Strict liability applies only to consumer actions, says Supreme Court

The Consumer Protection Act, particularly Section 61, gives consumers positive benefits by imposing strict liability upon a producer, importer, distributor or retailer of goods for any harm caused thereby. But the liability does not extend to a supplier of goods.

In the matter of Halstead-Cleak v Eskom Holdings Limited 2016 2 SA (GP), a cyclist came into contact with a low-hanging powerline spanning the footpath which he and other cyclists were using. The cyclists in front of the plaintiff managed to avoid the powerline; the last cyclist was not as lucky, however. He came into contact with the low-hanging powerline and sustained severe electrical burns. A summons was consequently issued against Eskom for the damages that he suffered.

The matter was heard in June 2015 in the Pretoria High Court. The Plaintiff based his case on Section 61 of the Consumer Protection Act (the CPA), alternatively, on delictual law.

Section 61(1) of the Consumer Protection Act states as follows;

“…the producer or importer, distributor or retailer of any goods is liable for any harm, as described in subsection 5, caused wholly or partly as a consequence of-

a) supplying any unsafe goods;
b) a product failure, defect or hazard in any goods; or
c) Inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of any goods,

irrespective of whether the harm resulted from any negligence on the part of the producer, importer, distributor or retailer, as the case may be.”

Section 61(1) imposes a strict liability on the producer, importer, distributor or retailer of goods, should the goods cause harm to a consumer for any reason stated above. This section is aimed at making it easier for consumers to hold manufacturers and further parties in the supply chain of goods liable as the consumer no longer needs to prove negligence on the part of the manufacturer or other parties in the supply chain.

But although Section 61(1) of the CPA creates strict liability, the CPA imposes further requirements that must be met before a consumer will succeed with his or her action based on Section 61(1).

Section 61(5) of the CPA states that:

“Harm for which a person may be held liable in terms of this section includes-

a) The death of, or injury to, any natural person;
b) An illness of any natural person;
c) A loss of, or any physical damage to, any property, irrespective of whether it is movable or immovable; and
d) Any economic loss that results from harm contemplated in paragraph a, b or c.”

The High Court held that Section 61(5) provides redress for “any person” and not only for a consumer as defined in the CPA. Based on this interpretation of section 61(5), the Court held that Eskom is fully liable for the harm caused to the plaintiff in terms of Section 61(1) of the CPA.

The Court extended the application and the protection of the Consumer Protection Act to any natural person, whether a consumer or not. This can hardly be the intention and purpose of the Act. Section 5 of the CPA states that the CPA applies to inter alia “goods or services that are supplied or performed in terms of a transaction to which the Act applies…” Accordingly, there must be a transaction between the supplier of the goods and a natural person. Once a transaction is present, the natural person will be deemed a consumer for purposes of the CPA.

Eskom appealed the decision of the Pretoria High Court and the Supreme Court of Appeal came to a unanimous decision that the High Court erred in extending the definition of a consumer to “any natural person’’.

In essence, the Supreme Court of Appeal held that the following requirements must be met in order for a consumer to succeed with his/her claim under Section 61(1) of the CPA:

1. The goods must be supplied by a producer, importer, distributor or retailer.
2. The goods must be supplied or marketed to a consumer.
3. There must be a transaction between the supplier of the goods and the consumer;
4. The consumer must have suffered harm;
5. The harm must have been caused by the supply of unsafe goods, a product failure, defect or hazard in any goods; or inadequate instructions or warnings provided to the consumer pertaining to any hazard arising from or associated with the use of any goods.

The SCA held that the cyclist, at the time of the incident, was not utilising the electricity nor was there any relationship between Eskom, as the supplier or producer, and the cyclist. The cyclist was therefore not a consumer for the purposes of the Act. Accordingly, Eskom was not liable to the cyclist for the harm caused in terms of Section 61(1) of the CPA.

However, the cyclist is not without redress. The Supreme Court of Appeal referred the matter back to the High Court to decide whether Eskom can be held liable in delict. The cyclist will have to inter alia prove negligence on Eskom’s part in order to succeed with his claim.

It is evident that the mere fact that Section 61 of the Consumer Protection Act imposes strict liability does not automatically indicate that the section is applicable. Each case must still be decided on its own merits.