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IN THE NATIONAL CONSUMER TRIBUNAL

HELD IN CENTURION

Case number: NCT/122593/2018/75(1)(b)

In the matter between:

MARIA MAFADZA                                                                                                                             APPLICANT

AND

BIDVEST MCCARTHY VOLKSWAGEN ARCADIA (PTY) LTD                                                   RESPONDENT

Registration Number 1991/003245/06

 

Coram:

Ms P A Beck – Presiding Tribunal Member

Prof T Woker – Tribunal Member

Ms D Terblanche – Tribunal Member

 

Date of hearing: 2 July 2019

 

JUDGMENT AND REASONS

THE PARTIES

1. The Applicant is Maria Mafadza, an adult female residing at Pretoria West, Gauteng (“the Applicant.”) The Applicant represented herself at the hearing.

2. The Respondent is Bidvest McCarthy Volkswagen Arcadia (Pty) Ltd, a company duly incorporated in terms of the company laws of South Africa with its principal place of business at 470 Stanza Bopape Street, Arcadia, Pretoria. (“the Respondent.”) The Respondent did not attend the hearing.

 

THE APPLICATION

3. The Applicant initially applied for leave to refer her complaint, which was non-referred by the National Consumer Commission (the “NCC” or “Commission”), directly to the National Consumer Tribunal (the “Tribunal”) in terms of section 75(1)(b) of the Consumer Protection Act, 2008 (the “CPA”). The Respondent opposed the Application. The Application for leave to refer was granted by the Tribunal and the matter was set down for a hearing into the merits of the matter on 2 July 2019.

 

BACKGROUND

4. On 2 December 2017, the Applicant purchased a new motor vehicle, a 2017 Volkswagen Tiguan 1.4 TSI Comfort Line, (“the vehicle”) from the Respondent for the purchase price of R498 751,54.

5. The Applicant submitted that the process of purchasing this vehicle commenced in November 2017, when she, directly or through her friend Ms Maduwa approached various outlets for a quotation for a new Tiguan. She supplied the dealers with the full specifications of what she required of the vehicle, one of the specifications being a factory installed compact disc player.

6. The Applicant was told by the Respondent that the Respondent’s Arcadia showroom did not have a vehicle with the Applicant’s specifications; and that a vehicle with the Applicant’s specifications could be ordered for delivery from Witbank, to which the Applicant agreed.

7. On 4 December 2017, the Applicant took delivery of the vehicle from the Respondent.  Due to the late delivery of the vehicle, the Applicant did not have an opportunity to inspect the vehicle. The Applicant submitted that the salesperson rushed through showing her the vehicle. The Applicant requested that the salesperson play the compact disc player before the handover of the vehicle, but the salesperson could not do so, because he did not have a compact disc on hand to use.

8. The Applicant submitted that she did not drive the vehicle after taking delivery; but parked it in her garage for weeks prior to her trip to the Limpopo Province, to spend Christmas with her family. On route to Limpopo, the Applicant discovered that the compact disc player was not working. The Applicant was not able to insert a compact disc into the compact disc player. The Applicant could only report this problem with the compact disc player to the Respondent upon her return to Gauteng, which she duly did on 4 January 2018. The vehicle was booked for a full inspection of the compact disc player on 5 January 2018.

9. The Applicant was subsequently informed by the Respondent that the Respondent would not cover the repair of the compact disc player on the grounds that the Applicant tampered with the compact disc player. The Applicant requested a copy of the fault inspection report, but the Respondent refused to give the Applicant a copy of the fault inspection report.

10. The Applicant escalated her complaint to the Managing Director of the Volkswagen South Africa Head office. The Applicants’ efforts to resolve this problem directly with the Volkswagen South Africa Head Office Managing Director were unsuccessful.  

11. On 20 March 2018 the Applicant lodged a complaint with the Motor Industry Ombudsman of South Africa (“MIOSA.”) On 22 March 2018, the case manager of MIOSA, Mr Robin Wright, (‘’Wright”) addressed a letter to the Respondent. The Respondent did not respond to this letter.

12. On 26 July 2018, Wright wrote the following letter to the Respondent:

“With reference to the above mentioned complaint lodged with the Motor Industry Ombudsman of South Africa, (MIOSA) and our recent telephonic discussion in the same regard: Kindly provide your response to the above mentioned complaint via e-mail to cma3@miosa.co.za. All relevant documentation is attached. Please respond by close of business, Monday 30 July 2018, failing which we will have no other option but to close our file and advise the consumer to register a complaint with the National Consumer Commission for further action.”

13. No response was received from the Respondent to MIOSA’s letter of 26 July 2018.

14. On 14 August 2018, MIOSA sent the Applicant a letter which stated as follows:

“We kindly refer to a complaint lodged with the office of the Motor Industry Ombudsman of South Africa (MIOSA), regards the above. This matter was forwarded to the selling dealer/ service provider/ manufacturer in order to afford them an opportunity to impart their side of the matter…. Unfortunately, we did not receive the courtesy of a response. We view this as a contravention of Section 82(8) of the Consumer Protection Act 68 of 2008 (CPA) … With the above in mind, we are left with no option but to close our file and recommend that you register your complaint with the National Consumer Commission… in order for them to act in terms of Section 72 of the CPA.”

15. On 21 August 2018, the Applicant referred her complaint to the NCC. On 29 November 2018, the NCC wrote a letter to the Applicant which stated as follows:

“The Commission has assessed your complaint and determined that there is a dispute of facts, related to who tempered with the compact disc player. Issues of dispute of facts can be appropriately addressed through an arbitration process. We note that the damage does not render the vehicle inoperable and it that it could be repaired, which does not warrant cancellation of the sales agreement. As a result of the above, we cannot pursue the matter… The Commission is issuing a notice of non-referral and advise that we are closing the file.”

16. On 29 November 2018, the NCC issued a notice of non-referral stating that the complainant does not allege any fact which, if true, would constitute grounds for remedy under the CPA.

 

RELIEF SOUGHT

17. The Applicant wants the Tribunal to order the Respondent to repair the compact disc player at its own cost or to refund the Applicant the cost of repairs to the compact disc player.

 

THE APPLICABLE LAW

18. The CPA provides in section 55 that consumers are entitled to safe, good quality goods.  Every consumer has the right to receive goods that are reasonably suitable for the purposes for which they are generally intended; are of good quality, in good working order and free of any defect.  These goods must also be useable and durable for a reasonable period; having regard to the use to which they would normally be put and to all the surrounding circumstances of their supply.

19. Section 56 of the CPA provides consumers with an implied warranty of quality.  In any transaction pertaining to the supply of goods a retailer warrants that the goods comply with the requirements and standards contemplated in section 55, except to the extent that these goods have been altered contrary to instructions or after leaving the control of the retailer.  Within six months after the delivery of the goods to a consumer, the consumer may return the goods to the supplier without penalty and at the supplier’s risk and expense, if the goods fail to satisfy the requirement and standards contemplated in section 55.  The supplier must then at the direction of the consumer, either, repair or replace the defective goods or refund the consumer the price paid by the consumer for the goods.

 

THE APPLICANT’S SUBMISSIONS

20. The Applicant submitted that the Respondent supplied her with compact disc player that was defective from the start.  She stated that she requested the Respondent to repair the compact disc player; but that the Respondent refused on the grounds that the Applicant tampered with the compact disc player.

21. The Applicant vehemently denies that she tampered with the compact disc player. The Applicant stated that she understood how warranties work; and has no reason to tamper with the compact disc player when she could simply take it to the Respondent for repairs, which she did.

22. According to the Applicant she met with the Respondent on 4 January 2018 to discuss the fact that the compact disc player was not in working order. The fault was that it was not possible, for the Applicant, to insert a compact disc into it.  

23. The Respondent told the Applicant that the compact disc player was inspected by the Respondent’s technician on 5 January 2017; and the report of the technician concluded that the compact disc player has been tampered with.

24. After the inspection, the Applicant felt the Respondent was dismissive of her complaint that the compact disc player was defective from the start. Instead, the Respondent alleged that the compact disc player was defective because the Applicant tampered with it. The Respondent refused the Applicant’s request to provide her with a copy of the fault inspection report. The Applicant escalated her complaint to the Respondent’s Head Office and MIOSA. The Respondent ignored both complaints.

25. The Applicant takes issue with the Respondent’s refusal to provide the Applicant with copy of the fault inspection report; and with the attitude of the Respondent to the industry regulator, MIOSA’s communications with the Respondent which were ignored by the Respondent.

26. The Applicant submits that she reported the defective compact disc player to the Respondent within one month of taking delivery of her new motor vehicle; and that the Respondent is obligated under the CPA to repair, replace or refund the Applicant for the defective compact disc player.

27. The Applicant pursued this matter over the past two years for the above reasons. She seeks a remedy for her complaint under the CPA.

 

THE RESPONDENT’S SUBMISSIONS

28. Mr Ian van Niekerk, (“van Niekerk”) the new vehicle sales manager of the Respondent, made submissions on affidavit.

29. In short, van Niekerk stated that the compact disc player was tampered with by the Applicant after delivery of the vehicle by the Respondent, to the Applicant. Van Niekerk goes further and states as follows:

“We will therefore not be held liable to repair or refund the applicant’s [Maria Mafadza] motor vehicle compact disc player as the warranty does not allow for this due to it being tampered with after delivery of the vehicle. This is based on an investigation by one of our trained technicians.”

 

THE HEARING

30. On 30 May 2019, the registrar issued a notice setting this application down for hearing on 2 July 2019. The registrar sent the notice by email to the Respondent at Stephan@mcmotor.co.za and to drmorena@mcmotors.co.za (the Respondent’s chosen service address.)

31. The Respondent did not attend the hearing. On the day of the hearing; and prior to the commencement of the hearing; the Tribunal requested that the registrar telephones the Respondent due to the Respondent’s non-appearance for the hearing set down at 10h00, despite proper service of the notice of set down of the hearing on the Respondent.

32. The Registrar was informed by the Respondent that he was aware of the set down of the matter, but was away on vacation. The Tribunal was satisfied that the service requirements as set out in Rule 30(1)(b)[1] were met.

33. Consequently, the Tribunal proceeded to hear this application by default in the Respondent’s absence.

 

CONSIDERATION AND EVALUATION OF EVIDENCE

34. A careful consideration of all the evidence submitted to the Tribunal, both on affidavit and through oral evidence, indicates that the basic facts of the matter are not in dispute.  The only real factual issue in dispute is how it came about that the compact disc player is not in working order.

35. The Applicant submitted that the compact disc player was defective from the start; and therefore the supplier (ie the Respondent) is responsible under the CPA to repair or replace the compact disc player; or to refund the Applicant the cost of the compact disc player.

36. The Respondent submitted, on affidavit, that the compact disc player is defective, because the Applicant tampered with it based on the report of the Respondent’s technician. For this reason the Respondent cannot be held liable under the CPA for the cost of repair; replacement of the compact disc player; or to refund the Applicant; nor does the Applicant have a claim under the warranty of the new vehicle.

37. In order to apply the provisions of section 55 of the CPA to these particular facts it must be clear that the compact disc player, supplied by the Respondent, was not of good quality, in good working order and free of defects. If the defects became apparent within a period of six months then section 56 of the CPA would apply and the Applicant would be entitled (at the very least) to a refund of the price of the compact disc player.

38. The evidence before the Tribunal, given by the Applicant under oath, is that the compact disc player was defective in the same month that the Applicant took delivery of her new vehicle.

39. The evidence in the answering affidavit submitted by the Respondent is that it was found by the Respondent’s trained technician that the compact disc player was tampered with after delivery of the vehicle to the Applicant. No further evidence of tampering was made available to the Tribunal by the Respondent or the fault inspection report.

40. Access to the fault inspection report was denied by the Respondent to the Applicant; denied to MIOSA; and denied to the Presiding Member who chaired the leave to refer hearing. The Tribunal can only draw an adverse inference that the Respondent may have information about the condition of the compact disc player that he wishes to hide by his refusal to provide the Applicant, MIOSA and the Tribunal with access to the fault inspection report. Alternatively; it may shed some light on the unresolved question in the mind of the Tribunal of whether indeed the Applicant was supplied with a compact disc player for which she paid the amount of R4 450,56.

41. Other than the Respondent’s statement under oath, the Respondent did not present any evidence to contradict the version of the Applicant; and neither was the Respondent’s version able to be challenged by the Applicant and the Tribunal under cross-examination because the Respondent elected not to attend the hearing. The Respondent further did not avail its technician to the Tribunal on the day of the hearing to be cross-examined on the findings in the fault inspection report. This has crucial implications for a decision in this matter.

 

The allegation of tampering

42. In President of South Africa v South African Rugby Football Union [2] the Constitutional Court stated:

“As a general rule it is essential, when it is intended to suggest that a witness is not speaking the truth on a particular point, to direct the witness’s attention to the fact by questions put in cross-examination showing that the imputation is intended to be made and to afford the witness an opportunity, while still in the witness-box, of giving any explanation open to the witness and of defending his or her character”[3]

43. The Constitutional Court also held that if a point in dispute is left unchallenged in cross-examination the party calling the witness (in this case the party making the statement) is entitled to assume that the unchallenged witnesses testimony is accepted as correct. 

44. This is a rule that was enunciated in the English decision of Browne v Dunn[4] and has been consistently followed by South African courts.[5]  The Constitutional Court pointed out that the rule in Browne v Dunn is not merely one of professional practice but is essential to fair play and fair dealing with witnesses.  Witnesses whose evidence is challenged must be given the opportunity to deal with that challenge.[6] 

45. In this particular matter the Respondent explained in its answering affidavit that the problem lay with the compact disc player being tampered with.  A confirmatory affidavit from the technician who examined the compact disc player was not presented to the Tribunal; or the fault inspection report.  The Respondent further elected not to attend the hearing.

46. At no stage has the Applicant contradicted herself in her evidence.

47. Section 117 of the CPA states as follows:

“In any proceedings before the Tribunal, or before a consumer court in terms of this Act, the standard of proof is on a balance of probabilities.”

48. In Dwele v Phalatse and Others[7] (11112/15) [2017] ZAGPJHC 146 (7 June 2017) the honourable judge stated in para 13 that -

“In motion proceedings a final order may be granted if those facts averred in the applicant’s affidavits, which have been admitted by the respondent, together with the facts alleged by the respondent, justify such an order. In certain instances the denial by a respondent of a fact alleged by the applicant may not be such as to raise a real, genuine or bona fide dispute of fact.  It is bona fide disputes in motion proceedings which fall to be determined on the facts contained in the opposing papers which must be preferred in accordance with the rule in Plascon-Evans Paints Ltd v. Van Riebeeck Paints (Pty) Ltd [1984] ZASCA 51;  1984 (3) SA 623 A at 634 E – 635 C.”

49. In Secequip (Pty) Limited v Secure Excel (Pty) Limited , HULLEY AJ in paragraph 14 stated that -

“Moreover, in having regard to the affidavits, the court must be careful to distinguish between primary and secondary facts” quoting Van Reenen J, in Dros that ‘Facts may be either primary or secondary. Primary facts are those capable of being used for the drawing of inferences as to the existence or non-existence of other facts. Such further facts, in relation to primary facts, are called secondary facts.”

50. Van Reenen J, in Die Dros (Pty) Ltd v Telefon Beverages CC & Others[8] remarked that -

“[s]econdary facts, in the absence of the primary facts on which they are based, are nothing more than the deponents own conclusions” and “accordingly do not constitute evidential material capable of supporting a cause of action.” Van Reenen, J in die Dros para 28 goes further and states as follows:

“It is trite law that the affidavits in motion proceedings serve to define not only the issues between the parties, but also to place the essential evidence before the court (See: Swissborough Diamond Mines (Pty) Ltd & Others v Government of the Republic of South Africa & Others 1999(2) SA 279 (W) at 323G) for the benefit of not only the court, but also the parties. The affidavits in motion proceedings must contain factual averments that are sufficient to support the cause of action on which the relief that is being sought is based. Facts may either be primary or secondary. Primary facts are those capable of being used for the drawing of inferences as to the existence or non-existence of other facts. Such further facts, in relation to primary facts, are called secondary facts (See: Willcox & Others v Commissioner of Inland Revenue 1960(4) SA 599 (A) at 602A; Reynolds N.O. v Mecklenberg (Pty) Ltd 1996(1) SA 75 (W) at 78I). Secondary facts, in the absence of the primary facts on which they are based, are nothing more than a deponent's own conclusions (See: Radebe v Eastern Transvaal Development Board 1988(2) SA 785 (A) at 793C-E) and accordingly do not constitute evidential material capable of supporting a cause of action.”

51. Based on the above and applied to the case under consideration, it is the view of the Tribunal that the averment by the Respondent in its answering affidavit of tampering is a secondary fact which in the absence of the primary facts on which they are based, are nothing more that the deponent’s own conclusions and accordingly do not constitute evidential material capable of supporting a successful challenge to the complaint.

52. Consequently, the failure by the Respondent to put forward the fault inspection report of its technician that the compact disc player was tampered with; the bare denial of the Respondent of any liability of the Respondent in terms of the CPA is found by the Tribunal not “…. such as to raise a real, genuine or bona fide dispute of fact.”[9]

53. Other than the Respondent’s “say so” no evidence upon which the Tribunal can rely of possible tampering with the compact disc player, is before the Tribunal. In the absence of clear evidence of tampering with the compact disc player, any such statement of tampering is further found by the Tribunal as merely an uncollaborated statement.

54. It follows that the Tribunal finds that the NCC, in its investigation of this matter, erroneously concluded that the compact disc player had been tampered with without any evidence in support of such a finding.  In so-doing the NCC has dismally failed the Applicant in that it failed to consider whether there could have been a factory fault with the compact disc player and to fully investigate the Applicant’s complaint that the compact disc player was defective from the start.

55. Based on the above the only inference that can be drawn by the Tribunal is that the compact disc player was not in working order and could not be used by the Applicant.

56. Having regard to all the evidence (or lack of evidence as the case may be) before the Tribunal, the Tribunal is able to conclude that the compact disc player which the Respondent sold to the Applicant was not in working order from the start; and that the Applicant is entitled to exercise her rights under section 56 of the CPA. This being so, the Respondent can be held responsible for the repair, replacement or the refund of the cost of the compact disc player in terms of the CPA.

57. There is no doubt to the Tribunal that the Applicant is a tenacious consumer who pursued this matter for two years through all the legal channels because she firmly believed that she was treated unfairly by the Respondent.

CONSIDERATION OF AN ADMINISTRATIVE FINE

58. We now turn to whether the Tribunal may impose an administrative fine in this particular matter;   even though the Applicant did not include this prayer in her papers.

59. In considering whether to impose an administrative fine, the Tribunal had regard to Section 2 and Section 3 of the CPA; to its inquisitorial powers; and to its powers to impose an administrative fine as provided under Section 151 of the Act.

60. The Tribunal’s power to impose an administrative fine is derived from section 151 of the Act.

Section 151(1) of the Act provides as follows –

“The Tribunal may impose an administrative fine in respect of prohibited or required conduct in terms of this Act or the Consumer Protection Act, 2008.”

Section 151(2) of the Act provides as follows –

“An administrative fine imposed in terms of the Act may not exceed the greater of-

(a) 10 per cent of the respondent’s annual turnover during the preceding financial year; or

(b) R1 000 000”.

61. When determining an amount, the Tribunal must consider the legislation from which it derives its own mandate and consider the factors in Section 151(3) of the Act which provides as follows:

“(a) The nature, duration, gravity and extent of the contravention;

(b) Any loss or damage suffered as a result of the contravention;

(c) The behaviour of the Respondent;

(d) The market circumstances in which the contravention took place; and

(e) The level of profit derived from a contravention.”

62. Section 2 of the Act which requires the Tribunal to interpret the Act in a manner that “gives effect to the purposes set out in section 3.”  Section 3 of the Act, is in summary, to promote and advance the social and economic welfare of South Africans, to promote a fair, transparent, competitive, sustainable, responsible, efficient, effective and accessible credit market and industry to protect consumers.

63. In National Credit Regulator v Werlan Cash Loans ad paragraph 32 The Tribunal stated that: “Section 151(2)(b), establishes an alternative to an administrative penalty of 10% of annual turnover namely R1 000 000,00. Accordingly, where no evidence regarding annual turnover is available, the Tribunal still has the option to award a penalty not exceeding R 1 000 000,00.  The Tribunal stated further in the Werlan matter that the Tribunal must consider fairness towards both the Applicant and the Respondent, any mitigating factors that can be taken into account in arriving at the final amount of the penalty as well as the evidence before the Tribunal of the Respondent’s annual turnover.  For this reason we are of the view that the Tribunal may impose an administrative penalty without reference to annual turnover.”

64. The behaviour of the Respondent, in the evidence before the Tribunal shows:

64.1 the Respondent’s callous disregard for the Applicant, MIOSA, the Act and the Tribunal;

64.2  the Respondent did not co-operate with MIOSA or the Tribunal in the case of a matter arising in terms of the CPA;

64.3  the Respondent has no regard for the Applicant who is without a functioning compact disc player for the past 2 years; and

64.4 the Respondent ignored the fact that the Applicant paid an amount of R4 450,56 for a compact disc player that is not in working order; and the amount of R498 751,54 for a new motor vehicle that included a working compact disc player.

65. The behaviour of the Respondent is clearly not consistent with the purposes and the requirements of the Act; and such behaviour is in conflict with the best interests of consumers.

CONCLUSION

66. In the light of the factors to be taken into account by the Tribunal in Section 151(3) it is the considered view of the Tribunal that there is no doubt that the imposition of an administrative fine is appropriate in the circumstances having regard to the nature of the contravention; and the Respondents attitude towards the Applicant, MIOSA and the Tribunal. However, it is also appropriate that the Tribunal applies a rational approach to the evidence led by the Applicant’; the lack of evidence led by the Respondent; and the impact on the Applicant who pursued this matter for over two years.

ORDER

67. Accordingly, the Tribunal makes the following order:

67.1  The Application is upheld;

67.2  The Respondent must repair or replace the compact disc player of the Applicant at the cost of the Respondent by 7 August 2019;

67.3  The Respondent must pay an administrative fine of R100 000.00 (One Hundred Thousand Rand) into the National Revenue Fund referred to in Section 213 of the Constitution of the Republic of South Africa, 1996 within 30 days of the date of this judgment. The Banking Details of the National Revenue Fund are as follows:

Bank Name             :  The Standard Bank of South Africa Limited

Account Holder        :  Department of Trade and Industry

Branch Name          :  Sunnyside

Branch Code           :  05100

Account Number      :  370 650 026

Reference              : NCT/122593/2018/75(1) and Name of Person or Business making payment

67.4  Payment of R50 000,00 (Fifty Thousand Rand) of the administrative fine is suspended for a period of 30 days from the date of this judgment, subject to the Respondent complying with paragraph 67.2 of this judgment;  

67.5 Should the Respondent fail comply with paragraph 67.2 of this judgment, then the Respondent must:

67.5.1 pay the full administrative fine of R100 000 (One Hundred Thousand Rand) in accordance with section 67.3 of this judgment, by 7 August 2019; and

67.6 There is no order as to costs.

 

THUS HANDED DOWN AT CENTURION ON THIS 10^th DAY OF JULY 2019.

 

[Signed]

P A BECK

PRESIDING MEMBER

Ms D Terblanche (Member) and Prof T Woker (Member) concurring.

 

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