Van Niekerk v FirstRand Bank Limited

Mrs Aletta Cateriena van Niekerk entered into an instalment sale credit agreement under the National Credit Act 34 of 2005 with FirstRand Bank Limited to purchase a second-hand 2012 Ford Ranger motor vehicle, financed by the bank. Shortly after delivery, the vehicle exhibited serious mechanical problems, including defects in the gearbox and oil cooler. Despite attempted repairs by the motor dealer, the defects persisted. Expert evidence showed that the gearbox fitted was unsuitable and that the defects were latent and materially impaired the vehicle’s utility. Mrs van Niekerk cancelled the agreement in writing in April 2018, relying on the common law actio redhibitoria, alternatively the Consumer Protection Act 68 of 2008. The bank rejected the cancellation and sued for cancellation and damages, while Mrs van Niekerk counterclaimed for confirmation of cancellation and restitution of amounts paid. The High Court found that she had waived her common-law rights and that the CPA did not apply, dismissing her counterclaim. She appealed to the Supreme Court of Appeal.

The appeal was upheld with costs. The High Court’s order was set aside and replaced with an order dismissing the bank’s claim with costs and upholding Mrs van Niekerk’s counterclaim, confirming cancellation of the credit agreement and ordering the bank to pay restitution of R170 023.23 with interest and costs.

The case clarifies the continued availability of the common law actio redhibitoria in credit agreements governed by the NCA where goods are affected by latent defects. It affirms that the CPA applies to the goods that are the subject of a credit agreement, notwithstanding the exclusion of the agreement itself, and adopts a purposive, consumer-protective interpretation of both the NCA and CPA. It also limits the application of section 69 of the CPA where consumers are defending claims in court.