Dealership ordered to refund client nearly R170,000 and pay R202,000 storage fees for Volvo engine failure

Ask AI 4minCourt orders dealership to refund buyer after used Volvo suffers engine failure.

The Eastern Cape High Court in has ordered a dealership to refund a woman R169,990 for a second-hand Volvo that suffered catastrophic engine failure less than four months after purchase, and to pay more than R202,000 in storage fees for the inoperable vehicle.

Deputy Judge President Patricia Lynette Goliath ruled in favour of Lise Julie Dean in her case against Purple Rain Properties No 112 (Pty) Ltd, confirming the cancellation of the sale agreement and ordering the dealership to repay the full purchase price without deducting anything for the vehicle’s use.

The dealership was also ordered to pay interest at the prescribed legal rate and Dean’s legal costs.

Dean bought a second-hand 2013 Volvo S60 from the dealership on October 21, 2021, for R169,990. The vehicle was approximately eight-and-a-half years old when it was delivered.

According to the judgment, the first warning signs appeared on February 2, 2022, when a low-coolant warning illuminated while Dean was driving. Her husband topped up the coolant, and the dealership’s representative requested that the vehicle be taken to its workshop.

The following day, the dealership’s in-house workshop identified a cracked expansion tank that had caused water to leak from the cooling system.

The dealership carried out what it described as a “temporary and critical” repair and returned the vehicle on the same day.

However, on February 7, 2022, while travelling from Knysna to Hermanus, the Volvo displayed an engine performance failure warning and came to a halt near Caledon. Black smoke was also observed coming from the exhaust.

The vehicle was subsequently examined by Rola Volvo in Somerset West, which found that the engine had no compression and that coolant was dissipating between the cylinder and the short block.

A quotation of R165,627.60 was issued for engine repairs. The court noted that the vehicle had suffered a blown head gasket caused by overheating following the loss of coolant.

Dean demanded a refund on February 28, 2022, and offered to return the vehicle. However, the dealership refused to facilitate the refund and accept the vehicle back.

The Volvo was subsequently stored in Knysna from approximately April 2022 and remained inoperable.

Dean approached the Motor Industry Ombudsman, which recommended the cancellation of the sale and a partial refund on October 10, 2022. The dealership rejected the recommendation.

Dean then instituted legal proceedings, arguing that the dealership had breached the Consumer Protection Act (CPA) by selling her a vehicle that did not meet the required standards of quality, working order and durability.

The dealership argued that the vehicle had travelled approximately 3,400km before the first coolant warning appeared. It contended that this indicated the defect had not substantially impaired the vehicle’s usefulness as a passenger car.

It also challenged Dean’s claim for storage costs and other damages, arguing that she still had to prove the losses she had suffered.

The dealership closed its case without calling any witnesses to testify.

In considering the dispute, Goliath examined Sections 55 and 56 of the Consumer Protection Act.

Section 55 provides that consumers are entitled to goods that are suitable for their intended purpose, of good quality, in good working order and free of defects, and that remain usable and durable for a reasonable period.

Section 56 provides an implied warranty of quality and allows consumers to return goods that fail to meet the required standards within six months of delivery. Depending on the consumer’s choice, the supplier must repair or replace the goods or refund the purchase price in full.

The judge found that the cooling system problems emerged shortly after the sale and that the subsequent engine failure rendered the vehicle unusable.

“The engine failure was mechanical and serious, to the extent that it rendered the vehicle unusable,” Goliath said.

The judge added that there was no evidence that the breakdown had been caused by Dean’s negligence.

The court found that a reasonable consumer would have expected the vehicle to remain durable for a reasonable period, given its service history, and that the catastrophic engine failure within approximately four months of delivery fell short of that expectation.

Goliath further found that Dean had reported the problems and attempted to return the vehicle within the six-month statutory warranty period.

The court concluded that the dealership had contravened Sections 55 and 56 of the Act, entitling Dean to cancel the agreement and receive a full refund.

The court also ordered the dealership to reimburse Dean for the storage costs accumulated while the defective vehicle remained in Knysna.

The amount awarded was R202,425.80, updated to the date of judgment, together with further storage costs calculated at R1,200 per month from March 2026 to the date of judgment.

Goliath found that the dealership’s refusal to comply with the Motor Industry Ombudsman’s recommendation had resulted in additional storage expenses that could have been curtailed.

The judge held that Dean had been compelled to preserve the vehicle and institute legal proceedings, making it fair, just and equitable for the dealership to cover the costs incurred.

The court accordingly confirmed the cancellation of the October 21, 2021, sale agreement and ordered Purple Rain Properties to refund the R169,990 purchase price in full, without deductions for usage.

The company was further ordered to pay interest on the refund from February 28, 2022, until payment, as well as the storage costs and Dean’s legal costs on a party-and-party scale.