Wits Property Law, 2013

THE REI VINDICATIO In the next few lectures, we will discuss the main common law action through which ownership rights are protected, together with the limitations placed on it by the common law, by the Constitution and by statute. The Nature of the Action The rei vindicatio is, simply, an action to vindicate property, brought by the owner of the property. The rationale for the action is explained by Jansen JA in Chetty v Naidoo 1974 (3) SA 13 (A) at 20A-D: It may be difficult to define dominium comprehensively, but there can be little doubt that one of its incidents is the right of exclusive possession of the res, with the necessary corollary that the owner may claim his property wherever found, from whomsoever holding it. It is inherent in the nature of ownership that possession of the res should normally be with the owner, and it follows that no other person may withhold it from the owner unless he is vested with some right enforceable against the owner. The owner, in instituting a rei vindicatio, need, therefore, do no more than allege and prove that he is the owner and that the defendant is holding the res the onus being on the defendant to allege and establish any right to continue to hold against the owner.

The common law here seeks to entrench deeply an owners rights over his property. By merely proving the fact of ownership, an owner may ordinarily take property away from its possessor, irrespective of the context in, and purpose for, which the property is being used. Only where a subsidiary common law right of use or possession of the property can be established (usually as a result of the will of the owner himself) will an owner be unable to recover his property. Accordingly, the pleading requirements for the rei vindicatio are relatively straightforward. The applicant or plaintiff must prove -

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He is the owner of the thing. He need not demonstrate, at the outset, that he has clean title, although if this is raised as a defence he may be called upon to do so;

The thing is still in existence and is clearly identifiable; The respondent or defendant was in possession of the thing at the time the action or application was instituted.

See LAWSA (First Re-issue) vol 27 para 381 Generally speaking, the onus to prove the existence of a counter-veiling common law right lies with the defendant. The owner need not normally allege (except when claiming the return of property used as a home an exception well deal with in later lectures) that the defendant is in unlawful occupation or possession. Nor need the owner prove that the defendants possession of the property is negligent. The simple fact of possession, without any fault on the part of the possessor, is enough for the owner to succeed. These rules of pleading are subject to one exception: where the owner acknowledges at the outset that the possessor had some right of possession or occupation of the thing, the onus is on the owner to prove that this right has been lawfully extinguished. However, where the possessor denies the existence of the right acknowledged by the owner or does not rely upon it, then the onus shifts back to the possessor to show some other right to remain in possession of the property. These principles are illustrated by the Chetty v Naidoo quoted above. In that case

Wits Property Law, 2013

1. Naidoo bought a house at auction. The house was sold as part of the sequestrated estate of Chettys son. Chetty was living in the house at the time of the sale and continued to live there for many years after. 2. Naidoo eventually brought an action for ejectment. 3. Chettys defence was that Naidoo purchased the house at the auction on Chettys behalf. The agreement was that Chetty would remain in the house, and pay off the purchase price to Naidoo in instalments. The first instalment would be R400, with monthly instalments of R50 being paid thereafter until an amount of R2200 had been paid. The rest of the purchase price (which is not clear from the case but was probably around R8000) would be payable once the Durban City Council had compensated Chetty for expropriating part of the property to widen a road next to it. 4. Naidoo told a different story. He said that there was no agreement between the parties before the auction. After he bought the property, Naidoo said, he agreed to sell the property to Chetty for R8000, payable in instalments. The first instalment would be R400, with R50 instalments payable monthly. Naidoo denied that there was any agreement to wait for compensation from the Durban City Council before the full purchase price was paid. Naidoo said that, once Chetty stopped paying the instalments on the sale agreement, Naidoo cancelled the agreement, but then converted Chettys occupation of the house into a monthly tenancy. Naidoo says that Chetty agreed to this, but then refused to pay rent in terms of the tenancy, so Naidoo cancelled it and sued for eviction using the rei vindicatio.

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5. The High Court found that Chettys story about the sale agreement was fabricated. It also found that Naidoo need not prove the existence of a monthly tenancy, since the parties were agreed that, if there was a tenancy, it had been validly terminated. 6. On appeal, Chetty abandoned his story about the sale agreement, but argued that, since Naidoo had alleged a monthly tenancy, he had to prove that there was in fact a monthly tenancy AND that it had been validly terminated. Remember that Chetty denied that there had been a tenancy at all. Because Naidoo had led no evidence at all of a monthly tenancy (he had simply attacked Chettys story about the sale agreement), Chetty argued that he should not have succeeded in the rei vindicatio. 7. The Appellate Division disagreed. It said that, because Chetty did not rely on the existence of a monthly tenancy, it was not required for Naidoo to prove that such a tenancy had existed or that it had been terminated. The fact that an owner acknowledges a pre-existing right of possession on the part of a possessor or occupier only matters where the occupier actually relies on that right. Where the possessor does not do so, an owner need not prove the right, or its termination. The onus shifts back to the possessor to prove the existence of a different right. Apart from alleging and proving a right to possession (e.g. a lease or personal servitude etc.), it is, of course possible to dispute ownership of the thing (e.g. ownership may have passed by accession or prescription). It is also possible to defend the action by proving that the thing has been destroyed.

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However, outside these limited defences to the rei vindicatio, the common law recognises only one other general defence to it: the plea of estoppel. Estoppel Sometimes the owner of a thing places someone else in possession of it in such a manner as to hold out to third parties that the possessor is actually the owner, or at least has the right to dispose of the property without the owners prior consent. Think back to the Konstanz Properties case. There, WM Spilhaus placed an irrigation contractor in possession of pipes and machinery in such a way as to represent to Konstanz Properties that the owner of the pipes was the contractor. But, at the same time, it reserved ownership of the pipes and machinery to itself until the full purchase price was paid. The contractor did not pay the purchase price, but Konstanz Properties allowed an irrigation system to be installed on its farm. It did not know that the contractor did not own the parts installed, and that, consequently, ownership did not pass when it paid the contractor. That worked to Konstanz Properties disadvantage, because it meant that WM Spilhaus could claim the pipes by means of the rei vindicatio. Were it not for the doctrine of estoppel, Konstanz Properties would have had no way to stop the irrigation system being ripped up out of its farm. Estoppel operates as a defence to the rei vindicatio. It applies if 1. The owner intentionally or negligently represents expressly or by conduct that the person who disposed of his property was the owner, or had the right to dispose of the property; and

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2. The representation was relied and acted upon by the person raising the defence, and that reliance was directly to his detriment or disadvantage; The defence of estoppel is difficult to understand outside some real world examples. It is tempting to ask why on earth an owner would represent to third parties that he was not the owner of a thing. However, in practice, there are a variety of commercial situations in which this is done. Quentys Motors v Standard Credit Corp In this matter Quentys Motors, in Pretoria, delivered two cars on consignment to Love Motors in Durban. Love Motors displayed them in its car showroom as for sale. Then, without Quentys Motors knowledge, Love Motors sold them to Standard Credit Corp in terms of what is known as a floor plan agreement. This is a common way for car dealerships to obtain finance. They sell cars to finance companies subject to a right of re-purchase at a later date usually when they have a customer to sell the cars on to. This is what Love did with Quentys cars except they werent Loves to sell. By the time Quentys found out about any of this, Loves owner had fled to London to escape his creditors and the dealership was being liquidated. The cars had never been repurchased from Stannic, which had in the meantime taken possession of them and put them in storage at one of its garages. Quentys Motors then sued Stannic for the return of the cars. Stannic raised the defence of estoppel. On appeal to the Appellate Division, the court held that

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1. By delivering the cars on consignment to Love, Quentys Motors had held out that Love had the right to dispose of them. To deliver stock to someone on consignment means to place them in possession of the stock for onward sale. If the stock is sold on, the proceeds of the sale are paid back to the owner minus commission. If the stock is not sold, then it is returned to the owner. Quentys had allowed the cars to be displayed in Loves showroom. It had not insisted, for example, that a sign be placed on the cars informing anyone who cared to look that it was still the owner. There was accordingly no way of Stannic knowing that Quentys owned the cars. 2. Quentys ought reasonably to have foreseen that a prospective purchaser might act on its representation that Love could sell the cars. It was accordingly negligent in failing to take steps to stop prospective purchasers from forming that impression. 3. Stannic had relied and acted on Quentys representation to its detriment, because it had purchased the cars without knowing that Quentys owned them. This was to Stannics disadvantage, because Quentys could always claim the cars through the rei vindicatio but for the defence of estoppel. The Appellate Division accordingly held that the defence of estoppel had been established. Quentys rei vindicatio could not succeed. Grosvenor Motors v Douglas In Grosvenor Motors v Douglas the issue of fault on the part of the owner assumed particular importance. In that matter Douglas was approached by a man called Kriel, who was introduced to him by two local car salesmen who he knew 7

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and trusted. Kriel offered to buy Douglas car for 5 00 pounds. Kriel gave Douglas a cheque for the purchase price. Douglas could not immediately give Kriel the registration documents for the car, so Kriel asked him for a letter stating the Douglas had sold the car to Kriel. It turned out that Kriel was a confidence trickster. His cheque bounced a few days later, but by that time he had sold the car on to Grosvenor Motors for 460 pounds, and disappeared into the ether. He represented to Grosvenor Motors that he was the owner of the car, told them that he had paid the purchase price to Douglas, and showed them Douglas letter as evidence of this. Douglas, upon finding out that he had been defrauded, reported the incident to the police. On finding out where the car had ended up, he brought an action for its recovery through the rei vindicatio. Grosvenor Motors raised the defence of estoppel, on the grounds that Douglas had held out in his letter that Kriel was the owner of the car. The majority of the court (per Steyn JA) held that, while the letter Douglas gave to Kriel did have the effect of holding out to the whole world that Kriel owned the car, that is exactly what was intended, because Douglas had assumed that the cheque would be honoured and that Kriel would become the owner of the car. The question was not so much whether there was a representation, but whether that representation was made culpably that is whether Douglas had intentionally or negligently held out that Kriel was the owner when he was not. It is clear that Douglas did not intend for Kriel to be identified as the owner without Kriel actually becoming the owner. The question was whether he should have foreseen that Kriels cheque might not be honoured. 8

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Steyn JA found that, because 1. the request for the letter was not unusual in light of the fact that Douglas could not give Kriel the registration papers; and 2. Kriel had been introduced to Douglas by two people he trusted; it could not be said that Douglas was negligent. The plea of estoppel therefore had to fail. (See 427E 428G) The minority (per Centrelivres CJ) found that, even if Douglas was negligent, the letter he wrote was not directly relied upon by Grosvenor Motors. What they actually relied upon was Kriels representation that he had paid the purchase price to Douglas and had become the owner by doing so. (See 426A). For this reason too, the requirements of estoppel had not been met. Concour Holdings v Potgieter In Concour Holdings, the Court dealt with the nature of the representation relied upon in a plea of estoppel. In that matter Concour Holdings concluded an agreement of sale with a builder for a number of paving stones. The evidence established that the builder needed the stones for an urgent job paving a local car park. The stones were selected for their apricot shade which matched the building involved in this particular job. The paving stones were sold to the builder, who then laid them at a property owned by Potgeiter. The sale agreement reserved ownership of the stones to Concour until the full purchase price was paid. 9

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The builder laid the stones, but did not pay the full purchase price. Concour claimed the paving stones back using the rei vindicatio. The main question before the court was whether Concour had represented to Potgieter that the builder owned or had the right to dispose of the paving stones. Concour argued that, to ground a plea of estoppel, the representation had to be clear and unambiguous i.e. it had to admit of no reasonable interpretation other than that the builder owned or had the right to dispose of the paving stones. Simply supplying the paving stones to the builder was not enough, Concour argued. The Court found that while a representation made in words had to be clear and unambiguous to ground a plea of estoppel, a different standard was appropriate when dealing with a representation by conduct. In the case of a representation by conduct, the court held, the test is whether the representor might reasonably have foreseen that the representee would be misled by the representation. On the facts, Concour must have known that the paving stones were bound for speedy installation on a specific nearby property. It must have known that Potgeiter the owner of that property might infer that the builder installing them had the right to dispose of them, given that they were intended to permanently adhere to the ground on the property. The Court also held that Concour was negligent in making the representation. Read paragraph 12 of the judgment yourself to see why. The plea of estoppel accordingly succeeded.

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