Makkink v Accordian Investments (Pty) Ltd and Another (NCT/8473/2013/75(1)) [2013] ZANCT 59 (5 November 2013)

SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in compliance with the law and SAFLII Policy

IN THE NATIONAL CONSUMER TRIBUNAL

HELD IN CENTURION

Case number: NCT/8473/2013/75(1)

In the matter between:

WILLEM HENDRIK WESLEY MAKKINK

APPLICANT

and

ACCORDIAN INVESTMENTS (PTY) LTD FIRST RESPONDENT

NATIONAL CONSUMER COMMISSION SECOND RESPONDENT

Coram:

Ms D Terblanche – Presiding member

Mr J Simpson – Member

Ms H Devraj – Member

Date of Hearing: 5 November 2013

JUDGMENT

APPLICANT

1. The Applicant in this matter is Willem Hendrik Wesley Makkink, an adult person residing in P [….] (hereinafter referred to as “the Applicant”).

2. The Applicant deposed to his own founding affidavit but mandated Mr. MJ Browne to act on his behalf in this matter.

RESPONDENTS

3. The Applicant cited two Respondents:

3.1 The First Respondent is Accordian Investments (Pty) Ltd, a company duly registered in terms of the Company Laws of the Republic of South Africa (“the First Respondent”).

3.2 The First Respondent did not oppose the application.

3.3 The Second Respondent is the National Consumer Commission, an organ of state within the public administration, but as an institution outside the public service, established in terms of Section 85 of the Consumer Protection Act 68 of 2008 (“the CPA” or “the Act”) (“the Second Respondent”).

3.4 The Second Respondent did not oppose the application.

BACKGROUND

4. This application is brought in terms of Section 75(1)(b) of the Consumer Protection Act, Act 68 of 2008 (“the Act” or “The CPA”) for leave to refer a matter non-referred by the NCC, directly to the National Consumer Tribunal (the “Tribunal”), with the leave of the Tribunal.

5. The Notice of non-referral in terms of section 75(1) of the CPA was issued to the Applicant by the Second Respondent on 26 November 2012.

6. The main application was filed with the Tribunal on 10 April 2013.

7. The Applicant applied to the Tribunal for a default order in terms of Rule 25(1) of the Rules for the Rules for the Conduct of Matters

before the National Consumer Tribunal (the Rules) as neither of the Respondents opposed the Application.

8. The Applicant seeks the following relief from the Tribunal:

8.1 Compelling the First Respondent to:

8.1.1 Scrap the vehicle so that no other member of the public can ever suffer ownership thereof;

8.1.2 Repay the full purchase price with interest at a rate to be determined by the Tribunal;

8.1.3 Collect the vehicle at own expense from where it has been towed to storage;

8.1.4 Pay for and provide all government required documentation to have the vehicle removed from the Applicant’s name; and

8.1.5 Comply with a set time limit with penalties or compensation for non-compliance with such order.

8.2 Alternatively, that the First Respondent repairs this vehicle with the following stipulations:

8.2.1 New or reconditioned engine;

8.2.2 New radiator;

8.2.3 New starter motor;

8.2.4 New clutch;

8.2.5 New electronic window mechanisms;

8.2.6 New or repaired front bumper;

8.2.7 Colour match passenger front door to vehicle;

8.2.8 That the First Respondent pays when the Applicant takes the vehicle to DEKRA in order to obtain a reliable report after repairs;

8.2.9 Correct any additional faults identified by DEKRA to the work list above;

8.2.10 Pay for and perform all government requirements to register the new engine serial number to the vehicle and to scrap the removed engine;

8.2.11 Collect the vehicle at own expense from where it has been towed to for storage;

8.2.12 Provide a service report of all work performed on the vehicle with proof of new components used;

8.2.13 Provide the standard warranty for replaced/repaired components;

8.2.14 Provide a comprehensively insured (including any excess) courtesy vehicle delivered to Mrs Botha for use until all stipulations have been met.

9. Applicant submitted that –

9.1 He purchased a 2006 Tata Indica 1.4 LX Hatch, on 20 July 2010 from Tata Gezina (“the dealership”) for use by his daughter, Mrs AA Botha (“Mrs Botha”).

9.2 Problems with this vehicle ensued practically before day one. When the Applicant’s daughter took delivery of the vehicle on 27 July 2010 certain identified pre-sale issues had not been attended to, despite undertakings to that effect.

9.3 Applicant sufferered through numerous problems, breakdowns and repairs of this vehicle from date of purchase to approximately April 2013. At the date of the hearing, 5 November 2013, the vehicle is not in use and being stored whilst the dispute between Applicant and First Respondent remains unresolved.

9.4 The Applicant approached various organisations to assist him with his complaints against the First Respondent, amongst them the Motor Industry Ombudsman (MIO), the Retail Motor Industry Organisation (RMIO) and the Gauteng Consumer Affairs Court.

9.5 Applicant lodged his complaint with the Second Respondent on 12 November 2011. A conciliation meeting was facilliated by the Second Respondent on 14 February 2012. The Second Respondent issued a conciliation notice on 07 February 2012. On the date of the conciliation meeting the parties reached a settlement in the following terms:

“The parties have agreed as follows:

The Respondent will take the car to the AA for diagnose (sic) of all faults on the motor vehicle.

The Respondent will fix the M/vehicle as per report from AA then the car will be taken back again to verify that all faults have been fixed.

The Respondent will also polish the paint that is peeling off on the motor vehicles (sic) and also provide 4 new tyres.

Respondent will furnish the complainant with a service book.

The complainant will be responsible for the payment of the First Report from AA and Respondent will pay for the Second Report.

On the 5 March 2012, the motor vehicle will be taken for its last assessment at AA to which after (sic) the complainant will take possession of the car.”

9.6 Almost immediately after the settlement agreement was entered into there was a disagreement between the parties regarding the terms of the settlement agreement, specifically that they were not accurately and / or comprehensively captured.

9.7 First Respondent failed to comply with the settlement agreement and Mr Browne, on behalf of the Applicant, approached the Second Respondent to issue a notice of non-referral.

9.8 The Second Respondent proceeded to issue a notice of non-referral on 26 November 2012 stating that the First Respondent did not comply with the settlement agreement and that the Second Respondent has no jurisdiction over the matter as the vehicle was purchased before the general effective date of the CPA.

FACTUAL POSITION

10. As the Respondents did not file answering affidavits in response to the application launched by the Applicant, Applicant’s version of events stands uncontroverted and deemed admitted in terms of Rule 13 of the Rules of Proceedings of Matters before the Tribunal (“the Rules”).

11. Rule 13(5) provides that:

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

12. Two representatives from the First Respondent appeared at the hearing. They did not have a mandate from First Respondent to represent it at the hearing. No answering affidavits had been lodged for the First Respondent either. The representatives did however express an interest in trying to resolve the matter with the Applicant. The matter was stood down on a number of occasions during the day to allow the parties to reach a settlement but they were unable to do so. The hearing thus continued with the Applicant addressing the Tribunal.

ISSUES TO BE DETERMINED

LATE FILING

13. Whether the Tribunal can condone the late filing of the application without the Applicant applying for condonation and accordingly whether the Tribunal is appropriately charged with the matter.

APPLICATION OF THE CONSUMER PROTECTION ACT, ACT 68 OF 2011

14. The Applicant brought an application for default judgment in terms of Rule 25(1) of the Rules of the Conduct of Matters before the National Consumer Tribunal on 04 June 2013, subsequent to the Respondents’

failure to oppose his main application for leave to refer a matter non–referred by the second Respondent directly to the Tribunal.

15. In order to grant an order by default the Tribunal has to determine whether there is merits to the Applicant’s matter in terms of the Consumer Protection Act –

0.79in; text-indent: -0.39in; line-height: 150%"> 15.2 The Tribunal must then, if such leave is granted, conduct a hearing into the matter as provided for in section 75(4)(a).

1.38in; text-indent: -0.59in; line-height: 150%"> 15.2.1 Key to this determination is whether the Consumer Protection Act is applicable to this specific matter? Firstly, to the sale of the vehicle, and secondly, to the services rendered?

15.2.2 Can the First Respondent be held liable for the alleged defects? Firstly in respect of the sale of the vehicle and secondly for the services rendered?

15.2.3 Whether the Applicant has proved a contravention under the CPA; and whether he is entitled in law to the relief sought.

Applicable Provisions of the CPA

16. Section 75

Referral to Tribunal

(1) If the Commission issues a notice of non-referral in response to a complaint, other than on the grounds contemplated in section 116, the complainant concerned may refer the matter directly to –

(a) The consumer court, if any, in the province within which the complainant resides, or in which the respondent has its principle place of business in the Republic, subject to the provincial legislation governing the operation of that consumer court; or

(b) The Tribunal, with the leave of the Tribunal.

(4) The Tribunal-

(a) must conduct a hearing into any matter referred to it under this Chapter, in accordance with the requirements of this Act, and the applicable provisions of the National Credit Act pertaining to the proceedings of the Tribunal; and

(b) may make any applicable order contemplated in this Act or in section 150 or 151 of the National Credit Act, read with the changes required by the context.”

SUBMISSIONS BY THE APPLICANT

17. Applicant prepared a comprehensive document setting out his arguments and orally submitted them to the Tribunal. We do not intend dealing with each and every aspect canvassed in the above referred to document save for those that are directly relevant and merit consideration.

Late filing and non-application for condonation

18. Applicant submitted that he is a lay person and was not aware of the filing prescripts insofar as the time for lodging the application is concerned and that there was a delay occasioned due to the complaint having been lodged with the Gauteng Consumer Affairs Court.

Default judgment application

19. Applicant submitted that once he successfully filed his application, as he did when he fully filed in terms of the Rules on 10 April 2013, as evidenced by the notice of complete filing issued by the Tribunal, he crossed the bar to be granted a default judgment order.

Application of the CPA

20. Here the Applicant postulates two scenarios for the applicability of the CPA - one pertaining to the period pre-CPA general effective date and the other pertaining to the post-CPA effective date.

21. With regard to the pre-General Effective Date of the CPA, Applicant suggested that the CPA finds application through Item 8 of schedule 2 of the transitional provisions of the CPA.

21.1 In this regard he specifically referred the Tribunal to two applicable repealed laws namely the Harmful Business Practices Act, Act 71 of 1988 and the Trade Practices Act, Act 76 of 1976.

21.2 In support of this Applicant relies on articles published by Dr Jacolien Barnard on legal authority quoted namely “The influence of the Consumer Protection Act 68 of 2008 on the warranty against latent defects, voetstoots clauses and liability for damages”[1] and “The legal protection afforded to the consumer under current South African law with emphasis on the legal position in specific credit agreements contained in standard-form contracts”[2] as well as the judgement of the Gauteng Consumer Affairs Court in the matter of Fazlyn Salie v Birnam Business College[3] .

21.3 On the other hand he submitted that the matter falls to be determined under the CPA as repairs were still done to the vehicle after the general effective date of the CPA.

22. In respect of the post-General Effective Date of the CPA, Applicant relies on the settlement agreement he entered into with the first Respondent, facilitated by the Second Respondent on 14 February 2012.

22.1 Applicant submitted that this agreement established a new agreement. His complaint is based on the First Respondent’s non-compliance

with the settlement agreement.

22.2 The applicable sections of the CPA, according to Applicant, are sections 40(1), 41(1) – (3) and section 53(1)

Order sought

23. Applicant seeks the default order set out above and at the hearing also requested a costs order and an administrative penalty to be imposed on the First Respondent. In this regard Applicant focused on the “indignation” in dealing with the First Respondent, the first Respondent’s deceitful conduct – the unfair practice.

ANALYSIS OF THE LAW AND FACTS

Default judgment

24. In order for the Tribunal to grant a default order, it has to satisfy itself that all the requirements for a default application have properly been met in the proceedings as required by the Rules.

25. Rule 25(3) provides as follows:

“The Tribunal may make a default order-

(a) After it has considered or heard any necessary evidence;

(b) If it is satisfied that the application documents were adequately served.”

26. The test to be applied in order to determine whether or not a default order should be granted has been set out in several Tribunal

Judgments.

27. In the matter of Cars R Us v NCC[4] the Tribunal considered its mandate to grant such orders and held as follows:

“38. Rule 3(2)(c)(vi) of the Tribunal Rules provided that the Tribunal may consider applications for default judgment in terms of Rule 25.The said Rule 25(3) provided as follows:

“(3) The Tribunal may make a default order –

(a) After it has considered or heard any necessary evidence; and

(b) If it is satisfied that the application documents were adequately served.

This formulates the test for an application for default judgment before the Tribunal…”

28. The Aspect of Default Judgment was also discussed in the matter of ADT Security (Pty) Ltd v NCC[5]. In that matter the Tribunal held as follows:

“17. In order for the Tribunal to grant a default order, it has to satisfy itself that all the requirements for a default application have properly been met and sought in the proceedings as required by the Rules. The test to be applied in order to determine whether or not a default order may be applied for is that the Tribunal must firstly be satisfied that the application documents were properly served and further that “no response to the application was filed within the time stated in the application.”

29. The test for an application for default judgment therefore is that the Tribunal must firstly be satisfied that there is sufficient evidence in support of the application before it and that the application documents were adequately served. This refers to service of the main application on the Respondents.

30. There are sufficient facts before the Tribunal that the Applicant brought the default judgment application properly. Applicant served the main application properly and filed the application for default judgment, attaching to it all the documents filed in the main application, with the Tribunal in accordance with the Rules.

31. In the matter of CMH Alfa Westrand v NCC[6] the Tribunal however explained that the application for default judgment cannot be considered solely on the basis of the aforesaid test. In that matter the Tribunal held as follows:

“2.4 Again, the Tribunal has deliberated on the question of whether the default judgment should be granted or not as applied for. And in doing so, the Tribunal has combined the answer to this question with that of the merits of the case of the Applicant. This was in recognition of the fact that mere failure to oppose by a party does not necessarily make a case of an applicant automatically valid in law and in fact. The merits of the matter still had to be considered in the view of this Tribunal.”

32. The fact that the papers were filed and the matter was not opposed is however not the singular factor upon which default judgment may be awarded. The application should also be sustainable in law, more so before the Tribunal as it is required to be inquisitorial in its approach to the matters it hears.

33. The notice of non-referral was issued to the Applicant on 26 November 2012. The present application was filed with the Tribunal on 10 April 2013 and therefore outside of the prescribed timeframe of 20 business days from the date of issuance the notice of non-referral[7].

34. The late filing was canvassed with the Applicant at the hearing. Applicant explained that the matter was referred to the consumer

court in the interim but that he did not apply for condonation for the late filing of the application at all.

35. The Rules for the Conduct of Matters before the National Consumer Tribunal (hereinafter the Rules) provides for the Tribunal to condone non-compliance with its rules on application on good cause shown. This is provided for in Rule 34 of the Rules which provides that “(1)(a) A party may apply to the Tribunal in Form Ti.r34 for an order to … (a) condone late filing of a document or an application … (2) The Tribunal may grant the order on good cause shown.”

36. The Applicant did not bring a condonation application. The plain reading of the Rules do not sustain an interpretation allowing the Tribunal to entertain condonation out of its own accord without an application and a show of good cause. The Tribunal is accordingly not empowered to entertain this application.

37. In the spirit of the provisions of section 142 of the National Credit Act, Act 34 of 2005 (the NCA) which require of the Tribunal to be, amongst others, informal and accessible, the Tribunal did consider whether it could have granted Applicant the relief sought had he brought the application in time, alternatively had he brought an application for condonation and shown good cause.

38. To embark on this inquiry the Tribunal has to consider first whether it can grant Applicant ‘leave to refer’ in terms of section 75(1)(b) of the CPA which stipulates that the Applicant may, in the event of the issuing of a notice of non-referral by the NCC, refer the matter directly to the Tribunal, with the leave of the Tribunal. In the matter of Westinghouse Brake and Equipment (Pty) Ltd v Bilger Engineering (Pty) Ltd[8], the following was held:

"…that, if possible, a statutory provision must be construed in such a way that effect is given to every word or phrase in it.... The reason is, of course, that the lawgiver, it must be supposed, will choose its words carefully in order to express its intention correctly, and will therefore not use any words that are superfluous, 'meaningless or otherwise otiose "(per TROLLIP JA in S v Weinberg 1979 (3) SA 89 (A), at p 98 E - F).. [9]

39. The specific provisions of Section 75(1)(b) of the Act and the requirement of the granting of leave to refer contained therein must

be construed as a specific intention of the legislature. By including this requirement the legislature expressed its intention of a separate requirement namely that a Section 75(1)(b) referral cannot be adjudicated on without the applicant in a specific matter first having obtained leave from the Tribunal to make such a referral.

40. In determining whether the Applicant should be granted leave to refer the matter to the Tribunal, the Tribunal must consider the

requirements for the granting of “leave”. A similar application can be found in the High Court practice, where an applicant applies for leave to appeal a judgment. It was held in the Westinghouse Brake and Equipment (Pty) Ltd – matter, as cited above, that “in applications for leave to appeal properly brought before the appropriate court in terms of the old sec 20, read with sec 21 as it then was, the only relevant criteria were whether the applicant had reasonable prospects of success on appeal and whether or not the case was of substantial importance to the applicant or to both him and the respondent.”

41. The Tribunal will therefore, when considering whether to grant the Applicant leave to refer or not, use the same test as applied in the High Court for applications for “leave” and will therefore consider:

41.1 The Applicant’s reasonable prospects of success with the referral;

41.2 Whether the matter is of substantial importance to the Applicant or Respondent.

42. The Applicant’s prospects of success with the referral depend on whether the Tribunal is of the view that the Applicant is entitled to relief in terms of the Act. This aspect will be discussed in detail below where the application of the CPA to the Applicant’s

complaints is considered. On the second aspect, it suffices to state that taking into account the amount of time and effort the Applicant invested in prosecuting this matter, it is evidently of substantial importance to him.

43. The Second Respondent issued the notice of non-referral on the basis that the CPA is not applicable to the present matter. The Second

Respondent stated in such notice that: “We have noted that the sales (sic) transaction between you and the respondent was entered into on the 20th of July 2010 and delivery of the vehicle was issued to you (sic) on the 27th of July 2010. Both the dates of purchase and delivery predate the general effective date of the Consumer Protection Act, the FirstApril 2011. According to schedule 2 (section 121(3) item 3(1)(b) the Consumer Protection Act does not apply to any transaction concluded, or agreement entered into, before the general effective date. We regrettably have to issue a notice of non-referral to your complaint…”

44. With regard to the interpretation and legal conclusions drawn by the Applicant about the application of the CPA to the complaint

pre-dating the general effective date of the CPA –

44.1 The wording of the relevant provision reads, in respect of the application of the CPA as a result of the two repealed laws, that “ 8(1) Despite the repeal of the repealed laws, for a period of three years after the general effective date the Commission may exercise any power in terms of such repealed law to investigate any breach of that law that occurred during the period of three years immediately before the general effective date.”

44.2 In the ADT-Security matter[10] the Tribunal was also tasked with the question of applicability of repealed laws. The Tribunal, in that matter, referred to its previous judgments on this issue and held as follows:

“The interpretation of Schedule 2 Item 8 was dealt with fully by the Tribunal in the case of City of Johannesburg v NCC[11], a judgment handed down by this Tribunal in March 2012.

Equally so, the interpretation of Schedule 2 Item 8 (and how it applies to matters which arose prior to the general effective date of the CPA) has already been pronounced upon several times by the Tribunal and specifically in the above-mentioned City of Johannesburg-matter. This judgment is binding on the Respondent[12]. For the purpose of the current judgment at hand, the rest of the argument seeking to set aside the compliance notice becomes academic.

In order for the Respondent to rely on the continued application of repealed laws, it must show which law it is relying on, furthermore

demonstrate exactly the applicability to the situation and proof of the alleged contraventions to the extent that was required in terms of that law[13].

There is no evidence before the Tribunal that the Applicant contravened the provisions of any repealed law. The compliance notice furthermore does not set out in clear and unambiguous terms which sections of which repealed law has been contravened and to what extent."

44.3 Considering the submissions by the Applicant, the breach of the Harmful Business Practices Act as relied on by the Applicant is not supported by evidence demonstrating the applicability of such repealed laws to the present situation and by proof of the alleged contraventions of such repealed laws as required by such laws.[14]

44.4 It is the view of the Tribunal that those submissions cannot be upheld as no complaint had been laid in terms of those laws prior to their repeal.[15]

45. With regard to the interpretation and legal conclusions drawn by the Applicant about the application of the CPA to the settlement

agreement, submitted by the Applicant to be the ‘transaction’ as envisaged in the CPA, post-dating the general effective date of the CPA the following –

45.1 With regard to the application of the CPA subsequent to its general effective date, based on the breach of the settlement agreement

entered into between the parties, the view of the Tribunal is that a settlement agreement cannot be viewed as a ‘transaction’

as defined.

45.2 The dictionary meaning of settlement is “1 the action of settling. 2 an official agreement intended to settle a dispute. 3 a place where people establish a community. “[16] or “arrangement, conclusion, confirmation, establishment, working out”[17].

45.3 The settlement agreement is furthermore not a transaction as envisaged in the CPA as it was not entered into “.. in the ordinary course of business…” [18]. It is an action, intended to reach a specific outcome (to settle a dispute).

46. Had the CPA been applicable to the matter, it could have been argued that the standard of the goods did not meet the standards required by Section 55 and 56 of the CPA or that the services rendered did not comply with the provisions of Section 54 of the CPA.

47. As is stated above however, the transaction and many of the subsequent services rendered precedes the effective date of the Act.

48. With regard to the application of the CPA after the general effective date flowing from the settlement agreement, we find that the CPA does not apply as the settlement agreement is not a transaction as envisaged for the CPA to find application, even if the Tribunal overlooks the fact that the matter was brought to the Tribunal out of time with no condonation application having being made for the late filing.

49. The CPA is therefore not applicable to the matter and the Tribunal does not have jurisdiction to adjudicate on the matter.

Order

50. The Tribunal accordingly dismisses Applicant’s application for leave to refer the non-referred complaint to the Tribunal directly.

This done and signed at Centurion this 2nd day of December 2013.

__________________________________________

D R Terblanche, Presiding member

H Devraj (Member) and J Simpson (Member) concurring

[1] J Barnard LLB, LLM Senior Lecturer, University of Pretoria.

[2] A thesis submitted in fulfillment of the requirements of the Degree of Masters of Laws of Rhodes University by Fulufhelo Clyde Ndou, January 2001.

[3] G cc 01/18/00.

[4] NCT/4659/2012/101(1).

[5] NCT/4114/2012/101(1)CPA.

[6] NCT/3710/2012/101(1) (P) CPA.

[7] Regulations re: National Consumer Tribunal (Table 2B) Section 75(1)(b).

[8] 1986 (2) SA 555 (A) at par 15.

[9] See Barrett, N .0. v Macquet, 1947 (2) SA 1001 (AD) at p 1012; Port Elizabeth Municipal Council v Port Elizabeth Electric Tramway Co Ltd 1947 (2) SA 1269 (AD) at p 1279.

[10] 2 supra.

[11] NCT/2667/2011/101(1) (P) & NCT/2081/2011/101(1) (P).

[12] In terms of Section 152(1)(a) any decision, judgement or order of the Tribunal is binding on the Respondent in terms of matters arising out of the CPA.

[13] The Tribunal has previously dealt with this aspect in City of Johannesburg v National Consumer Commission NCT/2667/2011/101 and NCT/2081/2011/101. See also Volkswagen SA v NCC NCT 3913/2012/101(1)(P)CPA.

[14] Section 8 of schedule 2 of the Transitional Provisions of the CPA.

[15] Section 6(2) of Schedule 2 of the Transitional Provisions on the CPA.

[16] Oxford English Dictionary, Second Edition, Page 689.

[17] Collins English Dictionary and Thesaurus, Fourth Edition 2011, Page 797.

[18] Section 1 of the CPA.