (even if agreeing to a repair earlier in the proceeding for the sake of expedience). She has not lost her right to reject the vehicle in my view noting that she made her application to the Tribunal (in which she seeks rejection) soon after receiving advice from the local repairer that the steering rack ought to be replaced. Her rejection (which was made by her application to the Tribunal) was made within a reasonable time of her discovery of the defect, therefore.
• [30] Within ten working days of the date of this decision she is to be reimbursed the purchase price paid in full. Further I will order that Mrs Saju is reimbursed the $145 plus GST, which she paid for the local repairer’s diagnosis of the problem. Once those amounts are paid to Mrs Saju, the vehicle is to be made available to the Trader to uplift, at its expense (if any).

D M Jackson
Adjudicator

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^[1] Kaipo v Clarke DC Waitakere TT 233/02, 12 April 2002 at [7].
^[2] Assessors are appointed by the Minister of Commerce and Consumer Affairs under s 88(2) of the Motor Vehicle Sales Act 2003, having regard to the Assessor’s personal attributes, qualifications and skills and knowledge of, or experience in, the different aspects of matters likely to come before the Tribunal. Under cl 10 of Sch 1 of the Motor Vehicle Sales Act, an Assessor sits as a member of the Tribunal and has a duty to assist the Adjudicator in the determination of the claim, although the Adjudicator alone determines the claim.