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[2014] ZAGPJHC 92
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Lifestyle Transport CC v Minister of Police and Others (14488/13) [2014] ZAGPJHC 92 (15 April 2014)
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Certain
personal/private details of parties or witnesses have been
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REPUBLIC
OF SOUTH AFRICA
SOUTH
GAUTENG LOCAL DIVISION,
JOHANNESBURG
CASE
NO: 14488/13
DATE:
15 APRIL 2014
NOT
REPORTABLE
NOT
OF INTEREST TO OTHER JUDGES
In
the matter between:
LIFESTYLE
TRANSPORT
CC
....................................................................................
Applicant
and
THE
MINISTER OF
POLICE
..........................................................................
First
Respondent
TANZER
TRANSPORT FOOD HALL
WAREHOUSING
CC t/a TANZER TRANSPORT
..................................
Second Respondent
ASTROTAIL
125
CC
......................................................................................
Third Respondent
PLATINUM
TRUCK CENTRE (PTY)
LTD
................................................
Fourth Respondent
JUDGMENT
OPPERMAN
AJ
Introduction
[1]
The applicant seeks an order declaring that
the applicant is the owner of a Mercedes-Benz truck 2435, with
registration no. KNM
[…], chassis no. 6[…] and engine
no. V[…] ("
the vehicle
"),
which is in the possession of the first respondent.
[2]
In the alternative, the applicant seeks an
order that the first and second respondents be interdicted and
restrained from disposing
of or alienating the vehicle, pending the
outcome of an action to be instituted by the applicant for the return
of the vehicle,
within thirty days of the granting of such order.
[3]
The first, third and fourth respondents did
not oppose the application.
[4]
The second respondent only opposed the
application.
SUMMARY
OF THE FACTS
[5]
Much
of the facts were, at the end of the day, common cause, alternatively
the second respondent's version was to be preferred,
having regard to
the principles enunciated in the
Plascon-Evans
matter.
[1]
[6]
Admittedly, the applicant's alternative
relief is for interim relief and the
Plascon-Evans
rule will thus not be applicable. In my
assessment of the evidence, I will distinguish, insofar as it is
necessary.
[7]
The business of the applicant is that of a
transport company. In order to fulfil its duties, it purchases
trucks from time
to time.
[8]
The second respondent carries on business
as a transport company. It owns and operates a fleet of
delivery vehicles for that
purpose. When a vehicle is no longer
suitable for use by the second respondent in the course of its
transport business, the
second respondent sells the vehicle on a
second-hand basis.
[9]
The manner in which the vehicles are so
sold by the second respondent is that the vehicles are handed, on
consignment, to a second-hand
motor dealer such as the third
respondent. The arrangement between the second respondent and
the dealer includes the dealer
ascertaining from the second
respondent the price that it is prepared to accept for the vehicle
from a purchaser thereof.
For purposes of administrative
and logistical convenience, the vehicle is then physically removed
from the second respondent's
premises onto the premises of the
second-hand dealer. The physical possession (
detentio
)
of the vehicle is handed over to the dealer on the basis that the
dealer will not become the owner of the vehicle, but will return
the
vehicle to the second respondent in the event of the dealer not being
able to find a purchaser for that price.
If, on the other
hand, the dealer is able to achieve the price, then, the dealer would
hand the vehicle over to the purchaser against
payment.
[10]
At the time when the vehicle is physically
handed over to the dealer, the second respondent signs the relevant
change of ownership
form in favour of the dealer and hands the
completed form to the dealer. If the vehicle is not sold by the
dealer to a third
party, then the completed change of ownership form
is handed back by the dealer to the second respondent together with
the vehicle
itself. The second respondent and the dealer embark
on this process subject to the condition that ownership of the
vehicle
will remain vested in the second respondent until such time
as the dealer is able to sell the vehicle at the price required by
the second respondent.
[11]
The transaction between the second and the
third respondent in relation to the vehicle in issue in the present
proceedings, was
at all times governed by the arrangement set out
hereinbefore relating to the second respondent’s general modus
operandi
in respect of the sale of it’s vehicles.
[12]
In relation to the vehicle in issue in this
application, the second respondent required an amount of R250 000.
[13]
The third respondent was given the vehicle
to sell, but never achieved that price.
[14]
The background to the relationship between
second and third respondents is that during March 2011, the managing
director of the
second respondent, Mr Tanzer, was approached by Mr
Pickl and Mr Paton who claimed to represent the third respondent.
From
April 2011 onwards, the second respondent began to do business
with the third respondent in relation to the sale of second-hand
vehicles that the second respondent wished to dispose of.
[15]
During August 2012, Mr Paton agreed with
the second respondent that the third respondent, in accordance with
the standard arrangements
outlined hereinbefore, would sell the
vehicle in issue in the present proceedings. Further, the sale
of the vehicle was not
supposed to take place until the second
respondent had invoiced the third respondent in the amount of R250
000.
[16]
On 12 September 2012, Mr Tanzer discovered
that the vehicle had been sold to the fourth respondent for R180 000
by Mr Paton.
No monies had been paid to the second respondent.
[17]
Mr Tanzer also discovered that the fourth
respondent had on-sold the vehicle to the applicant for the sum of
R235 000.
The tax invoice dated 3 July 2012 purporting to
emanate from the second respondent in terms of which the second
respondent had
sold the vehicle to the third respondent, is not
authentic and the second respondent contends that it is a forgery.
For present
purposes this must be accepted.
[18]
On 15 September 2012, the second respondent
discovered that Mr Paton was not a representative of the third
respondent but that he
had merely acted as a “broker” for
the third respondent. It was subsequently established
that Mr Paton,
had sold the vehicle purportedly on behalf of the
third respondent, and Mr Paton had appropriated the proceeds of the
sale of the
vehicle for himself.
[19]
The third respondent has never paid the
second respondent anything for the vehicle.
[20]
During the early part of February 2013, the
applicant's driver, driving the vehicle, attempted to cross the
border into Swaziland.
The border officials would not allow the
vehicle into Swaziland and the vehicle was returned to the
applicant's premises.
On 13 February 2013, at the business
premises of the fourth respondent, the first respondent seized the
vehicle. This
was done as Mr Tanzer, acting as a
representative of the second respondent, had laid a complaint in
respect of the vehicle.
[21]
The first respondent advised that neither
the applicant nor the fourth respondent would obtain return of the
vehicle and clarity
should be sought from the Court.
[22]
On or about 7 December 2012, Mr Paton was
arrested for fraud and theft in respect of the vehicle.
OWNERSHIP
OF THE VEHICLE
[23]
The Applicant’s claim is vindicatory
in nature. For the purposes of a vindicatory claim, the applicant is
required to establish
that it is the owner of the
res
in question See
Goudini Chrome (Pty) Ltd
v MCC Contracts (Pty) Ltd
[1992] ZASCA 208
;
1993 (1) SA
77
(A) at 82A;
Concor Construction
(Cape) (Pty) Ltd v Santambank Ltd
1993
(3) SA 930
(A).
[24]
The second respondent contends that it is
the owner of the vehicle.
[25]
It is clear that the second respondent is
the victim of a fraud perpetrated on it by Mr Paton. The third
respondent did not comply
with the contractual arrangement which
provided that ownership might only pass once payment in full of the
purchase price had been
made. Ownership, of course, only passes if
two requisites are met: there must be an intention to pass ownership
and an intention
to receive ownership (the so-called ‘saaklike
ooreeenkoms’, see
Concor
,
supra at 933 C- J) and there must be delivery of the object (
res).
Applying the aforegoing principles, ownership could not have passed
to the third respondent, who could thus not have transferred
it to
the fourth respondent who in turn, had no right to transfer it to the
applicant. See too
Lendalease Finance
(Pty) Ltd v Corporacion de Merçadeo Agricola & others
1976 (4) SA 464
(A) at 489G-H;
De Wet v
Santam Bpk
[1996] ZASCA 1
;
1996 (2) SA 629
(A) at
638E-F in respect of delivery of the vehicle.
[26]
I find that the second respondent remained,
and is still on these facts, the owner of the vehicle.
ESTOPPEL
[27]
The applicant argued that the second
respondent should be estopped from asserting its ownership in and to
the vehicle. It
contended that the requirements for estoppel,
in particular in the context of conduct amounting to a representation
in regard to
ownership, are as follows:
27.1.
there must be a representation by the
owner, by conduct or otherwise, that the person who disposed of
his/her property was the owner
of it or was entitled to dispose of
it;
27.2.
the representation must have been made
negligently in the circumstances;
27.3.
the representation must have been relied
upon by the person raising the estoppel;
27.4.
such person's reliance upon the
representation must be the direct or proximate cause of his/her
acting to his/her detriment.
[28]
The argument went further that, a person
may be bound by a representation constituted by conduct if:
28.1.
the representor ought reasonably to have
expected that the representee might be misled by his conduct;
28.2.
the representee had acted reasonably in
construing the representation in the way he/she did.
[29]
The applicant contended that the conduct of
an owner entrusting another with the
indicia
of ownership, such as documents of title, and in particular
registration certificates in the case of motor vehicles, may amount
to a representation if relied upon by a person raising estoppel.
It relied on
Electrolux (Pty) Ltd v
Khota and Another
1961 (4) SA 224
(W)
at 247B-E;
Broekman v T.C.D. Motors
(Pty) Ltd
1949 (4) SA 419
(T) at 423
and
Unitrans Automotive (Pty) Ltd v The
Trustees of the |Rally Motors Trust
2011 (4) SA 35
(FSB), para [11] and [12] at 41.
[30]
It contended that
in
casu
, the second respondent had handed
over the completed change of ownership forms with only the details of
the purchaser having been
omitted. This enabled the third
respondent to register the vehicle into its name and to transfer the
vehicle to the fourth
respondent, albeit on paper only.
It argued that when the second respondent delivered the vehicle to
the third respondent,
it furnished it with the following:
30.1.
relevant change of ownership forms;
30.2.
an exit disc so that the vehicle could be
exited from the second respondent's premises;
30.3.
the vehicle;
30.4.
keys to the vehicle.
[31]
Under these circumstances, so it argued,
the second respondent was estopped from alleging or relying upon its
ownership in respect
of the vehicle.
[32]
Prior to considering the merits of the
estoppel argument, consideration should be given to whether it is at
all competent to found
a cause of action on estoppel. It has been
said that estoppel is not a shield but a sword. This shield can thus
not assist the
applicant in these proceedings. See
Union
Government v National Bank of South Africa Ltd
1921 AD 121
at 128;
Rosen v Barclays
National Bank Ltd
1984 (3) SA 974
(W)
at 983H‒I;
Sodo & another v
Chairman, African National Congress, Umtata Region & others
[1998] 1 All SA 45 (Tk).
[33]
The applicant conceded that estoppel cannot
be used to found a cause of action and I am accordingly not called
upon to decide whether
or not estoppel might have been successfully
raised in different circumstances. I must express my gratitude to the
Second Respondent’s
legal representatives for the very
comprehensive and helpful heads of argument.
[34]
I attempt hereinunder to record the gist of
the arguments advanced in respect of the estoppel issue as formulated
by the Second
Respondent. The Second Respondent argued that:
34.1.
It did not make a representation to the
applicant. The applicant did not contend that it had received the
vehicle from the second
respondent. The applicant had purchased the
truck from the fourth respondent. The essence of the doctrine of
estoppel by representation
is, so the argument went, that a person is
precluded or estopped from denying the truth of
a
representation made by him or her to another person
if the latter, believing the truth of the representation, acted on
it, to his or her detriment. See
Aris
Enterprises (Finance) (Pty) Ltd v Protea Assurance Co Ltd
1981 (3) SA 274
(A) at 291E.
34.2.
The mere fact that an owner left his
property in the possession of a third party does not constitute in
and of itself a legally
relevant representation that the possessor or
holder of the property is authorized to dispose of it. The estoppel
asserter can
consequently not base an estoppel on the mere fact that
the owner left his property in the possession of a third party. See
Oceana Leasing Services (Pty) Ltd v BG
Motors (Pty) Ltd
1980 (3) SA 267
(W);
Rabie and Sonnekus The Law of Estoppel
in South Africa
at 130.
34.3.
It is undisputed that it is standard
practice for a superseded vehicle to be placed by the second
respondent in the physical possession
of a dealer and for the
relevant change of ownership form to be completed in favour of the
dealer so as to facilitate transfer
of ownership of the vehicle by
the dealer to a purchaser who is prepared to pay the price required
by the second respondent. There
is no evidence to the effect that any
of the second respondent’s vehicles dealt with in this way have
ever been fraudulently
sold by a dealer to a third party at a price
less than that required by the second respondent.
34.4.
That being so, there is nothing to indicate
that the second respondent ought reasonably to have foreseen the
possibility that the
truck in question would be fraudulently sold by
the third respondent to the fourth respondent. The second respondent
did business
with the representatives of the third respondent from
April 2011 onwards without any such incident taking place. It was
only during
August 2012 that the agreement was made with Mr. Paton
that the vehicle would be sold by the third respondent on behalf of
the
second respondent. Tit was contended that here is no basis in the
affidavits for the conclusion that the second respondent ought
reasonably to have foreseen that the truck in question would or might
(as a reasonable possibility) have been fraudulently sold
by the
third respondent to a third party (the fourth respondent) for less
than the amount that the second respondent was asking
for the
vehicle.
34.5.
The second respondent also submitted that
in order for an estoppel to operate, the representation must have
been the direct or proximate
cause of the applicant acting to his or
her detriment. In the present application, this requirement, so the
submission ran, was
not met for the following reasons: (i) there was
no representation by the second respondent to anyone that the third
respondent
could sell the relevant truck for only R180 000; (ii)
there was no representation of any kind by the second respondent to
the applicant; and (iii) the direct or proximate cause of any
detriment which the applicant might have suffered was clearly the
fraud committed by the third respondent in purporting to sell the
truck to the fourth respondent for only R180 000.
34.6.
This fraud led the fourth respondent to
believe that the transaction had the effect of transferring ownership
in the truck to the
fourth respondent which in turn enabled the
fourth respondent to transfer ownership to the applicant. The fraud
by the third respondent
clearly severed the chain of causation
between the second respondent’s conduct in handing the physical
possession of the
truck and its associated documentation to the third
respondent and the detriment alleged to have been suffered by the
applicant.
Similarly, in
Union
Government v National Bank
, 1921 AD at
138 Solomon JA held that the conduct of the postmaster in
leaving a post-office date stamp unguarded was not the
cause of the
loss: the direct cause of the loss was ‘
the
intervention of an act of wickedness’
on the part of the third party who fraudulently used the date stamp
to stamp stolen postal orders, which the postmaster could not
have
been expected to anticipate.
34.7.
Importantly, so the second respondent
pointed out, Solomon JA in the
National
Bank
case (supra) rejected the
so-called ‘
facilitation theory’
,
under which whenever one of two innocent parties suffers by the act
of a third person, he who enabled such person to occasion
the loss
must sustain it. The ‘
facilitation
theor
y’ was ultimately rejected
as not forming part of South African law in
Stellenbosch
Farmers’ Winery Ltd v Vlachos t/a The Liquor Den
2001 (3) SA 597
(SCA) para 17 at 608J‒609E, where
Nienaber JA held:
‘
[
T]he
so-called “facilitation theory” . . . has long
been discredited in this country (cf, for instance, Union
Government
v National Bank of South Africa Ltd
1921 AD 121
at 131, 138; and
Grosvenor Motors (Potchefstroom) Ltd v Douglas
1956 (3) SA 420
(A) at
425F‒H). Thus it was declared by Corbett J in OK Bazaars
(1929) Ltd v Universal Stores Ltd
1973 (2) SA 281
(C) at 287H‒288B:
“
As
in the present instance, cases of estoppel by negligence often
involve the fraudulent conduct of a third party and the complaint
against the person sought to be estopped is that his negligence
permitted or facilitated the fraud. In this situation our Courts
have
rejected, as being too broadly stated, the so-called ‘facilitation
theory’, viz that wherever one of two innocent
parties must
suffer by the acts of a third, he who has enabled such third person
to occasion the loss must sustain it (see Grosvenor
Motors’
case supra at 425; see also Connock’s (SA) Motor Co Ltd v
Sentraal Westelike Ko-operatiewe Maatskappy Bpk
1964 (2) SA 47
(T) at
48). It has, on the contrary, been held that such cases must be
adjudged by the ordinary general principles relating to
estoppel by
negligence; and, of course, the fraudulent intervention of a third
party is an important factor in determining whether
the conduct of
the person sought to be estopped proximately caused the other’s
mistaken belief and resultant loss; and whether
this result was
reasonably foreseeable (see, for example, National Bank case supra).’
34.8.
In
Grosvenor
Motors (Potchefstroom) Ltd v Douglas
1956 (3) SA 420
(A), reliance by the appellant (the estoppel
asserter) on estoppel, failed where a fraudster had induced the
respondent (the estoppel
denier) to provide him with a note stating
that the respondent had sold a particular car to the fraudster. The
fraudster had then
used the note to deceive the appellant into
believing that the fraudster had authority to on-sell the car to the
appellant. Centlivres CJ
held that even if the respondent had
been negligent in providing the fraudster with the note, the trial
court had correctly found
that ‘
the
real and direct cause’
of the
deception was not the note which the fraudster had used to accomplish
his fraud, but the fraudster’s own fraudulent
conduct. In the
circumstances, it could not be said that the note which the
respondent had given to the fraudster was the proximate
cause of the
appellant’s purchase of the car. The second respondent argued
that the same applies in the present application:
the real and direct
cause of the fraud of which the applicant was a victim was the
conduct of Mr Paton on behalf of the third respondent,
not the
conduct of the second respondent in providing the vehicle, its keys
and its ownership papers to the third respondent in
accordance with
normal sales procedures.
[35]
The second respondent argued further that
were this court to transform the shield into a sword, it would be a
sword with a double
edge:
35.1.
This, so the argument went, is so as the
effect of the court upholding the applicant’s argument based on
estoppel, would be
to allow the consequences of a fraud perpetrated
by the third respondent against the second respondent to stand. In as
much as
ownership cannot pass pursuant to a fraudulent transaction,
so too estoppel cannot be relied upon by the applicant as a basis
upon
which ownership could be held to have passed to the applicant by
virtue of a fraud perpetrated on second respondent.
35.2.
The rule that public policy does not permit
estoppel to operate in circumstances where its application would
produce a result which
is not permitted by law, necessarily involves
that a plea of estoppel will not be upheld if its effect would be to
render enforceable
what the law, be it at common law or by
legislation, had in the public interest declared to be illegal or
invalid:
Rabie and Sonnekus The Law of
Estoppel in South Africa 3 ed (2012) by J C Sonnekus at
291.
If the applicant’s argument
based on estoppel were to be upheld, then the consequences of a fraud
perpetrated by the third
respondent against the second respondent
would be given legal efficacy, and the fraud would be treated as
having the legal consequence
of passing ownership from the second
respondent to the third respondent, and thereafter from the third
respondent to the fourth
respondent, and from the fourth respondent
to the applicant.
[36]
Although the arguments in relation to
estoppel advanced by the second respondent are persuasive, I do not,
by virtue of the concession
made by the applicant in relation to
whether or not it could found a cause of action, have to make a
finding in respect of the
substance of the ‘defence’ of
estoppel in order to reach my conclusion in this application. I am
for another reason
reluctant to do so, being that the applicant did
not argue the merits of the estoppel point, having made the
concession referred
to hereinbefore. I would not want to bind another
court with my findings, particularly not under circumstances where
the point
was not fully argued.
INTERIM
RELIEF
[37]
The applicant seeks in the alternative an
interim interdict against the second respondent restraining it from
disposing of or alienating
the vehicle, pending the outcome of an
action to be instituted by the applicant for the return of the
vehicle.
[38]
The requirements which the applicant must
satisfy in order to obtain an interim interdict are: (i) a prima
facie right; (ii) a well-grounded
apprehension of irreparable harm if
the interim relief is not granted and the ultimate relief is
eventually granted; (iii) a balance
of convenience in favour of the
granting of the interim relief; and (iv) the absence of any other
satisfactory remedy.
[39]
The applicant has not demonstrated either a
prima facie right of ownership nor a clear right.
[40]
Even if the applicant were able to
demonstrate a prima facie right of ownership vesting in it, the
second respondent has never,
since learning of the applicant’s
assertion that it owns the vehicle, threatened to violate any such
right by alienating
or disposing of the vehicle.
[41]
A well-grounded apprehension of irreparable
harm to the applicant, if the interim relief is not granted and the
applicant ultimately
succeeds in establishing the right contended for
by it, is absent. The second respondent stated that it has no
intention, in the
event of the vehicle being returned to it by
members of the South African Police Service, of disposing of or
alienating the vehicle
while legal proceedings pertaining to the
vehicle were pending or in prospect. The second respondent, in fact,
was anxious to retain
the vehicle under its supervision and control,
since the vehicle is currently being kept in an open yard under the
control of the
South African Police Service, where the vehicle is
unprotected against the elements.
[42]
In the present instance, the applicant
clearly has a satisfactory alternative remedy, namely an action for
the recovery of the purchase
price paid by it to the fourth
respondent (plus interest thereon), alternatively an action for
damages in the amount of the purchase
price, together with an action
for damages for any consequential loss which might be claimable by
the applicant against either
the fourth respondent or the third
respondent arising from the failure to afford the applicant the use
of the vehicle at the time
when the fourth respondent undertook that
the vehicle would be handed over.
ORDER
[43]
I accordingly make the following order :
The application is dismissed with costs.
___________________________
I
Opperman
Acting
Judge of the High Court
Heard:
4 March 2014
Judgment
delivered: 17 April 2014
Appearances:
For
Applicant: Adv JW Kloek
Attorneys:
Beukes & Sonja Nel
For
First Respondent: Adv D Joubert
For
Second Respondent: Adv RG Cohen
Attorneys:
Mervyn Dendy Attorney
[1]
Plascon-Evans
Paints (Pty) Ltd v Van Riebeeck Paints (Pty) Ltd
[1984] ZASCA 51
;
1984 (3) SA 623
(A)