About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Supreme Court of Appeal
SAFLII
>>
Databases
>>
South Africa: Supreme Court of Appeal
>>
1987
>>
[1987] ZASCA 90
|
|
Barclays Western Bank Ltd. v Ernst (158/86) [1987] ZASCA 90; [1988] 1 All SA 274 (A) (22 September 1987)
Case No 158/86
IN THE SUPREME COURT OF SOUTH AFRICA
(
APPELLATE
DIVZSION
) In the matter between:
BARCLAYS WESTERN BANK LIMITED
Appellant
and
IRENE ERNST
Respondent
Coram: RABIE ACJ,
JOUBERT, BOTHA, JACOBS et
NESTADT JJA.
Heard
:
Delivered
:
21st August 1987.
JUDGMENT RABIE ACJ
:
This/
2 This appeal arises from an action in the Transvaal Provincial Division in
which the appeilant claimed an order against the respondent
for the
delivery
to it of a certain Hilux Toyota light delivery vehicle
(hereinafter referred to as "the vehicle" of/which it claimed to be
the owner. The respondent, who was in possession of the vehicle,
denied that the appellant was the owner thereof. The
Court (Flemming J) granted an order of absolution from
the instance with costs, and the appeal is against that
order.
The vehicle was in May 1981 the subject
matter of a written agreement of lease entered into
between Midway Killarney (Pty) Ltd and one Van Coller.
Midway Killarney (Pty) Ltd, the owner of the vehicle,
discounted/
3 .
discounted the agreement of lease with the appellant
in
terms of a master discounting agreement. The preamble
to this
agreement, which was concluded on 28 February
1981 and in which the appellant is referred to as "the
Bank" and Midway Killarney (Pty) Ltd as "the Trader",
reads as follows:
"It is contemplated that the Bank shall in its sole discretion from time to
time purchase the Trader's rights, title and interest
in Credit, Instalment Sale
and Suspensive Sale Agreements and Leases ('the Agreements' or 'Agreement') and
thereby acquire ownership
in and to the subject matter of such agree-ments ('the
Goods')".
Clauses 1 and 2 of the agreement provide as follows:
"1. The terms and conditions hereof shall apply to each and every transaction
as contemplated in the preamble hereof.
2.1 In every instance after the date of signature hereof in which the
Trader
wishes/
4.
wishes to sell to the Bank the rights title and interest in any Agreement and
the ownership in and to the Goods which form the subject
matter of such
Agreement, the Trader shall deliver to the Bank the relevant Agreement and all
documents of the nature referred to
in 2.2.3 below.
2.2 The delivery of the documents referred
to in 2.1 shall constitute an
offer by
the Trader to the Bank, to sell and to
cede to the Bank upon and
subject to
all the terms and conditions contained
herein and at such price as may be agreed between the Trader and the
Bank;
2.2.1
all the
Trader's rights, title and interest into and under the
Agreement;
2.2.2
the ownership of the Goods
describe therein;
2.2.3
2.3 The Bank shall in respect of each Agreement
delivered to it under 2.1
either:
2.3.1
return the Agreement to the Trader if it declines to purchase
same, or
2.3.2 pay to the Trader the purchase
price/
5
price determined by the Bank and the Trader in respect of such Agreement, which
payment shall constitute an acceptance by the Bank
of the Trader's offer to sell
that Agreement."
Two further clauses of the
Agreement should also be
noted, viz:
"3. In respect of every Agreement purchased by the Bank from the Trader in
terms hereof, the Trader warrants in favour of the Bank:
3.6 That immediately before the purchase
thereof by the Bank hereunder, the Trader was the owner of such Agreement and
of
the Goods , and
that upon the purchase thereof, the Bank will become the owner of all rights
under the Agreement and also the owner of the Goods,
the subject matter of such
Agreement."
"15. No variation of any of the terms of this agreement shall be of any force
and effect unless in writing and signed by both parties."
The/
6
The relevant provisions of the agreement of lease will
be
set out later in the judgment.
The appellant's main witness at the trial was
Mr. K.L. Stein, who was the sales manager of Midway Killarney (Pty) Ltd
(hereinafter
referred to as "the trader") during May 1981. His evidence was to
the following effect. During May one Van Coller came to the trader's
place of
business and stated that he wished to purchase the vehicle. When Van Coller
indicated that he could not pay for the vehicle
in cash, Stein asked him to sign
a "credit application form" which was
to be submitted to the appellant. The
signed form
in was handed to one Lee Engelbrecht, who was/the appellant's
employ. (Engelbrecht testified that she was employed
as a "business development officer".) The application
was/
7 was approved by the appellant. Engelbrecht then asked
Stein for "a vehicle invoice" in respecr of the vehicle,
and he drew such an invoice on 19 May 1981. The invoice
was addressed to "Wesbank Bramiey" and stated that the
vehicle was "to be delivered on your behalf to Professor
Van Coller". (Engelbrecht testified that she delivered
the invoice to the appellant "in order for the admin (
sic
department.to draw up the documents", i.e. the "lease
agreement document".) A few days later (it appears
from evidence given at the hearing that it was on 21
May) Van Coller returned to the trader's place of
business and on that occasion he concluded the aforesaid
agreement of
lease in respect of the vehicle with the trader.
The agreement had been prepared by the appellant
and delivered by Engelbrecht to the trader.
Mr. Leonard Skok, one of the trader's directors
8. signed the agreement on
behalf of the trader, and Stein witnessed the signatures of Skok and Van Coller.
After the agreement had
been signed, Stein said, he,Skok and Van Coller went to
where the vehicle was parked. When they got there, he gave Van Coller the
vehicle's keys, the service manual and various other documents, including the
"change of ownership papers." While they were standing
next to the vehicle,
Stein said, Van Coller called over a man who was standing nearby. He told them
that this man was his farm manager
and that he would drive the vehicle to the
farm. Van Coller then left. The signed agreement of lease was delivered to the
appellant,
and on 26 May the appellant sent the trader its cheque for R6 720-43.
Thereafter, Stein said,
the/
9.
the trader had no further interest in the matter.
According
to the agreement of lease Van Coller hired the vehicle from the trader. The
"principal debt including finance charges" which
Van Coller had to pay in terms
of the agreement was R8 958-24. The amount was payable in montly instalments of
R248-84 over a period
of two years, and the lessee could, at the end of that
period, purchase the vehicle at the "money value" thereof as determined by
the
lessor. The instalments were (save for the first, which was to be paid by cheque
on the conclusion of the agreement) to be paid
by way of debit orders against
Van Coller's account with a bank in Cape Town. (The evidence shows that twelve
instal-
ments/
10.
ments were paid to the appellant in this way and that
no
further payments were made thereafter.)
Clause 1.1 of the agreement of lease provides
as follows:
"1.1 The Lessee is aware that all thé
Lessor's rights in this Agreement are to be ceded and together therewith
ownership of the Goods transferred. In contemplation thereof,
the Lessee: 1.1.1
agrees to recognise the cessionary of the Lessor's rights as the new owner and
to hold the Goods as bailee on behalf
of the new owner subject to the terms of
this Agreement;".
Clause 3 of the agreement reads as follows:
"The Goods shall remain the property of the
Lessor and nothing in the
Agreement shall be
construed as conferring on the Lessee any
right or
interest in the Goods other than
as Lessee ".
11.
Leonard Skok, mentioned above, testified that,
after the agreement of lease had been signed, Van Coller requested him to leave
the
registration documents relating to the vehicle blank because he intended
registering the vehicle "in the name of the farm", which
was in the Orange Free
State. He agreed to do so, Skok said, and gave Van Coller the papers "for him to
fill out in the name of the
farm".
Mr P.F. Ernst, a farmer in the
Lichténburg district, testified on behalf of the respondent, who is his
wife. He explained how
it came about that the respondent was in possession of
the vehicle. About 15 months prior to the above-mentioned events of 21 May
1981,
he said, his neighbour, Mr J.G. Terblanche, told him that Van Coller (who was
Terblanche's stepfather)
could/
12. could buy motor vehicles at bargain prices, and he asked him
(Ernst) whether he would be interested in buying a vehicle cheaply.
Ernst
replied that he would like to buy a light delivery vehicle. Terblanche informed
him that the price would be about R3 700, and
he gave Terblanche a cheque for
the required amount. Thereafter there was a long delay, but finally, on 21 May
1981, Terblanche and
he accompanied Van Coller to the trader's premises in
Johannesburg. When they arrived there, Van Coller went inside. He came out
again
after a few minutes and called him and Terblanche into Stein's office. Van
Coller introduced them to Stein and then left. Stein,
he said, handed him the
registration documents
relating/
13. relating to the vehicle. He could not dispute, he said,
that Stein handed the vehicle's keys to Van Coller, for he found them
in the
vehicle when he drove it away from where it was parked. He registered the
vehicle in his wife's name in Lichtenburg on the
next day (22 May 1981).
Terblanche corroborated Ernst's evidence. He also told the Court that he had
heard that Van Coller had died.
In the particulars of its claim, as
supplemented by further particulars, the appellant alleged that it became the
owner of the vehicle
on 19 May 1981. As to the manner in which it claimed that
ownership in the vehicle had passed from the trader to it, the appellant's
case
at the trial was that it was effected by way of
attornment/
14. attornment. (As to what attornment involves, see e.g.
Hearn & Co (Pty) Ltd v. Bleiman
1950(3) SA 617 (C) at 625 C-G;
Caledon & Suid-Westelike Distrikte Eksekuteurskamer Bpk v. Wentzel en
Andere
1972(1) SA 270 (A) at 273 A-C;
Air-Kel (Edms) Bpk h/a Merkel
Motors v. Bodenstein en 'n Ander
1980(3) SA 917 (A) at 923 B-G; C.G. van der
Merwe,
Sakereg
, at 220.) Ownership in the vehicle passed to it, the
appellant contended, when Van Coller, who had been placed in possession of the
vehicle by the trader and held it on behalf of the trader as owner, agreed with
the trader that he would thereafter hold it on behalf
of the appellant as the
new owner thereof. The trial Court, referring to authority which is
tó
the/
15 the effect that ownership in a movable in the hands of a third
party can be transferred by attornment only while such third party
is in
possession of the article, held that Van Coller who gave up possession of the
vehicle almost immediately after its keys had
been handed to him by Stein on 21
May, did not have the necessary control, or power of control, over the vehicle
so as to allow of
its delivery to the appellant by way
of attornment. The Court held, with reference to
of
clauses 2.2 and 2.3/the master discounting agreement,that
cession of the
trader's rights under its agreement with Van Coller and of its ownership of the
vehicle to the appellant took place
on 26 May 1981, and that the trader
could/
16
could, therefore, not have lost its ownership of
the
vehicle before that date.
In this Court counsel for the appellant,
contending that the trial Court's decision was wrong,
submitted in his written heads of argument that -
"at the date of the conclusion of the agreement of lease on 19.5.1981 between
the Appellant and Van Coller, there were present all
the essential ingredients
for the transfer of ownership of the vehicle from the trader to the Appellant by
way of attornment."
(In his oral argument counsel accepted that the agreement
of lease,
although dated 19 May 1981, was signed on 21
May 1981.) The submission is
developed in the following
way in counsel's written heads of argument:
"7.2/
17
"7.2 As at the date of the Appellant's
approval and conclusion of the agreement of lease, on 19.5.1981: 7.2.1. The
Appellant had verbally approved the transaction on 19.5.1981
and prepared the
necessary documentation for signature, agreed to purchase the trader's right,
title and interest in and to the agreement
of lease and to acquire ownership of
the vehicle. 7.2.2 The trader had verbally and by
conduct in
submitting an invoice....
to the Appellant, agreed to cede
its rights
under the agreement of
lease and to transfer ownership
of the vehicle to
the Appellant.
No formal or written cession was
required by the Master
Agreement.
7.2.3 Van Coller, who received possession
on 19.5.1981, agreed
to hold for
Appellant and to acknowledge
Appellant as owner
7.3/
18.
7.3 It is respectfully submitted that,
despite the wording of clause 2.3.2
of
the master discount agreement, the
cession in fact occurred at the time
of
the conclusion of the agreement of lease
on 19.5.1981 and not when
payment was
made by the Appellant to the trader on
the 26th May 1981. By
their conduct,
and for practical reasons, the two
parties could invest the
master agreement
with a new content.
7.3.3 The trader and the
Appellant could waive the provisions of the master agreement and effect cession
orally on 19.5.1981. The
master agreement does not require written or formal
cession.
7.4 The effect of clause 2.3.2 was merely to delay, until payment, the efficacy
of the completed cession.
7.5 It is submitted that the verbal and/or tacit agreement of cession,
despite
the delay in its efficacy, was sufficient for the transfer of ownership by way
of attornment provided that Van Coller was in control
of the vehicle (as he
was)
at/
19
at the date of such cession, namely 19.5.1981.
7.6 The evidence discloses that, immediately after signature of the agreement of
lease
on 19.5.1981, Van Coller received possession of the keys of the vehicle
and,accordingly, was in control thereof at the time of the
verbal and/or tacit
cession, and, when he signed the lease, he acknowledged Appellant as owner."
In his argument in this Court counsel
accepted, as stated above, that the
agreement of lease
between the trader and the appellant was signed on
21
May 1981, although it bears the date 19 May 1981. As
to the cession of
the trader's rights in respect of the
vehicle to the appellant, counsel stood
by the submission
made in his written heads of argument, viz. that the
date/
20 date of the cession was 19 May 1981. His submission was, if I
understood it correctly, that the agreement to cede came into being
on 19 May
1981 when the trader's employee, Stein, issued the above-mentioned invoice when
requested to do so by the appellant's employee,
Lee Engelbrecht, but that the
cession became effective on 21 May 1981. Counsel conceded that if the cession
took place only on 26
May 1981, as found by the trial Court, the appellant's
claim that it acquired the ownership of the vehicle from the trader must fail.
(See also the proviso in paragraph 7.5 of counsel's heads of argument, quoted
above.)
The concession was rightly made. To enable ownership
to/
21 to pass in a case such as the present, the
law requires that the person who is to hold the article concerned on behalf of
the intended
new owner must be in control thereof (or at least have the right of
control thereover) when the owner of the article cedes his rights
in respect
thereof to the intended new owner. (See
Hearn & Co. (Pty) Ltd v.
Bleiman
,
supra
, at 625 H;
Air-Kel (Edms) h/a Merkel Motors v.
Bodenstein en 'n Ander
,
supra
, at 924 D-E.) Van Coller was not in
possession of the vehicle on 26 May 1981. As shown above, the evidence was that
the keys of the
vehicle were handed to him on 21 May 1981, but that he allowed
the respondent's husband to take possession of the vehicle almost
immediately/
22
immediately thereafter. In the circumstances it is vital to
the success of the appellant's claim that it is the owner of the vehicle
to
establish, as its counsel endeavoured to do, that the trader's rights in respect
of the vehicle were ceded to it while Van Coller
was in control of the
vehicle.
I proceed now to consider counsel's
argument. The master
discounting agreement was intended
to apply to all agreements concluded by
the trader in
respect of which the appellant wished to purchase
the
trader's rightsand to acquire the ownership of the
subject matter of
such agreements. (See the preamble
to the agreement and clause 1
thereof.) If
the/
23
the transaction between the trader and Van Coller is governed
by the terms of the master discounting agreement, it is clear from the
provisions of clauses 2.2 and 2.3 thereof that the cession of the trader's
rights to the appellant, including the right to acquire
ownership of the
vehicle, was effected on 26 May 1981 when the appellant, after receiving the
agreement of lease concluded by the
trader and Van Coller, sent its cheque for
R6 720-43 to the trader. The argument is, however, as pointed out above, that
the parties'
conduct shows that they chose to "depart from the provisions of the
master discounting agreement relating to the question of the
cession of the
trader's rights to the appellant.
As/
24 As stated above, it is submitted that the
issuing of the invoice by Stein at the request of Engelbrecht on 19 May amounted
to a
cession which became effective on 21 May when the agreement of lease was
concluded.
I consider the whole of counsel's argument
to be untenable. I
do not propose to discuss it in
detail, and find it sufficient to say the
following:
(a) Clause 15 of the master discounting agreement
provides that
no variation of the terms of the agreement shall be of any force or effect
"unless in writing and signed by both parties."
There is no evidence that the
parties agreed in writing to any variation of the terms of the agreement.
Consequently it cannot be
argued that they were varied. (See
S.A. Sentrale
Ko-op Graan
maatskappy
/
25
maatskappy Bpk v. Shifren. en Andere
1964(4) SA 760 (A)).
(b) The issuing of the invoice by Stein at
the
request of Engelbrecht, and Engelbrecht's preparation of the agreement of
lease which was to be signed by the trader and Van Coller,
cannot be said to
afford evidence of a departure from the terms of the master discounting
agreement concerning the cession of the
trader's rights to the appellant. They
seem to have been merely practical and administrative measures relating to the
preparation
of documents. It is relevant to note in this regard that Engelbrecht
testified that she delivered the invoice to the appellant "in
order for the
admin (
sic
) department to draw up the documents",
i.e./
26
i.e. the agreement of lease. Her evidence contains no suggestion that the
invoice was, as was argued on behalf of the appellant, a
document which provided
evidence of a cession.
(c) Neither Stein nor Engelbrecht testified
that
their conduct constituted a departure from the terms
of the master
discounting agreement. There was, also, no evidence that they had been
authorised by their respective employers to adopt
a practice which was in
conflict with the provisions of the master discounting
agreement.
(d) Finally, the appellant's case in the Court
a
quo
was
that the cession of the trader's rights to
the/
27
the appellant was effected in the manner described
in
clauses 2.1, 2.2 and 2.3 of the master discounting
agreement. This
appears clearly from the following
extract from Stein's
evidence-in-chief:
"
MR BORUCHOWITZ
: What is that document?
this is the Master Discount Agreement be-tween Killarney Toyota and Barclays
Western Bank.
When was it concluded between the parties?
It was dated 28 February
1981.
Now in terms of Clause 2.2 - M'Lord I beg leave to hand up to Your Lordship
the original of that document. In terms of clause 2.2
it proves that delivery of
the documents referred to in clause 2.1, these are the documents forming the
subject matter of the sale,
of the lease, constitute an offer to the bank to
sell and to cede to the bank all the rights of Midway Killarney
and to the agreement. Yes.
Now did you deliver - you have already given
evidence that you delivered
those documents?
That is correct.
To/
28
To the bank, Now did Midway Killarney
have any further interest in this
particular
matter after you delivered the documents to
the bank? No,
none whatsoever.
When did you receive payment? We
received payment a couple of
days later.
you I would like/to look at
EXHIBIT A
.
What is that
document? This is a cheque
made by Barclays Western Bank to
Killarney
Toyota.
At which branch, which bank does Killarney
Toyota bank? We bank
at Standard Bank,
Killarney. That is their rubber stamp on the cheque.
The cheque appears to bear this. Does
it bear the stamp of the bank where
you bank?
That is correct.
(Speaking simultaneously). That is
correct.
Was that cheque in.fact received by
Killarney Toyota? Yes, it
was. We have
a rubber stamp on the back which we do, as soon as we receive a cheque.
Now after payment was received, did
Killarney Toyota have any further
interest
in this matter? No."
According/....
29
According to this evidence, which is in conflict with the
argument advanced by counsel, cession of the trader's rights to the appellant
took place when the appellant, having received the agreement of lease from the
trader, sent its cheque to the trader, i.e. on 26
May 1981. As stated above, it
was rightly conceded by counsel that if the cession was effected on that date,
Van Coller could not
have held the vehicle on behalf of the appellant as the
owner thereof.
In view of all the aforegoing I am of the opinion that the
trial Court's decision was correct. In the circumstances it is unnecessary
to
discuss the question whether Van Coller ever held, or intended to hold,
the/
30 the vehicle on behalf of the appellant as the new owner thereof,
and whether the intended cession could validly have been effected
if Van Coller
did not genuinely intend to hold the vehicle on behalf of the appellant.
The appeal is dismissed with costs.
P J RABIE
Acting Chief Justice
JOUBERT JA
BOTHA JA
Concur. JACOBS JA
NESTADT JA