The vehicle had low kilometres on the clock. Image / 123rf
The vehicle had low kilometres on the clock. Image / 123rf
Margaret Lindsay was driving in rush-hour traffic on an Auckland motorway. Suddenly, the vehicle's electric motor stopped. There was no motive power and only enough momentum to reach the safety shoulder.
"The dashboard displayed an ominous warning: 'engine failure'.
"The vehicle's motor would not restart and it needed to be towed home. The following morning, a different message appeared on the dashboard: 'Warning, danger, electrical failure'."
So reads the action-packed introduction to a Motor Vehicles Disputes Tribunal decision on a claim brought by Margaret and her husband John Lindsay over their 2017 Renault Zoe EV40 electric car - bought from Taupō dealer Central Motor Group (trading as EV Central) for $43,000 three years ago.
The incident happened shortly before Christmas. The recently-released decision from a May tribunal hearing ultimately went the couple's way, seeing them collect a $28,285 payout, but not before some hand-to-hand legal combat over how a key piece of consumer protection legislation should work when a product is bought for both work and personal use.
The couple brought a claim to the tribunal under the Consumer Guarantees Act (CGA) after the retailer wanted to "reject" their purchase (the CGA has provisions for a customer get their money back, a free repair or a replacement if a good fails to last a "reasonable" amount of time for its price-point; it over-rides warranty periods arbitrarily claimed by a manufacturer or retailer; retailers are responsible for remedy if the act is breached. The CGA only applies in watered-down form to used-good sales).
A Renault Zoe EV (electric vehicle), similar to the one purchased by the Lindsays. Photo / Driven
But EV Central told the Lindsays that a replacement engine was needed. The couple would have to pick up the tab - an estimated $28,000 - themselves. To boot, the replacement engine would take several months to arrive.
The dealership did not dispute that the electric engine failed, but its managing director, Richard Blakeney-Williams, told the tribunal he had received advice from the Motor Trade Association (MTA) that the Renault did not fall under the CGA for two reasons.
One, because the Lindsays had bought it through their company, Medivoce - and because they had waived their rights to be covered by the Act regardless.
The CGA is aimed at purchases by consumers buying goods for personal or household use, with business purchases outside its protection. But tribunal adjudicator Jason McHerron ruled that in this case, the vehicle had been bought for both personal and business use so "despite purchasing the vehicle for its business ... the Act, therefore, applies to this dispute."
And McHerron also said the Act still applied, whatever fine print the Lindsays had signed about opting out. As Consumer NZ head of research, Jessica Wilson, earlier told the Herald: "You can't contract out of the law".
Was it a new car?
The adjudicator also rejected EV Central's claim that the "grey imported" Renault was a used vehicle under the Motor Vehicle Sales Act because it had been previously registered in the UK, meaning the manufacturer's warranty no longer applied (and the CGA offers only limited protection for used-good sales).
McKesson noted there was just 165km on the clock. And he added, " I acknowledge the Renault was a "grey import" and therefore sold as a used vehicle. However, in my view, it is appropriate to treat this vehicle as if it were very nearly new, given that it was of such low mileage when sold and was identified as having a vehicle year that is the same as the year of purchase, 2017. The facts that the vehicle did not come with a manufacturer warranty, or that Medivoce declined to purchase mechanical breakdown insurance, are irrelevant to the application of the guarantee of acceptable quality under the Act."
Consumer NZ has been a staunch critic of mechanical breakdown insurance and other extra-cost extended warranties, which Wilson says are in many cases a waste of money because they confer rights a buyer already enjoys for free under the CGA. (Although there are exceptions, including if a consumer values a provision which provides a replacement item during a repair period, or where a business purchase is involved). Retailers including Warehouse Group-owned Noel Leeming ($200,00) and PB Tech ($77,000) have been fined for making misleading claims about extended warranties.
McHerron determined that the Lindsays could not "reject" their purchase and get a full $43,000 refund because they had owned the Renault for three years and driven 17,500 before the fault.
But the adjudicator did rule that EV Central had to pay the Lindsays $28,427.54, plus $142 to cover the cost of the tow after the December motorway breakdown incident.
Consumer head of research Jessica Wilson says extended warranties are a waste of money for most consumers because they're paying for rights they already enjoy for free under the Consumer Guarantees Act. Photo / File
EV Central's Blakeney-Williams told Consumer he was acting on advice from the MTA, which told his company there were "reasonable grounds" to challenge the claim.
"We took that advice and defended that position in court. As soon as we lost, we paid the Lindsays in full," Blakeney-Williams said.
The MTA said it was "reviewing the tribunal's decision carefully to inform the guidance we provide to members and consumers in future".
The Lindsays have since sold the Renault for parts and bought a new EV.
• The Motor Vehicle Disputes Tribunall deals with disputes of amounts up to $100,000. It can be more if both parties agree in writing. It costs $50 to make a claim. Claims are usually heard within two months.
More: The Commerce Commission has a guide to the Consumer Guarantees Act, and how to make a complaint, here. Consumer's quick guide to the CGA is here.
