A case in the High Court in Kimberley involving a dissatisfied client seeking a new vehicle or a refund shows there are no shortcuts when it comes to the law.
The court recently dismissed a nearly five-year-long dispute between a woman and a car dealership because she failed to follow the dispute resolution process outlined in the Consumer Protection Act (CPA).
On 1 August 2019, Masego Precious Makadu purchased a new Volkswagen Polo Vivo 1.0 TSI from NTT Volkswagen Kimberley through an instalment sale.
Eleven days later, the car failed to start, making a loud noise from the ignition. Makadu reported the issue, and the car was towed to the dealership. That day, the dealership claimed the car was fine and gave Makadu the option to take it back or leave it for further observation. She chose to leave it.
A technician later found a faulty fuse pin, which was fixed. Despite this, Makadu refused to accept the car and requested to cancel the sale agreement, which was declined.
Makadu’s lawyers formally notified the dealership of the cancellation. The dealership offered her a replacement car, but Makadu rejected it because her preferred model wasn’t available and referred the matter to her lawyers.
A week later, the dealership again offered a replacement on a “without prejudice” basis or for her to collect her repaired car. Makadu insisted on cancellation.
On 7 October 2019, Makadu filed a complaint with the Motor Industry Ombudsman of South Africa (MIOSA). On 3 June 2020, MIOSA reported that because the car had been repaired, it could not support Makadu’s request for cancellation. She was advised to take the matter to the National Consumer Commission.
Instead, Makadu filed a High Court application, requesting either the delivery of a new 2019 Volkswagen Polo Vivo 1.0 TSI “without latent or patent defects” or, if that wasn’t possible, the cancellation of the sale agreement and a refund.
First things first
The CPA contains a comprehensive dispute resolution mechanism to resolve disputes between consumers and suppliers.
According to the judgment, it is common cause between the parties that, save for lodging a complaint with MIOSA, Makadu did not refer the matter to the Consumer Tribunal, which is the next level of the internal remedies provided for in the CPA.
Section 69(d) of the CPA limits the right to approach the civil courts until all the internal remedies have been exhausted – as does section 7(2)(a) of the Promotion of Administrative Justice Act (PAJA). It requires a litigant to exhaust internal remedies before instituting review proceedings.
In the judgment, Acting Judge MJ Ramaepadi stated the legislative intention behind the dispute resolution scheme of the CPA “must have been that disputes between consumers and suppliers must, as the first port of call, be resolved through the dispute resolution mechanism provided for in the CPA”.
“I find that the applicant should have exhausted all the internal remedies before approaching this court for redress, which she has failed to do,” the judge said.
What the law says
Under the header “enforcement rights by consumer”, section 69 of the CPA provides that a person may seek to enforce any right in terms of the Act or in terms of a transaction or agreement, or otherwise resolve any dispute with a supplier, by:
- referring the matter directly to the Tribunal, if such a direct referral is permitted by this Act in the case of the particular dispute;
- referring the matter to the applicable ombud with jurisdiction, if the supplier is subject to the jurisdiction of any such ombud;
- if the matter does not concern a supplier contemplated in paragraph (b)
- referring the matter to the applicable industry ombud, accredited in terms of section 82(6), if the supplier is subject to any such ombud; or
- applying to the consumer court of the province with jurisdiction over the matter, if there is such a consumer court, subject to the law establishing or governing that consumer court;
- referring the matter to another alternative dispute resolution agent contemplated in section 70; or
- filing a complaint with the Commission in accordance with section 71; or
- approaching a court with jurisdiction over the matter, if all other remedies available to that person in terms of national legislation have been exhausted.
“Other remedies” referred to in section 69(d) would include those provided in sections 70 and 71 of the CPA, such as initiating a complaint with the National Consumer Commission, approaching the Consumer Court and approaching the National Consumer Tribunal.
Ramaepadi AJ said the obligation imposed on a litigant to exhaust internal remedies before approaching the courts is not an unnecessary burden.
“It serves an important purpose of ensuring that the administrative dispute resolution mechanism provided for in the relevant legislation is not undermined.”
