Court orders refund for unwitting buyer of previously written-off vehicle

A Johannesburg used car dealership has been ordered to refund the full outstanding financed value plus interest of a vehicle a consumer bought without knowing it was previously ‘written off’ by an insurance company.

Acting Johannesburg regional court magistrate HR Viana ordered Rasar (Pty) Ltd, trading as Jambo Motors, to pay Tumelo Kent Matia R226 944.07 plus interest at 7.75% per annum from 16 August 2020 to date of payment with costs.

In the judgment handed down last month, Viana also ordered Matia to return the 2018 White Golf VII 1.0 TSI Comfortline Blue Motion acquired on 14 September 2019 to the dealership.

Viana issued this order despite acknowledging the evidence does not show that Jambo Motors had actual knowledge of the defects to the chassis of the Golf detected during an assessment, and that there was no evidence that Jambo Motors fraudulently failed to disclose those defects.

Risks to consumers, road users

The judgment follows reports of unsuspecting consumers buying cars without knowing they were previously written off because the vehicle’s registration code was not amended to ‘Code 3’ on the National Traffic Information System (NaTIS) to reflect this – possibly through fraud, bribery and corruption.

This practice not only leads to consumers buying a used vehicle at an inflated price, these rebuilt vehicles are often unroadworthy and dangerous to drive and require the new owners to spend a significant amount of money to get them into a safe and roadworthy condition.

This led to the South African Motor Body Repairers’ Association (Sambra) again appealing to the SA Insurance Association (SAIA) to allow public access to the vehicle salvage database so consumers can check whether a vehicle has been written off before concluding a transaction.

Sambra chair Charles Canning on Wednesday applauded the judgment as “a milestone”, saying Sambra has been actively lobbying SAIA for years for the public release of a vehicle salvage database (VSD) that will inform prospective buyers of used vehicles, whether private individuals or user car dealers, of the status of the vehicle.

Canning said the SAIA has agreed that a vehicle salvage database will be published towards the end of the first quarter of 2023.

“Sambra welcomes this undertaking by SAIA as it will ensure that unsuspecting buyers of vehicles can obtain information about the status of the vehicle they intend buying and not end up with the proverbial ‘lemon’,” he said.

Retail Motor Industry Organisation (RMI) CEO Jakkie Olivier said it supports the publication of the database but still urges consumers to exercise caution and get an independent assessment wherever possible as the publication of the VSD will only cover that roughly 30% of the car parc that is insured.

Consumer protection

Matia’s claim against Jambo Motors was in terms of the provisions of the Consumer Protection Act and founded on those contained under Chapter 2 Part H, which deal with the “right to fair value, good quality and safety”, and alternatively Chapter 2 Part G, the “right to fair, just and reasonable terms and conditions”.

It was alleged Jambo Motors breached these two statutory provisions by selling Matia a defective vehicle, which was not of good quality nor in good working order, alternatively by requesting Matia to waive liability of Jambo Motors in an unfair, unjust and unreasonable manner.

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Matia’s uncontested testimony is that he would not have bought the Golf if he was aware of the defects that materially affected its mobility.

He was referred by Sambra to Chris Viljoen of Chris Viljoen Motors for an assessment of the Golf.

This came after a VW Bloemfontein dealership refused to work on the vehicle because it had been fitted with non-genuine VW parts and had a bent chassis; Matia wanting to return the vehicle to Jambo Motors but the dealership refusing to accept it and refund Matia; and the Motor Industry Ombudsman of SA being unable to resolve the dispute with Jambo Motors.

Long and winding road

Viljoen found that the Golf had 20 defects.

He also established that prior to its sale to Matia it was involved in a major accident, written off by King Price Insurance, stocked at salvage company SMD, sold at an auction and then “put back on the market”.

Viana said of serious concern to Viljoen was that a vehicle in the Golf’s condition, especially with a bent chassis, would cause an uneven drive and “choose its own path”, which was one of Matia’s complaints.

Jambo Motors dealer principal Mesum Hussain said the Golf had been driven 23 573km after being sold to Matia.

He also said he does not have much technical knowledge and relies on the Dekra AA report, and that the vehicle was previously involved in an accident.

The court heard that Dekra AA evaluated the overall condition of the vehicle for Jambo Motors and its report showed that the only defects to the Golf were of a minor nature.

Viana said it was clear from the evidence that none of the parties engaged in any thorough inspection of the Golf and that Jambo Motors relied on the Dekra AA report for knowledge of the condition of the Golf at the time of the sale.

Dekra report flawed?

However, Viana said that on the strength of Viljoen’s evidence “it appears the Dekra Report might be flawed”.

Viana said most importantly, Viljoen’s evidence regarding the defects of the Golf is undisputed in material respects.

Viana said Viljoen had experience regarding previous and unrelated Dekra Reports and his view is that on each occasion he had an opportunity to evaluate a Dekra Report, he found a “clean bill of health” was provided, yet on each occasion the particular vehicle had defects.

“In my view it can safely be accepted on a balance of probabilities that the defects, as Viljoen mentioned in his report, probably existed at the time of the sale of the Golf. There is no cogent evidence to show or suggest otherwise. The evidence of Viljoen is also supported by the probabilities,” he said.

Viana said the only defects shown or mentioned to Matia related to damage to the rear bumper, which as Viljoen indicated, were secondary because the major part of the damage was on the front part of the Golf.

“In light of Viljoen’s testimony, it cannot be said that there was a full and comprehensive disclosure to the plaintiff [Matia] of all the defects to the Golf at the time of the sale.”