Abstract

The owner who wanted to sell her used luxury bush trailer agreed with an accredited agent of the manufacturer of the trailer to park it on their premises in Wellington where it would be available for viewing by prospective buyers. She explicitly agreed with the manager of the company that she would retain all registration documents regarding the trailer and would personally enter into the final obligatory and real agreements when a suitable interested buyer was identified. It was, however, agreed that the finalisation of the asking price would be at the discretion of the agent, provided that she received her indicated set reserved minimum price. This would allow the agent to negotiate with an interested buyer for a price that would leave it with some profit.
When an interested buyer was identified, the agent, however, neglected to inform the buyer of the conditions and refrained to disclose that neither he nor the agency held the necessary ius disponendi to transfer ownership, although he accepted the transferred sum as significantly inflated final payment for the purchased trailer. He never disclosed to the owner that her trailer had found a buyer and was no longer in his possession. Nor did he transfer the amount as agreed to the account of the owner. When she discovered the fraud, she immediately instituted the rei vindicatio to retrieve her property. There was no real agreement between the owner and the buyer and consequently she retained her ownership and should be entitled to the rei vindicatio as remedy. The buyer could rely on his remedy under the law of contract (for eviction) because he was not placed in vacua possessio and was entitled to restitution of the amount paid. He was thus not without remedy.
The court, however, dismissed the owner’s application for the rei vindicatio with costs because in the court’s judgment the poor buyer was entitled to the defence of his bona fides. South African law does not recognise the bona fides of a buyer as a separate mode of acquisition of ownership. The recognised defence of estoppel is not mentioned by name in the judgment, although some of the case law that was referred to concerned that defence. The judgment, however, does not instil confidence that all the requirements for that defence had been mastered. At the very least the judgment does not disclose how the court was satisfied that those requirements were all met. The mere fact that the buyer alleged that he had been misled by the agent to believe that, in exchange for the transfer of the full asking price he would receive ownership of the trailer, is irrelevant, as would be the excuse of the receiver of stolen goods who was gullible enough to think the thief selling the stolen property had the ius disponendi to transfer ownership. The judgment does not disclose how the buyer would be able to renew the yearly registration of the trailer because the true owner was still holding back all the relevant registration documents and the successful reliance on estoppel does not alter the material legal position regarding the ownership.
Clearly the misrepresentation of a fraudulent third party should not result in the effective loss of the owner’s entitlements to her property. The defence of estoppel can successfully be relied on against the rei vindicatio of the owner only if the estoppel asserter can prove that he acted to his detriment because of the misrepresentation of the owner as estoppel denier, who acted negligently. The misrepresentation must have been so flagrant that the reasonable person in his position as the estoppel asserter would also have acted to his detriment on it.
In this matter the judgment does not disclose how the court established that the reasonable person in the position of the true owner of the trailer would have acted otherwise to prevent an unknown third party as prospective buyer from being misled by the fraudulent agent who pretended to be either the owner or authorised agent with ius disponendi. What more could the owner have done than to retain all the relevant registration documents to forewarn third parties of the limited powers of the agency? Attaching large neon-coloured stickers to the vehicle to publish the limited powers of the agency does not seem practical. It is submitted that no negligence can be found in the conduct of the owner, because it was on par with what could be expected from the reasonable person in her shoes. It is submitted that the reasonable person in the position of the buyer would by contrast not have been so gullible as to transfer the significant amount of the asking price without ascertaining that the alleged seller had the registration documents to transfer ownership as proof of his ius disponendi.