Z3 warranty supplier claiming physical damage

My husband upgraded to a Sony Experia Z3 January. Within the first month the phone heated up, by month two a fine hairline crack appeared on the back cover. When he returned to Canal Walk MTN store where he upgraded, they mentioned this was a common occurrence. Well, now 11 months later the phone heated up so intensely, that it switched off and the back cover shrunk due to the extreme heat. Naturally, being under warranty we booked in the handset at the same MTN store, who sent it to their service agents at the High Volume Repair centre in Montague Gardens. We received no feedback, other than acknowledgement it's been booked in. When we followed up we were advised the phone is \beyond economical repair"! Then the audacity to advise that we'll incur a R350 charge for assessing damages! I've been reviewing complaints related to this model and there are a disproportionate volume about the exact same problem"