Barnado v National Consumer Commission and Others (47933/17) [2021] ZAGPPHC 531 (26 August 2021)

IN THE HIGH COURT OF SOUTH AFRICA,

GAUTENG DIVISION, PRETORIA

CASE NO: 47933/17

In the matter between

WILHELMINA JOHANNA BARNADO

APPLICANT

And

NATIONAL CONSUMER COMMISSION

1ST RESPONDENT

CHAIRMAN OF THE NATIONAL CONSUMER

2ND RESPONDENT

COMMISSION

LAMBONS PTY LIMITED

3RD RESPONDENT

JUDGMENT

Delivered: This judgment is prepared and authored by the Judge whose name is reflected and is handed down electronically by circulation to the Parties/ their legal representatives by email and by uploading it to the electronic file of this matter on CaseLines. The date for hand-down is deemed to be 26 August 2021.

NTHAMBELENI AJ

INTRODUCTION

[1] This matter involves the interpretation of the provisions of the Consumer

Protection Act 68 of 2008 (the CPA) herein after referred as (“the Act”) in respect to consumers. Due to the nature and facts of the case it is of paramount importance to revisit the purposes of the Act.

[2] The purpose of the Act is to promote and advance the social and economic welfare of consumers in South Africa by:

2.1 establishment of a legal framework for the achievement/ maintenance of a consumer market that is fair, accessible, efficient, sustainable and takes responsibility to benefit consumers in general.

2.2 reduce and ameliorate any disadvantages experienced by accessing any supply of goods or services by consumers; who are low-income persons or persons comprising low-income communities; who live in remote, isolated or low-density population areas or communities; who are minors, seniors or other similarly vulnerable consumers; whose ability to read and comprehend any advertisement; agreement, mark, instruction, label, warning, notice or other visual representation is limited by reason of low literacy, vision impairment or limited fluency in the language in which the representation is produced,

published or presented.

2.3 the promotion of fair business practices.

2.4 protecting consumers from: unconscionable, unfair, unreasonable, unjust or otherwise improper trade practices; deceptive, misleading, unfair or fraudulent conduct; the improvement of consumer awareness and information and the encouragement of responsible, informed consumer choice and behaviour; the promotion of consumer confidence, empowerment, and the development of a culture of consumer responsibility, through individual and group education, vigilance,

advocacy and activism; providing for a consistent, accessible and efficient system of consensual resolution of disputes arising from consumer transactions. Providing for an accessible, consistent, harmonized, effective and efficient system of redress for consumers.

2.5 The dispute in this matter originates from a complaint filed with the National Consumer Commission (the first respondent) (“the Commission”) on the 12 November 2013. The complaint involves

sale transaction of a GWM Steed TCI 4 x 4 vehicle that the applicant purchased from the third respondent in February 2012. The basis of the complaint was that the vehicle suffered defects and that it was unfit for the purpose that it was intended for, further that the third respondent (“Lambons”) unduly refused to replace the vehicle or refund purchase price paid for it.

[3] On receipt of the complaint, the Commission referred it to the Motor Industry Ombudsman of South Africa (“MIOSA”) on the 18th March 2014. The applicant was compelled to submit herself to the jurisdiction of MIOSA and that its outcome will be final. MIOSA

furnished its decision on the matter on 30 June 2015.

[4] Despite the findings and recommendations of compliance, there was non- compliance on the side of the third respondent (Lambons) and the applicant’s attorneys wrote a letter to the Commission on the 6 June 2016 and requested that a “Compliance Notice” be issued in terms of section 100 of the CPA.

[5] The main question or bone of contention is whether the First and Second

Respondents (The Commission) complied with its statutory mandate in terms of the CPA. The court is to determine whether the Commission

abdicated its statutory mandate, failed to investigate a complaint and produce an investigative report with recommendation of the

enforcement of in terms of the CPA. On the hearing date of the matter the report was furnished but that on its own is not helpful to the applicant’s predicament.

[6] Section 4 (1) (a) of the CPA asserts the right of any person acting on his or her own behalf to approach a Court, the Tribunal or the Commission alleging that a consumer’s rights in terms of the CPA has been infringed, impaired, or threatened, or that prohibited conduct has occurred or is occurring. The Tribunal would then adjudicate on the dispute accordingly.

BACKGROUND FACTS

[7] This matter has a long history as it commenced on the 9 February 2012, when the applicant entered into an installment sale agreement with GWM finance a division of Wesbank which is a division of FirstRand Bank Limited.

[8] In terms of the agreement the applicant purchased a motor vehicle described as GWM Steed 5 2.5 4x4 P/U/S/C with engine number 1109852951 and the vehicle was delivered by the third respondent. Upon taking delivery of the vehicle the applicant experienced technical and mechanical problems with the vehicle and reported same to the third respondent.

[9] The applicant stated in the particulars of claim that the third respondent attempted to rectify the problems and on the last attempt, the applicant was informed that the vehicle will not be handed over unless she signed acknowledgment that the vehicle was repaired to her satisfaction. Applicant rightfully refused to do so as she did not have the opportunity to test the vehicle subsequent to the repairs and the vehicle was retained by the third respondent who is still in the possession of the vehicle.

[10] Thereafter the applicant engaged the services of her legal representatives who wrote a letter of demand to the third respondent dated the 5th March 2013. The main issue as covered in the letter was that the vehicle purchased from the third respondent, had various mechanical faults and that the third respondent neglected or refused to resolve the mechanical faults on the vehicle.

The contents of the letter of demand written by the applicant attorneys in Afrikaans is as follows:

“5 Maart 2013

DIE BESTERENDE DIREKTEUR

LAMBONS KIMBERLEY

SONDER BENADELING VAN REGTE

71 LANGSTRAAT

KIMBERLEY

.8301

FAKS: 053 833 7333 / 051 447 5025

Geagte Meneer

FOUTIEWE VOERTUIG VAN WILHELMINA JOHANNA BARNARDO

Ons bevestig da tons hierin optree namens Wilhelmina Johanna Barnardo.

Ons kliënt het op 12/02/2012 `n GWM Steed 5 2.5 TCI 4x4 enkel kajuit bakkie by u aangekoop. Die voertuig is na datum van aankoop verskeie kere ingestuur vir reparasies. Hierdie dluit die volgende in:

27/02/12 Klagte : Olie lek op die engine en bakkie rook erg Lambons (Pty) Ltd 30T09590 Werk gedoen: Replaced valve chamber cover bolt cap

07/05/12 Klagte: `Oli leak at tappel Lambons (Pty) Ltd 30T11900 Werk gedoen: Replaced valve chamber cover bolt cap

14/05/12 10,000.00 km diens Lambons (Pty) Ltd 30T12230 Fill cross member

18/05/12 Klagte: Oil leak Lambons (Pty) Ltd 30T12370 Werk gedoen: Replaced diapfram on Cylinder head

15/06/12 Boost pyp het gebars Lambons (Pty) Ltd 30T13000

01/08/12 Klagte: Vehicle got no power and leaking oil & turbo noisy Lambons (Pty) Ltd 30T14740 & 30T47 Werk gedoen: Replace injector Replace turbo

05/09/12 Turbo defective Lambons (Pty) Ltd 30T15980

20/09/12 Klagte : Vibrasie en groot geraas in transfer case Lambons (Pty) Ltd 30T16750 Bak kraak – claim (foto’s is geneem) Mounting wat bakwerk dra skeur los Vacuum regulator werk nie

20/09/12 Klagte: Turbo not kicking in GWM Kimberley 784 Werk gedoen: Dismantle, install and replace turbocharger assembly

19/11/12 30,000 km diens Lambons (Pty) Ltd 30T18610 Aircon not making pump – aircon pump Fuel fille hose to be replaced Fuel flap not securing – clip broken Cover at right front of the dash pulling loose Vibration at the right side Oil leak at turbo

Ons kliënt het u aanvanklil versoek om die voertuig te herstel op 27/02/12, 07/05/2012, 14/05/2012, 18/05/2012, 15/06/2012 en 01/08/2012. Die voertuig is nie op enige van hierdie datums behoorlik herstel sodat ons kliënt die voertuig na behore kon gebruik nie.

Na afloop van bogemelde datums het ons kliënt die voertuig weer ingebring vir herstelwerk op 5/09/201212 en 20/09/2012. Die voertuig was steeds nie korrek herstel nie en was daar binne hierde drie periode verdere defekte, gebreke en skade aan die voetuig. Die voertuig het dus nie voldoen aan die waarborge soos na verwys in Artikel 66 en 55. Wet op Verbruikersbeskerming nie. Die voertulg kan nie redelikerwys gebruik word vir die doel waarvoor dit aangekoop is nie, dit is nie van goeie kwaliteit nie, nie in `n goeie werkende toestand nie en nie vry van enige defekte nie. Dit was verder bruikbaar en / of duursaam (“durable”) vir `n redelike periode na datum van aankoop nie. Dit het dus nie voldoen en voldoen steeds nie aan voorgeskrewe standaarde van wetgewing nie.

Ons het hierin insruksie ontvang dat u óf `n nuwe voertuig aan ons kliënt moet lewer te wete `n GWM Enkelkajuit 2.4 petrol 4x4 bakkie óf die volle koopprys in die bedrag van R215,000.00 aan ons kliënt lewer alternatiewelik die koopprys aan ons kliënt betaal, u dit binne 7 (sewe) dae na datum van hierdie skrywe doen by versuim waaraan ons sal voortgaan met verdere regsaksie hierin.”

Die uwe

JAPIE VAN ZYL PROKUREURS / ATTORNEYS.

[11] Subsequent to the letter referred above, a formal complaint was lodged with the first

respondent on the 12 November 2013, and after receipt of the complaint the first respondents referred it to MIOSA in order for

MIOSA to deal with it in terms of the Act. On the 30 June 2015 MIOSA after investigating the complaint made recommendations that require compliance by the third respondent. The recommendations or directives by MIOSA was that the matter should be resolved in terms of the provisions of Section 56 of the Consumer Protection Act read together with Section 20 of the Act. In terms of Section 56(2) of the CPA, a consumer may return goods to a supplier, without penalty to consumer and at the supplier’s own risk and expense, if the goods fail to satisfy the requirements and standard as contemplated in Section 55.

[12] Section 55 stipulates that goods have to be reasonably suitable for the purposes for which they are generally intended, of good quality, in good working order and free of any defects and should be useable and durable for a reasonable period of time (having regard to the use to which they would normally be put and to all the surrounding circumstances of their supply).

[13] The directive from the recommendations was that the third respondent should refund the

purchase price and any amount paid by the applicant for the vehicle less any amount necessary to render it fit for re-stocking and the costs of usage thereof. The recommendations were transmitted through an email correspondence to an address that was successfully used as correspondence between the plaintiff and the third respondent.

[14] The recommendations are as envisaged in clause 23.11 of the South African Automotive Industry

Code of Conduct promulgated in terms of Section 82 of the Act by way of Government Notice 817 of 17 October 2014. The recommendations are in line with the provisions of Section 70(3) (a) of the Act. The third respondents are bound by the recommendations and to ought to have implemented them and non-compliance with the recommendations amounts to prohibited conduct as envisaged in the Act. It is clear from the papers that there was non-compliance by the third respondent with the recommendations. In order to ensure receipt of the recommendations, a copy of the recommendations was sent to the third respondent via email by applicant attorneys and the email that was used as previously used in correspondence with the third respondents.

[15] Neither the email communication and other attempts to elicit a response from the third

respondent were successful and to date the third respondent has simply failed to comply with MIOSA’s recommendations or directives. Upon the realization that the recommendations won’t be complied with, the applicant filed a request for compliance to be issued by the first respondent in terms of section 100 of the Act, and same was filed by the applicant attorneys on the 6 June 2016.

[16] The request was sent via email to Pinky Makanya as a previous case manager allocated the

matter. The applicant attorney received email correspondence to contact a call centre telephone number 012 761 3000 to receive

further assistance with the recommendations. A telephone call was made by one Ms Kotze acting on behalf of the applicant to the call center . The person who answered the call did not know why Ms Kotze was directed to the call center, and as a result she requested direct telephone contacts for Ms Makhaya and her director. On the same day she made telephone calls to the telephone numbers provided with no success. Several follow up telephone calls were made between the periods of 22 to 28 June 2016 by Ms Kotze and the telephone calls were unanswered.

[17] On the 29 June 2016 Ms Kotze once again made a telephone call to the call center and asked to be transferred to Ms Makhanya. She was informed that it was not possible to transfer the call, however the person who answered undertook that a message would be transmitted to Ms Makhanya to email her as a matter of urgency. Ms Kotze on the same day tried to call the numbers provided for Ms Makhanya and her director without any success. Neither was she contacted by Ms Makhanya or anybody else from the office of the first respondent.

[18] On the 7 July 2016 Ms Kotze again phone the call centre and was informed by one Elias that he cannot find anything regarding the case on their system and that Ms Kotze must forward an email of the 6 June 2016 to enquires@thencc.org.za and same was done.

[19] Despite the email being sent to the address as provided by Elias, there was still no response. Ms Kotze persisted occasionally between the period of August and September 2016 to call the call center of the first respondent and was always informed that she must send email correspondence to the same email address provide on previous occasion. She also tried on numerous occasions to make direct telephonic calls with Ms Makanya and her director without any success.

[20] On the 14 September 2016 during a telephonic call to the call center, Ms Kotze was told to send an enquiry to a different email address of fntuli@thennc.org.za which she immediately. The email sent did not receive any response as well.

[21] On the 11 November 2016 while talking to Mr Botha of MIOSA on an unrelated matter, Ms Kotze provided the relevant MIOSA reference number of the plaintiff’s case to Mr Botha and requested Mr Botha to see if he would be able to convince the first respondent to enforce compliance of the recommendations by the third respondents. Mr Botha made an undertaking stating that he would see what he could do in that regard but Ms Kotze never heard from him regarding the plaintiff’s

case.

[22] The applicant has approached this Court as a last resort after there was neither compliance with the order by the third respondent or assistance from the first respondent to enforce compliance with its order made against the third respondent. It is clear that the conduct of the first respondent in this matter abetted the recalcitrant non-compliance

with the recommendations by MIOSA.

[23] The conduct of the third respondents will be dealt with in determination of costs with regards to their non-compliance with the recommendations that was issued by MIOSA.

APPLICATION OF THE LAW TO THE PLAINTIFF’S CASE

[24] The CPA was enacted as legislation that provides an extensive framework for consumer protection which aims to develop, enhance and protect the rights of consumers and to eliminate unethical suppliers and improper business practices. Certain areas of the common law regarding consumer rights have been codified by the CPA and certain unfair business practices that were previously unregulated are now governed by the CPA. The CPA has a wide field of application. It applies to every transaction occurring within South Africa for the supply of goods or services or the promotion of goods or services and the goods or services themselves, unless the transaction is exempted from the application of the CPA. The CPA is applicable in the matter that is before court as a redress mechanism for the consumer as the applicant in this case.

[25] The aim of the act of the act is to promote a fair, accessible and sustainable marketplace for consumers products and services and for that purpose to establish national norms and standards relating to consumer protection, to provide for improved standards of consumer information, to prohibit certain unfair marketing and business practices, to promote

responsible consumer behaviour, to promote a consistent legislative and enforcement framework relating to consumer transactions and agreements, to establish the National Consumer Commission.

[26] The National Consumer Commission (NCC) (the first respondent) is responsible for carrying

out the functions and exercising the powers assigned to it by or in terms of the Act, any other national legislation, section 92 (1) or by the Minister as envisaged at section 72 (2) (a) of the Act and must do so in accordance with the values and principles mentioned in section 195 of the Constitution (the basic values and principles governing public administration). As an organ of state, it is responsible to the Minister see Memorandum on the objects of the Consumer Protection Bill, 2008. It is a juristic person and has jurisdiction throughout the Republic.

[27] On the enforcement function of the NCC, any of the persons listed in section 4(1) (a) – (e) (‘a listed person’) may, in the manner provided for in the CPA, approach a court, the National Consumer Tribunal (NCT) or the NCC alleging that a consumer’s rights in terms of the Act have been infringed, impaired or threatened, or that prohibited conduct has occurred or is occurring. The NCC’s enforcement functions are listed in section 99(b) and (d)–(i). The enumeration of functions in section 99 essentially comprises a summary of the NCC’s functions. As an administrative agency, the NCC is primarily an investigative and enforcement body. It is responsible for enforcing the Act by:

28.1 Initiating see section 71(2) or receiving section 71(1) complaints concerning alleged prohibited conduct or offences, and dealing with those complaints in accordance with Part B of Chapter 3 (sections 72–75);

28.2 referring complaints for dispute resolution section 72(1) (b);

28.3 referring complaints to another regulatory authority section 72 (1) (c);

28.4 investigating and evaluating alleged prohibited conduct and offences section 99 (d) and complaints section 72 (1)(d);

28.5 conducting interrogations section 102 and searches section 103-105 of the Act;

28.6 issuing and enforcing compliance notices section 99(e); 73 (1) (c) 9(iv);

28.7 negotiating and concluding undertakings and consent orders contemplated in sections 73(1)(c)(ii) and 74(1);

28.8 appearing before the NCT as permitted or required in terms of the provisions of section 99(h);

28.9 referring alleged offences in terms of the Act to the National

Prosecuting Authority;

28.10 proposing draft consent orders in terms of section 74 section 73 (1) (c)(ii) or

28.11 making referrals to the NCT section 73(2) (b) or to the consumer court of the province in which the supplier has its principal place of business in the Republic section 73(2) (a) . The NCC may only refer a matter to the consumer court if there is a consumer court in that province and it believes that the issues raised by the complaint can be dealt with expeditiously and fully by such referral section 73(2) (a) (i)-(ii) of the Act.

[28] The aim of the CPA is to protect consumers such as the plaintiff from exploitation and abuse in the marketplace, it provides consumers with the Bill of Rights as set out in its preamble. The CPA will not be effective and will be rendered useless unless there is a mechanism of enforcement and affordable for consumers in the pursuit of enforcement of their rights.

[29] It is important to note the preamble of the Act that state that the people of South Africa

recognize; that apartheid and discriminatory laws of the past have burdened the nation with unacceptably high levels of poverty,

illiteracy and other forms of social and economic inequality and that it is necessary to develop and employ innovative means to:

30.1 fulfil the rights of historically disadvantaged persons and promote their participation as consumers;

30.2 protects the interests of all consumers, ensure accessible, transparent and the marketplace; and efficient redress for consumers who are subjected to abuse or exploitation in;

30.2.1 to give effect to internationally recognized customers’ rights;

30.2.2 that recent and emerging technological changes, trading methods, patterns and

agreements have brought, and will continue to bring, new benefits, opportunities and challenges to the market for consumer goods and services within South Africa and that it is desirable to promote an economic environment that supports and strengthens a culture of consumer rights and responsibilities, business innovation and enhanced performance.

[30] For the reasons set out above, and to give effect to the international law obligations of:

31.1 promote and protect the economic interest of consumers;

31.2 improve access to, and the quality of, information that is necessary so that

consumers are able to make informed choices according to their individual wishes and needs;

31.3 protect consumers from hazards to their well-being and safety;

31.4 develop effective means of redress for consumers;

31.5 promote and provide for consumer education, including education concerning the social and economic effects of consumer choices;

31.6 facilitate the freedom of consumers to associate and form groups to advocate and promote common interest and

31.7 promote consumer participation in decision-making processes concerning the marketplace and interest of consumers.

[31] In order to arrive to the correct interpretation of any legislation the correct tools of interpretation have to be engaged. In the case of the CPA both the purposive and literal theories of interpretation are applicable. In terms of the purposive theory, the focus is not solely on the literal meaning of words, there is a requirement that the interpreter must move beyond the manifested intention of the legislation. Devenish Interpretation of Statutes at 36. According to the purposive

methodology, the interpreter has to endeavor to infer the design or purpose which lies behind the legislation. In order to do so, the interpreter has to make use of an unqualified contextual approach, which allows an unconditional examination of all internal and external sources.

[32] S v Mhlungu and Others [1995] ZACC 4; 1995 (3) SA 867 (CC) at 916, where Sachs J in quoting Lord Denning stated that ‘... Judges do not go by the literal meaning of the words or by the grammatical structure of the sentence. They go by the design or purpose which lies behind it. When they come upon a situation which is to their minds within the spirit – but not the letter – of the legislation, they solve the problem by looking at the design and purpose of the legislature at the effect it was sought to achieve. They then interpret the legislation so as to produce the desired effect. This means that they fill in the gaps, quite unashamedly, without hesitation. They ask simply: what is the sensible way of dealing with this situation so as to give effect to the presumed purpose of the legislation

[33] In this matter the court is tasked with the same responsibility as in the Mhlungu and others matter and the court is inclined to follow the purpose and the intention of the legislators of the CPA. It is important to note that the CPA in its preamble seeks to ensure that consumers have access to fast, effective and economic redress for disputes. Paleker 2003 ADR Bulletin 48 set out the reason that the purpose of the CPA is to augment high litigation costs that is also time consuming. It is clear that this is precisely the case in this matter as the launch of the matter is from 2012 some nine (9) years ago to the hearing date of this matter in court on the 13 May 2021.

[34] The aim of the CPA is to provide consumers will a less costly and less cumbersome avenue for redress and, in doing so, the CPA empowers the consumers to enforce their rights. Christie and Bradfield at Law of Contract 22 correctly opine that “the real value in legislation lies with the mechanisms it introduces for the relatively more accessible and informal resolution of consumer disputes.”

[35] When purchasing a product as the applicant did with the purchase of a GMW Steed 5 2.5 TCI 4 x 4 P/U/S motor vehicle with engine number 1109852951 on the 9 February 2012 from the third respondent. The applicant as a consumer has fundamental rights that are protected in the Act. The Act is concerned primarily with the social and economic welfare of consumers in a marked-based society and with the realization and enjoyment of consumer rights generally.

[36] In dealings with consumers in the ordinary course and scope of business, a person must not engage in any conduct contrary to, or calculated to frustrate or defeat the purpose of and the policy of the Act as envisaged in Section 4(5) (a) of the Act that state ‘(5) In any dealings with a consumer in the ordinary course of business, a person must not: (a) engage in any conduct contrary to, or calculated to frustrate or defeat the purposes and policy of this Act;’

[37] The provisions as cited at paragraph 26 above are clear and it is thus clear that as stated they place into question the conduct of the third respondent after its failure to comply with the recommendations of the 30 June 2015 granted by the Motor Industry Ombudsman of South Africa (MIOSA) as referred by the First Respondent.

[38] The terms of the recommendations were clear that the matter should be resolved in terms of Section 56 of the CPA, read together with Section 20 of the Act. In terms of the order the third respondent should have refunded

the purchase price to the applicant less any amounts necessary to render the vehicle for re-stocking and the costs of usage thereof.

There was non- compliance with the recommendations issued against the third respondents. There are no reasons advanced on papers before Court why there was no compliance and the only reasonable inference to be drawn from the conduct of the third respondent is that it is contemptuous disregard of the recommendations and such conduct is tantamount to prohibited conduct as envisaged in the CPA.

[39] The applicant made attempts to escalate, through a request for a compliance order to be issued by the first respondent in terms of the provisions of Section 100 of the CPA. Despite the necessary being made on the 6 June 2016 by the attorneys of the plaintiff, the request seem to have not reached the offices of the first respondent after a series of emails and telephonic calls. It is clear from the papers that the office of the first respondent was either complicit and or negligent in failure to attend the enquiries of the applicant in efforts to enforce compliance with the recommendations as issued by MIOSA.

[40] The National Consumer Commission (NCC) the first respondent in this case has the statutory

function and exercise its powers in terms of the CPA, any other legislation as envisaged in terms of Section 92(1) or by the Minister

see section 71(2) (a) of the Act and must do so in accordance with the values and principles in section 195 of the Constitution which are basic values and principles governing public administration; see section 85 (2) (c) (ii) of the CPA. The question at the heart of this matter is whether the first and second respondents complied with the statutory mandate in terms of the CPA.

[41] The short answer is no and if there was compliance the plaintiff would not be in court seeking orders that they seek since the commencement of litigation proceedings against the respondents. There is a clear concession that the first and second respondents have not concluded its investigation into the complaint without a substantive reason provided as to why such investigations are dragging for years with no end in sight.

[42] It is trite that the enforcement notices as envisaged in the provisions of sections 99 and 100 are meant to facilitate the promotion of informal resolution of dispute and enable the Commission to monitor the consumer market to ensure that prohibited conduct are prevented. It is further stated by the first and second respondents that ideally enforcement notices are used where investigations have been completed or voluntary compliance by is most likely.

[43] The position of the first respondent as stated in paragraph thirty-two above is a clear reason why the plaintiff was being sent from pillar to post in attempts to seek enforcement notice against the third respondent. The conduct of the first respondent with regard to the interpretation and application of enforcements provision is counter-intuitive and against the preamble of the Act. The Act seeks a speedy resolutions of disputes in the interests of consumers and not to conduct non-stop investigations while not issuing compliance notices to the parties that are in clear breach such as the third respondent.

[44] The National Consumer Tribunal has stated that the purpose of a compliance notice is to

ensure that a party who is not complying with the Act, is informed of its non-compliance and it is given an opportunity to align its conduct and ensure that in future it does comply with the Act see Murray, Cloete et al; Auction Alliance and CJ Digital SMS Marketing (‘a second chance for a transgressor to ensure that it brings its conduct within the ambit of the Act). See also Clientele General Insurance Limited v The National Consumer Commission NCT/ 4671/2012/60(3) at paras 75-76.

LATENT DEFECTS

[45] According to section 53 of the Act –

(a) A “defect” is:

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

(ii) any characteristics of goods and components that renders the goods or components less useful,

practicable or safe than persons would generally be entitled to expect in the circumstances;

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

(c) “hazard” means a characteristic that –

(i) has been identified as, or declared to be a hazard in terms of other law; or

(ii) presents a significant risk of personal injury to any person or damage to property when the goods

are utilised; and

(d) “unsafe” means that, due to a characteristic, failure, defect or hazard, particular goods present an extreme risk of personal injury or property damage to the consumer or to other persons.’

[46] Section 55(2) of the Act provides that all goods must be reasonably suitable for the purposes

for which they are generally intended, of good quality, in good working order and free of any (not only material) defects. The goods must be useable and durable for a reasonable period of time, having regard to the use to which they would normally be put and to all the surrounding circumstances of their supply. When a latent defect is present, it means that the product lacks the quality promised in terms of the sale agreement. The consumer then has the choice of a refund, replacement or repair of the goods in terms of section 56. This can in turn also be regarded as an implied warranty.

[47] The applicant stated in the particulars of claim that the third respondents attempted to rectify the mechanical problems and on the last attempt, the applicant was informed that the vehicle will not be handed over unless she signed acknowledgment that the vehicle was repaired to her satisfaction. Applicant rightfully refused to do so as she did not have the opportunity to test the vehicle subsequent to the repairs and the vehicle was retained by the third respondent who is still in the possession of the vehicle. It is clear that the attempts to solve the mechanical problems were unsuccessful on the applicant’s version.

[48] In terms of section 56(1) of the Act, any transaction or agreement is subject to an implied

warranty by the producer, retailer or supplier, to the effect that any products produced, supplied or distributed should comply with the quality requirements and standards. This is however not applicable if the consumer was informed of the specific condition of the products and the consumer expressly accepted the product on that basis or knowingly acted in a way compatible with accepting the product in that condition.

[49] A consumer may return the product to the supplier within six months, without penalty, at the supplier’s risk and expense. If the product is returned, a supplier must, at the direction of the consumer, either repair or replace the defective products, or refund the purchase price, provided that if a supplier repairs the returned product

unsuccessfully, the supplier is obliged, within three months thereafter to repair, replace or refund the consumer the purchase

price of the returned product.

[50] In Vousvoukis v Queen Ace CC trading as Ace Motors 2016 JOL 35677 (ECG) the plaintiff instituted a claim for a refund as a result of a latent defect against the defendant in terms of section 56 of the Act. In brief, in September 2011, the plaintiff purchased a used motor vehicle from the defendant. Three months after the plaintiff took possession, the vehicle experienced mechanical problems. It was established that the engine had been destroyed through no fault of the plaintiff. The defendant replaced the engine at its own cost, but six months later, that engine also experienced mechanical problems.

[51] In the Vousvoukis, the plaintiff claimed a refund of the purchase price. Alternatively, he relied on the provisions of the Act in that the supply of the vehicle to him contravened the implied warranty of quality contained in section 55(2)(b) and (c) of the Act. On that basis, he claimed restitution in terms of section 56(2) of the Act. In the further alternative, the plaintiff alleged that the second engine installed by defendant was, unbeknown to plaintiff, latently defective at the time of its installation, and he claimed restitution flowing from the actio redhibitoria. By the time the matter went to trial, it had been established that the cause of the vehicle’s mechanical problems was damage to the oil pump. What had caused the damage to the teeth of the oil pump drive gear was in contention between the parties.

[52] The court held that the plaintiff was a credible witness who made a favourable impression

upon the court and based on the evidence before it, the court found that the only inference to be drawn was that the damage to the vehicle must have been occasioned by an object present inside the engine itself. Once that was established as a fact, then the only further plausible inference to be drawn was that such object must have been present inside the engine at the time of its installation into the vehicle.

[53] Similarly, in this case as in the matter of Vousvoukis the vehicle showed serious defects right from the beginning, evidenced by the fact that it leaked oil; left a heavy trail of smoke and required amongst others, the replacement of its valve chamber cover bolt cap on the very first it was brought in. The oil leak remained a problem; and in time the boost pipe burst and the vehicle had no power, and the turbo engine was noisy. As a result, the third respondent had to replace the turbo on the 1 August 2012. Even then, the turbo remained defective; the vehicle kept vibrating and exhibiting great noise. By September 2012, the pick-up cracked and the mounting for the body of the pick-up teared loose. By November 2012, the turbo engine still exhibited an oil leak. It is clear the vehicle suffered serious mechanical faults.

[54] The first respondent is required to exercise its functions in accordance with the values and principles enshrined in the Constitution specifically in Section 195 the basic values and principles governing public administration

include: the promotion of high standards of professional ethics; the efficient, economic and effective use of resources; that services

must be promoted impartially, fairly, equitably and without bias; and that public administration must be accountable.

[55] The tardiness in the resolution of the applicant’s case is clearly against the letter and the spirit of the provisions of section 195 of the Constitution. Although there were submissions made that the report

has been completed and furnished to the applicant, such doesn’t redeem the conduct of the first respondent, their failure to timeously conclude the case and referring the case to relevant authorities for concomitant action is to be frowned upon. The first respondent failed in its monitoring function, it is obliged to monitor the consumer market and ensure that prohibited conduct such as the conduct of the third respondent is prevented, detected and prosecuted.

[56] There was an argument advance by the first and second respondent counsel that there is

compliance in terms of the report as the investigations as envisaged by the Act was conducted and the report was furnished belatedly. It is common cause that further indulgences were sought by the first and second respondent in order to conclude the investigations and refer the matter to the tribunal. The conduct of the first and second respondents in handling this matter defeats the purposes of the Act and is thus counter-intuitive as it doesn’t afford the plaintiff a speedy resolution as guaranteed in the provisions of the Act.

[57] 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] ZAFSCH 105 (9 June 2016); [2016] 3 All SA 794 (FB) at par 2 of the judgment states as follows: “if anyone believe 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 judgement will change that belief.”

[58] The sentiments in the Imperial Group matter are clear as broad day light on the facts of the current case and as set out and clearly demonstrated, it is not the intention of the legislature that the consumers continue to perish while there is a clear failure to resolve their disputes with suppliers in a fair, inexpensive and speedy manner as envisaged in the preamble of the CPA read with the provisions of Section 195 of the Constitution.

COSTS

[59] It is trite law that costs follow the results, however in this matter the third respondents seek a cost order on the basis of their allegation that the plaintiff dragged them to the matter, and later amended prayers sought against them.

[60] Intercontinental Exports (Pty) Ltd v Fowles 1999 (2) SA 1045 (SCA) at 1055 F-G correctly states “It is so that when awarding costs, a court has a discretion which must be exercised judicially after due consideration of salient facts of each case at that moment. The decision a court takes is a matter of fairness to both sides.”

[61] The court in this matter having exercised its discretion as set out in the Intercontinental

Export as cited in paragraph 49 above. It is clear that there was non-compliance with the recommendations of MIOSA as issued against

the third respondents after the referral of the dispute between the applicant and the third respondent by the first respondent. It is an undeniable fact that the conduct of the first and second respondent has aided the non-compliance of the third respondent in this matter and such conduct is not in line with the spirit and purpose of the CPA.

[62] The third respondent’s conduct may not be rewarded by any cost order given their conduct in this matter, both in relation to the history of the dispute and their opportunistic stance adopted. The amendment of prayers in the notice of motion to aligned them with compliance of the CPA doesn’t not ameliorate the conduct of the third respondents in the entire matter. In case the third respondent willfully complied with the recommendations by MIOSA this matter wouldn’t have been before court.

ORDER

[63] In the circumstances the following order is made:

64.1 The first and second respondents are ordered to comply with its statutory mandate to enforce the provisions of the Consumer Protection Act 68 of 2008 (“the CPA”) and to ensure efficient redress of the applicant’s complaint which she lodged with the first respondent on the 12 November 2013, and followed up by her request on 6 June 2016 for the issue of a compliance notice by the first respondent pursuant to the order received from the Motor Industry Ombudsman dated 30 June 2015 by taking one or more of the following steps:

64.1.1 investigating and finally dealing with the applicant’s

aforesaid complaint in an efficient and effective manner as envisaged in terms of the provisions of Part B of Chapter 3 of the CPA;

64.1.2 investigating, considering and evaluating the third respondent’s

alleged prohibited conduct under sections 73 (1) (c) (iv), 99 (d) and or 100(2) of the Consumer Protection Act in circumstances where the third respondent:

64.1.2.1 contravened the provisions of section 56(2) of the CPA by refusing to: (a) replace the defective GWM Steed vehicle; or (b) refund to the applicant the purchase price paid by her for the goods in the sum of 209, 780.00;

64.1.2.2 ignored and failed to comply with the order of the Motor Industry Ombudsman dated 30 June 2015;

64.1.2.3 ignored and consequently refused to carry out the actions imposed on it by the said ombudsman.

64.1.3 Issuing and enforcing compliance notices against the third respondents in terms of sections 73(1) (c) (iv), 99 (e) and 100 of the CPA after due investigations and notice to the third respondent in terms of section 100(2) of the CPA;

64.1.4 Referring the matter to the National Consumer Tribunal, and

effectively dealing with the matter before the National Consumer Tribunal, in terms of sections 73(2) and 99(h) of the CPA;

64.1.5 The respondents are ordered to file a report in writing on action

taken by them in order to give effect to prayer 1, within 30 calendar days from the date of this order. Further that a copy of the report be furnished to all the parties in this matter.

64.1.6 Failure by the first and second respondent to enforce compliance by the third with the recommendations issued by MIOSA within 30 calendar days from the date of this order, the third respondent is ordered to comply with the terms of the directives or recommendation issued by Motor Industry Ombudsman of South Africa issued on the 30 June 2015 in respect of complaint filed with the first respondent against the third respondent by the applicant, and which was referred to the ombudsman for resolution in terms of Act 68 0f 2008.

64.2 The respondents are ordered, jointly and severally to pay the costs of this application.

RR NTHAMBELENI

ACTING JUDGE OF THE HIGH

COURT, GAUTENG DIVISION,

PRETORIA

Appearances

FOR THE APPLICANT: AM HEYSTEK SC

INSTRUCTED BY: JAPIE VAN ZYL ATTORNEYS

FOR THE 1ST AND SECOND RESPONDENT: OUPA MODISA SC

INSTRUCTED BY: LEKHU PILSON ATTORNEYS

FOR THE THIRD RESPONDENT: S. GROBLER SC

INSTRUCTED BY: A VAN JAARSVELD