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[2014] ZASCA 166
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Investgold CC v Uys and Another (686/2013) [2014] ZASCA 166 (1 October 2014)
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 686/2013
Not Reportable
In
the matter between
INVESTGOLD
CC
APPELLANT
and
DIRK
UYS
FIRST
RESPONDENT
MARIESA
TROSKIE
SECOND RESPONDENT
Neutral citation:
Investgold
CC v Uys & another
(686/2013)
[2014] ZASCA 166
(01 October 2014)
Coram:
Bosielo, Tshiqi,
Saldulker JJA and Mocumie, Gorven AJJA
Heard:
16 September 2014
Delivered:
01 October 2014
Summary
:
Purchase and Sale of coins – whether payment of the purchase
price coupled with delivery of the coins was done
with the intention
to pass ownership – whether ownership of the coins passed to
the purchaser – gold coins subsequently
stolen from the vault
by the seller’s employee – whether the subsequent theft
of coins by seller’s employees
vitiated its intention to
transfer ownership.
ORDER
On
appeal from:
South
Gauteng High Court, Johannesburg (Boruchowitz J sitting as court of
first instance):
It
is ordered that:
1
The appeal is upheld with costs including the costs of two counsel
where employed.
2
The order of the trial court is set aside and substituted with an
order dismissing the plaintiffs' claim with costs.
JUDGMENT
Bosielo
JA (Tshiqi and Saldulker JJA and Mocumie, Gorven AJJA concurring):
[1]
The crisp legal question to be answered in this appeal is whether
ownership of the coins passed to the purchaser when delivery
thereof
was made. Simply put, does the fact that the purchaser had paid the
price in full and the seller had physically delivered
the coins to
the purchaser who received them into his undisturbed possession make
the sale complete? At face value this legal question
might appear to
be simple. However, the peculiar facts of this case prove otherwise.
[2]
Shorn of unnecessary frills the following facts are common
cause: Early in 2011, Rudy Hugo (Hugo) and Raymond Jardine
(Jardine),
acting in their capacities as the appellant’s (Investgold)
brokers and therefore its agents visited Dirk Uys (Uys)
at his
business premises in Brooklyn where they sold him gold coins for
R76 000 (seventy six thousand rand). Uys indicated
to them that
he had R1 million which he wanted to use to buy more gold coins.
[3]
This transaction was followed by another one involving the purchase
of kruger rands and rare coins by Uys and Troskie during
January 2001
for R1,6 million in cash. It is common cause that the quotation and
tax invoice for this sale transaction were not
issued in Uys’
name but in the names of Hugo and Jardine. This is because Uys wished
to avoid the Financial Intelligence
Centre Act 38 of 2001 (FICA) and
also that he did not want the South African Revenue Service (SARS) to
know about it. However,
this was subsequently corrected by Investgold
after they became aware of it. The three agreed that as soon as the
coins were available
Hugo would advise Uys to come and fetch them at
Investgold’s premises in Killarney.
[4]
On 26 January 2011, after being advised that their coins were
available for collection, Uys went to Investgold’s premises
at
Killarney to collect same. Upon arrival Uys was taken to a
cubicle inside the office by Hugo where Rafique Davids (Davids),
Investgold’s stock controller, handed the gold coins to him
Uys, together with Hugo and Jardine, inspected them to verify
and
satisfy himself that they were the coins which he and Troskie (the
second respondent) had ordered as per the quotation.
Upon being
satisfied, Uys, Hugo and Jardine signed the requisite delivery note
and receipt for the gold coins and returned it to
Davids. The coins
were then handed over to Uys who received them into his possession as
the owner.
[5]
After Uys had taken possession of the gold coins and was about to
leave Investgold’s premises, Hugo then suggested to
him that it
was not safe for him to travel with coins and, instead suggested that
they be kept safe for him in Investgold’s
vault. At this stage,
Uys telephoned his fiancee, Troskie, seeking her consent to store the
gold coins in a safe as suggested by
Hugo. After he had received the
go ahead from Troskie, Uys packed the coins in a bag and, accompanied
by Hugo, took them for safekeeping
to what he believed was
Investgold’s vault. Unknown to him, the vault belonged to a
company called Knox Titanium Vault Company
(Pty) Ltd (Knox Vaults).
Uys, assisted by a lady called Roxy who apparently worked for Knox
Vaults, put the gold coins in a safe.
This was after Roxy had
explained all the security features of their vaults to him and he was
satisfied that his gold coins were
safe. After he had put the gold
coins in the vault, Roxy gave him one key for the safe whilst she
retained the other one. Uys was
told that both keys were needed to
gain access to the gold coins. In other words, none of them could
open the vault without the
other one.
[6]
A tragic event then occurred. On 11 March 2011, Gert Pieter Erasmus
(Erasmus) Investgold’s general manager telephoned
Uys and
informed him that his gold coins had been stolen. It is common cause
that Hugo had stolen the coins from Knox’s safe
after they had
been placed there. Later Hugo admitted the theft in an affidavit and
returned some of the coins. It is not in dispute
that Hugo had
already on 19 January 2011, unknown to Uys, forged Uys’
signature to lease the safe from Knox Vaults. Hugo
had misled Uys to
believe that he was storing his coins with Investgold when in truth
it was with Knox’s Vault.
[7]
Based on these facts Uys and Troskie issued summons against
Investgold in the main for specific performance by way of delivery
of
the coins which they had purchased and which were stolen by Hugo. The
court below granted judgment in favour of the respondents
on this
claim. As indicated, the issue was whether Hugo and Troskie had
established that, when the coins were delivered to Uys,
Investgold
did not have the intention to transfer ownership to Uys and Troskie
[8]
In motivating his judgment, the learned judge held that, because
Investgold was an artificial person, it could only act through
a
natural person. These natural persons, through whom it acted, had to
have the intention to pass ownership. He found that these
natural
persons from whom the intention to pass ownership must be inferred
were Hugo and Jardine, and not Erasmus, the manager
or the stock
controller, Davids. This is because he found them to be the people
who were instrumental in the sale transaction and
therefore
Investgold’s directing minds. The learned judge held as
follows:
‘
It
is clear therefore that there was no intention on the part of the
defendant to transfer ownership of the coins to the plaintiffs.…
The presence of an intention to steal the coins on the part of the
persons who were the directing minds of the defendant would
have
prevented the transfer of ownership.’
He
proceeded further as follows:
‘
The
element of physical possession or detentio has also not been
established. It is clear on the evidence that Hugo, assisted by
Jardine, were at all material times in control of the coins. Even
though the coins were pushed through the glass enclosure by the
stock
controller, Davids, they exercised de facto control. The fact that
Uys handled the coins momentarily during the verification
process did
not make him the possessor of the coins. Even if I am incorrect in
this regard, Uys’ physical possession was
not accompanied by a
concurrent intention by the defendant to convey ownership to the
plaintiffs.’
[9]
Investgold appeals against this judgment with the leave of the court
below.
[10]
Counsel for Investgold submitted that at the critical time when Uys
received the coins from Davids, delivery of the coins was
completed.
It was contended further that when Uys decided, after a telephonic
consultation with Troskie, to take the coins for
safekeeping to
Investgold, he exercised free and independent election as the owner
of the coins. At this stage, so the contention
went, he had full
dominium of the coins and enjoyed undisturbed possession.
[11]
On the other hand, although admitting the handing over of the coins,
the respondents’ counsel submitted that the mere
physical
handing over of the coins did not constitute delivery as Hugo and
Jardine never intended to pass ownership of the coins
to Uys and
Troskie. This is evidenced by the fact that as far back as 19 January
2011, Hugo had already formed the intention to
steal the coins when
he forged Uys’ signature to procure the safe from Knox Vaults.
He contended further that the intention
to steal by Hugo and possibly
Jardine negated any intention on the part of Investgold to transfer
ownership of the coins to Uys
and Troskie. It suffices to state that
this submission ignores the fact that with the systems set up by
Investgold, Hugo would
not succeed in stealing the coins whilst they
were in Investgold’s custody. This is the reason why he had to
ensure that
Uys received them in his possession.
[12]
Relying on
Consolidated
News Agency (Pty) Ltd (In Liquidation) v Mobile Telephone Networks
(Pty) Ltd
[1]
it was submitted that as Hugo and
Jardine were Investgold’s agents and directing minds, their
actions and intentions were
those of Investgold. In other words their
actions and intentions are attributed to Investgold. Based on this it
was contended that
because Hugo and Jardine never intended to pass
ownership in the coins to Uys and Troskie, Investgold never
discharged its legal
obligation to transfer ownership. It was
submitted that what happened on 26 January 2011 was not actual and
genuine delivery but
a mere sham or ruse.
[13]
A contract of purchase and sale,
emptio
vendito
is
described as a contract whereby one person promises to deliver a
thing to another and the latter in return promises to pay a
price
therefor. The obligation of the seller is to give the purchaser
undisturbed possession (
vacua
possessio
) of the
merx
coupled with a guarantee against eviction to the purchaser.
[2]
[14]
In a cash sale where payment has taken place, ownership will be
transferred on delivery.
[3]
It is trite that the intention to transfer and receive ownership
(animus transferandi
dominii and animus accipiendi dominii)
is
proved in various ways and can be inferred from the circumstances.
[4]
In this regard, Watermeyer JA stated:
[5]
‘
Ownership
of movable property does not in our law pass by the making of a
contract. It passes when delivery of possession is given
accompanied
by an intention on the part of the transferor to transfer ownership
and on the part of the transferee to receive it.
If it is delivered
in pursuance of a contract of sale, the ownership may pass at the
time of delivery or it may not.’
In
Cornelissen NO v
Universal Caravan Sales (Pty) Ltd
,
[6]
the majority held that:
The
words “sold and delivered” do not necessarily connote
that ownership in the goods has passed to the purchaser, for
it is
trite law that mere physical delivery of property, unaccompanied by
an intention to transfer ownership, does not give the
recipient
dominium
.’
[15]
It is axiomatic that the vexed legal question whether there has been
delivery accompanied by an intention to pass
dominium
depends upon the intention of the parties and the facts of each
case.
[7]
[16]
This question resolves itself into two issues. The first is to
determine who to look to as being in a position to form an intention
to transfer ownership on behalf of Investgold. The second is to
determine the intention of Investgold at the time. As mentioned,
the
court below held that the brokers were the guiding minds of
Investgold. I do not agree. The sole role of the brokers at the
time
the coins were delivered was to counter-sign the delivery notes once
Uys and the brokers had established that the correct
coins had been
delivered. Beyond that, the brokers played no part in the delivery of
the coins. The guiding mind of Investgold
was that of the general
manager Erasmus in setting up the system to be implemented for cash
sales and deliveries in particular.
This system was set up so as to
pass ownership. The evidence shows conclusively that the coins were
delivered to Uys by Davids
on 26 January 2011 with the intention to
pass ownership. Uys in turn accepted ownership of the coins with the
intention of becoming
the owner.
[17]
As regards the second question, it seems to me that the intention of
Investgold was that transfer of ownership would take place
when the
system for delivery had been implemented and completed. This system
was set up in order to ensure that delivery took place
in accordance
with an accepted quotation (order) and that documentary proof of this
delivery was obtained. It is therefore my view
that, in the present
matter, because effect was given to the system for delivery and the
process was followed to completion, the
intention to pass ownership
was proved. In any event, if the ‘guiding mind’ must be
determined at the time of a particular
delivery, it could not have
been those of Hugo or Jardine but that of Davids whose job was to
select coins in accordance with the
order, deliver them to Uys and
ensure that delivery was documented by way of his signature and those
of the broker or brokers who
had been responsible for the sale.
[18]
Even if it can be argued that the mind of Hugo must be looked to, it
is inconceivable that, knowing as he did that he could
not steal
coins in the possession of Investgold, he held a mental reservation
concerning transfer of ownership when delivery took
place for the
sole reason that he wanted to steal from Investgold rather than from
Uys and Troskie. He was intent on stealing the
coins at some future
date. The only persons he could successfully persuade to adopt his
scheme were Uys and Troskie. No inference
can be drawn that he did
not intend them to become owners because he did not want to steal
from them.
[19]
It follows that the court below erred in finding that ownership of
the coins had not passed to Uys and Troskie. It further
erred in
finding that, despite physical delivery having been effected, the
coins were at all times under the control of Hugo. If
this were in
fact so, Hugo would not have needed to ask Uys whether he wished to
deposit the coins for safekeeping. He may have
thought, with
justification that Uys was under his influence to place the coins
where he could steal them but he was not in control
of the coins.
Investgold accordingly discharged the onus to prove the transfer of
ownership of the coins to Uys and Troskie. In
doing so Investgold
discharged its obligations under the cash sales. As such, the claim
for specific performance ought to have
failed.
[20]
Uys and Troskie relied on two alternative claims. The first one was
based on the fact that after becoming aware that
Hugo and
Jardine had ordered the coins in their names, Investgold
intentionally or negligently omitted to advise them of
this fact
which resulted in them failing to take steps to protect their
interests, and allowing Hugo to steal their coins. The
second one is
based on an alleged misrepresentation by Hugo and Jardine which led
to Uys storing his coins at Knox Vaults after
they led him to believe
that they would be safe whereas they were not safe as Hugo
subsequently stole them from the safe. The learned
judge did not deal
with the two alternative claims. Save to state that they persisted
with the two alternative claims, counsel
for Uys and Troskie did not
make any submissions in support of the two claims. As regards the
first of these, the law recognises
no such legal duty. As regards the
second, the theft by Hugo has nothing to do with carrying out his
employment with Investgold.
No vicarious liability for his actions
thus arises. It suffices to state that the two alternative claims
have no merit.
[21]
In the result, the following order is made:
1 The appeal is upheld with costs including the costs of
two counsel where employed.
2
The order of the trial court is set aside and substituted with an
order dismissing the plaintiffs' claim with costs.
_________________
L
O BOSIELO
JUDGE OF APPEAL
Appearances:
For
Appellant : AG
South
Instructed by:
Maritz Smith Van Eeden Inc.; Johannesburg
Symington & De Kok, Bloemfontein
For
Respondent : H van Eeden SC (with him
JW Steyn)
Instructed by:
Bento Inc.; Johannesburg
Phatshoane Henny Attorneys,
Bloemfontein
[1]
Consolidated News Agency (Pty) Ltd (In
Liquidation) v Mobile Telephone Networks (Pty) Ltd
2010
(3) SA 382
(SCA) paras 30 and 31.
[2]
G R J Hackwill M A
Mackeurtan’s
Sale of Goods in South Africa
5 ed
(1984) at 66.
[3]
Electra Home Appliances (Pty) Ltd v Five Star
Transport (Pty) Ltd
1972 (3) SA 583
(W) at 585-6.
[4]
Commissioner of Customs and Excise v Randles
Brothers & Hudson Ltd
1941 AD 369
,
at 398-400.
[5]
At 398
[6]
Cornelissen NO v Universal Caravan Sales (Pty)
Ltd
1971 (3) SA 158
(A) at 179D-E.
[7]
R Norman
Purchase
and Sale in South Africa
(1919)at 290.