Lemon law 'takes priority over any opt-out action'

Bought a "lemon"? You still stand a chance of getting that defective good replaced or repaired, even if you have waived your warranty.

In the first reported case of its kind here, a car dealer has been made to pay for a battery which failed two months after a customer bought a vehicle, even though the man got a discount for opting out of a written guarantee to correct any defects.

Dealer Speedo Motoring had sold a second-hand Lexus GS 450 Hybrid Super Lux to businessman Ong Gek Sing in 2012 for $138,000. It came with a $1,800 discount as he had said no to an extended warranty.

Speedo Motoring arranged to have the car evaluated by vehicle inspection provider STA Inspection, and it was given an acceptable "B" grading.

Two months later, the hybrid battery system failed and was replaced by Mr Ong, together with the car's tyres and front disc brakes that were worn out. All this cost him $8,089.

Mr Ong sued in the Small Claims Tribunal where referee Awyong Leong Hwee ruled he could claim for the defective battery, but not the tyres and brakes which had suffered "wear and tear".

Speedo Motoring appealed to the High Court, but Judicial Commissioner George Wei, in judgment grounds released on Tuesday, upheld the earlier decision, and made clear that the "lemon law" trumps any "opting out" move or waiver.

The law, introduced in September 2012 under the Consumer Protection (Fair Trading) Act, is meant to help consumers who have unintentionally bought a "lemon" - they can seek redress if a defect is discovered within six months from the time of delivery.

The judge said in his judgment that "...the Act clearly envisions the consumer being in a weaker bargaining position as compared to the vendor or supplier", and that it is a "protective framework which consumers can rely on in seeking recourse against vendors and suppliers, over and above any rights they may already have under general law".

There was an implied condition that the car was in satisfactory condition and this condition was breached based on a "fact-sensitive" probe, he ruled.

The judge, however, stressed that Speedo had not acted in an underhanded manner or concealed any knowledge of the defective battery when the car was sold, pointing out that both seller and buyer probably were not aware of it.

The STA evaluation did not cover the battery.

He said, among other things, that the seller should record and highlight potential defects to the buyer before any deal is sealed.

The judge added that there was no blanket rule and each case would be looked at individually.

In this case, he said the $4,500 awarded by the tribunal was appropriate as it took into account a 30 per cent discount from what Mr Ong had spent for the new battery, which replaced a second-hand one.

The ruling may have a ripple effect on vendors, particularly those selling used cars, electronics and mobile phones - which command a big chunk of such complaints.


This article was published on April 18 in The Straits Times.Get a copy of The Straits Times or go to straitstimes.com for more stories.