FINANCES

A consumer’s gripe with the dealership where she had bought her car has nothing to do with the financial arrangements she had entered into with a credit provider; thus, she cannot simply refuse to pay her monthly instalments, the Gauteng High Court, Johannesburg, ruled.

It was found in favour of Absa, which financed the vehicle under an agreement between it and the purchaser, only identified as Ms Baloyi.

The bank wanted to obtain summary judgment against Baloyi for the return of the vehicle and the cancellation of her credit agreement.

Baloyi, on the other hand, argued that she was protected by the Consumer Protection Act (CPA). But it was found that the CPA excludes credit agreements under the National Credit Act.

Absa financed the vehicle Baloyi had bought from the motor dealership, CHM Group, Midrand. According to the terms of the sale agreement, she was due to pay monthly instalments of R6,827, with the final instalment being payable on August 30, 2029.

She, however, made no payment of the debt since its inception. The detailed bank statement provided by the bank shows that she never made any payments.

At the time of the institution of the legal action by Absa, Baloyi was in arrears in the amount of R127,195, and the total outstanding balance was R597,344, according to the certificate of balance.

Baloyi argued that she is not responsible for the outstanding payments due to fraudulent misrepresentation, breach of contract, and failure to disclose material facts by the dealership, which she said led to the return of the financed vehicle within three days of purchase.

She raised several defences to the claim for summary judgment, which included that the dealership violated multiple provisions of the CPA. The dealership, meanwhile, refused to refund her.

According to Baloyi, the bank had a duty to mitigate its losses and should have taken steps to recover the funds from the dealership. 

She claimed that payment may be withheld where the supplier’s performance is defective, asserting that the vehicle was unfit and that misrepresentation occurred.

Baloyi said the Gauteng Consumer Protection Authority informed her that the bank recovered the vehicle from the dealership, yet it continues to demand full payment as if the vehicle was lost or retained by her.

She lodged a complaint with the Motor Industry Ombudsman and the National Consumer Commission and requested that Absa’s application for summary judgment be stayed pending the outcomes of these proceedings.

Counsel for Absa argued that Baloyi’s claims of violation of the CPA are directed at the dealership, not the bank.

It said the bank is not the supplier of the vehicle but merely financed it. Therefore, any claims regarding the vehicle’s condition are for Baloyi to pursue against the dealership.

The court agreed and said the bank has demonstrated a clear and enforceable claim founded on a written credit agreement between it and Baloyi.

It said Baloyi’s defence is not good in law because the crux of her defence lay against the dealership and not the bank.

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