Most dealerships would have the same problem regarding defects on motor vehicles that could lead to the cancellation of a purchase agreement. The question would be whether these defects could be justified as imperfection, causing the defects to render the vehicle less useable and justifying the cancellation of the purchase agreement.
The CPA defines “defect” in section 53(1) as follows:
- any material imperfection in the manufacture of the goods or components, or performance of the services, that renders the goods or results of the service less acceptable than persons generally may expect in the circumstances; or
- any characteristic of the goods or components that renders the goods or components less useful, practicable, or safe than persons generally would be reasonably entitled to expect in the circumstances; ….”
Dealerships will be confronted by consumers wishing to cancel a transaction due to defects present on the vehicle, even if these defects are minor.
It is important to establish whether these defects could have rendered the vehicle less usable or impaired. The courts have held that a defect could lead to the cancellation of a transaction but must apply their minds regarding the severity of these defects. The ambit of the Consumer Protection Act Section 55 ambiguously supports the argument of the severe defects on the vehicle that could lead to a cancellation.
In one of the recent cases before the NCT (National Consumer Commission) Nqunqa v Eerste Geluk Motors CC NCT/131419/2019/75(1)(b) – CPA the issue to be decided was the extent of the defects and whether these defects could form part of interpreting a defect within the Consumer Protection Act intituling the purchase agreement to be cancelled. There is a dispute between the parties whether the Applicant cancelled the sale of the vehicle (on the Applicant’s version) or agreed to the Respondent repairing the vehicle (on the Respondent’s version). If the Applicant’s interpretation is correct, and the Respondent supplied the Applicant with a vehicle with defects as defined in section 53(1) in contravention of section 55(2) of the CPA that would entitle the Applicant to cancel the sale and receive a refund of the purchase price from the Respondent.
In the light of the findings above, the tribunal will not consider and make a finding whether the Applicant cancelled the sale or agreed to the Respondent repairing the vehicle. The right to cancel is only available to the Applicant had the Respondent supplied the Applicant with materially defective goods, which is not the case in this matter.
The above finding was clearly based on interpreting a defect “The Tribunal finds that the defects in the vehicle were not of the nature described in the definition of defects in section 53(1) of the CPA entitling the Applicant to cancel the sale in terms of section 56(2) of the CPA.
In the case Motus Corporation (Pty) Ltd and Another v Wentzel (Case no 1272/2019) [2021] ZASCA 40, the counsel for the Applicant argued and placed before the Honourable Court that-
“It is unnecessary to reach a firm conclusion whether the defects complained of by Ms Wentzel fall either under section 53(1)(a)(i) or section 53(1)(a)(ii). It must be accepted on the facts that are common cause that her vehicle had certain issues, which she brought to the attention of Renault.
It is more difficult to determine whether they amounted to defects as defined in the statute. Not every small fault is a defect as defined. It must either render the goods less acceptable than people generally would be reasonably entitled to expect from goods of that type or render the goods less useful, practicable or safe for the purpose for which they were purchased.
Is every rattle or unfamiliar noise a defect in terms of the statute? A defective module may be readily replaced, as occurred with the immobiliser. Does that render the vehicle defective to entitle the purchaser to return it and demand repayment of the purchase price? Clearly not.”
Regarding the above, it would be clear for a dealership to establish the weight of the complaint from the defect and or imperfection. This will assist in resolving and/or counter the allegations that the defect might not justify the cancellation request.
Therefore, by interpreting the definition of a defect as per Section 53 of the Consumer Protection Act, it will be required to establish the weight of the argument to cancel an agreement based on a defect, but that this defect must be of such an extent that it would render the vehicle less useful and/or impaired. If the defects fall within Section 53, the consumer might have a reason to cancel the purchase agreement based on the severity, therefore rendering it impaired.
Contact your nearest SEESA for expert advice from our Consumer Protection & POPI Legal Advisor. Alternatively, leave your details on our website and a SEESA representative will contact you.
About the Author:
Frank Maritz is a Senior Legal Advisor for Consumer Protection & POPI at SEESA’s Bloemfontein office. He has almost 10 years of hands-on experience in Consumer Protection Legislation. Frank obtained his LLB degree from the University of South Africa.
References:
- Section 53 and 55 Consumer Protection Act 68 of 2008
- Motus Corporation (Pty) Ltd and Another v Wentzel (Case no 1272/2019) [2021] ZASCA 40
- Nqunqa v Eerste Geluk Motors CC NCT/131419/2019/75(1)(b) – CPA