Tribunal fines car dealer and home renovator for not respecting consumers’ rights

The National Consumer Tribunal has fined a car dealer R200 000 and a home renovator R50 000 for not respecting consumers’ rights in terms of the Consumer Protection Act. They also have to refund the consumers.

The National Consumer Commission took the two matters to the Tribunal after the complaints received from the two consumers could not be resolved through mediation, alleging that the companies contravened provisions of the Consumer Protection Act (CPA).

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WP Motors refused to refund a consumer who bought a defective bakkie

A consumer bought a Ford Ranger bakkie from WP Motors for R276 607.49 in 2020, and two days later, the engine seized. The consumer then wrote to WP Motors saying he wanted to cancel the transaction for a full refund, but the dealer refused and insisted on repairing the bakkie while also claiming that the driver’s negligence caused the breakdown.

After the repairs, WP Motors delivered the bakkie to the consumers, but it had a water leak, and it went back to the dealer. According to the Tribunal’s judgement, the consumer accepted the bakkie because he was told that he would have to pay storage costs. However, he said he never gave up his right to cancel the transaction.

The Tribunal found that WP Motors contravened sections 55(2)(b) and (c) and 56(2)(b) of the CPA and declared its conduct prohibited. In addition, the Tribunal ordered WP Motors to refund the consumer R276 607.49 and pay an administrative fine of R200 000.

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Tribunal’s basis for penalty imposed on car dealer

The administrative penalty is based on:

• the nature, duration, gravity and extent of the contravention
• loss or damage suffered as a result of the contravention
• the behaviour of WP Motors
• The level of profit WP Motors derived from the contravention
• The degree of cooperation from WP Motors with the consumer.

Section 55(2)(b) and (c) deals with a consumer’s right to receive goods that are reasonably suitable for their intended purpose, of good quality, in good working order, free of defects and usable and durable for a reasonable time.

The Tribunal found that WP Motors disregarded this right, as the engine of the bakkie failed within three days of purchase, rendering the vehicle unusable. “The consumer was deprived of using and enjoying the bakkie he bought,” the Tribunal said in the judgement.

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Consumer’s right to return defective goods within six months

Section 56(2)(b) of the CPA gives consumers the right to return defective goods to the supplier, without any penalty and at the supplier’s risk and expense, within six months of delivery.

The Tribunal concluded that the consumer’s acceptance of the vehicle does not amount to repudiation of his refund claim. “On the contrary, the first respondent unfairly placed the consumer in an untenable position by compelling him to accept the vehicle against his will when it insisted on repairing the vehicle.

“This conduct unconscionably undermines the rights afforded by section 56(2). The acceptance of the vehicle under these circumstances post-repair cannot be used to imply that the consumer repudiated his election to cancel the agreement and receive a refund.”

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Home Renovations Cape Town did not fix substandard work

Another consumer complained to the National Consumer Commission after paying Home Renovations Cape Town R478 545 in October 2021 for a house renovation. While the renovation process was underway, the consumer noticed defects with the renovations and was not satisfied with the workmanship. By then, he already paid R467 498.

 He complained about poor workmanship regarding:

• The pool building was poorly renovated, and the pool pump house was never built
• There was a hole in the pool
• The paving around the pool collapsed
• Electric appliances installed that were not functional, and no electricity certificate was issued
• The ceiling and walls leaked after repairs
• The sliding doors that were non-functional
• Installed tiles that were cracked and painted boundary walls that were starting to peel
• Almost every renovated area has a defect of some sort and
• Renovation in some areas that were not completed.

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Consumer rights under CPA to protect them – Tribunal

Although the consumer asked Home Renovations to correct the defects and complete the contract, Home Renovations did not fix the defects and stopped all work.

Home Renovations did not oppose the matter before the Tribunal, and therefore, the Tribunal deemed the facts submitted by the consumer admitted. The consumer’s evidence showed that proper repairs could not be done and that the incomplete repairs compromised his safety.

In its judgement, the Tribunal said the rights afforded to consumers under the CPA are there to protect them. “An infringement of those rights could have serious financial consequences for a consumer.

“In this case, the applicant was financially prejudiced by spending R476 498 in vain and his family’s safety was compromised. This undoubtedly continues to cause him a great deal of distress.”

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Tribunal finds contravention of CPA

The Tribunal found that by failing to rectify defects, halting all renovations and requesting an outstanding balance before completing the work, Home Renovations Cape Town contravened sections 54 (1)(b) and (c) as well as Section 54(2) of the CPA.

According to section 54(1)(b)(c) of the CPA, the consumer has the right to the performance of services in a manner and quality that people are generally entitled to expect when a supplier undertakes to perform any services for or on behalf of the consumer,.

Section 54(2) also requires that suppliers must use, deliver or install goods that are free of defects and of a quality that people are generally entitled to expect if the goods are required to perform the services.

The Tribunal imposed an administrative fine of R50 000 and ordered Home Renovations Cape Town to refund the consumer R420 748.20. The Commission was also instructed to ensure that Home Renovations processes the refund to the consumer.

Hardin Ratshisusu, acting commissioner of the Consumer Commission, says the Commission welcomes the two judgements. “Both judgements convey a strong message to suppliers of goods and services that consumer rights must be respected. We believe the Tribunal’s findings will deter other suppliers from engaging in prohibited conduct.”