Consequences of Failure to Exhaust Internal Remedies Under CPA

Introduction

In the case of Makadu v NTT Volkswagen [2024] ZANCHC 52, the court dealt with the issues of defective goods and the exhaustion of internal remedies before approaching the court. The applicant, dissatisfied with a brand-new Volkswagen Polo Vivo that failed to start, sought the cancellation of the sale agreement and a refund. This case highlights the importance of following the procedural steps outlined in the Consumer Protection Act (CPA) 68 of 2008 before seeking judicial intervention.

Facts of the Case

Sale and Delivery:
The applicant entered into an installment sale agreement with Volkswagen Financial Services South Africa for a new Volkswagen Polo Vivo, facilitated by NTT Volkswagen Kimberley (NTT).

Defective Vehicle:
Upon attempting to start the vehicle, the applicant found that it would not start, accompanied by a harsh noise from the ignition. The vehicle was towed back to NTT, where a technician confirmed the issue, noting a "clack-clack noise" during start attempts.

Diagnosis and Attempted Repair:
The workshop foreman diagnosed the problem as a fuse pin not making secure contact, which resulted in a lack of power to the ignition. The fuse was replaced and inserted into a different socket, resolving the issue. The applicant, however, refused to accept the repaired vehicle and requested the cancellation of the sale agreement.

NTT's Response:
NTT declined the cancellation request but offered a replacement vehicle, which was not in the applicant's preferred choice. The applicant then referred the matter to her legal representatives and complained to the Motor Industry Ombudsman of South Africa (MIOSA).

Court Application:
Dissatisfied with the ruling of MIOSA, the applicant sought a court order for the delivery of a new defect-free Volkswagen Polo Vivo, the setting aside of the MIOSA recommendation, or, alternatively, the cancellation of the sale agreement and a refund.

Respondents' Preliminary Point:
The respondents argued that the applicant failed to comply with section 69(d) of the CPA, which requires exhausting all internal remedies before approaching the court. The applicant had only complained with MIOSA and did not refer the matter to the Consumer Tribunal.

Discussion and Findings

Section 69(d) of the CPA:
The court discussed the implications of section 69(d) of the CPA, emphasizing the need for consumers to exhaust internal remedies, such as approaching the National Consumer Commission or the Consumer Tribunal, before seeking court intervention. Mr. Olivier, representing Volkswagen, argued that this requirement ensures the administrative dispute resolution mechanisms are not undermined.

Comprehensive Dispute Resolution Mechanism:
The court found that the CPA provides a comprehensive mechanism for resolving disputes between consumers and suppliers. The legislative intent behind this scheme is to first resolve disputes through internal remedies before involving the civil courts.

Failure to Exhaust Internal Remedies:
The court noted that except for the MIOSA complaint, the applicant did not pursue other available remedies within the CPA framework, such as the Consumer Tribunal. This failure to exhaust all internal remedies meant that the applicant's approach to the court was premature.

Conclusion

The court concluded that the applicant's failure to exhaust all internal remedies provided by the CPA before approaching the court was a violation of section 69(d). The application was thus refused. This case underscores the necessity for consumers to follow the procedural steps outlined in the CPA to ensure proper resolution of disputes regarding defective goods.

Order:
The court refused the application due to the applicant's failure to exhaust all internal remedies as mandated by the CPA.

This case serves as a crucial reminder of the procedural requirements under the Consumer Protection Act, emphasizing the importance of utilizing all available dispute resolution mechanisms before seeking judicial relief.