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IN THE CONSUMER AFFAIRS COURT FOR THE NORTH WEST PROVINCE

HELD AT MMABATHO

 

Case number: NW09/2018

 

In the matter between:-

 

 

STANLEY LEFU NYAMA                                                                                       PLAINTIFF

 

 

and

 

 

GW BEKKER T/A LICHTENBURG MOTORS                                                     DEFENDANT

 

Coram:           J.Nkomo, K.Kgomongwe and Khula

Heard:            24 July 2018

Delivered:      26 July 2018

 

In summary: Claim for further payment of R 9 177.99 after payment of R 50 822.81- whether payment of R 9 177.99 in full and final settlement prohibits further claims- application of section 40 of Consumer Protection Act 68 of 2008.

 

Result: Plaintiff’s claim not successful. No costs ordered.

 

 JUDGMENT

 

John Nkomo (Members K.Kgomongwe and D.  Khula concurring)

 

 

Introduction

 

 

1.         The plaintiff, Stephen Lefu Nyama reported a case to the Office of the Investigation of Unfair Business Practices in the North West Province. The case is against G.W Bekker who trades as Lichtenburg Motors at 12 Thabo Mbeki Drive, Lichtenburg. The respondent is a dealer in amongst others second-hand motor vehicles. The dispute between the parties has had the occasion of being investigated and looked at by the Motor Industry Ombudsman of South Africa (MIOSA). It delivered its findings on 21 September 2016 it rightfully ruled that the plaintiff was to be refunded his full purchase price of R 60 000.00. By the time MIOSA gave its outcome, the plaintiff had already through its representatives, Clientele Legal negotiated and accepted an offer of R 50 822.81 from the defendant. The money was paid to the plaintiff on 14 September 2016. The plaintiff wants payment of the balance of R 9 177.19. This is the difference between the purchase price of R 60 000,00 and the amount of R 50 822.81 that he was paid.

 

 

Background

 

 

2.         The background of the matter can be succinctly be put as follows. On 17 September 2015, the plaintiff paid a consideration of R 60 000.00 in lieu of a 2005 model Renault motor vehicle. From the start the plaintiff experienced problems with the motor vehicle, it faltered on the day following the day of taking delivery of it. The defendant agreed to tow it and repair it. After its repair thereon and after collecting it from the defendant’s premises in Lichtenburg, the motor vehicle broke down again in Vryburg. It remained with the defendant up until the 7^th of October 2015 when the plaintiff collected it in Vryburg. It would not drive for more than 20 kilometers, it broke down again. On the 8^th of October 2015 the plaintiff contacted the defendant, he opted to return the motor vehicle and demanded the refund of the purchase price of R 60 000.00.

 

 

3.         It is not clear as to when did the plaintiff report the dispute to MIOSA. The defendant did not refuse to refund the purchase price but wanted certain deductions to be made. These were an amount for the depreciated value of the motor vehicle and the haulage costs. It appears that the plaintiff was also being assisted by Clientele Legal. An email from Tanya Jooste of Clientele Legal dated 14 September 2016 reads as follows”

 

Dear Sir/Madam,

 

RE: Mr. Nyama-(Identity Number...) -Motor vehicle- Purchase/Sale of vehicle

 

Our telephonic conversation of earlier today refers.

 

We confirm that our client has instructed that he accept the settlement offer as per your letter dated 17 August 2016. We confirm that your offices will make payment to our client in the amount of R 50 822.81 in full and final settlement of the abovestated matter. We confirm that this payment will be made with immediate effect after receipt of this email.

 

We trust that the above is in order.

 

Kind regards

 

Tanya Jooste

Legal advisor -External Attorney Portfolio

Clientele Legal

LLB (North -West University)”

 

 

4.         Perhaps one needs to at this stage refer to the letter from the defendant which constitutes the offer that was being accepted by Tanya Jooste on behalf of the plaintiff. It is dated 17 August 2016 and addressed to Clientele Legal. The relevant part reads as follows:-

 

“As such, and for the purpose of an undertaking and obtaining final consensus, we are totally prepared to refund your client taking our costs into consideration. We therefore undertake to refund your client the amount of R 50 822.81(fifty 6000 Eight hundred and Twenty Two Rand and Eighty one cents). Such is with express conditions upon acceptance thereof that your client provide us with the registration papers as agreed”

 

 

5.         The amount of R 50 822.81 was paid to the plaintiff as offered and as accepted on 14 September 2016. On 21 September 2016 MIOSA gave its ruling, it ordered full payment of the amount of R 60 000.00. The plaintiff now wants the court to order payment of a further amount of R 9 177,19.

 

 

 

 

 

6.         The parties call upon the court to decide on the following issues:-

 

 

6.1.     whether or not the payment received in full and final settlement finalised the matter and whether can the plaintiff later claim for the balance between the original claim and what was subsequently offered and accepted.

 

6.2      whether or not the offer was accepted without prejudice as the defendant had placed undue pressure on the plaintiff to accept the offer.

 

 

7.         I propose to answer the second question first. It is argued on behalf the plaintiff that the offer was accepted on a without prejudice basis. The email from the plaintiff’s representatives that accepted the offer bears no words that state that the offer is being accepted on a without prejudice basis or that the plaintiff reserves its rights in any manner. This contention is not supported by any piece of evidence. It is a statement made from the bar by the Consumer Protector. It is trite that statements from the bar do not constitute evidence. It is on the foregoing reasons that I conclude that the offer was not accepted on a without prejudice basis. It was accepted unconditionally.

 

 

Was the plaintiff under pressure or duress when he accepted the offer?

 

 

8.         We have in this regard been referred to Section 40 of the Consumer Protection Act[1]. It reads as follows:-

 

“(1) A supplier or an agent of the supplier must not use physical force against a consumer, coercion, undue influence, pressure, duress or harassment, unfair tactics or any other similar conduct, in connection with any-

 

(a)       marketing of any goods or services;

 

(b)       supply of goods or services to a consumer;

 

(c)       negotiation, conclusion ,execution or enforcement of an agreement to supply any goods or services to a consumer;

 

(d)       demand for, or collection of, payment for goods or services by a consumer ;or

 

(e)       recovery of goods from a consumer”

 

 

9.         The relevant section of the letter from the defendant that is said to have placed duress on the plaintiff to accept the offer reads as follows:-“

 

“ In the event that your client does not accept this undertaking we shall have no alternative but to further charge your client for storage fees accordingly, as of the date of final repairs made to the vehicle. As such should your client reject this undertaking and institute legal proceedings we will defend such vigorously”

 

 

10.      One now needs to analyze the above paragraph to see if there were any elements of coercion, threats or duress in it. In this regard the defendant delivered the message to the effect of stating that it will be charging storage fees from the date the that the vehicle was repaired to the date of finality of the matter and that if legal action is instituted, it will be defended. The defendant at worst warns that it will charge storage fees. The argument by the Consumer Protector that the possibility of storage being charged coerced the plaintiff to accept the offer is untenable for the following reasons. The plaintiff had elected to proceed in terms of section 56 (2) of the CPA. It provides as follows:-

 

“ Within six months after the delivery of any goods to a consumer, the consumer may return the goods to the supplier, without penalty and at the suppliers risk and expense[2],  the goods fail to satisfy the requirements and standards contemplated in section 55, and the supplier, must at the discretion of the consumer, either-

 

(a)       repair or replace the failed, unsafe or defective goods; or

 

(b)       refund to the consumer the price paid by the consumer for the goods[3].”

 

11.      There exists no doubt, in my view that the correct legal position is that once the plaintiff had decided to have the motor vehicle returned in terms of this section, the costs of its delivery back to the defendant were for the account of the defendant. Secondly, once delivered back the risk of the motor vehicle lay with the defendant. Lastly the defendant was obliged to refund the purchase price without deductions. The circumstances under which the protections in section 40(1)[4] could be invoked are not where the consumer has elected to return the goods and claim a refund in terms of section 56(2)(b)[5]. It is clear from the wording of Section 40(1)[6] that it applies to the stage of the marketing, negotiation of a consumer agreement, conclusion of a consumer agreement, the supply of the goods and recovery of the goods from the consumer. It is found therefore that section 40(1) does not find application in the circumstances of this matter.

 

What is the effect of accepting an offer in full and final settlement?

 

 

12.      In order to arrive at an answer to this question, one needs to first ask a question to the effect that what is in fact the legal meaning of an offer. An offer to settle is a compromise. In practice it means that the parties agree to settle their dispute and thereby compromising the creditor’s claim should he/she accept the offer. The acceptance of an offer is therefore in itself a binding agreement. One therefore has to look at the law of contract as it relates to offer and acceptance.  It is clear from the evidence that the defendant’s letter dated 17 August 2016 constituted an offer of compromise. It was at the election of the plaintiff to accept or to reject the offer. General practice is that it is the debtor that will make an offer “in full and final settlement”. In this regard it is the plaintiff that accepted the offer in full and final settlement. This is neither here nor there. 

 

13.      Acting Judge of Appeal Malan as he then was commented as follows in Be Bop A Lula Manufacturing & Printing CC v Kintex Marketing (Pty) ltd[7] :-

 

“ The essential issue is whether an agreement of compromise was concluded: one is concerned simply with the principles of offer and acceptance. The first question is whether the cheque accompanied by the Credit Request and Final Reconciliation constituted an offer of compromise. In other words,” the proposal, objectively construed, must be intended to create binding legal relations and must have so appeared to the offeree…Although, generally, a contract is founded on consensus, contractual liability can also be incurred in circumstances where there is no real agreement between the parties but one of them is reasonably entitled to assume from the words and conduct of the other that they are in agreement.”

 

 

14.      It is trite that the party that seeks to rely on a compromise bears the onus of proving it.

 

Applying the legal principles to the facts

 

 

15.      It has already been said that the plaintiff was in fact entitled to receive his full refund of the purchase price of R 60 000.00. On 17 August 2016 the defendant made an offer of compromise in the amount of R 50 822.81. The offer was accepted through the plaintiff’s legal representatives email dated 14 September 2016 which was followed by payment of the amount so offered. Once the plaintiff’s representative accepted the offer, a valid and legal contract was established. It is thus concluded that the defendant has been successful in proving that a compromise has been reached by the parties. There was nothing stopping the plaintiff through his legal representative from rejecting the offer or accepting it conditionally.

 

 

 

In view of the findings made, I conclude as follows:-

 

 

 

1.         The plaintiff’s action does not succeed.

 

 

2.         There is no order as to costs.

 

 

 

Dated at Mmabatho on this the 26^th day of July 2017.

 

 

 

John Nkomo

Chairperson

 

 

Plaintiff:          STANLEY LEFU NYAMA

Represented by Office of the Consumer Protector

Office of the Investigation of Unfair Business Practices

NWDC Building

Cnr University Drive & Provident Street

Mmabatho

Email: eletsogo@nwpg.gov.za

 

 

Defendant:       GW BEKKER T/A LICHTENBURG MOTORS

                        12 Thabo Mbeki Drive

                        Lichtenburg

            Email: ian@lichtenburgmotors.co.za/

lichtenburgmotors@telkomsa.net

 

 

 

Of interest to:              TANYA JOOSTE

                                    Clientele Legal

                                    Clientele office park

                                    Corner Rivonia and Alon Roads

                                    Mornigside

                                    Email: TJooste@clientele.co.za

                                    Ref: Mr. Nyama

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