faulty blacberry

I am on contract with Vodacom with a Blackberry 9320 and the contract ends in June. As I was in Robertson a couple of weeks ago, I decided to hand my device in because the camera was no more in working order and the telephone could not lock. It happened all of a sudden about a week before I handed it in. So I received it back yesterday and the report says that there was water damage!!! I was never near water with the phone and if you can see the device it is in perfect condition. I cannot understand how can they just let you know they cannot repair the phone because of a reason that is not true. I am very furious as a had to get a touch screen phone which I have never used because I battle with the operation of it. I feel that the least they could have done is to repair or replace it as the contract is still valid. I don't care if Blackberry does not have the same hand pieces anymore, I want a phone that is in working condition because I feel this is breech of contract. They promise you all kind of things to get the contract but when you have a problem they just let you of the hook like that. I want response on this matter as soon as possible please.