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Summary PVL3704 notes and summaries
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- University Of South Africa (Unisa)
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Unit 1 – ESTOPPEL – OVERVIEW(1) Explain the concept ``estoppel'' and give an example.
Estoppel is a doctrine which operates in the following circumstances: Where one person represents to another
that a certain set of facts exists, and the other, as a result of such representation, alters
his or her own legal position to his or her detriment, the person making the representation is precluded or
estopped from asserting that a different set of facts actually exists.
STUDY UNIT 2 - THE ENGLISH AND SOUTH AFRICAN LAW OF
ESTOPPEL
STUDY UNIT 3 - REQUIREMENTS FOR A SUCCESSFUL RELIANCE ON
ESTOPPEL: INTRODUCTION; MISREPRESENTATION
QUESTION 1
John leaves his broken vacuum cleaner at the ABC Store for repairs. The store specialises in electrical repairs, but also sells second-hand
electrical appliances. After being repaired, John’s vacuum cleaner is displayed by the dealer among the goods for sale in the store by mistake
and the vacuum cleaner is sold to Peter. When John discovers this, he claims his vacuum cleaner from Peter with the rei vindicatio, but Peter
raises estoppel against John’s claim.
1.1 Does John’s conduct in this case amount to a misrepresentation? Explain with reference to case law. (15)
1.2 Is fault a requirement for a successful reliance on estoppel by Peter? Explain with reference to case law. (10)
QUESTION 3
A has sold his television set to B for R2 000. The contract stipulates that ownership will only pass to B
after the last instalment has been paid. A has given a letter to B stating the following: “Herewith I, A,
confirm that I have sold Sony TV set No 123321 to B.” After a period of six months and payment of R1
200 B wants to sell the set to C and shows C the letter from A. C who is very cautious, first phones A
who again confirms the sale to B. C buys the set from B for R1 500. Thereafter B fails to make any further
payments to A. A now claims back his TV set from C with a rei vindicatio. Advise A whether C may have
any possible defences against this claim, and if so, what the requirements would be. (15)
This is a fairly wide question dealing with estoppel and its requirements, the most pertinent of which here would be the questions of
misrepresentation and negligence on the part of the owner. Where case law is discussed use own discretion to award marks within the
permitted mark allocation.
1. Identification
This question deals with estoppel as a defence to the owner’s rei vindicatio. The elements of misrepresentation
and negligence on the part of the owner are of specific relevance here. (2)
2. The law
Re requirements for Estoppel:
1. Misrepresentation – creation of false belief by estoppel denier. (1)
2. Fault (intent or negligence) on part of estoppel denier. (1)
3. Prejudice on part of estoppel assertor. (1)
4. Causation – the estoppel assertor must have acted to his detriment as a result of the
misrepresentation of the estoppel denier. (1)
5. The raising of estoppel must be permissible in law in the circumstances. (1)
A. Misrepresentation
Misrepresentation is any word or conduct that communicates an untruth. Generally it must be a
misrepresentation of fact and may consist of a positive misrepresentation or by omission where there is
a legal duty to speak or otherwise act positively. (2)
Misrepresentation where owner leaves his property in possession of another. General rule: mere
leaving of one’s property in possession of another does not create the impression that the latter has the
right to sell the property (1 mark).
, Examples from case law
Adams v Mocke: A authorized his driver to hire horses if his horse became disabled on the road – he hired a
mule from E and left the lame horse there until the mule was returned. E sold the horse. A claimed it back and
succeeded. The court stated that:
...’an owner does not lose his right of vindication unless he had so entrusted his goods under circumstances
which might fairly and reasonably induce third parties to believe that the ostensible owner was the true owner or
had authority from the true owner to dispose of the goods. In the present case no such circumstances have been
proved to exist. The fact that the plaintiff entrusted the postcart horses to his driver could lead no one reasonably
to believe that he had the right to sell or exchange horses.’ (3)
In Morum Bros Ltd v Nepgen, the facts were the following: A sold two horses to S, subject to a suspensive
condition that, despite delivery ownership would not pass before the purchase price had been paid. After the
horses had been delivered to him but before he had paid the purchase price, S sold them to a bona fide
purchaser. A thereupon instituted the rei vindicatio against the second purchaser, who invoked the doctrine of
estoppel, contending that A, the owner, had placed S in a position to represent himself as the owner of the
horses. The court rejected this contention and ordered the defendant to return the horses to A. (3)
Exception
If there is evidence of title documents or a blank transfer form or something similar, representation may in fact
amount to a misrepresentation, since conduct may be reasonably conducive to the false conclusion that the
possessor is the owner (and may dispose of the thing). (2)
In Fawdon v Lelyfeld A the owner of a racehorse leased it to B and L (not allowed to do so in terms of the
Jockey Club Regulations) so a lease was drawn in the guise of a contract of sale. B and L got a false receipt for
the fictitious sum of R200. They then sold the horse to Mrs. C. A claimed the horse with the Rei Vindicatio and
Mrs. C used estoppel – the court found in favour of Mrs. C
In Electrolux v Khota it was stated that when an owner entrusts his property to another it isn’t
enough to represent that dominium has vested in the possessor. BUT if the owner gives a document of
title/authority to dispose of the property such a representation is created
Examples of indicia
Such indicia may be the documents of title and/or of authority to dispose of the articles, as for example the share
certificate with a blank transfer form annexed, as in West v De Villiers; or such indicia may be the actual manner
or circumstances in which the owner allows the possessor to possess the articles, as for example the owner-
wholesaler allowing the retailer to exhibit the articles in question for sale with his other stock in trade. (3)
B. Fault (negligence)
Negligence does not seem to be a strict requirement for estoppel, but aside from a few possible
exceptions it does seem to be a requirement against the rei vindicatio of the owner. (2)
Case law
In Grosvenor Motors (Potchefstroom) Ltd v Douglas it was stated that in the case of rei vindicatio there
must be negligence on the part of the denier – K was going to buy the respondents car, his cheque book
was in Welkom. The respondent lost the car’s license papers but gave him a letter stating his possession of
the car. K’s cheque was dishoured, in the mean time K had sold the car to the appellant. A pleaded estoppel
against the owners Rei vindicatio – and the cout rejected the plea because negligence on the part of the
denier was required. The owner forfeits his right to vindicate where the person who acquires the property
does so because (of the negligence of the owner) he was misled to believe that the person from whom he
acquired it was entitled to dispose of it – to prove estoppel the appellant had to prove culpa on the part of the
respondent
, In Johaadien v Stanley Porter (Paarl) (Pty) Ltd J wanted to buy F’s car but wanted proof of ownership- F
had bought the car on a hire purchase agreement from Stanley Porter Garage and had paid the last
installment. J bought the car. The garage later claimed the car using the rei vindicatio. J relied on estoppel
but didn’t succeed as he failed to prove negligence The majority of the court held that negligence is a
requirement for estoppel where it was raised as a defence to the rei vindication. The minority of the court
stated that negligence wasn’t a requirement and that estoppel in this case should have been upheld. The
interests of the owner and the bona fide acquirer of possession must be weighed up against each other.
In Oakland Nominees (Pty) Ltd v Gelria Mining & Investment Co (Pty) Ltd it may be stated that the owner will
be frustrated by estoppel upon proof of the following requirements:
(i) There must be a representation by the owner, by conduct or otherwise, that the person who disposed of his
property was the owner of it or was entitled to dispose of it.
(ii) The representation must have been made negligently in the circumstances.
(iii) The representation must have been relied upon by the person raising the estoppel.
(iv) Such person's reliance upon the representation must be the cause of his acting to his detriment.
From the case law, it is therefore clear that the requirement of fault (negligence) is stated unequivocally
for cases where estoppel is raised as a defence against the rei vindicatio (excluding the possible
exception based on equity mentioned in the Johaadien and Oakland Nominees cases). (1)
Application
A created the impression (misrepresentation) in the mind of C, both in writing and telephonically, that B
was the owner of the television set (or at least could dispose of it). He was also clearly negligent in
acting in this way and hence estoppel should succeed against his rei vindicatio. (2) [15]
QUESTION 5
A takes his car to B, who sells second-hand cars, to have his car valued. The car is parked on
B’s showroom floor where it is left for three days. In this period one of the sales staff, X, who
believed the vehicle to be part of the stock, sold the vehicle to C for cash. A now claims the
vehicle from C with a rei vindicatio. Advise C with reference to relevant case law. (10)
Answer (mark fairly strictly)
Study Unit 3:
1. Identification of problem – whether estoppel will succeed [1]
2. Khota case [3]
3. Discussion or listing of all elements [2]
4. Discussion on misrepresentation [3]
5. Discussion Grosvenor Motors [3]
6. Fault requirement at rei vindicatio cases [3]
7. Conclusion
No estoppel
No misrepresentation [1]
No fault [1]
C could raise the defence of estoppel. (½)
5 requirements –
1. Misrepresentation made by A (½),
2. negligence on the part of A (½),
3. causal link between misrepresentation and prejudice suffered by C (½),
4. prejudice suffered by C (½) and
5. to succeed with estoppel will be allowed by law (½)
Only first two difficult to prove under these circumstances.
Misrepresentation by words or conduct, or even silence. (1)
Misrepresentation must have been such as to lead a reasonable man to believe that it was meant to be acted
upon in that manner. (1)
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