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[2001] ZASCA 14
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McCarthy Retail Ltd v Shortdistance Carriers CC (110/99) [2001] ZASCA 14; [2001] 3 All SA 236 (A); 2001 (3) SA 482 (SCA) (16 March 2001)
CASE NO.110/99
IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
In the matter between
McCarthy Retail Ltd Appellant
and
Shortdistance Carriers CC Respondent
Before: Smalberger ADCJ, Harms, Olivier, Schutz and
Cameron JJA
Heard: 27 February 2001
Delivered: 16 March 2001
Garage’s
action for necessary and useful expenses against owner with whom it
has no contract - repaired in mistaken belief
insurance company had
instructed it - enrichment proved - irrelevance of insurance policy
- question of whether enrichment at
the expense of not arising -
obiter dicta on acceptance of general enrichment action- and
overruling of Gouws v Jester Pools
- postponement of appeal refused.
W P SCHUTZ
________________________________________________________________
J U D G M E N T
________________________________________________________________
SCHUTZ
JA:
[1] The dispute is whether the appellant, McCarthy
Retail Ltd (“the garage”),
has
an enrichment claim for repairs to a Peterbilt truck owned by the
respondent, Shortdistance Carriers CC (“the owner”).
The agreed value of the repairs is R 186 000.
[2] The truck was damaged in an
accident in December 1995, after which the owner took it to Dan
Perkins Trucks (Pty) Ltd, an agent
of the garage, which together
with its principal will also be referred to as “the garage”.
No instruction to repair
was given by the owner, who had insured
the truck with Truck and General Underwriting Managers (Pty) Ltd
(“the insurer”)
and paid the premiums. On 12 December
1995 the owner submitted a claim. An insurance loss-adjuster, Mr
Hamilton, was employed
by the insurer to inspect the truck at the
garage. At the trial there was a dispute whether he instructed the
garage, represented
by Mr Dinkel, to proceed with the repairs on
behalf of the insurer. The trial judge, Booysen J, accepted
Hamilton’s evidence
that no such instruction was given, but
held that Dinkel had laboured under the
bona
fide
but mistaken
belief that he had. The garage effected the repairs, which were
completed by the end of January or early February
1996. The
repaired truck was delivered to the owner by the garage at the end
February or early March. During December an
agreement had been
concluded between Dinkel and Mr Ramdhani, a member of the owner.
The excess payable by the owner under
the policy was R 50 000, but
Dinkel agreed to reduce the amount to R 25 000 at the expense of the
garage, which amount the owner
paid in two instalments.
[3] The
garage, believing it had a contract with the insurer, submitted its
invoice to it. On 2 April 1996 the insurer repudiated
the owner’s
claim in a letter addressed to his insurance broker. This
triggered the operation of a clause of the policy
which provided
that if legal action were not commenced within six months of the
rejection of a claim, all benefits under the
policy would be
forfeited. This meant that under the policy the owner had until
about 2 October 1996 to launch legal action.
Ramdhani’s
undisputed evidence was that he did not know of the letter of
repudiation until his broker transmitted a copy
of it to him in
September 1996. His further undisputed evidence was that although a
Mr Buchanan from the garage asked him for
a copy of the claim form
in August 1996, Buchanan did not tell him that there was a problem
with regard to the payment of the
claim. This despite the fact that
Dinkel learned of the repudiation in the middle of June 1996, and
had throughout been conducting
the dealings with the insurer and
informing Ramdhani of progress. The owner did not institute action
against the insurer.
[4] On appeal it is common cause that Booysen J was
correct in holding
that
the insurer was not entitled to repudiate the policy on the grounds
that it did. (This has nothing to do with the six months
period.
The grounds of repudiation alleged were that the owner was not in
possession of a certificate of fitness or an operator’s
card
as required by the policy.) What remained in issue was whether a
direct contract of repair was concluded between the garage
and the
insurer.
[5] With
regard to this issue Booysen J held:
“
It was equally clear from the evidence that no
contract existed between Truck and General/Global and Dan Perkins
pursuant to which
Defendant’s truck was repaired. Mr Dinkel,
the manager of Dan Perkins, gave evidence to the effect that Mr
Hamilton, claims
assessor, authorised Dan Perkins to repair the
truck. It is quite clear though that even if he had done so, he had
no mandate
or authority from the insurance company to do so. I am,
however, in any event, satisfied that Mr Hamilton did not authorise
the repairs. His evidence is clear and credible. It accords with
the contemporaneous notes and correspondence. He came across
in the
witness box as a careful man with a perfect understanding of his
duties and mandates. Having seen him give evidence I
have no doubt
that he did not, as Mr Dinkel claims, instruct the latter to do the
repairs. Mr Dinkel, it was clear from his
evidence, was an
impatient and somewhat impulsive man who, I could see, could easily
have jumped to the conclusion that he had
the necessary authority to
proceed with the repairs when such conclusion was not justified.
One could see him misunderstanding
what was said to him by
Hamilton.”
I find nothing to criticise in this
finding and conclude that there was no contract between the garage
and the insurer, although,
as the judge also found, Dinkel
bona
fide
believed that
there was.
[6] Accordingly,
the essential facts are: The owner took his damaged truck to the
garage but did not instruct it to repair the
truck, made a claim on
his insurer, but took no active part in the dealings between the
garage and the insurer thereafter.
The garage repaired the truck
believing that the insurer had instructed it to do so, but it was
wrong. There was no contract.
Before the insurer repudiated the
claim the garage returned the truck to the owner. The value of its
repairs was R 186 000.
The insurer communicated its repudiation to
the owner’s broker on 2 April 1996, but the broker did not
inform the owner
until September. In the meantime the six months
period for instituting action had been running, so as to expire by
2 October.
The owner did not institute an action at any stage.
There had been no basis for the insurer’s repudiation before 2
October
and the policy was a valid policy. Despite its knowledge
of the repudiation by June 1996, the garage did not alert the owner
to the existence of a difficulty about the one or other of them
recovering the cost of the repairs from the insurer. Do these
facts
support an enrichment claim by the garage against the owner?
[7] Booysen
J held that they did not, saying:
“
As I understood the argument
advanced on behalf of the Plaintiff, it was conceded that if the
insurance company had not been entitled
to repudiate the claim, no
unjust enrichment could be said to have taken place. I agree. In
that event the Plaintiff would
have repaired the vehicle under the
mistake that it was doing so at the request of the insurance
company, and the Defendant on
the other hand received the repaired
vehicle in terms of its contract with the insurance company. It
thus received the benefit
for which it had paid its premiums and was
not unjustly enriched or enriched
sine
causa
.”
In its notice of application for
leave to appeal the statement that the garage had made the
concession recorded by the judge
a
quo
was challenged
as a misdirection. Leave to appeal was granted by him and the
appeal proceeded on the footing that no such concession
is made.
What
are the foundations of our enrichment law?
[8] Unlike other branches of our
law, the rich Roman source material has not led to an unqualified
judicial recognition (with
a few exceptions) of a unified general
principle of unjustified enrichment, from which solutions to
particular instances may
be derived. Rather there has been an
augmentation of the old causes of action, from case to case, usually
with reference to
rules treated as being of general application.
This has led to a more or less unified patchwork (the “lapwerk”
according
to Professor de Vos
Verrykingsaanspreeklikheid
in die SA Reg
3ed). And although there has been no unequivocal recognition of a
general enrichment action, time and again unjustified enrichment
principles have been treated as a source of obligations being the
basis for creating a new class or sub-class of liability
in
particular circumstances. No better example of this can be found
than the minority judgment of Ogilvie Thompson JA in
Nortje
en ‘n Ander v Pool NO
1966(3) SA 96 (A) - the majority judgment in which is still
sometimes held out as having given the final death-blow to a general
enrichment action. The question whether such an action should be
recognized was passed by in
Kommissaris
van Binnelandse Inkomste en ‘n Ander v Willers en Andere
1994(3) SA 283 (A), but Botha JA made it clear that the piecemeal
extensions of the old actions, which have been proceeding for
over a
century in South Africa, have not been impeded by the decision in
Nortje’s
case (at 331 B - 333 E). See also
Bowman,
de Wet and du Plessis NNO and Others v Fidelity Bank Ltd
1997(2) SA 35 (A) at 40 A - B. One of the restraints upon the
acceptance of a general action is the belief, or fear, that a
tide
of litigation would be let loose. Initially there may be some surge
of litigation, particularly under the emotive banner
of “unjust
enrichment.” But it should not last long, once the
restrictions even on a general action are appreciated.
My opinion
is that under a general action only very few actions would succeed
which would not have succeeded under one or other
of the old forms
of action or their continued extensions. For this reason, if it be
a good one, the acceptance of a general
action may not be as
important as is sometimes thought, save, of course, that its denial
may lead to occasional individual injustices.
A more daunting
consequence of acceptance is the possible need for a
re-arrangement of old-standing rules. Are the detailed
rules to go
and new ones to be derived from a broadly stated general principle?
Or are the old ones to stand, and be supplemented
by a general
action which will fill the gaps? The correct answers to these
questions are not obvious. But I would support
the second solution.
In a rare case where even an extension of an old action will not
suffice I would favour the recognition
of a general action. The
rules governing it should not be too difficult to establish - see de
Vos ch VII for an outline.
We have been applying many of them
for a long time.
[9] How we have reached our present
state is a matter of history. The Roman law, although containing
several general affirmations
of liability for unjustified
enrichment, did not evolve a general action. Nor did the mediaeval
writers, although there are
some who would challenge this statement.
But there is a strong, if by no means unanimous, body of academic
opinion that Grotius,
influenced by Spanish jurists and theologians,
had come to accept unjustified enrichment as an independent source
of obligations,
just as contract or delict were. The case for
Grotius is persuasively stated in Feenstra’s chapter
Grotius’
Doctrine of Unjust Enrichment as a Source of Obligation: its Origin
and its Influence in Roman-Dutch
Law
p
197, contained in
Vol 15,
Unjust
Enrichment The Comparative Legal History of the Law of Restitution
(1995) edited by Schrage, in the
Comparative
Studies in Continental and Anglo-American Legal History
series. Whether Professors Feenstra and Scholtens are right about
Grotius need not be determined, because the latter has demonstrated
quite convincingly, in my opinion, that by the eighteenth century
the Hooge Raad had come to accept the existence of what we
would
call a general enrichment action, although the descriptions of it by
individual judges differed - see Scholtens “The
General
Enrichment Action That Was”
(1966) 83 SALJ 391
, Feenstra (op
cit) 228-235. The main reason why this development did not affect
the evolution of Roman-Dutch Law in Southern
Africa, up to and
including
Nortje’s
case, is that the decisions recorded by Bynkershoek and Pauw lay
unpublished for two centuries and more. This reveals the weaknesses
of a practice (that of Holland at the time) which did not require
judges to give full reasons for their decisions and which
lacked
systematic law reporting. We now know from the hard print that
there is a common law basis for the acceptance of a general
enrichment action, at least one of a subsidiary nature. In this
respect the decision of the majority in
Nortje’s
case at 139 G - H has been shown by the then largely dormant
authority to be clearly wrong.
[10] However, if this court is ever
to adopt a general action into modern law, it would be wiser, in my
opinion, to wait for
that rare case to arise which cannot be
accommodated within the existing framework and which compels such
recognition. If once
a general action is accepted much less energy,
hopefully, will be devoted to the correct identification of a
condictio
or an
actio
than at present and more time to the identification of the elements
of enrichment. This does not mean, however, that the old
structure’s relatively few distinctive rules applying only to
particular forms of action, such as the requirement in the
condictio
indebiti
that the
mistake should be reasonable, will disappear.
The
case before us
[11] The case before us can be
solved by reference to established principles. Appellant’s
counsel, as also the trial judge
in granting leave, suggested that
the appropriate action is the
condictio
sine causa
. This
presents a difficulty:
“The object of condiction is
the recovery of property in which ownership has been transferred
pursuant to a juristic act
which was
ab
initio
unenforceable or has subsequently become inoperative (
causa
non secuta
;
causa
finita
)”.
Per van den Heever J in
Pucjlowski
v Johnston’s Executors
1946 WLD 1
at 6.
[12] The case before us was
presented as if it was the delivery of the repaired truck which was
the defining event. That delivery
transferred neither the truck
(which was already owned by the recipient) nor the repairs (which
had already become the property
of the owner by accession). What we
are concerned with is a typical instance of necessary and useful
improvements made to an
owner’s property without a contract
between the repairer and owner. In the Roman and Roman-Dutch law
the
bona fide
possessor could exercise a lien for the amount of his necessary and
useful expenses or the increase in market value brought
about,
whichever was the lesser (de Vos 96). This principle applied also
to the improvement of movables (de Vos 97, Grotius
2.10.4, van der
Linden 1.7.2). The Roman-Dutch law developed on the Roman law in
the respect that the improver was not confined
to the defensive
remedy of exercising his lien, but was granted an action (de Vos
98). Thus the fact that in the case before
us the garage has given
up possession voluntarily does not leave it remediless. It may sue,
as it has done.
[13] A further development in modern
South African law has occurred in the case of occupiers (as opposed
to possessors). A
bona
fide
possessor
believes that he holds as owner, although he is mistaken as to his
ownership. An occupier does not have that belief,
but nonetheless
has or believes he has some lesser right to possess. If he in fact
has such a right he is a lawful occupier.
If he
bona fide
believes
he has but is mistaken, then he is a
bona fide
occupier
(de Vos 246-7). Both have rights of defensive possession and
action similar to those accorded
bona
fide
possessors
(de Vos 259 et seq and 249 et seq respectively). De Vos 263
asserts that none of these actions is to be seen
as an
application of the
condictio
sine causa
.
But see Scholtens “Enrichment at Whose Expense?”
(1968)
85 SALJ 371
at 374 and O’Brien “A Generally Applicable
Condictio Sine Causa for South African Law?”
2000 TSAR 752
at
760. (Both these articles are in part a reaction to the refusal of a
general action in
Nortje
.
There is an attempt to inspan the
condictio
sine causa
in an
extended form in its place. A few spadefuls of earth are thrown
over the course of the enrichment stream. In no time little
rivulets advance to penetrate over, round or through the dam. Have
we not been defying gravity?)
[14] On the facts the garage was a
lawful occupier. The owner placed it in possession of the truck in
the contemplation that
it should be repaired, even though it did not
itself instruct those repairs. The fact that Dinkel then made a
bona fide
mistake in believing that the insurer had instructed him to repair
does not affect that position. At worst for the garage it
was a
bona
fide
occupier. It
makes no difference which of the two it was.
[15] Are
the four general requirements for an enrichment action, as listed in
the title “Enrichment” by Lotz (revised
by Horak) Lawsa
Vol 9 First Reissue para 76, satisfied? The owner’s
arguments on these points largely hinge upon the
role of the
insurance policy.
[16] The first and fourth
requirements in Lawsa are enrichment of the defendant and the lack
of a
causa
for that enrichment. The owner was impoverished when his truck was
damaged in an accident. Had he not been insured he would
have had
to bear the cost of repair. Had he contracted for repairs he would
not have been enriched when the repaired truck was
returned to him
as he would have had to pay the agreed contract price. As it was
put by Rose-Innes J, following de Vos, in
Govender
v Standard Bank of South Africa Ltd
1984(4) SA 392 (C) at 404 D, “In assessing whether defendant
has been enriched by the payment, account must be taken of
any
performance rendered by defendant which was juridically connected
with his receipt of the money”. See also
B&H
Engineering v First National Bank of SA Ltd
1995(2) SA 279 (A) at 294 I-J, in which
Govender’s
case was approved.
[17] But in the case before us the
owner did not enter into a contract with the garage in respect of
the repairs not covered by
the excess, so that he did not have to
pay a contract price therefor. On the face of it he was enriched by
the receipt of the
repaired truck without there being a
countervailing performance on his part, juridically connected with
that enrichment. However,
says the owner, but what of my insurance
policy for which I had to pay premiums? This is said to be the
cause of the enrichment.
The answer is that it was not the policy
or the payment of the premiums which procured the repairs, but the
mistaken belief
of Dinkel that the insurer had instructed him to
proceed. The policy was something quite extraneous when it did not
give rise
to the repairs. Its purpose was to reimburse the owner in
one way or another should his truck be damaged. As far as the garage
was concerned all that the payment of the premiums procured was a
visit by an insurance assessor, who may have agreed what a
reasonable price for the repairs would be, but who did not instruct
that they be effected. The upshot is that the owner was
enriched
sine causa.
The amount of the enrichment was agreed at R 186 000. By clear
implication this meant that the market value of the damaged
truck
was agreed to have been raised by that amount by necessary and
useful expenditure.
[18] Much of the argument was
devoted to the part played by the insurance policy and it was
central to the court
a
quo’s
judgment
.
I have sought to
demonstrate that upon a proper analysis it is irrelevant to the
case before us. My decision depends upon that
conclusion. However,
I would point out, without incorporating it in my decision, that
had the owner availed himself of the
rights for which he had
expended premiums he should have had not only the repaired truck but
also a good claim against his insurer,
the proceeds of which he
could have used to pay the garage’s enrichment claim. He had
actual notice of the repudiation
of the policy in September 1996,
some time before the six months period expired on 2 October 1996. He
may be deemed to have known
even earlier, if his broker’s
knowledge is to be attributed to him. Although the existence and
extent of enrichment is
usually taken at the date of the summons
(August 1997 in the case before us), one of the exceptions is where
the defendant permits
the enrichment to be lost at a time when he
should have allowed for the possibility that the benefit he had
received might later
prove to constitute an unjustified enrichment:
Lawsa para 76 p 63, de Vos 336-7. In my opinion a reasonable
person in the
owner’s position would have anticipated that the
garage had not been paid and might look to him; and would then have
studied
his policy and instituted action within the six months
period. The record contains no suggestion that he did so. Instead
he
chose to ward off the garage’s claim. On the face of it he
could have saved himself. On appeal it was common cause (although
it was in issue in the court below) that the insurer was not
entitled to repudiate the policy on the grounds originally relied
on. Had his action succeeded, no enrichment problem would have
arisen. He would have had the funds to pay the garage, there
being
no suggestion that the insurer would not have been able to pay the
claim. And also for the reason of the insurer’s
solvency, had
the facts been that there was a contract between the insurer and the
garage, again there would have been no enrichment
problem, as the
garage would have been paid by the insurer and would not have sued
the owner. During argument mention was made
of the Scottish case of
Kirkland Garage
(Kinross) Ltd v Clark
1967 Scots Law Times 60. The facts in that case were similar to
those in the case before us, save in the respects that there
was a
contract between the insurer and the garage, and the insurer was
insolvent. The case accordingly has no bearing on our
situation,
which does not present the sort of case, to be described more fully
below, the “type one” case, where
an intermediate party
has absconded or is insolvent.
[19] The
next requirement postulated by Lawsa is that the plaintiff should be
impoverished. Clearly the garage was impoverished.
[20] The remaining and sometimes
vexed question is whether the owner’s enrichment was at the
expense of the garage. How
to handle cases of “indirect
enrichment”, in which three or more parties are involved has
caused considerable debate.
At the one extreme is the
“subcontractor” class of case, represented in this court
by
Buzzard
Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd en
‘n Ander
1996 (4) SA 19
(A). A, a property owner, had contracted with B to
perform certain work on his property. B subcontracted the
electrical section
of the contract to C, who performed his
obligations. C was unable to recover from B, which had been
liquidated, so it sued A
as owner for enrichment. The action
failed, on the footing that the primary source of A’s
enrichment was not C, but the
main contract between A and B (at 29
F-G). (The proposition was also expressed in an alternative form,
that because A had got
exactly what he had bargained for with B, any
enrichment was not
sine
causa
(at 29 G)).
The reasoning has been criticised as being “very rigid”
by and Visser and Miller “Between
Principle and Policy:
Indirect Enrichment in Subcontractor and ‘Garage-Repair’
Cases”
(2000) 117 SALJ 594
at 605, on the ground that even
though the enrichment could never be
sine
causa
vis-à-vis
the main contractor, it could conceivably be so vis-à-vis
the subcontractor, whose entitlement would
be subject to the policy
considerations relevant to the particular situation. However that
may be, we are not concerned with
a
Buzzard
situation, called by van Heerden JA a “type two”
situation.
[21] Of more immediate interest are
the remarks made in
Buzzard
about the “type one” case, with which the subcontractor
“type two” case was contrasted (at 25 H- 26 A
and 27 D -
E). Type one arises (I take the most typical example) when A
contracts with B to improve property of another (the
owner) and A
claims from the owner for his enrichment, B having disappeared or
gone insolvent. Van Heerden JA found it unnecessary
to make a
finding on the “type one” situation and assumed for the
sake of argument that an action would lie in such
a case (
Buzzard
at 27 C). A sharp dispute of opinion underlies this assumption. In
a long-standing series of decisions in type one or analogous
situations, among which may be mentioned
United
Building Society v Smookler’s Trustees and Golombick’s
Trustee
1906 TS
623
and
Brooklyn
House Furnishers (Pty) Ltd v Knoetze
& Sons
1970 (3) SA 264
(A), it has been held that a type one improver may
exercise an enrichment lien against the owner in order to procure
payment
of his necessary and useful expenses. But in
Gouws
v Jester Pools (Pty) Ltd
1968 (3) SA 563
(T), a Transvaal full bench held that the improver
in a comparable situation had no action, because, such was the
reasoning,
the enrichment of the owner had not been at the expense
of A (the plaintiff) but at the expense of B, as the enrichment
flowed
from the performance by A of a contract with B. This
reasoning, of which he was a long-time proponent, was welcomed by de
Vos
343 and 350 - 1.
[22] The result was that the
defensive remedy of a lien was available but not its counterpart
of action. The attempt in the
Brooklyn
House
case to
reconcile this anomaly was stigmatised in
Buzzard
at 26 I - L as wrong. Neither a lien nor an action can exist
without an underlying liability for unjust enrichment, so that
they
were either both good or both bad (at 26 J - 27 B). See also
Singh
v Santam Insurance Ltd
[1996] ZASCA 92
;
1997 (1) SA 291
(A)at 297 D - E.
[23] Either
Gouws
v Jester Pools
must go, or many or all of the long list of cases represented by the
United Building
Society
case must
go, or so it seems to me. De Vos 347, 351 expresses concern that
the heresy (as he sees it) embodied in the lien
cases may yet
contaminate the action cases, leading to the jettisoning of the “at
the expense of” requirement in
both situations. The case
before us does not require us to decide the question which line of
approach is to be accepted. De
Vos himself expresses disquiet, in
at least some situations, in which the improver does work and cannot
recover, whilst the owner
holds the improved goods without being
liable to anyone (351 - 2). For myself I think there is much to be
said for the justice
of the lien cases, an unsophisticated justice
though it may be, but with which we have lived for a long time. A
improves a car
at the instance of B, wrongly believing him to be
owner. C claims the car by virtue of his ownership. Is he to get
it scot-free?
Or is he to first pay A his necessary and reasonable
expenses; A’s claim being moderated by the increase in market
value
cap, by the limitation to expenses to the exclusion of the
market price, and by the operation in the last resort of the
jus
tollendi
(the
right to compel removal of materials)? The question whether C is
enriched at the expense of A or of B in the example
given, is in any
event a matter of semantics (I do not dispute that the manner in
which the question is answered can have practical
consequences).
When A improves C’s vehicle the ownership in the improvements
passes at once to C’s estate by accession
and it seems to me
to pass there directly from A’s estate. Is it not a fiction
that it passes through the estate of B,
even though A owes a
contractual obligation to him to effect the repairs? (Cf Bregstein
Ongegronde
Vermogensvermeerdering
(1927) 218). Or take a case of necessary expenses -
Acton
v Motau
1909 TS
841.
By keeping Motau’s donkeys alive and well in putting
them to graze on his land, Acton there and then enriched Motau, and
had he established that in so doing he had incurred expense, instead
of turning them into a field of withered grass which would
soon have
been burned, he would have established his lien and his right to
compensation. Innes CJ and Bristowe J found no difficulty
in the
fact that there was a B in the case - that Acton had come into
possession of the donkeys under a contract of pledge with
one Jonas,
so that Acton was obliged to look after them. The fact that Acton
was
mala fide
,
in that he knew that Jonas’s title was disputed, does not
affect the matter.
[24] However,
the questions I have raised need not be answered in the case before
us, because it is not a multi-party case. There
is no B in the
equation. There was no contract between the garage and the insurer
or indeed with anyone. There is no-one else
at whose expense the
owner could have been enriched. Accordingly, in the case before us
the “at the expense of”
problem, sometimes encountered,
does not arise.
[25] All
the general requirements for enrichment liability being present, the
garage’s action should have succeeded.
Application
for a postponement
[26] On
the day before the hearing of the appeal (set down for 27 February
2001) a letter was placed before us on behalf of the
respondent
“the owner”. It stated:
“We confirm that our counsel in this matter is
Piet van Rooyen [the heads had been signed by Mr G R Thatcher, who
had appeared
at the trial]. Counsel has only just recently perused
the papers in this matter and he firmly believes that it is one of
an
intricate nature and accordingly since he has only been
instructed recently, more adequate preparation has to be done on
behalf
of the Respondent.
In the circumstances our Counsel will be seeking a
postponement tomorrow.”
[27] Inevitably
the application for postponement, which was opposed, was dismissed
and the appeal proceeded with Mr van Rooyen,
whose submissions on
the merits were in the event of material assistance to the court,
still appearing for the owner. Reasons
for the dismissal of the
application were to follow. These are the reasons.
[28] A party opposing an application
to postpone an appeal has a procedural right that the appeal should
proceed on the appointed
day. It is also in the public interest
that there should be an end to litigation. Accordingly, in order
for an applicant for
a postponement to succeed, he must show a “good
and strong reason” for the grant of such relief:
Gentiruco
A G v Firestone SA (Pty) Ltd
1969 (3) 318 (T) at 320 C - 321 B. The more detailed principles
governing the grant and refusal of postponements have recently
been
summarised by the Constitutional Court in
National
Police Service Union and Others v Minister of Safety and Security
and Others
2000
(4) SA 1110
(CC) at 1112 C - F as follows:
“The postponement of a matter set down for
hearing on a particular date cannot be claimed as of right. An
applicant for
a postponement seeks an indulgence from the Court.
Such postponement will not be granted unless this Court is satisfied
that
it is in the interests of justice to do so. In this respect
the applicant must show that there is good cause for the
postponement.
In order to satisfy the Court that good cause does
exist, it will be necessary to furnish a full and satisfactory
explanation
of the circumstances that give rise to the application.
Whether a postponement will be granted is therefore in the
discretion
of the Court and cannot be secured by mere agreement
between the parties. In exercising that discretion, this Court will
take
into account a number of factors, including (but not limited
to): whether the application has been timeously made, whether the
explanation given by the applicant for postponement is full and
satisfactory, whether there is prejudice to any of the parties
and
whether the application is opposed.”
[29] When
the appeal was called Mr van Rooyen informed us that he had been
briefed on appeal on the previous day. Despite the
fact that he
informed his attorney that a formal application for postponement
would have to be filed, nothing further has been
done and all that
we have by way of explanation is the letter already quoted and Mr
van Rooyen’s statements from the bar:
that the owner’s
former attorney had not been placed in funds, that he had withdrawn
and that the new attorney had been
placed in funds only some days
before the appeal.
[30] In
opposing the postponement Mr King, for the garage, handed in an
affidavit by his attorney. This showed that after receiving
notice
of the former attorney’s withdrawal on 19 January 2001, more
than five weeks before the appeal date, she took steps
to ascertain
whether the owner was aware of the date and to inform him of it if
he was not so aware. By 12 February she had
established that the
owner knew of the appeal and intended to instruct a new attorney.
In the end she supplied the new attorney
with a copy of the record
and the heads of argument.
[31] The
application for postponement falls short on all counts. There is
not even a serious attempt to provide a “full
and satisfactory
explanation” for the owner’s unpreparedness or the
lateness of the application. Nor is such explanation
as there is,
on oath, notwithstanding counsel’s advice to the new attorney.
[32] The
interests of other litigants and the convenience of the court are
also important. The record and heads have been read
by five
judges, variously months or weeks before the appeal date. The fact
that this case was placed on the roll meant that
another case had to
wait for the following term and if a postponement is granted this
consequence will extend into succeeding
terms.
[33] Moreover,
if the appeal were to be postponed, the garage would be prejudiced
by not obtaining a final determination of its
claim and payment,
should it succeed.
[34] These
are the reasons why the postponement was refused. The owner will
have to pay the costs of the unsuccessful application,
of the
communications referred to in the affidavit of the garage’s
attorney and of the affidavit itself.
[35] The
appeal is allowed with costs, including the costs of the
postponement application, which latter are to include the
communications referred to in the affidavit of Ms Kunst and the
affidavit itself.
The order of the court
a
quo
is altered to
read:
“The
defendant is ordered to make payment of
(1) R 186 000;
(2) Interest at the rate of 15.5%
per annum
a tempore
morae
;
(3) Costs of suit.”
W P SCHUTZ
JUDGE OF APPEAL
CONCUR
OLIVIER
JA
CAMERON
JA
SMALBERGER ADCJ
SMALBERGER
ADCJ:
I agree, for the reasons given by Schutz JA, that the
appeal should be allowed applying established principles. I express
no
opinion on, or concurrence with, the remarks of Schutz JA, sound
though they may seem, in relation to the foundation of our
enrichment
law or the correctness of the majority decision in
Nortje
en ‘n Ander v Pool NO
1966(3) SA 96
(A). I do so principally because the matters touched upon were not
raised or fully argued before us and their
consideration is not
essential to the determination of the appeal. Nor do I consider it
necessary to express any view with regard
to the “at the
expense of” requirement for enrichment where there is
multi-party involvement for, as Schutz JA points
out, that does not
arise in the context of the present appeal.
I concur in the order made.
____________________
J W SMALBERGER
ACTING DEPUTY CHIEF JUSTICE
HARMS
JA/
HARMS
JA:
[1] Although I agree with the order
proposed I am, with some diffidence, unwilling to concur with
everything said in the judgment
of Schutz JA. My hesitation flows
from a number of considerations. Counsel were prepared to argue the
condictio sine
causa
and little
else; although seemingly an unusual case, upon reflection it
becomes clear that the matter can be accommodated under
well-established principles; and, I believe, this area of the law
should develop incrementally and not in leaps and bounds.
That does
not mean, however, that Schutz JA's prophetic views are incorrect.
[2] I agree with him that the
garage's case fits neatly within the niche of the action of the bona
fide occupier who expended
money and material on the improvement of
another's property (9
Lawsa
re-issue par 102). There appears to me to be no logical reason why
A, who mistakenly believed that he had a contract with B,
is
entitled to an enrichment claim in respect of what he has expended
on improving B's property (
Rubin
v Botha
1911 AD
568)
but not if he believed that he had a contract with C (the
effect of the judgment
a
quo
). The
remaining question is whether the general requirements underlying
all enrichment actions are present. They are that (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 (
op cit
par 76).
[3] The owner did not place the first two requirements
in issue but concentrated on (d), as did the trial Judge, and relied
to
a lesser extent on (c). The Court below postulated two
scenarios. The first was based upon the finding (which is now
accepted
by both parties) that the repudiation of liability under
the insurance policy was not justified. In that event, it held that
the garage -
“. . . would have repaired the vehicle under the mistaken
impression that it was doing so at the request of the insurance
company, and the [owner] on the other hand received the repaired
vehicle in terms of its contract with the insurance company.
It
thus received the benefit for which it had paid its premiums and was
not unjustly enriched or enriched sine causa.”
In the alternative and on the assumption that the
insurer was entitled to repudiate, the same would apply because -
“(t)he [owner] accepted delivery of the repaired vehicle
acting in terms of its contract with the insurance company. When
delivery was taken the insurance company had not repudiated
liability. The insurance policy was the primary source of the
performance of the work and enrichment.”
[4] These findings may by
implication equate the
sine
causa
requirement
with causation. Since the owner (or for that matter, the insurer)
had no right against the garage to have the vehicle
repaired and
because the garage had no other claim against either of them, the
shift of assets was without any legal ground and
therefore
sine
causa
. We are not
concerned with what the position would have been had there been no
repudiation or if the insurer had given the garage
an instruction to
repair because -
“[d]ie vraag of appellant deur die bewaring van die meubels
deur die respondent verryk is, moet in die lig van die omstandighede
wat in werklikheid geheers het, bepaal word, en nie in die lig van
omstandighede wat sou geheers het indien mev. Bond nie in
gebreke
sou gebly het om haar kontraktuele verpligtings na te kom nie.
Waar, byvoorbeeld, die eienaar van 'n saak dit in
die sorg van 'n opsigter laat wat teenoor die eienaar teen
vergoeding kontraktueel
verbind is om dit te bewaar, en in gebreke
bly om sy verpligtings behoorlik na te kom, met die gevolg dat die
saak aan beskadiging
blootgestel word, kan die eienaar klaarblyklik
nie teenoor die
negotiorum gestor
,
wat die saak in bewaring neem en uitgawes aangaan vir die behoud en
beskerming daarvan, aanvoer dat hy nie deur die bewaarneming
van die
saak deur die
gestor
verryk is nie aangesien hy die opsigter, wat kontraktueel verplig
was om die saak teen beskadiging te bewaar, reeds ten volle
vir sy
bewaarneming vergoed het. Hy sou ewe min kon beweer dat die
bewaarneming deur die
gestor
onnodig sou gewees het indien die opsigter nie in gebreke sou gebly
het nie om sy verpligtings na te kom.”
Per Botha JA in
Brooklyn
House Furnishers (Pty) Ltd v Knoetze & Sons
1970 (3) SA 264
(A) 272A-D. The facts of that case are instructive.
Mrs Bond had purchased goods on hire-purchase from the appellant.
In breach
of this contract she entered into a storage agreement with
the respondent. The latter was entitled to assert a right of
retention
(since Mrs Bond had failed to pay the storage fees)
against the appellant although, had Mrs Bond complied with her
contract with
the appellant, the appellant would have stored the
goods at less cost.
[5] As far as causation is
concerned, I agree with Schutz JA that the enrichment of the owner
was not juridically connected to
the insurance policy. It took
place regardless, and not because, of the existence of the policy.
The shift of assets occurred
between the garage and the owner and
that indicates that the owner was enriched at the expense of the
garage. This view is
in conformity with
Brooklyn
House
(at 273 in
fine - 274A):
“Dat verryking van die eienaar ten koste van die besitter, wat
die noodsaaklike of nuttige uitgawes aangegaan het, 'n vereiste
vir
die totstandkoming van so 'n rentensiereg is, moet toegegee word.
Dit is byna vanselfsprekend dat verryking van die eienaar
deur die
besteding van nuttige of noodsaaklike uitgawes aan die saak, ten
koste is van die persoon wat die uitgawes aangegaan
het, en na my
oordeel is dit, met betrekking altans tot die bestaan, al dan nie,
van so 'n retensiereg, nie ter sake nie dat
die uitgawes aangegaan
is ingevolge 'n geldige kontrak met 'n derde teen vergoeding.”
And at 275G-H:
“Dit sou dus, met betrekking tot die vraag of 'n retensiereg
teen die eienaar tot stand gekom het, nie verkeerd wees nie
om te
aanvaar dat, totdat die besitter deur òf die eienaar òf
die derde persoon behoorlik vergoed word, die verryking
van die
eienaar in werklikheid ten koste van die besitter is wat die saak
verbeter of bewaar het. In iedere geval, 'n besitter
wat, ingevolge
so 'n ooreenkoms met 'n derde, besit van die saak vir verbeterings
of bewaring kry, kom nie op onregmatige wyse
in besit daarvan nie,
en bewaar of verbeter hy die saak ten voordele van die eienaar,
voldoen hy aan al die vereistes vir die
totstandkoming van 'n
retensiereg teen die eienaar.”
[6] The fact that
Brooklyn
House
was wrong to
the extent that it held that a lien could exist independently of an
enrichment action (cf
Buzzard
Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd en
'n Ander
1996 (4)
SA 19
(A) 26I-27C) and that these passages focus on liens, does not
affect the validity of the underlying principles. At the end of
the
day the owner had the repaired vehicle as well as a claim under the
policy. His failure to have pursued the claim cannot
be laid at the
door of the garage.
_____________________
L T C HARMS
JUDGE
OF APPEAL