Property Law Principles

Question 1 Issue [1] This matter concerns the protection of ownership through rei vindicatio. Mr Mazibuko sought a relief, that is, the return of the 1957 Ferrari 335 S Spider Scoglietti by means of rei vindicatio from Mr Ngubane. Mr Mazibuko avers that he is still the owner of the vehicle and demands that Mr Ngubane return the vehicle to him. The principal issue I am called upon to determine is whether Mr Mazibuko is entitled to raise this action against Mr Ngubane and if so, whether he has a chance at successfully doing so. Relevant Law [2] There are a number of remedies that protect ownership. These remedies are: real remedies that restore physical control of ones’ property, delictual remedies where the owner has suffered financial harm and lastly, unjustified enrichment which provide for the payment of compensation for unjustified enrichment 1. There are mainly two types of real remedies, a) the rei vindicatio and, b) actio negatoria. The particular remedy of concern in this instance is the real remedy of rei vindicatio. Rei vindicatio is an action that may be instituted by an owner against anyone who controls their property without their consent2. The general rule of this action is that no one may be deprived of their property against their will: the so called nemo plus iuris potest quam ipse habet3 rule. This principle was reiterated in Chetty v Naidoo4 where Jansen JA explained that “one of the incidents of ownership is the entitlement of exclusive possession of the res...” The maxim ubi ream meam invenio, ibi vindico is the crux of this action; as Mostert and Pope put it, “where my property is found, I can vindicate it”5. Another point of relevance is the nemo plus iuris rule – it is a basic principle of transfer of ownership, namely that a person cannot transfer more rights than he has6. Vindicatory action may be instituted against movables and immovables (by means of an eviction order) as shown in Bester NO and others v Schmidt Bou Ontwikkelings7. However, in Mlambo v Fourie8, the court confusingly 1 Mostert and Pope (eds): The Principles of Property Law in South Africa p. 215 2 Miss Starosta (Lecture Notes): Property Law Notes p. 1 3 Silberberg and Schoeman’s Badenhorst: The Law of Property 2003 4th ed p. 223 4 1974 (3) SA 13 (A) 5 Supra 1 p. 217 6 Supra 1 p. 217 7 2013 (1) 125 (SCA) 8 1964 (3) SA 350 (T) 1

awarded damages where M had instituted rei vindicatio F. I criticise this decision because rei vindicatio is a real remedy, not a delictual one. [3] In Chetty’s case9, Chetty brought a rei vindicatio against Naidoo in respect of property occupied by Naidoo, who claimed but could not prove that she had brought the property. The case sets out the following rules:    

the owner need not aver that the defendant is in unlawful control of his property. how the owner characterizes the defendants control is immaterial. the burden is on the defendant to prove a right. if the owner concedes any right to the defendant, he must show that right has been terminated if he still wishes to succeed.

[4] An owner who wishes to institute the rei vindicatio must allege and prove the following three elements10: a) that he or she is the owner of the thing in question. b) that the thing in question still exists and is identifiable. c) that the thing being vindicated is in the physical control of the defendant. I now turn to a more detailed discussion of the said elements: a) The owner must prove that he or she is the owner of the thing in question; It is the most important element of vindicatory action that the owner must prove, at least on a preponderance of probabilities that he or she is the owner of the thing in question. The nature of proof differs according to the circumstances of each case and the type of property being vindicated, for example if it is a house then a title deed shall suffice and if it is a car then registration papers are enough to establish prima facie proof of ownership. In Grosvenor Motors (Potchefstroom) Ltd v Douglas11 the court supported this principle when it held that as the respondent had proved that he was the owner of the car, his vindicatory action could be successful. This principle was once again stressed in Ebrahim v Deputy Sherrif12 where the court held that the test whether the claimant has discharged the onus of proving his ownership to movable property which is not in his possession is whether in the result, the probabilities are balanced in his favour. b) The thing in question must still exist and be identifiable; The reason why an owner institutes vindicatory action is to regain physical control of his property. It would therefore be illogical to raise vindicatory action in respect of property that no longer exists or has been consumed, alienated or destroyed, the 9 Supra 4 10 Supra 3 p. 226 11 1956 SA (A) 12 1961 (D) 2

appropriate remedy in this regard would be a delictual claim for damages. Moreover, once property has lost its’ original form either through accession, mixing and fusing, then the owner can no longer use the rei vindicatio. c) The thing must be in the physical control of the defendant; Logically speaking, a person against whom vindicatory action is being raised must be in a position to carry out the order of return if the action succeeds. It is therefore of paramount importance that the defendant be in physical control of the property at the time the action is instituted. In Machaka v Mosala13 the court developed a principle it is not for the applicant as owner to prove that possession of the car by the respondent is unlawful…in principle, the onus rests on the respondent to prove that his continued possession of the car is lawful. [5]

The defendant can raise the following defences against the rei vindicatio:

a) the defendant can allege that the claimant is no longer the owner of the thing. In Concur Construction (Cape) (Pty) Ltd v Santam Bank Ltd14 the court held that in some instances it might be necessary to prove the owners intention to relinquish ownership. b) that the thing has been destroyed or alienated. c) that the defendant’s possession is, in fact lawful. d) that the defendant was no longer in physical control of the property at the time the action was instituted. According to FNB v Perry15, good faith is no a defence to rei vindicatio, hence even if the defendants is under the impression that their possession is bona fide the owner may still vindicate the thing from them. Application [6] It is necessary to stress that Jabulani does not own the vehicle in question, he was merely in possession of the car and was instructed to return the car after graduation. Now in this instance, the strict rule of transfer of ownership applies; Jabulani cannot transfer more rights of ownership unto another, especially since he himself is not legally vested with this right. [7] I now proceed to the first element of rei vindicatio, it is common cause that this vehicle was sold to Mr Ngubane without Mr Mazibukos’ knowledge. It naturally follows that since Mr Mazibuko was unaware of this sale and transfer of “ownership”, he cannot be said to have possessed an intention to transfer ownership of the vehicle. The law, as I conceive it to be, is that Mr Mazibuko is therefore still the owner of the Ferrari. 13 2006 (OPD) 14 1993 (3) SA 930 (AD). 15 2001 (3) SA (SCA) 3

[8] With regards to the second prerequisite, it is not in dispute that the thing being vindicated still exists and that it is clearly identifiable. The car is not a consumable good, nor has it been dismantled or damaged beyond repair. I think it is therefore safe to conclude that Mr Mazibuko has passed the second hurdle. Moving on to the third and final prerequisite. [9] It is stated in the facts that immediately after purchasing the Ferrari, Mr Ngubane sold the car to one Mrs Van Rooyen who purchased the car. It is not necessary to go to any further details since it has already been established that Mr Ngubane is no longer in physical possession of the said vehicle. How then can Mr Ngubane be ordered to return a vehicle that is no longer in his physical control? Let alone one that he no longer owns? Clearly it cannot be so. I hold that the third element of rei vindicatio has not been satisfied by Mr Mazibuko. Conclusion [10] Since it is a trite requirement that all three elements of vindicatory action must present concurrently so as to ensure a successful outcome for the owner, the conclusion is inescapable that Mr Mazibukos chances of successfully raising this action are slim. The application will not succeed.

Question 2 Issue [1] The sole issue in this instance is whether estoppel, as a limitation to the rei vindication shall bar Mr Mazibuko’s vindicatory action against Mrs Van Rooyen. Relevant Law [2] One of the restrictions of the owners’ entitlement to vindicate his/her property is based on the Doctrine of Estoppel16. As a limitation on the use of rei vindicatio, estoppel acts to bar vindicatory action. According to the doctrine, ownership of the person instituting the vindicatory action is not disputed and essentially remains in place, but the owner is unable to regain possession of the property for the duration of the estoppel. Simply put, a successful defence of estoppel suspends the owners’ right to vindicate his property. At first, estoppel case law dealt mostly with movable property, however in AGS of South Africa v Capes17 it was confirmed that estoppel can apply to immovable property as well. [3] Estoppel acts as a defence to vindicatory action where the owner of the property has placed it in the hands of another person in the circumstances which may lead third parties to mistakenly believe that such other person is in fact the

16 Supra 3 p. 236 17 1978 (4) SA 485 (CC) 4

owner of the thing that has been entrusted to him or he/she has been duly authorised to dispose of it on the owners behalf 18. [4] The following requirements were set out as follows in Oakland Nominees v Gelria Mining and Investment Co.19 and Quenty’s Motors (Pty) Ltd v Standard Credit Corporation Ltd20: a) The owner must create an impression that the intention is to transfer ownership to the controller or that the controller is empowered to transfer ownership on behalf of the owner. b) The misrepresentation must be made intentionally or negligently (fault). c) The person raising the estoppel must have relied on this misrepresentation. d) The action taken because of the misrepresentation must have been to the defendants’ detriment. I now turn to a more detailed discussion of each of these elements. [5] With regard to a), the question of when an owners conduct will amount to a misrepresentation that the person who disposed of his/her property was the owner of it or was entitled to dispose of it, it has been held in Electrolux (Pty) Ltd v Khota21 that a) the mere entrusting of control/ possession is insufficient – it must be entrusted with indicators of ownership or entitlement of disposal, and b) if that conduct is not such as would in the eyes of a reasonable person, in the same position as the respondent, constitute a representation that the possessor was the owner of, or entitled to dispose of the articles, then…no estoppel could arise. But if such conduct does beget that representation, then the next enquiry would logically be whether the respondent relied upon, or was misled by, that representation in buying the articles. [6] With regard to b), it now seems that the owner, as a general rule must have acted negligently when he/she entrusted his property to another person who subsequently disposed of it to a third party. The question is whether a reasonably prudent person would, in those circumstances have foreseen harm and guarded against it. Furthermore, in Quenty’s case, the owner placed his vehicle in the possession of the dealer with signs attached that indicating that it was for sale. The dealer displayed this vehicle among the other stock in trade. The court took the view that the owner should have foreseen that ordinary members of the public would be misled into thinking that the dealer was authorised to sell the vehicle. Consequently, the owner had acted negligently by not taking steps to prevent the misrepresentation. Also, in Johaadien v Stanley Porter (Paarl) (Pty) Ltd 22 the

18 Supra 3 p. 236 19 1976 (1) SA 441 (A) 20 1994 (3) SA (A) 21 1961 (4) SA 244 (W) 22 1970 (1) SA 394 (A) 5

court held that negligence on the part of the owner must be proved before the defence of estoppel can succeed. [7] Moving on to c), the defendant raising estoppel must have relied on this misrepresentation. The onus rests largely on the defendant to prove that but for the misrepresentation, he/she would not have entered into the transaction. The defendant must make it clear that it is the misrepresentation and nothing else that led him/her into the particular transaction. In ABSA Bank t/a Bankfin v Jordasche Auto CC.23 the defence of estoppel was unsuccessful because the defendant could not provide sufficient evidence that it relied on the misrepresentation. [8] The final requirement is that the defendant must have acted upon the misrepresentation to his detriment. In other words, the defendant must show that reliance on the misrepresentation was the cause of his decision to transact, which led to the negative consequences that followed. Reliance on the misrepresentation must inevitably have resulted in the defendant acting to his detriment.

Application [9] Beginning with the first element of estoppel, Mr Mazibuko borrowed Jabulani his Ferrari in good faith, Mr Mazibuko then asked Jabulani to assist him with license renewal and so provided him with the logbook of the car in case of any queries raised at the licensing office while he was away. In my view, there is nothing in these actions that create an impression, even to the slightest degree that Jabulani was empowered with the authority to dispose of or even alienate the vehicle. Mr Mazibuko merely entrusted control and possession of the vehicle to Jabulani, and this is not enough to fully establish the first requirement of estoppel. [10] Secondly, Mr Mazibuko did not intend to give Jabulani an impression that he had the authority to sell his Ferrari, nor was he negligent in this respect. I advance two reasons in support of this contention: a) Mr Mazibuko specifically told Jabulani that the vehicle is to be returned to him after Jabulani’s graduation (14 April). If Mazibuko had intended to pass ownership to Jabulani then why would he have requested that the car be returned on the said date? I see no other reason besides that of regaining possession, b) with regards to the statement “Jabulani my son, what’s mine is yours…” in considering the high value of this car (R15 Million and over R100 Million internationally) I doubt that a reasonable person in Jabulani’s position would have or should have taken this statement literally. Regardless of the fact that Mazibuko is a multi-billionaire, I do not believe that he or anyone else in his position would so lightly give away a car of such high value. [11] Now since I have established that there was no misrepresentation on Mr Mazibukos’ part, common sense dictates that it cannot follow that Mrs Van Rooyen 23 2003 (1) SA 401 (SCA) 6

relied on any such misrepresentation, or that the misrepresentation was to her detriment. Conclusion [12] I am of the view that Mr Mazibuko does indeed have a chance of success against Mrs Van Rooyen and that it is probable that his vindicatory action will succeed.

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