Imperial Nissan Menlyn a division of the Imperial Group (Pty) Ltd v National Consumer Commission (NCT/4733/2012/101(1) (P)) [2013] ZANCT 26 (10 September 2013)

IN THE NATIONAL CONSUMER TRIBUNAL

HELD AT CENTURION

Case No: NCT/4733/2012/101(1) (P)

DATE:10/09/2013

In the matter between:

IMPERIAL NISSAN MENLYN

A DIVISION OF THE IMPERIAL GROUP (PTY) LTD................................................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

JUDGEMENT AND REASONS

INTRODUCTION

1. The Applicant is Imperial Nissan, Menlyn, a division of the Imperial Group (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 68 of 2008, (“CPA”).

3. At the hearing of this matter, the Applicant was represented by Pieter Hendrik Jacobs, a legal director in the employ of the

Applicant.

4. The Respondent did not attend the hearing nor did the Respondent respond to the application within the time permitted. The Applicant filed an application for a default order in terms of Rule 25 (2) of the National Consumer Tribunal Regulations, 2007. Hence the matter is decided on a default basis.

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 National Consumer Tribunal (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 judgement 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. As the Respondent did not lodge any answering affidavit or appear at the hearing, the Tribunal considered the information contained in the Respondent’s compliance notice and the Applicant’s affidavits to assess the facts of the matter. Only those aspects relevant to the judgement will be mentioned.

9. During December 2010, Mr. Nadraj Maduray (hereinafter referred to as “the complainant”), expressed interest in purchasing a 2008 model Nissan Navara vehicle from the Applicant. The complainant however wanted certain faults with the vehicle repaired before he would purchase it. The Applicant undertook to ensure that the vehicle was repaired.

10. On 14 January 2011 the complainant sent an e-mail to the Applicant alleging that his vehicle had not been delivered to him yet and he wanted to cancel the agreement. The complainant however still took delivery of the vehicle on 21 January 2011. After taking delivery the complainant noticed certain faults on the vehicle such as scratch marks on the body panels, engine noise, brake noise, window winding mechanism faults etc. The complainant sent an e-mail to the Applicant on 24 January 2011 requesting that the faults be repaired.

11. It appears that a number of exchanges took place between the complainant and the Applicant thereafter but the complainant remained

dissatisfied with the vehicle.

12. On 8 June 2011 the complainant approached the Retail Motor Industry Organisation to resolve the dispute. This resulted in a mediation agreement being reached between the parties on 15 August 2011. The mediation agreement, signed by both the complainant and a representative from the Applicant, stated that the Applicant would repair the faults detailed in the mediation agreement.

13. The complainant also approached the NCC and lodged a complaint against the Applicant on 28 June 2011.

14. The compliance notice issued by the NCC states that the complaint was forwarded to the Applicant by the Respondent on 4 July 2011 and that the Applicant was granted an opportunity to respond within 7 working days. The Applicant responded to the complaint on the 16th of August 2011 and the matter was later set down for conciliation on 3 February 2012.

15. The compliance notice states that at the conciliation the Applicant offered to buy the vehicle back for R150 000.00 (One Hundred and Fifty Thousand Rands) alternatively that the consumer returns the vehicle for diagnosis and repairs, which offer was rejected by the complainant.

16. A compliance notice was issued by the Respondent on 30 March 2012 and served on Imperial Nissan on 11 May 2012.

17. The compliance notice stated that the Applicant had contravened sections 55 (2) (a) (b) (c) and Sections 56 2 (a) (b) of the CPA. The notice stated that the “…respondent must cancel the contract and refunds (sic) the complainant.”

18. The Applicant subsequently lodged this application for a review and cancellation of the compliance notice on 1 June 2012.

APPLICANT’S SUBMISSIONS

19. The Applicant submits that the sale of the vehicle was completed prior to the date of the general effective date of the CPA and as such the CPA does not apply.

20. The Respondent failed to conduct an investigation as required by the Act.

21. The Respondent erred in ordering the Applicant to terminate the sale agreement.

22. The Respondent erred in deeming the vehicle to be defective as required by section 53 of the CPA.

23. The Respondent failed to allege or point out a breach in the repealed legislation in relation to any matter forming the subject of the complaint or compliance notice which empowers the Respondent to exercise the powers provided for in terms of Schedule2, Item 8(1), of the Act.

24. There were no reasonable grounds to uphold the compliance notice and as such the Applicant submits that the Compliance notice must be set aside in toto.

25. The Respondent failed or neglected to respond to the application and as such the Compliance notice must be set aside on a default basis.

RESPONDENT’S SUBMISSIONS

26. The Respondent did not oppose the application or appear at the hearing and the Applicant filed a Rule 25(2) default application.

27. Rule 13(5) 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”

28. 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

29. While the Tribunal takes note of the circumstances surrounding the purchase of the vehicle the first aspect which must be considered is whether the CPA is in fact applicable to this matter. The following aspect therefore needs to be considered:

29.1 Whether the CPA is in fact applicable, 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

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

31. The sale and delivery of the vehicle to the complainant took place on 24 January 2011.

32. The compliance notice issued by the Respondent relates directly to the circumstances surrounding the sale of the vehicle on 24 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.

33. 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 delivered before 31 March 2011 and the CPA is therefore not retrospectively applicable in this matter.

34. The issuing of a compliance notice relating to this transaction therefore amounts to a retrospective application of the CPA. The Tribunal has handed down a number of judgments1 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 a compliance notice retrospectively in this respect.

35. Considering that the compliance notice fails to clear the very first hurdle relating to its lawfulness it is not necessary to evaluate any further aspects relating to the Applicant’s submissions.

36. 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.

Applicability of sections 55 and 56 of the CPA

37. 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.

38. In the matter of Accordian Investments (Pty) Ltd v NCC2, 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.

39. The judgment 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.

40. 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.

ORDER

Accordingly, the Tribunal makes the following order:

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.

1Peugeot 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)

2NCT 4061/101(1)(P)CPA