Accordian Investments (Pty) Ltd t/a Tata SA v National Consumer Commission (NCT/3948/2012/101(1) (P)) [2013] ZANCT 28 (10 September 2013)

IN THE NATIONAL CONSUMER TRIBUNAL

HELD AT CENTURION

Case No: NCT/3948/2012/101(1) (P)

DATE:10/09/2013

In the matter between:

ACCORDIAN INVESTMENTS (PTY) LTD t/a TATA SA...................................................Applicant

and

THE NATIONAL CONSUMER COMMISSION ….........................................................Respondent

CORAM:

Prof T Woker (PRESIDING)

Adv J Simpson (MEMBER)

Ms H Devraj (MEMBER)

Hearing Date: 15 August 2013

JUDGMENT AND REASONS

INTRODUCTION

1. The Applicant is Accordian Investments (Pty) Ltd t/a TATA SA (hereinafter referred to as “the Applicant”) a private company with limited liability registered in terms of the company laws of South Africa.

2. The Respondent is the National Consumer Commission (hereinafter referred to as “the Respondent”), an organ of state within the public administration established in terms of Section 85 of the Consumer Protection Act, Act 68 of 2008 (“CPA”).

3. At the hearing of this matter, the Applicant was represented by counsel – Mr Dean Whittington.

4. The Respondent filed an answering affidavit but did not attend the hearing.

5. The Applicant brought an application to the National Consumer Tribunal (Tribunal) to have a compliance notice issued against it by the Respondent, reviewed and cancelled in terms of section 101(1) of the CPA.

6. The Tribunal has jurisdiction to hear this matter in terms of section 101(1) of the CPA. This section provides that a person issued with a compliance notice in terms of section 100 may apply to the Tribunal in the prescribed manner and form for its review.

7. This judgment follows the hearing of this matter on 15 August 2013 at the offices of the Tribunal in Centurion. The Applicant’s

representative submitted oral arguments in support of the written application.

BACKGROUND

8. On 26 January 2011, Mr T Mhlanga (hereinafter referred to as “the complainant”), purchased a new Tata Xenon double cab motor vehicle from Kia Motors South Africa (Pty) Ltd trading as Tata Bloemfontein (hereinafter referred to as “Tata Bloemfontein”).

9. The Applicant in this matter submits that it does not own Tata Bloemfontein. It is an entirely separate legal entity that only

supplies vehicles to Tata Bloemfontein, as the Applicant is the importer and distributor of certain Tata vehicles in South Africa.

10. Shortly after purchasing of the vehicle, towards the end of January 2011, the Complainant had a Mix Telematix tracking device (“the tracking device”) fitted to the vehicle. The Applicant submits that the tracking device was fitted as an aftermarket accessory and was not fitted by either the Applicant or Tata Bloemfontein.

11. On 10 February 2011 the vehicle would not start and had to be towed. The Complainant was subsequently informed by Tata Pretoria Central (a dealership owned by the Applicant (hereinafter referred to as “Tata Pretoria”) that the vehicle’s battery had run down and had to be recharged.

12. On 07 March 2011 the vehicle once again failed to start and was towed to Tata Pretoria. The vehicle was inspected and it was established that the vehicle had a faulty alternator, which was subsequently replaced by Tata Pretoria. The vehicle spent 5 days at the workshop of Tata Pretoria.

13. The Complainant furthermore reported alleged problems relating to the vehicle’s driver window, automatic door lock, window wipers, door warning lights, air-conditioning, the bonnet opening mechanism, the right rear passenger door and complained that the vehicle was rattling.

14. During April 2011 the complainant lodged a complaint with the Respondent regarding his experience with the Tata motor vehicle he had purchased.

15. On 28 April 2011 the complaints handling unit of the Respondent addressed a letter to “Tata SA (Bloemfontein)”. The letter referred to the complaint lodged by the Complainant and called for a response from the Applicant by 9 May 2011.

16. The Applicant responded to the letter by informing the Respondent that the Complainant was supposed to bring the vehicle to the dealership on 26 April 2011 but that the Complainant had cancelled the appointment. He further placed on record that the Complainant

undertook to make a new appointment but had not done so yet.

17. On 09 May 2011 Tata Pretoria discovered that the tracker unit that the Complainant had fitted to the vehicle was not properly installed and resulted in the tracker unit draining the power from the vehicle’s battery.

18. Tata Pretoria had the unit removed and re-installed by the company that had originally fitted the device, leaving the vehicle in a working order.

19. On 09 May 2011 the Complainant indicated to the Applicant that he does not want the vehicle anymore. This was confirmed by an email sent by the Complainant to the Applicant on the same day.

20. On 19 May 2011 the Complainant delivered the vehicle to the premises of Tata Bloemfontein.

21. The Applicant, and specifically Mr. Lubbe, sent an email to the Complainant to place on record that all appropriate steps have been taken to address the Complainant’s complaints relating to the vehicle and that the problems was not caused by the vehicle itself, but occurred due to the tracking unit being installed in a faulty manner.

22. The Complainant replied to the correspondence on 19 May 2011 and stated that he wants Tata Bloemfontein to take the vehicle back and that he would not be collecting the vehicle from the dealership.

23. On 09 June 2011 Mr. Lubbe sent an email to the Complainant in which he informed the Complainant that his grounds of complaint had been addressed by Tata Bloemfontein; that the vehicle had been tested to ensure that there is 100% compliance with the manufacturer’s

specifications and that the vehicle was ready for collection.

24. The Complainant replied on the same day saying he would be cancelling the insurance as well as the tracking service on the vehicle.

25. On 01 July 2011, Tata Bloemfontein received a notice from the Respondent to attend a conciliation hearing on 14 July 2011.

26. On 19 July 2011, following the conciliation, the Applicant (on behalf of Tata Bloemfontein) addressed an email to the Respondent referring to the following issues:

26.1 That the CPA did not apply to the matter based thereon that the conduct complained of took place prior to the commencement of the CPA;

26.2 That the Applicant is committed to transparency and always endeavours to resolve customer issues;

26.3 That all complaints relating to the vehicle had been addressed and that the dealership had leather seats fitted to the vehicle at the Complainant’s request;

26.4 Settlement proposals which were, in the Applicant’s view, reasonable.

27. According to the Applicant the Respondent failed to respond to such correspondence and it was therefore re-sent to the Respondent on 26 and 27 October 2011. Neither the Applicant nor Tata Bloemfontein received any response to such correspondence.

28. The Respondent issued a compliance notice addressed to Tata SA (Bloemfontein) dated 10 February 2012. This notice was served on the Applicant on 17 February 2012. The notice called on “Tata SA (Bloemfontein)” to cancel the contract, take the vehicle back and to refund the deposit paid on the vehicle as well as the monthly repayments made by the Complainant on the credit agreement. The notice directed that, in the event of non-compliance, the Respondent would request that the Tribunal impose an administrative fine of five hundred thousand rand on “Tata SA (Bloemfontein)".

29. On 9 March 2012 the Applicant filed this application for review of the compliance notice with the Tribunal.

APPLICANT’S SUBMISSIONS

Jurisdiction

30. The Applicant submits that the conduct that forms the subject matter of the compliance notice took place prior to the commencement of the CPA and therefore falls outside the Respondent’s jurisdiction.

31. The Applicant submits that the CPA commenced on 31 March 2011 and that it does not have retrospective application, unless specifically

provided for in Item 3(2) thereof. Item 3(2) specifically stipulates that Sections 53 to 58 of the CPA shall apply only with respect to any goods or services supplied to the consumer in terms of the agreement, on or after the general effective date.

32. The Applicant submits that only the services rendered by Tata Bloemfontein after 31 March 2011 are subject to the provisions of the CPA and that everything that happened before then, including the conclusion of a contract of sale in respect of the vehicle, falls outside the jurisdiction of the Respondent.

33. The Applicant submits that the events that the Complainant complained about occurred prior to the effective date of the CPA and that the Respondent therefore had no power to issue a compliance notice in respect thereof.

The Investigation

34. The Applicant submits that the Respondent did not conclude an investigation in respect of the complaint, as is mandatory by virtue of the provisions of section 72 of the CPA, and could therefore not have issued the compliance notice in terms of Section 100.

35. The Applicant submits that the compliance notice does not contain the results of an investigation by an inspector on behalf of the Respondent. The Applicant forms this view from the content of paragraphs 1.2 to 1.3.4 of the compliance notice which merely repeats the allegations made by the Complainant without any substantiation. The Applicant submits that it is therefore clear that the legitimacy and truthfulness of the claims made by the Complainant have not been investigated by the Respondent.

36. The Applicant submits that, since the Respondent did not conduct and complete an inspection as required in terms of section 72 of the CPA, the Respondent could not have issued a compliance notice, as the completion of the investigation is a jurisdictional prerequisite for the issuance of a compliance notice.

The entity to which the notice was issued

37. The compliance notice states that the Applicant has contravened Section 55(2)(b) and 56(2)(a) and (b) of the CPA.

38. The Applicant submits that it does not own the dealership that sold the vehicle to the complainant. The dealership is in fact owned by Kia Motors South Africa (Pty) Ltd t/a Tata Bloemfontein and is a service provider in the business of selling and servicing Tata and Kia motor vehicles.

39. The Applicant only supplies Tata vehicles to the dealership.

40. The Applicant submits that it is an independent legal entity, separate from Tata Bloemfontein and that, on the Complainant’s

own version, the vehicle in question was purchased from Tata Bloemfontein.

41. The Applicant submits that it was not the supplier of the vehicle in question and that it is not the legal entity with whom the Complainant entered into the sale agreement.

The steps required to be taken

42. The Applicant submits that the steps that were required to be taken by the Applicant, as set out in the compliance notice, are not related to the provisions of the CPA that the Applicant could have transgressed. In the premises the compliance notice constitutes

directions to the Applicant that fall outside the Respondent’s powers.

43. The Applicant is directed to “cancel the contract and take back the motor vehicle, settle the outstanding balance of the motor vehicle account and refund the complainant a deposit of R 25 000.00 (the value given by the respondent for the complainants motor vehicle that he traded in) plus all the money the complainant already paid through monthly instalments of R 4 200.00 since February 2011 until the date of complying with this notice”

44. The Applicant submits that cancelling the contract and refunding the Complainant are steps that are directed at a contravention in terms of sections 55 and 56. The Applicant submits that, since it is not a supplier (or seller) as contemplated in these sections, the compliance notice ought to be cancelled.

45. In addition, the Applicant submits that, as was indicated on behalf of the dealership, the complaints in respect of the vehicle had been addressed, even though the major complaint was as a result of the defective fitment of a tracking unit by a third party. The Applicant submits that the dealership in any event complied with the provisions of the CPA insofar as it may have been applicable.

46. The Applicant submits that it is clear from its papers that it communicated with the Respondent in an attempt to co-operate and assist, and even made proposals as to how the matter could be resolved.

47. The Applicant submits that the compliance notice issued against the Applicant and served on it on 20 February 2012 ought to be cancelled.

RESPONDENT’S SUBMISSIONS

48. The Respondent filed an answering affidavit with the Tribunal on 6 July 2012. It also filed a request for condonation of the late filing on the same date.

49. During the hearing the Applicant’s counsel submitted that he had not received the Respondent’s answering affidavit and had no knowledge of the contents thereof.

50. The request for condonation must be addressed before the Tribunal can assess the issues to be considered in this matter.

Request for condonation of late filing

51. A party may apply for condonation of the late filing of an application, papers or any other document or non-compliance with the Rules of the Tribunal (“the Rules”)1. Such an application may be brought for an order to:

Condone the late filing of a document or application;

Extend or reduce the time allowed for filing or serving;

Condone the non-payment of a fee; or

Condone any other departure from the rules or procedures2

The Tribunal may grant such an order on good cause shown.3

52. In Melane v Santam Insurance Company Limited4 it was held that:

“The approach is that the Court has a discretion, to be exercised judicially upon a consideration of all the facts, and in essence it is a matter of fairness to both sides. Among the facts usually relevant are the degrees of lateness, the explanantion therefor, the prospects of success and the importance of the case. These facts are inter-related: they are not individually decisive. What is needed is an objective conspectus of all the facts. A slight delay and a good explanantion may help to compensate for prospects of success which are not strong. The importance of the issue and strong prospects of success may tend to compensate for a long delay. There is a further principle which is applied and that is that without prospects of success, no matter how good the explanation for the delay, an application for condonation should be refused…cf Chetty v Law Society of the Transvaal 1985(2) SA 756 (A) at 765 A-C; National Union of Mineworkers and Others v Western Holdings Gold Mine 1994 15 ILJ 610 (LAC) at 613E. The courts have traditionally demonstrated their reluctance to penalize a litigant on account of the conduct of his representative but it emphasized that there is a limit beyond which a litigant cannot escape the results of the representative’s lack of diligence or the insufficiency of the information tendered. (Salojee & Another NNO v Minister of Community Development 1965 (2) A 135 (A) 140H-141B; Buthelezi & Others v Eclipse Foundries Ltd 18 ILJ 633 (A) at 6381-639A).”

53. In Head of Department, Department of Education, Limpopo Province v Settlers Agriculture High School and Others5 it was held that the standard of considering an application of this nature is the interests of justice.

Whether it is in the interest of justice to grant condonation depends on the facts and circumstances of each case. It requires the exercise of discretion on an objective evaluation of all the facts. Factors that are relevant include but are not limited to:

the nature of the relief sought; the extent and cause of the delay; the effect of the delay on the administration of justice and other litigants; the reasonableness of the explanation for the delay; the importance of the issue to be raised in the intended appeal; and the prospects of success6

54. From the dictum in Melane7 it was held that these factors are interrelated and should not be considered separately.

55. In the present matter the Respondent applied for condonation for the late filing of its answering affidavit in the prescribed form TI.r34 on 06 July 2012. The Respondent filed an affidavit in support of such application in which it explains the procedure followed from receipt of a complaint, the investigation thereof, settlement negotiations etc until such time as the matter reaches the legal department. It appears to be a lengthy process. The Respondent submits that it decided to withdraw its matters from attorneys in January 2012 in order to deal with matters internally. This created pressure in the legal department and delays in preparing papers. The Respondent submits that the Applicant would not suffer any prejudice as a result of the late filing of the answering affidavit and requests that such late filing be condoned.

56. Firstly it is clear that the delay in filing the answering affidavit was excessive. Rule 13(2) provides as follows:

“An answering affidavit to an application or referral other than an application for interim relief must be served on the parties and filed with the Registrar within 15 business days of the application date, or within a shorter period, if directed by the Registrar by notice in writing.”

The answering affidavit in the present matter should therefore have been served within 15 days from the 09th of March 2012, which is the date upon which the application was served on the Respondent and filed with the Tribunal. Considering the fact that the 21st of March 2012 (Human Right’s Day) was a public holiday, the answering affidavit therefore had to be filed on or before 02 April 2012. The affidavit was only filed 3 months later on 06 July 2012. While the Tribunal can understand a possible delay when faced by a sudden increase in workload, a delay of three months under these circumstances is not reasonable.

57. The issues raised by the Respondent in its answering affidavit do little to address the material defects in the compliance notice

raised by the Applicant. There is no reasonable prospect of the Respondent’s submissions being successfully argued.

58. Finally it is telling that the Respondent did not attend the hearing to argue its case in any way. This lack of participation indicates that the Respondent does not regard its case as arguable.

Service of the answering affidavit and condonation application on the Applicant

59. The Applicant denied receiving the Respondent’s answering affidavit. In this regard Rule 13(6) provides as follows:

“Within 3 business days of serving an answering affidavit in terms of Rule 13(1), the Respondent must file with the Registrar-

a cover sheet describing the matter and stating its Tribunal Reference Number ;

a copy of the answering affidavit; and

proof of service in accordance with rule 30(3) for the persons mentioned in rules 13(1)(a) and (b).”

60. Rule 30 of the Tribunal Rules deals with the service and proof of service of documents and in turn provides as follows:

“(1) A document may be served on a party by-

Delivering it to the party; or Sending it by registered mail to the party’s last known address.

Parties may expedite service by sending notices and documents by fax or e-mail, provided that this is followed within 3 business days with service in accordance with rule 30(1)(a). Proof of service in terms of:

Rule 30(1)(a), must be by-

A signed acknowledgement of receipt by the party, a representative of the party, or a person who is 16 years or older residing or employed at premises occupied or utilized by the party; or An affidavit by the person who served the document if the person to whom it was delivered refused to sign for it;

Rule 30(1)(b), must be the postal agent’s receipt with the tracking code of the document; Rule 30(2), must be a copy of the transmission report, to be followed subsequently with proof in terms of rules 30(3) (a) or (b).”

61. It appears from page 77 of Section A of the paginated case file that the original application for condonation, affidavit in support thereof and the answering affidavit was filed with the Tribunal by hand.

62. On 17 July 2012 the Tribunal sent a Notice of Complete Filing in respect of the application for condonation to the parties. This was done via e-mail as per page 4 of Section B of the paginated case file. The notice states that the application complies with the requirements of the Rules and was transmitted to both parties.

63. No evidence of service of the application for condonation, affidavit in support thereof and the answering affidavit on the Respondent was however provided to the Tribunal. It was not filed simultaneously with such application and also not thereafter.

64. The wording of Rule 34 or Table 2 to the Regulations does not specifically require that an application for condonation should be served on the other parties to a matter. However, Table 2 does require that the application be filed in the form of Form TI.r34 and part D of such form requires proof of service in accordance with Rule 30. It would therefore appear that the proof of service of the condonation application on the other party is also required.

65. The most relevant requirement in respect of the present matter is the requirement in Rule 13(6) that the answering affidavit should be served in accordance with Rule 30(3).

66. The Applicant alleges that it did not receive the answering affidavit. There is no evidence that the answering affidavit was

served on the Applicant as required by Rule 13(6). The Respondent therefore failed to comply with the provisions of Rule 13(6).

Conclusion regarding the Respondent’s application for condonation

67. Based on all the factors mentioned the Tribunal hereby refuses the application for condonation of the late filing of the Respondent’s

answering affidavit. The Respondent’s answering affidavit is therefore disregarded as far as this judgement is concerned.

68. Under the circumstances Rule 13 (5) is applicable which provides as follows:

“Any fact or allegation in the application or referral not specifically denied or admitted in the answering affidavit, will be deemed to have been admitted”

69. As a result thereof the Applicant’s application and all of the allegations contained therein are deemed to be admitted.

ISSUES TO BE CONSIDERED BY THE TRIBUNAL

70. While the Tribunal takes note of the circumstances surrounding the purchase of the vehicle and what transpired thereafter, the first aspect which must be considered is whether the CPA is in fact applicable to this matter, considering the date of the sale of the vehicle and the date on which the CPA came into operation.

APPLICABILITY OF THE CPA TO THIS MATTER

71. The general effective date on which the CPA came into operation is 31 March 2011.

72. The sale and delivery of the vehicle to the complainant took place on 26 January 2011.

73. The compliance notice issued by the Respondent relates directly to the circumstances surrounding the sale of the vehicle on 26 January 2011. Although further interaction took place between the complainant and the Respondent after 31 March 2011, these individual interactions were not separately raised or addressed in the compliance notice.

74. Item 3 of Schedule 2 of the CPA determines the extent to which the CPA applies to “pre-existing transactions and agreements” and the CPA does not apply to any transaction concluded, or agreement entered into, before the general effective date; or any goods

supplied or services provided to a consumer before the general effective date, being 31 March 2011. Sections 53 to 58 of the CPA

apply to pre-existing transactions: “Only with respect to any goods or services supplied to the consumer in terms of the agreement, on or after the general effective date”. The vehicle in this case was also delivered before 31 March 2011 and the CPA is therefore not retrospectively applicable in this matter.

75. The issuing of the compliance notice relating to this transaction therefore results in a retrospective application of the CPA. The Tribunal has handed down a number of judgments8 addressing the aspect of the retrospective application of the CPA and setting aside the compliance notice on a default basis. There is no empowering provision in the CPA vesting the Respondent with authority to issue compliance notices retrospectively in this respect.

Applicability of sections 55 and 56 of the CPA

76. Although the sale and delivery of the vehicle took place before the CPA came into operation, it appears from the evidence available that problems with the vehicle were experienced by the complainant after the general commencement date of the CPA being 31 March 2011.

77. In the matter of Accordian Investments (Pty) Ltd vs. NCC9, the Tribunal panel found that sections 55 and 56 of the CPA may find application in cases such as these, where the sale and delivery of the vehicle took place before 31 March 2011 but the problems with the vehicle manifested after 31 March 2011.

78. The judgement in the Accordian-matter does not describe the exact circumstances under which sections 55 and 56 can be applied and the nature of ‘manifested’ but at the very least, detailed and specific evidence would have to be placed before the Tribunal regarding the nature of the problems experienced with the vehicle and whether they would qualify under the wording of section 55, before any assessment in this regard could be done. It would further be reasonable to allow the parties before the Tribunal to present legal argument on this aspect before any finding in this regard can be made.

79. In the absence of specific evidence and argument placed before the Tribunal in this regard, the Tribunal is unable to make any finding on the possible contravention of sections 55 and 56 of the CPA or the applicability of these sections to this matter.

Conclusion

80. The Tribunal finds that the CPA is not applicable to this matter, as the agreement was entered into prior to the general effective date of the CPA and the vehicle was delivered prior to such date. Considering that the compliance notice therefore fails to clear this first hurdle relating to its lawfulness it is not necessary to evaluate any further aspects relating to the Applicant’s submissions.

81. For the reasons set out above the Tribunal concludes that the compliance notice issued by the Respondent was not issued in accordance with the CPA.

ORDER

Accordingly, the Tribunal makes the following order:

82. The Compliance notice issued by the Respondent is hereby cancelled.

DATED ON THIS 10th DAY OF SEPTEMBER 2013

[signed]

Adv J Simpson

Member

Prof T Woker (Presiding member) and Ms H Devraj concurring

1 Regulations for Matters Relating to the Functions of the Tribunal and Rules for the Conduct of Matters before the National Consumer Tribunal, 2007 – Published under GN789 in GG30225 of 28 August 2007 as amended by GenN428 in GG34405 OF 29 June 2011

2 Rule 34(1) of the Rules

3 Rule 34(2) of the Rules

4 1962 (4) SA 531 (A) at 532C-F

5 2003 (11) BCLR 1212 (CC) at para[11]

6 Van Wyk v Unitas Hospital and Others 2008(4) BCLR 442 (CC) at para 20 as applied in Camagu v Lupondwana Case No 328/2008 HC Bisho.

7 1962 (4) SA 531 (A) at 532C-F

8 Peugeot Citroen South Africa (PTY) LTD t/a Citroen South Africa vs. NCC NCT/4062/2012/101 (1) (P); Kia Motors South Africa (PTY) LTD t/a Kia Motors The Glen vs. NCC NCT/3914/2012/101(1)P and City of Johannesburg v NCC NCT/2667/2011/101(1) (P) & NCT/2081/2011/101(1) (P)

9 NCT 4061/101(1)(P)CPA