Court Rejects R699 Car Bid

The Port Elizabeth High Court has dismissed an application for the certification of a class action brought by consumers who were impacted by the collapse of the R699 car scheme.

The judgment comes as a massive blow to thousands of consumers who were lured by the deal but have now been left with higher instalments they say they cannot afford.

Johannesburg-based consumer activist, Simon Lapping, said while the decision was a blow, he did not believe it was the end for consumers.

“It does not close the door. Definitely not. I have been trying to get in touch with people so that we can pursue other constitutional avenues, one of which where we can request a commission of inquiry into the scandal,” he said.

Lapping said because over 20000 people in the country have been affected by the collapse of the scheme, he did not believe it could “simply be brushed under the carpet”.

“People have constitutional rights and should be treated equally and fairly. I have not read the judgment yet but what I have heard is that the judge has focused on technical issues, but constitutional issues outweigh technical issues.”

Judge Dayalin Chetty dismissed the application – brought by Johannes Ignatius Bartosch on behalf of thousands of consumers left out of pocket by the collapse of the scheme – with costs.

The proposed action sought to have thousands of credit agreements concluded between consumers and banks for vehicle finance through the scheme, be set aside.

As required by law, the party seeking to represent a class must first apply to a court for it to certify the action as a class action. Thereafter it may issue summons.

In his judgment, Chetty said none of the requirements for a class action had been met through the application, as the claim must be legally tenable, and there needs to be evidence of a prima facie case.

“No cause of action raising a triable issue has been disclosed. Additionally, and equally fatal, this court does not have the necessary jurisdiction to adjudicate upon the matter,” Chetty said.

Chetty said it also appeared that Bartosch’s entire case is “predicated upon extravagant assertions” such as that three of the four commercial retail banks did not conduct an assessment as required by the National Credit Act and that Satinsky – the company managing the deals – collaterally performed this function on behalf of the credit providers.

He said Bartosch also alleged that “the consumer did not generally understand or appreciate the consumer’s risk, costs or obligations under the proposed credit agreement or that the entering into of that credit agreement would make the consumer over-indebted”.

Chetty also said that it appeared that Bartosch’s attorney, Duncan Heuer of Pieterse Cary Finlaison Attorneys, had blown the matter out of proportion by inviting the public to participate in the litigation through print media and the internet.

Heuer said: “It has been our intention from the outset of this matter to assist consumers affected by the R 699 car scheme, at no cost to them. Despite the judgment, we shall continue to do so in any way we possibly can.”

Heuer said the firm respected the court’s decision not to certify the consumers affected by the R 699 car scheme as a class.

“We have, however, after careful consideration and having taken advice from senior counsel, taken a decision as a firm to file a notice of intention to seek leave to appeal the cost order made against the firm.”

He said that due to the number of consumers affected by the R699 car scheme it was the firm’s opinion, as well as counsel’s, that a class action would be the most appropriate form of court proceedings to deal with the matter.

“As the court held that the current matter does not lend itself to be pursued by way of class action, going forward consumers will now have to engage with their credit providers individually, whether they are legally represented or not,” he said.

Johan Vlok, a consultant at Brown Braude & Vlok Incorporated which was one of the firms which instructed Standard Bank, said he was satisfied with the judgment.

“The fact that the application did not meet the requirements for a class action was grounds enough for it to be dismissed. But the judge also added the matter of jurisdiction because all the banks are in Gauteng. They have branch offices here but that it not enough,” Vlok said.

Meanwhile Newton Park pensioner Marie van Antwerp said she was now battling to pay off her Tata Indica, which she purchased under the scheme last year.

“I used to pay between R699 and R1000 a month, depending on the mileage but now the cost has gone up to R2500 plus insurance, for a little car like that,” she said.

Van Antwerp said she was battling to get the bank to extend her contract from five years to seven years in order to bring the amount down. She said she has only been paying R1500 per month as it is all that she can afford.

“I need my car because I run my own business. My husband is unemployed and I am a pensioner so if they take away my car they are taking away my livelihood.”

When The Herald asked Satinsky Group chief executive Albert Venter – who developed the marketing model for the scheme – about his opinion on the outcome of the application for certification of the class action, his response in the text message was “no comment”.

-Lee-Anne Butler/The Herald