CONTE NTS

INTRODUCTION ........................................................................................................ 1

TRANSFER ................................................................................................................ 2

ABSTRACT SYSTEM OF TRANSFER OF OWNERSHIP ...................................... 3

CASH AND CREDIT SALES .................................................................................. 4

DELIVERY ................................................................................................................. 5

ACTUAL DELIVERY (traditio vera) ......................................................................... 5

CONSTRUCTIVE DELIVERY (traditio ficta) ........................................................... 5

REGISTRATION ........................................................................................................ 9

CONCLUSION ......................................................................................................... 10

bIBLIOGRAPHY ....................................................................................................... 10
INTRODUCTION

Derivative acquisition is the most important way of acquiring ownership today and is
mainly referred to as traditio or transfer of ownership and normally takes place in
pursuance of a contract. This method of acquisition of ownership or transfer occur as
a bilateral transaction as it involves the cooperation of a predecessor in title and almost
invariably there must be some juridical act to transfer ownership and in most cases
this would be a contract of sale or a donation. There are two ways of transfer of
ownership, delivery in case of movable property and registration in the case of
immovables1.

The first legal requirement is derived from the nemo quod non habet or the nemo plus
iuris rule (no one is capable of transferring more rights than he or she has), there is
also the element of legal capacity of the transferor and transferee to transfer and
accept ownership respectively. There are various variables and natural dispositions
that determine the legal capacity and these include natural, financial and legal
capacities in areas such as marital status, mental disposition, age, and insolvency.
Under the relevant provisions of the Married Persons Equality Act 1 of 1996, a
husband and wife married in community of property have equal capacity to dispose of
the assets of the joint estate and generally to administer the joint estate. However,
except under certain extraordinary circumstances, a spouse married in community of
property shall not, without the consent of the other spouse, alienate or enter into any
contract for the alienation of any right in the immovable property forming part of the
joint estate. The other requirement is that the property must also be in commercio; that
is the property must be susceptible to private ownership2.

1 Amoo, S.K. 2014. Property Law in Namibia. Pretoria: Pretoria University Press, p 133

2 Amoo (2014: 133)

1
TRANSFER

In the matter of Connor Construction (Cape) (Pty) Ltd v Santam Bank Ltd 1993 (A) the
requirements for transfer of ownership are outlined as follows3:

1. The thing must be negotiable (res in commercio).

2. The transferor must have contractual capacity.
3. The transferor must be the owner of the thing and as stated in Desai NO v Desai
1996 (A) the transfer can be undertaken by an agent or nominee on behalf of
the owner, he need not do it himself.
4. The transferee must have contractual capacity to accept transfer of ownership.
5. The transfer must be accepted by the transferee, his/her agent or nominee.
6. When it comes to movables transfer of ownership is effected by delivery to the
transferee in a way that is legally accepted (tradition) and in case of immovables
transfer is effected by registration in the deeds registry.
7. Delivery and registration must take place with the intention of the owner to
transfer ownership and the intention of the transferee to accept ownership.

In the matter of Merkel Motors v Bodenstein 1980 (A), it was stated that mere
agreement between the parties is insufficient for transfer of ownership as delivery is
also required and delivery is insufficient without an agreement between the owner and
the transferee that ownership is transferred and accepted4. Further, it was held in the
matter of Cape Explosive Works Ltd v Denel (Pty) Ltd 2001(SCA) that a distinction
should be drawn between the preceding obligation creating agreement and the real
agreement. For a real agreement there should be consensus between the parties in
respect to transfer and receipt of ownership and it must meet all the common-law
requirements for a valid contract, there must also be a legal cause for the transfer of
ownership and if ownership is transferred on the basis of a preceding contract of sale,

3 Connor Construction (Cape) (Pty) Ltd v Santam Bank Ltd 1993 (A)

4 Merkel Motors v Bodenstein 1980 (A)

2
it is transferred to the buyer only if the full purchase price has been paid unless credit
was granted by the seller to the buyer5.

ABSTRACT SYSTEM OF TRANSFER OF OWNERSHIP

In Commissioner of Customs and Excise v Randles, Brothers and Hudson, it was held
that the invalidity of the preceding obligation-creating agreement does not affect the
validity of the transfer of ownership and that ownership can be transferred in spite of
the invalidity of the obligation-creating agreement if there was a valid real agreement
coupled with delivery or registration6. Further, In Oshakati Tower (Pty) Ltd v Executive
Properties CC & Others, Muller JJ outlined that Namibian property law is based on the
abstract system of law. Namibia is an abstract system, which is the same in South
Africa. In this system two separate agreements are recognised, namely the underlying
agreement and the real agreement. A defect in the first agreement does not prevent
valid transfer. In respect of the real agreement it is a requirement it should not only be
voidable, but it should be void ab initio because of a mistake or fraudulent
misrepresentation. A forgery would certainly also render the agreement void. For
transfer, the owner must have the intention to pass ownership. If there was no such
clear intention to transfer ownership, ownership does not pass. The authorities further
make it clear that non‐compliance with a statutory requirement may render contracts
unenforceable, depending on the intention of the legislature. In this regard non‐
compliance with statutory requirements, as set out in s 228 of the Companies Act, may
render the real agreement unenforceable and void. The learned Judge further stated
that under an abstract system of passing of ownership the mere intention of the parties
to pass ownership is sufficient without reference to the underlying causa for the
transfer. This principle originated in Roman law and was developed further by natural
law jurists of the seventeenth century and pandectists, and accepted in modern law.
The abstract principle guarantees certainty in that it disallows the invalidity of an

5 Cape Explosive Works Ltd v Denel (Pty) Ltd 2001(SCA)

6 Commissioner of Customs and Excise v Randles, Brothers and Hudson 1941 (A)

3
underlying causa to affect the existence or validity of a transfer 7. The real agreement
to pass ownership is treated in abstracto, that is, totally independently from the
contractual agreement which provides the causa for the transfer. Although the abstract
system simplifies matters for the transferee it does not leave the transferor, who has
transferred an object by virtue of an invalid causa, without a remedy. Since ownership
passes to the transferee, the transferor is deprived of his rei vindicatio. However, he
or she may still claim by way of condictio on the ground of unjust enrichment8.

CASH AND CREDIT SALES

In the matter of Grosvenor Motors (Potchefitroom) v Douglas, it was held that

ownership is transferred in the case of a cash sale only once the purchase price has
been paid in full, except in those cases where the parties intended that the seller would
grant credit to the buyer and that ownership is transferred before the full payment of
the purchase price. There is a rebuttable presumption that it is a cash sale if there is
no explicit provision that credit is granted to the buyer that can be rebutted by the
circumstances of every case9. In Eriksen Motors (Welkom) v Protea Motors
Warrenton, it was decided that the rule does not apply in all cases and that the
circumstances of every case must determine whether the parties intended a cash or
credit transaction and in the case of a credit transaction parties may also that
ownership will not be transferred until the purchase price has be been paid in full, and
delivery is then subject to a suspensive condition and ownership is transferred only
once the conditions of payment are met10.

7Oshakati Tower (Pty) Ltd v Executive Properties CC and Others (2) 2009 (1) NR 232 (HC)
8 Amoo, S.K. 2014. Property Law in Namibia. Pretoria: Pretoria University Press, 136.
9 Grosvenor Motors (Potchefitroom) v Douglas 1956 (A)
10 Eriksen Motors (Welkom) v Protea Motors Warrenton 1973 (A)
4
DELIVERY

Delivery is required to transfer ownership of movables in addition to the real agreement

between the transferor and the transferee11.

ACTUAL DELIVERY (TRADITIO VERA)

Indicates that the movable is actually handed over to the transferee in such a way that
the transferee is able to exercise physical control with the intention to be owner. It
need not be made to the transferee in person, if the necessary intention regarding the
transfer and receipt of ownership is present, then it is regarded as transfer of
ownership through actual delivery12.

CONSTRUCTIVE DELIVERY (TRADITIO FICTA)

Takes place where the act of transfer is not as explicit as in the case of actual delivery
but where a change occurs in the intention with which the thing is controlled which
indicates the intention that ownership is transferred. It has five categories as
discussed below13:

1. Clavium tradition- a thing is delivered by clavium tradition if, due to its nature or
size, it cannot be actually handed over to the transferee, but an instrument by
means of which the transferee is enabled to exercise physical control is handed
to him. For instance:
• In Eriksen Motors (Welkom) v Protea Motors Warrenton, it was held that the
delivery of the registration certificate of the car does not constitute delivery
for purposes of transfer of ownership, but it enables the transferee to
register the car in his name, the registration however, does not necessarily

11 Van der Walt, A.J & Pienaar, G.J 2009. Introduction to law of Property. South Africa: CTP Book
Printers, p 128.

12 Van der Walt, A.J & Pienaar (2009: 129).

13 Van der Walt, A.J & Pienaar (2009: 129).

5
 indicate transfer of ownership14. While, in Numill Marketing cc v Sitra Wood
Products Pty Ltd, it was held that bills lading or consignment notes
documents are delivered to the transferee which certify that ownership of a
specified cargo is transferred to the transferee15.
2. Delivery with the long hand (traditio longa manu) - takes place when, due to its
nature, size and weight, a thing cannot be delivered physically, but instead it is
pointed at. The thing is indicated to the transferee so that s/he can exercise
physical control thereof. If physical control cannot be exercised, delivery did not
take place16. For example;
• In Groenewald v Van der Merwe, four requirements were set out17:
• 1. The intention of parties to effect delivery in this way must be clear,
especially if things cannot be delivered physically.
• 2. The thing must be pointed out by the transferor to the transferee in the
presence of the thing.
• 3. The transferee must be enabled to exercise physical control of the thing-
mere separation is not sufficient.
• 4. The thing must be identified clearly- separated from the rest.
3. Delivery with the short hand (traditio brevi manu)-takes place when the
transferee is already in physical control of the thing but without the necessary
intention to be owner and then the intention of both parties change to such an
extent that the transferee in future exercises physical control with the intention
to be owner. The change of intention in terms of real agreement thus indicates
when ownership was transferred and no physical delivery is required 18. For
instance:

14 Eriksen Motors (Welkom) v Protea Motors Warrenton 1973 (A)

15 Numill Marketing cc v Sitra Wood Products Pty Ltd 1994 (C)

16 Van der Walt, A.J & Pienaar (2009: 130).

17 Groenewald v Van der Merwe 1917 (A)

18 Van der Walt, A.J & Pienaar (2009: 132)

6
 • In the matter of Consolidated Factors v National Cash Register Co- a thing
was previously delivered to the lessee’s physical control in terms of contract
of lease, and subsequently bought by the lessee. The court held that it need
not be delivered again, and the mere change in intention of the parties
accompanied by payment if credit is not granted is sufficient for transfer of
ownership19. Further in Info Plus v Scheelke and Another, it was held that
in terms of delivery in the case of some credit agreements in terms of the
National Credit Act 34 of 2005, it is not necessary to conclude a new real
agreement to transfer ownership but that the initial real agreement is subject
to condition that ownership will pass to the purchaser only once the final
instalment has been paid20.
4. Constitutum possessorium- ownership is transferred without the thing being
actually delivered to the transferee. Transfer takes place by means of change
of intention of the parties in respect of ownership, the thing remains in the
physical control of the previous owner who exercises control on behalf of the
new owner or for another valid legal cause for continued physical control. The
following requirements must be met:
• The transferor must be in control of the thing as owner.
• The previous owner’s intention to be owner must be terminated by means
of change of intention, as explain in Epol (Edms) Bpk v Sentraal-Oos (Koop)
Bpk that the new owner intends to be owner in respect of the thing but the
previous owner exercises physical control over the thing on behalf of the
new owner on the basis of a valid legal cause to which the new owner has
explicitly consented21.
• In Bank Windhoek Bpk v Rajie, it was stated that there is no presumption in
favour of constitutum possessorium. Therefore parties relying on it will have
to prove that the intention of the parties was that ownership should be

19 Consolidated Factors v National Cash Register Co 1973 (T)

20 Info Plus v Scheelke and Another 1998 (SCA)

21 Epol (Edms) Bpk v Sentraal-Oos (Koop) Bpk 1997 (O)

7
 transferred in spite of the fact that the transferor controls the thing on behalf
of the transferee22.
• To prevent fraud, the reason why the thing remained in the transferor’s
control after transfer of ownership must be explicitly identified.
• In Quenty’s Motors (Pty) Ltd v Standard Credit, it was held that although
transactions imply that the seller never loses physical control of the thing
and the parties alleges that delivery took place by way of constitutum
possessorium, if the parties never had the intention of transferring
ownership, but used the transaction merely to avoid complying with the
requirements for pledge, ownership will not be transferred by means of
constitutum possessorium23.
5. Attornment- Takes place if ownership of a movable must be transferred by
owner A to owner B, but at the time of delivery the movable is in the physical
control of C, who exercises physical control in terms of a valid legal cause.
Ownership is then transferred to B if C agrees to exercise physical control on
behalf of B and no longer on behalf of A. the following requirements should be
met:
• The parties to the transfer (the transferor, transferee and the person
exercising physical control of the thing) must be in agreement that physical
control of the thing would in future be exercised on behalf of the transferee
in terms of his/her intention to be owner.
• In Barclays Western Bank Ltd v Ernst, it was outlined that, the person in
physical control of the thing must have been in control or had the right to
exercise physical control at the time when the transferor and the transferee
had the intention to transfer ownership, the controller need not be in control
of the thing when he is informed that he must control it on behalf the
transferee, as long as he was at the time when the change in intention

22 Bank Windhoek Bpk v Rajie 1994 (A)

23 Quenty’s Motors (Pty) Ltd v Standard Credit 1994 (A)

8
 regarding the transfer of ownership from transferor to the transferee took
place24.
• In Celdon en Suid-Westelike Distrikte Eksekuteurskamer v Wentzel, the
court found that ownership had been transferred by attornment to A since C
had already agreed in the credit agreement, after cession of the contract,
he would exercise physical control on behalf of A and not B. the court a quo
found that C had to be in physical control at the time of the notification and
the permission to control the vehicle on behalf of A. However, this decision
was overturned by the appellate division as it found that, it is only a
requirement that C must have been in physical control at the time of cession
of the credit agreement. Therefore ownership had been transferred to A25.

REGISTRATION

Registration may be defined as the recording of documents or books of some facts or

such other acts as the existence of a description of a corporal thing or of a transaction
or some event of a right. Transfer of real rights in immovable property is effected by
means of registration. Section 16 of the Deeds Registry Act 47 of 1937 provides that:
Save as otherwise provided in this Act or in any other law the ownership of land may
be conveyed from one person to another only be means of a deed of transfer executed
or attested by the registrar, and other real rights in land may be conveyed from one
person to another only be means of a deed of cession attested by a notary public and
registered by the registrar. The object of registration is to give notice of the ownership
of a right in property to all persons concerned and in particular to the creditors of the
owner of the property or intended purchaser of the property.26

In Willoughby’s Consolidated Co Ltd v Copthall Stores it was held that when land was
acquired by prescription, the practice is for the party who had so acquired it, to institute

24 Barclays Western Bank Ltd v Ernst 1988 (A)

25 Celdon en Suid-Westelike Distrikte Eksekuteurskamer v Wentzel 1972 (A)

26 Van der Walt, A.J & Pienaar (2009: 137)

9
an action for the registration of his or her acquired rights in the deeds office Section
16 of the Deeds Registries Act makes registration a precondition for the conveyance
of ownership of land27. In the case of Crause & Andere v Ocean Bentonite Edms (Bpk)
it was held that in all cases in which a registered real right is to be transferred as a
result of an agreement Under Roman‐Dutch law the transfer of a real right, even
though done in performance of a contract, is always regarded and must be analysed
as a separate transaction from the contract itself because the contract merely creates
personal rights and obligations and therefore an additional act is required to create the
real right. The additional act is delivery in the case of movables, and in the case of
immovables delivery is effected by registration. By virtue of the application of the
doctrine of constructive notice, every person is deemed to have knowledge of a duly
registered document as a result of which it becomes enforceable against the whole
world at large in accordance with the maxim nemo ex suo delicto meliorem suam
conditionem facere potest meaning nobody will be permitted to defeat another
person’s potential right for his own individual benefit if he or she knows of its existence.
Registration is therefore meant to protect real rights in immovable property, such real
right cannot vest in the acquirer without an act of registration in the deeds office 28.
However in, Cassim & Others v Meman Mosque Trustees it was held that registration
is not an absolute criterion for if there is a flaw in the title of ownership this flaw cannot
be cured or rectified by the mere fact of registration. Furthermore, in the case of sale
or transfer of land where the transferor or the plaintiff who has an effective title is not
the sole owner of the property, registration cannot exempt the defendant from liability
on the basis that the defendant should have been aware of the fact that the plaintiff
was not the holder or the sole holder of any particular registered real right29.

CONCLUSION

In conclusion, transfer of ownership can be done by either delivery or registration.

27 Willoughby’s Consolidated Co Ltd v Copthall 1913 AD 267

28 Crause & Andere v Ocean Bentonite Edms (Bpk) 1979 (1) SA 1076 (O)

29 Cassim & Others v Meman Mosque Trustees 1917 AD 154162

10
BIBLIOGRAPHY

Books

Amoo, S.K. 2014. Property Law in Namibia. Pretoria: Pretoria University Press.

Van der Walt, A.J & Pienaar, G.J 2009. Introduction to law of Property. South Africa:
CTP Book Printers.

Cases

Bank Windhoek Bpk v Rajie 1994 (A)

Barclays Western Bank Ltd v Ernst 1988 (A)

Cape Explosive Works Ltd v Denel (Pty) Ltd 2001(SCA)

Cassim & Others v Meman Mosque Trustees 1917 AD 154162

Celdon en Suid-Westelike Distrikte Eksekuteurskamer v Wentzel 1972 (A)

Commissioner of Customs and Excise v Randles, Brothers and Hudson 1941 (A)

Connor Construction (Cape) (Pty) Ltd v Santam Bank Ltd 1993 (A)

Consolidated Factors v National Cash Register Co 1973 (T)

Crause & Andere v Ocean Bentonite Edms (Bpk) 1979 (1) SA 1076 (O)

Epol (Edms) Bpk v Sentraal-Oos (Koop) Bpk 1997 (O)

Eriksen Motors (Welkom) v Protea Motors Warrenton 1973 (A)

Groenewald v Van der Merwe 1917 (A)

Grosvenor Motors (Potchefitroom) v Douglas 1956 (A)

Info Plus v Scheelke and Another 1998 (SCA)

Merkel Motors v Bodenstein 1980 (A)

11
Numill Marketing cc v Sitra Wood Products Pty Ltd 1994 (C)

Oshakati Tower (Pty) Ltd v Executive Properties CC and Others (2) 2009 (1) NR 232
(HC)

Quenty’s Motors (Pty) Ltd v Standard Credit 1994 (A)

Willoughby’s Consolidated Co Ltd v Copthall 1913 AD 267

12