Court orders ATL Automotive to pay over $1m to customer for selling faulty vehicle

A court has ordered ATL Automotive Limited to pay over $1 million in damages to a customer for selling a defective 2014 Volkswagen Jetta, emphasising the legal obligation of car dealers to provide vehicles of acceptable quality.

Supreme Court Justice Sonya Wint-Blair ruled in July that ATL did not sell Jason Samuels a car suitable to be used, in breach of the law. 

Samuels purchased the VW in February 2014 for $4.8 million following a reduction of $3.4 million due to a concession he got as a government worker. 

However, three months after the purchase, the vehicle developed multiple defects, including a persistent knocking noise, hard brakes, difficulties with the gas tank, and warning messages on the dashboard.

Despite returning the car to ATL for repairs on at least 10 occasions during the two-year warranty, the issues remained unresolved.

In 2016, Samuels sued ATL, alleging breaches of contract and violations of the Sale of Goods Act and the Consumer Protection Act.

He claimed ATL was aware of widespread issues with the Jetta model from at least 2011 and did not inform him.

He also accused the dealership of misleading him about the car's condition.

Samuels further claimed that a 2016 crash involving the Jetta was caused by its faulty braking system.

ATL had offered to buy back the car for $2.8 million — 42% less than its original value — but Samuels rejected the offer.

Wint Blair's ruling pointed to the significant time the vehicle spent in repairs —104 out of 213 days between May 2014 and December 2015.

The judge found that ATL had failed to meet its obligation under the Sale of Goods Act to deliver the vehicle in a condition suitable for sale.

"Attempts were made to discredit the claimant [Samuels] and his witness in that there was no report to the insurer that the brakes were defective," said the judge.

"It is a hopeless suggestion that a car with defective brakes or a defective clutch should be driven on the road. These were defects which rendered the VW unsafe. A new car which cannot be driven safely is useless to its owner and cannot be described as of merchantable quality."

According to her, "there is a clear breach" of section 15(b) of the Sale of Goods Act, the provision that essentially says that at the time of sale, the product must be fit for purpose. 

In rejecting ATL's defence that it had delivered the car according to the contract, the judge said there was no evidence that any of the repairs after delivery were due to problems that could have been detected during inspection.

"The VW was returned to the defendant 10 times. None of the repairs were attributed to the fault of the claimant," the judge said.

"The first major repairs were made some four to five months after delivery. This must mean that in actual commercial practice, the issue of merchantability arises when the claimant became aware of the defects. Four to five months cannot be considered an unreasonable period in all the circumstances of the case."

ATL also argued that it had covered the repair costs, but the judge noted that who paid for the repairs was irrelevant, adding there was no evidence after 2015 suggesting the vehicle had been returned to a "good and new" condition.

The judge ruled against Samuels' claims that ATL breached the Consumer Protection Act and that ATL misled him about the car.

The court awarded Samuels $26,512 in special damages for repair costs and $1.1 million in general damages, with interest from the date of purchase until July 2024.

A $250,000 insurance payment received by Samuels was taken into account.

Claims for transportation costs were denied due to lack of evidence.

ATL Automotive was ordered to cover legal costs.

Attorneys Kevin Williams and Gordon McFarlane, instructed by Grant, Stewart, Phillips & Co., represented Samuels, while ATL's case was led by King's Counsel Charles E. Piper and Najeev Spence, instructed by Charles E. Piper & Associates. 

- Barbara Gayle

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