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Masilo and Another v Mystic Cars (Pty) Ltd (NCT/229019/2021/75(1)(b)) [2023] ZANCT 25 (3 July 2023)

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To mark IN THE NATIONAL CONSUMER TRIBUNAL

HELD IN CENTURION

 

Case number: NCT/229019/2021/75(1)(b)

 

 

In the matter between:

 

MPHO WILLIAM MASILO                                               1ST APPLICANT

 

LORAINNE ALEXIA MASILO                                         2ND APPLICANT

 

And

 

MYSTIC CARS (PTY) LTD                                              RESPONDENT

 

Coram:

Mr CJ Ntsoane        -       Presiding Member

Adv C Sassman      -       Tribunal Member

Dr M Peenze          -       Tribunal Member

 

Date of Hearing       -         26 January 2023

Date of Judgment    -         3 July 2023

 

 

JUDGMENT AND REASONS

 

 

PARTIES

 

1.       The First Applicant is Mpho William Masilo, an adult male (Mr Masilo). Mr Masilo is a consumer as defined in section 1 of the Consumer Protection Act, 2008 (the CPA).

 

2.       The Second Applicant is Lorraine Alexia Masilo, an adult female (Mrs Masilo). Mrs Masilo is a consumer, as defined in section 1 of the CPA.

 

3.       Collectively, Mr and Mrs Masilo are referred to as the applicants. They are a married couple.

 

4.       The Respondent is Mystic Cars (Pty) Ltd, a private company duly incorporated and registered in terms of the company laws of the Republic of South Africa (the respondent).

 

JURISDICTION

 

5.       Section 27(1)(a)(ii) of the National Credit Act 2005 (the NCA) empowers the Tribunal or a Tribunal member acting alone to adjudicate allegations of prohibited conduct by determining whether prohibited conduct has occurred and, if so, by imposing a remedy provided in the NCA. Section 150 of the NCA empowers the Tribunal to make an appropriate order concerning prohibited or required conduct under the NCA or the CPA. The Tribunal, therefore, has jurisdiction to hear this application.

 

TERMINOLOGY

 

6.       Unless otherwise stated, a reference to a section in this judgment refers to a section in the CPA.

 

APPLICATION TYPE AND RELIEF SOUGHT

 

7.       The applicants make this application in terms of section 75(1) (b), which provides that: “if the National Consumer Commission issues a notice of non-referral in response to a complaint, the complainant may refer the matter directly to the Tribunal, with leave of the Tribunal.” On 28 October 2022, the Tribunal granted the applicants leave to refer their complaint directly to the Tribunal.

 

8.       The applicants allege that the respondent contravened sections 55, 56, and 41 and require the redress provided in section 54(2).

 

9.       They seek appropriate relief, being a refund of the purchase price, cancellation of the ABSA credit agreement, a refund of their legal fees, and payment of the costs of storing the vehicle and the associated release costs.

 

BACKGROUND

 

10.   On 16 July 2020, the applicants bought a Mercedes Benz 220 CDI Automatic motor vehicle (the vehicle) from the respondent.

 

11.   The vehicle’s purchase price was R225 900.00, with R80 000.00 deducted as a trade-in value for a 2009 Mercedes Benz C180. ABSA Bank (ABSA) financed the balance of R145 900.00.

 

12.   The applicants took delivery of the vehicle on 20 July 2020. They immediately noticed that the manuals, service book, and spare keys were missing. The respondent eventually supplied them to the applicants.

 

13.   On 28 November 2020, the vehicle broke down on the road and was taken to an authorized Retail Motor Industry workshop (the RMI workshop).

 

14.   On 1 December 2020, the applicants reported the breakdown to the respondent. The respondent recommended that a diagnosis and mechanical report be obtained to determine the cause and extent of the breakdown.

 

15.   On 11 December 2020, the RMI workshop issued a repair estimate. The diagnosis showed that the dual mass flywheel and clutch were damaged and needed replacement. The quotation for the repairs amounted to R47 782.66. The applicants immediately forwarded it to the respondent.

 

16.   On 15 December 2020, the respondent replied to the applicants’ email stating that the applicants were aware that the vehicle had run approximately 200 000km at the time of sale and had declined to purchase a warranty as part of the sale. The change to the vehicle resulted from wear and tear, for which the respondent was not liable. Although the respondent was not obliged to pay for the repairs it was nevertheless willing to contribute R10 000.00 towards the repairs as a goodwill gesture.

 

17.   On 19 January 2021, the applicants lodged a complaint against the respondent with the Motor Industry Ombudsman of South Africa. The Ombudsman investigated the complaint. On 7 April 2021, it issued a recommendation that the respondent be held liable for the total cost of the vehicle’s repairs.

 

18.   The respondent failed to comply with the Ombudsman’s recommendation. The applicants then referred the matter to the Gauteng Office of Consumer Affairs and the National Consumer Commission. They both issued notices of non-referral. The matter is now before the Tribunal for adjudication.

 

ISSUES TO BE DECIDED

 

19.   The Tribunal is required to decide whether the applicants have proved on a balance of probabilities that the respondent contravened the CPA and are entitled to the relief sought.

 

POINTS IN LIMINE

 

20.   At the hearing, the respondent raised two points in limine. First, the true applicant is Mrs Masilo and not Mr Masilo. Therefore, Mr Masilo does not have locus standi; and there is no reason why Mrs Masilo could not represent herself. Second, ABSA has a substantive financial interest in the matter, is an interested party, and must, therefore, be joined as a party in this matter. The applicants’ failure to join ABSA rendered their claim defective.

 

21.   The Tribunal considered both points in limine. Turning to the first point, the Tribunal was satisfied that the supporting evidence showed that the applicants are married to each other. This matter affects their joint estate because the vehicle and the accompanying credit transaction form part of their joint estate. It was also within their right to choose a representative amongst themselves. Consequently, this point in limine fails.

 

22.   Concerning the second point, the Tribunal was satisfied that the matter before the Tribunal does not involve the repayment of the credit agreement with ABSA. Instead, it involves a defective motor vehicle regulated under the CPA and does not necessitate a joinder. Consequently, this point in limine also fails.

 

THE HEARING

 

23.   Both parties presented their case to the Tribunal. It transpired that just after four months after the delivery of the vehicle, Mrs. Masilo experienced mechanical problems while driving the vehicle and reported them to the respondent. These problems led to the breakdown of the vehicle, which the respondent disputed.

 

24.   The vehicle was towed to the RMI workshop. The diagnostic report was provided to the parties showing that the dual mass flywheel and clutch were damaged and needed replacement. A quotation of R47 782.66 was provided to both parties. The respondent refused to pay for the vehicle’s repairs.

 

25.   The vehicle did not comply with the applicants’ expectation concerning good quality goods at the time of the sale, which the respondent disputed.

 

26.   The vehicle was not reasonably suitable for the purposes for which it was generally intended. The respondent’s version was that the vehicle was sold in good condition and was reasonably suitable for its intended purposes.

 

27.   The applicants maintained that the vehicle’s mileage as recorded in the service book was incorrect. They also submitted that the respondent led them to believe that the vehicle had an up-to-date full-service history. They believed that if the vehicle was fully serviced in accordance with Mercedes Benz’s recommendations, the breakdown would have been avoided.

 

28.   The respondent conceded the service provider’s (Pitstop) inaccuracies and discrepancies concerning the vehicle’s service record amounted to an error or oversight. However, the applicants were not motor vehicle experts, and their evidence should be rejected. Moreover, the applicants’ refusal to take an extended warranty did not equate to the respondent being responsible for the problems the vehicle experienced.

 

THE PROVISIONS OF THE CPA

 

29.   Part H of the CPA concerns a consumer’s right to fair value, good quality and safety. Section 53 of the CPA provides that-

 

Applicable definitions

 

(1)      In this Part, when used concerning any goods, a component of any goods, or services-

 

(a)       defect” means –

 

(i)         any material imperfection in the manufacture of the goods or components, or performance of the services, that renders the goods or results of the service less acceptable than persons generally would be reasonably entitled to expect in the circumstances; or

(ii)       any characteristic of the goods or components that renders the goods or parts less useful, practicable, or safe than persons generally would be reasonably entitled to expect in the circumstances;

 

(b)       failure” means the inability of the goods to perform in the intended manner or to the intended effect.

 

30.   Section 55 sets out the consumer’s rights to goods that are reasonably suitable for the purpose intended and are free of any defects-

 

Consumer’s rights to safe, good quality goods

 

(1)      This section does not apply to goods bought at an auction, as contemplated in section 45.

 

(2)      Except to the external contemplated in subsection (6), every consumer has a right to receive goods that –

 

(a)       are reasonably suitable for the purposes for which they are generally intended;

(b)       are of good quality, in good working order, and free of any defects;

(c)       will be useable and durable for a reasonable period of time, having regard to the use to which they would generally be put and to all the surrounding circumstances of their supply; and

(d)       comply with any applicable standards set under the Standards Act, 1993 (Act No. 29 0f 1993), or any other public regulation.

 

31.   Section 56 provides a six-month period within which the goods can be repaired, replaced, or returned for a refund-

 

Implied warranty of quality

 

(1)      In any transaction or agreement pertaining to the supply of goods to a consumer, there is an implied provision that the producer or importer, the distributors, and the retailer each warrant that the goods comply with the requirements and standards contemplated in section 55, except the extent that those goods have been altered contrary of the retailer, as the case may be.

 

(2)      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 supplier’s risk and expense, if the goods fail to satisfy the requirements and standards contemplated in section 55, and the supplier must, at the direction 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)      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 hazardous part is discovered, the supplier must-

 

(a)       replace the goods.

 

ANALYSIS

 

32.   It was common cause that the applicants purchased the vehicle from the respondent on 16 July 2020 and took delivery on 18 July 2020. The vehicle broke down on 28 November 2020, and on 1 December 2020, the applicants formally informed the respondent of the breakdown.

 

33.   The RMI diagnostic report revealed a damaged flywheel and clutch, a defect within the meaning of section 53 (1) (a), and required replacement at a cost of R47,782.66. The respondent refused to pay for the repairs but offered to contribute R10,000.00 towards the repairs. The applicant then turned to the Ombudsman, who investigated the complaint and recommended that the respondent be held liable for the total cost of the repairs. The respondent failed to comply with the Ombudsman’s recommendation, and the matter ultimately found its way to the Tribunal.

 

34.   Section 55 (2) gives the applicants the right to receive goods that are of good quality, in good working order, and free of any defects. So too, section 56 (2) gives them an implied warranty of quality entitling them within six months after the delivery of the goods to return the goods to the supplier if the goods fail to satisfy the requirements and standards contemplated in section 55. The supplier must then, at the direction of the consumer either (a) repair or replace the goods or (b) refund the purchase price to the consumer.

 

35.   The vehicle broke down just over four months after the applicants took delivery of it. The respondent elected not to follow the Ombudsman’s recommendation to repair the damaged parts and the applicants, as they were entitled to do, claim a refund of the purchase price.

 

36.   In the Tribunal’s view, it is irrelevant whether the applicants are motor vehicle experts. Moreover, the respondent failed to make out a case on which the Tribunal can rely that the damaged parts amounted to a wear and tear issue.

 

FINDING

 

37.   Consequently, the Tribunal is satisfied that the respondent committed prohibited conduct, being an act or omission in contravention of the CPA, by contravening section 55 (2) (b) read with section 56 (2) (a), and the applicants are entitled to a refund of the purchase price.

 

OTHER RELIEF

 

38.   The applicants sought additional relief concerning the cancellation of the ABSA credit agreement, a refund of their legal fees, and payment of the costs of storing the vehicle and the associated release costs.

 

39.   The Tribunal is not empowered by its governing legislation to cancel the ABSA credit agreement or make an order concerning the storage and associated release costs.

 

40.   Nevertheless, the applicants are not without recourse. They are entitled to approach the Chairperson of the Tribunal for a certificate in terms of section 115 (2) (b) of the CPA to institute proceedings in a court of law.

 

ORDER

 

41.   Accordingly, the Tribunal makes the following order:

 

a.      The respondent’s conduct in contravention of section 52 (2) read with section 56 (2) (a) of the CPA is declared prohibited conduct;

 

b.      The respondent is within 30 days of the issue of this judgment, to pay R225 900.00 plus interest thereon, calculated at the rate of 10,25% from 16 July 2020 until the date of final payment, into the applicants’ elected bank account; and

 

c.       There is no cost order.

 

 

CJ Ntsoane

 

Presiding Tribunal Member

 

Adv C Sassman (Tribunal Member) and Dr M Peenze (Tribunal Member) concur.