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[2021] ZANCT 26
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Leutle v Kolev Motors CC (NCT/136678/2019/75(1)(b)) [2021] ZANCT 26 (20 July 2021)
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IN THE NATIONAL CONSUMER TRIBUNAL
HELD IN CENTURION
Case number: NCT/136678/2019/75(1)(b)
In the matter between:
LORDWICK MOGALAKANE LEUTLE APPLICANT
and
KOLEV MOTORS CC RESPONDENT
Coram:
Adv. F Manamela – Presiding member
Ms. H Devraj – Tribunal member
Ms. PA Beck – Tribunal member
Date of hearing – 15 July 2021
Date of judgment – 20 July 2021
JUDGMENT AND REASONS
APPLICANT
1. The Applicant is Lordwick Mogalakane Leutle an adult male person and consumer (“the Applicant”) as defined in the Consumer Protection Act, No. 68 of 2008 ("the Act" or "the CPA,")with his place of residence at Kempton Park, Johannesburg, Gauteng. At the hearing, the Applicant was represented by an attorney Mr GH Leshaba, of the law firm Mampeule Attorneys.
RESPONDENT
2. The Respondent is Kolev Motors CC (“the Respondent”) a closed corporation duly registered as such in terms of the Close Corporations Act 69 of 1984 with registration number 1998/0535/8423. The Respondent is a car dealership with its principal place of business at 97 van Reebeeck Avenue, Edenvale, Johannesburg, 1809.
3. The Respondent was represented by Adv N Lombard instructed by Stephanie Aproskie Attorneys.
JURSIDICTION
4. The application for leave to refer the matter directly to the National Consumer Tribunal (“the Tribunal”) was heard by a single member of the Tribunal in accordance with section 75(1)(b) of the CPA, and leave was duly granted. This Tribunal has jurisdiction to adjudicate this matter.
5. This judgment therefore, follows a hearing of the matter on the merits of the main application.
6. A reference to a section in this judgment refers to a section in the CPA.
THE HEARING
7. The matter was heard on an opposed basis. This judgment is based on the documents before the Tribunal and on the evidence of the parties at the hearing of this matter.
SUMMARY OF THE EVIDENCE AND BACKGROUND
The Applicant's case
8. On 4 August 2016, the Applicant purchased a 2012 model Audi A3 from the Respondent for the purchase price of R159 000.00. It had 133 900km on the odometer. The purchase price was financed with a loan from Nedbank Limited. In September 2016, the Applicant experienced problems with the vehicle’s clutch. He took the vehicle back to the Respondent on 11 October 2016. The Respondent repaired the vehicle. In December 2016 he took the vehicle back again for the same problem. He was informed by the Respondent that the “megatronics” transmission was at fault. The cost of repair was R28 500.00. The Respondent lodged a claim against the warranty on the vehicle for a maximum of R21 500.00. The Respondent held the Applicant liable for the difference of R7 000.00. The Applicant refused to pay this difference and lodged a complaint with the Motor Industry Ombudsman of South Africa (“MIOSA”) in January 2017. On 27 January 2017, MIOSA issued a recommendation stating that the Respondent must repair the vehicle, at no cost to the Applicant. Based on the MIOSA recommendation, the Respondent repaired the vehicle at its own cost in February 2017.
9. A month after the repair, the Applicant brought the vehicle back again to the Respondent due to the same clutch problem. The Respondent refused to repair the vehicle as it deemed the clutch to be a “wear and tear” problem. By this time the vehicle had travelled over 35 000km. The Applicant lodged a complaint with MIOSA again. On 25 August 2017, MIOSA issued a recommendation that the vehicle must be returned to the Respondent; and that the Respondent must either refund the purchase price or replace it with a similar vehicle. The Respondent must when it refunds the purchase price deduct the cost of usage. Based on the MIOSA recommendation, the Respondent calculated the cost of usage at R99 720.60 based on the Automobile Association rates of R2.43 per km. The Applicant refused to accept the settlement.
10. The vehicle remained at the Respondent’s premises from August 2017. Nebank Limited took judgment against the Applicant for the arrears on the vehicle financed loan.
11. On 24 October 2017, the Applicant lodged a complaint with the National Consumer Commission (“the NCC.”) More than a year later the NCC issued a notice of non-referral dated 22 March 2019. The letter accompanying the notice stated that the Respondent could not be held liable for a “wear and tear” item such as a clutch.
12. The Applicant lodged an application with the Tribunal on 30 July 2019. He also applied for condonation for the late filing of the application. On 25 June 2020, condonation for the late filing of the Application was granted by the Tribunal. In his application, the Applicant wants the Tribunal to order the Respondent to comply with the MIOSA recommendation.
The Respondent's case
13. The Respondent did not place the facts in dispute, the sequence of events, the faults with the vehicle and the repairs completed on the vehicle. The Respondent submitted that it complied with all the MIOSA recommendations. The Applicant however, refused to agree to the calculations of the Respondent for “wear and tear” which were in compliance with the MIOSA recommendations.
14. The Respondent confirmed that Nedbank Limited obtained judgment against the Applicant for the vehicle but that it did not attach the vehicle. The Respondent settled the matter with Nedbank Limited whereby the Respondent sold the vehicle and used the proceeds of the sale to settle the balance owing on the vehicle.
15. Thus the Applicant is not liable for any debt on the vehicle finance.
16. Accordingly, the Respondent seeks an order that the Applicant’s case is dismissed by the Tribunal.
ISSUE TO BE DECIDED
17. The Tribunal is required to consider and decide:
17.1 whether the CPA applies to this matter;
17.2 whether the Respondent has committed a contravention of a section under the CPA; and
17.3 whether the Applicant is entitled to the relief sought under the CPA.
18. The Applicant seeks the relief that the Respondent is ordered by the Tribunal to comply with the recommendation of the Motor Industry Ombudsman of South Africa’s (“MIOSA’s’’) recommendation in terms of section 56(3) of the CPA.
RELEVANT STATUTORY PROVISIONS OF THE CPA
19. Section 55: Consumer's right to safe, good quality goods - Section 55 (2) (a), (b) and (c) respectively gives a consumer the right to receive goods that are reasonably suitable for their intended purpose and are of good quality, in good working order and free of defects; and is 'plainly' useable and durable for a reasonable time.
20. Section 56: Implied warranty of quality - Section 56 (1) provides that where there is an agreement concerning the supply of goods, there is an implied provision that the retailer warrants that the goods comply with the requirements and standards contemplated in section 55. Subsection 56 (2) gives the consumer the right to within six months after taking delivery of the goods to return the goods to the supplier. If the supplier does not meet the requirements and standards contemplated in section 55, then the supplier must, without imposing a penalty and at the supplier's risk, either repair or replace the defective goods under section 56 (2) (a) or refund the consumer the price the consumer paid for the goods under section 56 (2) (b).
0in; line-height: 200%">21. Section 56(3): This section goes further. It provides that if the supplier repairs goods, and within three months after that repair has not remedied the defect, or a further defect is discovered, then the supplier must either replace the goods or refund the consumer the price the consumer paid for the goods.
22. Section 55(6): This section provides an exception to section 55(2)(a) and (b.) It stipulates that section 55(2)(a) and (b) does not apply to a transaction if the supplier has informed the consumer that the supplier has offered the particular goods in a specific condition, and the consumer has agreed to accept the goods in that condition or acted reasonably with accepting goods in that condition.
23. Definition of prohibited conduct: - The CPA defines prohibited conduct to mean an act or omission that contravenes the CPA.
CONSIDERATION OF THE MERITS
24. The facts in this matter are common cause. These are that all the defects, failures, or faults with the clutch of the vehicle manifested within six months of the Applicant taking delivery of the vehicle; that the Respondent repaired the vehicle; and that the vehicle broke down again after such repairs. It is common cause that MIOSA issued two recommendations; and that the Applicant rejected the second recommendation of MIOSA that the Respondent refunds the Applicant the purchase price of the vehicle, less the cost of “wear and tear” on the vehicle.
25. Section 55(2)(b) of the CPA requires a supplier to provide goods that are of good quality, in good working order, and free of defects. The vehicle the Applicant purchased from the Respondent broke down for the first time within one month of the Applicant taking delivery of the vehicle from the Respondent. Following the first repair of the vehicle, it broke down again within 6 months after having purchased it.
26. The circumstances surrounding the Applicant’s claim against the Respondent, therefore, fall within the ambit of the CPA. Applying sections 55 and 56 of the CPA to the Applicant’s matter, the Applicant had the right to receive a motor vehicle that was reasonably suitable for the purpose for which it was generally intended. The vehicle must be of good quality, in good working order and free of any defects, and must be usable and durable for a reasonable period in time, having regard to the use to which vehicles of this nature would normally be put.
27. The Applicant, therefore, was entitled in terms of section 56(2) of the CPA to return the vehicle to the Respondent within six months of taking delivery of the vehicle without incurring a penalty. In that event, the Respondent was obliged as per the Applicant’s election (my emphasis) to refund, repair, or replace as required by section 56(2)(a) and (b) of the CPA.
28. It is common cause that the Respondent repaired the clutch of the vehicle on MIOSA’s recommendation. However, after the vehicle broke down after the first repair to the clutch, the Respondent used the Applicant’s vehicle warranty to repair the clutch again. The cost of this repair was the sum of R28 500.00. The warranty covered only R21 500.00 of these repairs and the Respondent wanted to hold the Applicant liable for the shortfall of the repair costs in the amount of R7 500.00, which the Applicant refused to pay.
29. MIOSA then made a second recommendation being that the Respondent should refund the Applicant after deducting an amount for the Applicant’s use of the vehicle. MIOSA based this recommendation on section 20 of the CPA. The Respondent complied with the second MIOSA recommendation.
30. In the view of the Tribunal, Section 20 of the CPA upon which the MIOSA’’s recommendation is based cannot have application in cases involving section 55 defects. Nowhere in the CPA is there reference to “wear and tear’” and there is no apparent legal basis that these items are excluded from the provisions of sections 55 and 56 of the CPA. Although the Respondent complied with the MIOSA recommendations as referred to above, the Tribunal took into account and gave weight to whether the consumer’s rights in terms of section 55(2)(c) of the CPA “to receive goods that will be useable and durable for a reasonable period of time, having regard to the use to which they would normally be put and to all the surrounding circumstances of their supply; and …” have been infringed or not. If one has regard to section 55(2)(c) of the CPA, the second MIOSA recommendation requiring a deduction for “wear and tear” gives rise to an injustice because there is no apparent lawful basis for requiring a consumer to pay for the use of the vehicle that was defective from the start.
31. Accordingly, the Applicant's action of taking the vehicle to the Respondent for repairs did not forfeit his right to return the vehicle if the vehicle broke down again after the repairs and reclaim the purchase price in terms of his established right to do so under the CPA. With regard to section 56(3) of the CPA, if a supplier repairs any particular goods or any component of any such goods; and within three months after that repair, the failure, defect or unsafe feature has not been remedied, or a further failure, defect, or unsafe feature is discovered; the supplier must replace the goods; or refund the consumer the price paid by the consumer for the goods.
32. This matter therefore clearly falls within the ambit of the CPA. It should be noted that, in line with section 56(4) of the CPA, the implied warranty imposed by section 56(1) of the CPA and the right to return goods as set out in 56(2) of the CPA are each “in addition to any other implied or expressed warranty or condition stipulated by the producer or retailer.”
33. In this matter, the consumer paid for a vehicle of which he hardly had the use of, due to it breaking down within the first month of purchase and after repairs to the vehicle undertaken by the Respondent within 6 months of the purchase of the vehicle. This indicates prohibited conduct in terms of the CPA. It is also important to point out that the MIOSA recommendation is just that, a recommendation and cannot in the application of such a recommendation give rise to an injustice to a consumer that takes away a consumer’s right of choice (the Applicant in this instance) in terms of the CPA in favour of the Respondent’s choice to comply with the MIOSA recommendation.
CONCLUSION
34. The Applicant relies on sections 56(2) and (3) of the CPA, which does not limit the Applicant's right to return the vehicle and reclaim the purchase price. If the legislature had intended to limit a consumer's rights under sections 56(2) and (3), then it would have inserted a similar provision to that contained in section 20 (6) of the CPA.[1]
35. Consequently, the Applicant does not have to account for the use, depletion, or deterioration of the vehicle or the vehicle's condition not having deteriorated when exercising his rights under sections 56(2) and (3) of the CPA to return the vehicle and claim a refund of the purchase price.
36. Ultimately the consumer’s statutory remedy remains and any limitation of the consumer’s rights must therefore lie in the CPA.
37. In the Tribunal's view, the vehicle, therefore, did not satisfy the requirements of section 55(2) of the CPA because the vehicle was not suitable for its intended purpose; was neither of good quality nor in good working order and free of defects; and 'plainly' not usable and durable for a reasonable time.
38. Turning to the relief sought by the Applicant, unfortunately, events have overtaken us and the vehicle has already been sold by the Respondent and the Applicant’s debt to Nedbank Limited settled out of the proceeds of the sale.
39. This does not however preclude the Tribunal from making a finding and ordering relief to the Applicant. Section 4(2)(b)(ii) of the CPA behoves the Tribunal to make an appropriate or innovative order, to give practical effect to the consumer’s right of access to redress.
FINDING
40. Having regard to the submissions made by the Applicant in this matter, the Tribunal finds, on a balance of probabilities, that the Respondent has contravened sections 54; 55(2) and 56(2) of the CPA when it supplied the defective vehicle to the Applicant.
41. These contraventions constitute prohibited conduct. On this basis, the Respondent is found to have engaged in prohibited conduct. A finding of prohibited conduct by the Tribunal means that the Applicant is entitled to a certificate from the Chairperson of the Tribunal, which he can submit to a civil court to claim his damages. This will entail the incurring of further costs for the Applicant who, in the Tribunal’s view, has suffered enough. The Applicant is,therefore, entitled to relief.
ORDER
42. Accordingly, the Tribunal makes the following order:
42.1 The Applicant’s case is upheld;
42.2 The Applicant may approach the Chairperson of the Tribunal for a certificate to claim his damages in the High Court; and
42.3 There is no order as to costs.
SIGNED AND DATED ON THIS 20TH DAY OF JULY 2021
[Signed]
P A BECK
TRIBUNAL MEMBER
Ms. H Alwar (Tribunal Member) and Adv. F Manamela (Presiding Tribunal Member) concur with this
judgment.
[1] Section 20 deals with a consumer's right to return goods.