Absa Bank Ltd v Nedbank Ltd t/a The Motor Finance Corporation and Others (13187/2016) [2016] ZAWCHC 190 (15 December 2016)

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[2016] ZAWCHC 190
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Absa Bank Ltd v Nedbank Ltd t/a The Motor Finance Corporation and Others (13187/2016) [2016] ZAWCHC 190 (15 December 2016)

THE
HIGH COURT OF SOUTH AFRICA
(WESTERN CAPE DIVISION, CAPE TOWN)
In
the matter between
Case
No: 13187/2016
ABSA
BANK LTD
APPLICANT
and
NEDBANK
LTD t/a THE MOTOR FINANCE CORPORATION
1
st
RESPONDENT
SCORPION
TAILPIPES CC
2
nd
RESPONDENT
MJ
SWANEPOEL
3
rd
RESPONDENT
AS
STEYN
4
th
RESPONDENT
FC
de KOKER
5
th
RESPONDENT
Coram
:
ROGERS J
Heard:
29 NOVEMBER 2016
Delivered:     15 DECEMBER 2016
JUDGMENT
ROGERS J:
Introduction
[1]
The applicant (‘Absa’) claims the
return of four vehicles of which it claims to be the owner. The first
respondent (‘MFC’)
opposes the application. The second to
fifth respondents are the persons who purchased the vehicles in terms
of instalment sale
agreements concluded with MFC. Absa was
represented by Mr L Olivier SCA and MFC by Mr Ohannessian SC leading
Mr M Reineke.
[2]
Absa’s claim is a reivindicatio. MFC’s
opposition is that Absa has failed to establish its ownership,
alternatively
that it is estopped from asserting its ownership.
[3]
On 11 August 2016 an order was made by agreement
between Absa and MFC that if Absa succeeded in establishing its
ownership, MFC
would pay Absa the amount outstanding in respect of
each vehicle. It was further agreed that the application would not be
served
on the second to fifth respondents. This explains why the
second to fifth respondents have not participated in these
proceedings.
MFC has evidently decided that it rather than its
clients should suffer the loss if Absa succeeds.
[4]
During argument it appeared to me that points of
contention did not arise so much from disputes of fact as from
alleged deficiencies
in the evidence presented. MFC alleged that Absa
had failed to allege sufficient facts to establish its ownership and
in particular
had failed to prove that it had paid for the vehicles.
Absa in turn alleged that MFC had failed to allege sufficient facts
to give
rise to an estoppel. I suggested that it might be in the
interests of justice for each side to supplement their papers where
they
were able to do so that I could determine the matter on the
basis of all the available evidence. The parties were unable,
however,
to agree on this course of action. I must thus decide the
application on the papers as they stand.
[5]
It is unnecessary to give details of the four
vehicles. I shall identify them simply by reference to their
manufacturers, namely
Kia, Mitsubishi, Ford and Toyota respectively.
Background
facts
[6]
Both Absa and MFC are involved in vehicle
financing inter alia by way of floorplan agreements with motor
dealerships. Absa previously
had a floorplan agreement with a
dealership called
Paarlweg
Motors CC (‘PWM’). The contractual
arrangements included a floorplan agreement and an agency agreement.
For convenience
I shall refer to them collectively as the floorplan
agreement
[7]
The modus operandi envisaged by the floorplan
agreement was that PWM would request Absa to buy vehicles from the
seller at the price
agreed between PWM and the seller. PWM was
authorised to purchase such vehicles on Absa’s behalf. PWM had
to obtain an invoice
issued by the seller to Absa recording the
seller’s knowledge of the agreement and its intention to pass
ownership to Absa.
PWM was authorised to accept the invoice as Absa’s
agent. When the seller delivered the vehicle to PWM, the latter would
take possession on Absa’s behalf as owner.
[8]
PWM was required to display visible signage that
the vehicles were subject to wholesale finance with Absa. PWM
acknowledged that
Absa would retain ownership of a vehicle until it
had been paid for in full. PWM was prohibited from doing anything
which would
give the impression that it rather than Absa was the
owner of the vehicles. PWM was required to conduct its transactions
with third
parties in such a way that the third party understood that
Absa was the owner. Subject to Absa’s rights, PWM was permitted

to sell the vehicles in the ordinary course of its business but Absa
would only sign documents to effect transfer of ownership
to PWM upon
receipt of full payment of the amount owed to Absa.
[9]
According to Absa, it purchased the four vehicles
in question pursuant its agreement with PWM – the Kia in
December 2015,
the Mitsubishi and Ford in the latter part of May 2016
and the Toyota in early June 2016. The administrative modus operandi
followed
does not appear to have been strictly in accordance with the
agreement. The sellers issued their invoices to PWM which in turn
issued matching invoices to Absa. Absa alleges that it effected
payment directly to the sellers – on 9 December 2015 (the
Kia),
31 May 2016 ( the Mitsubishi), 3 June 2016 (the Ford) and 9 June 2016
(the Toyota). It is not in dispute that PWM came into
possession of
the vehicles. Absa alleges that it was the owner and was still the
owner when it launched the present proceedings.
[10]
On 13 June 2016 Absa notified PWM in writing that
due to the conduct of the facility Absa had no alternative but to
call for repayment
of the outstanding balance owing, namely
R2 803 320, within seven days and to cancel the facility
with immediate effect.
If the full amount was not settled within
seven business days, Absa reserved the right to take all necessary
steps to protect its
interests. Absa alleges that the outstanding
balance included the amounts owing in respect of the vehicles in
issue in the present
case.
[11]
At some stage the four vehicles were ‘sold’
by PWM to customers who obtained finance from MFC. PWM abused its
access
to Absa’s computer system so as to generate documents
which resulted in the licensing authorities registering each vehicle

in the name of MFC as ‘title holder’ and the customer as
‘owner’ (more on this below). The agreements between
MFC
and its customers are not part of the papers but it may be assumed
that MFC, having purchased the vehicles from PWM, on-sold
them to the
customers in terms of instalment sale agreements which reserved
ownership to MFC.
[12]
The dates on which the vehicles were thus sold by
PWM do not appear from the papers. From documents attached to MFC’s
answering
affidavit it can be concluded that the sales of the Kia,
Mitsubishi and Ford occurred by no later than 17 June 2016 (by that
date
the documents which PWM caused to be issued for licensing
purposes were in existence).
[13]
PWM was placed in provisional liquidation on 4
July 2016.
[14]
Following an exchange of correspondence between
attorneys acting for Absa and MFC, the present application was
launched on 26 July
2016.
Vehicle
registration
[15]
In terms of the
National Road Traffic Act 93 of
1996
a vehicle is registered in the name of an ‘owner’
and ‘title holder’. Depending on the circumstances, the

same person or different persons may be ‘owner’ and
‘title holder’. The expression ‘owner’
is
defined in
s 1
as meaning inter alia the person who has the
right to the use and enjoyment of the vehicle in terms of the common
law or a contract
with the title holder or a motor dealer who is in
possession of the vehicle for the purposes of sale and who is
licensed or obliged
to be licensed as a dealer. The expression ‘title
holder’ means the person who has to give permission for the
alienation
of the vehicle in terms of a contract with the owner or
the person who has the right to alienate the vehicle in terms of the
common
law. The ‘title holder’ is thus closer to the
common law notion of an owner than the ‘owner’ as defined

in the Act.
[16]
Regulation 53A
of the regulations promulgated in
terms of the Act provides that no motor dealer may display a vehicle
for purposes of sale unless
the vehicle has been registered in his or
her name as dealer stock. Counsel on both sides expressed some
puzzlement as to what
exactly this means.
[17]
In practice, it appears that when a dealer
displays a vehicle for sale which belongs to a financier in terms of
a floorplan agreement,
the vehicle is registered in the name of the
financier as ‘title holder’ and in the name of the dealer
as ‘owner’.
In the present case, the sales of the Kia,
Mitsubishi and Ford to PWM and the matching sales from PWM to Absa
were reflected in
sequential registrations. Pursuant to the sales to
PWM, the latter was registered as ‘title holder’ and
‘owner’.
Pursuant to the matching sales from PWM to Absa,
the latter was registered as ‘title holder’ while PWM
remained the
‘owner’. It appears that the registrations
followed the sequence of the transactions though presumably they
occurred
simultaneously.
[18]
In the case of the Toyota, which was acquired by
PWM only a few days before it was sold to MFC’s client (the
fifth respondent),
PWM caused the vehicle to be registered in its own
name as ‘title holder’ and ‘owner’. The
failure to reflect
Absa as ‘title holder’ was almost
certainly part of the abuse which PWM had by then embarked upon.
[19]
Absa has a computer system to which its dealers
have access. The dealers can generate the documents required by the
licensing authorities
to effect a change of registration. PWM abused
this system to generate documents in Absa’s name, thereby
permitting the vehicles
to be registered in the name of MFC as ‘title
holder’ and the second to fifth respondents as ‘owner’.
[20]
The eNatis system is a national register of motor
vehicles kept and administered by the registration authorities in
compliance with
s 77
of the
National Road Traffic Act. The
system reflects the registration history of any given vehicle.
[21]
The ownership of a vehicle is not in law
determined by its registration under the Act (
Absa
Bank Ltd v Knysna Auto Services CC
[2016]
ZASCA 93
paras 7-8 and 11). Vehicle registration is not in this
respect akin to the registration of immovable property in the deeds
office.
Absa’s
ownership
[22]
Mr Ohannessian submitted that because the sellers
had not issued invoices to Absa as required by the agreement,
ownership in the
vehicles did not pass to Absa. I reject this
argument. The fact that Absa and PWM did not follow the exact
administrative procedures
envisaged in their agreement does not mean
that ownership did not pass. The issue is one of fact, not contract.
The original sellers
clearly intended to sell the vehicles and in
fact delivered them to PWM. That they intended to pass ownership
cannot seriously
be contested. They may have intended to pass
ownership to PWM, being the entity to whom they issued their
invoices. However, and
as between PWM and Absa, there can be no doubt
that they intended Absa to acquire ownership of the vehicles. This
appears to have
been by way of a matching sale by PWM to Absa. In
each case PWM issued an acknowledgment that it had sold the vehicle
to Absa,
that it had taken delivery on behalf of Absa and that
notwithstanding PWM’s possession of the vehicle ownership
remains vested
in Absa as contemplated in the floorplan agreement.
[23]
Mr Ohannessian argued, in the alternative, that
ownership would only have passed from the sellers to Absa (via PWM)
if the purchase
price was duly paid to the sellers. He submitted that
Absa had failed to prove payment.
[24]
It may be correct that the sales by the sellers
to PWM were cash transactions, the intention being that ownership
would pass against
payment of the purchase price. The notion,
however, that ownership might still vest in the original sellers has
an air of unreality
about it. There is no suggestion that they have
asserted ongoing rights of ownership. We do not know that the sellers
parted with
possession prior to receiving payment. If any of them
did, one would have expected that by now they would have come forward
if
they had not been paid. The Kia was sold to PWM as long ago as
December 2015. Even in the case of the other three vehicles, the

sales occurred more than five months before the date on which the
application was argued before me.
[25]
Ironically enough, the party that sold the Ford
to PWM was MFC itself and Absa’s alleged payment was made to
MFC. MFC was
the presumably the owner by virtue of an instalment sale
agreement with a customer. On 26 May 2016 MFC furnished a settlement
quotation
for the vehicle. If MFC did not receive payment, this would
no doubt have been stated in the answering affidavit. MFC did not
allege
that it was the owner of the Ford because the old instalment
sale agreement had not been settled but by virtue of the more recent

sale of the vehicle by PWM to MFC’s new customer (the fourth
respondent).
[26]
The absence of assertions of ownership by the
sellers provides strong commercial support for Absa’s
allegation in the founding
papers that it purchased, paid for and
retained ownership of the vehicles. Absa’s deponent, Mr Graham,
the team leader of
its Retail Business Bank Commercial Asset Finance
Legal Recoveries Department, stated that all Absa’s records
relating to
the application were under his control and that he had
personally inspected them.
[27]
There were matching sets of documents for each
vehicle purchase. These included invoices issued by the sellers to
PWM, invoices
issued by PWM to Absa, and invoice cover sheets in
which PWM furnished Absa with particulars of the sellers’ bank
accounts
and the amounts owing to the sellers. Mr Graham’s
allegation that Absa duly effected payment to the sellers in
accordance
with these documents is in my view sufficient in the
absence of other evidence to suggest that payment was not duly made.
There
is no such countervailing evidence. I have already referred to
the fact that none of the sellers has asserted a claim of ownership.

I find far-fetched the notion that Absa, a leading financier, would
claim that substantial amounts are owing to it by PWM in respect
of
the vehicles if Absa had not actually parted with money. To do so
would be fraud.
[28]
Included in each set of documents was something
which Mr Graham identified as ‘proof of payment’. Mr
Ohannessian said
that on close analysis these documents did not prove
payment because they do not contain dates or amounts. The documents
in question
seem to be screenshots of banking information. They
contain particulars inter alia of the sellers and their bank
accounts. There
is background screen information which is not
legible. If there were good reason to doubt that payment was made,
these documents
might be equivocal. It is shoddy practice for a
deponent to attach a document of poor legibility and which requires
elucidation
to explain its full import. Absa’s attorneys should
have put this right before issuing the application.
[29]
However I do not think in the circumstances of
this case that the unsatisfactory nature of these documents justifies
a conclusion
that Absa has failed to prove payment. After all, and as
I have said, it would have sufficed for Mr Graham to allege payment
without
furnishing documentary proof. The fact that the documentary
proof may fall short in the absence of elucidation should not in the

circumstances be regarded as a fatal defect. Although the annexed
versions of the screenshots may not be dispositive, I have no
reason
to doubt that Mr Graham examined computer records of this kind to
satisfy himself of payment. The other circumstances I
have mentioned
point very strongly in favour of the conclusion that payment was
made.
[30]
I am thus satisfied that Absa has proved its
ownership.
Estoppel
[31]
The law applicable to MFC’s defence of
estoppel is uncontentious. For convenience I refer to the owner as X,
the person raising
the estoppel as Y and the person from whom Y
purported to acquire ownership as Z. I shall frame the legal
principles with reference
to a vehicle, that being the type of
property in issue in the present case. Our law jealously protects
ownership. X is estopped
from asserting its ownership only where Y
was misled, by X’s negligence, into believing that Z was the
owner of the vehicle
or was entitled to dispose of it. To make good
the defence, Y must prove the following: (i) that X, by conduct or
otherwise, represented
that Z was the owner of the vehicle or was
entitled to dispose of it; (ii) that X made the representation
negligently; (iii) that
X’s representation was relied upon
by Y; (iv) that Y’s reliance on the representation was the
cause of his acting
to his detriment. (See
Quenty’s
Motors (Pty) Ltd v Standard Credit Corporation Limited
[1994] ZASCA 41
;
1994
(3) SA 188
(A) at 198G-199B;
Knysna Auto
Services
supra para 16.)
[32]
X’s conduct in entrusting possession of the
vehicle to Z is not sufficient to constitute a representation that Z
is the owner
or has the right to dispose of it. X must have entrusted
Z with the indicia of ownership or the right to dispose of the
vehicle.
Such indicia may be the documents of title or of authority
to dispose of the vehicle or may be found in the manner or
circumstances
in which X allowed Z to possess the vehicle, for
example allowing Z to exhibit the vehicle for sale with his other
stock in trade
– the so-called ‘scenic apparatus’
(
Electrolux (Pty) Ltd v Khota & Another
1961 (4) SA 244
(W) at 247-248), quoted with
approval in
Quenty’s Motors
at
199C-G).
[33]
To this statement of the principles must be added
the requirement that Y must have acted reasonably in forming the view
he did of
X’s representation (
Electrolux
at 246G-H;
Konstanz
Properties (Pty) Ltd v
Wm
Spilhaus en Kie (WP) Bpk
[1996] ZASCA 28
;
1996
(3) SA 273
(A) at 284I-J
;
Concor Holdings
(Pty) Ltd t/a Concor Technicrete v Potgieter
2004
(6) SA 491
(A) at 495B
-C;
Knysna
Auto
para 18.) Furthermore Y’s reliance
on X’s representation must be reasonable (
NBS
Bank Ltd v Cape Produce Co (Pty) Ltd & Others
2002
(1) SA 396
(SCA) at 412C-E;
Pangbourne
Properties Ltd v Basinview Prope
rties
(Pty) Ltd
[2011] ZASCA 20
para 15;
LAWSA
2
nd
Ed Vol 9 para 661).
[34]
MFC’s deponent is a Ms L Botha, MFC’s
National Manager: Special Support & Litigation, Collections and
Recovery.
She states that the facts asserted in her affidavit are
within her personal knowledge unless the contrary is indicated. She
does
not claim to have been involved in the transactions by which MFC
purported to acquire ownership. The nature of her position indicates

that she would only have become involved after it emerged that Absa
was asserting ownership. Her affidavit displays no personal
knowledge
of the contracts which MFC concluded with PWM or with its four
customers (the second to fifth respondents). The contracts
are not
annexed to her affidavit. She gives no particulars as to when they
were concluded, what their terms were and who represented
MFC in
concluding them.
[35]
Ms Botha makes conclusory assertions regarding
estoppel, culled from the legal principles summarised above. She says
that Absa allowed
PWM to display the vehicles for sale and through
its negligence allowed PWM to represent that it was the owner or
entitled to dispose
of them. The high watermark of factual detail is
an assertion that at the time each vehicle was purchased, the second
to fourth
respondents did not observe any visible signage at the
premises or on the vehicles recording that they were subject to
wholesale
finance with Absa. (The vehicles in question would be the
Kia, Mitsubishi and Ford. Nothing is said about the fifth respondent
and the Toyota.) The ‘evidence’ in support of her
contentions takes the form of a confirmatory affidavit from a
candidate
attorney who says he spoke with the customers in question
to confirm these facts.
[36]
There is no admissible evidence as to what the
customers did or did not see. In any event, MFC’s defence of
estoppel is concerned
with representations made to Absa, not to the
customers. Ms Botha states that the three customers were acting as
MFC’s agents.
She gives no facts to support that conclusion. It
may be that when MFC subsequently concluded instalment sale
agreements with them,
they were to act on MFC’s behalf in
taking delivery of the vehicles. It is very unlikely that they were
made agents of MFC
for any other purposes. I find the suggestion
ludicrous that MFC would have relied on private individuals in
determining whether
it was safe to conclude financing transactions.
Furthermore, the customers almost certainly saw the vehicles on PWM’s
floor
before concluding their agreements with MFC. They could not
have been agents of MFC at that stage. And the customers would have

had no reason to be on the lookout for indications that the vehicles
were subject to wholesale finance with a bank. Ms Botha does
not say
that MFC sent the customers back to PWM’s premises specifically
to look for notices or stickers.
[37]
Absa by contract imposed on PWM the obligation to
display the relevant notices and stickers. On the assumption that PWM
failed to
do so, it does not necessarily follow that Absa was
negligent. Although Absa had the right to conduct inspections, I
doubt whether
its failure to exercise this right would, in the
absence of proven reason for suspicion, amount to negligence. There
would in any
event be practical limitations on the frequency with
which inspections could be conducted. Absa was not called upon to
answer a
contention that it had failed to conduct inspections at
reasonable intervals.
[38]
Ms Botha alleges that Absa negligently gave
PWM opportunity to generate documents for the licensing authorities
on the strength
of which the latter registered the vehicles in the
name of MFC as ‘title holder’ and each of the four
customers as
‘owner’. Mr Ohannessian submitted that MFC
would not have parted with money until the vehicles were so
registered.
In other words, so the argument went, MFC relied on such
registration in concluding that there was no impediment to its
ownership
of the vehicles. (Payment in this context means payment by
MFC to PWM since MFC certainly did not make payment to Absa.)
[39]
One would have thought that registration as
‘title holder’ would occur after the acquisition of
ownership (including
payment of the purchase price), not before.
However Mr Graham himself says in his founding affidavit that
financial institutions
refuse to make payment unless they are
registered as title holders of the vehicle concerned. Accordingly,
and although Ms Botha
was not involved in MFC’s acquisition of
the vehicles, I am willing to accept that MFC only parted with funds
once it was
registered as ‘title holder’.
[40]
However, if the practice of the financial
institutions is as Mr Graham and Ms Botha state, there appears to me
to be a fundamental
obstacle to a successful estoppel in the case of
bank-to-bank transactions (ie where the seller is a bank by virtue of
a floorplan
agreement and the purchaser is a bank by virtue of an
instalment sale agreement with the new user of the vehicle). In such
a case
both banks would know (i) that the purchasing bank will
only part with money once it is registered as title holder; (ii) that

the selling bank nevertheless remains owner until it has been paid.
The purchasing bank cannot thus reasonably rely on its registration

as title holder as an assurance that the selling bank has surrendered
ownership.
[41]
Furthermore, if MFC relied to its prejudice on
representations contained in registration documents, this must have
been through
the agency of one or more of its employees, none of whom
has been identified or provided evidence. If the employees who
represented
MFC when it parted with money looked at registration
documents, we do not know what exact documents they saw:
(i)
One
possibility is that MFC’s employees saw the confirmations of
registration which PWM generated by abusing its access to
Absa’s
computer system. These documents boldly proclaim that they are issued
without prejudice to Absa’s rights, that
they have been
generated electronically on a floorplan administration system and do
not constitute a representation that Absa intends
to pass ownership
to the named ‘title holder’ and ‘owner’, and
that Absa remains owner until paid in full.
These documents would
have been lodged with the licensing department. MFC attached copies
(there were only three because the Toyota
was never registered in
Absa’s name as ‘title holder’). Mr Ohannessian said
that MFC procured them only after
the institution of the present
proceedings. He may be right though there is no clear evidence on the
point. Ms Botha simply says
that these documents were collected from
the licensing department by an employee of MFC. She does not say when
this happened.
(ii)
Another
possibility is that MFC saw the registration history of the vehicles
on the eNatis system. MFC, being a vehicle financier,
would like Absa
undoubtedly have access to the eNatis system. If so, MFC would have
observed that, immediately prior to the registration
of the vehicles
in the name of MFC and its customers, the Kia, Mitsubishi and Ford
were registered in the name of Absa as ‘title
holder’ and
PWM as ‘owner’. MFC would thus have been aware that Absa
had financed the vehicles with reservation
of ownership. MFC would
have known that the facilitation of the transaction through
re-registration of the vehicles in MFC’s
name as ‘title
holder’ would not in itself mean that Absa had ceased to be the
owner. MFC would have known that Absa
would retain ownership until
paid
(iii)
A
third possibility is that MFC saw a copy of the actual registration
certificates reflecting itself as title holder and its customers
as
owners. The current registration certificates would not reflect the
history of registrations. Registration certificates in this
form have
not been included in the papers. If MFC has copies, Ms Botha chose
not to annex them to her affidavit.
[42]
If the documents MFC saw and relied on were those
mentioned in (i) or (ii) above, MFC would have been alerted to Absa’s
probable
ownership and would not have acted reasonably in paying out
money on the assumption that there was no impediment to MFC’s

ownership. MFC would have been put on notice and would not have acted
reasonably without directing some enquiry to Absa, particularly
since
MFC was evidently being asked to pay PWM, not Absa.
[43]
Even if the documents MFC saw were those
mentioned in (iii), I do not think MFC acted reasonably in assuming
that there was no impediment
to its ownership. MFC, as a large
vehicle financier, would be familiar with floorplan agreements and
reservations of ownership.
MFC knew that the person purporting to
sell the vehicles was PWM, a motor dealership, which in all
probability had a floorplan
agreement with another financier. MFC
would know that re-registration can occur without simultaneous
transfer of ownership. As
I have said, that seems to be what happens
in bank-to-bank transactions.
[44]
MFC has not explained how its own floorplan
agreements are administered. For all one knows, MFC like Absa has a
computer system
to which dealers are permitted access for purposes of
generating registration documents. MFC may well be familiar with
Absa’s
system and the documents which can be generated from it
by dealers (including the clear statement that re-registration does
not
affect Absa’s ownership). Such systems can be abused. The
registration certificate is not irrebuttable proof of ownership.
Most
dealers may be honest but the occasional bad apples are to be
expected. I cannot believe that a large financier would part
with
money simply on the strength of a registration certificate unless its
approach were that it is not cost-effective to investigate
every
transaction and that it will thus ‘take its chances’ and
suffer the occasional loss where necessary. The latter
sort of
approach might be a pragmatic business decision but would not satisfy
the law’s requirement for reasonable reliance.
A reasonable
institution in MFC’s position would at least check the eNatis
system to check whether the immediately preceding
registration was in
the name of another financier as ‘title holder’.
[45]
Since the onus rested on MFC to plead estoppel,
Absa was entitled to deal with the defence in reply. If that meant
that MFC needed
an opportunity to file a second set of papers, it
could have sought leave to do so. In his replying affidavit Mr Graham
said that
no reasonable financial institution would rely only on the
eNatis registration. Financial institutions conduct HPi searches.
HPi,
he says, is a national vehicle database operated by Transunion
containing information of any outstanding instalment sale agreements,

major insurance claims and the like. He says that if MFC had
conducted this simple and easily accessible search, it would have

been aware of Absa’s ownership. MFC did not seek an opportunity
to respond to these allegations.
[46]
MFC alleged that Absa was negligent in allowing
PWM to have access to the computer system after Absa’s demand
and cancellation
of 13 June 2016. Even if Absa was negligent in this
respect, MFC would have to prove that it acted reasonably in relying
on the
registration documents generated by PWM. I have already
explained the absence of evidence as to what exactly MFC relied upon
and
why in my view reliance on such documents would in any event not
have been reasonable.
[47]
As to whether Absa was negligent in the respect
alleged, the premise of the argument is that PWM accessed the
computer system after
13 June 2016. If the date of 17 June 2016,
reflected in the three confirmations of registration attached to Ms
Botha’s answering
affidavit, is the date on which PWM generated
the documents, that was a few days after the cancellation. Identical
confirmations
dated 28 June 2016 were attached to Absa’s
founding affidavit. Mr Olivier informed me that when these documents
are printed
off the system they bear the date of printing. Since MFC
presumably did not have access to Absa’s system, it may be a
fair
assumption that the confirmations were generated by PWM on 17
June 2016. As I have said, I am willing to assume that MFC only
parted
with money after these documents were generated and the
registration particulars altered.
[48]
I nevertheless think it would be a marginal call
to say that Absa was negligent in failing to terminate PWM’s
access in the
three or four days following the dispatch of the
termination letter. PWM had been given seven days to settle its
account and Absa
might have been waiting to see how PWM reacted. If
PWM had settled the facility, PWM would have acquired ownership of
all the vehicles.
There is no evidence that Absa had reason to
believe that PWM would act fraudulently.
[49]
What I have said above applies mainly to the Kia,
Mitsubishi and Ford, which were registered in Absa’s name as
‘title
holder’ immediately prior to BMW’s
fraudulent transactions. Perhaps counter-intuitively, MFC’s
defence of estoppel
is weaker, not stronger, in the case of the
Toyota which was never registered in Absa’s name as ‘title
holder’.
Because PWM defrauded Absa by failing to cause the
Toyota to be registered in Absa’s name in accordance with the
successive
sequence of transactions, PWM did not need to take
advantage of Absa’s computer system in order to procure
registration into
MFC’s name as ‘title holder’.
[50]
If Absa is to be criticised, it can only be
because it failed to take steps to ensure that the Toyota was
registered in its name
as ‘title holder’. One must bear
in mind, though, that the Toyota was probably only delivered to PWM
on or about 9
June 2016. Absa duly received from PWM the standard
acknowledgment that Absa was the owner. Absa was entitled to assume
that PWM
would register the vehicle in the usual way. Within a few
days PWM had caused the vehicle to be re-registered in MFC’s
name
as ‘title holder’. I do not think that MFC has
demonstrated any negligence by Absa in this relatively brief window
period. And even if Absa had taken steps to ensure that it was
registered as ‘title holder’, matters would then have

unfolded in the same way as occurred in the case of the Kia,
Mitsubishi and Ford. It follows that if the defence of estoppel fails

in respect of these three vehicles, it must also fail in the case of
the Toyota.
[51]
I have thus come to the conclusion that MFC has
failed to establish facts to make good its defence of estoppel.
Conclusion
[52]
The application must thus succeed. In terms of
the agreed order of 11 August 2016, the following order is made:
(i)
The first
respondent is directed to pay the applicant, in respect of each of
the four vehicles identified in the notice of motion,
such amount as
the applicant may prove to the first respondent’s reasonable
satisfaction to be outstanding in respect of
the vehicle under the
floorplan agreement.
(ii)
The first
respondent is ordered to pay the applicant’s costs, including
any costs that stood over for later determination.
______________________
ROGERS J
APPEARANCES
For
Applicant
Mr
LM Olivier SC
Instructed
by
Marais
Muller Hendricks Inc
1
st
Floor, Tygerforum A
53
Willie van Schoor Drive
Tyger
Valley
For
First Respondent
Mr
T Ohannessian SC and Mr M Reineke
Instructed
by
DRSM
Attorneys
38
Bolton Road
Cnr
4
th
Avenue
Rosebank
Johannesburg