High Court dismisses used car dealer’s appeal against Consumer Tribunal finding

The High Court in Pretoria has dismissed with costs a used car dealer’s appeal against a Consumer Tribunal finding that it did not comply with the Consumer Protection Act and fined it R100 000 for non-compliance and ordered that it had to refund the consumer the R459 900 that he paid for the car.

Sandton Repo Cars, the used car dealer, appealed the National Consumer Tribunal’s ruling, which was handed down in June 2024, in favour of the NCC, which acted on behalf of the consumer.

The consumer paid R459 900 in May 2020 for a 2018 Volkswagen Golf from Sandton Repo. The dealer assured her that the vehicle had never been involved in an accident. Five days later, the car began leaking oil.

In October 2020, the consumer took the car to Volkswagen in the Western Cape, where she was informed that it had been involved in an accident and told that it was unsafe to drive. The consumer then informed Sandton Repo through her lawyers that she was exercising her rights to cancel the transaction for a full refund under section 56(2)(b) of the Consumer Protection Act (CPA).

ALSO READ: Consumer Tribunal fines two used car dealers and orders R1 million total refund

Used car dealer refused to collect the car that was not safe to drive

However, Sandton Repo Cars refused to collect the car and demanded that it be delivered so that the dealer could inspect it to determine the cost of usage before agreeing to cancel the transaction.

After the National Consumer Commission (NCC) investigated the complaint and was unable to settle the matter amicably, it referred the matter to the Consumer Tribunal.

The Consumer Tribunal ruled that Sandton Repo Cars contravened section 51(1)(b) of the Consumer Protection Act (CPA) by including terms that indirectly waived the consumer’s rights, as well as section 55(2)(a) to (c) by supplying a defective vehicle and section 56(2)(b) by failing to refund the consumer.

Therefore, the Tribunal ordered Sandton Repo Cars to refund the consumer an amount of R459 900 and imposed an administrative penalty of R100 000.

ALSO READ: Consumer Tribunal orders two used car dealers to pay up R395 075

This is what the CPA says about the duties of the used car dealer

Section 51(1)(b) provides that a supplier is not allowed to enter a transaction or agreement subject to any term or condition if it directly or indirectly purports to waive or deprive a consumer of a right in terms of the CPA, avoid its obligation or duty in terms of the CPA or set aside or override the effect of any provision of the CPA.

According to section 55, the used car you buy must be safe and of good quality, but this section is not applicable if you bought the car at an auction. You have the right to buy a car that is reasonably suitable for the purpose it is intended for.

The car must be of good quality, in good order and free of any defects and useable and durable for a reasonable period of time, depending on what you will generally use it for, unless the dealer has told you expressly about defects on the car and you have already agreed to buy it.

Seeing that the dealer sells cars, you can also, in terms of this section, assume that he will give you good advice when you explain what you will use the car for.

Section 56 is also very important when you buy a used car and guarantees that the car adheres to the standards set in Section 55. If this is not the case, you can return the car within six months after buying it, and the dealer has to repair it, exchange it, or give your money back.

ALSO READ: Court confirms Consumer Tribunal decision dealer must refund and pay a fine

Car dealer says it is appealing due to prescription of the complaint

Taking the matter on review to the High Court, Sandton Repo Cars contended that the consumer’s complaint had already prescribed when the NCC referred it to the Consumer Tribunal. Section 116 of the CPA provides that a complaint may not be referred to the Consumer Tribunal more than three years after the act or omission that is the cause of the complaint.

However, the High Court held that Sandton Repo relied on Section 112 of the Prescription Act, which relates to the prescription of debt and not the conduct the consumer complained about.

ALSO READ: High Court confirms Consumer Tribunal judgment and R200 000 fine against used car dealer

Not so fast, High Court says

The High Court ruled that Section 116 of the CPA does not contain the provisions relating to knowledge of cause and delay and interruption or the deeming provisions found in the Prescription Act.

The High Court said that it is, in any event, according to the facts, unnecessary to seek to import prescription principles into this inquiry or make parallels with prescription. The High Court was also not addressed on the competency to do so.

“The complaint in this matter arose not only from the supply of defective goods but also from the refusal of the dealer to collect the vehicle at its own cost and make the refund. The dealer did not collect the car, and there was no refund.

“Accordingly, the conduct which founded the complaint is a course of conduct as contemplated in section 116, and the time period has not started.”

ALSO READ: High court agrees with Consumer Tribunal’s R100 000 fine for used car dealer

Consumer Commission welcomes the dismissal of the appeal

Hardin Ratshisusu, acting commissioner of the NCC, welcomed the judgment, “particularly as it clarifies the jurisdiction of the NCC to investigate and prosecute continuing conduct that remains unresolved. 

“Consumers will now be able to file complaints in circumstances where suppliers unduly delay providing redress, with the hope that such complaints would lapse. This will ensure section 116 of the CPA (regarding time) is applied in a manner that fully protects consumers.” 

Sandton Repo must now refund the consumer R459 900 and pay an administrative penalty of R100 000.