Tribunal fines used car dealer R100 000 for disregarding consumer’s rights

The National Consumer Tribunal has fined another used car dealer R100 000 for selling a consumer a defective vehicle and also ruled that the dealer must repay the consumer and his insurance company R106 000.

At a hearing on 8 January, the Consumer Tribunal declared the conduct of Avura Motors, trading as Avura Executive Auto, prohibited, fined the company R100 000 and ordered a total refund of R106 088.28.

The consumer complained to the National Consumer Commission (NCC) in November 2022 that Avura Executive Auto, a used car dealer in Rustenburg, sold him a defective vehicle. The consumer paid R288 577.50 for a pre-owned 2014 Mazda and within 28 days the car started to show defects.

After the consumer informed Avura Executive Auto of the defects and elected to have the car repaired, the dealer refused to repair it and said it was in good condition when it was sold. Avura also relied on its own 30-day or 1000 km warranty and said the consumer already drove for more than 1 000 km.

The consumer therefore had to take the car to a third party for repairs. The third-party charged R106 088.28 for parts and labour and the consumer filed a claim under his mechanical warranty that assessed the vehicle and concluded it overheated and required engine reconditioning.

The insurer paid R75 000 towards the cost of the repairs and the consumer paid the balance of R31 088.28.

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Consumer Tribunal found contraventions of CPA

In July last year, the NCC referred the matter to the Consumer Tribunal which ruled that Avura supplied a defective vehicle and contravened sections 55(2)(a) to (d) and 56(2)(a) of the Consumer Protection Act (CPA).

According to section 55(2)(a) to (d), every consumer has the right to receive goods that are reasonably suitable for their intended purpose, of good quality and usable and durable for a reasonable period.

Section 56(2)(a) stipulates that a consumer can return goods to the supplier without penalty within six months and the supplier must repair or replace the unsafe or defective goods. The consumer can choose to have the goods repaired or replaced.

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Dealer denied it contravened the CPA

Avura Executive Auto opposed the application and denied that it contravened any provision of the CPA and said the car was serviced in May 2022, approximately two months before it was sold to the consumer. The service included a check of the cooling system and no faults were reported.

In addition, Avura Executive Auto referred the Consumer Tribunal to the consumer’s insurer’s assessor report detailing the assessment conducted on the car where the assessor recorded the damage to the vehicle as a blown cylinder head gasket due to overheating.

The assessor’s report confirmed that the cause of the overheating was difficult to establish but was likely due to water loss since all the cooling system components were corroded and contaminated with rust due to prolonged operation with insufficient coolant mixture.

Avura Executive Auto also submitted that the consumer drove approximately 4000 km after taking possession of the car and contended that it was the consumer’s responsibility to maintain the car and that his own negligence and failure to do so resulted in the car overheating.

The consumer cannot rely on the implied warranty provided under the CPA and the application should be dismissed, Avura Executive Auto argued.

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Consumer Tribunal found no evidence consumer was negligent

Considering the evidence, the Consumer Tribunal said there was no evidence that suggests the damage was caused by the consumer’s negligence or normal wear and tear while the consumer had the vehicle.

“By Avura Executive Auto’s own admission during the hearing, the consumer was not required to service the vehicle between the time he took possession of it and the time it overheated. Further, there is no evidence that the consumer ignored any warning signals that the vehicle needed to be checked or that it was overheating.

“There is, therefore, no evidence of any misuse of the vehicle by the consumer or any failure to take reasonable steps required to maintain the vehicle within the period of usage. The evidence before the Tribunal indicates that the vehicle was defective when sold and that the defect only manifested itself later.”

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Consumer Tribunal found that contraventions display total disregard for CPA and consumer rights

In its ruling the Consumer Tribunal found that Avura’s contraventions are serious, displaying a total disregard for the CPA and the consumer’s rights. In addition, the Consumer Tribunal found that the consumer was exploited by the sale of a vehicle which was not of good quality.

The Consumer Tribunal found that Avura Executive Auto contravened sections 55(2)(a) -(d) and 56(2)(a) of the CPA and that the contravention amounted to prohibited conduct. The Tribunal also granted an interdict prohibiting Avura Executive Auto from engaging in the same or similar prohibited conduct in the future.

Avura Executive Auto was ordered to refund the consumer R31 088.28 within 30 business days of the judgement and refund the consumer’s insurer R75 000 for the cost of the repairs. Avura Executive Auto was also ordered to pay an administrative penalty of R100 000 within 60 business days.

Hardin Ratshisusu, acting commissioner of the NCC, welcomed the judgement and said it should serve as a deterrent and a reminder to all suppliers that they must comply with the CPA and its regulations. “Disregarding consumers’ rights as afforded to them under the CPA has serious consequences.”