Used car dealer instructed to refund consumer, Court confirms Tribunal’s finding

The Western Cape division of the High Court has confirmed the finding of the National Consumer Tribunal that a used car dealer from Cape Town must refund a consumer after the car broke down again after it was repaired.

The National Consumer Commission (NCC) has welcomed the judgment that confirmed that used car dealer, Unicity Trading (PTY) Ltd, trading as Cape SUV, contravened provisions of the Consumer Protection Act (CPA).

The National Consumer Tribunal heard the case against the used car dealer earlier this year and ruled in favour of the consumer, finding that Cape SUV’s conduct was prohibited and ordering it to refund the consumer within 30 business days the purchase price of R151 900 that he paid for a Daihatsu Terios and collect it from the consumer within five business days.

However, Cape SUV took the matter on review to the High Court, arguing that the vehicle broke down as a result of the consumer’s driving behaviour and that the malfunctioning of the gearbox was a “further defect”.

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Car dealer sold car with defects from day one

The consumer complained to the NCC and its investigation revealed that the vehicle manifested several defects since the day the consumer collected it. In a period of three months, the vehicle was repaired about three times.

A day after the vehicle was repaired for the third time, it broke down with a gearbox failure. The consumer notified the supplier of this defect and said he wanted to cancel the sales agreement and return the vehicle for a full refund. Cape SUV refused, contravening section 56(3) of the Consumer Protection Act (CPA).

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Section 56(3) of the CPA about the implied warranty of quality

Section 56 provides for an implied warranty of quality and provides that there is an implied warranty of quality in any transaction or agreement pertaining to the supply of goods to a consumer that the producer or importer, distributor and retailer each warrant that the goods comply with the requirements and standards of section 55, that provides for the consumer’s rights to safe goods of good quality.

The consumer can return the goods within six months, without penalty and at the supplier’s risk and expense, if the goods fail to satisfy the requirements and standards contemplated in section 55. The consumer can choose if the supplier must repair or replace the failed, unsafe or defective good or refund to the consumer.

In this case, subsection 3 applied, which provides that if the supplier repairs any particular goods or component and it fails or has a defect or becomes unsafe within three months and this is not fixed, the supplier must replace the goods or refund to the consumer.

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Broken gearbox not due to consumer’s driving style

The High Court ruled that Cape SUV’s argument that the gearbox malfunctioning was due to the consumer’s driving style was without merit and further ruled that the failure of the gearbox was a clear indication that the vehicle was defective from the start.

The court also reminded the supplier that “the purpose of the CPA is to promote a fair, accessible and sustainable marketplace for consumer products and services and for that purpose to establish national norms and standards relating to consumer protection to provide for improved standards of consumer information, to prohibit unfair practices.

The supplier was ordered to refund the consumer the purchase price of the vehicle and collect it within five business days.

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Watch out, the NCC is watching

“This judgment should send a strong message to suppliers who disregard the rights of consumers. The NCC has particularly prioritised the second-hand motor vehicle industry given the high volumes of complaints received from disgruntled consumers. This judgment not only affirms the rights of consumers as enshrined in the CPA but also the NCC’s approach in dealing with these matters,” acting NCC commissioner, Hardin Ratshisusu, said.