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[2011] ZAFSHC 51
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Unitrans Automotive (Pty) Ltd v The Trustees of the Rally Motors Trust (6017/2010) [2011] ZAFSHC 51 (10 March 2011)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No. : 6017/2010
In
the matter between:-
UNITRANS
AUTOMOTIVE (PTY) LIMITED
…..........................
Applicant
and
THE
TRUSTEES OF THE RALLY MOTORS TRUST
…......
Respondent
_____________________________________________________
HEARD
ON:
3 MARCH 2011
_____________________________________________________
JUDGMENT BY:
FISCHER, AJ
_____________________________________________________
DELIVERED ON:
10 MARCH 2011
_____________________________________________________
[1] Unitrans Automotive
(Pty) Ltd (applicant) brought an application in which it sought and
was granted
ex parte
an interim interdict preventing the
trustees of the Rally Motors Trust (respondent) from dealing with a
properly identified 4 x
4 Hilux motor vehicle pending the subsequent
obtaining of a declaratory order to the effect that the applicant was
as such the
owner of the motor vehicle together with further
ancillary relief relating to the return thereof. Respondent opposed
the granting
of such final relief, which was then argued before me.
[2] The salient facts
which as such are not in dispute may be summarised as follows:
2.1 On 2 November 2002 a
certain Kok visited the premises of applicant where he was introduced
to one of the sales persons employed
by applicant, a certain Mr.
Amaro (Amaro).
2.2 Kok intimated that he
was visiting from New Zealand and that he intended touring Botswana
with the motor vehicle before selling
same as he regarded this as a
more expedient and cost effective manner in which to tour as opposed
to hiring a vehicle.
2.3 The purchase price
was set at R359 000,00 and Kok advised that he intended doing a “cash
deal”.
2.4 Amaro was more than
keen and willing to assist Kok, who advised that he intended leaving
on his trip the very next day. As a
result hereof Amaro and on 2
November 2002 prepared not only the relevant tax invoice addressed to
Kok, but in addition thereto
the official certificate of registration
in respect of the motor vehicle evidencing the registration of same
in the name of Kok,
together with the official motor vehicle licence
and licence disk, such documents having been issued in terms of the
National Road Traffic Act of 1996
.
2.5 On 3 November 2010
Kok returned and advised that he would effect payment by means of an
electronic transfer of funds, but that
he needed to make the
necessary arrangements with Absa Bank. A certain Disney (Disney), an
accounting officer in the employ of
applicant, assisted Kok in
gaining access to the Absa website on her own computer shortly
whereafter Kok produced what on the face
thereof appeared to be a
copy of the confirmation of a successful beneficiary payment via the
internet banking system. Amaro was
apparently satisfied with such
“proof of payment” whereafter an offer to purchase was
prepared and signed by all relevant
parties, including applicant’s
sales manager, a certain Mr. Schoombee. The vehicle together with the
aforementioned documentation
was thereafter handed over to Kok, who
left the premises in his “newly acquired vehicle”.
2.6 What thereafter
transpired can only be described as a woeful tale of naivety,
incompetence and misplaced trust. Applicant according
to its own
ipse
dixit
very well knew that as the payment was effected by means of
an electronic transfer from a different bank to that used by
applicant,
the funds would only become available in applicant’s
account “’n paar dae later”. Applicant furthermore
stated that
“
normaalweg
sal applikant in omstandighede soos die, die voertuig hou totdat die
betaling op die applikant se rekening reflekteer.
In die geval was
die omstandighede egter sodanig dat Mnr. Armaro en ander werknemers
van applikant, Kok vertrou het.”
On 8 November 2010 the
accounting officer finally decided to advise Amaro that payment had
as yet not been “made” as
applicant’s bank
statements failed to reflect such a transaction. Amaro thereafter
phoned Kok on several occasions enquiring
about the non-payment
problem only to be met by explanations from Kok ranging from a claim
that he was already in Botswana, that
his wife would attend to the
payment from her own funds, that his mother-in-law was now objecting
to payment from her daughter’s
funds and finally an undertaking
that he (Kok) would be back in the country by 11 November 2010. On 11
November 2010 Kok arrived
at the premises of applicant and advised
that he would immediately attend to the payment via a bank in New
Zealand whereupon he
and Amaro went to Standard Bank (being
applicant’s bank) to effect the transaction through their
foreign exchange facility.
Amaro was advised that any such
transaction would take between two and ten working days to be
finalised whereupon the two gentlemen
returned to the premises of the
applicant where the accounting officer, Mrs. Disney, was advised that
payment would be effected
in the very near future. The woeful tale
was compounded by the fact that Amaro noticed that Kok was in fact no
longer driving the
relevant vehicle, and had arrived in another
allegedly belonging to his father. It was only after Kok had left the
premises that
Disney contacted Standard Bank and was advised that the
transaction would in fact take several days whereupon applicant
finally
decided to request Kok to return the vehicle pending payment
from New Zealand. Kok once again misled the applicant as to when he
intended “returning” the vehicle and it was only on 15
November 2010 that applicant confirmed that no such transaction
involving transfers from a bank in New Zealand had been arranged by
Kok. Then for the first time the applicant realised that it
had been
misled at all material times by Kok.
Unknown to the
applicant Kok had already and on 3 November 2010 sold the motor
vehicle to respondent.
[3] In its Answering
Affidavit the respondent advised that Kok had conveyed the same story
to it, namely that he was visiting from
New Zealand; that he found it
more appropriate to purchase the vehicle whilst visiting South Africa
and to thereafter sell it before
departing; that he had earlier in
the year bought the vehicle from applicant; that he wanted R295
000,00 for the sale of the vehicle
to respondent and that not only
the registration papers, but proof of identity together with an
international driver’s licence
were presented. On the strength
of the aforegoing respondent purchased the motor vehicle from Kok,
issued him with the necessary
tax invoice and thereafter registered
the vehicle in its own name as part of its stock. Respondent raised
as a defence to applicant’s
claim in terms of the
rei
vindicatio
that applicant was, in the circumstances, estopped
from claiming return of the vehicle in question.
[4] Mr. Steyn, on behalf
of the applicant, submitted that the defence of estoppel could not be
upheld as Kok was at no material
time the owner of such vehicle and
that the only reason why applicant had parted with the vehicle was as
a result of the fraudulent
conduct on the part of Kok which amounted
to nothing less than theft. In support of his argument Mr. Steyn
referred the Court to
the case of
BROEKMAN v TCD MOTORS (PTY),
LTD
1949 (4) SA 418
(TPD). The legal position has been dealt
with over a number of years in cases such as
GROSVENOR MOTORS
(POTCHEFSTROOM) LTD v DOUGLAS
1956 (3) SA 420
(A);
ELECTROLUX
(PTY) LTD v KHOTA AND ANOTHER
1961 (4) SA 244
(W);
JOHAADIEN
v STANLEY PORTER (PAARL) (PTY) LTD
1970 (1) SA 394
(A);
KAJEE
v H M GOUGH (EDMS) BPK
1971 (3) SA 99
(N);
OAKLAND
NOMINEES (PTY) LTD v GELRIA MINING & INVESTMENT CO (PTY) LTD
1976 (1) SA 441
(A);
QUENTY'S MOTORS (PTY) LTD v STANDARD
CREDIT CORPORATION LTD
[1994] ZASCA 41
;
1994 (3) SA 188
(A) and
ABSA
BANK BEPERK v RAMAKATANE AND ANOTHER
[2001] 1 ALL SA 559
(O).
[5] All the above cases
including the
BROEKMAN
-case,
supra
, deal,
amongst other things, with the causal connection between the
representation and the extent to or manner in which the representee
acted on such representation to his or her own prejudice which has
commonly become known as the so-called proximate cause test.
In
casu
it was incumbent upon the respondent to show that
culpa
on the part of the applicant caused the respondent to be misled into
the erroneous belief that Kok had the right to dispose of
the
vehicle. Put differently, the respondent must discharge the onus of
proving that the negligence on the part of applicant (and
not any
other person’s negligence) was the cause of respondent’s
erroneous belief.
See:
GROSVENOR
MOTORS (POTCHEFSTROOM) LTD v DOUGLAS
1956 (3) SA 420
(AD) at
p. 427 E.
The Appeal Court appears
to have gone even further in the
JOHAADIEN
-case,
supra
,
by qualifying the view expressed in the
GROSVENOR MOTORS
-case,
supra
, by saying that it was conceivable that the owner of a
motor vehicle could “by reason of compelling considerations of
fairness”
be estopped from asserting his or her rights even if
there was no
culpa
on his or her part.
See:
JOHAADIEN
-case,
supra
at
p. 409 E – G.
[6]
Mr. Steyn, on behalf of the applicant, submitted that the applicant
had not acted negligently
vis-a-vis
the respondent in handing the vehicle, together
with all necessary registration papers, to Kok but had in fact only
acted negligently
vis-a-vis
itself in believing Kok’s story. He further
submitted that respondent had been misled by the unlawful and
criminal representations
made to it by Kok and that such was the
proximate cause of respondent’s prejudice. To this extent Mr.
Steyn relied on the
BROEKMAN
-case,
supra
, in
which it was found that the proximate cause of the deception on the
respondent was the “act of wickedness” and
“fraudulent
misrepresentation” of the third party (
in
casu
Kok) relating to the possession
and completion of a formal “notice of change of ownership”
document as envisaged in
terms of
section 9(1)
of the then prevailing
Motor Vehicle Ordinance. The
BROEKMAN
-case,
supra
, was
decided in favour of the owner/applicant on facts which differ
materially from those in the present application. The applicant
in
that case did not hand over registration papers to the third party
evidencing a change of ownership as was the case
in
casu
. More apposite is the case of
KAJEE
,
supra
, in
which the full bench found in favour of the party in the same
position as that of the party in the present application on very
similar and comparable facts.
[7]
The legal position has however been succinctly stated by the Supreme
Court of Appeal in, amongst others, the case of
STELLENBOSCH
FARMERS' WINERY LTD v VLACHOS t/a THE LIQUOR DEN
2001 (3) SA
597
(SCA) at 609 where Nienaber JA referred to the case of
OK
BAZAARS (1929) LTD v UNIVERSAL STORES LTD
1973 (2) SA 281
(C)
at 287 H – 288 B:
“
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 whereever 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
p. 425; see also
Connock's
(
S.A
.)
Motor
Co. Ltd
.
v
Sentraal
Westelike Ko-operatiewe Maatskappy Bpk.
,
1964
(2) SA 47 (T)
A
at
p. 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.”
[8] Nienaber JA went on
to state that our courts have, in attempting to determine whether it
was the fraud of the intervening party
(
in casu
Kok), or the
negligence of the owner (
in casu
the applicant) which caused
the representee (
in casu
respondent) to act to his prejudice
“chiefly but not exclusively” employed the so-called
proximate cause test. The
learned Judge went on to state that
whatever the approach was, it should not be viewed in isolation but
rather in the context of
a broad overall picture which would as such
as of necessity include matters of policy and fairness.
See:
STELLENBOSCH
FARMERS' WINERY LTD
-case,
supra
, p. 610 D.
[9] In
ABSA
BANK BEPERK v RAMAKATANE
-case,
supra
, at
p. 563 E – G Hancke J dealt with the requirements for
successfully relying on estoppel as stated in the case of
OAKLAND
NOMINEES (PTY) LTD v GELRIA MINING & INVESTMENT CO (PTY) LTD
1976 (1) SA 441
(A) at p. 452 F – G. A useful approach to the
whole problem is to be found in the case of
ELECTROLUX (PTY)
LTD v KHOTA AND ANOTHER
1961 (4) SA 244
(W) at p. 247 B –
E.
“
To give rise
to the representation of
dominium
or
jus
disponendi,
the
owner's conduct must be not only the entrusting of possession to the
possessor but also the entrusting of it with the
indicia
of
the
dominium
or
jus
disponendi
.
Such
indicia
may
be the documents of title and/or of authority to dispose of the
articles, as for example, the share certificate with a blank
transfer
form annexed, as in
West
v De Villiers
,
1938 CPD 96
, and the other cases referred to therein; or such
indicia
may
be the actual manner or circumstances in which the owner allows the
possessor to possess the articles, as for example, the
owner/wholesaler allowing the retailer to exhibit the articles in
question for sale with his other stock in trade. In all such cases
the owner
'provides all
the scenic apparatus by which his agent or debtor may pose as
entirely unaccountable to himself, and in concealment
pulls the
strings by which the puppet is made to assume the appearance of
independent activity. This amounts to a representation,
by silence
and inaction . . . as well as by conduct, that the person so armed
with the external indications of independence is
in fact unrelated
and unaccountable to the representor (
in
casu
applicant) ... or otherwise.’”
[10] Mr. Snellenburg, for
the respondent, argued that if regard be had to the facts of the case
as read in the context of the correct
approach in applying the
“proximate cause” test, the respondent had shown that on
a balance of probabilities the applicant
should be estopped from
asserting ownership.
[11]
I am of the opinion that if regard be had to not only the manner in
which applicant dealt with Kok, but in addition thereto
the extent to
which Kok was entrusted with the
indicia
of dominium or jus disponendi
, being
the vehicle, its ignition keys, the certificate of registration and
the motor vehicle licence and licence disk evidencing
that the
vehicle had been transferred into the name of Kok, it must be
accepted that applicant had as such provided Kok with all
the “scenic
apparatus” with which Kok was able to represent to the
respondent that he was entitled to dispose of the
vehicle and that
respondent was as such entitled to purchase same from him. In the
OAKLAND NOMINEES (PTY) LTD
-case,
supra
,
at p. 458 H – 459 A Holmes JA encapsulates what in my opinion
is the correct approach:
“
It would be
wrong to say that the requirement is that the representation which is
relied upon must be the cause of the defendant's
loss
.
Such a formulation would emasculate the defence of estoppel, for the
cause of the defendant's loss is nearly always
the
villainy of the intermediary
.
(my emphasis) In estoppel by negligent representation we are
concerned with the effect of the representation on the state of mind
of the defendant, i.e., that his reliance on it was the cause of his
having
entered into the transaction
...
This state of mind precedes his loss. Hence the requirement is that
the representation and his reliance on it must be the cause
of his
having
acted as he did
-
to his detriment.” (emphasis of Holmes JA)
[12] I find on the facts
before me that without the
indicia of dominium
or the “scenic
apparatus” provided by applicant to Kok, Kok would have been
unable to persuade respondent to act to
its own detriment and
purchase the motor vehicle in question. The respondent purchased the
motor vehicle and was able to register
same in its own name by virtue
of the
indicia
or “scenic apparatus” provided to
it by Kok. Kok had in turn been provided with such
indicia
by
applicant in circumstances where it acted negligently and on its own
ipse dixit
contrary to normal practise and procedure in
parting with the
indicia
and/or “scenic apparatus”
before receiving payment. The applicant was furthermore negligent in
not foreseeing that
Kok could and in fact did deal with the vehicle
as his own property given the facts. In the circumstances and having
regard to
the facts and considerations of fairness I am of the
opinion that the applicant is not entitled to the relief it seeks and
that
the application should be dismissed with costs.
I accordingly make the
following order:
The application is
dismissed with costs.
_______________
P.U. FISCHER, AJ
On behalf of the
applicant: Adv. J.F. Steyn
Instructed by:
Matsepes Attorneys
BLOEMFONTEIN
On
behalf of the respondent: Adv. N. Snellenburg
Instructed
by:
Symington
& De Kok
BLOEMFONTEIN
/sp