Sinenhlanhla Masilela|Published
A Cape Town dealership has been ordered to refund a customer R90,000 after selling her a defective Hyundai H1, and pay a R100,000 administrative fine for contravening the Consumer Protection Act.
The National Consumer Tribunal set aside the vehicle sale agreement between N Magoda and Herring & Van der Burgh CC, trading as Auto King Milnerton, after finding that the dealership had failed to resolve persistent problems with the vehicle.
In its recent judgment, the tribunal also ordered the dealership to refund MFC, a division of Nedbank, R246,117.70, representing the amount it had paid towards the vehicle.
The dealership must pay both refunds within 10 business days and deposit the R100,000 administrative fine into the National Revenue Fund within 30 business days.
Customer complained of persistent vehicle defects
Magoda bought a used 2015 Hyundai H1 from the dealership on October 8, 2022, for over R328,300. The vehicle had travelled 161,230km at the time of purchase.
She paid a R90,000 deposit, while MFC financed the balance.
However, the vehicle developed persistent oil leaks and turbo-related problems. A diagnosis conducted by Hyundai Bellville on March 15, 2023, formed part of the evidence considered by the tribunal.
The tribunal found that the vehicle was defective when it was sold and that the dealership had failed to meet its obligations under the Consumer Protection Act.
The judgment found that the defects infringed sections 55(2)(a) to (c) of the Act, which deal with consumers' rights to goods that are reasonably suitable for their intended purpose, of good quality and free of defects.
The dealership also contravened section 56(3), which provides remedies where goods fail to meet the applicable quality standards during the relevant warranty period.
Dealership's explanations rejected
The dealership argued that the Hyundai H1 was a high-mileage used vehicle that had previously been used as a taxi.
It also raised concerns about petrol allegedly being introduced into the diesel engine, arguing that this caused subsequent damage.
However, the tribunal found that the petrol contamination occurred in February 2024, after the six-month implied warranty period, and did not explain the earlier problems experienced by Magoda.
The dealership also raised an allegation that the vehicle had been involved in an accident after the sale. The tribunal rejected this argument, finding that the DEKRA report relied on did not confirm accident-related damage.
The tribunal concluded that the dealership's repeated repairs had not resolved the underlying problems and that the consumer was entitled to relief.
Financing agreement also cancelled
MFC, which financed part of the purchase, opposed the relief sought because of its interest in the vehicle and the credit agreement.
The tribunal nevertheless ordered the cancellation of both the sale agreement and the associated instalment agreement.
It directed the dealership to refund MFC R246,117.70, the amount paid to the dealership towards the purchase price, in addition to returning Magoda's R90,000 deposit.
MFC told the tribunal that Magoda's account was in arrears by R168,986.34, equivalent to approximately 25 months of missed payments. Her last recorded payment was R4,000 on August 6, 2025.
The tribunal did not order the dealership to reimburse her for instalments, insurance premiums or repair costs. The judgment indicated that she could pursue a separate civil claim for damages, if appropriate.
Dealership faces R100,000 administrative fine
In addition to the refunds, the tribunal imposed a R100,000 administrative fine on the dealership.
It considered the seriousness of the contraventions but noted that there was no finding of malice, evidence of previous enforcement action or proof of repeated offences.
The tribunal also ordered the dealership to collect the Hyundai H1 at its own risk and expense within 10 business days.
The case cited the first respondent as Auto One Motors in the original papers, but the tribunal amended the citation to reflect the correct entity, Herring & Van der Burgh CC trading as Auto King Milnerton.
No costs order was made.
sinenhlanhla.masilela@iol.co.za
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