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[2024] ZAKZPHC 75
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Scott-Williams v Old Mutual Life Assurance Company of South Africa (AR 542/17) [2024] ZAKZPHC 75 (16 August 2024)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
Case
Number: AR 542/17
In
the matter between:
GRANT
SCOTT-WILLIAMS
APPELLANT
and
OLD
MUTUAL LIFE ASSURANCE COMPANY
OF
SOUTH AFRICA
RESPONDENT
On
appeal from:
the Durban Regional Court (sitting as court of first
instance):
The
appeal is dismissed with costs, and such costs to be taxed on Scale
B.
JUDGMENT
Z
P NKOSI J (CHILI J concurring):
[1]
The respondent (as plaintiff in the court below) instituted action
against the appellant (defendant
in the court below) seeking payment
of the sum of R291 274.80 (as amended) with interest and costs of
suit. The appellant defended
the action and the trial ensued and
judgment was granted against him.
[2]
The appellant now appeals against the judgment before this court
primarily on the ground that
the respondent was non-suited to bring
the action as the claim vested in the ICS Pension Fund ("the
ICS"). The appeal
is opposed by the respondent.
[3]
From the pleadings and evidence adduced by the respondent in the
trial (as per Messrs Stephen
Joseph Sprout and Anton Naude) the
respondent administered the ICS pension fund of which the appellant
was a beneficiary with reference
number 69012/25647. It appears that
the appellant was in the employ of the ICS Group for approximately
two years and became entitled
to receive an amount of R4 395.47 as a
surplus apportionment benefit upon exit.
[4]
On or about 16 May 2013, the respondent paid a miscalculated amount
of R295 670.27 to the appellant
being under the bona fide, reasonable
but mistaken belief that the surplus benefit was payable to him out
of the scheme, whereas,
at the time of payment the appellant was not
entitled to any surplus benefit over and above an amount of R4 395.47
and the respondent
had no legal or natural obligation to make the
payment.
[5]
The appellant was thus unjustly enriched at the expense of the
respondent in the amount of R291
274.80 as the respondent was obliged
to refund the ICS, and in fact did so after the error was discovered.
In the premises, it
was averred that the appellant is indebted to the
respondent in the amount of R291 274.80 which amount the appellant
failed and/or
neglected to pay despite due and proper demand.
[6]
At the trial it became an issue that while the respondent made the
payment of the refund to the
ICS, it had not been pleaded. It also
emerged from the testimony of Mr Anton Naude, the legal adviser
within the respondent, that
at the time summons was issued, the
respondent had not yet refunded the ICS for the amount of loss
incurred due to the excess payment
made to the appellant, but stated
that such a loss lies with the respondent, as the appointed
administrator, in terms of clause
20.1.2 of the agreement between the
parties and the respondent had to reclaim the amount from the
appellant.
[7]
The appellant's case was thereafter closed without any evidence being
led by the appellant. Thus,
the court below accepted the facts as set
out by the respondent's two witnesses and found that although the
payment was made from
the ICS fund account, in reality it was the
respondent who erroneously caused the payment to be made to the
appellant and had to
bear loss and has thus been impoverished - not
the ICS.
[8]
The issue in the appeal is whether the court below erred in finding
that the respondent had locus
standi in the action. And if so,
whether the court erred in finding that the appellant had been
enriched at the expense of the
respondent when the payment was made
by the respondent from the funds owned by ICS.
[9]
On the main, the appellant contends that, amongst other issues which
seem to have become irrelevant
for consideration on appeal, the
respondent's claim did not satisfy the four general requirements for
a claim based on
condictio indebiti
. On the issue of the
respondent's plea lacking the necessary averments to sustain a cause
of action, I consider that if the appellant
held that notion, it was
open to him to raise an exception to the summons. He did not do so.
[10]
It is a trite principle of law that for an enrichment action based on
the
condictio
indebiti
to succeed, the following general requirements must be met:
[1]
(a)
the defendant must be enriched;
(b)
the plaintiff must be impoverished;
(
c) the defendant's enrichment must be at the expense of
the plaintiff; and
(d)
the enrichment must be without cause (
sine causa
) i.e.
unjustified.
[11]
From the evidence adduced, it is undisputed that the appellant had
been enriched by the payment made
to him by the respondent from the
ICS funds. He led no evidence to deny that fact in the trial;
and importantly, the same
was conceded by his counsel in the appeal,
and correctly s o.
[12]
The next question should be whether the appellant's enrichment was at
the expense of the respondent as the
court below found. It was the
court's findings that although the payment was made from the ICS
fund, in reality it was the respondent
who ultimately suffered loss.
[13]
Mr
Tucker
appearing for the appellant holds the view that the respondent has
pursued a wrong action, by way of
condictio
indebiti
,
to reclaim the amount erroneously paid to the appellant instead of an
action based, amongst others, in
negotiorum
gestio
[2]
or to have sought cession of the action from the ICS because the
appellant's enrichment was not at the expense of the respondent
but
the ICS.
[14]
This submission deems to elevate form over substance and ignores
legal dynamism. In
Bowman,
De Wet and Ou Plessis NNO and Others v Fidelity Bank Ltd
[3]
it was held that:
'
... the principles underlying the
condictio
are not
immutable...The rules of the condictio are also not identical for all
situations and there is scope for deviation, for
instance where
deceased or insolvent estates and the like are concerned.'
It
was further held:
[4]
'Sight
was lost of the fact that the first plaintiffs, both in relation to
the overpayment and to the claim for a refund, were and
are acting in
a representative capacity.".
[15]
It was further held that:
[5]
'although
it was a general requirement for the
condictio indebiti
that
the error which gave rise to the payment must not have been an
inexcusable error in the circumstances of the case, a person
acting
for the benefit of others and who in that capacity overpays someone
under a
bona fide
mistake as to such persons legal rights
should not be made to suffer for his mistake (Wessels Law of Contract
in South Africa,2
nd
ed paragraph 999).'
In
Yarona
Healthcare Network (Pty) Ltd v Medshield Medical Scheme
[6]
the protection recognised in
Bowman
was extended to a medical scheme on the basis that:
[7]
'...the
scheme exists for the benefit of its members, often vulnerable people
and is administered by persons who owe a fiduciary
duty to them. In
that sense persons charged with the administration of the scheme can
be viewed as representatives standing in
a similar position to
executors, trustees and liquidators.'
[16]
In this instance, the respondent administered the pension fund for
members and beneficiaries. In that sense,
it acted in a
representative and fiduciary capacity similar to executors,
liquidators and trustees.
[17]
It seems to me that the enrichment action lies with the respondent
and the facts as pleaded entitled it (as
representative) to recover
the overpayment from the appellant.
[8]
The respondent's pleaded case was the
condictio
indebiti
.
The respondent incurred liability to repay the overpayment to the ICS
and its patrimony was thus reduced by that liability.
[9]
[18]
The payment made by the respondent to the appellant was said to have
been made in the mistaken belief that
it was owing. Not every mistake
entitles the mistaken party to recover payment and in the normal
course the onus rests on the claimant
to prove the excusability of an
error.
[10]
Is the respondent's
error excusable in this case?
[19]
A person acting for the benefit of others and who in that capacity
overpays someone under a bona fide mistake
as to such person's rights
should not be made to suffer for his mistake.
[11]
It seems more reasonable to hold that the excusability of error
extended to executors, liquidators, trustees and administrators
of a
medical fund ought to be extended to the respondent as
administrator of the pension fund on the reasoning set forth
in
Yarona
.
[20]
I therefore conclude that:
(a)
the respondent as administrator of the fund, acting in a fiduciary
capacity had locus standi to
institute proceedings to recover that
which was paid to the appellant
indebiti
. It may be gleaned
from its pleadings and evidence led in the trial that the respondent
was claiming the overpayment in that capacity
as the refund to the
ICS was only paid later; and
(b)
the respondent, as administrator, was impoverished to the full extent
of the overpayment and t
e respondent in that capacity is entitled to
recover that which was lost to the scheme.
Order
[21]
In the result, I make the following order:
The
appeal is dismissed with costs, such costs to be taxed on Scale B.
Z
P NKOSI J
CHILI
J
CASE
INFORMATION
DATE
OF HEARING:
14
JUNE 2024
DATE
OF JUDGMENT:
16 AUGUST 2024
APPEARANCES
COUNSEL FOR THE
APPELLANTS:
ADV. MC TUCKER
Instructed by
Atkinson Turner & De Wet
478
Lilian Ngoyi (Windermere) Road Durban
Tel:
031 312 1303
Fax: 031 312 0175
Docex 127, Durban
Email:
atkinsonturner2@atdw.co.za
Ref: Mr
Turner/lp/03/S2058
COUNSEL FOR THE
RESPONDENT
ADV. R.M VAN ROOYEN
Instructed by Mac
Gregor Stanford
Kruger Inc
291 Kingsway,
Amanzimtoti
C/o Cilliers &
Co C/o Messenger King
Suite 801, 8
th
Floor
Esplanade Garage
127
Margaret Mncandi Avenue
Durban
Tel:
031 903 8077
Email:
dorette@cilliersco.co.za
Ref: D
Cilliers/MAC1/0024
[1]
Capricorn
Beach Home Owners Association v Potgieter t/a Nilands and Another
2014 (1) SA 46
(SCA) para 20;
Glenrand
MIB Financial Services (Pty) Ltd and Others v Van den Heever NO and
Others
[2013] 1 All SA 511
(SCA) para 15.
[2]
Odendaal
v Van Oudtshoorn
1968
(3) SA 433 (T).
[3]
Bowman,
De Wet and Du Plessis NNO and Others v Fidelity Bank Ltd
1997 (2) SA 35
(A) at 40A-B.
[4]
Ibid at 42G-H.
[5]
Ibid at 370-E.
[6]
Yarona
Healthcare Network (Pty) Ltd v Medshield Medical Scheme
2018 (1) SA 513 (SCA).
[7]
Ibid para 44.
[8]
Bowman
above fn 3 at 430.
[9]
See
Kudu
Granite Operations (Pty) Ltd v Caterna Ltd
2003 (5) SA 193
(SCA) para 23.
[10]
Yarona
above fn 6 para 24.
[11]
Bowman
above
fn 3 at 44C-D, 44H and 45F.