Oriental Products (Pty) Ltd v Pegma 178 Investments Trading CC and Others

• Jurisdiction: South Africa
• Judge: Harms DP, Lewis JA, Maya JA, Shongwe JA and R Pillay AJA
• Judgment Date: 01 December 2010
• Citation: 2011 (2) SA 508 (SCA)
• Docket Number: 126/2010
• Hearing Date: 12 November 2010
• Counsel: JC King SC for the appellant. AJ Dickson SC for the first respondent. No appearance for the second, third and fourth respondents.
• Court: Supreme Court of Appeal

Oriental Products (Pty) Ltd v Pegma 178 Investments Trading CC and Others
2011 (2) SA 508 (SCA)

2011 (2) SA p508

Citation	2011 (2) SA 508 (SCA)
Case No	126/2010
Court	Supreme Court of Appeal
Judge	Harms DP, Lewis JA, Maya JA, Shongwe JA and R Pillay AJA
Heard	November 12, 2010
Judgment	December 1, 2010
Counsel	JC King SC for the appellant.; AJ Dickson SC for the first respondent.; No appearance for the second, third and fourth respondents.

F Flynote : Sleutelwoorde

G Estoppel — Estoppel by representation — Elements — Representation — By inaction — Whether representation by inaction established — Failure to correct faulty entry in deeds registry — Claim for immovable property fraudulently transferred and registered in deeds registry — By knowingly leaving deeds register to reflect incorrect position as to ownership, claimant representing to world in general and to person who has subsequently taken transfer of H property from transferee that transferee was true owner of property.

Estoppel — Estoppel by representation — Elements — Fault — Negligence — Whether established — Claim for immovable property fraudulently transferred and registered in deeds registry — Claimant aware of value attached I to entries in deeds registry and that others can act on assumption that register correct by selling property or effecting improvements thereon — Such calling for urgent action by claimant — Semble: Failure to take urgent action might constitute fault required to estop claimant from vindicating property.

Land — Deeds registry — Faulty entry — Reliance on — Whether it may found J defence of estoppel — Although fact of registration no guarantee of right

2011 (2) SA p509

registered, public entitled to assume correctness of register — True owner A of property, fraudulently transferred to another person, who knowingly leaves register ro reflect incorrect position, representing to world that registry reflecting true state of affairs — Estoppel will operate to protect subsequent purchaser who relied on correctness of register to his detriment.

Headnote : Kopnota

Per Harms DP; Lewis JA, Maya JA and R Pillay AJA concurring: The two B requirements for a valid reliance on estoppel are misrepresentation and fault. (Paragraph [27] at 516F.)

The public is entitled to rely on the correctness of entries in the registers of the deeds office. Although the fact of registration is not a guarantee of any right registered, a party will not take transfer of immovable property if he C has reason to suspect that the register is wrong. By knowingly leaving the register to reflect the incorrect position as to ownership, a party claiming to be the true owner of property fraudulently transferred to another (the second owner), by omission, represents to the world in general and to the person who has subsequently taken transfer of that property in particular (the third owner) that the second owner was the true owner of the property. D It cannot be said with any measure of confidence that the third owner did not take transfer in the light of this representation. (Paragraph [28] at 516G – I.)

A party claiming to be the true owner of property is negligent, if it is aware of the fraudulent transfer of the property to another, and if it is aware of the value E attached to entries in the deeds register and should know that others could act on the assumption that the register was correct, by not only selling the property, but also by effecting improvements thereon. All this calls for urgent action and failure to take such urgent action might well be found to amount to negligence and a finding that the claimant is estopped from vindicating its property. (Paragraph [30] at 517B – D.) F

Cases Considered

Annotations:

Reported cases

Apostoliese Geloofsending van Suid-Afrika (Maitland Gemeente) v Capes 1978 (4) SA 48 (C): referred to

Barclays Western Bank Ltd v Fourie 1979 (4) SA 157 (C): considered G

Commissioner of Customs and Excise v Randles, Brothers & Hudson Ltd 1941 AD 369: referred to

Dreyer and Another NNO v AXZS Industries (Pty) Ltd 2006 (5) SA 548 (SCA) ([2006] 3 All SA 219): referred to

Electrolux (Pty) Ltd v Khota and Another 1961 (4) SA 244 (W): considered

Grosvenor Motors (Potchefstroom) Ltd v Douglas 1956 (3) SA 420 (A): dictum at 427 considered H

Hollins v Registrar of Deeds 1904 TS 603: applied

Houtpoort Mining & Estate Syndicate Ltd v Jacobs 1904 TS 105: applied

Johaadien v Stanley Porter (Paarl) (Pty) Ltd 1970 (1) SA 394 (A): dictum at 406 considered

Klerck NO v Van Zyl and Maritz NNO and Another and Related Cases I 1989 (4) SA 263 (SE): considered

Legator McKenna Inc and Another v Shea and Others 2010 (1) SA 35 (SCA): dictum in para [21] considered

Meintjies NO v Coetzer and Others 2010 (5) SA 186 (SCA): referred to

Oakland Nominees (Pty) Ltd v Gelria Mining & Investment Co (Pty) Ltd 1976 (1) SA 441 (A): considered J

2011 (2) SA p510

Trust Bank van Afrika Bpk v Western Bank Bpk en Andere NNO 1978 (4) SA 281 (A): referred to. A

Case Information

Appeal from a decision in the KwaZulu-Natal High Court, Pietermaritzburg (Jappie J). The facts appear from the judgment of Shongwe JA.

JC King SC for the appellant. B

AJ Dickson SC for the first respondent.

No appearance for the second, third and fourth respondents.

Cur adv vult.

Postea (December 1). C

Judgment

Shongwe JA:

[1] This appeal is against the order of the KwaZulu-Natal High Court, D Pietermaritzburg (Jappie J), dismissing the appellant's application to vindicate the immovable property described as Lot 117, Clansthal, situated in the development area of Clansthal, province of KwaZulu-Natal, and 4047 square metres in extent (the property), which is registered in the name of the first respondent; and also for an order against the fourth respondent (the Registrar of Deeds for KwaZulu-Natal), E to register the transfer of the said property in the name of the appellant. The appeal is with leave of the court a quo.

[2] The appellant's case in the court a quo, as well as before us, is that it was, at all material times, the lawful registered owner of the property and that its property was fraudulently transferred, first to the second F respondent and thereafter to the first respondent, without the appellant's knowledge or authority. The third respondent is alleged to have purported to represent the appellant in passing transfer of the property to the second respondent. In truth, he had never been authorised to do so. The second and third respondents, who took part in the proceedings below, have filed notices to abide the decision of this court. The registrar G did not participate at all in these proceedings.

[3] The factual background is as follows: one Mr Kuk Siu Wah, a businessman and a Chinese national resident in Hong Kong, visited South Africa in or about 1990. He then bought, inter alia, the following H companies: Oriental Products (Pty) Ltd, the appellant company; and Galaxy Minerals (Pty) Ltd. He, and his daughter, Ms Cook Yin Ping, who is for convenience referred to as Ms Cook, were the only two directors of the appellant. The third respondent, Mr Hong Wei Qu, also a Chinese national, came to South Africa in 2001 to work as manager of Mr Kuk's companies Galaxy Minerals (Pty) Ltd and Flourishing I Trading (Pty) Ltd in Mtubatuba, KwaZulu-Natal.

[4] The third respondent refers to Mr Kuk as his grandfather. On 18 December 2006 Mr Kuk discovered that the property in question was no longer registered in the name of the appellant. This he discovered after instructing attorneys in Johannesburg to do a property search at the J deeds office. After numerous letters between his Hong Kong attorneys

2011 (2) SA p511

Shongwe JA

and Johannesburg attorneys it transpired that the property in question A had indeed been sold and transferred to the second respondent, who in turn sold and transferred it to the first respondent.

[5] The appellant, represented by Mr Kuk, instructed his attorneys to launch the application to recover the property. This happened in January 2008. B

[6] It transpired that the third respondent was indeed responsible for the sale and transfer of the property. His version was that he was authorised by Mr Kuk to look for a buyer and sell the property. He alleges Mr Kuk provided him with a special...