Chetty v Italtile Ceramics Ltd

Italtile Ceramics Ltd owned all stock at its CTM Gezina store, which was managed by Mr D C Chetty under a joint venture and franchise agreement. Contrary to company policy requiring cash-and-carry sales, Chetty introduced a manual delivery book system allowing favoured customers to buy on credit without Italtile’s knowledge. He also engaged in ‘stock rolling’ by making false entries on Italtile’s SAP system, temporarily writing off missing stock and reversing the entries at month-end to conceal variances. A stock audit revealed significant discrepancies, leading Italtile to terminate the joint venture and sue Chetty via the condictio furtiva for the value of missing stock, alleging theft or furtum usus.

The appeal was upheld with costs. The High Court’s order was set aside and replaced with an order dismissing Italtile’s claim with costs.

The case clarifies the scope and limits of the condictio furtiva in South African law, particularly distinguishing between fraudulent accounting conduct and furtum usus. It confirms that unauthorised or dishonest conduct does not automatically amount to theft or furtum usus and emphasises the importance of legal causation in delictual claims.