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[2016] ZAFSHC 105
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Imperial Group (Pty) Ltd t/a Auto Niche Bloemfontein v MEC: Economic Development, Environmental Affairs and Tourism Free State Government and Others (A169/2014) [2016] ZAFSHC 105; [2016] 3 All SA 794 (FB) (9 June 2016)
IN
THE HIGH COURT OF SOUTH AFRICA,
FREE
STATE DIVISION, BLOEMFONTEIN
Case
No.: A169/2014
In
the matter between:
IMPERIAL
GROUP (PTY) LTD
t/a
AUTO NICHE BLOEMFONTEIN
Applicant
and
MEC:
ECONOMIC DEVELOPMENT,
ENVIRONMENTAL
AFFAIRS AND TOURISM
FREE
STATE GOVERNMENT
1
st
Respondent
N
J GROBLER N.O.
(In
his capacity as ACTING CHAIRPERSON:
FREE
STATE CONSUMER AFFAIRS COURT) 2
nd
Respondent
CHAIRPERSON:
FREE STATE CONSUMER
AFFAIRS
COURT
3
rd
Respondent
DR
NICOLAAS RUDOLPH JOHANNES
VAN
ZYL
4
th
Respondent
ACROTEK
CC t/a L R SPARES
5
th
Respondent
DOVER
PARTS (PTY) LTD
6
th
Respondent
ENGINE
WORLD BLOEMFONTEIN
7
th
Respondent
CONSUMER
PROTECTOR:
FREE
STATE CONSUMER AFFAIRS COURT
8
th
Respondent
CORAM:
VAN
ZYL, J
et
DAFFUE, J
JUDGMENT
BY:
DAFFUE,
J
DELIVERED
ON:
9
JUNE 2016
I
INTRODUCTION
[1]
Legislation to protect customers against unfairness in the commercial
world has long been overdue in South Africa. Several
national
acts have been promulgated over the years with limited success and
consequently repealed recently. Two pieces of
legislation, the
one a provincial and the other a national Act, i.e. the Free State
Consumer Affairs (Unfair Business Practice)
Act, 14 of 1998 (“the
Free State Act”) and the Consumer Protection Act, 68 of 2008
(“the CPA”) respectively,
play a cardinal role in the
dispute between the litigants
in
casu
and
need to be considered in order to adjudicate the dispute.
[2]
If anyone believed that the application of the CPA would ensure that
an aggrieved consumer would in future be in a position
to have
his/her dispute with a supplier resolved in a fair, inexpensive and
speedy manner, the facts emerging from this judgment
will change that
belief.
[3]
Early in 2012 a dispute arose about service delivery between the
Imperial Group’s Auto Niche dealership in Bloemfontein
and a
motor vehicle owner, Dr NRJ van Zyl (“Van Zyl”). It
is now four years later and there is still no light
in the proverbial
tunnel. The ruling of the Acting Chairperson of the Free State
Consumer Affairs Court that that court had
jurisdiction to adjudicate
the dispute between the parties has been taken on review to the Free
State High Court and this application
must be adjudicated now.
II
THE
PARTIES
[4]
Applicant in the review application is Imperial Group (Pty) Ltd,
trading as Auto Niche, Bloemfontein. Auto Niche is a
motor
vehicle dealer in Volvo and Land Rover motor vehicles and it also
operates a service centre.
[5]
The MEC for Economic Development, Environmental Affairs and Tourism,
Free State Provincial Government is cited as first respondent.
Mr N J Grobler in his capacity as the Acting Chairperson of the Free
State Consumer Affairs Court is cited as second respondent
and the
Chairperson of the Free State Consumer Affairs Court as third
respondent. Van Zyl, the consumer and the original
complainant,
is cited as fourth respondent. Acrotek CC, trading as L R
Spares, Dover Parts (Pty) Ltd and Engine World Bloemfontein
are cited
as fifth, sixth and seventh respondents respectively insofar as they
have been cited as parties before the Free State
Consumer Affairs
Court. They did not play any role in the proceedings before the
High Court. The Consumer Protector:
Free State Consumer Affairs
Court is cited as eighth respondent. First, second, third and
eighth respondents are represented
by the Office of the State
Attorney, Bloemfontein, while Van Zyl is represented by the attorney,
Frans F Erasmus. Applicant
is represented by Symington & De
Kok. In order to avoid confusion I shall refer to first,
second, third and eighth respondents
as the respondents, unless it is
necessary to refer to a specific respondent.
III
THE
RELIEF CLAIMED
[6]
Applicant claims the following relief
ex
facie
the notice of motion which is quoted
verbatim
:
(a)
“
Reviewing,
setting aside and substituting a decision of the Free State Consumer
Affairs Court contained in a judgment issued by
Second Respondent on
28
January 2014
,
under case number
FSCAC
2013/10-28
(contained in annexure “
MH2”
to the founding affidavit appended hereto), to the effect that the
Free State Consumer Affairs Court has jurisdiction to
entertain
an action instituted by Fourth Respondent against,
inter
alia
,
Applicant (“the decision”);
(b)
Substituting
the decision with one in terms whereof it is held that “
the
Free State Consumer Affairs Court does not have jurisdiction to
entertain the action instituted by Fourth Respondent against
Applicant as well as Fifth, Sixth and Seventh Respondents under case
number
FSCAC
2013/10-28
;
Alternatively
,
setting aside the decision and remitting it back to the Free State
Consumer Affairs Court for adjudication before a differently
constituted Tribunal;
(c)
Directing
First Respondent to pay the costs of this application and in the
event of it being opposed by any of the other Respondents,
that such
Respondents (together with First Respondent) pay the costs of this
application jointly and severally.”
The
alternative prayer in prayer (b) is in direct conflict with the
essence of the relief claimed. Applicant eventually
comprehended
its predicament and this alternative prayer was
abandoned in the heads of argument.
IV
THE
DISPUTES TO BE ADJUDICATED
[7]
The following disputes need to be adjudicated:
7.1
Whether or not the High Court has jurisdiction to entertain
applicant’s review application;
7.2
If it has jurisdiction, the merits of the review application have to
be considered with reference
to
inter
alia
the contrasting and divergent submissions of the parties pertaining
to the Free State Act and the CPA insofar as enforcement action
by a
consumer is applicable.
V
MATERIAL
FACTS IN CHRONOLOGICAL ORDER
[8]
The following material facts are undisputed:
8.1
On 28 November 2011 Van Zyl complained with applicant about a noise
and fluid loss which allegedly
occurred after a previous service on
his 2000 model Land Rover Discovery (“the vehicle”).
8.2
On 2 December 2011 Acrotek CC (the fifth respondent) provided a quote
for certain engine parts.
8.3
On 6 December 2011 applicant provided a quotation for labour to fit
the engine parts to be supplied
and delivered by fifth respondent.
8.4
On 20 December 2011 the engine parts arrived at applicant.
8.5
On 15 January 2012 applicant commenced with the works on the vehicle.
8.6
On 27 January 2012 applicant requested permission from Van Zyl to
open the engine and remove the
cylinder head for testing as it did
not function correctly post assembly of the engine parts.
8.7
On 1 March 2012 Engine World (seventh respondent) provided a
technical report on the damaged engine.
8.8
On 5 March 2012 applicant denied any responsibility and claimed that
Van Zyl supplied his own
parts.
8.9
On 24 April 2012 Van Zyl complained to the National Client Service
Department of applicant.
8.10
During the period 20 January 2012 to 29 August 2012 and prior to the
involvement of the attorneys, Van Zyl
on his own tried to resolve the
matter with applicant internally without any success.
8.11 On
30 August 2012 Van Zyl caused a letter of demand to be written to
applicant.
8.12 On
14 December 2012 applicant forwarded a letter, through its attorneys,
to Van Zyl.
8.13 On
26 March 2013 the Free State Consumer Affairs Protector (eighth
respondent) made contact with applicant
in order to investigate the
complaint, but applicant failed to respond.
8.14 On
24 May 2013 the Free State Consumer Affairs Protector again made
contact with applicant in order to investigate
the complaint, but
without any success as applicant failed to respond.
8.15 On
27 May 2013 another attempt was made by the Free State Consumer
Affairs Protector to contact applicant
who failed to respond.
8.16 On
the same day, 27 May 2013, the Free State Consumer Affairs Protector
warned applicant that the matter
would be referred to the court.
8.17 On
31 October 2013 the Free State Consumer Affairs Court convened and a
point
in limine
relating to that court’s lack of
jurisdiction was taken by applicant and argued. Second
respondent reserved judgment.
8.18 On
28 January 2014 second respondent ruled in favour of Van Zyl to the
effect that the Free State Consumer
Affairs Court had jurisdiction to
entertain the claim.
8.19
On 18 July 2014 the review application was issued out of the Free
State High Court which application was
eventually heard on 5 October
2015.
VI
LEGAL
PRINCIPLES AND SUBMISSIONS PERTAINING TO THE HIGH COURT’S
JURISDICTION TO ADJUDICATE THE REVIEW APPLICATION
[9]
Applicant seeks an order in terms whereof the decision of the Free
State Consumer Affairs Court issued by second respondent
in his
capacity as Acting Chairperson of that court is reviewed, corrected
and set aside. The basis for the relief claimed
is contained in
paragraphs 13 and 14 of the founding affidavit which I quote
verbatim
:
“
13.
More in particular, applicant seeks to review and set aside the
ultimate decision (contained on p 15 of annexure
“MH2”)
that ‘… the claim brought by the Complainant may be
adjudicated by the Consumer Court as a forum’
which is
ultimately a decision that the Court has jurisdiction to entertain a
dispute/complaint/claim/action referred directly
to it or initiated
in it as a Court of first instance.
14.
To the extent that the Court constitutes a Tribunal and the Second
Respondent as an officer of the Tribunal
performing judicial
functions, this application is brought under the provisions of
section
33 of the Constitution
of the Republic of South Africa, 1996, read together with
the
common law
and the provisions of
rule
53 of the rules of the above Honourable Court.
”
(emphasis
added)
[10]
Applicant referred to the provisions of the CPA and particularly
relied on the procedures contained in ss 69 to 73 thereof,
stating
that Van Zyl failed to allege compliance with any of the procedures
contained in these sections and in particular that
he failed to refer
the dispute to the Motor Industry Ombud (MIO), or an alternative
dispute resolution agent or the National Consumer
Commission (“the
Commission”).
[11]
It is also alleged by applicant that the Free State Consumer Affairs
Court is a creature of statute and does not have powers
to entertain
an action for specific performance and damages. That court has
only those powers assigned to it by the Free
State Act. It went
on to state in paragraph 25 of the founding affidavit that
“
it
did not appear from the particulars of claim that fourth respondent
sought to rely on any provisions of the CPA”.
This
last statement is wrong. Van Zyl’s particulars of claim
that served before the court
a
quo
is annexed to applicant’s founding affidavit. Van Zyl
concluded in paragraph 15 thereof that
“
(F)irst,
second and third defendants
(first
defendant is the applicant herein),
have
transgressed
sections 54
,
55
,
56
and
57
of the
Consumer Protection
Act
.”
Consequently Van Zyl claimed from applicant the following: “
(1)
The effective completion of the work on Plaintiff’s vehicle at
First Defendant’s own expense. (2) The return of
Plaintiff’s
vehicle in a sound working order. (3) Payment of any and all legal
costs which Plaintiff may be ordered to pay
Second and/or Third
Defendants. (4) Costs of suit.”
There
is also an alternative claim that does not have to be considered at
this stage. It needs to be emphasised that this
court is not
concerned with the merits of Van Zyl’s claim. It is
specifically kept in mind that applicant’s version
of the
events is quite the opposite of that of Van Zyl. Applicant’s
version as set out in paragraph 16 of the founding
affidavit is that
“
the
engine still malfunctioned, as a result of defective parts supplied
by Fourth Respondent
(Van
Zyl)
and
allegedly purchased from Fifth Respondent
(Acrotek)
.”
[12]
The national legislation anticipated and eventually adopted in terms
of s 33 of the Constitution is the Promotion of Administrative
Justice Act, 3 of 2000 (“PAJA”). The grounds
of review on which an applicant may rely, are set out in s
6 of
PAJA. It must also be considered that we are dealing with a
review application and not an appeal. Generally speaking,
the
process followed by a tribunal or functionary may be attacked on
review, but the outcome is to be attacked on appeal and not
review.
[13]
There is no clear indication on which common law grounds applicant
relies for the allegation that it has a right to review
the decision
of second respondent.
[14]
Van Zyl pertinently raised the point in his answering affidavit and
through submissions of his counsel that the High Court
does not have
jurisdiction to entertain the review. In short, it is his case
that applicant should have appealed against
the judgment of the Free
State Consumer Affairs Court to the National Consumer Tribunal
(“NCT”), and in the event of
dissatisfaction, to lodge a
review application or an appeal to the High Court in terms of s
148(2) of the National Credit Act,
34 of 2005 (“the NCA”).
It is therefore necessary to consider whether this court has
jurisdiction to adjudicate
the review application.
[15]
Section 24 of the Supreme Court Act, 59 of 1959, which has now been
repealed, stipulated as follows:
“
24.
Grounds of review of proceedings of
inferior
courts
1)
The
grounds upon which the proceedings of
any
inferior court
may be brought under review before a provincial division, or before a
local division having review jurisdiction, are-
a) absence of
jurisdiction on the part of the court;
b) interest in the
cause, bias, malice or the commission of an offence referred to in
Part 1 to 4, or section
17, 20 or 21 (in so far as it relates to the
aforementioned offences) of Chapter 2 of the
Prevention and Combating
of Corrupt Activities Act, 2004
, on the part of the presiding
judicial officer;
c) gross
irregularity in the proceedings; and
d) the admission of
inadmissible or incompetent evidence or the rejection of admissible
or competent evidence.
2)
Nothing in this section shall affect the provisions of any other law
relating to the review of proceedings
in inferior courts.”
(emphasis
added)
[16]
The amendments to
s 24
as are apparent from
ss 21
and
22
of the
Superior Courts Act, 10 of 2013
are significant. I quote these
two sections for a better understanding of the argument.
“
21
Persons over whom and matters in relation to which Divisions have
jurisdiction
(1)
A Division has jurisdiction over all persons residing or being in,
and in relation to all causes arising and all offences triable
within, its area of jurisdiction and all other matters of which it
may according to law take cognisance, and has the power-
(a)
to
hear and determine appeals from
all
Magistrates' Courts
within its area of jurisdiction;
(b)
to
review the proceedings of all
such
courts
;
(c)
in
its discretion, and at the instance of any interested person, to
enquire into and determine any existing, future or contingent
right
or obligation, notwithstanding that such person cannot claim any
relief consequential upon the determination.
(2)
A Division also has jurisdiction over any person residing or being
outside its area of jurisdiction
who is joined as a party to any
cause in relation to which such court has jurisdiction or who in
terms of a third party notice
becomes a party to such a cause, if the
said person resides or is within the area of jurisdiction of any
other Division.
(3)
Subject to
section 28
and the powers granted under section 4 of the
Admiralty Jurisdiction Regulation, 1983 (105 of 1983), any Division
may issue an
order for attachment of property to confirm
jurisdiction.
22
Grounds for review of proceedings of
Magistrates'
Court
(1)
The
grounds upon which the proceedings of any
Magistrates'
Court
may be brought under review before a court of a Division are-
(a)
absence
of jurisdiction on the part of the court;
(b)
interest
in the cause, bias, malice or corruption on the part of the presiding
judicial officer;
(c)
gross
irregularity in the proceedings; and
(d)
the
admission of inadmissible or incompetent evidence or the rejection of
admissible or competent evidence.
(2)
This
section does not affect the provisions of any other law relating to
the review of proceedings in
Magistrates'
Courts.
”
(emphasis
added)
It
follows from the above that the statutory right of review of the High
Court to review decisions in terms of the
Superior Courts Act has
been limited to proceedings of the Magistrates’ Court.
There is no provision in
ss 21
and
22
for the High Court to review
and set aside a judgment or ruling of the Free State Consumer Affairs
Court. These consumer
affairs courts are also referred to as
tribunals, but if one considers the difference in wording between the
repealed
s 24
and the present
ss 21
and
22
of the
Superior
Courts Act no reference
to tribunals is found in either of the
two Acts, whilst the repealed
s 24
referred to
“
inferior
courts”.
If
the
Free
State Consumer Affairs Court is regarded as a court of law, then this
court does not have jurisdiction because of the repeal
of
s 24
of Act
59 of 1959. If the ruling or judgment of the Free State
Consumer Affairs Court is considered to be administrative
action, the
review application should have been brought in terms of PAJA.
[17]
Applicant also relies on rule 53 of the Uniform Rules of Court,
apparently to indicate the procedure to be followed in review
applications. This rule is applicable to reviews in terms of
the
Superior Courts Act and
the common law, but reviews under PAJA
are governed by the rules of procedure for judicial review of
administrative action published
under regulation R966 in the
Government Gazette of 9 October 2009.
[18]
Applicant’s counsel submitted that, subject to statutory
limitation or modification in a particular case, a High Court
has an
inherent right to review the proceedings of anybody or tribunal on
which statutory duties are imposed without the necessity
of any
special machinery of review created by the legislature. He
identified this form of review as a review under the common
law.
He submitted that the mere creation of a statutory right of review
does not oust the High Court’s inherent right
of review, unless
it is excluded expressly or by necessary implication. He
referred in this regard to Herbstein & Van
Winsen:
The
Civil Practice of the Supreme Court of South Africa
,
4
th
ed at 938 and
Johannesburg
Consolidated Investment Co v Johannesburg Town Council
1903 TS 111
at 116 and
Zulu
v Minister of Defence and Others
2006 JOL 17436
(TPD). Since these two judgments were pronounced
and the 4
th
edition of Herbstein & Van Winsen was issued, the
Superior Courts
Act and
the rules of procedure for judicial review of administrative
action were promulgated. However it is apparent that applicant
is relying on the extra-ordinary power of inherent jurisdiction of
the High Court.
[19]
The legislature has created a statutory framework in adopting the CPA
to deal with the rights and obligations of suppliers
and consumers to
ensure speedy, inexpensive and fair procedures. A specialised
framework has been created for consumers and
suppliers to resolve
disputes. Parties must pursue their claims primarily through
these mechanisms. See:
Chirwa
v Transnet Ltd & Others
[2007] ZACC 23
;
2008
(4) SA 367
(CC). The Constitutional Court has repeatedly held that
where legislation has been enacted to give effect to a constitutional
right(s),
a litigant should rely on that legislation to give effect
to the right(s), or else to challenge that legislation as being
inconsistent
with the Constitution. See
inter
alia:
Mazibuko
& Others v City of Johannesburg
2010 (4) SA 1
(CC) at para [73]. The NCA, CPA and the Free
State Act were specifically enacted to entrench and govern the
realisation of
the fundamental consumer rights under the Constitution
as will be shown in more detail below.
[20]
Applicant
inter
alia
relies on s 148(2)(b) of the NCA. The particular subsection
deals with appeals. Section 148(2)(a) deals with reviews
and it
reads as follows:
“
Subject to the
rules of the High Court, a participant in a hearing before a
full
panel
of the Tribunal may –
(a)
apply to the High Court to review the decision of the Tribunal in
that matter;”
(emphasis
added, the significance which will become clear in the next
paragraph).
[21]
The High Court’s right of review is limited
in
casu
.
The remedies provided in the CPA, read with s 148 of the NCA have to
be pursued. I do not agree with Van Zyl’s
submission that
this court does not have jurisdiction
in
casu
and/or
that applicant is barred from approaching the court because of its
failure to exhaust internal remedies. Section 148
of the NCA
must be read in proper context and also with ss 26 and 31 of the NCA
and the definition of “Tribunal” in
s 1. “Tribunal”
is defined as
“
the
National Consumer Tribunal established by section 26.”
Section
31 distinguishes between a Tribunal consisting of a single member and
a panel composed of any three members of the Tribunal.
Contrary
to s 148(2) which deals with appeals and reviews from the
full
panel
of the Tribunal, s 148(1) stipulates that a participant in a hearing
before a
single
member
of the Tribunal may appeal a decision by that member to the
full
panel
of the Tribunal.
In
casu
the
record reflects that second respondent chaired the Consumer Court
Panel which was composed of him and four other Panel members.
I
hold the view that this panel must be regarded as a full panel of the
Tribunal, i.e. the Free State Consumer Affairs Court.
This
leaves no room for a finding that applicant should have followed a
different avenue from the one it elected to pursue.
[22]
I therefore find that the High Court has jurisdiction to adjudicate
the application for review. It is now necessary to
consider the
merits of the review application.
VII
ADJUDICATION
OF THE MERITS OF THE REVIEW WITH REFERENCE TO CONSUMER LEGISLATION
[23]
As indicated
supra
the Free State Act and the CPA are cardinal to the proceedings before
us. It is not difficult to ascertain how the Free State
Act and
the CPA have to be applied
in
casu
.
Section 83 of the CPA provides for the co-operative exercise of
concurrent jurisdiction between national and provincial
consumer
authorities. Section 84 gives some practical effect to the
provisions of s 83 and I quote this section for clarity:
“
84.
Provincial
consumer protection authorities –
A provincial consumer protection
authority has jurisdiction within its province to –
(a)
issue
compliance notices in terms of this Act on behalf of the Commission
to any person carrying on business exclusively within
that province;
(b)
facilitate
the mediation or conciliation of a dispute arising in terms of this
Act between or among persons resident, or carrying
on business
exclusively within that province;
(c)
refer
a dispute contemplated in paragraph (b) to the provincial consumer
court within that province, if there is one; and
(d)
request
the Commission to initiate a complaint in respect of any apparent
prohibited conduct or offence in terms of this Act arising
within
that province.”
[24]
It is necessary to consider the present approach to statutory
interpretation before the particular legislation is considered.
Wallis JA dealt with the matter as follows in
NATAL
JOINT MUNICIPAL PENSION FUND v ENDUMENI MUNICIPALITY
2012 (4) SA 593
(SCA) at para [18]:
“
[18]
… The present state of the law can be expressed as follows:
Interpretation is the process of attributing
meaning to the words
used in a document, be it legislation, some other statutory
instrument, or contract, having regard to the
context provided by
reading the particular provision or provisions in the light of the
document as a whole and the circumstances
attendant upon its coming
into existence … The ‘inevitable point of departure is
the language of the provision itself’,
read in context and
having regard to the purpose of the provision and the background to
the preparation and production of the document.”
[25]
Wallis JA submitted that his approach to the statutory
interpretation was consistent with the “emerging
trend in statutory construction” mentioned in
Bato
Star Fishing (Pty) Ltd v Minister of Environmental Affairs and Others
[2004] ZACC 15
;
2004 (4) SA 490
(CC) at para
[90]
. Recently the Constitutional
Court set out what it deemed to be the correct approach to statutory
interpretation somewhat
differently in
Bakgatla-Ba-Kgafela
Community Property Association v Bakgatla-Ba-Kgafela Tribal Authority
& Others
2015 (6) SA 32
at paras [34] – [36]:
“
[34]
It is by now trite that s 39(2) of the Constitution has introduced a
new approach to the interpretation of statutes. The section
obliges
courts to promote 'the spirit, purport and objects of the Bill of
Rights' when construing legislation. This new approach
has been
described as 'a mandatory constitutional canon of statutory
interpretation'. The duty to seek an interpretation that promotes
the
objects of the Bill of Rights arises, even where the parties have not
raised the issue, because the obligation imposed by the
section is,
as was observed in Phumelela, mandatory.
[35]
Consistent with s 39(2) this court laid down the right approach to
construing legislation similar to the Act, in Goedgelegen
Tropical
Fruits. There Moseneke DCJ reaffirmed the approach in these terms:
'It
is by now trite that not only the empowering provision of the
Constitution but also of the Restitution Act must be understood
purposively because it is remedial legislation umbilically linked to
the Constitution. Therefore, in construing as a result of
past
racially discriminatory laws or practices in its setting of s 2(1) of
the Restitution Act, we are obliged to scrutinise its
purpose. As we
do so, we must seek to promote the spirit, purport and objects of the
Bill of Rights. We must prefer a generous
construction over a merely
textual or legalistic one in order to afford claimants the fullest
possible protection of their constitutional
guarantees. In searching
for the purpose, it is legitimate to seek to identify the mischief
sought to be remedied. In part, that
is why it is helpful, where
appropriate, to pay due attention to the social and historical
background of the legislation. We must
understand the provision
within the context of the grid, if any, of related provisions and of
the statute as a whole, including
its underlying values. Although the
text is often the starting point of any statutory construction, the
meaning it bears must pay
due regard to context. This is so even when
the ordinary meaning of the provision to be construed is clear and
unambiguous.’
[36]
Therefore, in construing s 5(4) of the Act, we are obliged not only
to avoid an interpretation that clashes with the Bill of
Rights but
also to seek a meaning of the section that promotes the rights of the
Bakgatla-Ba-Kgafela Traditional Community to restitution
of land. Had
the Supreme Court of Appeal borne this duty in mind, it could have
attached a different meaning to the section —
a meaning that
would be consonant with the purpose of the Act.”
[26]
It is thus clear from the approach of the Constitutional Court that
it is the duty of a court in construing statutes to seek
an
interpretation that promotes the objects of the Bill of Rights and to
avoid an interpretation that clashes therewith.
As mentioned by
Moseneke DCJ in the
dictum
quoted with approval by the Constitutional Court in the passage
above, the mischief to be remedied must be sought and due attention
must be paid to the social and historical background of the
legislation.
[27]
A reading of the long title of the CPA, its preamble and ss 2 to 4
thereof confirm that the CPA is concerned primarily with
the social
and economic welfare of consumers in a market-based society.
The preamble confirms recognition of the fact that
inter
alia
“…
it
is necessary to develop and employ innovative means to - ….
(b) protect the interests of consumers, to ensure accessible,
transparent and effective redress for consumers who are subject to
abuse or exploitation in the marketplace;”
Section
2(9) provides that in the event of an inconsistency between any
provision of the CPA and any provision of any Act not contemplated
in
ss (8),
“
(a)
the provisions of both Acts apply concurrently, to the extent that it
is possible to apply and comply with one of the inconsistent
provisions without contravening the second; and (b) to the extent
that paragraph (a) cannot apply, the provision that extends the
greater protection to a consumer prevails over the alternative
provision.”
Section
4(3) reads as follows:
“
If
any provision of this Act, read in its context, can reasonably be
construed to have more than one meaning, the Tribunal or court
must
prefer the meaning that best promotes the spirit and purposes of this
Act, and will best improve the realisation and enjoyment
of consumer
rights generally, and in particular by persons contemplated in
section 3(1)(b).”
[28]
A fragmented and out-dated body of consumer law contained in several
pieces of legislation has been repealed and replaced by
the CPA as is
apparent from s 121. One such Act is the Consumer Affairs
(Unfair Business Practices) Act, 71 of 1988.
[29]
Victor J set out the legislative framework of the CPA in
Afri-forum
v Minister of Trade and Industry
2013 (4) SA 63
(GNP) from paras [11] to [17]. I agree with his
viewpoint that the extensive reach of consumer protection is imbedded
in
the CPA itself, that s 3 thereof defines its purpose and policy in
minute detail and that these detailed provisions provide in
particular for the achievement and maintenance of a consumer market
that is fair, accessible, efficient, sustainable and responsible
for
the benefit of consumers generally. As mentioned in para [13]
of
Afri-forum
,
the ambit of the CPA is to develop and employ innovative means to
promote the full participation of consumers and to ensure accessible,
transparent and efficient redress.
[30]
Before the CPA is considered in more detail, it is necessary to deal
with some aspects contained in the Free State Act.
A Consumer
Affairs Court was established for the Province in terms of s 13 of
the Free State Act. It appears from the application
papers that
the Free State Consumer Affairs Court has been in existence for at
least the last six years, conducting the business
for which it was
established.
[31]
Business practice is defined in s 1 of the Act. It includes
inter
alia
“
(d)
any act or omission on the part of any person whether acting
independently or in concert with any other person”
.
Unfair business practice is defined in the particular section as
“
any
business practice which, directly or indirectly, has or is likely to
have the effect of prejudicing unreasonably or deceiving
any
consumer”
.
[32]
The Free State Act provides for the lodging of complaints with the
Office for the Investigation of Unfair Business Practices,
the
functions of which office are to be performed by the Consumer
Protector. See: s 3 read with ss 5 and 6. The Consumer
Protector may conduct an investigation and
inter
alia
summon and question persons and instruct them to produce books and
documents for the purposes of investigation. The Consumer
Protector may also negotiate and conclude arrangements in terms of s
11 with any person for the discontinuance or avoidance of
any unfair
business practice. In accordance with s 12 and upon completion
of an investigation the Consumer Protector may
institute proceedings
in the Free State Consumer Affairs Court against the person alleged
to be responsible for the unfair business
practice.
[33]
The functions, powers and duties of the Free State Consumer Affairs
Court are set out in s 17 while s 22 provides for orders
to be issued
prohibiting unfair business practice. A right of appeal is
provided in s 25, but this section is meaningless
insofar as it
provides for an appeal to the special court established in terms of s
13 of the Harmful Business Practices Act, 71
of 1988 which Act has
been repealed as mentioned above.
[34]
Unlike applicant’s version as contained in its founding
affidavit, Van Zyl pertinently relied on the provisions of the
CPA
and s 53 to 56 in particular, dealing with the right to fair value,
good quality and safety. It is therefore necessary
to briefly
refer to these sections. A defect is defined in s 53 as
follows:
“
i.
any material imperfection in the manufacture of the goods or
components, 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.”
Failure
is defined as
“
the
inability of the goods to perform in the intended manner or to the
intended effect.”
[35]
A consumer’s rights to demand quality service is expressed in
the following manner in s 54:
“
(1)
When a supplier undertakes to perform any services for or on behalf
of a consumer, the consumer
has a right to –
(a)
the
timely performance and completion of those services, and timely
notice of any unavoidable delay in the performance of the services;
(b)
the
performance of the services in a manner and quality that persons are
generally entitled to expect;
(c)
the
use, delivery or installation of goods that are free of defects and
of a quality that persons are generally entitled to expect,
if any
such goods are required for performance of the services; and
(d)
the
return of any property or control over any property of the consumer
in at least as a good condition as it was when the consumer
made it
available to the supplier for the purpose of performing such
services, having regard to the circumstances of the supply,
and any
specific criteria or conditions agreed between the supplier and the
consumer before or during the performance of the services.
(2)
If a supplier fails to perform a service to the standards
contemplated in subsection (1)
the consumer may require the supplier
to either –
(a) remedy any
defect in the quality of the services performed or goods supplied; or
(b)
refund to the consumer a reasonable portion of the price paid
for the services performed and goods supplied,
having regard to the
extent of the failure.”
[36]
Section 55 deals with a consumer’s rights to safe, good quality
goods, whilst s 56 provides for an implied warranty of
quality.
The implied warranty of quality is to the effect that 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 s 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.
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 s 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. Further
obligations are placed
upon the supplier in s 56(3) and (4).
[37]
Chapter 3 of the CPA deals with the protection of consumer rights and
consumers’ voice. Part A of chapter 3 pertinently
deals
with the consumer’s right to be heard and to obtain redress.
Sections 68 to 71 are contained in Part A.
Section 68 deals
with the protection of consumer rights whilst s 69 deals with the
enforcement of those rights; s 70 is concerned
with alternative
dispute resolution and s 71 with the initiation of a complaint to the
National Consumer Commission (“the
Commission”)
established in accordance with s 85. I shall deal with ss
69 and 70 in particular in more detail
infra
.
[38]
Part B of chapter 3 deals with Commission investigations.
Section 75 provides that when the Commission issues a notice
of
non-referral in response to a complaint, the complainant may in
certain circumstances refer the matter to a consumer court with
jurisdiction or to the Tribunal with leave of the Tribunal.
[39]
In Part C of chapter 3 the legislature has addressed the redress by
the court in s 76 of the CPA. It is important to
remember that
the reference to “court” in this section and throughout
the CPA does not include a consumer affairs court.
Therefore
unless one finds a specific reference to a consumer court in any of
the sections of the CPA, the reference to court excludes
the consumer
court.
[40]
I deem it necessary to quote ss 69, 70 and 71 of the CPA in full.
These sections read as follows:
“
69
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)
(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.
70
Alternative dispute resolution
(1) A consumer may seek to resolve any
dispute in respect of a transaction or agreement with a supplier by
referring the matter
to an alternative dispute resolution agent who
may be
-
(a) an
ombud with
jurisdiction
, if the supplier is subject to the jurisdiction of
any such ombud;
(b) an
industry ombud accredited in terms of section 82 (6)
, if the
supplier is subject to the jurisdiction of any such ombud;
(c) a
person or entity
providing conciliation, mediation or arbitration services
to
assist in the resolution of consumer disputes, other than an ombud
with jurisdiction, or an accredited industry ombud; or
(d)
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.
(2)
If an
alternative dispute resolution agent concludes that there is no
reasonable probability of the parties resolving their dispute
through
the process provided for, the agent may terminate the process by
notice to the parties, whereafter the party who referred
the matter
to the agent may file a complaint with the Commission in accordance
with section 71.
(3)
If an
alternative dispute resolution agent has resolved, or assisted
parties in resolving their dispute, the agent may-
(a)
record
the resolution of that dispute in the form of an order, and
(b)
if the parties to the dispute consent to that order, submit it to the
Tribunal or the High Court to be made a consent
order, in terms of
its rules.
(4)
With
the consent of a complainant, a consent order confirmed in terms of
subsection (3) (b) may include an award of damages to that
complainant.
71
Initiating complaint to Commission
(1)
Any person may file a complaint concerning a matter contemplated in
section 69 (c) (iv) with the
Commission
in the prescribed manner and form, alleging that a person has acted
in a manner inconsistent with this Act.
(2)
The
Commission may directly initiate a complaint concerning any alleged
prohibited conduct on its own motion, or-
(a)
when
directed to do so by the Minister in terms of section 86 (b); or
(b)
on
the request of-
(i)
a
provincial consumer protection authority;
(ii)
another
regulatory authority; or
(iii)
an accredited consumer protection group.”
(emphasis
added).
[41]
“Ombud with jurisdiction” is defined in s 1 of the CPA as
“
in
respect of any particular dispute arising out of any agreement or
transaction between a consumer and a supplier who is –
(a)
subject to the jurisdiction of an “ombud” or “statutory
ombud”, in terms of any national legislation
means that ombud,
or statutory ombud, or (b) …”
Although
an industry ombud as mentioned in s 69(c) is not defined in the Act,
such industry ombud must be accredited in terms of
s 82(6) of the
CPA. Section 82 deals with industry codes and specifically
provides in ss 82(6) that if a proposed industry
code provides for a
scheme of alternative dispute resolution and the Commission considers
that the scheme is adequately situated
and equipped to provide
alternative dispute resolution services comparable to those generally
provided in terms of any public regulation,
the Commission when
recommending that code to the Minister, may also recommend that the
scheme be accredited as an accredited industry
ombud.
[42]
I shall more fully deal with this aspect later, but wish to mention
at this stage that notice 817 dated 17 October 2014 issued
by the
Minister of Trade and Industry provided for the prescription of a
South African Automotive Industry Code and accreditation
of the
alternative dispute resolution scheme administered by the motor
industry ombud of South Africa as an accredited ombud in
terms of s
82 of the CPA. It was directed that the notice would come into
effect three months after publication in the Government
Gazette, i.e.
on 17 January 2015. Detailed provisions appear in the Code
pertaining to the obligations of suppliers regarding
complaints, the
alternative dispute processes to be followed and the like.
Suppliers shall
inter
alia
display at all their trading premises notices reflecting that there
is a Code which bind suppliers and when requested by consumers
they
have to, at no costs, provide them with contact details of the
particular internal complaints handling department and the
motor
industry ombud of South Africa. Suppliers must also attempt to
resolve complaints and disputes in accordance with the
spirit and
provisions of the Code, the Act and Regulations and dispute
procedures. Every reasonable effort must be made to
resolve
complaints within thirty days. If a matter is not resolved
within thirty days of the dispute between the consumer
and the
supplier, the consumer may approach the motor industry ombud of South
Africa.
[43]
It is not clear from the wording of ss 69 and 70 whether an express
hierarchy of alternative dispute resolution agents has
been set out.
Bearing in mind the use of the word “may” instead of
“must”, and the provisions of
the Act in general, its
context and the relevant background, it may be argued that s 69 in
particular has not set down an implied
hierarchy either. It
cannot be found with certainty that the legislature intended
consumers to follow a preferred route of
redress in accordance with
an implied hierarchy. The word “may” is generally
not used to indicate a peremptory
meaning, unlike the word “must”.
Section 69 (and s 70) may be open to more than one interpretation.
Various choices
are available from which an election may be made by
the consumer in order to obtain effective protection under the CPA. I
again
emphasise that insofar as any provision of the CPA, read in its
context, can reasonably be construed to have more than one meaning,
a
court must prefer the meaning that best promotes the spirit and
purposes of the Act and will best improve the realisation and
enjoyment of consumer rights generally.
[44]
In Naudé and Eiselen (managing editors),
Commentary
on the
Consumer Protection Act
,
loose leave edition by Juta, Van Heerden, the author of chapter 3,
submits at 69-11 with reference to the apparent hierarchy
created in
s 69
that a consumer may approach a consumer court before approaching
another dispute resolution agent,
“
especially
since section 70(1)(d) of the Act indicates that a consumer court may
be approached to resolve a dispute as an alternative
to approaching
any of the alternative dispute resolution agents mentioned in section
70(1)(a), (b) and (c) of the CPA.
”
The
author found support in the view expressed by Du Plessis (2008)
20
SA Merc LJ
74 at 80 where she concluded that a consumer court may be regarded as
point of first entry in all consumer “litigation”.
[45]
Van Heerden continues at 69-18 as follows:
“
With
regard to the order in which the alternative dispute resolution
agents mentioned in ss 69 and 70 should be approached, it is
to be
noted that these sections do not expressly lay down a
hierarchy of
alternative dispute resolution agents providing an order in which
such agents may be approached. The aforementioned
sections,
however, appear to imply a preferred “order” in which the
alternative dispute resolution agents should be
approached, depending
on their existence. This implied hierarchy is nevertheless not
absolute as it may for instance occur
that in a given situation one
or more of these alternative dispute resolution agents such as an
ombud with jurisdiction or an industry
ombud does not exist……
Thus it is clear that where ombuds exist, whether ombuds with
jurisdiction or industry ombuds,
they are to be preferred to
approaching other dispute resolution agents.
Alternatively
to approaching the above alternative dispute resolution bodies a
consumer may approach a consumer court of the province
with
jurisdiction, if there is such a consumer court.
Therefore, if a consumer resides in a province where there is a
consumer court, such a consumer is not barred from approaching
the
consumer court even if an ombud with jurisdiction exists.
However,
there is a distinct possibility that the consumer court may decline
to hear the matter and refer the dispute to the ombud
with
jurisdiction instead, on the basis that such ombud has the
appropriate expertise to deal with the matter.”
[46]
The Northern Cape Division considered the particular legislation
recently. I refer to
Imperial
Group (Pty) Ltd t/a Cargo Motors Klerlsdorp v Dipico and Others
(1260/2015)
[2016] ZANCHC 1
(1 April 2016). In paragraph 27 Phatshoane, J
found that s 69 should be read contextually, in conjunction with s 70
and the
purpose of the statutory enactment.
[47]
When the matter was argued before the Free State Consumer Affairs
Court in November 2013, there was no industry ombud accredited
in
terms of s 82(6) of the CPA. Applicant’s submission that
the Free State Consumer Affairs Court did not have jurisdiction
to
entertain the dispute is without substance. The whole purpose
of the CPA is to promote and advance the social and economic
welfare
of consumers in South Africa. When the CPA is considered any
ambiguous provision must be interpreted in favour of
the consumer.
The CPA is aimed at a speedy, fair and inexpensive procedure.
Contrary to the purpose of the legislation,
the consumer was dragged
into litigation that was totally unnecessary.
[48]
Even if there was an industry ombud accredited in accordance with s
82(6) at the time when the dispute arose or even in the
event of a
finding that the dispute falls within the ambit of s 69(b) dealing
with an ombud with jurisdiction, Van Zyl’s
neglect to follow
the route of referring the dispute to either of these ombuds shall
not be held against him. It is clear
that applicant was not
prepared to enter into any kind of alternative dispute resolution
processes. It even failed to communicate
and/or negotiate with
the Consumer Protector on several occasions. Furthermore, the
industry ombud does not have jurisdiction
in the matter at hand as
he/she may not determine the
“
merits
and the quantum of damages.”
See
clause 17.2 of the Code referred to
supra.
[49]
I have referred to the preamble and ss 2(9) and 4(3) of the CPA above
and wish to emphasise that the protection of the interests
of
consumers and effective redress are of paramount importance. In
concluding as he did, second respondent endeavoured to
follow the
desired approach which I fully subscribe to and I quote the following
dicta
appearing on pages 11 and 14 of the judgment respectively:
“
More
extensive powers are provided to Consumer Courts by the
National
Credit Act, 2005
and the
Consumer Protection Act, 2008
. These
Acts cannot be ignored when considering the powers of the creature of
statute……”
and
“
The
Consumer Affairs Act, 2008 extends the jurisdiction of the Consumer
Affairs Court. If that had not been the case, the
whole purpose
of providing protection to consumers (prescribed by section 3 of Act
68 of 2008) would fail…..”
[50]
At best for applicant, the Free State Consumer Affairs Court might
have found that the institution of action was premature
and should be
stayed pending a referral of the dispute to an ombud with
jurisdiction or the industry ombud (if such a person existed
at all
which is clearly not the case) and the outcome of such proceedings.
This is a totally different scenario from the
one advocated for by
applicant. Van Zyl’s alleged failure to comply with
internal remedies could not have the effect
that the Free State
Consumer Affairs Court’s jurisdiction to entertain the dispute
disappeared in thin air.
[51]
Applicant’s submission that unless the Commission has referred
a dispute directly to the Consumer Affairs Court, or a
certificate of
non-resolution has been issued by the Commission, a Consumer Affairs
Court will not have jurisdiction to entertain
a dispute is, without
merit. This only applies if a consumer has elected to make use
of alternative dispute resolution provided
for in ss 70 to 75.
Van Zyl did not follow that route. In any event ss 72 to 75
must be read in context.
The Commission is responsible for
enforcing the CPA by
inter
alia
promoting
the informal resolution of any dispute arising in terms of the CPA
between a consumer and a supplier, but it is not expected
to
intervene in or directly adjudicate any such dispute. See: s 99
of the CPA. The Commission will only investigate
complaints
which could not be resolved through any of the other mechanisms
provided for in the CPA and even then there is no obligation
imposed
upon it to intervene or directly adjudicate any dispute between the
parties. It is not in dispute that the Commission
may refer
matters to the Tribunal established in s 26 of the NCA and may appear
before the Tribunal as required or permitted by
the CPA.
[52]
I have shown that the jurisdiction of the Free State Consumer Affairs
Court has been established. At best for applicant,
it might
have argued that that court should have held that the action was
premature and that the dispute should have been referred
to an ombud
first. This is not the case respondents were asked to meet.
VIII
CONCLUSION
[53]
I am satisfied that applicant failed to establish proper grounds for
review and therefor the application is doomed to fail.
There is
no reason why applicant shall not be ordered to pay the costs of the
application including the costs of opposition of
all respondents that
opposed the application. It was argued on behalf of first,
third and eighth respondents that even in
the event of the
application being successful, these three parties should not have
been joined in the proceedings and therefore
a misjoinder has
occurred. Consequently, so it was argued, even if applicant was
successful, it should have borne the costs
of these three
respondents. I agree with these submissions and confirm that I
would have ordered applicant to pay their costs
accordingly.
These three parties do not have a direct and substantial interest in
the outcome of the litigation and would
not to be materially and
substantially affected by any order in favour of applicant.
However, bearing in mind the conclusion
to which I arrived, it is
unnecessary to deal with this issue any further.
IX
ORDER
[54] Therefore the
following order is issued:
The
application is dismissed with costs, such costs to include the costs
of opposition of first, second, third, fourth and eighth
respondents.
_____________
J.P. DAFFUE, J
I concur.
_____________
C. VAN ZYL, J
On
behalf of the applicant: Adv. M. C. Louw
Instructed
by:
Symington
& De Kok
BLOEMFONTEIN
On
behalf of the first, second, third
and
eighth respondents: Adv. L.
C. Sibeko SC
and
Adv. N. P. Yina
Instructed
by:
State
Attorney
BLOEMFONTEIN
On
behalf of the fourth respondent: Adv. P. R. Cronje
Instructed
by:
Phatshoane
Henney
BLOEMFONTEIN
/eb