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[2019] ZASCA 71
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Motor Industry Ombudsman of South Africa v Silver Park Motors CC t/a Silverton Motors and Another (479/2018) [2019] ZASCA 71 (30 May 2019)
THE SUPREME COURT OF APPEAL OF SOUTH
AFRICA
JUDGMENT
Reportable
Case
No: 479/2018
In
the matter between:
THE MOTOR INDUSTRY OMBUDSMAN
OF SOUTH AFRICA
APPELLANT
and
SILVER PARK MOTORS CC
T/A SILVERTON
MOTORS FIRST
RESPONDENT
THE MINISTER OF THE
DEPARTMENT OF TRADE
AND
INDUSTRY SECOND
RESPONDENT
Neutral
citation:
The
Motor Industry Ombudsman of South Africa v Silver Park Motors CC
(479/18)
[2019]
ZASCA 71
(30 May 2019)
Coram:
Maya
P, Cachalia, Molemela and Schippers JJA, and Gorven AJA
Heard:
17
May 2019
Delivered:
30
May 2019
Summary:
Registration as
retailer under
Consumer
Protection Act 68 of 2008
–
meaning
of ‘accessories’ in South African Automotive Industry
Code of Conduct
(the
Code) – seller of fuel and engine oils not a supplier or
retailer of accessories under the Code.
ORDER
On appeal from:
Gauteng Division of
the High Court, Pretoria (Avvakoumides AJ sitting as court of first
instance):
The appeal is
dismissed with costs.
JUDGMENT
Schippers
JA (Maya P, Cachalia and Molemela JJA and Gorven AJA concurring):
[1]
The
appellant is the ombud for the South African automotive industry,
accredited in terms of s 82 of the Consumer Protection Act
68 of 2008
(the Act), and the South African Automotive Industry Code of
Conduct
[1]
(the Code) prescribed
by the second respondent, the Minister of Trade and Industry (the
Minister), under the Act. The appellant
is the independent dispute
resolution forum for the automotive industry, its suppliers and
customers. It is funded by contributions
from participants in the
industry, calculated in terms of the Code.
[2]
[2]
On 30
November 2015 an official of the appellant inspected the premises of
the first respondent from which it conducts a fuel retailer’s
business, and enquired of its member, Mr Ronald Dennis, why it had
not registered as a retailer under the Act and the Code. The
official
was told that the first respondent would not register with the
appellant because it does not form part of the motor industry
envisaged in the Code.
[3]
Consequently,
on 19 April 2016 the appellant applied to the Gauteng Division of the
High Court, Pretoria, for a declaratory order
that the first
respondent was a retailer as defined in the Act and thus liable for a
contribution to finance the appellant’s
activities in giving
effect to the Code. The grounds for the application were that first
respondent was a retailer or supplier
of accessories of vehicles as
envisaged in the definition of ‘Automotive Industry’ in
the Code, because it conducted
business as a fuel retailer. It sold
Shell fuel and Shell Helix car engine oils containing additives which
supposedly cleaned,
repaired and protected vehicle engines, Wynn’s
products and other types of accessories for motor vehicles, from a
shop on
its premises. These included ‘accessories’ that
were put into the fuel tank of a motor vehicle or used in conjunction
with the vehicle.
[4]
The
first respondent opposed the application. It did not dispute
that it was a
retailer of Shell fuel and lubricants and Wynn’s products; and
that ancillary to its main business as a fuel
retailer, it sold
general convenience items, magazines, sweets and fresh produce from
the shop on its premises. However, it denied
that the fuel and
lubricants it sold were motor vehicle accessories within the ordinary
meaning of that term; that it was a retailer
or supplier of
‘accessories’ as envisaged in the definition of
‘Automotive Industry’; and that it sold
‘
other
types of motor vehicle accessories’ (not described at all in
the founding affidavit).
[5]
The
first respondent contended that the appellant was not entitled to the
contributions claimed as these had not been determined
in accordance
with the Code. It brought a counter-application in which it sought an
order joining the Minister as the second respondent,
and in the event
that it fell within the definition of ‘Automotive Industry’,
that the provisions of the Code requiring
retailers to pay mandatory
contributions to the appellant be reviewed and set aside on the
ground that they were
ultra
vires
the Act. The joinder application was granted and the Minister opposed
the counter-application.
[6]
The
central issue before the court a quo was whether the first respondent
was a retailer or supplier of accessories as envisaged
in the
definition of ‘Automotive Industry’ in clause 2.3 of the
Code (the definition). A related issue was whether
it ‘renders
a related repair or replacement service to consumers in respect of
such vehicles’, because the fuel and
additives it sold
purportedly enhanced the functioning of vehicles. The definition
reads:
‘ “
Automotive
Industry” means importers, distributors, manufacturers,
retailers, franchisors, franchisees, suppliers and intermediaries
who
import, distribute, produce, retail or supply passenger,
recreational, agricultural, industrial, or commercial vehicles,
including
but not limited to passenger vehicles, trucks, motorcycles,
quad cycles or, whether self-propelled or not an internal combustion
propelled engine for a boat, or import, distribute, manufacture,
retail or supply any completed components and/or accessories to
such
vehicles, and/or renders a related repair or replacement service to
consumers in respect of such vehicles; and trailers, and
“anyone
who modifies, converts or adapts vehicles”.’
[7]
The
matter came before Avvakoumides AJ
who
found that the first respondent was not a retailer of accessories,
neither did it render a repair or replacement service to
consumers as
contemplated in the definition. The application was therefore
dismissed. By reason of its conclusion that the first
respondent did
not fall within the definition, the court a quo did not consider it
necessary to decide the review application.
The appeal is with its
leave.
[8]
It is
common ground that the first respondent is not an importer,
distributor, retailer or supplier of vehicles as defined in the
Code.
The only question is whether it is a retailer or supplier of
accessories of recreational, agricultural, industrial or commercial
vehicles specified in the definition (the specified vehicles).
[9]
Counsel
for the appellant submitted that the first respondent is a
distributor, retailer or supplier of completed components or
accessories to the specified vehicles, and that it renders a repair
or replacement service to consumers in respect of such vehicles
within the meaning of those terms in the definition. In support of
this submission it was contended that the sale of fuel to consumers
is a ‘replacement’ of the fuel in their vehicles; that
fuel which purports to clean, repair and maintain engines
‘constitutes
a related repair service’; and that by
providing an air pump on its premises to fix slow punctures or to
replace air in the
tyres of vehicles, the first respondent also
renders a repair or replacement service to consumers.
[10]
There
is no evidence that the first respondent is a retailer of ‘completed
components’ within the meaning of that term
in the definition.
It is difficult to see how the sale of fuel to consumers is converted
to a ‘repair or replacement service’
in respect of their
vehicles; or how the first respondent could ever be a retailer or
supplier as envisaged in the definition,
of air to inflate tyres
which is freely provided to motorists at garages or service stations.
Counsel for the appellant rightly
abandoned this argument.
[11]
What
remains then is whether the first respondent is a retailer or
supplier of ‘accessories’, more specifically whether
the
fuel, Shell Helix car engine oils and Wynn’s products are
‘accessories’ as contemplated in the definition.
The
appellant’s counsel submitted that these were accessories ‘in
terms of the ordinary English meaning of the word’
for the
following reasons. Fuel is added to a motor vehicle not only to ‘make
it more useful’ but also to complete
it – the vehicle
would not be able to drive without it. The purpose of the Code is to
protect consumers and it would be incongruous
to interpret a
non-essential addition to a vehicle such as a spoiler as an
accessory, but not fuel ‘which is an essential
component’
of the vehicle. In accordance with the principle in the law of
property, once fuel, an ‘accessory’,
is added to a motor
vehicle ‘it ceases its separate identity and forms part of the
motor vehicle’ and ‘the owner
of the thing becomes the
owner of the accessory’.
[3]
However, the
appellant’s counsel conceded that this principle found no
application in this case, and that the issue was one
of statutory
construction.
[12]
It is
a settled principle of statutory construction that when interpreting
a legislative provision, what must be considered is the
language
used, the context in which the provision appears, the apparent
purpose to which it is directed, and the background to
its
preparation and production.
[4]
[13]
The
starting point is s 2 of the Act. It provides that the Act must be
interpreted in a manner that gives effect to its purposes
set out in
s 3. These include promoting and advancing the social and economic
welfare of consumers in the country by, inter alia,
promoting fair
business practices; and protecting consumers from unconscionable,
unfair and improper trade practices, and deceptive,
misleading,
unfair or fraudulent conduct.
[5]
[14]
Industry
codes are governed by s 82 of the Act. Section 82(1)
(a)
provides that an ‘industry code’ means a code:
‘
(i)
regulating the interaction between or among persons conducting
business within an industry; or
(ii)
regulating the interaction, or providing for alternative dispute
resolution, between a person contemplated in subparagraph
(i) and
consumers. . . .’
In
terms of s 82(2) the Minister by regulation may prescribe an industry
code on the recommendation of the National Consumer Commission.
If a
proposed industry code provides for a scheme of alternative dispute
resolution, when recommending that code to the Minister,
the
Commission may also recommend that the scheme be accredited as an
‘accredited industry ombud’.
[6]
[15]
The
Code does not define the term ‘accessories’ and it must
therefore be given its ordinary meaning having regard to
the
particular context in which it is used. In the Shorter Oxford English
Dictionary
[7]
‘accessory’,
as a noun, means:
‘
An
additional or subordinate thing; an adjunct, an accompaniment; a
minor fitting or attachment. . . .’
As
an adjective the word is defined as follows:
[8]
‘
Of a thing:
additional; subordinately contributing, dispensable; adventitious.’
[16]
In my
view, on its plain wording and a sensible construction of the
definition, the word ‘accessories’, means additional,
subordinate things; accompaniments; and minor fittings or attachments
to, for example, passenger vehicles, such as tow bars, sun
shades,
mud flaps, boot spoilers, mats designed to fit a particular brand of
car and the like. Fuel such as petrol and diesel,
Shell Helix engine
oils and Wynn’s products simply do not fall into this category.
In the ordinary language of the definition
and in the particular
context, an ‘accessory’ is neither something that makes
the vehicle more useful nor complete.
A vehicle without fuel or
engine oil is not anything less than a vehicle.
[17]
Thus
in
Silke
,
[9]
Sutton JP, in construing the meaning of ‘accessories and
equipment’ in a price control regulation in order to determine
whether a wireless set was an accessory of a car, said:
‘
There
is no definition of “accessory” or of “equipment”
in these regulations, but it seems to me that the
definition which is
given of “accessory” in Chambers'
Twentieth
Century Dictionary
is
the one that we should apply, namely, that an accessory is a
secondary, additional or non-essential item of equipment.
In a case
of this kind we must, to some extent, use our knowledge of what
constitutes an accessory to a motor-car and what constitutes
equipment, and it seems to me that the difference between an
accessory and equipment is this; that an accessory is an amenity in
the car; it may be something more but it is at least an amenity which
is not necessary for the proper use of the car, such as a
wireless or
a clock or a cigarette-lighter, whereas equipment would be something
that is necessary for the proper use of the car,
such as windscreen
wipers, bumpers or a speedometer.’
[18]
Counsel
for the first respondent referred us to various foreign cases in
which the word ‘accessory’ was interpreted.
[10]
These were however of limited assistance because they concern the
appropriate classification of things for purposes of customs
duty
according to classification schemes and rules of interpretation for
those schemes, which courts are obliged to apply in the
countries
concerned. But that does not detract from the ordinary meaning of
‘accessory’ considered in those cases.
So for example in
Amoena
,
[11]
Lord Carnwath said that one would not naturally describe petrol as ‘a
part or accessory of a car’. In similar
vein, Lehane J in
Boehringer
[12]
concluded that ‘fuel is not an accessory for a vehicle, a tape
for a recorder or a film for a camera’. Likewise in
Polaroid
Australia
,
[13]
Gibbs J, stated that:
‘
. . .
[A]
film is not part of a camera, nor a bullet of a gun, nor petrol of a
motor vehicle. . . An accessory for a camera is an extra
and
additional part of the equipment of the camera itself such
as a light meter, a filter or a wide-angle lens, and
in the ordinary
course of language a film would not be referred to as an accessory
for a conventional camera, nor a film pack or
a picture roll as an
accessory for a Polaroid camera.’
[19]
The
plain language of ‘accessory’ in the definition as
meaning additional or subordinate things, minor fittings or
attachments is underscored by the immediate statutory context:
‘accessories’ is used in close association with, but
in
contradistinction to, ‘completed components’ of the
specified vehicles. Thus retailers and suppliers of components
of,
and accessories to, those vehicles fall within the definition. The
Shorter Oxford English Dictionary defines ‘component’,
inter alia, as:
‘
A
constituent part;
spec
.:
(
a
)
any of the separate parts of a motor vehicle, machine, etc . . .
.’
[14]
A
component or constituent part of a vehicle is therefore something
that is essential or integral to its functioning, such as a
piston,
crankshaft, cylinder head, and an ignition and exhaust system.
[20]
Fuel
pumped into the tank of a vehicle, car engine oils and Wynn’s
products are obviously not vehicle components. Neither
are these, in
my opinion, and as a matter of common sense, accessories. On the
appellant’s argument, petrol or diesel stored
in underground
fuel tanks of a fuel retailer’s premises – most certainly
not an addition or minor attachment to a car
– would be an
accessory of a vehicle. And if fuel in a storage tank is not an
accessory of a vehicle, then it is inconceivable
how it can be
transformed into such an accessory when it is pumped into the
vehicle’s tank.
[21]
The
contextual meaning of ‘accessories’ is further
strengthened by the fact that importers, distributors, manufacturers,
retailers or suppliers who render a ‘related repair or
replacement service to consumers in respect of such vehicles; and
trailers, and “anyone who modifies, converts or adapts
vehicles”’, are also included in the definition. In other
words, only those engaged in a repair or replacement service
connected to the retail or supply of the specified vehicles, or who
modify vehicles, are part of the automotive industry. Again, fuel
retailers are excluded. It is thus hardly surprising that all
of the
automotive industry associations listed in Schedule 1 to the Code are
retailers of vehicles or vehicle components.
[22]
Further,
the above interpretation is consistent with the purposes of the Act
and the Code – to regulate relations between
persons conducting
business within the automotive industry, to provide for a scheme of
alternative dispute resolution between consumers
and participants in
the industry, and to create an industry ombudsman to provide
alternative dispute resolution services. The Code
states that it is
an industry code which applies to the entire automotive industry as
defined; that it relates to conduct for the
supply of goods and
services by the automotive industry and consumers across the country;
and that it focuses on consumer protection,
supplier guidance and
fair business practices.
[23]
Counsel
for the appellant however submitted that the purpose of the Code was
to protect consumers against rogue or dishonest retailers
selling
substandard fuel to unsuspecting consumers, which would be defeated
if the term ‘accessory’ were interpreted
to include a
spoiler which is a non-essential item of a vehicle, but not fuel
which is an essential component without which the
vehicle cannot
function. Consumers, so it was submitted, would not be entitled to
approach an ombud and be left without a remedy.
[24]
The
submission does not bear scrutiny. Consumers of fuel and lubricants
are protected under the Consumer Goods and Services Industry
Code of
Conduct (the Consumer Goods Code),
[15]
prescribed by the Minister as the industry code for the consumer
goods and services industry; and in terms of which the consumer
goods
and services ombud is the accredited industry ombud under s 82 of the
Act. The Consumer Goods Code is a catch-all code covering
the retail
or supply of goods and services, and provides that the words,
‘Consumer’, ‘Goods’ and ‘Service’
have the meaning given to them in s 1 of the Act. Thus, ‘consumer’
means, inter alia, ‘a person to whom goods
or services are
marketed in the ordinary course of a supplier’s business’.
The term ‘goods’ includes:
‘
(a)
anything marketed for human consumption;
(b)
any tangible object not otherwise contemplated in paragraph
(a)
…’
[25]
The
Consumer Goods Code expressly excludes from its ambit (a)
participants and entities regulated by another code prescribed by
the
Minister under s 82 of the Act, such as the Code; and (b) the
automotive industry. The former code defines the ‘Consumer
Goods and Services Industry’ as meaning:
‘
.
. . [A]ll Participants and/or entities involved in the Supply Chain
that provides, markets and/or offers to supply Goods and Services
to
Consumers, unless excluded in terms of clause 4.4 hereof.’
Clause
4.1 provides:
‘
The
Code applies to all Participants, unless they are regulated elsewhere
by other public regulation, a code prescribed by the Minister
in
terms of section 82 of the CPA and/or where a complaint falls within
the jurisdiction of an Ombud with Jurisdiction, or an Industry
Ombud
accredited in terms of section 82(6) of the CPA.’
Clause
4.4 reads:
‘
This
Code excludes: transactions that are not covered by the CPA and/or
that are governed by other public regulation; the automotive
industry, Electronic Communication Service as defined in section 1 of
the Electronic Communications Act, 2005 (Act No. 36 of 2005)
and
transactions with organs of state or financial institutions.’
[26]
So,
contrary to the appellant’s contention, consumers indeed have a
remedy and are entitled to lodge a complaint with the
Office of the
Consumer Goods and Services Ombud in cases where rogue or dishonest
fuel retailers sell substandard products to them.
This too, the
appellant’s counsel conceded.
[27]
The
definition makes it clear that the Code applies to retailers or
suppliers of the specified vehicles, component parts and accessories
of such vehicles, and those who render repair or replacement services
connected with those vehicles. It does not apply to fuel
retailers
who do not engage in these activities. It follows that the court a
quo was correct and that the appeal must fail.
[28]
The
appeal is dismissed with costs.
_______________________
A
Schippers
Judge of Appeal
APPEARANCES
For
Appellant: R Michau SC
L
Harilal
Arthur
Channon Attorneys
Huggett
& Retief Inc, Bloemfontein
For
First Respondent: G Quixley
Seton
Smith and Associates
Honey
Attorneys, Bloemfontein
[1]
‘
Consumer
Protection Act, 2008
: Prescription Of The 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 Industry Ombud GN R817,
GG
38107, 17 October 2014.’
[2]
Clause 13.2 of the Code provides
that the appellant ‘is funded by the Automotive Industry in
the manner as set out in Schedule
5.
’
[3]
Macdonald Ltd v Radin NO &
The Potchefstroom Dairies and Industries Co Ltd
1915
AD 454
at 467.
[4]
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012] ZASCA 13
;
2012 (4) SA 593
(SCA) para 18;
Amcu
& others v Chamber of Mines of South Africa &
others
[2017] ZACC 3
;
2017 (3) SA 242
(CC) para 34.
[5]
Section 3(1)
(c)
and
(d)
of the Act.
[6]
Section 82(6) of the Act.
[7]
S
horter
Oxford English Dictionary on Historical Principles
6
ed (2007) at 13.
[8]
Ibid at 13.
[9]
R v Silke
1947
(4) SA 297
(C) at 298-299.
[10]
Amoena (UK) Ltd v Revenue and
Customs Commissioners
[2016]
4 All ER 705
;
[2016] UKSC 41
;
Chief
Executive Officer of Customs v Boehringer Mannheim Australia Pty Ltd
[1997] FCA 1235
;
26 AAR 375
;
Deputy
Commissioner of Taxation v Polaroid Australia Pty Ltd
(1971) 46 ALJR 32
;
Re
National Panasonic (Australia) Pty Limited and Collector of Customs
(New South Wales)
[1985] AATA 132
(5 June 1985); and 330651 BC Ltd v HMTQ 2003 BCCA
658.
[11]
Amoena
fn
10 para 41.
[12]
Boehringer
fn
10.
[13]
Polaroid Australia
fn 10 at 656-657.
[14]
Shorter
Oxford English Dictionary
fn 7 at 473
.
[15]
‘
Consumer
Protection Act (66/2008
): Prescription of the Consumer Goods and
Services Industry Code and Accreditation of the Alternative Dispute
Resolution Scheme
Administered by Consumer Goods and Industry Ombud
as an Accredited Industry Ombud in terms of Section 82 of the Act GN
R 271,
GG
38637,
30 March 2015.’