Peugeot Citroen South Africa (Pty) Ltd t/a Citroen South Africa v National Consumer Commission (NCT/4062/2012/101 (1) (P) [2012] ZANCT 21 (10 October 2012)

IN THE NATIONAL CONSUMER TRIBUNAL

HELD AT CENTURION

Case No: NCT/4062/2012/101 (1) (P)

DATE:10/10/2012

In the matter between:

PEUGEOT CITROEN SOUTH AFRICA (PTY) LTD.......................................Applicant

t/a CITROEN SOUTH AFRICA

and

NATIONAL CONSUMER COMMISSION........................................................Respondent

CORAM:

MASEKO J.M. (PROF.) (PRESIDING) TERBLANCHE D. (MS.) (CHAIRPERSON)

SIBANDA, F (MR) (MEMBER)

Date of Hearing: 3 AUGUST 2012

JUDGMENT AND REASONS

The Applicant

The Applicant, Peugeot Citroen South Africa (Pty) Ltd (Applicant) is a private company with limited liability and registered as such in accordance with the laws of the Republic of South Africa under registration number 2001/023277/07 with its principal place of business at 44 Saturn Crescent, Linbro Business Park, Frankenwald; Sandton 2146.

The Applicant is a wholly owned subsidiary of the PSA Group based in France. It operates throughout South Africa, promoting the Peugeot and Citroën vehicles brands. It has various departments such as marketing and customer relations ensuring the integrity of the brand. The Applicant also stands behind the warranty on all Citroën vehicles. If a vehicle is brought to one of the dealerships for repairs while under warranty, the dealership will do repairs without charging the customer. The dealership would in turn invoice Citroën SA for the work done. Each dealership which sells Citroën or Peugeot products is a separately-owned entity and is entirely independent of the Applicant.

At the hearing, the Applicant was represented by Adv. Fredman, counsel, instructed by Webber Wentzel Attorneys.

The Respondent

The Respondent is the National Consumer Commission (“NCC”); a public entity, established by section 85 of the Consumer

Protection Act No. 68 of 2008 (“CPA”). The Respondent is located at Berkley Office Park, 08 Bauhinia Street, Highveld

Technopark, Centurion.

The Respondent is mandated to perform functions in terms of the CPA more specifically those set out in sections 92 to 98 of the Act.

The Respondent also attended the hearing represented by Mr. Peter Mashabela, but had not filed any answering affidavits to the

substantive issues.

Jurisdiction

This National Consumer Tribunal (Tribunal) has jurisdiction to hear this matter in terms of section 101 of the CPA.

Section 101 empowers the Tribunal, to confirm, modify or cancel all or part of a compliance notice.

Issue to be Decided

The issue to be decided by the Tribunal is whether the Compliance Notice issued by the 2nd Respondent on 13 May 2011, stands to be reviewed and set aside or not. The second issue to be decided was whether this tribunal should grant a default order along the lines applied for, based on the failure of the Respondent to file opposing papers within the dies induciae in the legal and regulatory framework.

Background

The hearing is consequent to the Applicant objecting, in terms of section 101(1) of the CPA, to the compliance notice issued by the Respondent against it on the 21st February 2012 in terms of section 100 (1) of the CPA. The matter was set down for a full hearing on all the grounds of objection raised to the compliance notice.

Citroën Fourways is one of the dealerships which sell Citroën products in South Africa. It purchases vehicles from the Applicant and sell them at a profit. It is an entirely separate legal entity from the Applicant and it has its own service department which repairs and services client’s vehicles.

On 01 December 2010 Ms V. Moodley (the consumer) purchased and took delivery of a Citroen C3, 1.4 Attraction from Peugeot Citroen in Fourways. On the 27th of January 2011 the consumer complained about a burning smell emanating from her vehicle and that the radio was faulty in that it was switching from radio to CD mode and from loud to soft without being prompted. The service manager at the Dealership, Manny Marques, and a technician, Sheldon Skyperman determined that the burning smell was being caused by a piece of plastic that became caught in the vehicle’s exhaust pipe and that the radio would need to be replaced. A radio was ordered by the Dealership on 28 January 2011 and was received and installed on 02 March 2011.

On 29 March 2011 the consumer brought the vehicle back to the Dealership complaining that there was a rattling noise in the

dashboard. She also complained that there was a noise coming from the rear of the vehicle when using the brakes and of a difficulty

to change gears. It was inspected by the same technician and the following repairs were made:

The dashboard seal was replaced; and

The rear shocks of the vehicle were replaced.

On the 28th April 2011 the manager of the complaints handling unit in the NCC addressed a letter to the Dealership attaching a complaint from the consumer (annexure “Citroën 3”).

The Dealership received a Compliance Notice on Friday the 29th April 2011. The next Monday, 2 May 2011, was a public holiday and on 3 May 2011, the Dealership forwarded the Compliance Notice to the Applicant’s General Manager: Dealer Development and Quality, Mr. Chris Beukes. Take note that this is not the Compliance Notice which forms the basis of this application. The aforementioned notice was issued to the Dealership and it is unclear what the outcome thereof was. The Compliance Notice that is sought to be reviewed is another notice issued to the Applicant on 01 March 2012.

Grounds for Challenging the Compliance Notice

Regarding the grounds for setting aside the Compliance Notice in question, the Applicant submitted, in summary that:

The Act does not apply retrospectively to this complaint

The vehicle was purchased and delivered before the CPA came into force and for this reason alone, the Compliance Notice ought to be set aside.

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 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 lease agreement in respect of the vehicle in question was concluded before the general effective date and that the vehicle was also delivered to the Complainant before the general effective date.

The exceptions set out in Item 3 are not applicable and as such, that the CPA cannot be applied to this transaction.

Lack of Authority of the Respondent by the empowering provision

The grounds for review set out in Section 6 of PAJA1 and the Compliance Notice is reviewable on the following ground, among others that section 6(2)(a)(i) is applicable – the

Respondent had no authority to issue the notice in terms of the relevant empowering provisions in the CPA.

The incorrect party has been cited in Compliance Notice

This assertion is based on the fact that:

The Compliance Notice was sent to the Applicant;

In the covering letter the Respondent makes the point that the Notice is served on the Applicant;

On the form required by Regulation 42 the notice applies to the Applicant;

The address of the Applicant is set out on the form;

The Applicant was cited as respondent in the Notice;

However, the vehicle in question was purchased from the Dealership; called Kempstone Motor Group Trust t/a Peugeot Citroen Fourways (“the dealership”);

The real arrangement between Applicant and dealers of Peugeot Citroen products is such that if a vehicle is brought to one of the dealerships for repairs while under warranty, the dealership will do repairs without charging the customer. The dealership would in turn invoice Citroën SA for the work done (Applicant). Each dealership which sells Citroën or Peugeot products is a separately-owned entity and is entirely independent of the Applicant.

The Dealership supplied the vehicle to the Complainant;

The Dealership repaired the vehicle;

The Dealership was the intermediary in the lease agreement with the Complainant’s bank;

The dealership was called upon to attend the conciliation;

The complaint was directed against the Dealership, and the NCC thus believed that the Dealership engaged in prohibited conduct as envisaged in section 100(1) of the CPA; and

In the body of the Compliance Notice, reference is made to the Dealership as the respondent, and not to the Applicant in this

matter.

Lack of particularity in Compliance Notice

The Compliance Notice lacks sufficient particularity and falls to be set aside also in that:

Section 100(3) of the CPA requires that the information that must be contained in a Compliance Notice and the notice itself must set out “details of the nature and extent of non-compliance”; The Compliance Notice sets out the facts considered to be relevant. It sets out the alleged contraventions of the CPA, by simply referring to sections 55(2) (b), 56(2) (a) and 56(2)(b) of the CPA. The notice provides no details of the nature and extent of non-compliance. It simply lists the relevant provisions and then reproduces a verbatim extract of them;

Proper compliance with Section 100(3)(c) requires a proper explanation to be given of the extent to which the vehicle was considered not to be of good quality, in good working order and free from defects. It also requires the reasons for such assumptions to be provided;

This point is not a technical ground for review and is also not without a proper explanation of the extent to which a respondent is said to be in breach of a provision of the Act. It is impossible for a respondent (to such a Compliance Notice) to respond meaningfully to the complaint against it; and

given the lack of particularity in the Compliance Notice, it falls to be reviewed in terms of the following provisions of PAJA:

Section 6(2)(b) – a mandatory procedure prescribed by s100(3) of the CPA was not complied with ; and

Section 6(2)(c) – the administrative action was procedurally unfair. The failure of the Compliance Notice to set out the alleged contraventions of the CPA in sufficient detail prevented the Applicant from being able to respond to the allegations

meaningfully.

Failure to conduct an investigation

Under this ground, the Respondent failed to conduct an investigation as required by the CPA and was therefore not lawfully entitled to issue a Compliance Notice. This is based on the assertions that:

Section 71(1) of the CPA entitles any person to file a complaint; Section 72(1) provides that the Respondent, on initiating or receiving a complaint, must appoint an inspector to investigate the complaint; and

Section 73(1) lists the various steps the Respondent may take after concluding an investigation.

In the light of the above; conducting an investigation is a jurisdictional requirement for a Compliance Notice to be issued.

In this matter, no investigation was conducted before the notice was issued. In particular, the Respondent communicated with the

Applicant by forwarding the complaint, arranging two telephonic conciliations and forwarding the Compliance Notice.

Therefore, the issuance of the Compliance Notice was lacking in particularity, is non-compliant with s100(3)(c) of the CPA and, therefore, falls to be set aside.

Analyses of the Evidence and Arguments

The Respondent reiterated its position not to oppose the application in its entirety at the hearing. But the Tribunal still had to consider the application on its merits despite the fact that it was not opposed as a default application.

After the Respondent had attempted to withdraw the Compliance Notice, days before the hearing, the Applicant opposed such withdrawal at the hearing. The basis for the opposition was that, much as such withdrawal would have disposed of the matter on the face of it, the Respondent was not competent to effect such a withdrawal in terms of the law.

Section 101 of the CPA expressly empowers the Tribunal, to confirm, modify or cancel all or part of a compliance notice. The Respondent is not empowered to do same.

This Tribunal takes judicial notice of the common law doctrine against a public authority revisiting or altering its own decision – functus officio2. The Supreme Court of Appeal has deepened the application of this legal rule in Pitelli v Everton Gardens Projects CC [2010] 4 All SA 357 (SCA). It therefore, remained for this Tribunal to decide the application and the order prayed for, in the face of the facts, the applicable law as well as recognition that the Respondent is not competent to review its own Compliance Notice.

The Tribunal accepts the Applicant’s version of events as set out above and finds that on the facts before it, taking cognisance of the Respondent’s attempts to withdraw the notice and when applying the applicable law, the compliance notice issued by the Respondent should be set aside.

Order

For the above analysis and facts, we accordingly make the following order:

The compliance notice issued by the Respondent is set aside.

No order is made for costs.

Thus done and handed down on this 1st day of October 2012.

Prof. Joseph M. Maseko

Presiding Member

Ms. Diane Terblanche, Chairperson of the Tribunal and Mr Fungai Sibanda, Panel Member, concurring.

1 Section 6 of the Promotion of Administrative Justice Act 3 of 2000

2 The Black’s Law Dictionary defines “functus officio” as when an officer of official body having no further authority or legal competence, after performing his or her office.