A rare case considering the right to reject goods under the Consumer Rights Act 2015
Reported cases arising out of the Consumer Rights Act 2015 are few and far between, in large part because only a tiny minority of sales to consumers are likely to be worth litigating over. In April 2019, however, the judgment of HHJ Godsmark QC was handed down in the case of Dr William Van Gordon v Volkswagen Financial Services (UK) Ltd (t/a Audi Finance) (Unreported, Nottingham County Court, 30th April 2019). It was a rare treat for consumer lawyers, because the date of purchase was less than one week after the 2015 Act came into force and so brought it within the realms of the new Act rather than the 1979 Act.
Dr Van Gordon purchased a new Audi A8 Quattro under a 48-month hire-purchase agreement with the Defendant after paying a deposit on 4th November 2015. On 5th November 2015 he drove the car away, and by the next day he had emailed the Audi dealership describing a loud vibrating rattling noise from the driver’s side. On 10th November 2015 he drove the vehicle in the presence of an Audi technician, who he says noticed the noise immediately and found it to be out of the ordinary. The vehicle was kept by Audi overnight and on 12th November 2015 it was returned to Dr Van Gordon.
Upon return to the Dr Van Gordon the rattle appears to have disappeared, but a new one had begun and the technician agreed that second noise should not be there either. The vehicle was kept by Audi again until 17th November 2015, when it appeared that the problems had been resolved.
The car seemed to work well for around a month until a long journey to Sicily led to the original rattle becoming apparent again. On 5th January 2016 Dr Van Gordon emailed Audi to complain again, and on 12th January 2016 he emailed to exercise his right to reject. He noted his entitlement to reject the vehicle and return it for a full refund, but instead suggested replacement. Audi did not respond positively.
Dr Van Gordon also decided to take up the issue with the Defendant (the finance company). He did so on 10th February 2016 and essentially set out his rejection of the goods in plain terms to both the dealership and the finance company. [Para 8] The response received did not resolve any of the issues, and Dr Van Gordon was then given the runaround. Dissatisfied as he was, he stopped payments of hire fees which led to the issue of default notice. The vehicle was taken to two different Audi garages where an Audi technician on each occasion identified the rattle. The vehicle was eventually returned to the dealership on July 2017.
The Claimant sought a declaration of his right to reject under the Consumer Rights Act 2015, together with a refund of monies paid and other damages.
The Defendant defended the claim (and issued a counterclaim for breach of the hire-purchase agreement) on three bases:
1. The complaints did not amount to non-compliance with the contract;
2. There was a failure to request Audi Finance (rather than the dealership) to repair the rattle;
3. There had been affirmation of the hire-purchase agreement by Dr Van Gordon in keeping up the monthly payments after rejection and the delay in returned the vehicle. [Para 15]
The judge made the following findings:
1. There was a rattle and vibration in the Audi at the time of delivery. Live evidence of the Claimant and his colleague confirmed this, and it was corroborated by the fact that the dealership had taken the car back in for repair and kept it in when a second rattle was identified. It was further corroborated by the observations of Audi technicians at the two other garages, and of the Claimant’s expert. [Para 25]
2. On the facts as applied to Section 9(2) and 9(3) of the 2015 Act the rattle was bad enough for £55,000 prestige car to not have been of satisfactory quality, and there was accordingly breach of Section 9. [Paras 26-27]
3. The repair by Audi was ineffective to the extent that the effect of the re-emergence of the rattle soon afterwards was that the Audi was again not of satisfactory quality and did not conform with the contract. [Para 29]
4. The dealership (Derby Audi) were at all material times acting on behalf of Audi Finance in relation to handling defects with the car and management of the repairs. [Paras 31 – 34, 36-42]
5. Therefore when Derby Audi performed repairs and requests for repairs were made to the Derby Audi, the Claimant was dealing with the trader within the meaning of Section 24(5) of the 2015 Act. [Para 42] Therefore there was no failure to request the Defendant to repair the rattle.
6. There was no subsequent affirmation of the contract. He rejected the vehicle on 10th February 2016 and his stance never changed. Continuation of payments was not conclusive of affirmation; nor was the accrual of mileage on the particular facts of the case. [Para 49]
7. The right of rejection was exercised in February 2016 and terminated the hire-purchase agreement. The default notice issued on 5th October 2016 was therefore invalid because the contract had been determined by the Claimant. [Para 59]
There was accordingly judgment for the Claimant and the counterclaim was dismissed.
This case is not binding but it is persuasive. The persistence of the Claimant in gathering evidence and asserting his rights in accordance with then-brand-new legislation was both impressive and decisive.
A belts-and-braces approach to rejection on the part of a consumer would be to communicate with both dealership and finance company in a case such as this. However, the operation of Section 24(5) in most cases with mainstream finance providers is likely to lead to a finding that requests for repair or notices of rejection sent to the agent rather than the contracting party are effective for the exercise of rights under the 2015 Act.
Traders dealing with consumers would be well advised to not rely upon technical points of law to avoid liability. Instead traders should clarify their internal policies and decide either
a) the agent will deal with the issue on behalf of the trader; or
b) the agent will promptly pass the issue on to the trader for resolution
and then reach an agreement with the agent to act in accordance with that policy.
This will prevent the runaround given by the dealership and the finance company in the present case, which in turn will improve consumer satisfaction and reduce the trader’s costs.