Victory for consumers: Supreme Court rules that woman can get refund for faulty Ford Ranger

In a victory for consumer rights protection, the Supreme Court of Appeal ruled that a woman who had returned the 2012 Ford Ranger she had bought for her son as the vehicle had the wrong gearbox fitted was within her rights to do so.

FirstRand Bank, which financed the vehicle under a credit agreement, objected and said she had waived her right to cancel the financing agreement by first sending the vehicle for repairs. It argued that the Consumer Protection Act did not apply to the transaction.

The High Court earlier agreed with the bank and ruled against purchaser Aletta van Niekerk. She subsequently turned to the SCA, which in turn ruled that Van Niekerk did not waive her common law rights.

It found that her reliance on the legal remedy, which allows a buyer to cancel a sale and get a full refund for the purchased item with a hidden defect that existed at the time of the sale, was justified.

Van Niekerk bought the Ford Ranger 3.2 TDCI 4x4, automatic vehicle in December 2017, from a dealership in the North West Province. She subsequently signed a credit agreement with the bank and paid a deposit of R150,000.

The balance of R268,180.56, including interest and finance charges, was payable in 72 equal monthly instalments of R3,724. The vehicle was delivered to Van Niekerk, and her son Gerrie took possession of it on the same day.

Four days later, it experienced problems relating to the oil cooler and the gearbox. Gerrie returned the vehicle to the dealership, where the gearbox was replaced.

The vehicle was returned to Gerrie; however, within two months, it overheated, and Gerrie again returned the vehicle to the dealership, stating that he was no longer interested in having it and that the salesperson should cancel the agreement.

A professional mechanic pointed out that the replaced gearbox was manufactured for an entirely different model of vehicle and was not suitable for the vehicle bought by Van Niekerk.

The bank did not accept Van Niekerk’s cancellation and instituted an action in the High Court for cancellation of the agreement.

In response, Van Niekerk filed a counterclaim. She wanted payment of R170,023.23 from the bank — the R150,000 deposit she had paid as well as five months’ instalments, which the High Court had turned down.

The High Court concluded that the bank was not the supplier as defined in the CPA and that it had merely financed the vehicle.

The court concluded that the bank’s claim was based on an instalment sale agreement which is excluded from the operation of the CPA. It also held that Van Niekerk ought to have cancelled the agreement with the bank when the defect to the gearbox was first discovered and that she ought to have exhausted the remedies in Section 69 of the CPA before instituting her counterclaim.

The SCA, however, in ruling in her favour, found that the High Court misdirected itself in law and fact. The bank acted as both the supplier and credit provider under the agreement, and the CPA applied to the goods.

The appeal court said the defects to the vehicle were serious and undiscoverable on ordinary inspection and rendered the vehicle unfit for use. Van Niekerk lawfully cancelled the agreement, and she is entitled to a refund from the bank, the SCA concluded.

zelda.venter@inl.co.za