Abstract:
When the defence of estoppel succeeds against the rei vindicatio it results in
the suspension of the owner’s rei vindicatio for an indefinite period. This result is generally
in line with the limited evidentiary and defence function of estoppel, which underscores that
estoppel cannot change the legal position of the parties. Yet, in 2011, the Supreme Court of
Appeal in Oriental Products (Pty) Ltd v Pegma 178 Investments Trading CC and Others 2011
(2) SA 508 (SCA) made controversial remarks that suggest that estoppel can have ownership
acquisition consequences. This interpretation significantly increases the impact of estoppel
on ownership by suggesting that estoppel does not merely suspend the owner’s right to
recover its property but instead terminates it altogether. Although the argument that estoppel
should have ownership acquisition consequences has been considered by scholars based on
doctrinal, comparative and policy reasons, neither the traditional position nor the Oriental
Products interpretation has been subjected to detailed constitutional scrutiny. Such scrutiny is
imperative as it will establish whether these interpretations are valid interpretations. Therefore,
this contribution aims to determine whether the traditional position and the Oriental Products
interpretation, respectively, would survive constitutional muster if tested against section 25 of
the Constitution of the Republic of South Africa, 1996. The conclusion is that the traditional
position constitutes a severe deprivation, but not an arbitrary deprivation of property. It also
does not constitute an expropriation of property, since expropriations cannot take place in terms of the common law. Essentially the contribution shows that the traditional position
regarding the consequences of estoppel is valid in view of section 25 of the Constitution, the
property clause, and can therefore be upheld. Notably, the Oriental Products interpretation,
does not survive constitutional scrutiny. It does not meet the law of general application
requirement of section 25 and cannot be saved by the limitation clause, viz, section 36 of the
Constitution. This is because estoppel, in principle, cannot authorise transfer or compulsory
loss and acquisition of ownership since it cannot change the legal position of the parties. What
this finding essentially reveals is that the interpretation that estoppel can result in ownership
acquisition should be avoided as it is doctrinally flawed and constitutionally invalid.
Description:
This article is based on a paper presented at the Constitutional Court Review XI Conference held in 2020; the paper, in turn, developed from sections of C Joshua The Consequences of a Successful Estoppel Defence: A Constitutional Analysis (unpublished LLD dissertation, Stellenbosch University, 2021).