An analysis of Motus Corporation (Pty) Ltd and Another v Wentzel (Case no 1272/2019)  ZASCA 40 (13 April 2021)
In April this year the Supreme Court of Appeal (SCA) delivered judgment in the dispute between a Renault dealership and Abigail Wentzel. Wentzel claimed a refund for a defective Renault Kwid based on section 56 of the Consumer Protection Act (CPA).
Renault were appealing the earlier decision of the Pretoria High Court, which found in favour of Wentzel and ordered Renault to repay the purchase price (including finance charges) to Wentzel.
Disappointingly the SCA found in favour of Renault because the SCA found that she had not satisfied all the requirements of section 56(3) and had failed to report further defects to Renault after the car was repaired for the last time. This decision is a warning to all consumers to make sure that they report every defect to the supplier in order to achieve success with a claim under section 56 of the CPA.
In December 2017 Wentzel bought a new Renault Kwid from the dealership for R 176 400.41. The purchase was financed by MFC. By the time that judgement was delivered, Wentzel had already paid off the loan from MFC, and had paid MFC a total amount of R 256 965.84 (purchase price plus finance charges).
According to Wentzel, the defects began to manifest while the Renault Kwid was on Renault’s showroom floor. Wentzel heard a ticking and rattling noise emanating from the front of the car, which the sales person told Wentzel was not unusual and a result of the navigation system starting to run. However, this noise got worse and, approximately 1 week after taking delivery of the car, Wentzel took the car back to Renault for it to be repaired. After this initial repair, Wentzel experienced countless more problems with the Kwid, including the brakes, Bluetooth system, air-conditioning system, windows and even the roof racks coming loose- the car was taken to Renault for repair on 3 separate occasions.
On 21 February 2018, just before she took the car to Renault for the third and final repair, Wentzel lodged a complaint with the Motor Industry Ombudsman (MIOSA) requesting a refund of the purchase price. MIOSA did not respond to Wentzel’s complaint and so on 16 May 2018 Wentzel brought an application in the Pretoria High Court against the dealership, Renault and MFC for cancellation of the finance agreement and a refund of the purchase price (including interest) of R 256 965.84.
Section 56(3) gives the consumer the right to a refund or replacement if, within three months after the dealership has repaired it, it turns out the problem has not been successfully repaired, or a further problem emerges.
The basis for Wentzel’s claim in court was that Renault had contravened sections 49(1)(b), 55(2)(b) and (c), 56(2)(a) and (b), and 56(3) of the CPA by selling her a brand new Renault Kwid which was “woefully defective”. Thus, the principal issue that the SCA had to consider was whether Wentzel was entitled to a refund of the purchase price that she paid for the Renault Kwid.
Renault also argued that Wentzel had failed to exhaust the internal remedies provided for in section 69 of the CPA and that Wentzel’s court application was premature. Section 69 lists ombuds, arbitrators, the National Consumer Commission and Tribunal and consumer courts which must apparently deal with a dispute before consumers can bring the dispute to court- a real headache for consumer lawyers because a consumer’s claim lapses if it is not brought to court within 3 years.
Renault chose not to pursue their argument regarding section 69 of CPA and it was thus not necessary for the SCA to address this issue. However, the SCA stated, albeit obiter, that section 34 of the Constitution and the right of access to courts should be a guiding principle when interpreting section 69 of the CPA. The SCA stated the following at paragraph 26:
“The primary guide in interpreting the section will be s 34 of the Constitution and the guarantee of the right of access to courts. Section 69(d) should not lightly be read as excluding the right of consumers to approach the court in order to obtain redress. A claim for cancellation of the contract and the refund of the price of goods on the grounds that they were defective falls under the actio redhibitoria and dates to Roman times. Our courts have always had jurisdiction to resolve such claims and there is no apparent reason why the section should preclude a consumer, at their election, from pursuing that avenue of relief until they have approached other entities.”
The SCA went on to say at paragraph 27 that section 69 is:
“couched in permissive language consistent with the consumer having a right to choose which remedy to pursue … Given the purpose of the Act to protect the interests of the consumer, who will always be the person seeking redress under it, there is no apparent reason why they should be precluded from pursuing immediately what may be their most effective remedy.”
Regarding Wentzel’s entitlement to a refund of the purchase price under section 56(3) of the CPA, the SCA held that:
“to obtain the refund remedy, Ms Wentzel had to show, first, that Renault repaired the defective parts; secondly, that within three months after the repairs, the defects had not been remedied or that a further failure was discovered.”
Renault denied that the car remained defective and alleged that all defects that Wentzel had complained about had been resolved by Renault, who had repaired the car on three separate occasions. However, Wentzel alleged that, despite not reporting this to Renault, the defects persisted after the third and final repair. The SCA found that Wentzel was required to report the further defects to Renault in order to enforce the right to a refund under section 56 and, because she failed to do so, her claim could not succeed.
The SCA then considered the amount that Wentzel was claiming and held that, even if Wentzel had satisfied the requirements of section 56(3), she would still not be entitled to a refund of the amount of R 256 965.84 and the High Court erred in granting Wentzel this relief. In this regard the SCA stated:
“even if she had brought herself within the provisions of s 56(3), she was not entitled to a refund of the amount stipulated in the court a quo’s order. This was not the amount she paid to Renault. It was the amount she agreed to pay to MFC in terms of the agreement with them. Her claim for the refund was not against the financier but against the supplier of the vehicle.”
Although the consumer was ultimately unsuccessful in this matter, this judgment provides us with insight into how the implied warranty of quality can be properly enforced against a supplier and how consumers should frame their relief. The decision also provides us with much needed guidance concerning the application and interpretation of section 69 of the CPA and will hopefully result in other courts following a similarly unrestricted approach.
Here’s a link to the full judgment: http://www.saflii.org/za/cases/ZASCA/2021/40.html