Marks & Lamb Classic Cars CC v Kona (80288-17) [2019] ZAGPPHC 3 (16 January 2019)

80 Reportability
Property Law
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Brief Summary

Ownership — Rei vindicatio — Applicant claims ownership of a vehicle sold by an agent in liquidation — Respondent purchased the vehicle in good faith — Applicant retains registration papers but fails to prove ownership — Court finds that ownership likely passed to the respondent through the agent's sale, dismissing the application for rei vindicatio.

Comprehensive Summary

Summary of Judgment


1. Introduction


The proceedings were motion proceedings in the Gauteng Division of the High Court, Pretoria, in which the applicant sought to recover possession of a motor vehicle by way of the rei vindicatio.


The applicant was Marks & Lamb Classic Cars CC, which had placed a 1977 Mercedes Benz 450 SL (“the vehicle”) with Hamptons Exclusive Cars (“Hamptons”) for sale on consignment. The respondent was Mbulelo Kona, who had purchased the vehicle from Hamptons and was in possession of it.


The matter came before the High Court as an application in which the applicant alleged that it remained the owner of the vehicle and that the respondent’s possession was unlawful as against the owner. The respondent resisted the claim on the basis that he purchased in good faith and that the applicant was estopped from vindicating the vehicle due to the manner in which the vehicle was presented for sale at Hamptons.


The general subject-matter of the dispute concerned whether the applicant had established the factual and legal prerequisites for vindicatory relief (in particular, proof of ownership), in circumstances where a vehicle was sold by a dealer holding it on consignment and where the underlying consignment/agency terms were not disclosed to the court.


2. Material Facts


It was common cause that the applicant placed the vehicle for sale on consignment with Hamptons. The applicant did not disclose the terms of the consignment agreement, despite relying on the assertion that it remained owner.


It was also common cause that the respondent purchased the vehicle from Hamptons for R395 000, and that the respondent was in possession of the vehicle at the time of the application.


The respondent alleged (as part of the background to the dispute) that the applicant informed him that Hamptons had not paid the purchase price over to the applicant. The court noted that an allegation in argument that Hamptons was in liquidation was not supported on the papers, and Hamptons was not joined as a party.


The respondent admitted that the applicant remained in possession of the vehicle’s registration papers (registration certificate). The applicant relied on that fact as proof that it remained the owner.


A material feature emphasised by the court was that the circumstances and legal basis upon which the vehicle was displayed and offered for sale at Hamptons were matters within the applicant’s knowledge (and potentially Hamptons’ knowledge), and not within the respondent’s knowledge at the time of purchase. Despite this, the applicant did not place the consignment/agency terms before the court.


3. Legal Issues


The central legal questions the court was required to determine were whether the applicant had established the elements required for the rei vindicatio, specifically whether the applicant had proved ownership of the vehicle, given the undisputed fact that the respondent was in possession.


A further issue raised on the papers was whether, assuming ownership was proved, the respondent had set up a sufficient defence of estoppel based on alleged representations arising from the vehicle being displayed for sale at Hamptons without caveats. However, the court treated the estoppel enquiry as dependent on the anterior question of ownership, and ultimately found it unnecessary to decide estoppel once ownership was not proved.


The dispute primarily concerned the application of legal principles to the proven facts: the legal consequences of possession of registration papers, the effect of a consignment/agency sale on ownership, and the evidentiary burden resting on an applicant who seeks vindicatory relief in motion proceedings while withholding material contractual terms.


4. Court’s Reasoning


The court approached the matter from the starting point that a party seeking the rei vindicatio must both allege and prove ownership, and must prove that the respondent is in possession of the thing claimed. Possession by the respondent was common cause, so the decisive enquiry became whether ownership by the applicant had been established on the papers.


The applicant’s case was that it remained owner because it retained the registration papers. The court accepted that possession of registration papers is prima facie proof of ownership, but held that it is not conclusive proof. The court reasoned that a motor vehicle is not immovable property whose transfer is governed by a statutory conveyancing system; accordingly, ownership of a motor vehicle is not transferred (or retained) merely by reference to registration documentation.


In dealing with the statutory context, the court held that the National Road Traffic Act 93 of 1996 regulates the registration and licensing of motor vehicles, but does not regulate the transfer of ownership in the sense contended for by the applicant. The court noted that the statutory definitions of “owner” and “title holder” refer back to contractual and common-law rights, underscoring that registration is not determinative of ownership.


The applicant invited the court to infer from its retention of the registration certificate that its agreement with Hamptons reserved ownership until the certificate was handed over. The court declined to draw that inference, emphasising that the applicant conceded the existence of a consignment arrangement but failed to disclose the terms of that arrangement, which were “purely within the applicant’s own knowledge”. The applicant also did not explicitly confirm under oath that Hamptons had not paid it or that the purchase price remained owing, a gap the court regarded as significant given the asserted basis for vindication.


The court was critical of the applicant’s litigation stance: it relied on the respondent’s inability to plead detailed circumstances of the display and sale (facts lying within the knowledge of the applicant and Hamptons), while simultaneously withholding the consignment/agency terms that could clarify whether Hamptons had authority to sell and transfer ownership. The court considered that, on a holistic reading of the founding and replying affidavits, the facts emerging from the applicant’s own papers indicated that Hamptons acted as the applicant’s agent and sold the vehicle to the respondent.


Against that background, the court held that the applicant’s reliance on the registration certificate, without disclosure of the underlying contractual arrangement and without sufficient factual substantiation regarding non-payment or retained ownership, amounted to a bare legal conclusion insufficient to discharge the onus of proving ownership. Because ownership was not proved, the court held that it was unnecessary to determine the respondent’s defence of estoppel: without proof of ownership, vindicatory relief could not succeed in any event.


5. Outcome and Relief


The court dismissed the application.


The applicant was ordered to pay the respondent’s costs.


Cases Cited


No cases were cited in the judgment.


Legislation Cited


National Road Traffic Act 93 of 1996.


Rules of Court Cited


No rules of court were cited in the judgment.


Held


The court held that in an application based on the rei vindicatio the applicant bears the burden of alleging and proving ownership. Although possession of a vehicle’s registration papers is prima facie evidence of ownership, it is not conclusive, and the applicant’s reliance on that fact alone—without disclosure of the consignment/agency agreement terms and without adequate factual substantiation—was insufficient to prove ownership on the papers.


Because ownership was not proved, the court held that it was unnecessary to decide the respondent’s estoppel defence. The application for return of the vehicle was dismissed with costs.


LEGAL PRINCIPLES


A claimant seeking the rei vindicatio must allege and prove both ownership and the respondent’s possession of the property. Where possession is common cause, the claim stands or falls on proof of ownership.


Possession of a motor vehicle’s registration papers constitutes prima facie proof of ownership, but it is not decisive. Ownership of a motor vehicle is determined by contract and the common law, and is not conclusively established by registration documentation.


The National Road Traffic Act 93 of 1996 provides for registration and licensing of motor vehicles but does not, on its own, regulate or determine the transfer of ownership of a motor vehicle for purposes of private-law claims.


In motion proceedings, where material facts regarding ownership and authority to sell are within the applicant’s knowledge (such as the terms of a consignment/agency agreement), an applicant cannot discharge the onus of proving ownership by relying on bare conclusions while withholding those material contractual facts.

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[2019] ZAGPPHC 3
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Marks & Lamb Classic Cars CC v Kona (80288-17) [2019] ZAGPPHC 3 (16 January 2019)

IN
THE HIGH COURT OF SOUTH AFRICA
(GAUTENG
DIVISION, PRETORIA)
CASE
NO: 80288/17
(1)
REPORTABLE:
YES
/NO
(2)
OF INTEREST TO OTHER JUDGES:
YES
/NO
(3)
REVISED.
DATE:
16/01/2019
SIGNATURE:
In
the matter between:
MARKS
& LAMB CLASSIC CARS CC
APPLICANT
And
MBULELO
KONA
RESPONDENT
JUDGMENT
YACOOB
AJ:
Introduction
1
The applicant, Marks & Lamb Classic
Cars CC, placed a 1977 Mercedes Benz 450 SL ("the vehicle")
for sale on consignment
with Hamptons Exclusive Cars ("Hamptons").
The terms of the agreement between the applicant and Hamptons have
not been
disclosed by the applicant.
2
The respondent purchased the vehicle
from Hamptons, for R395 000. The parties submitted in argument that
Hamptons is in liquidation,
although that allegation is not on the
papers. The respondent alleges that the applicant informed him that
Hamptons has not paid
over the purchase price of the vehicle to the
applicant. Hamptons is not a party to these proceedings. The
applicant now makes
application for a
rei
vindicatio.
3
The applicant's counsel submitted at the
hearing that the question to be answered is who should bear the
burden of Hamptons having
sold the car to the respondent without
paying the purchase price over to the applicant. In light of the view
I have taken of the
matter this is an apt but unfortunate way of
articulating the issue.
The
Applicant's Case
4
The applicant's case is that it is
still. the owner of the vehicle because it has retained the
registration papers, that the respondent
is in possession of the
vehicle, and that the applicant, as owner, is entitled to regain
possession of the vehicle.
The
Respondent's Case
5
The respondent's case is that it
purchased the vehicle in good faith from Hamptons, and that the
applicant is estopped from vindicating
the vehicle because the
applicant represented either that Hamptons was the owner or that
Hamptons had the power to sell the vehicle
by allowing the vehicle to
be displayed for sale with no caveats on Hamptons' shop floor.
6
For obvious reasons the respondent was
not able to plead the exact basis on and circumstances in which the
vehicle was displayed
for sale, as this was in the sole knowledge of
the applicant and Hamptons.
7
The respondent admits that the applicant
is still in possession of the registration papers.
The
Issues
8
The applicant takes the view, and has
submitted to this court, that it has alleged and proved all that it
needs to allege and prove
in order to regain possession of the
vehicle, that is, that it is the owner of the vehicle and that the
respondent is in possession
of it. It is, according to the applicant,
for the respondent to prove otherwise.
9
The respondent submits that it has
pleaded a clear enough case for the court to find that the applicant
is estopped from claiming
vindication of the vehicle.
10
The
applicant, on the other hand, contends that the respondent has not,
because the basis of the estoppel is unclear. That is, it
is not
clear whether the respondent's case is that the applicant represented
that Hamptons was the owner of the vehicle, or whether
the
representation is that Hamptons had authority to sell the vehicle, or
that Hamptons itself represented that it was the owner
of the
vehicle.·
11
It is common cause that the vehicle is
in the possession of the respondent. Assuming for the moment that the
applicant has in fact
proved that it is the owner of the vehicle, It
is the applicant alone who has the knowledge of how the vehicle came
to be displayed
on the shop floor of Hamptons. The applicant's
representatives are aware of this. They are also aware that the
respondent could
have had no knowledge at the time of the transaction
of the basis on which the vehicle was displayed, unless Hamptons made
him
aware of that basis.
12
The applicant also does not share with
the court the details of the consignment agreement between itself and
Hamptons, contenting
itself with simply picking holes in the
respondent's case, which is based on facts many of which are solely
within the applicant's
knowledge.
13
In its replying affidavit the applicant
states that Hamptons "clearly was in a position to sell the
vehicle on behalf of the
applicant as agent, but such a
representation is not relied upon". This shows the applicant's
lack of
bona fides
in
coming to this court. It is aware that it placed the vehicle with
Hamptons for sale as an agent. It is aware that that is a valid

defence. It is aware that the respondent could not know the exact
basis of the agreement between Hamptons and the applicant. Yet,
it
relies on the respondent not having pleaded what he did not know in
order to submit that the respondent has no defence.
14
This approach cannot be rewarded by the
courts. The court must look at the case as a whole, and the
conspectus of the evidence as
a whole in making its decision. The
facts which emerge from the applicant's own papers, if one reads the
founding and replying
affidavits together, are that Hamptons acted as
the applicant's agent and sold the vehicle to the respondent.
15
However, before dealing with the merits
of the respondent’s defence, the question must be answered
whether the applicant remains
the owner of the vehicle.
16
The possession of the registration
papers is
prima facie
proof
of ownership. However, the possession of papers is not conclusive
proof of ownership. A motor vehicle is not immovable property,
the
sale and transfer of which is governed by statute. There is no
requirement that the change of ownership of a motor vehicle
be
registered for transfer to take place.
17
The only statutory requirement regarding
motor vehicles is that they be registered and licenced, in terms of
the
National Road Traffic Act, 93 of 1996
. This does not regulate the
transfer of ownership of motor vehicles. The definitions of "owner"
and "title holder"
in the
National Road Traffic Act make
this clear - both refer o rights in terms of contract and the common
law.
18
The applicant asks the court to infer
from the fact that it retained possession of the registration
certificate that the terms of
its agreement with Hamptons permitted
it to retain ownership until the certificate was handed over.
However, despite. conceding
that there was a consignment agreement
with Hamptons, and stating that Hamptons was in a position to sell
the vehicle on behalf
of the applicant as agent, the applicant fails
to place before the court the terms of its consignment or agency
agreement with
Hamptons. Again, that is something that is purely
within the applicant's own knowledge.
19
Nor does the applicant confirm
explicitly and under oath that Hamptons has not paid it, or that the
purchase price is still due
to it by Hamptons. Without knowledge of
the details of the arrangement between the applicant and Hamptons, it
is difficult to conclude
that Hamptons in fact owes the purchase
price to the applicant, and that Hamptons did not have the power to
transfer ownership
to the respondent.
20
The applicant has simply alleged, as a
legal conclusion, that it is the owner of the vehicle because it is
in possession of the
registration certificate. That is insufficient,
particularly in the circumstances of this case, where the fact that
the vehicle
is in the respondent's possession is not a result of
events of which the applicant was unaware. The key event which led to
the
respondent possessing the vehicle is the applicant placing the
vehicle for sale with Hamptons, on terms known only to the applicant.

The applicant's reticence in these circumstances does not support a
conclusion that ownership did not pass. It is therefore apt
that the
applicant bears the burden of Hamptons actions.
21
The applicant must both allege and prove
ownership in order to succeed in these proceedings. In my view it has
not proved ownership.
The question of the nature of the
representations made to the respondent, in order for the respondent
to rely on estoppel to avoid
the
rei
vindicatio,
therefore does not
arise.
22
In the circumstances, I make the
following order:
The
application is dismissed with costs.
S.
YACOOB
ACTING
JUDGE OF THE HIGH COURT
COUNSEL
FOR APPLICANT:
WJ
DE BRUYN
APPLICANT'S
ATTORNEYS:
HAJIBHEY-BHYAT
INC
COUNSEL
FOR RESPONDENT:
M
BOIKANYO
RESPONDENT'S
ATTORNEYS:
GQWEDE
ATTORNEYS
DATE
OF
HEARING
11
SEPTEMBER 2018
DATE
OF JUDGMENT
16
JANUARY 2019

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