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Court distinguishes between estoppel and rei vindicatio

Ownership is arguably the most extensive right that persons have with regard to their property. So, if an owner is deprived of its property without a legal cause, the owner is entitled to recover the property from the person in possession of it.
Court distinguishes between estoppel and rei vindicatio
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The usual remedy for this purpose is the rei vindicatio, which allows the true owner to institute a vindicatory action against a possessor for its immediate return. This action is available even if the possessor believed he had acquired the property from the owner.

The doctrine of estoppel can, however, defeat a vindicatory remedy. If an owner causes an outsider to believe that a possessor is the owner of the property and has the right to dispose of it, the owner is 'estopped' from denying that the possessor had such right.

A recent decision of the Supreme Court of Appeal, Van der Molen v Fagan, illustrates this point. Fagan sold her vehicle to one Amod. He would pay for the vehicle a month later, and ownership would pass only on payment, although Fagan delivered the vehicle together with its original documents to Amod immediately.

Car sold to dealership

In possession of the vehicle and its documents, Amod registered it in the name of a friend but failed to pay Fagan. The friend, appearing to be the owner of the vehicle, sold it to a car dealership, which in good faith, sold the vehicle to Van der Molen. Fagan brought a vindicatory action against Van der Molen for the return of the vehicle. He raised the defence of estoppel and argued that by handing over possession of the vehicle and its documents to Amod, Fagan had represented to him that the car dealership was the owner and Fagan was therefore estopped from claiming ownership.

The court set out the requirements for a successful defence of estoppel: (1) representation by the owner that the possessor of the thing is the owner thereof; (2) the representation must have been made negligently; (3) the party claiming estoppel must have relied upon the representation; and (4) such reliance must be the cause of that party acting to its detriment.

The court held that Van der Molen could not succeed because the representation he relied upon was made when Fagan handed over the documents to Amod, who, armed with possession and the registration documents, registered the vehicle in his friend's name. But the representation had been made to Amod and not to Van der Molen. Fagan's application accordingly succeeded and she recovered her vehicle.

About Amanda Swanson

Amanda Swanson is a candidate attorney in the Litigation Department at Garlicke & Bousfield Inc.

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