Sorento rejection dismissed because claim was against manufacturer

 

The Motor Vehicle Disputes Tribunal hearing decision regarding Michael Griffin and Kia Motors New Zealand Limited

Background

Michael Griffin bought a used 2008 Kia Sorento with 17,025kms on its odometer for $39,795 from Winger Motors Limited on May 12, 2009. The car was first registered on May 13, 2008, and Griffin obtained the unexpired term of the manufacturer’s five-year warranty.

Griffin rejected the Sorento in May 2016 claiming it had a failure of substantial character, which he said was an ongoing loss-of-power issue, that made it unsafe under the terms of the Consumer Guarantees Act and filed an application against Kia Motors New Zealand Limited (the manufacturer).

Kia Motors said the vehicle’s fault was caused by contaminated diesel fuel which was not a failure on its part to comply with the act’s guarantee of acceptable quality. Kia Motors said that under the act, the right to reject a vehicle can only be exercised against the supplier not the manufacturer.

The case

Griffin said in August 2009, the car lost power during acceleration from an intersection. He stopped the Sorento and restarted the vehicle successfully. The car performed satisfactorily until it lost power again five months later. Waikato Kia scanned the vehicle’s ECU but was unable to find any fault codes. Griffin said that after January 2010, the loss-of-power issue occurred every two months at low speed. Griffin said he was not greatly troubled by the car’s fault because it was covered by the manufacturer’s warranty and he was confident the trader would fix it.

In 2013, Waikato Kia told Griffin it would continue the warranty cover for the loss-of-power fault. Griffin said the Sorento was returned to Waikato Kia on numerous occasions but it failed to diagnose the cause of the fault.

In January 2016, Griffin said he was driving the Sorento when it lost power and almost collided with another vehicle. Waikato Kia replaced the car’s fuel pick up assembly but about three weeks later the fault reoccurred.

Griffin told Kia Motors in May 2016 that he wanted to reject the vehicle. Kia Motors offered Griffin a deal to buy a replacement vehicle but he rejected the offer.

On October 4, Griffin’s legal adviser sent a letter to Kia Motors rejecting the vehicle on his behalf. The manufacturer’s lawyers replied explaining that under the act, the right to reject a vehicle can only be exercised against the supplier.

 The finding

At the start of the hearing, the tribunal’s adjudicator explained the remedies which the act provided to a consumer to make a claim against a manufacturer and gave Griffin the opportunity to apply for an adjournment so he could take legal advice. However, Griffin decided to continue with the hearing.

The tribunal heard that in February 2012, the manufacturer instructed Waikato Kia to replace the turbo and radiator assembly based on information of known components that caused intermittent loss of power.

On March 4, 2013, Griffin told Waikato Kia the vehicle was losing power under load. A scan found no fault codes. Waikato Kia removed the fuel pump and reported finding debris in the fuel swirl pot.

Waikato Kia rechecked the vehicle for intermittent loss of power from February 2016 to June 2016 and a fault code P1186 (fuel pressure monitoring too low) was recorded. The manufacturer said that code confirmed a fuel system component failure from the fuel contamination identified by Waikato Kia in March 2013 and recommended replacing all components in the fuel system, an estimated at $18,062.

In determining whether the vehicle complied with the guarantee of acceptable quality at the time of sale, the tribunal considered the Sorento’s age, mileage and sale price.

The tribunal accepted Griffin’s evidence that the Sorento lost power three months following purchase and the fault was intermittent and ongoing.

The manufacturer’s claim that it was not responsible for the loss of power fault because there was debris in the fuel swirl pot in March 2013 was not accepted by the tribunal because it did not explain the loss-of-power failures in August 2009 and January 2010. The tribunal’s assessor said a small amount of debris might reasonably be expected in the fuel swirl pot in a diesel vehicle after seven years and 84,175kms and should not cause the intermittent loss of power described by the buyer.

The assessor said the fault was likely to be caused by the control module or an earth loom issue and possibly a high-pressure voltage problem.

The tribunal found that the Sorento failed to comply with the act’s guarantee of acceptable quality because it lacked the durability which a reasonable consumer would regard as acceptable for the vehicle’s age, price and mileage.

However, under the terms of the act, the buyer’s redress against the manufacturer was limited to damages for any reduction in the value of the goods below the price he paid because the vehicle had an intermittent loss of power fault. The buyer was also entitled to any consequential losses that met the test of foreseeability under the act. Griffin told the tribunal he had no idea what those damages would be.

 Order

Griffin was unable to reject the car because his claim was against the manufacturer of the vehicle and not the supplier, and because he failed to offer evidence of any reduction in the car’s value as a result of the loss-of-power issue, his application was dismissed.

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