Product Liability: Who Is A “Consumer”?

In the case of Halstead-Cleak, Derek Anthony vs Eskom Holdings Limited (26360/2014) [2015] VAT ZAGPPHC Mr Halstead- Cleak sustained severe electrical burns on his forehead, chest, arms and thighs when he inadvertently came into contact with a low hanging live power line while riding his bicycle on a footpath.

Section 61 of the Consumer Protection Act (CPA) holds the producer, distributor or retailer liable of any harm caused wholly or partly as a consequence of:

  • the supplying of unsafe goods;
  • a product failure, defect or hazards in any goods or
  • the inadequate instructions or warnings provided to the consumer pertaining to any hazards arising from or associated with the use of any goods.

The producer, importer, distributor, or retailer will be held liable in irrespective of whether the harm resulted from any negligence on their part.

Section 61(5) further states that harm for which a person may be held liable in terms of this section includes the death of, or injury to, any natural person; or an illness of any natural person.

The High Court determined that the wording of Section 61(5) makes it clear that liability arises not only in respect of “consumers” as defined in the CPA or consumers in the general sense, but to “any natural person”. Mr Halstead-Cleak need not, therefore be a “consumer” in the contractual sense as defined in order for Eskom to be liable to him.

The judgement as it then stood, had far reaching implications: a producer, importer, distributor or retailer, as case may be, may have been held liable, not only for harm suffered by consumers of goods or services supplied by them, but also to bystanders.

The case was further considered by the Supreme Court of Appeal (SCA), who came to a different conclusion than that of the High Court above.

The SCA stated that from the definitions, the Preamble and purpose of the Act, it is clear that the whole tenor of the CPA is to protect consumers. The CPA must therefore be interpreted keeping in mind that its focus is the protection of consumers.

Who is the “consumer” then?

In interpreting section 61 of the CPA, the SCA looked at the definition of “transaction” and “consumer” as defined in section 1 of the CPA. In particular the SCA noted that a “consumer” in section 1 is a person to whom goods or services are marketed in the ordinary course of a supplier’s business, or who has entered into a transaction with a supplier in the ordinary course of a supplier’s business. The definition includes a person who is a user of the goods or a recipient or beneficiary of the particular service irrespective of whether that person was a party to a transaction concerning the supply of the goods or services. However the court further noted that the important features here are that there must be a transaction to which a consumer is party, or the goods are used by another person consequent on that transaction.

In addition and taking into consideration that section 61 is a section in Chapter 2 of the CPA dealing with “Fundamental Consumer Rights”, the SCA stated that it is clear that the harm envisaged in section 61 must be caused to a natural person mentioned in s 61(5)(a), in his or her capacity as a consumer.

The court came to the conclusion that “a consumer is a person who buys goods and services, as well as persons who act on their behalf or use products that have been bought by consumers.”

In the premises the SCA held that Mr Halstead-Cleak was not a consumer vis-à-vis Eskom as he did not enter into any transaction with Eskom as a supplier or producer of electricity in the ordinary course of Eskom’s business. Mr Halstead-Cleak was not utilising the electricity, nor was he a recipient or beneficiary thereof. The situation may have been different if Mr Halstead-Cleak suffered the electrical burns in the course of utilizing the supply of the electricity to his home or otherwise in the course of his use of electricity.

Although section 61(1)(b) makes provision for liability due to a product failure, defect or hazard in any goods. It was not found that the harm suffered by Mr Halstead-Cleak was as a result of the electricity itself failing, or that the electricity had a defect. Failing in this context would be if the electricity were unable to perform in the intended manner.

The situation may have been different if Mr Halstead-Cleak suffered the electrical burns in the course of utilizing the supply of the electricity to his home or otherwise in the course of his use of electricity.

By Kgolofelo Makhuthudisa
kgolofelo@dyason.co.za