Motus Corporation (Pty) Ltd t/a Zambezi Multi Franchise and Another v Wentzel

On 7 December 2017, Ms Wentzel purchased a new Renault Kwid motor vehicle from Motus Corporation (Renault) for R176 400.41. She financed the purchase through the Motor Finance Corporation (MFC), with the total amount payable under the instalment sale agreement being R261 924.84 over 72 months. Shortly after taking delivery, Ms Wentzel experienced various problems with the vehicle, including a ticking/rattling sound, flickering lights, air-conditioning issues, Bluetooth malfunction, brake noise, rattling windows, and loose roof rails. She took the vehicle to Renault for repairs on three occasions: 27 December 2017, 23 January 2018, and 23 February 2018. Renault undertook repairs including replacing the immobiliser module, securing the driver's window, deglazing brake pads, and replacing roof rails. On 21 February 2018, Ms Wentzel referred the matter to the Motor Vehicle Ombudsman of South Africa (MIOSA), but MIOSA declined jurisdiction on 10 September 2018, incorrectly citing that legal action had been instituted. On 16 May 2018, before MIOSA's decision, Ms Wentzel approached the high court seeking cancellation of the credit agreement and a full refund of R256 965.84 under sections 55 and 56 of the Consumer Protection Act 68 of 2008.

• Whether Ms Wentzel was required to exhaust internal remedies under section 69 of the Consumer Protection Act before approaching the high court
• Whether section 69(d) creates a hierarchy of remedies that must be followed sequentially before approaching a court
• Whether Ms Wentzel satisfied the requirements of section 56(3) of the Consumer Protection Act for entitlement to a refund remedy
• Whether the defects complained of constituted 'defects' as defined in section 53(1)(a) of the Act
• Whether Ms Wentzel properly brought her claim by way of motion proceedings given the factual disputes
• What amount should be refunded under section 56(3)(b) read with section 20 of the Act
• Whether the punitive costs order was justified

The appeal succeeded. The high court's order was set aside and replaced with an order dismissing the application with no order as to costs in both the high court and the Supreme Court of Appeal.

A consumer is not entitled to a refund of the purchase price under section 56(3)(b) of the Consumer Protection Act unless they prove that: (1) the supplier repaired defective parts; and (2) within three months after the repair, the defects were not remedied or a further failure was discovered. It is incumbent on a consumer to report further defects to the supplier within the three-month period for purposes of enforcing the warranty provisions. The amount refundable under section 56(3)(b) is limited to the 'price' as defined in section 1 of the Act - being the amount paid to the supplier, not amounts paid to third-party financiers. Section 20(6) entitles a supplier to deduct a reasonable amount for the consumer's use of goods during the time they were in the consumer's possession. Motion proceedings cannot be used to resolve genuine factual disputes, and where such disputes exist, the Plascon-Evans rule requires the court to accept the respondent's version unless it consists of bald denials, raises fictitious disputes, or is palpably implausible.

The Court made extensive obiter comments on section 69(d) of the Consumer Protection Act, expressing significant concerns about its interpretation. The Court noted that section 69 does not present a clear hierarchy of remedies and observed that requiring consumers to exhaust all other remedies before approaching a court would raise serious concerns regarding section 34 of the Constitution (the right of access to courts). The Court suggested that section 69 should be interpreted permissively, allowing consumers to elect which remedy to pursue, rather than mandating a sequential exhaustion of remedies. The Court noted that the actio redhibitoria (claim for cancellation and refund for defective goods) has ancient roots in South African law and there is no apparent reason why consumers should be precluded from immediately pursuing this remedy in court. The Court expressed concern that the stringent construction some high courts have placed on section 69(d) would preclude urgent relief even where contractually provided for, which would raise constitutional validity concerns. The Court emphasized that given the Act's purpose to protect consumers, there is no apparent reason why dissatisfied consumers should be precluded from pursuing their most effective remedy immediately or find themselves enmeshed in procedural niceties. The Court also criticized MIOSA's decision to decline jurisdiction on incorrect grounds, stating this was 'very disturbing'. The Court observed that not every small fault in an entry-level vehicle amounts to a 'defect' under the Act - issues like Bluetooth performance do not render a vehicle less acceptable for its primary purpose as transportation. The Court noted that accessory features like Bluetooth systems, while convenient, cannot render goods defective when the primary function (transportation) is unimpaired.

This judgment provides important guidance on the interpretation and application of the Consumer Protection Act's remedies for defective goods. It establishes that the refund remedy under section 56(3) is subject to strict preconditions that must be satisfied. The judgment clarifies that not every minor fault constitutes a 'defect' as defined in section 53(1)(a) - it must render the goods less acceptable than persons generally would be reasonably entitled to expect, or less useful, practicable or safe. The judgment also provides important guidance on calculating refunds under section 20, emphasizing that consumers must refund the price paid to the supplier (not finance charges paid to third parties) and that suppliers may deduct reasonable amounts for use of goods. While the Court declined to definitively resolve the interpretation of section 69(d), it provided significant obiter guidance suggesting that the provision should not be interpreted as creating a mandatory hierarchy of remedies that must be exhausted before approaching a court, and that such an interpretation would raise constitutional concerns regarding access to courts under section 34 of the Constitution. The judgment reinforces that motion proceedings cannot be used to resolve genuine factual disputes and that the Plascon-Evans rule applies to consumer protection cases.