Absa Bank Ltd t/a Bankfin v Jordashe Auto CC

Jordashe Auto CC, a second-hand motor dealer, delivered motor vehicles to another dealer, Ritchies Motors (controlled by Marais), on a consignment basis with an express reservation of ownership until Jordashe was paid. Ritchies dishonestly subjected many of these vehicles to a floor plan financing agreement with Absa Bank, purporting to sell and deliver them to Absa as security for financing, despite lacking ownership. Absa claimed ownership based on this floor plan arrangement and attached the vehicles. Jordashe brought urgent proceedings for return of the vehicles and succeeded in the High Court and Full Court. Absa appealed to the Supreme Court of Appeal, alleging ownership by fictitious delivery, estoppel, and fraud by Jordashe. Four of the vehicles had never been delivered to Ritchies at all, though their registration papers had been fraudulently used.

The appeal succeeded in part. Absa’s appeal failed in respect of four vehicles never delivered to Ritchies, but otherwise succeeded to the extent that the final relief granted to Jordashe was set aside. The matter was referred back to the Transvaal Provincial Division for oral evidence on whether Jordashe knew of, consented to, or acquiesced in the floor plan agreement. Prior costs orders in favour of Jordashe were set aside and reserved.

The case is significant for its clarification of ownership disputes involving consignment stock and floor plan financing, reaffirming the nemo dat quod non habet principle and setting limits on estoppel in commercial transactions. It emphasises that banks relying on floor plan arrangements must prove reliance on representations made by the true owner, not merely by a dishonest intermediary. The judgment also illustrates the approach to disputes of fact in motion proceedings and the circumstances under which matters must be referred to oral evidence.