Euromobil Sdn Bhd v Nan Ya Hardware Sdn Bhd (BA-12B-65-04/2016)

This is an appeal by the Appellant (Defendant) on the Sessions Court’s decision of 23.3.2016 where the Respondent’s (Plaintiff) claim was allowed under section 32 of Consumer Protection Act 1999 (CPA) and the Appellant’s counterclaim of RM 19,550.00 was dismissed.

For ease of reference, the parties in this judgment, will be known as they were in the Sessions Court.

The relevant facts to this case can be summarised based on the Plaintiff’s Statement of Claim and both counsels’ written submissions as follows:

The Plaintiff is a company incorporated in Malaysia and having its business address at Lot 4846, Jalan KPB 11A, Kawasan Perindustrian Kampung Baru Balakong, 43300 Seri Kembangan, Selangor Darul Ehsan.

The Defendant is a company incorporated in Malaysia having its registered address at Level 5, Wisma DRB-Hicom, No. 2 Jalan Usahawan U1/8, Seksyen U1, 40150 Shah Alam, Selangor Darul Ehsan and its business address at Lot 27, Jalan 3 Pelukis U1/46, Seksyen Utara Satu Kawasan Perindustrian Temasya, 40150 Shah Alam, Selangor Darul Ehsan.

The Defendant carries on the business as the importer, distributor and services provider of Audi motor vehicles in Malaysia.

By a Vehicle Sales Order dated 09.07.2012 (page 18 of Appeal Record (C)), the Defendant as the supplier had agreed to sell and the Plaintiff as consumer had agreed to purchase an Audi motor vehicle model A8L 3.0 TFSI QTR at the price of RM668,355.00 by paying to the Defendant an initial booking fee of RM30,000.00 (“Booking Fee”), particulars of which is within the knowledge of the Defendant.

On around 30.08.2012, the Defendant delivered to the Plaintiff an Audi motor vehicle bearing Registration No. WWB 888, Model Code: Audi A8L 3.0 TFSI QTR, Chassis No. WAUZZZ4H6DN002018 and Engine No: CGW049203 (“the Vehicle”.

Upon delivery of the Vehicle, the Plaintiff had paid a further sum of RM38,684.00 to the Defendant, thus making a total deposit sum of RM68,684.00 (“Deposit”) to the Defendant as shown in the Defendant’s Invoice No: 2610031645 with its corresponding Vehicle Delivery Order No: 610032921 (page 20 of Appeal Record (Bahagian C)). 4

To finance the purchase of the Vehicle, the Plaintiff had on 04.09.2012 obtained a hire purchase facility sum of RM600,000.00 from Affin Bank Berhad (“the Financier”) at the term charges at 2.28% per annum (which term charges for 5 years shall amount to RM68,400.00) and the total amount of RM668,400.00 (being the principal sum of RM600,000.00 plus term charges of RM68,400.00, hereinafter referred as “Total Amount Payable to Financier”) shall be repaid to the Financier by way of 60 equal monthly installments of RM11,000.00 each commencing from 04.10.2012.

The Plaintiff claimed that less than a month after the Plaintiff had taken delivery of the Vehicle from the Defendant, the Plaintiff discovered defects in the Vehicle with unusual loud and rattling noise emanating from the rear passenger seats even while driving at low speed (“the Defects”).

The Plaintiff had complained to the Defendant about the Defects and had sent the Vehicle to the Defendant’s authorized service centers for repairs and rectifications on the following occasions and at the following service centers:- i. from 26.09.2012 to 08.10.2012 (13 days) at Glenmarie; ii. from 09.10.2012 to 10.10.2012 (3 days ) at Chan Sow Lin; iii. from 21.06.2013 until to-date at Glenmarie. 5

The Plaintiff claimed that despite having sent the Vehicle to the Defendant’s authorised service centers for repairs and rectifications, the Defendant had not rectified and upon Plaintiff’s request for an identification of the problem and/or cause of the Defects and for a confirmation whether the Vehicle has been repaired, the Plaintiff avers the following:

the Defendant had through their letter dated 14.08.2013 informed the Plaintiff that they have removed the complete rear suspension assembly and re-assembled the same, done the wheel alignment and camber setting and had escalated the matter to Audi AG for assistance and advise on the next steps;

(ii) the Defendant had through their email of 12.09.2013 to the Plaintiff’s representative by the name of one Elaine Tan (“Plaintiff’s Representative”) had admitted that the Defects still persists even though the Defendant had removed and re-installed the anti-roll bar and replaced the Vehicle’s stabilizer bar and the coupling rod and had also lubricated, cleaned and retightened the bolts and nuts leading to the sub-frame and anything that comes in contact with connecting to the rear undercarriage, including the interior car items;

(iii) in the same email of 12.9.2013, the Defendant further confirmed that they suspected the noise was coming from 6 both rear air dampers and that the technical support of Singapore has agreed to replace the said parts. The Defendant by letter of 2.10.2013 informed the Plaintiff that they have received the parts from Audi AG in Germany and was then in the midst of carrying out the repairs.

In reply to the Defendant’s letter dated 02.10.2013, the Plaintiff claimed via their letter of 08.10.2013 voiced out their grave concern on the repairs done, stating Plaintiff’s opinion, “feels like this car has been taken apart by your so-called qualified technicians and put back again like an accident car which have been salvaged from the wreckers” and the Plaintiff had also requested from the Defendant for an assurance and guarantee that the Vehicle will be functional and safe.

Despite numerous requests and/or reminders by the Plaintiff and/or the Plaintiff’s Representative for and identification of the cause of the Defects and also for an assurance and guarantee that the Defects have been fully rectified and that the Vehicle will be functional and safe, the Defendant had failed and/or unable to do so.

The Plaintiff pleaded that the Defendant is in breach of section 32 of CPA which provides that there is an implied guarantee that the Vehicle supplied by the Defendant must be of acceptable quality, by supplying the Vehicle which is not of acceptable quality and/or that the Defects are failure of a 7 substantial character which the Plaintiff as a reasonable consumer would not have purchased the Vehicle had they been fully acquainted with the nature and extent of the Defects.

The Plaintiff then rejected the Vehicle, by leaving the Vehicle in the Defendant’s service center and had through their solicitor’s letter dated 22.10.2013 notified the Defendant stating that the Plaintiff had exercised its rights to reject the Vehicle together with the grounds for the rejection pursuant to the provisions of the Consumer Protection Act 1999 and demanded for a full refund of the purchase price.

Notwithstanding such rejection and demand, the Defendant had refused to refund the full purchase price or any part thereof to date.

On 17.12.2013, the Plaintiff commenced a legal suit against the Defendant in Shah Alam Sessions court vide Suit No. B52-183- 12/2013 (“the Suit”) claiming for the relief as pleaded in paragraph 22 below.

Before the commencement of the full trial, the Defendant proposed to resolve the disputes between the parties out of court. However, the Defendant was unable to determine and finalise the terms and conditions of their proposal at that time as the new Audi A8, being the main subject of their proposal, would only be launched around June or July 2014. 8

In view of a probable out of court settlement, the parties had requested for the trial to be adjourned pending the outcome of the settlement but was declined by the court. As a result, the Plaintiff had on15.04.2014 withdrew the Suit with liberty for file afresh.

However, the settlement negotiation between the parties had failed and thus the filing of this suit. The Plaintiff claims against the Defendant as follows:

a declaration that the Plaintiff shall be entitled to reject the

a refund of the deposit sum of RM68,684.00;

the sum of RM668,4000.00 together with any penalty that may be imposed by the Financier towards the Plaintiff;

damages;

interest at the rate of 5% per annum on the sum to be paid from the dated of this Writ until full realization; and

costs,

any other reliefs as the court shall deem fit. 9

The Defects of the Vehicle was denied by the Defendant and stated that the Plaintiff’s complaints about the Vehicle “at all material time was in regard to the noise emanating from the passenger seat, if any”. The Defendant claimed that the Plaintiff’s complaint was never about the performance of the car but was confined to the noise which was discovered in the Vehicle which in any event was not of a substantial character.

The Defendant claimed that the Defendant had loaned to the Plaintiff a courtesy car of similar model and built pending inspection and repairs as follows:

car model Audi A8 bearing registration No. WVH 776 from the period of 20.06.2013 to 01.10.2013;

(ii) Car model Audi A8 bearing registration No. WUV 30 from 01.10.2013 to 08.11.2013.

The Defendant counter-claimed for the storage fees for the Vehicle at the Defendant’s center calculated at RM50.00 per day from 20.12.2013 to the date of filing of the Defence for 391 days, the sum of RM19,550 for which continues to accrue per day, costs of defending and counter-claim for this action and interest rate at 5% per annum calculated from date the sum for counter-claim was due until full settlement. 10

The Sessions Court allowed the Plaintiff’s claims as prayed. Dissatisfied with the Session Judge’s decision, the Defendant appealed to this Court. Plaintiff’s case [4] The learned counsel for the Plaintiff advanced several arguments for his claim, premised on the rights and remedy of a consumer based on the CPA that the Vehicle was not of acceptable quality and the Defects was of a substantial character. [5] The Plaintiff’s counsel averred that there is an important difference between Sale of Goods Act 1957 (SOGA) and CPA, where in the former, SOGA provides an implied condition that the goods supplied shall be of “merchantable quality” whereas in the latter, there is an implied guarantee that the goods shall be of “acceptable quality”. Citing a New Zealand’s Court of Appeal’s case of Nesbit v Porter [2000] 2 NZLR 465 on the concept of acceptable quality as distinguished from merchantable quality, the Plaintiff’s counsel submitted that the New Zealand Court of Appeal concluded that goods may be of merchantable quality yet still fall short of being an acceptable quality. [6] The Plaintiff’s counsel submitted that in Malaysia the statutory implied guarantee that the Vehicle supplied of must be of acceptable quality is provided under Section 32 CPA and therefore when the Plaintiff purchased the Vehicle from the Defendant, there was an implied guarantee under the CPA that the Vehicle was of acceptable quality, a quality befitting a new 11 luxury motor vehicle free from minor defects and should be reasonably fit for purpose as a new luxury motor vehicle, for comfortable and uninterrupted travelling. This is in reliance of a Court of Appeal case of Matang Plastik & Metal Work Industries Sdn Bhd & Ors v Daimler Chrysler Malaysia Sdn Bhd & Ors [2014] 8 CLJ 998, that once the goods is purchased, the provisions of section 32(1) of CPA would apply which is the implied guarantee. [7] It was brought to this Court’s attention that the Plaintiff had purchased from the Defendant a brand new Audi A8 in July 2012 for a price of RM668,684.00. According to the Plaintiff’s witness, SP1, the Plaintiff decided to buy the Vehicle because Audi is a world renowned for its luxury automobiles and Audi A8 is the top luxury sedan car with a high level of comfort, performance, craftsmanship and numerous high-tech features. [8] It was submitted that the Plaintiff purchased the Vehicle not merely for the purpose of travelling from one place to another but of doing so with the appropriated degree of comfort, reliability and pride and with the intention to enhance Plaintiff’s image and status in the business world. [9] The counsel for the Plaintiff submitted that the Defendant’s sales manager, one Wendy Tan (SD1) who had been working in automobiles industry for 18 years had confirmed during the cross-examination (pages 123-124 of Appeal Record (B)), as follows:

Audi A8 is the most expensive sedan car in Audi brand; 12

the purpose of buying an Audi A8 is not only for driving but to enhance the business image and status;

consumers purchase Audi A8 because it has a high level of comfort, reliability, luxury and craftsmanship; and

when the Respondent purchased the Audi A8, they would expect the Vehicle to have a quality befitting a new luxury car. [10] It was submitted that soon after the delivery of the Vehicle, the Plaintiff discovered the Defects, the unusual noise and/or rattling noise emanating from the rear passenger seats even while driving at low speed. The Plaintiff also submitted that the Defendant had admitted in paragraph 10.3 of its Defence that the Vehicle did have Defects but alleged it as a minor defect. [11] The Plaintiff’s counsel submitted the facts on the services rendered to the Vehicle based on the job sheets (pages 60-61 of Appeal Record) and Plaintiff’s witness’ (SP2) witness statement regarding the third service dated 21.6.2013, who previously owned an Audi Q5 Quatro purchased from the Defendant, assisted the Plaintiff that when she collected the Vehicle sometime in mid-July 2013, two of Defendant’s staffs tested the Vehicle and acknowledged that the Defects persist (page 260 of Appeal Record). [12] The Plaintiff’s counsel submitted that based on an email of 12.9.2013 from one Mr. Thamodharan, the Defects still persist even after the repairs 13 had been carried out (SP2’s Witness Statement, page 261 Appeal Record

(B)), “(a) replacing the vehicle’s stabilizer bar and the coupling rod; and

lubricated, cleaned and retighten the bolts and nuts leading to the subframe, and anything in contact with connecting to the rear undercarriage, including the interior car items.” [13] The Plaintiff’s counsel averred that the Plaintiff’s witness emailed to the Defendant on 13.9.2013 which was replied by the Defendant on 17.9.2013 that Defendant is receiving detailed technical advice from Audi AG and Audi TSC Singapore and “that there were few more steps to carry out before the rectification is done” but with no explanation as to why such repair has to be carried out or why such parts need to be replaced and to date the Defendant failed to identify the cause or nature of the Defects. [14] The Plaintiff’s counsel submitted that the Defendant’s witness (SD4) who is Defendant’s former Executive for Product Support, confirmed during the cross-examination that the noise can be heard during a test drive whom was accompanied with an Audi expert from Singapore, one Daniele Luisi, after the Vehicle was repaired (page 239 of Appeal Record (B)). [15] It was submitted that the Vehicle was defective when it was delivered to the Plaintiff and as such, the Plaintiff rejecting the Vehicle is reasonable relying on the authority of Puncak Niaga (M) Sdn Bhd v NZ Wheels Sdn Bhd [2011] 9 CLJ 833 where in that case, the Court of Appeal allowed the appellant’s claim to reject the Mercedes Benz car under the CPA by way of 14 a summary judgment as the respondent had breached the implied guarantee under CPA. [16] In relation to the issue of rejection, the counsel averred that the Plaintiff is entitled to reject, as at mid-September 2013, the problem was not resolved and the Defendant was still unable to identify the cause of the problem. In the email of 12.09.2013, the counsel pointed that the Defendant had admitted that the noise still persists despite replacing the Vehicle’s stabilizer bar and the coupling rod, lubricated, cleaned and retightened the bolts and nuts leading to the sub-frame and anything that comes in contact with connecting to the rear undercarriage, including the interior car items. [17] The counsel for the Plaintiff submitted that despite a series of attempt to repair the Defects, there was no solution forthcoming from the Defendant, Plaintiff lost all confidence in the Vehicle and rejected the Vehicle within a reasonable time based on the remedies to reject under section 41(1)(b)(i)of the CPA and following the case of Puncak Niaga (supra). Counterclaim [18] In relation to the counterclaim by the Defendant, the Plaintiff’s counsel asserted that the storage charges as stated in the Defendant’s Repair Order from 10.12.2013 until the date of filing of the Defence with the rate of RM50.00 per day was never signed by the Plaintiff and the Plaintiff never agreed to such terms and conditions and therefore it is not binding against the Plaintiff: Lim Hong Yeu v Mercedes-Benz Malaysia Sdn Bhd 15 & 2 Ors [2013] 1 LNS 192. The Court was told that during the period where the Vehicle was placed with the Defendant, there had been summons issued to the Plaintiff which proved that the Vehicle had been used by the Defendant (page 24 of Appeal Record (A) and (C)). Defendant’s case [19] The learned counsel for the Defendant advanced several grounds for this appeal and divided its arguments into four main areas that the Session Judge was erred on facts and law:

whether the alleged noise from the rear of the Vehicle was Defects;

whether the alleged Defects was substantial in nature;

the Plaintiff failed to identify the Defects and continues to fail to rectify / repair the Defects; and

the time of rejection of the Vehicle was unreasonable. [20] The counsel for the Defendant submitted that it is for the Plaintiff to show on facts and law that the Vehicle was Defects, not of an acceptable quality under section 32 of CPA. The Defendant’s counsel contended that since the Plaintiff failed to proof, the Vehicle has no Defects under section 32 CPA. The definition of ‘defect’ was submitted based on Black’s Law Dictionary (Eight Edition) by Bryan A. Garner, at page 450, to mean, as “an imperfection or shortcoming, esp. in a part that is essential to the operation or safety of a product”. [21] The Defendant’s counsel relied on the case of Asia Pacific Information Services Sdn Bhd v Cycle & Carriage Bintang Bhd & Anor 16 [2010] 6 CLJ 681 submitting that as no evidence was adduced to prove that the defects were in fact materially inherent latent defects in the car, the Plaintiff in this case failed to prove its case on a balance of probabilities as the only witness produced by the Plaintiff were the CEO of the Plaintiff and his driver without any technical witness nor expert evidence tendered to determine the cause of the problem encountered. [22] It was submitted by the Defendant that during the trial, the Plaintiff had on each of the two occasions brought the Vehicle to the Service Centre complaining of the alleged ‘noise’ as a loud and rattling noise which was never detected, except after a second test drive done in the presence of Plaintiff’s witness (SP2) (one Ms. Tan Nyi Ring) and Defendant’s witness (DW3) (Thamodharan Anatharsekaran) where SP2 confirmed that the alleged noise was in fact a ‘soft sound’ emanating from the rear right side of the Vehicle which could only be heard by sitting at the right hand side of the back seat and when the Vehicle was driven over uneven road surfaces. [23] It was brought to this Court’s attention that the alleged ‘noise’ recorded by the Plaintiff was replayed at the trial where the learned Session Judge had commented, “Ini bukan rattling”. The sound was detected on the second test drive conducted sometime in September 2013 and submitted that the Defendant had then immediately taken the necessary measures to identify and rectify the alleged ‘noise’ which was found to have come from the rear air dampers of the Vehicle and were replaced even though the air dampers were found to be, “perfect working condition performance wise. The original air dampers will not have any 17 effect on the drive-ability, roadworthy, reliability and performance of the car and therefore can still be used.” [24] The counsel for the Defendant pointed to the testimony of DW4 (one Faeroz Kahn Bin Mahbul Husain, the Defendant’s Executive Technical Support) which was unchallenged by the Plaintiff’s counsel that the Defendant had proceeded to replace the said air dampers “…so as to address the Respondent’s complaint to their level of satisfaction, and as part of our professionalism to our customer”. [25] The Defendant’s counsel averred that the test to determine Defects can be found in the High Court case of Chai Lang Fah @ Chai Lian Fah V. Cycle & Carriage Bintang Berhad [2011] 1 LNS 357 where the High Court in that case adopted the Federal Court in Lau Hee Teah v. Hargill Engineering Sdn Bhd & Anor [1979] 1 LNS40; [1979] 1 MLJ 145, in connection with the issue of what constitutes a new car, agreed with and adopted the test propounded by the Court of Appeal in England in Reg v Ford Motor Co. Ltd [1974] 1 WLR 1220, 1227-1228 by relying the test of the extent and nature of damage and the quality of the repairs. [26] The Defendant’s counsel submitted that even if there was defect, it was not substantial in nature as the Vehicle could be repaired and relied on the Federal Court cases of Seng Hin v. Arathoon Sons Ltd [1968] 1 LNS 134 and Lau Hee Teah v. Hargill Engineering Sdn Bhd & Anor [1979] 1 LNS 40; [1979] 1 MLJD 145, to support the contention that that if the said parts of the Vehicle can be repaired, the Vehicle cannot be said to be of 18 unmerchantable quality or unfit for the purpose, to which the burden of proof is under the Sale of Goods Act. [27] The counsel for the Defendant submitted that the cases relied by the Plaintiff’s counsel is distinguishable from the current case where in Matang Plastik & Metal Work Industries Sdn Bhd & Ors v Daimler Chrysler Malaysia Sdn Bhd [2014] 8 CLJ 998 [Auth 17 ABOA], there were two material differences, that is firstly the car in question had suffered four breakdowns before it caught fire and was extensively damaged and secondly, the Plaintiffs in that case had called two expert witnesses to prove their claim. [28] The Defendant’s counsel averred that the only case which will be of any significance is the case of Seah Peh Yee v Hap Seng Star Sdn Bhd [2013] 1 LNS 229 where the plaintiff had rejected the car within one month after the defendant was not able to identify the problem but the car in that case had only accumulated mileage of 1,700 km as opposed to the current case where the Plaintiff, according to the testimony of DW3 (page 246 Appeal Record (B)), accumulated mileage of 10,000.00 plus kilometers. [29] Based on the arguments put forward, the counsel for the Defendant urged this Court to apply the case of Asia Pacific Information Services Sdn Bhd v Cycle & Carriage Bintang Bhd & Anor [2010] 6 CLJ 681 where it was held that the problems encountered although not minor, were not sufficiently serious or fundamental to amount to a breach of the implied condition at the time of the sale. 19 [30] It was submitted that even if there was defect, based on all of the above, the defect is not substantial as the Defendant had attended and resolved the noise and had been rectified on three occasions, that is on 2.10.2013, 14.10.2013 and 21.10.2013, the latter by courtesy call where the Plaintiff informed the Defendant that the Plaintiff will collect the Vehicle on 30.10.2013. The counsel averred for this Court’s intervention that the Session Judge had misdirected herself and in not considering the relevant evidence and had contradicted herself in the finding of facts, relying on the cases, China Airlines Ltd v Maltran Air Corp. Sdn Bhd & Another Appeal [1996] 3 CLJ 163 and Lee Ing Chin @ Lee Tech Seng & Ors v Gan Yook Chin & Anor [2003] 2 MLJ 97. [31] The Defendant’s counsel also brought to this Court’s attention that the timing of rejection by Plaintiff was unreasonable as there was a gap of slightly more than one year from 9 October 2012 until 22 October 2013 and that following section 43(1)(a) of CPA, the rejection must be done within a reasonable period of time. [32] In relation to the counterclaim, the Defendant claimed that the Plaintiff had agreed over the phone on a day before the ‘collection date’ to collect the Vehicle and would be estopped from rejecting the Vehicle. It was submitted that the Plaintiff only requested Defendant “to buy back” and did not say rejecting the Vehicle, arguing further that if 1.20.2013 was the rejection date, there should be a letter issued which was Plaintiff’s letter of 22.10.2013 rejecting the Vehicle. 20 The Sessions Court’s Decision [33] The Sessions Court’s decision can be found at Rekod Rayuan Tambahan Bahagian A & C, pages 1-18. Some parts of the finding is reproduced, for ease of reference: “3. Plaintif telah pada 26.09.2012 menghantar Kenderaan tesebut ke pusat servis Defendan dan mengadu tentang Defek-Defek tersebut. Akan tetapi Defek-Defek terseubt belum dapat dibaiki lagi. Seterusnya, Plaintif telah pada 09.10.2012 menghantar Kenderaan tersebut ke pusat servis Defendan untuk membuat penampalan tayar dan pada masa yang sama telah mengadu tentang Defek-Defek tersebut yang masih berterusan. Walaupun aduan telah dibuat, Defendan telah gagal mengenalpasti punca Defek-Defek tersebut. Memandangkan Defek-Defek tersebut masih berterusan, Plaintif telah sekali lagi pada 21.06.2013 menghantar Kenderaan tersebut ke pusat servisDefendan untuk membaiki Defek-Defek tersebut. Sejak itu, Kenderaan tersebut telah berada di pusat servis berkenaan. Walaupun Defendan telah mengambil masa beberapa bulan untuk membaiki Defek-Defek tersebut, Defendan sehingga kini masih gagal dan / atau tidak dapat mengenal pasti masalah dan / atau punca Defek-Defek tersebut dan membaiki Defek-Defek tersebut dengan sepenuhnya. 21

Defek-Defek tersebut merupakan kegagalan yang bersifat substantial (“failure of substantial character”) kerana Plaintif, sebagai pengguna yang munasabah (“reasonable consumer”) tidak akan membeli Kenderaan tersebut sekiranya mereka mengetahui sepenuhnya tentang jenis dan takat Defek-Defek tersebut (“had they been fully acquainted with the nature and extent of the Defects”). Kegagalan Defendan untuk mengenal pasti masalah dan / atau punca Defek-Defek tersebut dan membaiki Defek-Defek tersebut selepas banyak percubaan jelas menunjukkan betapa substantialnya Defek-Defek tersebut. Plaintif menegaskan bahawa Defek-Defek tersebut telah ditemui kurang daripada sebulan selepas Plaintif telah menerima Kenderaan tersebut daripada Defendan dan Plaintif telah dengan segera mengadu kepada Defendan pada 26.09.2012, 09.10.2012 dan 21.06.2013. Walaupun Kenderaan tersebut telah dihantar ke pusat-pusat servis Defendan yang dibenarkan untuk pembaikan dan pembetulan, Defek-Defek tersebut belum diperbaiki lagi dan walaupun Plaintif telah meminta pengenalpastian tentang masalah dan / atau pun Defek-Defek tersebut, Defendan telah gagal untuk berbuat sedemikian.

Plaintif telah melaksanakan haknya untuk menolak Kenderaan tersebut dalam masa yang munasabah apabila Plaintif berbuat demikian dengan meninggalkan Kenderaan tersebut di pusat servis Defendan dan telah melalui surat peguamcara mereka bertarikh 22

22.10.2013 memberitahu Defendan bahawa Plaintif telah melaksanakan hak-hak mereka. Kelewatan yang dikatakan dalam menolak Kenderaan tersebut, adalah semata-mata kerana Defendan telah mengambil masa yang lama untuk cuba membaiki Kenderaan tersebut. Defendan telah gagal dan / atau tidak dapat mengenal pasti masalah dan / atau punca Defek-Defek tersebut dan tidak dapat memperbaiki Defek-Defek tersebut dengan sepenuhnya.

6.

Kenderaan tersebut tidak mempunyai kualiti bersamaan sebuah kereta mewah yang tiada kecacatan dan / atau bebas daripada defek kecil (“free from minor defects”).

(ii) Kenderaan tersebut adalah tidak munasabah sesuai (“not reasonably fit”) untuk kegunaan sebagai sebuah kereta mewah baru bagi perjalanan yang selesa dan tiada gangguan. Defendan tidak pernah pada apa-apa masa memberikan penjelasan atau pengenalpastian terhadap masalah dan / atau punca Defek-Defek tersebut ataupun memberikan jaminan kepada Plaintif bahawa Defek-Defek tersebut telah dibaiki sepenuhnya dan Kenderaan tersebut akan berfungsi dengan baik dan selamat. Kedua-dua surat Defendan yang bertarikh 14.10.2013 dan 30.10.2013 langsung tidak 23 memberikan penjelasan atau pengenalpastian terhadap masalah dan / atau punca Defek-Defek tersebut ataupun memberikan jaminan seperti yang diminta. Dalam keadaan ini, Plaintif tidak boleh dijangkakan untuk mengambil balik Kenderaan tersebut.

Berkaitan dengan tuntutan balas Defendan, disepanjang perbicaraan dijalankan Defendan gagal / tidak mengemukakan sebarang dokumentasi bagi menyokong tuntutan balas mereka. Oleh yang demikian, tuntutan balas Defendan sewajarnya ditolak dengan kos. KESIMPULANNYA:- Berdasarkan dari keterangan-keterangan seperti di atas, Mahkamah mendapati pihak Plaintif telah berjaya membuktikan kes atas beban bukti imbangan kebarangkalian terhadap Defendan. oleh itu berdasarkan dari Pernyataan Tuntutan Plaintif pada perenggan 22, tuntutan yang dibenarkan adalah prayer (a), (b), (c), (e), (f) dan (g). Prayer (d) gantirugi – digugurkan. Kos diberikan RM12,000.00. Tuntutan balas Defendan terhadap Plaintif ditolak dengan kos. Kos diberikan RM8,000.00. THE COURT’S FINDING [34] Generally, an appellate court is slow to interfere with the trial judge’s finding of facts unless there is a clear misdirection of law by the trial judge or the trial judge made a wholly erroneous estimate of damage suffered 24 that warrants this Court to intervene: Multar Masngud v Lim Kim Chet & Anor [1982] CLJ 237, FC and the case of Ming Holdings (M) Sdn Bhd v Syed Azahari Noh Shahabudin & Anor [2010] 6 CLJ 857, FC. [35] It is the Plaintiff who brought this suit and in consumer protection claims, the burden is still on the Plaintiff to proof based on the balance of probability following section 101 of Evidence Act 1950 and the Federal Court case of Letchumanan Chettiar Alagappan @ L. Allagapan, M. Venkatachalam S/O Venkatachalam Chettiar v Secure Plantation Sdn Bhd No. 02-78-10/2014 which illustrates the burden of proof that once the burden is discharged by the Plaintiff, the onus than shifts to the Defendant. [36] This is Plaintiff’s pleaded case that the Defendant had statutorily breached section 32 of CPA that the Vehicle purchased was not of acceptable quality due to the Defects discovered. The Defendant on the other hand denied in its Defence and Counterclaim that the Vehicle was defective and even if there were defects they were not of a substantial character under CPA. [37] Under the CPA, the proposition of law as explained in ‘Business Law’, by Lee Mei Pheng and Ivan Jeron Detta, Second Edition, 2014, at page 389, it provides the protection for consumers covering deceptive conduct, false representation and unfair practices of traders where ‘goods’ are subject to implied guarantees as to ‘acceptable quality’, title, fitness for purpose and that the goods comply with description and price. ‘Goods’ are defined under section 3 of CPA to mean, 25 “which are primarily purchased, used or consumed for personal, domestic or household purposes, and includes –

goods attached to, or incorporated in, any real or personal property;

animals, …

vessels and vehicles;

utilities; and

trees, plants and crops… but does not include choses in action, including negotiable instruments, shares, debentures and money;” [38] The ‘goods’ is for personal consumption as opposed to commercial and CPA applies to purchase of vehicle. The core issue is the ‘acceptable quality’ unlike ‘merchantable quality’ under SOGA which was the law prior to CPA, enunciated under section 32 CPA. I vehemently would refer to the CPA which should be construed as a whole, without isolating other relevant provisions pertinent to the acceptable quality test. I refer to the authority by M.N. Rao, Amita Dhanda in N S Bindra’s Interpretation of Statutes, Tenth Edition, 2007 at page 690, the legal intendment in statutory interpretation is that, each and every clause in a statute has been inserted for some useful purpose and therefore the instrument of the Act must be read as a whole to ascertain both its intent and general purpose. [39] The implied guarantee of acceptable quality provided under section 32 CPA, is reproduced, for easy reference, as follows: 26 “32. Implied guarantee as to acceptable quality.

Where goods are supplied to a consumer there shall be implied a guarantee that the goods are of acceptable quality.

For the purpose of subsection (1), goods shall be deemed to be of acceptable quality---

if they are---

fit for all the purposes for which goods of the type in question are commonly supplied;

(ii) acceptable in appearance and finish;

(iii) free from minor defects;

(iv) safe; and

durable; and

a reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects, would regard the goods as acceptable having regard to ---

the nature of the goods;

(ii) the price;

(iii) any statements made about the goods on any packaging or label on the goods

(iv) any representation made about the goods by the supplier or the manufacturer; and 27

all other relevant circumstances of the supply of the goods.” [40] The language of section 32(1) CPA provides the mandatory requirement that there shall be an implied guarantee, applicable to any supplier of goods to consumer. The term ‘supplier’ is defined under section 3 CPA which includes a person who in trade supplies goods to a consumer. Following section 32(2)(a)(i) – (v) CPA, what is meant by the goods shall be deemed as acceptable quality is listed which includes ‘fit for all the purposes’ and ‘free from minor defects’. It follows that section 32(2)(a) CPA must be read with part (b) of section 32(2) CPA. Reading the whole section 32(2) CPA, the goods shall be deemed to be acceptable quality if they fulfil the following requirements:

they are fit for all purposes, acceptable in appearance and finish, free from minor defects, safe and durable;

meet the standards that are reasonable consumer fully acquainted with the state and condition of the goods, including any hidden defects would regard the good as acceptable having regard to the nature of the goods, the price, any statements on the packaging or label, any representation made about the goods and all other relevant circumstances. [41] The evidence adduced by the Plaintiff, taking into account the admission of the Defendant that the Vehicle has Defects even after 28 numerous repairs, I viewed that the Vehicle is not of an acceptable quality within the provisions of the CPA. [42] For the Vehicle to be considered as an acceptable quality, based on the reading of section 32(2)(a) and (b) CPA, it requires an overall assessment together with the consumer’s knowledge and expectation. I hold such view on the ground of reasonable consumer test and “all other relevant circumstances” as stipulated under section 32(2)(b)(v) CPA and the decided appellate court cases. [43] As pleaded by the Plaintiff, the purchase of the Vehicle was made in reliance of the Defendant’s skill and knowledge and the public perception of the Vehicle that carries with it the business image and status, that it has a high level of comfort, reliability, luxury and craftsmanship. The Plaintiff pleaded that despite the image and status it carries, the Vehicle is not an acceptable quality. [44] The main contention revolves around the issue of acceptable quality which is the fulfillment of the standards including ‘fit for all the purposes’ and ‘free from minor defects’. According to Plaintiff’s line of argument, once the Vehicle is in breach on the implied guarantee, the Plaintiff’s right of redress is to reject the Vehicle: section 41(3)(b) CPA. The Defendant’s counsel’s counter-argument was that there was noise, albeit minor defect, is not of substantial character. [45] On this aspect of ‘defect’, the Defendant’s counsel referred to the Black Law’s Dictionary as well as case laws, describing it as an 29 imperfection or shortcoming, “…to the operation or safety of a product”. The Defendant’s counsel referred to one High Court case of Chai Lang Fah @ Chai Lian Fah v Cycle & Carriage Bintang Berhad [2011] 1 LNS 357 which adopted a Federal Court case of Lau Hee Teah v Hargill Engineering Sdn Bhd & Anor [1979] 1 LNS 40, [1979] 1 MLJ 145 that if the parts of the car can be repaired than it cannot be said to be of unmerchantable quality or unfit for the purpose under SOGA and not a defect of substantial character under CPA. [46] This Court viewed that the authority referred by the Defendant’s counsel of Chai Lang Fah (supra) case which made reference to the Federal Court case of Lau Hee Teah v Hargill Engineering (supra), was a negligent and misrepresentation case in reference to a dispute under SOGA and not CPA where in the former, prove of relationship between the manufacturer and the consumer and the causal link between damage and defect must be shown. [47] Upon careful perusal, the CPA does not specifically defined ‘defect’ for section 32 CPA claims. The only definition provided is in relation to product liability under section 67 (1) of Part X CPA which provides, “Subject to subsections (2) and (3), there is a defect in a product for the purposes of this Part if the safety of the product is not such as a person is generally entitled to expect.” Subsections (2) and (3) of section 67(1) CPA provides the determination of what a person is generally entitled to expect, all the relevant circumstances 30 which includes the manner in which, and the purpose for which, the product has been marketed. [48] Again, the CPA is to protect the consumer based on an objective standard where in the case of product liability, the issue of safety should be judged based on the public’s entitlement to expectation and not based on actual expectation: A and Others v National Blood Authority and other [2002] ALL ER 289. In relation to section 32 CPA claims, it is tested against the opinion and fully-acquainted reasonable consumer. The objective standard can be found in the New Zealand’s Court of Appeal’s case of Nesbit v Porter (supra) that, “…. goods are acceptable quality only if fit for all purposes for which goods of the type in question are commonly used and they meet the other standards referred to in section 7(1), including being free from minor defects, with all of these matters being tested against the opinion of a reasonable and fully-acquainted consumer having regard to the matters in paras (f) to (j) of that subsection.” [49] The CPA was drawn on the New Zealand’s Consumer Guarantees Act 1993 (NZCGA) where section 32 CPA is drafted based on section 7 of NZCGA. The case of Nesbit v Porter (supra) was decided on the interpretation of NZCGA, involving a second-hand Nissan Navara, an eleven year old vehicle imported from Japan. In that case, after five months, there were small problems that needed replacement and certain parts were found defective to which the appellants who purchased the car, remedied the defects on their own expenses as the dealer was alleged to 31 be uncooperative. To cut the story short, the test applied is based on a reasonable consumer with the consideration of the vehicle’s age and type, where it was viewed that it was reasonable to expect defects, latent at the time of supply, to be apparent soon after the supply of the vehicle. [50] The New Zealand Court of Appeal held that the goods are of acceptable quality only if fit for all purposes for which goods of the type are commonly used and they meet other standards including free from minor defect, tested against the opinion of a reasonable and fully-acquainted customer having regard to the matters listed that is the nature of the goods, the price, any statements made on the goods, any representation made and all other relevant circumstances of the supply of the goods. It was held that such standard of having regard to all the list under section 7(1) NZCGA is not similar their Sale of Goods Act. The appeal by the purchaser was unsuccessful because the right of rejection was found to be exercised not timeously. [51] For section 32 CPA claims, a failure to comply with the implied guarantee shall be of a substantial character, as defined under section 44 CPA that,

the goods would not have been acquired by a reasonable consumer fully acquainted with the nature and extent of failure;

the goods depart in one or more significant respects from the description or the sample; 32

the goods are substantially unfit for the ordinary purpose or special purpose made known to the supplier;

the goods are not of acceptable quality within the meaning of section 32 because they are unsafe. [52] On the evidence adduced by the Plaintiff, the first Defects was first communicated to the Defendant after less than a month where the first service or repair was carried out in the same month the Vehicle was purchased in September 2012. Based on the pleadings, the Plaintiff had sent the Vehicle to the Defendant’s authorized service centers for repairs. The Defendant had replaced the screen on the rear front seats where the Defendant testified that the screen was loosely placed and Defendant claimed it was rectified. On the second occasion, 9.10.2012, the Plaintiff sent the Vehicle to fix the Defects and to fix the punctured tyre (page 61 of Appeal Record (C)) but Defendant could not detect the Defects and they were not rectified. [53] The Plaintiff’s counsel submitted that numerous calls were made to fix an appointment for the Defects to be rectified but the appointment was always full and no one could attend to the Defects until the assistance from Plaintiff’s representative, SP2 on 21.6.2013. The Vehicle went for a test drive and Defendant acknowledged that there was noise from the rear passenger seat (page 260 of Appeal Record (B)). Sometime mid-July 2013, SP2 went to collect the Vehicle and the Vehicle was test driven by the Defendant whom acknowledged that the Defects persist (page 260 of 33 Appeal Record (B)) and the Defendant told SP2 to leave the Vehicle with the Defendant. [54] Based on Plaintiff’s evidence, in mid-August 2013, the Vehicle was test driven and the noise still persist (pages 91-93 of Appeal Record (B)). The Defendant emailed to the Plaintiff on 14.8.2013 in reference to the test drive of the Vehicle on 13.8.2013 and confirmed that there was noise but the level of the noise had been reduced and they removed the complete rear suspension assembly and reassembled and done the alignment and camber setting (page 23 of Appeal Record (C)). The Defendant also stated that they will escalate the matter to Audi AG for assistance. [55] Based on the evidence before this Court, this Court finds that the Plaintiff strongly objected to the Defendant’s evidence that the level of noise had been reduced as claimed by Defendant, producing Defendant’s email of 12.9.2013 stating that the Defects still persist even after Defendant had done all the rectification (pages 260-261 of Appeal Record (B)) which is, “removed and re-installed the anti-roll bar and replaced the Vehicle’s stabilizer bar and the coupling rod and also had lubricated, cleaned and retightened the bolts and nuts leading to the sub-frame and anything that comes in contact with connecting to the rear undercarriage, including the interior car items” The Defendant had on the same day stated in its email of 12.9.2013 confirming that the suspected noise was coming from both rear air dampers 34 and the technical support of Singapore has agreed to replace the said parts. [56] The air dampers were replaced in October 2013 based on the letter of the Defendant dated 2.10.2013 (page 24 of Appeal Record (C)). Although the air dampers were in perfect working condition, as affirmed by the Defendant in its oral evidence, the Defendant admitted that the noise came from the air dampers. The Plaintiff expressed his concern to the Defendant based on an email and letter of 8.10.2013 questioning the safety of the Vehicle (based on Plaintiff’s solicitor’s letter, pages 25-27 and pages 67- 68 of Appeal Record (C)): “…. Your explanation about carrying out the repairs on the car which in our opinion feels like this car has been taken apart by your so called qualified technicians and put back again like an accident car which have been savaged from the wreckers. We fear for our lives and safety when driving this car. Perhaps you can offer guarantee to our personal safety that this car will be functional and safe when on the road. Otherwise, we wish to know what are your solutions to us that our lives will be safe when driving this car. “ [57] This Court finds that if the air dampers were in perfect condition but had caused the Defects to the Vehicle which requires the Vehicle to be taken apart, it would be a reasonable inference that the Vehicle failed to comply the implied guarantee which was of a substantial character. This 35 Court made a finding that the Defendant’s letter of 2.10.2013 did not explain the Vehicle’s diagnosis except to state that the Vehicle, “had been diagnosed following strictly to AUDI repair standards and guidelines and a courtesy car has been provided …” [58] Upon careful perusal of the documentary evidence adduced by the Plaintiff, the Defendant did not provide a guarantee on the Vehicle upon request by the Plaintiff. Following section 38 of CPA, an express guarantee by manufacturer would have been binding on the consumer. Section 38 CPA defines ‘express guarantee’ as an undertaking and the letter by the Defendant was not a guarantee nor an undertaking that the Vehicle is of acceptable quality. Following section 3 of CPA, the definition of ‘manufacturer’ includes the importer or distributor of the goods which is applicable on the Defendant. Under the CPA, the Defendant is to inform the Plaintiff on the repairs carried out for the Plaintiff to understand the history of the faults and repairs, as the Plaintiff is entitled to an informed decision whether to reject the Vehicle or otherwise. [59] The principle of CPA can be found in one New Zealand’s case, decided by the New Zealand District Court, in Cooper v Ashley & Johnson Motor Ltd [1997] DCR 170, where it was held among others at page 2, that the NZCGA, “…. clearly vests the consumer with new right focused on reasonable consumer expectation rather than the previous rigid and technical approach. Where it was found there had been a breach of the Act a 36 consumer was given the option under s 18(2) of requiring the supplier to remedy the defect within a reasonable time or alternative to reject the goods and seek damages and compensation.” [60] The legal principle derived from New Zealand’s cases have been followed by our Court of Appeal cases, the first was the case of Puncak Niaga (supra) attributed by Plaintiff’s counsel, that made reference to the three authorities by Court of Appeal Judge Abdul Malik Ishak (as he then was), one of them is an English case of Rogers and another v Parish (Scarborough) Ltd and another [1987] 1 QB 933. In Rogers (supra) case, it was held that goods which were defective on delivery were not to be taken to be of merchantable quality for the purpose of s 14 of the Sale of Goods Act 1979 by reason of the fact that the defects had not destroyed the workable character of the goods, and it was not relevant as to whether the goods had been of merchantable quality upon delivery that the defects had subsequently been repaired. [61] In Rogers (supra) case, the consumer’s expectation was looked into not only on the purpose for which that kind was commonly bought including driving the vehicle, but that of doing so, with degree of comfort, ease of handling, reliability and pride in its appearance appropriate for the market at which the vehicle was aimed; “that defects which might be acceptable in a second hand vehicle and which would not therefore render it unmerchantable were not reasonably to be expected in a vehicle sold as new. …” 37 The plaintiffs in Rogers v Parish (supra) case were held to be entitled to repudiate the contract since the vehicle was not fit for its purpose as what plaintiffs were entitled to expect. [62] The other two cases are the decisions of the New Zealand District Court where the third case of Coopers v Ashley & Johnson Motors Ltd [1997] DCR 170, it was held in reference to the second case Stephens v Chevron Motor Court Ltd [1996] DCR 1 that a consumer’s election to have repairs carried out by the dealer might not prejudice a subsequent right to reject the goods if the consumer had not been provided with sufficient information by the dealer to make an informed decision as to whether to reject or not, which is the scenario in the current case. [63] In the Court of Appeal case of Matang Plastik & Metal Work Industries Sdn Bhd & Ors v Daimler Chrysler Malaysia Sdn Bhd & Ors [2014] 8 CLJ 998, it was held that once a car is purchased, the provision of section 32(1) CPA applied where the car is to be of acceptable quality, “…must be fit for all purposes for which the car was bought, acceptable in appearance and finish, free from minor defects, safe and durable.” [64] Based on the facts and evidence before this Court, the Plaintiff had proven based on the balance of probability that there were Defects of substantial character that the Vehicle was not fit for all purposes which it was bought, it was not free from minor defects and the facts on its durability and safety were doubtful. The onus shifted to the Defendant to adduce 38 evidence to rebut Plaintiff’s evidence but was never produced. There was no guarantee by the Defendant that the Defects was not of substantial character that would amount to a breach of an implied guarantee. The Defendant failed to provide evidence to corroborate particularly the technical advice that should be given by one Daniele Luisi who witnessed the Defects during one of the test drives. [65] The recorded sound produced by the Plaintiff is disregarded based on the evidence adduced (pages 235-236 of Appeal Record (B)) and the fact that the Defendant admitted that there was such noise and is a defect, which is not expected from a new and luxury vehicle as this Vehicle. Right of Rejection [66] This Court is of the view that the Plaintiff has the right to exercise its option to reject which was done reasonably, in the month of October 2013, when the Plaintiff was fully-acquainted with the hidden defects having regard to all the matters listed in section 32(2)(b) CPA. This Court finds that the Plaintiff’s offer to Defendant on 1.10.2013 to buy back the Vehicle was first an act of rejection followed by a written statement via Plaintiff’s solicitor’s letter of 22.10.2013 and therefore was reasonable within the purview of section 41 and section 45 CPA. [67] I have to disagree with the Defendant’s counsel’s argument of laying down the timeline from October 2012 till October 2013 as this would run contrary to the reading of section 32(2)(b) CPA. Furthermore, it would be unreasonable to expect the Plaintiff to wait for the Vehicle to be a total wreck before it can exercise its right of rejection. The law is clear as 39 decided by the appellate courts and based on the persuasive authorities of New Zealand, that the right to reject must be exercised within a reasonable time. [68] As decided in Puncak Niaga (supra) case, based on the facts and evidence adduced in this case, the time to reject would begin to run as soon as when the Vehicle had defects of a substantial character that was fully acquainted by Plaintiff in the month of September 2013 and the rejection exercised was in October 2013, is reasonable. [69] To answer Defendant’s counsel’s invitation to use the case of Asia Pacific Information (supra) as a reference, I hold the view that previous decisions cannot be a blanket application as they are not one size fits all. Ultimately, the facts must be determined on a case by case basis and on legal principles, I am bound by the appellate court’s decision. In addition, Asia Pacific Information Services (supra) case must be distinguished from the current case as the dispute in that case was considered under SOGA. Counterclaim [70] I dismiss the Defendant’s counterclaim for the simple reason that firstly, there were no terms and conditions agreed between the Plaintiff and the Defendant. It was undisputed that the Repair Orders were never signed by the Plaintiff for the terms to be binding on the Plaintiff. Secondly, as the Vehicle had been rejected, been returned by leaving the Vehicle with the Defendant, the Plaintiff is not liable for any storage charges: section 45

(2)(c) CPA. 40 [71] In view of the above, I do not find the Session Judge had misdirected herself in facts and law which requires this Court’s intervention. [72] In light of the above reasons, I dismiss the appeal and the counterclaim with cost. Dated: 17 November 2017 (ZALITA BINTI DATO’ ZAIDAN) Judicial Commissioner Shah Alam High Court 41 COUNSEL FOR THE APPELLANT / DEFENDANT

WONG JING EN Tetuan Nadzarin Kuok Puthucheary & Tan B4-3A, Solaris Dutamas Jalan Dutamas 50450 Kuala Lumpur [Ref: NKPT[L]14.1043] Tel: 03-207 8986 Fax: 03-6207 8987

EDWARD YII Tetuan Simon Hue & Associates W-0906, Amcorp Business Suites Tingkat 9, Menara Melawangi Amcorp Trade Centre No. 18, Jalan Persiaran Barat 46050 Petaling Jaya Selangor Darul Ehsan [Ref: SH/L1-2719(1013)/NYHSB/SH)