Ian Wyles Auctionners CC v Gasa and Another (4045/2009) [2009] ZAKZDHC 33 (13 August 2009)

IN THE HIGH COURT OF SOUTH AFRICA NOT REPORTABLE

(KWAZULU-NATAL DURBAN)

CASE NUMBER: 4045/2009

IN THE MATTER OF:

IAN WYLES AUCTIONEERS CC APPLICANT

VS

SIBONISO HOPEWELL GASA FIRST RESPONDENT

KUMAR SINGH T/A MR CAR SECOND RESPONDENT

______________________________________________________________

J U D G M E N T

Delivered on: 13 August 2009

NTSHANGASE, J:

[1] The applicant seeks confirmation of the rule granted by this court on 13 March 2009 the terms whereof are set out

hereunder:

‘1. That the forms and service provided for in the Uniform Rules of the Court are hereby dispensed with in terms of Rule 6 (12) (a) and that the matter be heard as an urgent application;

That a rule nisi do issue calling upon the first and second respondents to show cause, if any, before this court on the 1st day of April 2009 at 09h30 or so soon thereafter as the matter may be heard, why an order should not be granted in the following terms.

That the first respondent is directed to forthwith deliver the items listed in annexure “B” read with annexure “C” and “D” hereto to the applicant at 69 Dollar Drive, Richards Bay, KwaZulu-Natal;

That failing compliance with the order in sub-paragraph (a) above, the sheriff of this court, or his deputy, be and is hereby

authorised and directed to –

attach and remove the items listed in annexures “C” and “D” hereto wherever they may be found;

deliver the items listed in annexure “B” read with annexures “C” and “D” hereto to the applicant at 69 Dollar Drive, Richards Bay, KwaZulu-Natal.

That the first respondent pay the costs of this application on a scale as between attorney and own client.

That in the event of opposition by the second respondent, the first and second respondent pay the costs of this application.

That the provisions of paragraph 2(a) and 2(b) operate as an interim order with immediate effect pending the finalisation of this application.’

[2] The major, if not the sole debate in this matter, revolves around one of the items, a 2002 opel corsa 1.7D LDV and canopy with licence numbers reflected on annexure “D” to the applicant’s founding affidavit as ‘NRB 38168’ NUF 18954 [“the motor vehicle”] which were subject of an auction conducted by the applicant on 26 February 2009 as agent for undisclosed principals who owned the goods 1.

The motor vehicle and other items listed in annexure “B” to the applicant’s founding affidavit were purchased by the first

respondent as the highest bidder.

[3] The first respondent took delivery of the auctioned items including the log book of the motor vehicle upon presentation of a cheque post-dated to 27 February 2009 which was accepted by an employee of the applicant, Marcha – Ley Slinger [“Slinger”].

The cheque was dishonoured by the bank marked ‘Return to Drawer’. According to information conveyed to the applicant the cheque was stolen from Spiral Communications, against whose account it was drawn. It’s acceptance by Slinger was in violation of procedures as, ordinarily, Roberto Fierro [“Roberto”], the deponent to the applicant’s founding affidavit should have approved its acceptance.

[4] Roberto’s efforts to trace the first respondent at his chosen domicilium citandi et executandi proved fruitless. Consequently this matter has proceeded in his absence. The process in these proceedings was served on the first respondent by depositing the notice of motion, the founding affidavit and annexures thereto and confirmatory affidavits with the Building Manager of Spiral Communications, the first respondent’s domicilium and by inserting a copy of the papers under the entrance door of Spiral Communications. Roberto learned from a telephonic response from a male person at Spiral Communications that the first respondent was there unknown.

[5] There is no dispute that in concluding the sale as he did, the first respondent acted fraudulently and thereby caused the applicant

to surrender possession of the goods. Meanwhile, as was later discovered when the motor vehicle was traced to the second respondent, it had been registered into the name of LG Madlala and from him was acquired and registered into the second respondent’s trading name “Mr Car”, and then bore as the last 3 licence numbers ND 283688, NRB38168, NUF 18954 as per annexure “G” to the second respondent’s answering affidavit deposed to by Kishore Singh, the sole proprietor of the second respondent.

[6] In opposing the application the second respondent asserts legal ownership over the motor vehicle and points to its registration under “Mr Car” and the Deed of Sale [annexures “G” to “H5”]. In addition, the second respondent’s opposition is based on an alleged lien over the motor vehicle.

[7] There is no dispute that the second respondent’s acquisition of the motor vehicle was bona fide. The second respondent places over-reliance on the registration document as providing conclusive proof of ownership when, in fact, in terms of section 78 (1) of the Road Traffic Act 93 of 1996 it is no more than prima facie proof of matters stated on it.

[8] The issue is whether the purported purchase of the motor vehicle by the first respondent conferred ownership on the first respondent.

Ms Naidu, who appeared for the second respondent, relies on the authority of AXVS Industries v AF Dreyer (Pty) Ltd and Others2 in which it was stated that “(t)he fact that the plaintiff took possession of all movables at the premises of the company in

liquidation …after confirmation and with full knowledge and approval of the third defendant and his predecessors in title shows

that there had indeed been traditio ‘wat gepaard gaan met ‘n ooreenkoms tussen oorhandiger en ontvanger dat daarmee eiendomsreg gegee en geneem word’, to draw a parallel with the facts of the present case and as manifesting the present parties’ intention. In further support of this submission was cited the case of Vivier v Waterberg Ko-Operatiewe Landboumaatskappy Bpk 3 for the proposition that the delivery of the motor vehicle and its log book on 26 February 2009 to the first respondent, coupled with the post-dating of the cheque to 27 February 2009, made the transaction between the applicant and the first respondent one for credit, that ownership had passed upon delivery and that the fact that the cheque was dishonoured could not vindicate the motor vehicle in the hands of the second respondent, a third party who had bought the motor vehicle from the person to whom is was subsequently sold after the transaction between the applicant and the first respondent.

[9] In that regard, what distinguishes the present case is the effect of the terms and conditions on the buyer’s card, annexure “A”, which the first respondent signed before the transaction, which stipulate that “(t)he purchaser shall not be entitled to possession of any of his purchases until the total purchase price of all his purchases has been fully paid for by cash or bank guaranteed cheque. In the event of the purchaser failing to pay the full purchase price of any lot within the prescribed time or, if he fails to comply with any other terms of the sale, the purchaser shall forfeit any money paid to the auctioneer and, in addition, the auctioneer shall retain a possessionary lien of all lots…”

[10] Quite evidently there was no compliance with the terms and conditions of Annexure “A”. Instead, there was a perpetration of fraud by the first respondent. Consequently the applicant retained the “possessionary lien” of all lots purchased by the first respondent. The applicant’s lien was not destroyed by such lots’ fraud – induced surrender to the first respondent as the deprivation of the applicant’s possession was by undue means4 and did not pass good title of ownership on the principle of nemo pluris juris ad alium transferre potest quam ipse haberet. In the circumstances there was a fraudulent failure of fulfilment of the terms and conditions precedent to the passing of possession and ownership, in consequence whereof the applicant’s “possessionary lien” was retained and ownership did not pass to the first respondent. Accordingly, no person, including the second respondent, derived ownership rights over the motor vehicle.

[11] In regard to the lien, the second respondent referred to certain improvements effected to the motor vehicle, for which receipts reflecting a total amount of R2 720.00 are annexed as “J1” and “J2”. While it is conceded on behalf of the applicant that such improvements were effected, it was contended, correctly in my view, that the second respondent had failed to provide proof that such improvements were useful or necessary or that the motor vehicle was thereby enhanced5 in value, to establish the existence of the lien. The second respondent’s claim to the lien must accordingly fail.

[12] In regard to the lien the second respondent is not left remediless as, it may, on the basis of an enrichment action, recover any proven necessary and useful expenses or increase in market value of the motor vehicle, whichever is the lesser6. The second respondent’s right of security is also protected by tender made by the applicant in the amount of R2 720 reflected by the second respondent in annexures “J1” and “J2”.

[13] Ms Naidu also argued, in challenge of the applicant’s locus standi on the basis that the applicant was never given authority by the ‘erstwhile’ owner of the motor vehicle to institute these proceedings. I think the point is not well taken as, where the auctioneer sells movable property without disclosing his principal,

as happened in this case, he is himself the principal and personally responsible to the purchaser and may exercise the remedies of a seller against him including the vindicatory action.7

[14] The following order is made:

1. Paragraphs 2[a] and 2 [b] of the rule nisi are confirmed

2. The first and second respondents are ordered to pay the costs of this application, jointly and severally, the one paying the other to be absolved.

Date heard: 03 August 2009

Date delivered: 13 August 2009

For Applicant: Mr. P. Wallis

Instructed by: Shepstone and Wylie

Scotswood 35

Samora Marchel Street (formely Aliwal Street)

DURBAN

For Second Respondent: Ms. S. Naidu

Instructed by: Anand Govender & Co

c/o Abdul Shaikjee Attorneys

Suite 1115, 11 Floor

Tower B, Salisbury Centre

349-351 West Street

1 Index page II: Founding affidavit, para 16

2 2004 (4) SA 186 (w) at 196D-G

3 1956 (2) SA 665 (T)

4 Makhubedu v Ebrahim 1947(3) SA155 (T) at 167.

5 Nortje en ‘n Ander v Pool N.O. 1966 (3) SA 96 at 131 G

6 McCarthy Retail v Shortdistance Carriers cc 2001 (3) SA 482 at 489 F-G.

7 McKeurtan Sale of Goods in South Africa, 5th ed. 248.