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[1996] ZASCA 92
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Singh v Santam Insurance Company Ltd. (106/95) [1996] ZASCA 92; 1997 (1) SA 291 (SCA); [1997] 1 All SA 525 (A); (17 September 1996)
IN
THE SUPREME COURT OF SOUTH AFRICA (APPELLATE DIVISION)
CASE NO. 106/95
In the matter between
SHEILA DEVI SINGH
APPELLANT
and
SANTAM INSURANCE COMPANY
LIMITED
RESPONDENT
CORAM
: CORBETT CJ, FH
GROSSKOPF, MARAIS,
OLIVIER et SCHUTZ JJA
DATE
HEARD
: 5 SEPTEMBER 1996
DATE DELIVERED
: 17 SEPTEMBER 1996
SCHUTZ JA
2
JUDGMENT
SCHUTZ JA
The decision of the Court a quo,
reported as Santam Insurance Ltd
v Devil 1994(3) SA 763(T), has
evoked a good deal of comment in the journals, principally, I think,
because the facts were not set
out in any detail in the judgments.
Once the facts are known the case is an unremarkable one, save in one
respect, that the four
judges who have so far pronounced upon it are
equally divided in their opinions (Gautschi AJ at first instance
favouring the appellant
("Singh"), AC le Roux AJ with le
Grange J concurring, favouring the respondent ("Santam") a
quo, whilst Nugent
J dissented.) In terms of the majority decision
Singh's
3
claim for the return of her
Mercedes car failed.
Her founding affidavit is
terse. She alleges that she is the owner of the car, and that on 5
July 1990 one Lowe, an authorised assessor
in Santam's employ "took
possession" of it. Santam is still in possession. Those simple
and sufficient allegations, cast
in a form usually associated with
the case of Graham v Ridley
1931 TPD 476
, are followed by a final
paragraph reading: "I respectfully submit that, by having
dispossessed me of my motor vehicle, [Santam]
is in unlawful
possession of [it]."
The description of Santam's
possession as "unlawful" does not in itself attract any
additional onus: Chetty v Naidoo 1974(3)
SA 13 (A) at 20 D-E. But,
on the other hand, unlawfulness being a conclusion of law, and not
constituting the entirety of spoliation,
there are no facts alleged
4
sufficient to found spoliatory
relief. Dispossession without consent or legal process of one in
peaceful and undisturbed possession
are the essentials for such
relief. I mention these things only so that spoliation, hinted at in
Singh's replying affidavit, may
be put out of the way. It is not her
case. That was accepted on appeal.
Her ownership and Santam's
possession were not in issue. The case hinged upon the latter's claim
that it was entitled to retain possession
under a lien operative
against her. The onus of proving such a lien accordingly rested on
Santam, and in order to ascertain whether
it discharged it I turn to
its answering affidavit.
On 9 March 1990 Santam issued a
motor dealers' external risks policy to Kenilworth Motors and Motor
Sales, a firm owned by one
5
Muthusamy. Singh's Mercedes was
damaged in an accident in circumstances such that Santam was obliged
to indemnify the insured (Muthusamy)
under the policy. On 19 March
1990 Santam received a claim in respect of the damage. According to
the claim form Singh had been a
passenger in the car when the
accident occurred (she admitted her presence as a fact.) The cost of
repairs was estimated in the form
at R15 000.
The affidavit proceeds "Op
daardie stadium [when the claim form was received] was die motor
reeds afgelewer aan Hutton Paneelkloppers
["Hutton"] te
Wynberg, Johannesburg. Die applikante [Singh] was hiervan persoonlik
bewus." Because of its liability
under the policy Santam
instructed Hutton to undertake the repairs. Such repairs were
6
necessary for the upkeep of the
car and constituted necessary repairs. On 4 July 1990 Santam paid
Hutton R48 341.09, being the fair
and reasonable price for the
repairs which Hutton had effected. It was after these events that
Lowe took possession of the car from
Hutton on behalf of Santam,
which has since retained possession in purported exercise of a lien.
Those are the facts which Santam
sets out with regard to the
possession of the car. In her replying affidavit Singh adds that
prior to Lowe's actions Muthusamy had
paid the excess of R1500 to
Hutton, signed a release, removed the car on Singh's behalf, taken it
to another firm to have the wheel's
balanced, and not being satisfied
with Hutton's repairs, returned the car to that Arm.
Santam proceeds to allege that
Muthusamy has paid no premiums
7
at all, despite the fact that
the first fell due on 1 April 1990. In consequence Santam cancelled
the policy on 18 July 1990. It
claims that by virtue of the
aforegoing it has been impoverished and Singh enriched to the extent
of the payment to Hutton, which
represented not only the fair and
reasonable cost of the repairs but also Santam's actual expenditure.
The facts set out by Santam do
not establish a lien, if for no other reason than that any acts
which might have given rise to a lien
had spent themselves before
ever Santam acquired possession. By this I mean, that assuming Hutton
had a debtor and creditor lien
which availed against Santam, and an
enrichment lien which operated against the owner, Singh, those liens
ended when Santam paid
Hutton. A lien is accessory to a
8
main obligation and
indivisible: See Buzzard Electrical (Pty) Ltd v 158 Jan Smuts Avenue
Investment (Pty) Ltd and Another
[1996] 3 All SA 1
(A) at 4 g -i. In
the case of the debtor and creditor lien the principal right, to
payment, fell away, so that the lien also fell
away. In the case of
the enrichment lien (which is the one that matters), Button's
impoverishment was ended, so that any action that
there may have been
based on enrichment (on which more below) fell away. Loss of
possession, when Hutton voluntarily allowed the
removal of the car by
Lowe, is an additional reason, if there could be more reason, why the
Hutton liens could not have survived.
But the suggestion is that in
some manner Santam acquired its own lien. Santam's problem is that
after it acquired possession on
5 July
9
1990 it incurred no expenditure
on and made no improvement to the car. What the law requires for a
lien is that the outlay should
occur while the party claiming it is
in possession of the subject matter: Van Niekerk v van den Berg
1965(2) SA 525(A) at 539 C-E,
541 F-G; Gazide and Another v Nelspruit
Town Council 1949(4) SA 48(T) at 51. Accordingly I agree with what
was said by Nugent J in
his dissenting judgment (at 770 D-G):
"The appellant's
[Santam's] submission assumes that a salvage lien arises whenever
necessary expenditure is incurred on the
property of another,
provided only that at some time the property comes into the
possession of the creditor.
It is trite that the incurring
of such expenditure does not by itself give rise to a lien, and I do
not share the view that a lien
is somehow 'completed' by subsequent
acquisition of possession. Recognition of such a principle would seem
to me to be an invitation
to self help.
A salvage lien, as I understand
it, is a remedy which is
10
available to the possessor of property of another. In
other words, it operates as security for the recovery of necessary
expenditure
incurred by him in the course of his possession of
another's property. This seems to me to be implicit in the treatment
of the topic
by the authorities, though I have not found it expressly
so stated."
The express statement, if it be needed, is to be found
in the cases of Van Niekerk and Gazide mentioned above. Also, I
think that
we are concerned with an improvement, not a salvage lien.
The majority members of the Court a quo did not deal
squarely with this simple point, which is, I think, decisive of the
case, but
allowed themselves to be led into a debate as to whether
two separate salvage liens may co-exist over the same property, and
whether,
accordingly, Santam had established such a lien
independently of Hutton's original lien (at 767 G - 768 I). It is
sufficient to say
that the analogy of the
11
motor repairer sending out
specialised work to an auto-electrician is a misleading one. In that
case the repairer is given possession
and arguably never loses it,
whereas on the facts put forward by Santam it did not acquire
possession until all the repairs had been
effected and paid for.
Santam sought to overcome its
difficulties by contending that it had acquired possession before 5
July 1990 and was already in possession
when Mutton performed the
repairs. The contention was that Hutton possessed as agent for
Santam. It is possible for the possession
requisite to a lien to be
through another: see De Jager v Harris NO and the Master 1957(1) SA
171 (SWA) at 179. The suggestion was
that vicarious possession
through Hutton was established by clause 7 of the
12
insurance policy between Santam
and Mutnusamy, which provided that if events giving rise to a claim
occurred, Santam was entitled
to take possession of the vehicle,
either personally or through another. The existence of a power to
take possession does not establish
that possession was in fact taken.
Santam's affidavit does not even attempt to assert that Hutton
possessed as its agent. On the
contrary it states that Muthusamy
placed Hutton in possession, and Singh's reply adds that it was to
him that the car was returned,
and that he then returned it to
Hutton. Santam's own affidavit states "Nadat Hutton
Paneelkloppers die motor herstel net, het
die respondent [Santam]
besff van die motor geneem." And again "Kort daarna [ie
shortly after the payment of R48 341,09
by Santam to Hutton] het 'n
mnr Row Lowe, 'n werknemer van die
13
resondent, besit van die motor
namens die respodent geneem ..." (own emphasis). These passages
are quite inconsistent with Mutton's
previously having held on behalf
of Santam. The mere fact that Santam authorized Hutton to effect the
repairs takes the matter no
further, because Hutton could at least as
readily have done so while holding the car for Muthusamy as for
Santam. Given the fact
that it was Muthusamy who had delivered the
car, it was necessary for Santam to prove, if it was to succeed, that
there had been
some form of attornment, a tripartite agreement
between Santam, Hutton and Muthusamy, that whereas Hutton had
formerly held for him
it would thereafter hold for Santam. There was
no attempt to prove an attornment. Accordingly the attempt to
establish possession
prior to 5 July 1990 fails.
14
The possession upon which
reliance is placed to establish a lien must have been lawfully
acquired: Brooklyn House Furnishers (Pty)
Ltd v Knoetze and Sons
1970(3) SA 264 (A) at 275 B. This requirement creates a further
problem for Santam, because on the evidence
available it is difficult
to understand what right Santam had to take the car on 5 July, or for
that matter, what right Hutton had
to surrender it to Santam.
However, in the light of what I have said so far it is unnecessary to
pursue this point further.
There may be a yet further
difficulty in Santam's way. I do not make a finding on it, but as it
is important I shall indicate briefly
what it is. An enrichment lien
does not exist in vacuo. It serves merely to secure or strengthen an
underlying cause of action based
on unjust
15
enrichment: Buzzard Electrical
(Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd and Another
(above) at 4 g - h. Absent the
enrichment action there is no lien. I
shall assume that the impoverishment of Santam and the enrichment of
Singh have been established.
That notwithstanding, was the enrichment
sine causa?
In the Buzzard case Van Heerden
JA distinguished two types of enrichment claim of common appearance.
The first arises when A effects
improvements to the property of an
owner but not pursuant to a contract with him but pursuant to a
contract with B, and A then sues
the owner for enrichment. The second
arises when the owner contracts with B for improvements to his
property, but B, instead of doing
the work himself, sub-contracts it
to A, and A sues the owner once he has
16
completed the work. The two
types were styled type one and type two. Buzzard dealt with a type
two situation. It was held that the
subcontractor had no
enrichment action and consequently also no lien. Emphasis was placed
on the contract between the owner
and B, and it was reasoned "...
die eienaar het weens A se werksaamhede niks meer verkry as dit
waarvoor hy met B beding het
nie. Daarom was sy verryking nie sine
causa nie. Inteendeel was sy ooreenkoms met B die oorsaak van sy
verryking" (at 7 b -
c). Similar reasoning might apply in the
present case, if Singh was a party to the arrangements between
Muthusamy and Santam. In
her reply to the defence of lien she said
that Muthusamy had told her that his insurer was liable for the
damage to the car, and
that although she had no knowledge of the
details, she left it to
17
him to make the necessary
claim. From this it might be reasoned that her enrichment flowed from
Muthusamy's insurance policy and not
from Santam's payment. If
anyone was entitled to be enriched gratuitously it was she.
But even if the facts in this
case are not akin to type two the question remains whether her
enrichment was unjust. In argument Mr
van Niekerk, for Santam,
readily conceded that if all had gone according to plan, if Muthusamy
had paid his premiums and Santam had
paid pursuant to an extant
policy, there could have been no enrichment claim. But, it was
contended, Muthusamy had paid no premiums,
with the consequence that
a clause in the policy had operated so as to have nullified the
policy by the time that the payment was
made. I have
18
difficulty with this
contention, because Santam's own affidavit reflects that the policy
was cancelled by conscious choice only on
18 July, that is a
fortnight after the payment to Hutton. It therefore seems as if the
payment was made pursuant to the policy.
But even if the policy had
perished automatically, Santam's evidence indicates that it made the
payment in the belief that it was
still alive. This, it was
suggested, was done in error. There is no evidence of such error. And
even if there were one I find very
strange the suggestion that under
the guise of unjust enrichment the consequences of that error should
be visited upon Singh, the
party entitled to have her car repaired
for nothing. So that it may well be that Santam's claim to a lien
should founder also for
lack of an underlying enrichment action.
19
In the upshot Santam has not
proved an enrichment lien, and Singh, as owner is entitled to the
return of her car.
The appeal is upheld with costs
and the following order is substituted for that of the Court a quo:
"1. Santam Insurance Company
Ltd is ordered to return to Sheila
Devi
Singh the motor vehicle Mercedes
Benz 280 SE registration
number ND 407196. 2. Santam
Insurance Company Ltd is ordered to pay the costs of the
application heard before
Gautschi AJ in the Witwatersrand Local
Division.
20
3. Santam Insurance Company Ltd is ordered to pay the
costs of
appeal."
WPSCHUTZ JUDGE OF APPEAL
CORBETT CJ) F H GROSSKOPF JA)
) CONCUR
MARAIS
JA)
OLIVIER
JA)