In a recent legal battle, Springs Car Wholesalers (Pty) Ltd (hereinafter known as “the Applicant”)., operating as No Finance Cars, emerged victorious in their pursuit to reclaim two motor vehicles held by Diamond Panelbeaters and Towing CC (hereinafter known as “the Respondent”). The Respondent contested the Applicant's claim, citing the absence of admitted locus standi, asserting a salvage lien, and deeming the security provided by the Applicant inadequate.
The Factual Matrix:
The Applicant is the owner of two motor vehicles. Both motor vehicles were rented out to separate customers for 54-month periods. During the time the motor vehicles were being rented to customers, they were each involved in separate accidents.
The vehicles were both towed by the Respondent. The drivers of the vehicles agreed that the Respondent could store the vehicles at their premises at an agreed storage fee until the Respondent’s account was paid in full.
Once the Applicant became aware that the respective vehicles were in the Respondent’s possession, it attempted to resolve the matter with the Respondent. The Respondent sent the Applicant two respective invoices for the vehicles, one for R50 000.00 and one for R15 817.50. On or around 11 May 2022, the Applicant offered to pay the amounts reflected on the invoices as security for the Respondent’s alleged claim for the storage costs. The Respondent did not accept the claim as the storage costs had accumulated to R285 816.00 (capital) and R120 000.00 (interest) in the interim.
The Applicant argued that the Respondent did not have the authority to tow the vehicle, as it had not entered into such an agreement with the owner of the vehicles. The Applicant also clearly established that the vehicles had stickers on indicating that the vehicles could only be towed if permission had been acquired from the owner.
The Respondent avers that the drivers of the vehicles were liable for towing and storage costs as per the agreements concluded with them. However, it claimed that it is entitled to assert a salvage lien against the Applicant for the necessary or useful expenses in storing the vehicles. The Respondent claimed that it could not store other vehicles due to the vehicles occupying space in its premises. The Respondent further claimed that the expenses claimed for storage are market related and that the vehicles were being stored in a safe and secure environment.
The Respondent further claimed that the Applicant was not the owner of the vehicle because the vehicles had been financed. However, it is the Applicant’s assertion that it is common cause that he is the owner of the vehicles, while the finance institutions are merely the title holders.
In its answering affidavit, the respondent did not explain the factual scenario within which the instruction to tow the respective vehicles was obtained. Neither did it provide any facts from which it can be asserted that the vehicles were in danger of being damaged or stolen if they were not towed away and stored by the respondent.
The Applicant, asserting ownership of two vehicles, insisted on the restoration of possession and challenges the Respondent's reliance on a salvage lien, deeming it legally flawed. The applicant argues that the respondent is only entitled to security if a lis (legal dispute) existed between the parties.
In response, the Respondent denied unauthorized towing, asserting authorization from the drivers who guaranteed ownership. The Respondent claimed entitlement to storage fees, asserting a salvage lien over the vehicles. Citing the Ford v Reed Bros decision, the Respondent argued that storage fees and legal costs may be part of the salvage lien.
The Legal Showdown:
The crux of the dispute lay in the Applicant's demand for the return of its vehicles and the Respondent's defence being grounded in legal complexities. The Applicant made use of a simple claim for the return of its property, known as a rei vindicatio claim. The Respondent contended that the rei vindication could not be asserted as it had a salvage lien over the Applicant’s property.
Victory in Establishing Locus Standi:
The Respondent's initial challenge questioned the Applicant's locus standi, a legal term referring to the right or capacity to bring an action. The applicant as the dominus litis party, a legal term for the party who institutes the action and is seen to be the Master of the suit has the burden of proving that it holds the necessary locus standi. Locus Standi is proved by a party when they show that they derive a benefit from a favourable judgement from the instituted legal proceedings. In this matter the presiding Judge confirmed the successful discharge of the onus to prove locus standi. Therefore, the Applicant was found to have the necessary locus standi to institute a claim for restitution. This paved the way for the primary remedy of rei vindicatio.
Rei Vindicatio: The Key to Reclaiming Ownership:
The court emphasized the significance of a rei vindicatio as the primary remedy for an owner seeking to regain possession of their property. A rei vindicatio is the legal remedy available to owners who are out of possession of their property, whereby they can then sue the opposing party in order to recover possession of the property. In order to determine whether rei vindication would be a possible remedy, the Applicant only needed to establish three elements, namely; that the Applicant has ownership of the object, the continued existence of the object, and that the respondent has possession/control over the object. Given that all three required elements were present in this matter, the Applicant’s claim could be instituted using a rei vindicatio.
Understanding the Right of Retention & Salvage Liens:
In the judgement, Judge Van der Schyff J elaborated on the nature of a right of retention, a crucial element in the Respondent's salvage lien claim. However, the court found the Respondent lacking in proving that towing costs were necessary expenses for the preservation and safekeeping of the vehicles.
A salvage lien is a legal claim or right asserted by a party, often a service provider or entity that has incurred expenses, for the necessary or useful expenses incurred in saving, preserving, or storing someone else's property. It is commonly associated with situations where property, such as a vehicle, is towed, stored, or salvaged by a service provider. The entity providing the services may claim a salvage lien to secure payment for the costs incurred in providing those services.
The aspects that a party (the defendant or respondent raising the defence against the owner's rei vindicatio) must allege and prove to rely on a salvage lien, were comprehensively set out in Ambler’s Precedents of Pleadings:
i. Lawful possession of the object;
ii. That the expenses were necessary for the salvation of the thing or useful for
its improvement;
iii. The actual expenses and extent of the enrichment of the plaintiff;
iv. That the plaintiff's enrichment is unjustifiable; and
v. That there was no contractual arrangement between the parties in respect of the expenses.
The Court found that the Respondent did not sufficiently prove that the expenses were necessary for the preservation and safekeeping of the vehicles. The court specifically found the Respondent failed to prove that towing costs were necessary expenses for the preservation and safekeeping of the vehicles as there was no evidence before the court to indicate that it was to tow the vehicles from where they were stationary to the Respondent’s premises in order to preserve or keep the vehicles safe. The need to tow the vehicles for their protection against loss or damage and to prevent their value from decreasing was not established. To word it differently, the respondent failed to make out a case that the vehicles would have depreciated or perished had the expenses not been incurred.
Furthermore, the legality of the Respondent’s possession of the vehicles was also in question, due to the fact that the Respondent had towed the vehicles even though the vehicles had stickers indicating that they were not to be towed by unauthorized towing companies.
Salvage Lien Dismantled:
The Respondent's attempt to claim subsequent storage costs crumbled as the court negated the existence of a salvage lien in relation to towing expenses. The lack of a valid salvage lien meant the Applicant was not liable for the subsequent storage costs.
Conclusion: Success for Springs Car Wholesalers:
In the case of Springs Car Wholesalers (Pty) Ltd trading as No Finance Cars v Diamond Panelbeaters and Towing CC [2023] JOL 60981 (GP), the application for the return of vehicles succeeded. The Court's ruling established a precedent, emphasizing the effectiveness of the rei vindicatio remedy, given that the three elements mentioned earlier are met, ultimately securing victory for the Applicant.
The court furthermore asserted the existing precedent set out in Ambler’s Precedents of Pleadings in terms of requirements for a valid salvage lien. Due to the Respondent’s failure to prove that such a lien was warranted in this case, its defence ultimately failed and made way for the Applicant’s superior claim for restitution.
Reference:
Springs Car Wholesalers (Pty) Ltd trading as No Finance Cars v Diamond Panelbeaters and Towing CC [2023] JOL 60981 (GP)
Comments