Dreyer and Another NNO v AXZS Industries (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Harms JA, Mthiyane JA, Brand JA, Jafta JA and Nkabinde AJA
• Judgment Date: 26 September 2005
• Citation: 2006 (5) SA 548 (SCA)
• Docket Number: 250/04
• Hearing Date: 16 September 2005
• Counsel: M Basslian SC (with M M Segal) for the appellants. D W K Nigrini (with H Kriel and E Raubenheimer) for the respondent.
• Court: Supreme Court of Appeal

Brand JA:

[1] Proceedings in this matter started when the respondent instituted a vindicatory action against the appellants in the Johannesburg High Court for the delivery of movables, consisting of two C compressors, compressed-air pipes and other equipment used in the furniture-manufacturing industry ('the equipment'). The appellants were cited in their capacities as joint trustees of two trusts, the Anfred Trust and the Mareli Trust. The trusts were said to be in possession of the equipment. That much was common cause. The dispute D between the parties turned on the limited issue whether the respondent had discharged the onus of proving its ownership of the equipment. The Court a quo (Willis J) held that it did. Consequently, judgment was granted in favour of the respondent, with costs. The appeal against that judgment, which has E since been reported under the incorrect citation of AXZS Industries v A F Dreyer (Pty) Ltd and Others 2004 (4) SA 186 (W), is with the leave of the Court a quo.

[2] The equipment previously belonged to a company, A F Dreyer (Pty) Ltd ('the company'), that went into liquidation in about February 2002. Though the liquidator of the company was joined as third F defendant in the Court a quo, he never entered an appearance to defend.

[3] Prior to liquidation, the company, then controlled by the first appellant, Mr A F Dreyer, conducted its business as a manufacturer of furniture, from premises registered in the names of the two trusts. Initially, the appellants' main defence on the pleadings G was that the trusts had become the owners of the equipment through a process of accessio when it was attached to their building by Dreyer, acting on behalf of the company. In the alternative, and in any event, the appellants denied that the respondent was the owner of the equipment. Shortly before the commencement of the trial, the appellants abandoned their main defence based on accessio. H The only defence that remained was therefore that the respondent was not the owner of the equipment.

[4] The first argument raised by the respondent, in limine, as it were, both in this Court and in the Court a quo, was that, in the absence of any plea that the appellants had I a right or entitlement to hold the equipment, no proper defence had been raised to respondent's claim under the rei vindicatio. There is no merit in this argument. A party who institutes the rei vindicatio is required to allege and prove ownership of the thing. Since one of the incidents of ownership is the right to possession of the thing, a plaintiff who establishes ownership is not required to prove that the J

Brand JA

defendant's possession is unlawful. In that event, the onus to establish any right A to retain possession will rest on the defendant, as long as the plaintiff does not go beyond alleging ownership. But if the plaintiff fails to establish ownership, the possessor is to be absolved. This principle was recognised in Voet 6.1.24 and has been consistently applied by our Courts, at least since Kemp v Roper NO (1886) 2 Buch AC 141 (at 143) which was decided in 1886. (See also Ruskin NO v Thiergen 1962 (3) SA 737 (A) at 744; B Chetty v Naidoo 1974 (3) SA 13 (A) at 20A - C; Van der Merwe Sakereg 2 ed at 347 et seq; Badenhorst, Pienaar and Mostert Silberberg and Schoeman The Law of Property 4 ed at 255 et seq.)

[5] I revert to the facts. The respondent's case is that it acquired ownership of the equipment pursuant to a post-liquidation C auction sale of the movable assets of the company, which was held on 19 March 2002. The venue of the auction was the trusts' property, which constituted the former business premises of the company. It was not a public auction, but a so-called 'bid-out' between two bidders, the respondent and another interested party, who had submitted competing offers for movable assets of the company to its provisional D liquidators at an earlier stage.

[6] The respondent was represented at the auction by its managing director, Mr Gordon Brews. It is common cause that Brews's bid of R3,4m exceeded the highest offer of the other interested party, and that the respondent thus became the purchaser and eventually E the owner of whatever movables of the company were sold at the auction. The issue between the parties turns on whether the equipment formed part of the subject-matter of the auction sale. The respondent alleged that it did. The appellants' denial of this allegation was, essentially, based on the terms of a document titled 'conditions of F sale' which was read out by the auctioneer prior to the auction and signed by Brews, on behalf of the respondent, immediately after the hammer had fallen.

[7] The subject-matter of the sale is referred to in clause 1 of the conditions of sale. It provides that: G

'(T)he auctioneer's sole obligation and responsibility shall be to solicit higher offers or bids in respect of the purchase of all of the assets as per annexure A hereto subject to his sole and unfettered discretion.'

(My emphasis.) Clauses 20 and 21 relate to the same topic. Clause 20 stipulates that: H

'(T)he following items reflected in annexure A hereto shall be omitted and not form part of the sale.'

Clause 21 provides that:

'(T)he following items not reflected in annexure A hereto shall be included and form part of the sale.' I

Below the provisions of both clauses, a number of items were inserted in handwritten form.

[8] Annexure A is again referred to as follows in the last clause of the document:

'The above conditions of sale, having been publicly read out to the parties J

Brand JA

present, the assets of [the company], as per annexure A hereto, were offered to the interested parties in order to elicit the A highest possible offer and the highest offer was received from:

Purchaser - '

Then follows, in manuscript, the name of the respondent and, immediately thereafter, the signature of Brews on its behalf. B

[9] Other 'conditions of sale' relevant for present purposes are contained in clauses 7, 8 and 17. These clauses provide:

'7.

A contract of purchase and sale shall arise between the buyer [defined as the highest bidder] and the seller [defined as the provisional liquidators of the company] on the fall of the hammer on the terms set out herein, the purchase price being the amount of the highest bid accepted by the auctioneer . . . . C

8.

Ownership in and to the assets shall pass to the buyer on confirmation of the sale by the liquidators when the purchase price and all other amounts shall be paid in full and all other conditions (if any) of the purchase shall be met. Thereafter, the assets may be removed and not before. D

. . .

17.

These conditions of sale form the sole basis on which the seller and auctioneer transact with prospective buyers and on which a contract of sale will be concluded (on the acceptance of a bid or otherwise) between the seller and the buyer. No variation, alteration, novation, or cancellation of any of the terms hereof shall be of any force or effect unless reduced to writing and signed by all of the parties concerned.' E

[10] On 9 April 2002...