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[2021] ZASCA 40
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Motus Corporation (Pty) Ltd and Another v Wentzel (1272/2019) [2021] ZASCA 40; [2021] 3 All SA 98 (SCA) (13 April 2021)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case
no: 1272/2019
In
the matter between:
MOTUS
CORPORATION (PTY) LTD t/a
ZAMBEZI
MULTI
FRANCHISE
First Appellant
RENAULT
SOUTH AFRICA (PTY)
LTD
Second Appellant
and
ABIGAIL
WENTZEL
Respondent
Neutral
citation:
Motus
Corporation (Pty) Ltd and Another v Wentzel
(Case
no 1272/2019)
[2021] ZASCA 40
(13 April 2021)
Coram:
WALLIS, SALDULKER and ZONDI JJA and CARELSE and
KGOELE AJJA
Heard
:
26 February 2021
Delivered
:
This judgment was handed down electronically by circulation to the
parties’ legal representatives
by email. It has been published
on the Supreme Court of Appeal website and released to SAFLII. The
date and time for hand-down
is deemed to be 10h00 on 13 April 2021.
Summary:
Consumer Protection Act 68 of 2008
–
consumer approaching the high court to enforce their rights under the
Act against the supplier of the motor vehicle before
exhausting
internal remedies set out in
s 69
– whether
s 69
precludes
consumer from approaching the court to seek remedy –Refund
remedy: consumer not entitled to a refund of the purchase
price
unless they satisfy the court that all requirements stipulated in
s
56(3)
have been met – determination of amount of the purchase
price to be refunded regulated by
s 20.
Court a quo materially
misdirected itself in awarding refund remedy – appeal succeeds.
ORDER
On
appeal from:
Gauteng Division of the High
Court, Pretoria (Mavundla J sitting as court of first instance):
1
The appeal succeeds with no order as to costs.
2
The order of the high court is set aside and is replaced with the
following
order:
‘
The
application is dismissed, with no order as to costs.’
JUDGMENT
Zondi
JA (Wallis and Saldulker JJA and Carelse and Kgoele AJJA concurring)
Introduction
[1]
On 16 May 2018 the respondent, Ms Abigail Wentzel (Ms Wentzel),
brought an application
in the Gauteng Division of the High Court,
Pretoria, against the first appellant, Motus Corporation (Pty)
Limited t/a Zambezi Multi
Franchise (Renault) and the second
appellant, its parent company, Renault South Africa (Pty) Ltd
(Renault SA). She claimed to be
entitled to cancel a credit agreement
between herself and Renault in respect of a Renault Kwid motor
vehicle (the vehicle) and
to the refund of the purchase price in the
amount of R256 965.84. She tendered the return of the vehicle
against the refund
of the purchase price. The essential basis for her
claim was that Renault had, in breach of
ss 49
(1)(
b
), 55(2)(
b
)
and (
c
), 56(2)(
a
) an (
b
) and 56(3) of the
Consumer Protection Act 68 of 2008 (the Act), sold her a brand new
vehicle that was woefully defective. Renault
denied the alleged
breaches of the Act and that Ms Wentzel was entitled to the relief
that she sought.
[2]
The matter served before Mavundla J. The learned Judge upheld Ms
Wentzel’s claims
and granted an order in the following terms:
‘
1.
That the respondents are jointly and severally, the one paying the
other to be absolved,
ordered to repay the applicant the total
purchase [price] and finance charges for the Renault Kwid in an
amount of R256 965.84
within fifteen (15) days of this order;
2.
That the aforesaid amount shall be paid to the trust account of the
applicant’s
attorneys of record, within fifteen (15) days of
service of this order;
3.
That the respondents, are jointly and severally, the one paying the
other to
be absolved, ordered to pay taxed or agreed costs on
attorney and client scale.
4.
That the applicant returns the relevant vehicle to the premises of
the first
respondent, on the date of payment of the amount mentioned
in order 1 above.’
[3]
The appeal is before this Court with leave granted by the court a
quo. Renault attacks
the court a quo’s conclusions and the
factual findings on which they are based.
[4]
The issue is whether Ms Wentzel made out a case in terms of ss 56(2)
and (3) of the
Act for the refund of the purchase consideration paid
to Renault in respect of the vehicle. The related issues are whether
the
vehicle had defects; whether such defects were resolved by
Renault; and whether there were any further complaints received by
Renault
from Ms Wentzel, subsequent to the repairs undertaken by
Renault.
The
sale agreement
[5]
Central to an appreciation of the issues on appeal is the sequence of
material events.
On 7 December 2017 Ms Wentzel purchased the vehicle
from Renault in terms of a written offer to purchase. The total
purchase consideration
payable to Renault was R176 400.41 made
up as follows:
·
Selling
price
:
R131 491.23
·
Metallic
paint
:
3 000.00
·
Smash and
grab
:
4 000.00
·
Motor
Plan
:
10 745.97
·
On the road
charge
:
5 000.00
·
VAT
:
21 663.21
[6]
Ms Wentzel obtained finance for the vehicle from the Motor Finance
Corporation (Pty)
Ltd t/a M.F.C. (MFC), a division of Nedbank, and
the latter settled her indebtedness to Renault. The MFC provided
finance to Ms
Wentzel in terms of a Variable Rate Instalment Sale
Agreement (instalment sale agreement). The total purchase price
payable to
MFC under the instalment sale agreement, after addition of
finance charges and other related charges, was R261 924.84
payable
in monthly instalments of R3 637.37 over a period of 72
months. The relationship between Renault and MFC is not apparent from
the papers. Counsel for Renault informed the court from the Bar that
there was no relationship between the two and further that
the
vehicle was not subject to a floor plan agreement. But what is clear,
is that in terms of clause 3.2 of the instalment sale
agreement MFC
is the owner of the vehicle and is entitled to retain ownership of
the vehicle until all obligations and repayments
to MFC have been
fulfilled by Ms Wentzel. In terms of the instalment sale agreement
Ms Wentzel was obliged to collect the
vehicle from Renault and
to confirm acknowledgement of delivery on MFC’s behalf.
Additionally, she was required to inspect
the vehicle for any defects
before collecting it, and, if any defect was found, to decline
delivery of the vehicle and inform MFC
immediately of that fact.
Alleged
defects and breach of warranty
[7]
In her founding affidavit Ms Wentzel alleged that Renault guaranteed
that the vehicle
was suitable for the purpose for which it was
generally intended to be used, that it was in good working order and
free of any
defects, and fit for use on a public road. She alleged
further that Renault guaranteed that the vehicle was safe, roadworthy
and
would be useable and durable for a reasonable period of time.
[8]
Ms Wentzel contended that in breach of the warranty, Renault sold her
a vehicle beset
with numerous defects, some which manifested
themselves even before it left their premises on 7 December 2017. She
said that when
she started the vehicle, while on Renault’s
showroom floor, she heard a ticking and/or rattling sound emanating
from ‘the
front part of the vehicle’. She asked a sales
representative, a certain Mr Nicolas Andrade about the cause of the
noise.
Mr Andrade informed her that such noise was something not
uncommon to find in Renault Kwid models and it normally occurs when
the
navigation system starts running.
[9]
Ms Wentzel said that despite the assurance given to her by Mr
Andrade, the noise did
not stop. Instead, it increased in its
intensity. On Monday, 11 December 2017 she reported it to
Mr Andrade, who in turn,
reported it to Renault service department.
There was then an exchange of emails between her and Mr Andrade. On
14 December 2017
he wrote that he had not forgotten her and would
sort things out for her. On 17 December 2017, a Sunday, she
wrote asking
him to phone her in relation to the mats and a noise
that made the lights flicker. She also mentioned that her
air-conditioning
sometimes did not cool the car. He responded on
Tuesday in an email receipt of which was delayed for some reason
until 15 January
2018. In the meantime, the service department
arranged for the vehicle to be booked in for inspection on
27 December 2017.
[10]
It is common cause that on 27 December 2017, Ms Wentzel took the
vehicle to Renault for repairs.
According to the job card which was
prepared in respect of the vehicle, the vehicle had a ‘tick
noise in the dash and the
hazards flashing’. The vehicle had
done 270 kilometres. The invoice that was generated for the work that
was done on the
vehicle recorded that an immobiliser module was
replaced. Mr Gerben van der Merwe, the senior technician at Renault,
oversaw the
repairs which were carried out on the vehicle on 28
December 2017. Ms Wentzel collected the vehicle from Renault on
29 December
2017. There was no charge for attending to these
matters.
[11]
Ms Wentzel claimed that she had also on this occasion complained that
the Bluetooth system for
using her mobile phone was faulty, although,
like the air-conditioning, this was not recorded on the job card. She
said that when
she collected the vehicle, the Bluetooth was still
faulty and stopped audible functioning once the vehicle exceeded 70
kilometres
per hour. She claimed in her founding affidavit that over
the next few days further 'troubles and/or faults and defects'
manifested
themselves, but did not specify the nature of these. When
this was pointed out in the answering affidavit her reply was that it
was not for her to report defects. She said that as a result of these
she contacted Renault SA and was advised to approach the
Motor
Vehicle Ombudsman of South Africa (MIOSA) for assistance. Nothing was
done pursuant to this advice until 21 February
2018.
[12]
The delayed email from Mr Andrade was received by Ms Wentzel on
15 January 2018. In
another email addressed to various
people at Renault on 23 January 2018, she said that she tried to
contact Mr Andrade about
her number plates and foot mats and also
advised him that her brakes were making a screeching noise, the
driver's side front window
was rattling and the people could not hear
her when she phoned using the Bluetooth system. She took the vehicle
back to Renault
service department on 23 January 2018. At that stage
the odometer reading of the vehicle recorded 2863 kilometres. The
work that
was carried out on the vehicle, included ‘brakes
modification’ and securing the window of the door on the
driver’s
side. This was reflected on the job card and confirmed
by Mr van der Merwe who oversaw the repairs.
[13]
According to Ms Wentzel, on 25 January 2018 she sent a photograph to
Renault showing that the
roof rails were defective and pulling away
from the vehicle. The photograph is unclear, but seems to show that
the roof rail has
at the foremost point become unclipped. Ms Wentzel
said that by 22 February 2018, the noise in the vehicle had reached
an unbearable
level. An immobiliser warning light came on when she
was driving home that evening. She telephoned Mr Andrade to ask him
if it
was safe to continue driving the vehicle, given these problems.
On his advice, she took the vehicle back to Renault for service
on 23
February 2018.
[14]
The job card prepared in respect of the vehicle, records that the
complaints which were raised,
were ‘warning light is on, wind
noise when travelling over 70km per hour, roof racks loose, Bluetooth
sounds bad, rattle
noise at 70 km, brakes noisy’. By this time,
the vehicle had done 6211 kilometres. The invoices issued by Renault
on 28 February
2018 record that the brake pads were deglazed and
roof rails replaced. Renault explained that it was necessary to
deglaze the brake
pads in order to stop and/or soften the noise that
occurred with the application of brakes as the vehicle did not have
an anti-locking
braking system (ABS). A vehicle health check was
carried out and Mr van der Merwe, who attended to the repairs
himself, tested
the car by driving some 8 kilometres. In his
affidavit he stated that every problem raised by Ms Wentzel had
been properly
attended to and the car was not defective. Renault kept
the car for five days and returned it to Ms Wentzel on 28 February
2018.
[15]
On 21 February 2018 Ms Wentzel referred the dispute to MIOSA for
possible assistance in terms
of s 69
(c)
(i) of the Act. In her
referral to MIOSA, Ms Wentzel quoted what appears to be an email
addressed to Renault in which she repeated
the complaints referred to
above. She said that she did not want the car anymore and asserted
that she would not pay for this vehicle
for the next five years. She
sought a full refund or ‘a vehicle that [Renault] have the
means to fix every single component
. . .’. Two days
later the repairs referred to in the previous paragraph were
undertaken.
[16]
It is not apparent from the record what steps MIOSA took to attempt
to resolve the dispute, but
what we know, is that about six months
later, and on 10 September 2018, MIOSA declined to take her referral,
stating that it did
not have jurisdiction in respect of the dispute.
In doing so, it relied on s 17.2.6 of the South African Automotive
Industry Code
of Conduct (the Code), which states that MIOSA does not
have jurisdiction in respect of any dispute ‘where legal action
has
been instituted by either party, unless such complaint was
received by MIOSA before such legal action was instituted’. It
further stated that it has ‘no mandate to solicit refunds or
financial compensation’. I find MIOSA’s reliance
on s
17.2.6 of the Code, as a basis to decline jurisdiction, very
disturbing, having regard to the fact that no legal action had
been
instituted by Ms Wentzel, when she referred the dispute to MIOSA.
[17]
In her founding affidavit Ms Wentzel averred that, despite the
numerous attempts by Renault to
repair the vehicle, the defects
remain unresolved. She listed ten items, but only three of these did
not relate to items that had
been attended to when the vehicle had
been with Renault on the three occasions when she had taken it back
for problems to be attended
to. Her new and current complaints were
about loose back panels of the vehicle,
[1]
a 'ticking' sound when the engine was hot or after the car had been
driven
[2]
and a complaint that the air-conditioning was not blowing cool
air.
[3]
She alleged that, due to these persisting problems in the vehicle,
she, on 14 March 2018, escalated the matter to Renault’s
dealer
principal, Mr Werner Petzer, who she said acknowledged the defects
and offered to take Ms Wentzel’s vehicle back as
a trade-in for
a Renault Clio. She said that the proposed deal was not favourable,
as its terms would have been to her detriment.
For instance, her
vehicle would have been taken at a book value, which she considered
was too low for a brand new vehicle. Renault's
response was that Mr
Petzer had not acknowledged that the car was defective, but sought to
resolve the problems by assisting her
to purchase a Renault Clio to
replace the Kwid as the latter was an entry level vehicle. However,
she did not qualify financially
for such an arrangement.
[18]
Ms Wentzel contended that Renault’s conduct, in offering to
sell her another vehicle on
terms, which were to her detriment, was
in contravention of s 68(1)
(c)
of the Act. This section
provides that ‘if a consumer has exercised, asserted or sought
to uphold any right set out in the
Act or in the agreement or
transaction with a supplier, the supplier must not, in response . . .
alter, or propose to alter, the
terms or conditions of a transaction
or agreement with the consumer, to the detriment of the consumer’.
The section protects
consumers from victimisation by the suppliers
for enforcing their rights under the Act against the suppliers.
The
issues
[19]
In addition to opposing the application on the facts, Renault raised
four special pleas. First,
it argued that Ms Wentzel failed to
exhaust the internal remedies provided for by s 69 of the Act. It
alleged that, in terms of
the section, she had to, inter alia, refer
the matter directly to the Tribunal, or the applicable industry Ombud
with jurisdiction,
accredited in terms of s 82(
b
), to the
consumer court; alternative dispute resolution and filing a complaint
with the Commission, before approaching a civil
court.
[20]
Secondly, Renault raised a
lis alibi pendens
defence. In this
regard, it was alleged by Renault that Ms Wentzel had, prior to the
institution of the proceedings in the high
court, referred the matter
to MIOSA for resolution and that the matter before MIOSA was still
pending. Renault accordingly contended
that Ms Wentzel was precluded
from seeking the exact same relief from it in two separate
proceedings. Thirdly, Renault contended
further that Ms Wentzel
failed to comply with rule 18(6) of the Uniform Rules of Court, which
requires that when a party relies
on a contract, that contract must
be annexed to the pleadings. Finally, Renault averred that in light
of the irresoluble and material
disputes of fact on the papers, which
Ms Wentzel should have foreseen, she should not have proceeded by way
of motion proceedings.
The alleged disputes related to whether the
vehicle had defects and whether such defects were rectified by
Renault.
[21]
As regards the facts, Renault denied that the Bluetooth system
stopped functioning once the vehicle
exceeded the speed of 70
kilometres per hour. It alleged that Ms Wentzel only complained
about the Bluetooth on 23 February
2018 and the complaint was
resolved, when it was explained that the system was working, but
noise from the car being driven at
higher speeds, was the problem. It
maintained that all of Ms Wentzel’s other complaints relating
to the vehicle, were attended
to. It denied that it breached the
warranty by selling Ms Wentzel a vehicle that had defects. Renault
alleged that Ms Wentzel failed
to return the vehicle or inform it of
any of the alleged unresolved issues relating to the vehicle. It
averred that Ms Wentzel
only brought the vehicle for repairs on 27
December 2017, 23 January 2018 and 23 February 2018 and, to its
knowledge, all of her
complaints were resolved.
[22]
Renault argued that Ms Wentzel, after electing to have the vehicle
repaired by Renault, could
not claim a refund of the purchase price.
It contended that she was bound by her election and it was not open
to her to change
it
.
Renault’s
contention that Ms Wentzel could not claim a refund of the purchase
price because she had elected to have the vehicle
repaired, is not
correct. Ms Wentzel’s case for the refund of the purchase price
was based on the allegation that the defects
which were previously
repaired by Renault resurfaced within three months after the repair.
Her claim for the refund of the purchase
price was not precluded by s
56(3) provided all of the requirements of that section are met.
[23]
As a result of MIOSA’s delay in investigating her complaints
against Renault, Ms Wentzel,
on 16 May 2018 approached the court a
quo. It dismissed all of Renault’s defences. After setting out
the purposes of the
Act as set out in s 3
(d)
– to
protect the economic interests of consumers – and the
obligation imposed on the courts by s 4(2) – to develop
common
law as necessary to improve the realisation and enjoyment of the
consumer’s rights in general and to promote the spirit
and
purposes of the Act - the court a quo concluded that:
‘
the
courts must take a robust approach towards the economic giants, such
as [Renault], who can flex their financial muscle to bully
unsuspecting consumers to accept flawed goods, and raise all sort of
spurious defences and denials. In this case, there were too
many
flaws or defects for a new vehicle. I am inclined to lean towards
protecting the rights and interests of the applicant’.
The
court a quo accordingly ordered Renault and Renault SA jointly and
severally to make a refund of the full purchase price of
R256 965.84,
as set out in the instalment sale agreement on the basis of its
finding that the vehicle was simply not of good
quality. It did not
explain on what basis Renault SA was held liable, notwithstanding the
fact that it had no contractual relationship
with Ms Wentzel.
Discussion
Section
69(d)
[24]
Renault submitted that Ms Wentzel's application to the high court was
premature, because she
had not exhausted her remedies in terms of the
other provisions of s 69
(d)
of the Act, more particularly
because MIOSA, to which she had referred her complaints on 21
February 2018, had not yet rendered
a decision, when she commenced
these proceedings. Section 69 reads as follows:
'
Enforcement
of rights by consumer.
—A
person contemplated in section 4 (1) may seek to
enforce any right in terms of this Act or in terms of a
transaction
or agreement, or otherwise resolve any dispute with a supplier, by—
(
a
)
referring the matter directly to the Tribunal, if such a direct
referral is permitted
by this Act in the case of the particular
dispute;
(
b
)
referring the matter to the applicable ombud with jurisdiction, if
the supplier is subject
to the jurisdiction of any such ombud;
(
c
)
if the matter does not concern a supplier contemplated in
paragraph
(
b
)
—
(i)
referring the matter to the applicable industry ombud, accredited in
terms of section
82 (6), if the supplier is subject to any
such ombud; or
(ii)
applying to the consumer court of the province with jurisdiction over
the matter,
if there is such a consumer court, subject to the law
establishing or governing that consumer court;
(iii)
referring the matter to another alternative dispute resolution agent
contemplated in section
70; or
(iv)
filing a complaint with the Commission in accordance with section
71; or
(
d
)
approaching a court with jurisdiction over the matter, if all other
remedies available
to that person in terms of national legislation
have been exhausted.'
[25]
The section has caused considerable difficulty and is the source of
conflicting judgments in
the high court. The authors of
Commentary
on the
Consumer Protection Act
[4
]
say that 'the various entities that can be approached for purposes of
redress are not indicated in
s 69
in an order that presents a
clear picture of the exact route that a person has to follow in this
quest for redress'. Nonetheless
they suggest that the section
contemplates a hierarchy of remedies and they make a valiant effort
to describe such hierarchy.
[5]
The difficulty posed by the notion that the section creates a
hierarchy of remedies is illustrated by cases where the route taken
by the dissatisfied consumer has avoided the applicable ombudsman
with jurisdiction in terms of
s 69
(b)
.
[6]
Requiring dissatisfied consumers to pursue other remedies under
s 69
before approaching the high court under
s 69
(d)
has resulted in the consumer being non-suited.
[7]
In the present case MIOSA did not deal with Ms Wentzel's complaints
until 10 September 2018, when it wrote to her saying that
it had
no jurisdiction, because the complaint needed to be received by it
before the institution of legal action. The reference
to it preceded
the present litigation so it was incorrect to reject jurisdiction.
[26]
The need for us to address the scope of
s 69
(d)
fell away
in argument, because Mr Botes SC, who appeared for Renault
and Renault SA, indicated that he would not pursue
the point as his
clients preferred to address the issues of substance. Therefore, we
did not hear full argument on the matter.
The issues arising from the
section will need to be resolved on another occasion. It suffices to
say that the primary guide in
interpreting the section will be s 34
of the Constitution and the guarantee of the right of access to
courts. Section 69(
d
) should not lightly be read as excluding
the right of consumers to approach the court in order to obtain
redress. A claim for cancellation
of the contract and the refund of
the price of goods on the grounds that they were defective falls
under the
actio redhibitoria
and dates to Roman times. Our
courts have always had jurisdiction to resolve such claims and there
is no apparent reason why the
section should preclude a consumer, at
their election, from pursuing that avenue of relief until they have
approached other entities.
[27]
The section is couched in permissive language consistent with the
consumer having a right to
choose which remedy to pursue. Those in
(a)
,
(b)
and
(c)
appear to be couched as
alternatives and, as already noted, there is no clear hierarchy. Had
that been the aim it would have been
relatively simple to set the
hierarchy out in a sequence that would have been apparent, not
'implied', and clear for the consumer
to follow. Furthermore, subsec
(d)
does not refer to the consumer pursuing all other remedies
'in terms of this Act', but of pursuing all other remedies available
in terms of national legislation. That could be a reference to
legislation other than the Act, or to the remedies under both the
Act
and other applicable consumer legislation, such as the
National
Credit Act 34 of 2005
. Given the purpose of the Act to protect the
interests of the consumer, who will always be the person seeking
redress under it,
there is no apparent reason why they should be
precluded from pursuing immediately what may be their most effective
remedy. Nor
is there any apparent reason why the dissatisfied
consumer who turns to a court having jurisdiction should find
themselves enmeshed
in procedural niceties having no bearing on the
problems that caused them to approach the court.
[28]
One further matter deserves mention. The contract between Ms Wentzel
and the first appellant
dealt specifically with this question. It
provided in clause 6.1 that if she had a complaint, or a dispute
arose, the parties
would endeavour to resolve it within seven days,
failing which it could be referred to MIOSA. However, clause 6.2
said:
'Notwithstanding
the contents of clause 6.1, either party has the right to approach a
competent court for urgent redress.'
Is
such a contractual provision binding? It is easy to think of
instances where one or other of the parties to a dispute would want
urgent relief, but the stringent construction that some courts have
put on s 69
(d)
would, if correct, appear to preclude it.
That in turn, takes us back to s 34 of the Constitution and a
possible issue over
the constitutional validity of the section. In
view of the approach by Renault and Renault SA, we do not have to
consider these
problems in this case, but any court seized of a
similar contention will need to consider the issues we have mentioned
and, no
doubt, others that have not occurred to us.
The
other issues
[29]
In relation to the issues identified by Renault for resolution, I
prefer to leave aside the defences
of
lis alibi pendens
and
non-compliance with Rule 18(6). Both are technical and do not address
the substance of the issues between the parties.
Lis alibi pendens
is a purely dilatory defence and by the time the case was argued
all the relevant contractual documents were before the court. I
turn
then to the issue of alleged defects and Ms Wentzel's rights in terms
of the Act.
[30]
It is apparent that the parties offered mutually destructive factual
versions. On Ms Wentzel’s
version, the defects were never
resolved by Renault. Renault’s version is that all of the
complaints raised by Ms Wentzel
on 27 December 2017, 23 January 2018
and 28 February 2018 were resolved and no further complaints
regarding the vehicle were thereafter
brought to its attention. It
relied in this regard on direct evidence from the technician who
either supervised or personally attended
to her car. There is no
basis upon which that evidence can be rejected on the papers. The
basis of Ms Wentzel’s claim
depended on the determination
of issues, as to which there were serious disputes of fact and those
factual disputes ought to have
resolved by applying the test
enunciated in
Plascon-Evans
[8]
and subsequently explained by this Court in
National
Director of Public Prosecutions
.
[9]
[31]
This Court in
National Director of Public Prosecutions
held at
para 26:
‘
Motion
proceedings, unless concerned with interim relief, are all about the
resolution of legal issues based on common cause facts.
Unless the
circumstances are special they cannot be used to resolve factual
issues because they are not designed to determine probabilities.
It
is well established under the
Plascon-Evans
rule
that where in motion proceedings disputes of fact arise on the
affidavits, a final order can be granted only if the facts averred
in
the applicant’s (Mr Zuma’s) affidavits, which have been
admitted by the respondent (the NDPP), together with the
facts
alleged by the latter, justify such order. It may be different if the
respondent’s version consists of bald or uncreditworthy
denials, raises fictitious disputes of fact, is palpably implausible,
far-fetched or so clearly untenable that the court is justified
in
rejecting them merely on the papers. The court below did not have
regard to these propositions and instead decided the case
on
probabilities without rejecting the NDPP’s version.’
I
will return to this aspect later in the judgment. The court a quo
rejected Renault’s contention that disputes of fact existed
on
papers. It decided the matter on the facts, which it held to be
common cause. In order to assess whether this was permissible
it is
necessary to examine the relevant provisions of the Act.
[32]
The objectives of the Act, are to develop and employ innovative means
to ─
‘
(a)
fulfil the rights of historically disadvantaged persons and to
promote their full participation
as consumers;
(b)
protect the interests of all consumers, ensure accessible,
transparent and efficient
readiness for consumers who are subjected
to abuse or exploitation in the marketplace; and
(c)
to give effect to internationally recognised customer rights.’
The
Act was enacted to, inter alia, promote and protect the economic
interests of consumers.
[33]
Section 3 of the Act deals with the purpose and policy of the Act. It
reads:
‘
(1)
The
purposes
of
this
Act
are
to
promote
and
advance
the
social
and
economic welfare of consumers in South Africa by—
(
a
)
establishing a legal framework for the achievement and maintenance of
a consumer market
that is fair, accessible, efficient, sustainable
and responsible for the benefit of consumers generally;
.
. .
(
c
)
promoting fair business practices;
(
d
)
protecting consumers from—
(i)
unconscionable, unfair, unreasonable, unjust or otherwise improper
trade practices;
and
(ii)
deceptive, misleading, unfair or fraudulent conduct;
.
. .
(
g
)
providing for a consistent, accessible and efficient system of
consensual resolution
of disputes arising from consumer transactions;
and
(
h
)
providing for an accessible, consistent, harmonised, effective
and
efficient
system of
redress
for consumers.’
[34]
Ms Wentzel’s claim for the refund of the purchase consideration
was grounded on ss 49(1)
(b)
; 55(2)
(b)
and
(c)
;
56(2)
(a)
and
(b)
; and 56(3) of the Act. The reliance on
s 49(1)
(b)
was misplaced. The subsection provides that
any notice to consumers or provision of a consumer agreement that
purports to constitute
an assumption of risk or liability by the
consumer, must be drawn to the attention of the consumer in a manner
and form that satisfies
the formal requirements of subsecs (3) to
(5). It finds no application in a matter where the relief sought is a
claim for the refund
of the purchase consideration. In any event,
there was no factual support for the case based on the provision of s
49(1)
(b)
. Nothing further needs to be said about it.
[35]
Section 55 of the Act guarantees a consumer, such as Ms Wentzel, a
right to safe and good quality
goods. Section 55(2)(
b
) and (
c
)
on which Ms Wentzel relied, provide:
‘
(2)
Except to the extent contemplated in subsection (6), every consumer
has a right to receive
goods that─
(
a
)
. . .
(
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 normally be put and to all the
surrounding circumstances of their supply. . .’.
[36]
The provisions of subsection (6) to which reference is made in s
55(2) do not find application
in this case, as there is no evidence
that Ms Wentzel was expressly informed that the vehicle was offered
in a specific condition
and that she expressly agreed to accept it in
that condition, or knowingly acted in a manner consistent with
accepting the vehicle
in that condition. Ms Wentzel bought a brand
new vehicle and that being the case, she was entitled to the
protection afforded by
s 55(2). A right afforded to a consumer in
terms of s 55(2) exists, irrespective of whether it is contractually
warranted. It exists
by operation of law and is protected by s 56. A
consumer may enforce it in terms of the Act or in terms of an
agreement in the
event of its breach by the supplier.
[37]
Section 56 reads as follows:
‘
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 distributor and the retailer each warrant that the
goods comply with
the requirements and standards contemplated in
section 55, except to the extent that those goods have been altered
contrary to
the instructions, or after leaving the control, of the
producer or importer, a distributor or 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 unsafe feature is discovered, the supplier must—
(
a
)
replace the goods; or
(
b
)
refund to the consumer the price
paid by the consumer for the goods.’
[38]
Consideration of the question of whether Ms Wentzel established a
case based on these provisions
of the Act on which she relied, must
start with s 53(1)
(a)
, in which the concept of ‘defect’
is defined, together with the concepts of 'failure', hazard' and
'unsafe'. It is
clear that her claim was based on the goods having
defects. ‘Defect’ when used with respect to any goods,
component
of any goods, or services means –
‘
(i)
any material imperfection in the manufacture of goods or component,
or in 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 components
less useful, practicable or safe than persons generally
would be reasonably entitled to expect in the circumstances.’
[39]
The parties disagreed as to whether the alleged ‘defects’
relied upon by Ms Wentzel
constituted defects as contemplated by
s 53(1)
(a)
(i) or s 53(1)
(a)
(ii). Counsel for Renault
submitted that, properly construed, Ms Wentzel’s complaint
related to defects falling within the
ambit of s 53(1)
(a)
(ii).
In other words, the complaint of Ms Wentzel was about alleged defects
relating to characteristics of the vehicle that would
render the
vehicle less useful than persons generally would be reasonably
entitled to expect in a brand new vehicle.
[40]
Counsel for Ms Wentzel submitted that Ms Wentzel’s complaint
encompassed both classes of
‘defects’. In particular he
argued that the failure of the Bluetooth to perform optimally when
the vehicle travelled
beyond a speed of 70 kilometres per hour was a
fact that constituted a material imperfection in the manufacture of
the vehicle
rendering the vehicle less acceptable than persons
generally would be reasonably entitled to expect in a brand new
vehicle. I do
not think there is merit in this argument. A Bluetooth
system is accessory to the primary function of a motor car, which is
to
be driven and to enable travel from place to place. A functioning
Bluetooth system is no doubt a convenience for making and receiving
phone calls or other purposes related to the use of modern
technology. But a deficiency in it cannot render the goods less
acceptable
than people generally would be reasonably entitled to
expect from a motor vehicle of this type, or render it less useful,
practicable
or safe for the purpose for which it was purchased,
namely, as a motor vehicle.
[41]
On a broader basis, counsel emphasised that Ms Wentzel bought a brand
new vehicle, but because
of the issues she encountered, it was like a
second-hand vehicle. It is not necessary to reach a firm conclusion
as to whether
the defects complained of by Ms Wentzel fall either
under s 53(1)
(a)
(i) or s 53(1)
(a)
(ii). It must be
accepted on the facts that are common cause that her vehicle did have
certain issues, which she brought to the
attention of Renault. It is
more difficult to determine whether they amounted to defects as
defined in the statute. Not every small
fault is a defect as defined.
It must either render the goods less acceptable than people generally
would be reasonably entitled
to expect from goods of that type, or it
must render the goods less useful, practicable or safe for the
purpose for which they
were purchased. No evidence was led by either
side to inform the court of what purchasers of entry level motor
vehicles are reasonably
entitled to expect. Is every rattle or
unfamiliar noise a defect in terms of the statute? A defective module
may be readily replaced,
as occurred with the immobiliser. Does that
render the vehicle defective so as to entitle the purchaser to return
it and demand
repayment of the purchase price? Clearly not.
[42]
It is common cause that the issues with the vehicle started to
manifest themselves within six
months after its delivery to Ms
Wentzel on 7 December 2017. The vehicle was taken in for repairs by
Renault on 27 December 2017,
23 January 2018 and 23 February 2018.
Renault at its risk and expense, repaired the defective components in
the vehicle. Assuming
that these issues were defects, this is what
Ms Wentzel was entitled to in terms of s 56(2).
[43]
Ms Wentzel was not satisfied with the repair remedy afforded to her
by s 56(2). Instead, she
sought payment of the full purchase price
she had to pay, pursuant to the instalment sale agreement she
concluded with the MFC.
But she was not entitled to claim a refund of
the purchase price before all events stipulated in s 56(3) had
taken place.
To obtain the refund remedy Ms Wentzel had to show,
first, that Renault repaired the defective parts; secondly, that
within three
months after the repairs, the defects had not been
remedied or that a further failure was discovered.
[44]
The evidence revealed that the last time that the vehicle was
repaired by Renault, was on 28
February 2018 and on Renault’s
version, which must be accepted, Ms Wentzel did not report further
defects to them after 28
February 2018. Apart from twice raising the
noise from the brakes, which had been explained as due to the fact
that the car was
not fitted with ABS brakes, she never complained
that a repair was not properly carried out. Renault's evidence was
that all repairs
were properly carried out. It is correct that Ms
Wentzel saw Mr Petzer of Renault on 14 March 2018 and said she
informed him of
the defects, which according to her, he acknowledged.
But that discussion occurred in a different context and for a
different purpose.
She had gone to Renault to discuss the possibility
of replacing Renault Kwid with another vehicle. There is no record
that she
reported to Renault service department any defect relating
to the vehicle on 14 March 2018. It is correct that s 56(3) requires
a further defect to be discovered, not reported, for the consumer to
be entitled to the replacement of the goods or refund. In
my view, it
is required of a consumer to report further defects to the supplier
that manifest themselves within three months after
the repair of the
vehicle as such reporting is necessary for the purposes of enforcing
the warranty provisions.
[45]
In my view, Ms Wentzel has failed to show that the requirements of
s 56(3) were satisfied
and that she was entitled to a refund of
the purchase price in respect of the vehicle. The court a quo ordered
Renault to refund
to Ms Wentzel the total purchase price and finance
charges in an amount of R256 965.84. The court a quo misdirected
itself
in ordering the refund of the purchase price. In the first
place, as I have found above, Ms Wentzel did not make out a case for
a refund remedy. She failed to bring her claim within the ambit of s
56(3) of the Act. Secondly, even if she had brought herself
within
the provisions of s 56(3), she was not entitled to a refund of the
amount stipulated in the court a quo’s order. This
was not the
amount she paid to Renault. It was the amount she agreed to pay to
MFC in terms of the agreement with them. Her claim
for the refund was
not against the financier but against the supplier of the vehicle.
[46]
The definition of 'price' in s 1 of the Act is relevant here. It
provides that ‘price’,
when used in relation to ─
‘
(
a
)
. . .
(
b
)
the consideration for any transaction, means the total amount paid or
payable by the
consumer to the supplier in terms of that transaction
or agreement, including any amount that the supplier is required to
impose,
charge or collect in terms of any public regulation.’
I
n
this matter the amount charged by Renault for the vehicle was
R176 400.41. The amount of the refund ordered by the court
a quo
included the finance charges and other related charges which were
imposed by and payable to, MFC by Ms Wentzel. Assuming
in her favour
that the amount paid by MFC to Renault was a payment on her behalf,
if Ms Wentzel had made out a case for the refund
she was not entitled
to a refund of an amount greater than R176 400.41.
[47]
Section 20 of the Act provides a mechanism for the determination of a
refund. In terms of s 20(5)
upon the return of the goods, the
supplier must refund to the consumer the price paid for the goods,
less any amount that may be
charged in terms of subsection (6).
Subsection (6) provides:
‘
In
determining the right of a supplier to impose a charge contemplated
in s 20(5), if any goods referred to the supplier are:
(a)
. . .
(b)
in their original condition and repackaged in their original
packaging, the supplier
may charge the consumer a reasonable amount
for ─
(i)
use of the goods during the time they were in the consumer’s
possession,
unless they are goods that are ordinarily consumed or
depleted by use, and no such consumption or depletion has occurred;
or
(ii)
any consumption or depletion of the goods, unless that consumption or
depletion is
limited to a reasonable amount necessary to determine
whether the goods were acceptable to the consumer; . . .’.
[48]
The court a quo in determining the amount to be refunded to Ms
Wentzel failed to consider that
Ms Wentzel had used the vehicle for
over a period of 18 months and that Renault, in terms of s 20 would
have been entitled to deduct
a reasonable amount for the use of the
vehicle during the time it was in her possession. This was a relevant
fact which the court
a quo should have considered, but failed to
consider. This failure constituted a material misdirection which,
even if a proper
case had been out for such remedy, would have
entitled this Court to interfere with the court a quo’s
award.
[10]
[49]
In conclusion, I am not satisfied that a proper case had been made
out by Ms Wentzel for
a remedy under s 56(3)
(b)
of the Act, having regard to the serious disputes of fact which arose
on the pleadings. Motion proceedings, unless concerned with
interim
relief, are all about the resolution of legal issues based on common
cause facts and they cannot be used to resolve factual
issues.
[11]
To the extent there was a dispute regarding the nature of the defects
in the vehicle and whether they were resolved by Renault,
such
dispute ought to have been resolved in favour of Renault. For these
reasons the appeal must succeed.
[50]
Turning to the issue of costs, the court a quo ordered Renault to pay
taxed or agreed costs on
an attorney and client scale. This was a
punitive costs order which is not ordinarily made unless there are
special facts giving
rise to the litigation, or arising out of the
conduct of the losing party, which would render it just and
equitable, and necessary
to ensure that the successful party is not
out of pocket. The court a quo purportedly in the exercise of its
discretion to award
costs on a punitive scale, took into account the
fact that Ms Wentzel ‘does not have a deep pocket as compared
to the respondents’
and that she ‘must have been highly
prejudiced and inconvenienced in having to seek redress from the
respondents’.
It imposed the punitive cost order to ‘compel
the respondents to ensure that they sell to the public good quality
commodities’.
These considerations viewed cumulatively did not,
in my view, justify an award of costs on a punitive scale. This much
was conceded
by counsel for Ms Wentzel. The opposition by
Renault to the proceedings was not unreasonable. It was entitled to
enter the
fray in order to show that it took steps to address the
problems raised by Ms Wentzel in relation to the vehicle.
[51]
As regards the costs of appeal, it was submitted by counsel for
Renault that in the event of
the Court upholding the appeal, Renault
would not seek a costs order against Ms Wentzel. In the circumstances
no order will be
made as to costs.
The
Order
[52]
In the result the following order is made:
1
The appeal succeeds with no order as to costs.
2
The order of the high court is set aside and is replaced with the
following
order:
‘
The
application is dismissed, with no order as to costs.’
D
H Zondi
Judge
of Appeal
Appearances:
For
appellants:
F W Botes SC (with him S McTurk)
Instructed
by:
Rémon Gerber Attorneys Incorporated, Johannesburg
McIntyre van
der Post, Bloemfontein
For
respondent:
M Coetsee
Instructed
by:
Elliot Attorneys, Pretoria
Willie J Botha
Incorporated, Bloemfontein
[1]
As the
vehicle is a hatchback it is difficult to identify to what this
referred.
[2]
It is
unclear whether this was anything more than the sound of the engine
cooling down.
[3]
This
had not been reflected as a concern on any job card.
[4]
Naudé
and Eiselen
Commentary
on the
Consumer Protection Act
(Original
Service, Juta) 69-1. The relevant chapter was written by Professor
Corlia van Heerden.
[5]
Ibid
69-20 para 33.
[6]
Imperial
Group (Pty) Ltd t/a Cargo Motors Klerksdorp v Dipico and Others
[2016]
ZANCHC 1
and
Imperial
Group (Pty) Ltd t/a Auto Niche Bloemfontein v MEC: Economic
Development, Environmental Affairs and Tourism, Free State
Government and Others
[2016]
3 All SA 794
(FB). In para 43 of the latter judgment Daffue J
questioned whether the Act does in fact create an implicit hierarchy
of
remedies.
[7]
Joroy
4440 CC v Potgieter and Another NNO
2016
(3) SA 465
(FB) paras 8-10 and
Nzwana
v Dukes Motors t/a Dampier Nissan
[2019]
ZAECGHC 81 para 34.
[8]
Plascon-Evans
Paints Ltd v Van Riebeeck Paints (Pty) Ltd
1984
(3) SA 623 (A) 634-635.
[9]
National
Director of Public Prosecutions v Zuma
[2009]
2 All SA 243 (SCA); 2009 (2) SA 279 (SCA).
[10]
Trencon
Construction (Pty) Ltd v Industrial Development Corporation of South
Africa Limited and Another
[2015]
ZACC 22
;
2015 (5) SA 245
(CC) para 88.
[11]
Op
cit, note 6 para 26.