The constitutionality of Estoppel in the context of vindication

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.