It would be a common cause to deduct usage of a vehicle from the refund, but what happens when you are confronted with two sections that elaborate two different approaches?
In Section 20(6) of the Consumer Protection Act 68 of 2008, it is clear that as per (6) (b) (i) the supplier may charge the consumer a reasonable amount for use of the goods during the time they were in the consumer’s possession. In the alternative, Section 56 refers to a “no-fault clause” whereby the consumer may cancel without penalty.
In a recent case referred by the Consumer to MIOSA against a dealership, the above-mentioned question was asked as the closing letter of MIOSA did not reflect usage and was given in regards with Section 56. Therefore, this finding was not incorrect but did cause misunderstanding on the consumer’s side. The matter was then referred to the Consumer Affairs Court were by it was requested that a full refund must be supplied as the ruling was made by implementation of Section 56; again, the argument was that this section clearly conforms to no penalty.
It was argued on the basis that via interpretation of the word penalty, as it was clear that without penalty meant no deduction from the refund. It was placed before MIOSA as their finding letter did not include any mention about any deduction from the refund for usage, and that the finding was based on Section 56 and not Section 20.
Section 56 does not provide that the supplier can make any deductions for the use of the goods. This will operate unfairly where a consumer enjoyed a long period of uninterrupted use of a product before it became faulty. The unfair operation of this omission against suppliers is exacerbated by the fact that Section 56(2) does not provide for a price reduction as another alternative.
Unlike Section 20, which governs returns in a different context, Section 56(2) contains no provisions relating to liability for the use, depletion or deterioration of the goods. The question is whether a supplier who is accepting the return of the goods in terms of Section 56(2) has any claim in respect of the use of the goods.
As per the definition of penalty being, “a punishment imposed for breaking a law, rule, or contract.” It was argued once again that usage would not form part of this definition and that usage would generally form part of “usage” and therefore could not be seen as a penalty.
Once the matter was dealt with by MIOSA the closing letter confirmed that although the ruling was made in regard with Section 56 of the Consumer Protection Act the intention was for Section 20 to be read with Section 56, therefore giving effect to usage to be deducted from the refund.
Had the legislature intended it, Section 56 would have contained a similar provision and that a claim for use of the defective product cannot be brought against a consumer.
Above needs to be measured by the interpretation of MIOSA, in this regard which seems that Section 20 must be read together with Section 56.
About the Author
Frank Maritz is a Senior Legal Advisor with 10 years of legal background in the Consumer Protection Department at SEESA.
Resources:
Section 20 Consumer Protection Act
Section 56 Consumer Protection Act
MIOSA and SAFLII Case Law (Non-Reported)