Buyer’s old Delica van was not free of defects at the time of sale

The Motor Vehicle Disputes Tribunal hearing outcome regarding Alisha Hart and Auckland Budget Campervan Limited trading as D&M. Background Alisha Hart bought a 1996 Mitsubishi Delica van with 200,135kms on the odometer for $4,750 from Auckland Budget Campervan Limited trading as D&M on September 1, 2016. Hart told the trader that she wanted a camper van for a two-month tour of the South Island. Hart said the trader assured her the vehicle was suitable for that purpose. The contract of sale was recorded in a one-page agreement, under which the trader wrote that the van was sold “as trade-in condition” and the sale was a “private sale on “as is, where is” basis”. The agreement also stated Hart agreed she had “no recourse for this vehicle once the sale was complete” and that “the Consumer Guarantees Act & the Fair Trading Act do not apply to this Purchase”.  The trader provided a “7-day mechanical warranty”. The case Hart said 10 minutes after leaving the trader’s premises, the vehicle started shaking, lurched when shifting gears and the oil light flickered. She returned the Delica to the trader. It worked on the van and returned it to her that afternoon. Hart said the van continued to shudder, the oil light flickered and the engine temperature would “shoot up” when the vehicle’s windows were closed. She again returned the Delica to the trader on September 7. The trader said the van’s problems were normal and related to “the power draw” but fixed an idling issue. Hart said the van’s performance improved, although it continued to shudder and the oil light flickered. On two occasions the engine temperature rose as the vehicle drove uphill, subsequently dropping downhill. But she did not raise these issues with the trader because the mechanical warranty had expired. In October, Hart left Auckland in the Delica for the South Island. She stopped in Hamilton because the van’s temperature gauge was “very high” and it overheated again the next day in Piopio. She took it to Grainger Motors Limited which checked the cooling system, removed the thermostat housing, found no thermostat was fitted and refilled and bled the cooling system. Hart said Grainger Motors also identified a leaky hose and a “dodgy pipe” connection to the radiator. Grainger Motors told Hart it was unable to repair the van and charged her $39.10. Hart took the Delica to New Plymouth’s Strandon Automotive Limited, which installed a new thermostat, and replaced the clutch fan hub and leaky radiator hose, costing $581.52. Hart said the van continued to overheat but she could not afford further repairs. After researching into her legal rights, Hart spoke with the trader’s director Daryosh Marjomaki, and asked for a remedy under the CGA. She said Marjomaki stated the Delica had a seven-day warranty but paid her $375 for repair costs. She said Marjomaki told her the trader had done everything required under the law. Hart continued to experience problems with the Delica and on December 9, she had trouble starting it. On December 16, Hart rejected the van saying it had significant faults and was not fit for purpose. The trader said the CGA did not apply to the purchase of the Delica as it was a “park to sell” and private sale. On advice from the tribunal, Hart had Caltex Blockhouse Bay, an MTA certified repairer, inspect the van in March 2017. It recommended the radiator unit and thermostat be replaced, a cost of $695 + GST, and charged $80.50 for the assessment. The finding The tribunal said the trader was also a supplier under the CGA. It sold vehicles on behalf of others. It also supplied goods to a consumer – it transferred ownership and possession of the vehicle to the purchaser therefore the CGA applied to the transaction. The tribunal said the trader’s attempt to exclude the CGA was likely a breach of the FTA, which prohibited false or misleading representation about the existence of rights. The tribunal ruled the van didn’t comply with the CGA’s guarantee of acceptable quality because it was not free of defects at the time of sale nor durable because it had almost immediate problems with overheating. A reasonable consumer would not expect an old, cheap van with high mileage to be free of all defects. However, a reasonable consumer would not expect the defects to affect the vehicle’s performance at the time of purchase or lack durability. The trader had been aware of the faults since September 7 and had a reasonable opportunity to repair them but failed to do so which gave Hart the right to reject the vehicle under the CGA.  However, that right to reject can be lost through delay and the tribunal ruled Hart took too long to exercise her right to reject the vehicle. The tribunal said that had Hart not been misled about the existence of her rights under the CGA, she would likely have rejected the vehicle before departing for the South Island. However, the tribunal ruled Hart was entitled to a remedy under the CGA because the vehicle was not of an acceptable quality at the time of sale and she had paid for repairs even though the trader had a reasonable opportunity to fix the faults.  The orders The trader must refund Hart for repairs to the vehicle, less the $375 paid, and replace the radiator and thermostat.