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[2011] ZASCA 206
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Nazier Kolia t/a Nazco Motors v First Rand Bank Ltd Wesbank (357/08) [2011] ZASCA 206 (25 November 2011)
THE SUPREME COURT
OF APPEAL
OF
SOUTH AFRICA
JUDGMENT
No precedent significance
Case No:
357/08
In
the matter between:
NAZIER KOLIA t/a NAZCO MOTORS
….........................................................
Appellant
and
FIRST RAND BANK LIMITED t/a WESBANK
…........................................
Respondent
Neutral
citation:
Nazier Kolia v First Rand Bank
(357/08)
[2011]
ZASCA 206
(25 November 2011)
Coram:
Harms AP, Cloete and Cachalia JJA
Heard:
16 November 2011
Delivered:
25 November 2011
Summary:
Actio ad exhibendum ─
tacit conferral of
ius
disponendi ─
estoppel.
___________________________________________________________________
O R D E R
___________________________________________________________________
On appeal from:
South Gauteng High Court,
Johannesburg (Wessels AJ sitting as court of first instance):
The appeal is dismissed with costs including the costs
of the appellant’s application for condonation.
___________________________________________________________________
J U D G M E N T
__________________________________________________________________
HARMS AP (CLOETE and CACHALIA JJA concurring)
[1] The appellant, Mr Nazier Kolia, trading as Nazco
Motors, is a wholesale motor dealer. He purchases vehicles in bulk
from sellers,
such as car rental companies, and supplies them to
motor dealers for on-sale. During 2004, he sold seven such vehicles
to Supreme
Cars, a dealer in Polokwane, against delivery of a number
of post-dated cheques. The invoices contained a term reserving
ownership
until full payment of the purchase price. Supreme, in
circumstances that will be dealt will in some more detail,
transferred ownership
to itself and then, by entering into a floor
plan agreement with the respondent bank, First Rand Bank Ltd trading
as Wesbank, purported
to transfer ownership to the latter. The
cheques were dishonoured and Kolia sought to repossess the vehicles,
relying on his reserved
ownership. Wesbank had, in the meantime,
taken possession of them, relying on the rights it purportedly had
obtained from Supreme.
Some time later Wesbank, despite knowledge of
Kolia’s claim, disposed of the vehicles, and this gave rise to
the institution
of an
actio ad
exhibendum
against Wesbank in
which Kolia claimed the value of the vehicles.
[2] The case in the High Court, Johannesburg, was heard
by Wessels AJ, who already on or about 1 October 2007 (there are
three possible
dates) dismissed the claim after upholding a plea of
estoppel. The learned judge granted leave to appeal on 11 June 2008.
I shall
refrain from setting out the sorry saga of neglect which led
to the fact that the appeal record was only filed on 20 June 2011
because the parties were agreed that condonation should be granted,
something to which we reluctantly agreed.
[3] The modus operandi of Kolia, Supreme and Wesbank was
the same in relation to six vehicles and it is accordingly not
necessary
to distinguish between them and I shall take one as an
example.
1
Kolia purchased a 2002 model Toyota from CMH Car Hire on
14 January 2004, paid the purchase price in full, and took delivery
of
the vehicle. CMH handed to Kolia the original Natis registration
certificate relating to the vehicle as well as a signed blank
transfer form, documentation reflecting payment by Supreme of the
vehicle, and a letter from the title holder stating that the vehicle
could be registered in the name of another title holder. A Natis
certificate reflects the particulars of the title holder and of
the
owner (as defined in the
National Road Traffic Act of 1996
and see
also the National Road Traffic Regulations of 2000). To effect
transfer of the vehicle an original Natis document as well
as a
completed transfer form is required.
[4] Kolia did not register the vehicle in his name as he
was entitled to do but nevertheless, having regard to the aforegoing,
became
the common-law owner of the vehicle. This fact became common
cause in the court below. He then sold the vehicle to Supreme on 25
February 2004. The tax invoice indicates that the purchase price had
to be paid in two instalments, namely on 25 March and 5 April
2004,
and that ownership was reserved ‘until paid for in full’.
The necessary post-dated cheques covering the whole
of the purchase
price were handed to Kolia.
[5] Kolia, in turn, delivered the vehicle with its keys
to Supreme. In addition, he handed to Supreme the following
documentation:
(a) the original Natis certificate as received from
CMH; (b) the mentioned change of ownership form duly signed on behalf
of CMH;
and (c) documentation from the title holder (BMW Finance who
had financed the vehicle in the hands of CMH) as reflected on the
Natis document confirming that the vehicle had been paid for in full.
[6] It is convenient to quote Wessels AJ at this
juncture. He said:
‘
It is
clear from what is set out and from the scheme of the Act that the
Natis system, as it is called, has been designed to prevent
the sale
and registration of transfer of motor vehicles without the consent of
the title holder which are often the financial institutions
that
provide the finance for the purchase of motor vehicles. In this
regard, it is one of the salient features of the Natis system
that a
change in registration of the title holder and owner can only take
place if the person effecting such change has in his
possession the
original Natis certificate in respect of the vehicle as well as proof
emanating from the title holder (usually financier)
of the vehicle to
the effect that the vehicle has been fully paid for. This envisages a
situation where registration can only take
place if the original
holder of the Natis certificate has relinquished it for the purposes
of registration of the vehicle. The
Plaintiff, by supplying Supreme
Cars with the original certificate of registration in respect of the
vehicles obtained from CMH,
the signed change of ownership form and
the original Natis document with a letter from the title holder
confirming that the vehicle
had been paid for in full, made it
possible for Supreme Cars to register the vehicles into its name as
owner and title holder and
thereafter to register the vehicles in the
name of Supreme Cars as the owner and the Defendant as the title
holder respectively.
[All this occurred on 11 March 2004.] The
Defendant was registered as a title holder by virtue of financing it
provided in terms
of the floor plan agreement.’
[7] The handing over of the documentation was done to
enable Supreme to sell the vehicle and to transfer ownership to any
purchaser.
In other words and in spite of the reservation of
ownership, Kolia gave Supreme a tacit
ius
disponendi
. Supreme could sell and transfer
title and ownership of the vehicle as reflected in the Natis
registration certificate. This much
is apparent from Kolia’s
evidence:
‘
You
knew that in selling the vehicles and delivering them in the manner
that you did; that the vehicles were going to be onsold,
you knew
that? --- Yes I did.
And you delivered them to the
dealer for the purpose of them being on-sold, is that correct? ---
Yes.
You knew that they would not be
used for the dealer’s personal use, but that their aim was that
they go out to third parties.
--- That is correct.
And that they would come perhaps
the subject matter of financial arrangements, leases financing of
some nature. --- In most cases
yes, but we never know the ultimate
fact, because I do not do the account for Supreme, but generally yes.
You knew also, that in
delivering the documentation that you did, to Supreme or its
representative, that that would enable Supreme
to register itself as
an owner and a titleholder, you were aware of that? --- I was aware.
You were aware also that those
documents that you delivered into the possession of Supreme, would
have been delivered for the purposes
of allowing Supreme to sell the
vehicles to somebody else? --- Yes I did.’
[8] The value of the reservation of ownership was
accordingly limited: it could have been used to reclaim the vehicle
from Supreme
in the event of non-payment but for nothing more. I am
aware that Kolia sought to distinguish a disposition to a third
person from
that of one to a bank under a floor plan but I am unable
to discern the difference.
[9] The common cause facts set out above were pleaded
and formed the basis of the judgment below. However, since the focus
was on
the defence of estoppel they were relied upon to establish a
representation by Kolia. The trial court agreed, as do I. But they
are in my view dispositive of the anterior legal question of whether
Supreme was clothed by Kolia with the
ius disponendi
.
[10] That disposes of the appeal. I therefore do not
find it necessary to deal in any detail with the main point argued on
behalf
of Kolia on appeal, namely that the bank had failed to
establish that it had relied on the documentation in purchasing the
vehicle
and that it, therefore, could not have relied on estoppel.
The intervening act of Supreme of transferring the vehicle must be
ascribed
to Kolia. This is not a case where Supreme committed fraud.
It only failed to honour its cheques after the transfer of the
vehicle
to the bank. If regard is had to ordinary banking practice,
as set out in the evidence, there can be little doubt that the bank
would not have acted as it did had it not been for the
representations of Kolia. The trial court was obviously of the view
that
more specific evidence was not required in the circumstances of
the case. The ability of a court of appeal to interfere with factual
findings is limited and I am not satisfied that the trial court
erred.
[11] The appeal is dismissed with costs including the
costs of the appellant’s application for condonation.
______________________
L T C Harms
Acting President
APPEARANCES:
For Appellant: W B Pyl (with him N Mbelle)
Instructed by:
Stuart Harris Attorneys, Johannesburg
Honey Attorneys, Bloemfontein
For Respondent: D C Fischer SC
Instructed by:
Blakes Maphanga Inc, Johannesburg
Naudes, Bloemfontein
1
The
seventh vehicle was a new vehicle, which had not yet been
registered. The factory documents were instead provided. It is not
necessary to deal with this instance any further because what
follows applied mutatis mutandis.