CASE
NO. SA 25/2003

IN THE
HIGH COURT OF NAMIBIA

In the matter
between:

versus

CORAM: Strydom,
A.C.J., Teek, J.A. et O’LINN, A.J.A.,

Heard
on: 05/07/2004

Delivered on: 15/12/2004

APPEAL JUDGMENT

O’LINN,
A.J.A.: I have divided this judgment for the sake of easy
reference into the following sections:

I: Introduction

II: The
pleadings

III: The
legal principles applicable

IV: The
relevant circumstances and facts

V: The powers of Standard Bank
to act in terms of its contract with PRETORIUS and his company ABLE
TRADING (Pty) Ltd

VI: An analysis of the argument

VII: Conclusion

I: INTRODUCTION

This is an appeal against the
judgment of Frank AJ in the Court a quo, being the High Court
of Namibia.

This matter concerns a motor
vehicle (a Toyota Raider double cab) which had been sold by Standard
Bank Namibia Ltd, Stannic Division, the first respondent, to Able
Trading (Pty) Ltd, a private company, in terms of an instalment sales
agreement.

The vehicle was resold by
Pretorius, purporting to act on behalf of Auto Toy Store (Pty) Ltd,
to T A Eysselinck, the appellant in this appeal, at a time when the
balance owing by Able Trading (Pty) Ltd to Standard Bank Namibia Ltd,
Stannic Division, was still unpaid.

Acting on information received
at the end of February 2001, Standard Bank brought an urgent
application in March 2001 to attach the vehicle in Eysselinck’s
possession, pending an action which was then instituted against him
and the Able company.

Tim Eysselinck died prior to the
hearing of the appeal and his wife, in her capacity as executrix of
the deceased estate, was substituted as appellant.

The parties will hereinafter,
for the sake of convenience, be referred to as follows: “Eysselinck”
for the appellant, “Standard Bank” for the first respondent and
“Able Trading” for second respondent. Auto Toy Store (Pty) Ltd
will be referred to as “Auto Toy Store” and Ockie Pretorius as
“Pretorius”. The Raider double cab vehicle will be referred to
as “the vehicle”.

Pretorius was not cited as a
party, inter alia because he fled from Namibia soon after his
fraudulent activities became public knowledge in the media and his
house of cards collapsed.

The application against
Eysselinck in the High Court was granted and Eysselinck had to
surrender the vehicle. Able Trading did not defend the action which
followed but Eysselinck did.

The Court a quo confirmed
the interim order against Eysselinck and thereby confirmed the
legality of Standard Bank’s claim of ownership and the return of
the vehicle from Eysselinck to Standard Bank. Eysselinck appealed to
this Court.

Mr Heathcote appeared before us
for Eysselinck and Mr. Smuts S.C. for Standard Bank.

II: THE
PLEADINGS

Although Standard Bank’s claim
of ownership was also disputed in the Court a quo on behalf of
Eysselinck, this defence was abandoned in the appeal and Eysselinck
only continued the appeal on the basis of his alternative
defence. This defence was correctly set out in the judgment of the
Court a quo and it will consequently suffice for present
purposes to quote that defence as set out in that judgment:

“Alternatively, and in the
event of the court finding that the plaintiff is the owner, and that
the plaintiff is entitled to repossess the vehicle from the first
defendant, then and in that event the second defendant pleads that
the plaintiff is estopped from relying on his ownership to claim the
vehicle from the second defendant, and for the following reasons:

(a) the plaintiff negligently
represented to the second defendant, alternatively the plaintiff
negligently allowed the first defendant and/or Auto Toy Store (Pty)
Ltd (hereinafter jointly and severally referred to as the first
defendant) to represent to the second defendant that the first
defendant was the owner of the vehicle and/or had the right to
dispose of the vehicle and/or transfer ownership and possession of
the vehicle to the second defendant, and more particularly in the
following circumstances:

1. 
   the plaintiff was aware
   alternatively should have been aware of the fact that the first
   defendant was a trader in motor vehicles; and/or

   
   

2. 
   the plaintiff was aware
   alternatively should have been aware (if reasonable investigations
   were made) that the first defendant and/or the first defendant’s
   representative (one Ockert Pretorius) would sell the vehicle to the
   public at large and/or to the second defendant, in circumstances
   where the second defendant would have been unaware of the agreement
   that was entered into between the plaintiff and the first defendant;
   and/or

   
   

3. 
   the plaintiff allowed the
   vehicle to be possessed by the first defendant, in circumstances
   where the plaintiff was aware (alternatively should have been aware)
   that the vehicle would be sold to the public at large and/or would
   be displayed as a vehicle which could be purchased by any member of
   the public and/or the second defendant; and/or

   
   

4. 
   after the plaintiff delivered
   the vehicle to the first defendant, the plaintiff knew alternatively
   should have known (on reasonable investigation) that the vehicle
   would be sold to the public at large and/or the second defendant,
   such circumstances, creating a duty on the plaintiff to warn the
   public at large and/or the second defendant not to purchase the said
   vehicle from the first defendant, which the plaintiff failed to do;
   and/or

   
   

5. 
   the plaintiff stood by, well
   knowing that the first defendant was going to sell the vehicle to
   the public at large and/or the second defendant, without taking any
   steps to secure its ownership; and/or
   

   
   

6. 
   the plaintiff allowed such
   registration documents to be in possession of the first defendant
   and/or the plaintiff allowed and/or co-operated with the first
   defendant in order for the vehicle to be registered into the name of
   the second defendant, thereby representing to the second defendant
   that the first defendant could indeed dispose of the vehicle by
   transferring ownership to the second defendant. In particular the
   second defendant failed to comply alternatively did not ensure that
   there was compliance with regulation 15 A 57-1 of the regulations
   promulgated in terms of the Ordinance, when the plaintiff
   sold the vehicle to first defendant and while plaintiff knew,
   alternatively ought to have known that there would have been
   compliance with the said regulation when first defendant sold the
   vehicle to second defendant (which in fact there was).

   
   

7. 
   the plaintiff failed to act as
   a reasonable bank would have acted in the circumstances, and
   particularly in that the plaintiff did not take the necessary
   investigative steps in order to ensure that the public (and
   particularly the second defendant) should be protected against the
   first defendant and/or other entities in which one Ockert Pretorius
   had an interest; and/or

   
   

8. 
   the plaintiff allowed the first
   defendant to display the vehicle (as for sale) to the public and/or
   to the second defendant, in circumstances where the plaintiff knew
   alternatively should have known that it was accepting a risk in
   respect of this particular vehicle, and in circumstances where the
   plaintiff also allowed other vehicles to be sold by the first
   defendant in similar circumstances.”

   
   

The Court summed up the further
particulars provided on behalf of Eysselinck as follows:

“The gist of the further
particulars are to the following effect. That the information of
Pretorius’ checkered career was available to the Bank had it made
the necessary enquiries and that it should have known in the
circumstances to have dealings with him in whatever guise ran the
risk of him selling the vehicle contrary to the agreement with first
defendant. That the Bank by handing over possession of the vehicle
to Pretorius acted negligently in that this allowed the further
“sale” of the vehicle to second defendant. Subsequent to the
reports in the newspapers the Bank should

have warned the public at large
or second defendant. In this regard it is alleged that the Bank
should have published particulars of the vehicle in the newspapers,
contacted the registration authority to establish that the vehicle
was still registered in the first defendant’s name and have acted
in terms of clause 7.3 of the contract, i.e. inspected the vehicle
presumably to ascertain that it was still in the possession of first
defendant. In a catch-all it is alleged that if the Bank had acted
in the manner of a reasonable bank, it would have established the
dangers inherent in dealing with Pretorius and the vehicle’s
on-sale to the public or second defendant.”

III: THE
LEGAL PRINCIPLES APPLICABLE:

1. There
is no serious dispute between the approach of the Court a
quo and counsel for the parties
in regard to the legal principles applicable to a defence of
estoppel. The dispute is rather in the application of those
principles to the facts.

2. The
Court a quo dealt with
the requirements for a successful defence of estoppel by referring to
several of the leading decisions and the principles therein
discussed.

I
repeat the following extracts:

“Oakland Nominees Ltd v
Gelria Mining Investment Co Ltd 1976 (1) SA 441 (A) at 452 sets
out the approach in the following terms:

'South African law of
estoppel in regard to ownership.

Our law jealously protects the
right of ownership and the correlative right of the owner in regard
to his property, unless, of course, the possessor has some
enforceable right against the owner. Consistent with this, it has
been authoritatively laid down by this Court that an owner is
estopped from asserting his rights to his property only –

1. 
   where the person who acquired
   his property did so because, by the culpa of the owner, he was
   misled into the belief that the person, from whom he acquired it,
   was the owner or was entitled to dispose of it; or

   
   

2. 
   (possibly) where, despite the
   absence of culpa, the owner is precluded from asserting his rights
   by compelling considerations of fairness within the broad concept of
   the exceptio doli.

   
   

See Grosvenor Motors
(Potchefstroom) Ltd. V Douglas, 1956 (3) SA 420 (AD); Johaadien v
Stanley Porter (Paarl) (Pty) Ltd., 1970 (1) SA 394 (AD) at p.409.

These two cases relate to
estoppel in respect of ownership of movables. There seems no reason
for not applying these principles to a case such as the present one
where the plaintiff seeks a declaration that it is the ‘owner’ of
shares.

As to the formulation in (b),
supra, the occasion has not yet arisen for its further development by
this Court. Certainly it does not arise in the present appeal,
having regard to the pleadings, the evidence, and the arguments in
this Court.

As to (a), supra, it may be
stated that the owner will be frustrated by estoppel upon proof of
the following requirements –

1. 
   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. A helpful decision in this regard is Electrolux (Pty) Ltd v
   Khota and Another, 1961 (4) SA 244 (W), with its reference at p 247
   to the entrusting of possession of property with the indicia of
   dominium or jus disponendi.

   
   

2. 
   The representation must have
   been made negligently in the circumstances.

   
   

3. 
   The representation must have
   been relied upon by the person raising the estoppel.

   
   

4. 
   Such person’s reliance upon
   the representation must be the cause of his acting to his detriment.
   As to (iii) and (iv), see Standard Bank of SA Ltd v Stama (Pty)
   Ltd., 1975 (1) SA 730 (AD).'"

   
   

This
test has been consistently followed by the courts and was reaffirmed
in Quenty’s Motors (Pty) Ltd v Standard Credit Corporation Ltd 1994
(3) SA 188 (A) at 198-199 and in particularly at 199 C-G in the
following terms:

“In the Electrolux case
referred to by Holmes JA, Trollip J said at 247 B-E:

‘To give rise to the
representation of dominium or jus disponendi, the owner’s conduct
must be not only the entrusting of possession to the possessor but
also the entrusting of it with the indicia of the dominium or jus
disponendi. 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…;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….In all such cases
the owner“provides all the scenic apparatus by which his agent or
debtor may pose as entirely unaccountable to himself, and in
concealment pulls the strings by which the puppet is made to assume
the appearance of independent activity. This amounts to a
representation, by silence and inaction…as well as by conduct, that
the person so armed with the external indications of independence is
in fact unrelated and unaccountable to the representor, as agent,
debtor, or otherwise.

(Spencer Bower on Estoppel by
Representation at 208).'

Trollip J said further (at 247
in fine – 248 in pr):

'…It follows that to create
the effective representation the dealer or trader must, in addition,
deal with the goods with the owner’s consent or connivance in such
manner as to proclaim that the dominium or jus disponendi is vested
in him; as for example, by displaying, with the owner’s consent or
connivance, the articles for sale with his own goods. It is that
additional circumstance that provides the necessary “scenic
apparatus” for begetting the effective representation.’”

In
the context of an attempted reliance on estoppel by conduct in
respect of a motor vehicle subject to instalments sale agreements,
the Supreme Court of Appeal in South Africa in Info Plus v
Scheelke and Another 1998 (3) SA
184 (SCA) at 194 –195 held as follows:

“The requirements for a
successful reliance on estoppel in the context under consideration
have been set out in a number of decisions of this court. See, for
example, Quenty’s Motors (Pty) Ltd v Standard Credit Corporation
Ltd 1994 (3) SA 188 (A) at 198-9. The first requisite is that there
must be a representation by the owner (or possessor) that the person
who disposed of his property (‘the defrauder’) was the owner, or
entitled to dispose, of it. In most cases, of course, the ultimate
representation is made by the defrauder. The real question then is
whether the conduct of the owner effectively contributed to the
making of that representation.

In casu the second defendant did
not rely upon a representation that, apart from ownership, the jus
disponendi of the Mercedes vested in Sharman Motors. As has
appeared, Gavin represented to the second defendant that Sharman
Motors was the owner of the vehicle. No doubt the prior delivery of
the vehicle to Sharman Motors causally assisted Gavin in making that
representation, but the mere delivery of property by one person to
another does not by itself constitute a representation that the
latter is the owner (or is entitled to dispose) thereof: Electrolux
(Pty) Ltd v Khota and Another 1961 (4) SA 244 (W) at 246H, cited with
apparent approval in Oakland Nominees (Pty) Ltd v Gelria Mining and
Investment Co (Pty) Ltd 1976 (1) SA 441 (A) at 452E, and Konstanz
Properties (Pty) Ltd v Wm Spilhaus en Kie (WP) Bpk 1996 (3) SA 273
(A) at 286E. Nor does the fact that the transferee is a dealer or
trader in the particular commodity transform the transfer of
possession into such a representation. As was said by Trollip J in
Electrolux at 247-8:

‘…to create the effective
representation the dealer or trader must, in addition, deal with the
goods with the owner’s consent or connivance in such a manner as to
proclaim that the dominium or jus disponendi is vested in him; as for
example, by displaying, with the owner’s consent or connivance, the
articles for sale with his own goods. It is that additional
circumstance that provides the necessary “scenic apparatus” for
begetting the effective representation.’

Apart from placing Sharman
Motors in possession of the Mercedes the appellant did nothing that
could have created the impression, vis-à-vis the second
defendant, that the dominium of the vehicle vested in Sharman Motors.
Hence I do not think that the first requirement set out above has
been satisfied.”

See
also: Konstanz Properties (Pty) Ltd v Wm Spilhaus &
Kie 1996 (3) SA 273 (A) at 288.

Grosvenor Motors
(Potchefstroom) Ltd v Douglas 1956 (3) SA 420 at 428 F-G.”

I
accept this exposition of the law by the Court a quo as correct and
appropriate.

3. Mr
Smuts for Standard Bank however also relied on the following passage
from B&B Hardware Distributors (Pty) Ltd v
Administrator, Cape, 1989 (1) SA
957 (A) at 964:

“In order to found an
estoppel, a representation must be precise and unambiguous.”

I
do not agree with this dictum and do not believe that it should be
followed in Namibia. I fully agree with the criticism contained in
the book – “Law of Estoppel in South Africa” by the Honourable
P J Rabie, former Chief Justice of the Republic of South Africa,
where he says:

"As will be shown below, in
South African law an estoppel can be based on a representation
by conduct if the representee can show that he reasonably understood
the representation in the sense contended for by him and that
the representor should have expected that his conduct could mislead
the representee. It is not required that he must show that the
conduct in issue amounted to a precise and unequivocal
representation. In B & B Hardware Distributors (Pty)
Ltd v Administrator, Cape the court said, referring to an
alleged representation by conduct, that a representation on which an
estoppel is founded must be precise and unambiguous. The court
referred to Hartogh v National Bank and to Southern
Life Association Ltd v Beyleveld NO and failed to note
that in those cases the rule that a representation must be precise
and unambiguous was mentioned in connection with representations made
by words.

In South African law a person
can found an estoppel on a representation by conduct if he reasonably
understood it in the sense contended for by him and if, at the same
time, the representor should reasonably have expected that his
conduct could mislead the representee. It follows from this that the
rule that a representation must be precise and unambiguous if it is
to be capable of founding an estoppel can, at most, be considered to
be of application to representations made in words. It is submitted,
however, that the rule that a representation must be precise and
unambiguous is, even if it were limited to representations in words,
an unsatisfactory one. Experience teaches that representations made
in words can sometimes be reasonably capable of more than one
meaning, but according to the rule that a representation must be
precise and unambiguous, no estoppel can arise in such a case. If
the rule applicable to representations by conduct were made
applicable to representations made in words, a representee would be
able to claim an estoppel if he reasonably understood the
representation made to him in the sense contended for by him and if,
in addition, the representor should reasonably have expected that the
representation made by him could mislead the representee."

It
will be noted that Rabie ACJ, as he then was, wrote the judgment from
which Mr Smuts took the quotation. The criticism of that dictum
quoted above, is made by the same learned jurist when he wrote his
above quoted book on estoppel.

4. It
is also made clear in the above treatise that “a person can also
base an estoppel on a representation that was not made to him
personally, but to the public or class of persons of which he was a
member at the material time if the representation came to his notice
and he acted on the faith thereof.”¹

5. It
must also be pointed out that in the Electrolux case, Trollip J said
in a dictum quoted with approval in the Quenty’s Motors decision,
and referred to in the Konstanz Properties decision, that the indicia
of dominium or jus disponendi,
“may be documents of title and/or authority to dispose of the
articles…….²

In
Kajee v H M Gaugh (Edms) Bpk,
a full bench decision of the Natal Provincial Division,³
the fact that the owner delivered the vehicle to a buyer and at the
same time assisted the buyer to obtain registration of the vehicle in
the buyers name together with a piece of paper titled “Order
Contract” indicating the payment in cash of the purchase price,
constituted such iudicia of dominium
or jus disponendi.

In
actual fact the buyer had given the owner a cheque which was
dishonoured. The buyer however told the owner that the cheque would
be honoured and produced his chequebook as proof. The said buyer
immediately resold the vehicle without paying the amount due to the
owner.

When
the owner tried to vindicate the vehicle, the new purchaser raised
the defence of estoppel. The Court found that the owner could
foresee as a reasonable possibility, that the original purchaser, who
was unknown to him, would not meet the cheque and could resell the
vehicle. The owner/seller was thus negligent. In the result, the
innocent purchaser, who bought the vehicle from the original
purchaser, succeeded in his defence of estoppel.

It
must be obvious that if the owner/seller, does in fact know or has
reason to suspect that the buyer has a shady past, with a record of
selling encumbered vehicles fraudulently, and nevertheless sell to
such person on credit, such conduct would amount to culpa, but in the
form of recklessness, aggravated by not even taking any deposit.

In
another decision, referred to by Mr Heathcote, namely Ross
v Barnard⁴,
it was held:

“Ordinarily
where an owner has entrusted property to another, or known that
another has his property with knowledge of his ownership, the only
risk of disposal of his property to a bona fide
purchaser is the likelihood of a dishonest act by the possessor.
In such cases ordinarily the proximate cause of the prejudice to the
bona fide purchaser is the dishonest act of the possessor. Here
what the owner might anticipate was not a possible dishonest act by a
possessor, but an almost certain sale by a possessor who claimed the
right to sell, whose business it was to sell and to whom the
general public came to buy…”

“On the test given by de
Villiers JA in that case, it can I think only be said that the
purchaser was led to believe that the garage had the right to sell.
And I think that the proximate cause that Dr Barnard bought the car
was that Mrs Ross failed to give any indication to Mr Ruysenars that
his belief that he was entitled to sell the car, may not be
well-founded.” (My emphasis added)

The
distinction between a case where the owner's goods are unexpectedly
removed or alienated in a theftuous or fraudulent manner by an
intermediary and where this is not the position, was again drawn in
the decision of the South African Appellate Division in the Konstanz
Properties case.⁵

The
distinction was also emphasized in Boland Bank v Joseph and
Another, where the Court said:

“In
the present matter the applicant had substantial previous dealings
with Lenbou and had no reason to doubt the honesty of those
conducting its business affairs. Against this background it accepted
the assurance of Hamlett and could not have been said to have been
culpably negligent in so doing.”

It
was held in this decision that the Bank (Boland Bank Bpk) had not
been shown to have been culpably negligent in trusting the motor
dealer (Lenbou Motors (Pty) Ltd) because it had known that dealer for
a long time without that dealer having committed any dishonest
actions and thus the Bank had no reason to doubt the honesty of the
said motor dealer and its officials. The Bank was therefore not
culpably negligent in not taking steps to ensure that members of the
public were not deceived into believing that the motor dealer had the
right to dispose of the vehicle. The Bank was therefore not estopped
from asserting such a right.

It
follows that if the Bank, as in the instant case, knew, or should
have known that the dealer was a crook, the result would have been
the opposite. It follows also that even if the crookedness of the
dealer is discovered after the transaction between the Bank and such
person, the duty of care will continue and so also the need to
continue to take steps to prevent harm to innocent buyers who may
believe that the dealer has the right to sell.⁶

The
instant case differs from the facts of Kajee v Gough,
Ross v Barnard and Boland Bank
in one fundamental respect. Here the owner either knew at an early
stage of the dishonesty of Pretorius or should have known. The owner
thus could not have reasonably believed that Pretorius will not sell
the vehicle whilst still encumbered. Even if it is assumed in favour
of the Bank that at the stage when it sold the vehicle to Pretorius,
it could reasonably believe that Pretorius will not sell the vehicle
whilst encumbered, that belief could not be sustained when Standard
Bank on 4^th April 2000 received reliable information that
Pretorius is a fraudster, notorious for precisely that sort of fraud
– selling vehicles whilst still encumbered and then pocketing the
proceeds. There then arose a duty of care towards members of the
public who were potential buyers and thus innocent third parties and
an urgent need to take reasonable steps to prevent prejudice to such
innocent third parties.

The
instant case however does not only differ from Kajee v
Gough and Ross v Barnard in this
respect, but also from all the other decisions referred to by the
Court a quo and by
counsel in that Court and before us on appeal.

It
is thus necessary before I proceed with the final evaluation of the
Court a quo’s
judgment, to analyse carefully the special circumstances and facts
applicable in the instant case.

IV: THE
RELEVANT CIRCUMSTANCES AND FACTS:

1. During
or about June 1999, Pretorius approached one Vermeulen of Standard
Bank’s Ausspannplatz branch in order to obtain an overdraft
facility for A.B.L.E TRADING. The overdraft facility was granted for
a limited period, on the strength of an invoice according to which
Rössing Uranium had to pay ABLE TRADING COMPANY, N$1.5 million.
The Bank granted this facility without enquiring from Rössing or
verifying from any other source whether or not the alleged
transaction would indeed yield N$1.5 million. When the Bank for the
first time enquired approximately 20 months later, i.e. during
February 2001, Rössing informed the Bank, without raising any
problem, that the amount due was not N$1.585 000 as alleged by
Pretorius, but N$6380 for a single item, being the repair of a Gear
and Shaft.

2. The
company ABLE, was purportedly doing business in buying and selling
mining equipment. Standard Bank sold two or three motor vehicles to
ABLE, one of which was the motor vehicle resold by Pretorius to
Eysselinck. Pretorius was the sole shareholder and managing director
of ABLE as well as surety and co-principal debtor. The business of
ABLE, in particular the payments due on the vehicle, were financed by
the overdraft provided by Standard Bank.

As
Eysselinck and his counsel argued, Pretorius paid Standard Bank with
monies provided by Standard Bank.

3. Towards
the end of March 2000, Auto Toy Store applied to Standard Bank for
approved status as a motor dealer. The company had been incorporated
as such on 24.2.2000. This private company just as in the case of
ABLE, was in effect owned by Pretorius. Once again he was the sole
shareholder, managing director and surety and co-principal debtor.
He conducted the business of the company.

Standard
Bank was, according to witnesses testifying on its behalf,
disinclined to grant Auto Toy Store approved dealership, because it
was a new player in the field and also because certain information
concerning Pretorius came to the knowledge of Mr Blaauw, the head of
Standard Bank’s Stannic Division.

The
most explicit information was an e-mail forwarded to Blaauw of
Standard Bank by a Mr Chris Hastings employed by South African
Standard Bank dated 4 April 2000. It was quite clear this
communication related to a prior enquiry by Standard Bank Namibia.
The e-mail was marked as “IMPORTANCE – High” and read as
follows:

“Attie Maritz investigated a
case against Okkie (OP) Pretorius during July 1987 for advertising
and selling encumbered vehicles – belonging to banks and also
obviously Stannic.

He then also investigated
Exclusive Toys for Boys during 1995 (Okkie) for trading Stannic
vehicles, selling same, but not settling the amounts in respect
thereof. I obtained settlements for an amount of R352 000 from
various accounts from him during May 1995 – months after he had
traded and sold it. Toys for boys were never an approved dealer as a
result of Attie’s investigation.

Shortly thereafter, he fled the
country. It was widely published in the press at the time.

Chris, that is what I know about
Mr Pretorius and my recommendation to Stannic Namibia is not to sign
him as an approved dealer – you know the story about a leopard and
his spots…”

Notwithstanding
the aforesaid information on 4 April 2000, Standard Bank granted Auto
Toy Store, a qualified dealership status. The dealership was
qualified in that it was limited to deals with Standard Bank’s own
customers who wished to purchase vehicles from Auto Toy Store and was
subject to conditions that would protect the Bank’s customers and
ensure they would not be evicted in respect of the vehicles bought.
It is significant that apparently no thought was given to steps to
protect members of the public who were not clients of Standard
Bank.

During
August 2000 (according to the judgment of the Court a quo),
“at a meeting where the relevant divisions of the Banks were
present, the business of Auto Toy Store (Pty) Ltd was discussed in
passing. The representative of First National Bank indicated that
her bank did not deal with Auto Toy Store at all. According to
Blaauw, the representative of Standard Bank, he did not even respond
as the matter was mentioned in passing and that at that stage the
relationship with his Bank had been terminated."

The
aforesaid limited dealership was withdrawn by Standard Bank on 18^th
July 2000. The reason as stated by the Court a quo
was:

“…after information reached
the plaintiff that irregularities were occurring in respect of
deposits paid on deals to Auto Toy Store (Pty) Ltd or Pretorius.”
(It is noteworthy that the court at this stage of its judgment
apparently accepted that Auto Toy Store (Pty) Ltd was essentially
synonymous with Pretorius).

The
reason given by Blaauw, a senior manager of Standard Bank when he
testified in the Court a quo
was:

“…My Lord, we were closely
monitoring this because given the warnings we had from South Africa
and the question or the fact that the snake could again rear its
head. We were closely monitoring this and when it came to light it
wasn’t one of our customers but we were informed that he took
deposits that were not returned to customers. And then suddenly the
lights began flashing and turning red and we said look, this is what
we were waiting for. Lets kill this before it hurts our customers
and so that we just follow such. Because we are in the risk business
but risk has a certain or certain limitation or certain limits.”

The
following further questions and answers appear from the record:

Q: “You
didn’t want to take any further risk?”

A: “That’s
right My Lord.”

Q: “For
your customers?”

A: “That’s
correct.”

When
asked by counsel for Standard Bank to respond to argument on behalf
of Eysselinck – that given Pretorius's history, the Bank should
have known that Pretorius could have sold the vehicle to Eysselinck,
Blaauw replied:

“It
could have happened yes. He could have sold that vehicle at any
day..”

Blaauw
however contended throughout that as long as Pretorius paid his
instalments on the vehicle bought by ABLE, the Bank had no power to
interfere and “there was no ways that we would have known it
unless the amount was settled with us.”

Furthermore
Blaauw contended that the Bank could not act to prevent it unless
there was a breach of the contract with ABLE.

Questioned
on the issue of the realization that Pretorius was the real risk,
Blaauw conceded that it “doesn’t matter in which form he comes
…whether he comes in the form of a company, or a cc..”

He
further conceded that “the snake” and “the leopard” referred
to by him continued to be Pretorius. He explained that what he meant
by the snake rearing his head again was that “he is going to do
what he had done in the past.”

Blaauw
was further asked:

Q: “And you must have foreseen
otherwise you would have continued doing business with him that if
the opportunity arises (he) is going to repeat his old tricks?”

A: “We foresaw that yes.”

Blaauw
further testified that the Bank did take steps to protect their own
customers against the risk but took no steps to protect persons who
were not customers of the Bank.

The
following questions and answers crystallize the attitude of the Bank.

Q: “So you say that before you
can protect somebody when you let your vehicle in possession of a
crook, a fraudster, he must be a customer of you.”

A: “No My Lord, that was not
my intention – I didn’t leave the vehicle in possession of a
crook to catch out on an innocent third party, that was not our
intention at any stage of this whole saga.”

Q: “But you must accept that
in the normal course of events if Mr Eysselinck came to the shop Auto
Toy Store and there was part of the lot this vehicle, he would
have accepted the vehicle can be sold to him?”

A: “He could have done that
he took the risk – he went there out of his own free will – he
took the risk on him. That is what happened.”

Blaauw
also admitted that he knew, that all Pretorius needed in order to
give transfer, was the licence registration documents, and he knew
that those registration documents, were placed by Standard Bank in
possession of Pretorius.

As
an excuse for the alleged practice of his bank and that of other
banks, he said:

“Because a duplicate can be
easily obtained so that could defeat the objective of the exercise.”

Greef,
the manager: Credit Control of Standard Bank testified as follows
when it was put to her in cross-examination that if Standard Bank
took the trouble to enquire from Standard Bank South Africa, Standard
Bank would have informed Standard Bank Namibia of the shady past of
Pretorius: "I agree, but cannot answer whether they
did or not.”

She
also agreed that “in normal circumstances if this
information is available, then no go, the Bank wouldn’t do
business.”

It
was then put to her: This is so “because it is obviously such a
risk to the Bank’s own clients and to the public at large
that you simply would refuse to do business with such a fraudster, do
you agree?

A: “I
agree.”

This
testimony must be seen against the background of information
reflected in explicit newspaper stories in various South African
newspapers, inter alia
in “The Star” in 1997.

Greef
agreed that it did not matter whether the company’s name is ABLE
TRADING, AUTO TOY STORE, once the name Pretorius comes up – “the
red lights go on". However she contended that at the time when
the agreement was entered into with ABLE TRADING, “those facts were
not known to us.”

She
conceded that the Bank accepts it has a duty to organise it so as to
avoid the kind of malpractices discussed not only to its own
customers, but to the public at large.

4. There
was also evidence that Pretorius traded at the same premises with
motor vehicles under another name, prior to the name Auto Toy Store
(Pty) Ltd being registered.

5. The
history of the overdraft facility was summarized by the Court a
quo as follows:

"During May 1999 first
defendant was granted overdraft facilities on the basis of an alleged
transaction with Rössing Uranium Mine. This facility was
extended to 30 June 1999 on the basis of this transaction which
Pretorius indicated exceeded N$1.5 million. Thereafter this facility
was extended on various occasions. In the meantime financial
statements were also called for during July 1999. Despite repeated
reminders by the time it came to April 2000, neither the Rössing
deal nor the financials had realized. Subsequent to April 2000,
further extensions were granted. It would appear that sometime
during June 2000 financial statements were provided. The overdraft
limit was again extended pending the Rössing transaction. This
portion was renewed virtually on a monthly basis but always extended
on the basis of the Rössing deal. In fact, the overdraft was
called up and cheques dishonoured during September and beginning of
October 2000. After a lawyer intervened on behalf of Pretorius, the
overdraft was reinstated pending the Rössing deal. Prior to
the cheques being dishonoured second defendant bought the
vehicle. Needless to say, the matter just continued as before and on
29^th November 2000, the overdraft was again called up and
as from December 2000 cheques were dishonoured. On 8^th
January 2001 the account was placed in “lock-up”, which as I
understood, meant that it would be referred to plaintiff’s legal
department so that steps could be taken so as to attempt to collect
the amount due.

From June 1999 when the
transaction with Rössing was mentioned up to the 8^th
January 2001 (the date of lock up) no one from the Bank bothered to
check with Rössing whether there was in fact such a transaction
as alleged by Pretorius. Not surprisingly, when this matter was
eventually, during February 2001, taken up with Rössing the deal
was for just over N$1.500 and not N$1.5 million.

I have no doubt that the bank
was negligent in the way it allowed this continual extension of the
overdraft based on the Rössing deal without reference to
Rössing. Here it must be born in mind that the April 2000
information received from South Africa specifically referred to the
fraud allegedly committed by Pretorius and more specifically to him
selling encumbered vehicles and pocketing the monies in respect
thereof. Furthermore as a result of new information in the same vein
relating to misappropriation of deposits paid on vehicles, the Bank
during July 2000 cancelled the limited agreement they had with Auto
Toy Store (Pty) Ltd. In these circumstances I would have expected
the Bank to have taken more care prior to, basically routinely, and
based on the ipse dixit of Pretorius extend his overdraft
facilities."

(My emphasis added.)

It
must be noted that the statement – “Prior to the cheques being
dishonoured second defendant bought the vehicle,” is incorrect.
The vehicle was bought on 17 October 2000 and the cheques, according
to the judgment above quoted, began to be dishonoured in September
2000.

On
24^th November 2000 the story about Pretorius’s
fraudulent dealings broke in the Namibia press and some of his
fraudulent activities became public knowledge.

6. In
the application by Standard Bank to the High Court for return of the
vehicle Ms Greef, manager of Credit Control of Standard Bank, inter
alia stated in the founding
affidavit dated 4^th March 2001 on behalf of Standard Bank:

“The said Pretorius is the
same Pretorius who has recently become notorius as a result of
various fraudulent motor vehicle transactions either he or his
business concerns have been involved with. It has now become
common knowledge that Mr Pretorius left Namibia under suspicious
circumstances but that he has been arrested and kept in custody in
the Republic of South Africa on account of various fraudulent charges
that are presently investigated against him in that country.”

“Since the departure of Mr
Pretorius from the Republic of Namibia and since the first respondent
(ABLE) has ceased with its operations various judgments have been
granted against the former’s business concern which have remained
unsatisfied for a substantial period of time.”

When
Pretorius absconded, a substantial part of the amount owing at the
time of purchase, being N$278, 743.20, was still owing to Standard
Bank.

It
is apparent from this affidavit, that the whole aforesaid balance was
payable in instalments of N$4 645.72 per month and that no provision
whatever was made for any cash deposit payable.

6.1 The
Bank thus took a grave risk, also in regard to this particular
transaction. It is quite clear from the above and the testimony
given at the trial in the Court a quo,
that not only could Standard Bank have discovered with the minimum of
exertion at the very beginning that the overdraft was obtained by
fraud, but would have established Pretorius’s fraudulent modus
operandi from their colleagues
in Standard Bank South Africa. That bank was designated in clause
3.1 of Standard Bank’s contract with ABLE as its agent for the
purpose of paying monies due to Standard Bank in Namibia in terms of
its contract with ABLE.

6.2. It
is clear from the above that Standard Bank knew at a relatively early
stage, that it was dealing with a callous and devious fraudster.
With ordinary and reasonable care Standard Bank could have made this
discovery much earlier, if not at the very beginning of heir
relationship. What Standard Bank however managed to do, was to
clothe Pretorius with the cloak of respectability and reliability and
to finance and launch this fraudster, with his particular expertise
in selling vehicles whilst still the property of Banks and other
financial institutions and then pocketing the proceeds. Even after
receiving credible information and experiencing Pretorius’s
continuous default, the Bank only took some steps to safeguard itself
and its own customers, but continued its relationship with Pretorius
without taking any steps whatever to protect other members of the
public, who are innocent third parties.

7. The
business premises of the ABLE TRADING and AUTO TOY STORE were
situated in the same street, namely Newcastle Street.

7.1 The
domicilim citandi executandi
of both companies was the same, namely 6984 Newcastle Street,
Northern Industrial Area, Windhoek which was the physical address of
ABLE TRADING.

7.2 Standard
Bank knew at all times where the business premises of Pretorius were
situated.

7.3 The
premises were within easy reach of Standard Bank should its officials
have wished to visit it at any stage.

7.4 The
business premises of AUTO TOY STORE had impressive premises to the
knowledge of Standard Bank.

8. The
vehicle bought by Eysselinck, was exhibited by Pretorius as one of
his vehicles for sale at the premises of AUTO TOY STORE.

8.1 It
was at the said premises where Eysselinck noticed the vehicle, where
it was offered to him for sale and where it was bought by Eysselinck.

9. Eysselinck
had no knowledge whatsoever that Standard Bank had any interest in
the vehicle at any time when he bought it or at any time when he paid
the purchase price. The first time that he was apprized of such
interest, was when he was contacted on 28^th February 2001
by Greef, an official of Standard Bank, to claim the return to
Standard Bank of the vehicle.

10. Standard
Bank at no stage took any steps to inform the public at large of its
interest in this vehicle and to its knowledge, an innocent member of
the public had no protection, should Pretorius sell the vehicle to
such member, before payment of the balance due to Standard Bank.

V: THE
POWERS OF STANDARD BANK TO ACT IN TERMS OF ITS CONTRACT WITH
PRETORIUS AND HIS COMPANY ABLE TRADING:

The
contract between Standard Bank and Able Trading had the following
sections and provisions:

(i) A
section dealing with the terms and conditions of the agreement; and

(ii) A
section dealing with the terms of the suretyship.

The
relevant clauses of the first section are:

CLAUSE 4.1: OWNERSHIP:

“Notwithstanding the delivery
and transfer of possession of the goods to the purchaser, ownership
thereof shall remain vested in seller until purchaser has discharged
all purchaser obligation hereunder.”

CLAUSE 6.3

“The goods shall not without
sellers prior consent (and then subject to such conditions as seller
may stipulate) be removed from the area which formed the Republic of
Namibia on 21 March 1990.”

CLAUSE 7.3

“Seller, its servants and/or
agents may at all reasonable times inspect the goods on any premises
where they are kept.”

CLAUSE 10

“Notification to the
Landlord.

If the goods are to be kept or
stored at any time at premises not owned by purchaser, purchaser
shall immediately and from time to time as may be necessary notify
seller in writing of the name and address of the owner of such
premises, and purchaser shall, and (seller may) similarly notify the
Landlord of sellers ownership of the goods.”

CLAUSE 12: BREACH

“12.1 An event of default
shall occur if purchaser –

1. 
   defaults in the punctual
   payment of any of the payables; or

   
   

2. 
   commits any breach of any of
   the terms hereof or of any other agreement between the parties
   (all of which are agreed to be material)……

   
   

9. 
   Generally does or omits to do
   anything which may prejudice the sellers rights in terms of this
   agreement or cause seller to suffer any loss or damage…."

   
   

The
reason for clauses 12.1.2 and 12.1.9 is obvious. Agreements may be
technically separate but substantially interlinked as in the instant
case where the Bank did business with nominally two companies – but
they were one-man enterprizes, owned and driven by the same person,
where the default in one affects the other and where dishonesty and
fraud by that person, permeates the whole business relationship and
affects the whole business relationship.

It
is in such cases where the remedy lies in invoking clauses 12.1.2 and
12.1.9 and where it becomes prudent if not imperative, to invoke
those clauses.

It
is obvious that:

1. If any enquiry was made about
the Rössing deal before granting the overdraft, Pretorius would
have been exposed as the crook that he is and there would have been
no business with him and no further fraud on Standard Bank and
Eysselinck.

2. If an enquiry was made at a
later stage, e.g. when the e-mail from Standard bank, South Africa
was received on 4^th April 2000 exposing Pretorius,
Standard Bank would have been entitled in terms of clause 12.1.2 to
cancel any or all the agreements with Pretorius and Able Trading and
again, Pretorius would not have been able to defraud the Bank and
Eysselinck.

There were many occasions apart
from the above instances, when the agreement could have and should
have been cancelled. So eg:

1. 
   When the meeting between
   representatives of various Namibian Banks were held, whether or not
   it was in August 2000 or already in 1999, information was given that
   some other Banks refused to do business or further business with
   Pretorius, due to his shady past. That in itself should have been a
   spur to Standard Bank to make conclusive enquiries and act on it.

   
   

The
fact is that Pretorius removed the vehicle in question at some stage
from the premises of Able Trading to that of Auto Toy Store before
the sale to Eysselinck. That act constituted a breach of another
very important term of the contract, being clause 10, read with
clause 12.1.2 and 12.1.9.

The
argument that Standard Bank did not know of this breach, is
unconvincing. The whereabouts of the vehicle could have been
established by asking Pretorius about it and inspecting the premises
of Able Trading in terms of Clause 7.3.

The
duty of Standard Bank to make such enquiry became pressing at least
when on 4^th April 2000, the fraudulent activities of
Pretorius in regard to taking in second hand motor vehicles, was
pertinently brought to the notice of Standard Bank. That should have
alerted Standard Bank and shocked it into action even before
Eysselinck was defrauded.

A
simple enquiry about the whereabouts of the vehicle and/or an
inspection of the premises, would have indicated to Pretorius that he
was not dealing with a Bank who would be easy to defraud. A system
of regular inspections of the venue where vehicles bought from the
Bank are required to be kept, would have been prudent and reasonable
measure to protect not only the Bank and its customers, but the
public at large, particularly in a case where, as here, the dealer’s
fraudulent past was known. But once again, the Bank's officials and
representatives, did not avail themselves of this available and
obvious remedy and preferred to plead helplessness and ignorance of
the fraudster’s movements. Even if action was taken which was too
late to prevent the sale to Eysselinck, some of the loss to him could
have been averted if timeous action was taken by Standard Bank, e.g.
the large amounts of cash paid by Eysselinck to Pretorius subsequent
to the sale, in order to comply with his obligations to Pretorius and
his company Auto Toy Store, could have been prevented.

(ii) The continuous failure of
Pretorius to produce financial statements and to honour undertakings
given, was not only breaches of trust but breaches of express and/or
implied conditions of the financial facilities provided.

(iiii) When cheques were
dishonoured during September and the beginning of October, these
non-payments again constituted breaches of clauses 12.1, 12.1.1,
12.1.2 and 12.1.9 of the agreement. This took place before
Eysselinck bought the vehicle from Pretorius on 17^th
October 2000.

When
considering the aforementioned breaches, the full picture must be
kept in mind. This was not a case where a client of a bank committed
one or more breaches by not paying one or more instalments or by
paying late. This was a case where these breaches were committed by
a client who, according to reliable information, was a fraudster –
a “snake” who could strike at any time”, a “leopard who does
not change his spots.”

VI: AN
ANALYSIS OF THE ARGUMENT

1. THE
   REGISTRATION IN THE NATIS OFFICES

   
   

Standard
Bank had provided Pretorius with the registration papers indicating
his Company “ABLE” as the “owner”, and leaving the space open
provided on the NaTis registration certificate for “title holder”.
Pretorius then arranged for Eysselinck to be registered as owner and
title holder at the NaTis offices. (NaTis is the abbreviation for
Namibia Traffic Information System and is provided for by law).

The
Court pointed out that “the regulations (contemplate and are
entirely premised upon) a dual form of registration – in the
context of instalment sale agreements of the present nature – in
the registering authority. The regulations specifically provide for
the separate registration of a title holder and owner. Mr
Tjozongoro, the manager of the authority registering vehicles in his
evidence explained that this was done in order to seek to make the
system of registration operate on the same basis as in South Africa.”

For
some obscure reason, at the time of judgment, the regulations,
according to the Court, provided in subsection (2) that until a date
determined by the Minister in the Gazette, “the ‘title holder’
is to be construed as a reference to the owner of a vehicle and the
owner of a vehicle is to be charged with all the duties and
responsibilities imposed upon a title holder under the provisions of
the regulations.

As
was confirmed by Mr Tjonzongoro, the Government of Namibia has not
implemented the two concepts of title holder and owner in the
registration of motor vehicles. He further confirmed in his evidence
that such separate registration is not in place and is not possible
within his registering authority. Accordingly, certificates issued
by the registering authority in Namibia, will only contain
particulars of owner as defined.

The
Court correctly pointed out that according to the evidence, “a
person thus recorded as ‘owner’ of a vehicle, would be able to
hold out, by virtue of that certificate, that he or she is owner of a
vehicle and seek to transfer it".

Why
the Minister had failed to determine a date for the contemplated
implementation of the above stated dual system, was not explained in
Court. The proviso referred to as subsection (2) of the regulations,
is ambiguous and confusing, and is in need of urgent amendment.

As
the regulations stand with aforesaid proviso in place, it designates
a person an owner when such person is not. In my respectful view, it
can only contribute to fraud, as was the result in the instant case.

2. AVAILABLE
REMEDIES:

Mr
Tjozongoro also testified that there were other remedies for owners
in position of Banks, such as withholding of the registration
certificate, from the buyer, until full payment has been made or even
registration in the name of the real owner.

The
Court held that whatever the legal position may be, the registration
authorities function in this way – i.e. only register a person as
“owner” – come what may. This then is also the manner in which
“all the banks operate” and this was indeed “the only manner
acceptable to the authorities.”

The
Court continued to hold that

“the fact that the vehicle was
registered in the name of the first defendant was thus no indication
that first defendant could dispose of the vehicle given the
legislature backdrop to this registration and was in any event not a
representation by plaintiff, but by the registering authorities.”
(My emphasis added).

The
administration certainly deserve part of the blame, but I cannot
agree with the total exoneration of the Bank. Could one not at least
expect from Banks and Financial Institutions, registered under
Namibian laws and playing a very important role in any society, to
take up such a matter with the authorities and apply pressure to
rectify it, or to devise a practice such as suggested by Tjozongoro,
to protect innocent third parties? Instead of all the Banks
operating in this manner, as the Court accepted, why should they make
use of a practice they know or should know, and so contribute to
fraudulent and criminal transactions?

I
also cannot see why the Bank and the Court should shrug off the
suggestions made by Mr Tjozongoro as possible alternatives. So eg.
for the Court to say that a witness had commented that it could not
be of any use for the owner to keep the registration papers, is no
reason for the Court to reject the suggestion.

However,
if this cannot be done, the Banks, in the exercise of the necessary
foresight and reasonableness, must be aware, that the issued
registration certificate will amount to a fraudulent
misrepresentation, and that, for that very reason, other and
additional precautionary measures must be taken to protect their own
interests, as well as that of innocent third parties.

3. The
Court failed to place any blame on the Bank in this regard but
instead used this fraudulent system to blame Eysselinck, and
Eysselinck alone, for his loss and prejudice. The Court also stated
that Eysselinck must have been aware that his registration
certificate did not correctly reflect ownership and consequently, he
could not rely on the certificate wherein one of the Pretorius
companies was designated as owner. That may be correct. The
difference is that he knew that he had to pay within three months and
he did so. But when Pretorius sold the vehicle to him, Pretorius
sold the vehicle on the premises of his dealership, and acted in
other respects as a person or a company with the necessary dominium
and/or jus disponendi.
In this representation, Pretorius was assisted by Standard Bank’s
act of delivery, the financing of Pretorius, the refusal to blow his
cover as a crook, in addition to the handing over of the certificate.

4. The
Court further contended:

1. 
   “The only question that
   remains is whether the plaintiff should have done something after
   they received the information bout the character of Pretorius….
   'Hindsight is the most exact science but cannot play any role in
   the enquiry'."

   
   

Comment: That
is correct. But no one relied on “hindsight,” but rather
insisted on foresight.

2. 
   “Here it must be borne in
   mind that the first defendant was the purchaser of the vehicle and
   that this vehicle was fully paid up until March 2001 or shortly
   before that date.”

   
   

Comment: The
payment, for as long as it lasted, was primarily dependant on an
overdraft which was fraudulently obtained and by minimal diligence,
would never have been granted.

3. 
   “To have expected plaintiff
   to have placed advertisements in the press is simply unrealistic
   when plaintiff only had information and could not prove the factual
   basis for the suspicion.”

   
   

Comment: I
have indicated in section V, several steps that could have
been taken, other than the one here suggested.

However,
in regard to the suggestion of advertisements, the information was
reliable but if not, the slightest effort at further investigation
would have brought forward sufficient and reliable information and/or
evidence about the fraudulent activities by Pretorius in South
Africa.

As
far as Namibia is concerned, a call to Rössing about the N$1.5
million, would immediately have disclosed the fraud committed by
Pretorius at the very outset. Surely then, an appropriate
advertisement was justified, not necessarily defaming Pretorius, but
warning the public that certain vehicles with certain Registration
numbers and description presumably in possession of Pretorius, are
the property of Standard Bank and that the public must take care not
to buy such vehicles, without the consent of Standard Bank.

4. 
   “There is no evidence that
   plaintiff knew the vehicle was displayed at Auto Toy Store as being
   for sale.”

   
   

Comment: It may be true
that Standard Bank did not know. The problem is that Standard Bank
would not know if it does not make use of its powers to inspect the
address where the vehicle must be kept in terms of the contract
between the parties. The Bank will also not know if they do not even
ask their client, where the vehicle is kept. Surely that is the
least the Bank and its officials could have done when it received the
4^th April 2000 e-mail. Or can the Bank still shield
behind a policy of “ignorance is bliss”.

5. 
   “He also knew from the
   documentation delivered to him with the vehicle that the original
   purchaser was first defendant (i.e. ABLE TRADING) and not Auto Toy
   Store (Pty) Ltd.”

   
   

Comment: Yes, he must
have known that the first purchaser was, technically speaking, the
Pretorius private one-man company, completely owned and controlled by
Pretorius and Auto Toy Store, a similar company.

Every person with reasonable
intelligence would have regarded Pretorius, as the human being doing
these business deals. The real party who made the fraudulent
misrepresentations, aided and abetted by Standard Bank as I have
shown repeatedly, is Pretorius, and not one or more of his private
companies.

That is how Eysselinck obviously
saw it. He should not be blamed for having done so.

6. 
   “Thus in respect of events
   subsequent to November 2001, he did not establish that any
   representation by the plaintiff was the cause of him acting to his
   detriment. In fact the further losses, incurred by him in paying
   off the balance of the purchase price after what he read in the
   newspaper and in view of his knowledge at the time and what one
   could reasonably expect from him as set out above, is solely of
   his own making.” (My emphasis added)

   
   

Comment: By the time that
Eysselinck read in the newspaper, he had already bought and paid the
major part of the balance due before 24^th November 2000.
The amount paid by him in January 2001, was apparently about N$37700.
It must further be pointed out that Eysselinck did not claim money
lost, but retention of the vehicle he had bought.

Mr
Smuts pointed out that Standard Bank had thousands of instalment sale
clients to attend to and could not be expected to take special
precautions for the protection of a single member of the public who
was not their client, such as Eysselinck.

The
point is that Standard Bank cultivated and assisted Pretorius, one of
its clients, and sold to him a vehicle on the instalment sale system,
when that particular client from the outset, or soon thereafter,
posed a threat and a risk to members of the public, who were not the
clients of Standard Bank, by virtue of his record as fraudster,
particularly in regard to the resale of encumbered vehicles and the
pocketing of the proceeds.

6. Statement: “I have
no doubt that the Bank was negligent in the way it allowed this
continual overdraft based on the Rössing deal without reference
to Rössing.”

The
Court then however said:

“The question is whether this
negligence allowed or contributed to Pretorius making the
representation that the vehicle was for sale by putting on display on
the premises of Auto Toy Store (Pty) Ltd and whether this caused
second defendant to purchase the vehicle.”

The
Court summarized its reasons and concluded that: “…on the
evidence it is impossible in my view to state that the negligence by
the Bank in its conduct of the account of first defendant allowed or
contributed to the presentation made by Pretorius or Auto Toy Store
(Pty) Ltd that the latter was entitled to sell the vehicle.”
Consequently the Court dismissed Eysselinck’s plea of estoppel and
granted the relief claimed by Standard Bank, which included the
return of the vehicle to Standard Bank. Eysselinck thus lost the
vehicle and the cash amount of N$160 000 which he had paid to
Pretorius, purporting to act for Auto Toy Store.

7. Statement: “I have
already indicated that at the time of the sale of the vehicle to
first defendant the Bank was not negligent.”

Comment:
Standard Bank sold the vehicle to Pretorius, purporting to act for
Able Trading on 11^th November 1999, but Standard Bank
already granted overdraft facilities to Able Trading during May 1999,
six months earlier.

It
was then already, when the overdraft facilities were granted, i.e. in
May 1999 that the fraudulent activities of Pretorius began and in
regard to which the Court had found that Standard Bank was negligent.
This overdraft, fraudulently obtained, was used to pay the
instalments on the vehicle.

This
initial negligence, permeated the whole business relationship between
Standard bank and Pretorius. It was this financing by overdraft,
which obviously assisted Pretorius in launching his business and
continuing it until such time as he resold the vehicle to Eysselinck
on 17^th October 2000. In my respectful view, the learned
judge gravely misdirected himself on this point.

8. Statement: “I have
further already indicated that from the time the story broke in the
press about Pretorius’s dealings, which incidentally was 24
November 2000, the Bank cannot be said to have caused second
defendant to have relied on the representations by Pretorius.”

Comment:
By 24^th November, when “the story broke in the press”
Eysselinck had already bought the vehicle from Pretorius, one month
earlier on 17^th October 2000; had already paid a deposit
of N$60 000 before that date and a further amount of N$62 300 on 11
October 2000. The remaining balance of N$37 700 plus a fee for the
extension of the warranty was paid on 18^th January 2001.
The vehicle was already registered in the name of Eysselinck as owner
and title holder on 19 October 2000 and the clearance certificate
obtained was for the same date.

The
Court finding that as from the 24 November 2000, the Bank could not
be responsible for Eysselinck’s reliance on representations by
Pretorius can at best be relevant to the balance of approximately
N$37 700 paid by Eysselinck after the story broke in the press.

Compared
to this story which became public knowledge on 24^th
November 2000, Standard Bank had credible information at least from
4^th April 2000, that Pretorius was a crook, notorius for
pocketing cash obtained from selling of encumbered vehicles, such as
the one eventually sold to Eysselinck on 17 October 2001.

When
Eysselinck bought the vehicle and right up to 28^th
February, 2001 when Standard Bank suddenly pounced on Eysselinck, he
had not the slightest indication of Standard Bank’s interest as
owner and title holder and Standard Bank had done nothing whatsoever
to inform potential buyers from Pretorius or any of the two private
companies owned by him, of Standard Bank’s interest,
notwithstanding the fact that Standard Bank had delivered the vehicle
to Pretorius acting on behalf of Able Trading and had registered the
vehicle in the name of Able Trading, already in November 1999,
indicating Able Trading as owner and title holder.

Although
Eysselinck had sufficient indication as from 24^th November
that Pretorius was a crook, this fact did not disclose to him that
Standard Bank was the real owner and title holder. He confronted
Pretorius, who denied to him the allegation in the newspaper. He
thought it best in the circumstances to keep his side of the bargain
and to pay the balance due by him to Pretorius and in that way
protect his interests.

Notwithstanding
the fact that the “story broke” on 24^th November 2000,
Standard Bank only took legal steps against Able in March 2001, at
the time when it launched the application against Able Trading and
Eysselinck. By then Pretorius had absconded and his business
ventures closed down.

If
Standard Bank acted expeditiously after 24^th November
2000, it may have saved Eysselinck the loss of the last payment N$37
700, made on 18^th January 2004.

In
my respectful view the Courts finding in this regard is not only
incorrect, but irrelevant.

9. Statement: “This
narrows the scope of the enquiry down to the period between April
2000 when it received information indicating Pretorius was not to be
trusted and 1^st October 2000. I know there is a gap from
1^st October 2000 when second defendant purchased the
vehicle up to 24^th November 2000 when he as a result of
the press report also came to know that there were problems with
Pretorius. There is however no evidence whatsoever that the Bank
did anything in this period that could have reinforced the opinion of
second defendant that Auto Toy Store (Pty) Ltd was entitled to sell
the car.”

Comment:
This finding in my respectful view, amounts to a further
misdirection. Second defendant did not buy the vehicle on 1^st
October but only on approximately the 17^th October 2000
when the essential formalities embodying the sale were completed,
although payments were already made in advance.

It
is not a question of something specifically done during this period
that could have reinforced Eysselinck's opinion that Auto Toy Store
(Pty) was entitled to sell the vehicle. It is rather a question of
acts of commission following by acts of omission. There was a
continuous representation beginning with a delivery of the vehicle to
Pretorius, purporting to act for Able Trading, and leaving the
vehicle in his care with registration papers indicating Able Trading
as owner and title holder. Thereafter, in March 2000, Standard Bank
granted the Pretorius company, Auto Toy Store, a limited dealer
status and thereby assisted and financed his deals in second hand
motor vehicles.

The
bringing into existence of this dealership and the assistance given
to it until the dealership was revoked only on 18^th July
2000. The business nevertheless continued and was still in existence
when Pretorius sold the vehicle to Eysselinck. Although it became
more likely, since the establishment of this dealership, that
Pretorius will now sell second hand vehicles at this outlet,
including the vehicle belonging to Standard Bank and later sold to
Eysselinck, Standard Bank stood by in silence, without in any way
disclosing to the public or potential buyers, that it was in fact the
owner and title holder of the said vehicle.

Notwithstanding
the increasing pressure over months on Pretorius during this period
to fulfil his financial obligations to Standard Bank, which increased
the probability that the “snake” will strike by selling any
encumbered vehicle he could lay his hands on, Standard Bank stood by,
without disclosing its interest.

These
circumstances, as elaborated in Section (IV) supra,
including delivery to Pretorius of the vehicle and the papers
indicating Pretorius’s company as owner and title holder, gave to
Pretorius and the companies he owned and controlled, the indicia of
dominium and/or the jus disponendi.
It provides as was said in the Electrolux decision, “all the
scenic apparatus” of ownership or jus disponendi,
and as such, by “silence and inaction as well as by conduct,
“constitutes a representation, that “the person so armed with the
external indications of independence, is in fact unrelated and
unaccountable to the representor, as agent, debtor or otherwise".⁷

Furthermore,
insofar as Pretorius made a representation that he has the dominium
and/or jus disponendi,
Standard Bank by its acts and omissions, connived with him in
doing so or effectively contributed to the making of that
representation.⁸

This
is not a case where the goods of the owners were suddenly and
unexpectedly removed and alienated by theftuous and/or fraudulent
means, but where the vehicle in question has been left in possession
of a fraudster with the indicia
of dominium and/or the
right to dispose of the vehicle and where this state of affairs was
allowed to continue from 11 November 1999 to 28 February 2001.⁹

10. Statement: “The
extension of the overdraft in this period could likewise not assist
to create this impression as second defendant or any other member of
the public, would not know about this, and by that time the
vehicle had already been bought so that subsequent events could not
have had any effect on second defendants decision to purchase the
vehicle.” (My emphasis added).

Comment: (1) The
assumed factual premise is confusing and at best, incorrect. The
vehicle was only bought by Eysselinck during the period 11-17^th
October 2000. If the overdraft was not extended during the period 4
April 2000 to 11^th November 2000, the business of
Pretorius would probably have collapsed before the sale to Eysselinck
and his ability to pose as a respectable motor dealer would probably
have been destroyed long before he could offer the vehicle to
Eysselinck. If Standard Bank was not grossly negligent in granting
the overdraft in the first place, Standard Bank itself would have
uncovered Pretorius as a fraudster already in 1999 and there would
have been no business leading up to the eventual sale by Pretorius to
Eysselinck.

(2) The
calling up of the overdraft, in the light of the reasons for such a
step, should have led to a cancellation of the instalment sale
agreement, pertaining to the vehicle.¹⁰

The
members of the public, including Eysselinck, would then soon have
known about the collapse of the business of Pretorius and the sales
to Eysselinck and others would then in all probability never have
taken place. The vehicle sold by Standard Bank to Able Trading would
also have been reclaimed by Standard Bank and no longer available for
the fraud on Eysselinck.

Consequently
the Court’s argument rests on a false premise and is completely
unrealistic.

11. Statement: (i) “As
the vehicle was paid up during the period in question (April 2000 –
September 2000) the only relevant consideration, is to see whether a
call up of the overdraft at that stage would have led to the
instalments on the vehicle falling due and hence a repossession of
the vehicle prior to it being sold. The answer to this question
is not clear.”

(ii) “In fact had the account
been called up, the probabilities are taking Pretorius background
into consideration that he would have sold the vehicle to raise money
if he needed this. He would then probably have defrauded
someone else but that cannot take the matter any further.”

(iii) “Furthermore, he might
have kept the instalments up to date from the account of Auto Toy
Store (Pty) Ltd, which during this period was generally in credit and
sometimes for substantial amounts which would have prevented the
vehicle from being repossessed (save perhaps on the technicality of a
breach of one agreement is a breach of all with which aspect I have
dealt above).”

Comment:

Ad
11(i) The answer is clear. See my comment on point 6 supra
which is repeated for the purpose hereof.

Ad
11(ii): This argument acknowledges the obvious as argued on
behalf of Eysselinck, that it was reasonably foreseeable that
Pretorius could sell the encumbered vehicle at any time, but once
pressurized, for payment, the probability would increase. The
acknowledgement by the Court that he would then “probably have
defrauded someone else, is significant and underscores the
recognition of the fraudulent potential of Pretorius. To say that
this realization however “cannot take the matter any further”, is
difficult to comprehend. It certainly takes the matter further and
provides the strongest possible reason for Standard Bank to have
acted decisively in accordance with the powers it had available in
its contract with Able Trading, in order to protect not only itself,
but members of the public who were potential victims of Pretorius
fraud¹¹

Ad
11(iii): It is unlikely that he would have paid the heavy
instalments on Able's Trading’s account, if the overdraft was
called up. And as shown previously, if the reason for the call-up of
the overdraft was the discovery of the Pretorius fraud in
representing that Rössing owed him N$1.5 million which would
become due in due course, then it become imperative to cancel each
and every agreement with Pretorius, not only that of Able Trading, as
was the right of Standard Bank in terms of its contract as discussed
in Section (V) supra.
To regard the right of Standard Bank in terms of its agreement with
Able Trading as a “technicality”, cannot be correct. Even less
so would making use of such procedure be “senseless and oppressive”
as suggested by the Court a quo
in an earlier part of its judgment.

12. Statement: The
Court a quo also
stated:

“To every time when an
overdraft limit is exceeded cancel instalment sales agreements of
such persons is simply absurd”.

This
approach is a simplification of the problem, as appears from a later
part of the judgment. Nobody argued that every time an overdraft
limit is exceeded instalment sale agreements must be cancelled. Here
the “exceeding of the overdraft limit”, must be seen against the
total picture of the failure by Pretorius to keep other commitments
and above all the fraudulent acquisition of the overdraft facilities,
the information indicating that Pretorius was a fraudster, inclined
to commit fraud by selling encumbered vehicles and pocketing the
proceeds.

13. The
Court on occasion also found justification for Standard Bank’s
attitude in the alleged views and practices of other Banks. However,
there is a stark distinction between the attitude of Standard Bank
and other Banks in at least one fundamental respect.

At
a conference a substantial time before the sale to Eysselinck,
representatives of other Banks conferred with those of Standard Bank
in Windhoek, the precise date was in dispute.

The
representatives of some other banks indicated that they either
refrained from doing business with Pretorius or stopped doing
business with him, inter alia
because of the information of his fraudulent and shady past.

So
eg. First National Bank as well as Commercial Bank had declined to do
business with Pretorius. Ms Cilliers, representative and Branch
Manager of Wesbank branch of First National Bank, testified that
Pretorius came to Namibia in 1988 and applied to Wes Bank for an
approved dealership but it was refused. She disclosed that she had
received a call from South Africa that Pretorius had a dealership in
South Africa with the name of “Toys for Boys”. Customers will
put consignment stock on his floor – he sold the vehicles but not
settled the specific financial institutions so the customer will lose
his money…”

It
was not certain when this meeting had taken place, i.e. whether it
was 18^th August 2000 as suggested by Blaauw or much
earlier even August 1999 as suggested by Ms Cilliers or some other
date earlier then 18^th August 2000. The purpose of the
meeting was inter alia
the discussing of double discounting – the selling by dealers of
encumbered vehicles and pocketing the proceeds. Pretorius was
notorius for this type of activity also in Namibia, at least from 4^th
April 2000. But Blaauw, on behalf of Standard Bank, testified that
the business of Auto Toy Store was just discussed in passing.

If
the meeting took place during August 2000, one would have expected
that because of the “E-mail dated 4^th April 2000, Blaauw
or any other representative of Standard Bank would have conveyed this
information to his colleagues – which he apparently did not.

Blaauw
also testified that he revoked the dealership of Auto Toy Store in
July 2000 and since then he would not have done any business with
Pretorius or Auto Toy Store.

If
the aforesaid meeting with colleagues from other banks took place in
August 2000, the 4^th April “E-mail, followed by the July
revocation, would then have been fresh in his mind and one would have
expected him to inform his colleagues from other banks. But he
testified that he just discussed Auto Toy Store in passing.

The
Court a quo said –
“and it is clear it was after Auto Toy Store (Pty) Ltd had
commenced doing business, the probabilities are that this meeting
took place in August 2000.” The Court unfortunately failed to
consider that although the company Auto Toy Store (Pty) Ltd was only
registered as such on 24 February 2000 and applied to Standard Bank
for the status of recognized dealership towards the end of March
2000, Pretorius had apparently already done motor dealer business
before that time in Namibia, either under the name Auto Toy Store,
before it was registered as a company, or under or a completely
different name.

I
cannot understand the Court's argument that the meeting must have
been in August 2000, because, so the Court argued, it was after Auto
Toy Store had commenced doing business. Why then did Blaauw not
disclose to his colleagues that he felt it necessary to cancel its
recognition already in July? The probabilities thus point to a
meeting much earlier than August 2000.

Be
that as it may – whereas some other Banks took action, or refrained
from doing business with Pretorius, Standard Bank however, appeared
to keep the relationship alive and failed to take any legal action to
cancel and to recover its property, until March 2001.

In
a case like this, making use of the so-called “technical clause”
above to terminate all agreements and business with Pretorius, was
not only reasonable and prudent, but imperative in the circumstances
to protect Standard Bank’s true interests, and that of the public
including that of Eysselinck.

VII: CONCLUSION

This
is a case where, if there ever was one, the owner should, even if
there was no culpa on its side, be “precluded from asserting his
rights by compelling considerations of fairness within the broad
concept of the exceptio doli.”¹²

The
above principle has been referred to in the decisions quoted in the
argument before us. In my respectful view, the principle therein
stated can only enrich our law, if incorporated therein.

However,
it has not been fully argued and it is not necessary to decide in
this appeal, in view of my view that culpa has been proved in this
case.

I
also find that the plea of estoppel by appellant should succeed,
because the following requirements have been proved by the appellant,
on a balance of probabilities:

Eysselinck,
who acquired Standard Bank property did so because, by the culpa
of Standard Bank, he was misled into the belief that the person, from
who he acquired it, was the owner or was entitled to dispose of it.

In
this regard I find that Standard bank was the proximate and/or
decisive cause of Eysselinck’s prejudice, because, was it not for
the actions and omissions of Standard Bank as set out in detail in
this judgment, the prejudice to Eysselinck would not have resulted.

In
my respectful view, it cannot be said on the available evidence and
in the circumstances aforesaid, that Eysselinck was the sole or
proximate cause of his own prejudice.

Although
Pretorius was the person in the forefront, the prejudice would not
have occurred if Standard Bank had not, by its actions and omissions
over a long period of time, effectively contributed to the making of
the fraudulent representation.

I
have consequently come to the conclusion, after carefully considering
all the argument and the applicable facts, circumstances and the law,
that the plea of appellant of estoppel, should have succeeded in the
Court a quo.

Eysselinck
also appealed against a cost order in the Court a quo
when the proceedings were postponed because of incomplete discovery
by Standard Bank. The Court ordered that the wasted costs of the
postponement be costs in the cause. Mr. Smuts referred to the fact
that certain amendments of the pleadings were also moved by Counsel
for Eysselinck and submitted that no order as to costs should be
made. I am, however, not persuaded that there is any basis on which
this Court can interfere with the discretion exercised by the Court a
quo and the order, that the
wasted costs of the postponement shall be costs in the cause, must
remain.

In
the result:

1. The
appeal of appellant succeeds.

2. The
order of the Court a quo
is set aside in so far as it affects the appellant.

2.1 The
interim order as confirmed by the Court a quo
relating to the possession of the vehicle, is set aside, and the
vehicle shall be returned to the appellant as substituted.

3. The
first respondent, Standard Bank Namibia Ltd, is ordered to pay
appellants costs in the Court a quo
and on appeal.

________________________

O'LINN, A.J.A.

I agree.

________________________

STRYDOM, A.C.J.

I agree.

________________________

TEEK, J.A.