Hyundai dealership ordered to refund man over R667,000 after selling him a wrong BMW model

The National Consumer Tribunal ordered Hyundai N1 City to pay back a customer a little over R667,000 after he was sold a wrong model instead of a BWM 3 series (G20) 320i M Mzansi edition.

Sylvester Henry Bartes bought the pre-owned car in Cape Town on August 2022, the price included a delivery fee, tracker fee, registration fee and VAT.

Bartes paid the dealership a deposit of R50,000 and MFC financed the remainder of the purchase price.

In November 2022, the vehicle’s carbon front splitter was damaged in Bartes' driveway.

He appointed panel beater who sourced a quotation for the part replacement from BMW South Africa (SA) and in December 2022, and an agent from BMW SA subsequently emailed him saying the vehicle in question was not a Mzansi edition BMW.

Bartes further discovered that some of the parts on the vehicle were also not original BMW parts.

He argued that the dealership misrepresented the vehicle model to him and provided him with an inferior model to the one he thought he was purchasing.

He added that the dealership ought to have known that the vehicle it sold was not a Mzansi edition model, because a simple vehicle identification number check would have revealed its correct model name.

His wife, who was a witness, testified that her insurance broker insured the vehicle under her insurance policy for R863,692. She said the vehicle was insured as a Mzansi edition BMW, and although the purchase price was less than the insured value, they had no reason to query the values.

Bartes said he sourced a quotation from BMW SA for upgrading the vehicle to a Mzansi edition model and the upgrade required installing and replacing at least 31 items on the vehicle and would cost over R352,000.

In his application, he requested an order for the dealership to at least cover a portion of this expense. In the alternative, he sought an order cancelling the agreement between himself and the dealership, including the return of his deposit with interest.

In response, the dealership did not dispute that the vehicle sold to Bartes was not a Mzansi edition BMW, however, it denied that it fraudulently or negligently misrepresented the vehicle's model.

Explaining how Bartes was sold a wrong model, the dealership said that in May 2022, an inventory was re-organised, and during a stock entry process, an incorrect stock code was mistakenly applied, indicating that the vehicle was a Mzansi limited edition vehicle.

The dealership said it was not primarily engaged in trading BMW vehicles and had no prior knowledge of the vehicle's history, so the error went unnoticed hence personnel believed the vehicle was a Mzansi edition model and marketed it that way.

Despite the error, the dealership said Bartes was not charged for a Mzansi edition BMW, instead, the cost was in line with the lower-level BMW model provided to him, and therefore, he was not financially prejudiced when purchasing the vehicle.

It was said a limited edition Mzansi model BMW would have cost him an extra R100,000.

The dealership said the relief he was seeking was unreasonable and it amounted to an unjustified enrichment since he was not charged for a Mzansi model BMW.

Furthermore, the dealership said his request to cancel the sale agreement with a return of his deposit, with interest, would be unjustified since he had full use of the vehicle, which had depreciated in value by now.

Instead, the dealership suggested the cancellation of the sale agreement and he returns the vehicle and be liable for the vehicle’s usage and depreciation and the charges due to MFC.

The second option included the dealership replacing the vehicle with the correct model subject to him being liable for the same conditions and fees as in the first option and paying the difference in value of approximately R100,000.

Bartes declined both options.

Looking at the case, the tribunal said it was not disputed that the dealerships sold Bartes a wrong vehicle model. Whether this was done intentionally or negligently, it was something that was not going to be discussed.

The tribunal said the pressing issue was whether the dealership acted in line with the Consumer Protection Act (CPA).

"The two questions before the tribunal are whether the respondent’s (dealership's) conduct, resulted in a contravention of its statutory obligations under the CPA and, if so, what is the appropriate relief for the applicant (Bartes)," said the tribunal.

Based on evidence, the tribunal found that the dealership infringed the CPA by misleading Bartes in its words and conduct after misrepresenting the vehicle as a Mzansi edition BMW.

"By their words and conduct, the respondent failed to correct the applicant’s misapprehension regarding this material aspect of the vehicle he was purchasing.

"...the respondent’s conduct amounts to prohibited conduct and has caused the applicant financial prejudice for which he is entitled to relief." said the tribunal.

As a result, the tribunal cancelled the sale agreement concluded between the parties and ordered the dealership to collect the vehicle from Bartes on its own expenses and refund him R667,013.03.

There was no order on costs.

sinenhlanhla.masilela@iol.co.za

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