FirstRand Bank ordered to refund woman R170,000 after refusing to cancel deal over defective Ford Ranger
After a protracted court struggle over a defective 2012 Ford Ranger she bought for her son, a mother from the North West won, and a major financial institution was forced to restore a substantial amount of money as a result of her unwavering pursuit of justice.
In December 2017, the woman purchased a Ford Ranger 3.2 TDCI 4×4. After the son worked out an agreement with Autorama, a local car dealer in Klerksdorp, the sale was finalized.
FirstRand Bank provided financing for the car, and a substantial deposit of R150,000 was made through a trade-in car, leaving a balance of more than R268,000. Additionally, there was an R3,700 monthly payment for a period of 72 months.
Four days after the vehicle was delivered, it experienced problems relating to the oil cooler and the gearbox. The son returned the vehicle to Autorama, where the gearbox was replaced. In January 2018, the vehicle was returned to the son, however, within two months the vehicle overheated, and he again returned the vehicle to Autorama, stating that he was no longer interested in having it, and that the salesperson at the dealership should cancel the agreement
In a letter addressed to Autorama and the bank, the son’s attorney cancelled the deal in writing in April 2018.
The bank did not accept the cancellation and elected to institute an action in the high court over the cancellation of the agreement. The woman also instituted a counterclaim seeking a refund and cancellation of the agreement.
During the trial, the mother testified that neither she nor her son were aware of any pre-existing defects at the time of purchase. A pivotal moment came when a mechanic, Mr Moodley, confirmed the vehicle’s multiple defects, suggesting it had likely been in an accident prior to the sale and had mistakenly been fitted with an inappropriate gearbox. His findings were supported by photographs showing that the bolts of the oil cooler were not properly fastened, causing the cooler to become loose.
Despite compelling evidence of latent defects, FirstRand’s legal team chose to close their case without calling any witnesses.
The High Court ruled in favour of the bank, asserting it was merely a financier in the transaction, not the vehicle supplier. The judgment contended that the mother should have pursued cancellation at the initial signs of defect. Additionally, it stated she should have exhausted remedies under the Consumer Protection Act before counterclaiming against the bank.
The SCA further added that the high court was misdirected in its evaluation of the evidence and by not finding that the vehicle was latently, materially defective.
It was also added that the woman brought a counterclaim because the bank elected to institute its claim in the high court.
“She had no choice but to proceed with her counterclaim in the forum elected by the bank and she had to do so in terms of the uniform rules of court. Any interpretation that would effectively result in closing the door of the court to a consumer in circumstances where she was brought to the court by the bank and where she defends the claim instituted against her by the bank, would be in conflict with the purpose of the CPA and Section 34 of the Constitution, which imposes a positive obligation on the state to provide a consumer access to an appropriate forum,” said the court.
The SCA set aside the order of the high court and ordered cancellation of the credit agreement as well as a refund of over R170,000 with interest of 10,25%.