Absa Bank Limited v Eksteen

A Toyota Land Cruiser with tampered engine and chassis numbers was sold through a chain of transactions: from Ms Wilton to Nedbank, from Nedbank to Absa Bank, and from Absa Bank to Mr Eksteen, who later sold it to Mr Hugo. The police seized the vehicle from Mr Hugo under statutory authority after discovering the tampering and receiving information suggesting it had been stolen. Mr Eksteen refunded Mr Hugo and then sued Absa Bank for repayment of the purchase price, alleging breach of the implied warranty against eviction. Absa Bank resisted liability, arguing that Mr Eksteen should have challenged the seizure and that reliance on statutory prohibition against possession was improperly raised. Absa Bank joined Nedbank for indemnity, and Nedbank in turn joined Ms Wilton.

Both appeals were dismissed. Absa Bank was ordered to repay Mr Eksteen the agreed value of the vehicle with interest and costs. Nedbank was ordered to indemnify Absa Bank, and the appellants were ordered to pay the respondent’s costs jointly and severally.

The case reaffirms and applies the principle that the implied warranty against eviction in a contract of sale extends to seizure by police under statutory authority and that eviction is unassailable where possession is legally prohibited. It underscores that sellers bear the risk of defective title and cannot rely on technical pleading points to escape liability. The judgment also reinforces the duty of a seller to defend a buyer’s possession when called upon.