IN THE HIGH COURT OF SOUTH AFRICA
EASTERN CAPE DIVISION, MAKHANDA
Of interest
Case no. CA 32/2025
In the matter between:
ELDOFOX (PTY) LTD First appellant
ELDOCRETE (PTY) LTD Second appellant
and
AMATHOLE DISTRICT MUNICIPALITY Respondent
__________________________________________________________________
JUDGMENT
__________________________________________________________________
LOWE J
Introduction
1. I have had the opportunity of reading the judgment of Laing J, (“the concurring
minority judgment”). Whilst Laing J and I are in agreement as to the order to
be given, we arrive at that point by a somewhat different route, hence this
judgment accordingly.1
2. I am grateful to be able to adopt, in general terms, the background to the matter
as set out in the concurring minority judgment in paragraphs 25, 26 and 27, and
1 The delay in delivering this judgment is to be regretted, being occasioned primarily by the difference of view,
as expressed in the main judgment and the concurring minority judgment. Laing J was originally the scribe
designated, but in the end was the author of the concurring minority judgment.
in general terms, the summary of the proceedings in the court a quo in
paragraphs 28 – 33 of the said judgment.
3. The concurring minority judgment dismisses the appeal with costs, with which
order I agree, but I prefer to do so on a more focused and shorter basis, to the
extent set out below.
The relevant background facts
4. I point out that the judgment in the court a quo, per Zilwa J, sets out precisely
and accurately the issues as they came before that court, many of which were
common cause, as set out in a list of common cause facts handed up which
effectively arose from the pleadings.
5. In summary, the first and second appellants were the suppliers, in terms of
written suppliers agreements concluded with the Blue Nightingale Trading 397
(Pty) Ltd trading as the Siyenza Group (“Siyenza”), in respect of the delivery of
all top and bottom structures of VIP toilets t o be allocated to sites in the district
of the respondent (“the supplier agreements”).
6. The need for the supply of these VIP toilets was pursuant to the respondent
and Siyenza having purportedly concluded an agreement (“the municipal
agreement”) in terms of which Siyenza undertook to supply and install the VIP
toilets in designated areas within respondent’s area of jurisdiction.
7. In due course, and as set out in the concurring minority judgment, the municipal
agreement, between Siyenza and respondent, was set aside by court order.
8. Simultaneously with the conclusion of the supplier agreements, between first
and second appellants and Siyenza, written cession agreements were
concluded between Siyenza, first appellant, second appellant and respondent
as set out in the annexures to plaintiff’s particulars of claim. The crux of the
cession agreements was that Siyenza ceded, transferred and made over to
appellants its right, title and interest in, and to, any amount due and owing to
Siyenza by respondent, in terms of the municipal agreement, to the extent that
such amount did not exceed the sub -contractual debt in terms of the supplier
agreements.
9. Subsequent to the municipal agreement being set aside, as having been void
ab initio, it was common cause that appellants had delivered the components of
the VIP toilets, and that these had been transferred (delivered) sine causa.
10. To summarise, appellan ts had delivered the VIP toilets, as referred to in the
delivery notes relevant, to the areas identified in the delivery notes, each of
which were situate within respondent’s area of jurisdiction, and the items had
been received by the persons whose names appeared at the bottom of each
delivery note at the time and on the dates reflected thereon. The crux of the
action is that appellants were not paid by Siyenza, for the VIP toilets that were
delivered, being an enrichment action against respondent for the recovery of
the amounts, in respect of which appellants contended that the respondent was
enriched at their expense.
The causes of action
11. The causes of action, upon which appellants relied, were the condictio ob
causam finitam,2 alternatively the condictio indebiti.
12. As pointed out in the concurring minority judgment, the former cause of action
is available to recover money or property transferred under a valid causa which
subsequently fell away, whilst the latter is available when the transfer of money
or property was motivated by a mistaken belief relating to the validity, or
existence, of the underlying agreement.3
The recipiens issue
13. I preferred to deal with the matter on a limited basis relevant to the dismissal of
the appeal, this turning on one single issue primarily being that in both causes
of action these operate only against the recipiens of the indebitum. Put
differently the cause of action is against the primary entity which physically
received the transfer of money, or property relied upon. The defendant must
be the true recipiens of the money or property, the subject matter of the action.4
14. In both, there must be a tran sfer of money or property, and in both, the transfer
must be to the true recipiens thereof against whom the action lies. I pause to
state that the entity which physically received the money or property is not
necessarily regarded as the true recipiens as that entity may have been a
conduit for, or an agent of, the true recipiens.
2 This is an offshoot of the condictio sine causa specialis LAWSA vol 17 3 rd Ed para 222.
3 Kudu Granite Operations (Pty) Ltd v Caterna Ltd 2003 (5) SA 193 (SCA) [12] – [18]; Legator McKenna Inc and
another v Shea and others 2010 (1) SA 35 (SCA).
4 Licenses and General Insurance Company v Ismay 1951 (2) SA 456 (E); Phillips v Hughes ; Hughes v
Maphumulo 1979 (1) SA 225 (N) at 228 – 229; Minister van Justisie v Jaffer 1995 (1) SA 273 (A) at 280 – 281;
Randcoal Services Ltd v Randgold and Exploration Company Ltd 1984 (4) SA 825 (SCA) at 842 – 843 LAWSA
vol 17 3rd Ed para 214 (a) and (b).
15. Fundamentally then, the principal issue in this matter, and the issue which the
court a quo found appellants had failed to establish, was that the respondent
was the true recipiens of the VIP latrines delivered to the allocated sites.
16. On the basis of the evidence before the court a quo, and as correctly
summarised by that court:
16.1 Siyenza had contracted with respondent to carry out the VIP toilets supply and
installation project;
16.2 Siyenza had approached appellants for quotations for the supply of the VIP
latrines essential to the project;
16.3 These quotations were duly submitted by appellants to Siyenza;
16.4 The agreement for the delivery and assembly of the componen ts of the VIP
toilets was between appellants and Siyenza;
16.5 Siyenza appointed agents that received the components at the various villages
within respondent’s area of jurisdiction on behalf of Siyenza;
16.6 The respondent had at no time ordered any material from any of the appellants,
being orders placed by Siyenza in terms of its contractual obligation to supply
these;
16.7 It was only the cession agreements relevant to payment to be made to appellant
directly, by respondent, which bought respondent into the picture at all in the
relationship between Siyenza and appellants.
17. In my view the court a quo correctly concluded, on the evidence and the facts,
that the true recipiens of the components of the VIP toilets, delivered, but not
installed, was Siyenza through its various authorized nominees. In this regard
respondent played no role whatsoever as to the delivery, or receipt, of the
components in issue, this being within the responsibility and contractual
obligations of Siyenza.5 The agreements of cession are effectively irrelevant in
5 The involvement of Ms. Mjo, a ward councilor, in identifying the beneficiary in question and that Ms. Mjo
had provided Siyenza’s representatives with the details of the beneficiary, or the community representatives,
this context, and are not such as to bear upon the recipiens issue in any way at
all.
18. The court a quo correctly concluded, accordingly, that there was no enrichment
cause of action accruing against respondent in respect of appellants,
respondent not being the true recipiens of the components, delivered to
Siyenza which was the true recipiens.
19. That being so, that was the end of the matte r insofar as appellants relied upon
enrichment claims against respondent, on either basis referred to above.
20. Put differently, the first fundamental requirement of both condictio’s was that
this lay only against the true recipiens of the indebitum which was
unequivocally demonstrated not to be respondent. Thus, contrary to the
concurring minority judgment, I find unequivocally, that respondent was not the
true recipiens of the VIP toilets, and that this is determinative of the matter.
21. Whether or n ot the remaining requirements of both condictio’s were present
becomes irrelevant accordingly.
22. It suffices to say that I agree with the subsequent analysis, in any event, of the
court a quo in this regard, that court having found, correctly in my opinio n, that
for the various reasons expressed therein the remaining requirements for both
to whom the components should be delivered, is not such as to disturb the conclusion reached as to the true
recipiens. The court a quo’s misunderstanding of her evidence that Siyenza’s representatives would inform Ms.
Mjo about the imminent driver of the components and indicate to her “ names of the persons who had been
appointed by Siyenza to receive the deliveries” is by the way.
condictios were entirely absent. It is worth repeating the court a quo’s finding
that the ownership, or even possession of the VIP toilets, at no time vested in
the respondent at any stage and accordingly the presumption of enrichment did
not arise.6
23. It follows that the appeal must accordingly be dismissed with costs.
The order
24. For the above reasons, I order as follows:
1. The appeal is dismissed.
2. The appellants are to pay respondent’s costs of appeal including:
2.1. The costs of the application for leave to appeal in both the court a
quo and the Supreme Court of Appeal;
2.2. The costs of two counsel, where utilised, on scale C and B
respectively.
_________________
M.J. LOWE
JUDGE OF THE HIGH COURT
I agree,
6 Kudu Granite Operations (supra) [21].
___________________
G APPELS
ACTING JUDGE OF THE HIGH COURT
LAING J
25. This is an appeal against the dismissal of the appellants’ claim for enrichment
in relation to the supply of VIP latrines 7 to rural villages in the Eastern Cape.
The facts are mostly common cause.
Background
26. The appellants are private companies that manufacture and supply precast
concrete products. The respondent (‘the ADM’) is a district municipality, as
defined in terms of section 1 of the Local Government: Municipal Systems Act
32 of 2000 (‘MSA’). 8 The ADM previously concluded a contract with Blue
Nightingale Trading 397 (Pty) Ltd, trading as the Siyenza Group (‘Siyenza’), for
the supply and installation of VIP latrines at various locations falling within the
former’s municipal boundaries. Pursuant thereto, Siyenza concluded sub -
contracts with the appellants on 5 March 2015. The appellants were required to
deliver top and bottom structures for the VIP latrines to certain designated sites
7 The abbreviation stands for ‘ventilated improved pit’ latrines.
8 Section 1 defines a district municipality as a category C municipality, as envisaged under section 155 (1) (c) of
the Constitution.
and to train and supervise workers in the assembly thereof. At the same time,
Siyenza concluded cession agreements, ceding to the appell ants the right to
any amount owed by the ADM in terms of the main contract, to the extent that it
did not exceed the sub-contractual debt.
27. Consequently, the appellants delivered the components in question. The
information contained in the delivery notes r egarding dates, times, locations,
quantities, and persons receiving, was common cause. A dispute arose
between the ADM and Siyenza, culminating in an order that declared the main
contract unconstitutional, invalid, and unenforceable. This was reported as
Blue Nightingale 397 (Pty) Ltd t/a Siyenza Group v Amathole District
Municipality.9 The ADM made no further payments to the appellants after 10
June 2015. The parties agreed that the appellants’ performance, ie the delivery
of the components, was made sine causa.
In the court a quo
28. At trial, the second appellant’s managing director, Mr Werner Viljoen, testified
that the company had sent a quotation to Siyenza for the goods and services
required. The terms and conditions included a provision that ‘all concrete
panels and accessories remain the property of Eldocrete (Pty) Ltd [ie the
second appellant] until full and final payment.’ Siyenza provided the appellants
with details of where the components were to be delivered, the quantities
required, and the contact person. The appellants sent tax invoices by email and
9 2017 (1) SA 172 (ECG).
by hand to Siyenza, toget her with the corresponding delivery notes. Mr Viljoen
confirmed that the second appellant had retained ownership of the components
until it received payment. It played no part in the assembly of the VIP latrines,
which was Siyenza’s responsibility.
29. The first appellant’s witness, Mr Scott Burmeister, testified along similar lines.
He confirmed that the same reservation of ownership -provision had appeared
in the quotation that his company sent to Siyenza. He added that the
components were extremely durable and could last a lifetime.
30. Other witnesses included an employee of a transport contractor, Mr Moegamat
Markus, who testified that he had delivered the components to the sites to
which he was directed. Siyenza’s representatives allocated them in turn to
specific beneficiaries. A ward councillor, Ms Thobeka Mjo, testified that she had
been required to identify the beneficiaries in question. She attended a meeting
at which municipal officials explained that the ADM had appointed Siyenza to
implement its on -site sanitation programme and that the appellants would
provide the components required. Siyenza contacted Ms Mjo in due course
about delivery and provided her with details of its on-site representatives.
31. The court a quo found that the ADM had contracted Siyenza to carry out the
project and that the latter had reached an agreement with the appellants
regarding the supply and delivery of the components. Siyenza appointed
representatives to accept delivery on its behalf. The ADM never ordered the
components from the appellants and would have had nothing to do with them
but for the cession agreements. In the circumstances, the court a quo held that
the true recipiens of the components was Siyenza, via its representatives. The
ADM played no role in the deliver y thereof. It had been for Siyenza to decide
how to implement the programme; the ADM’s duty to make payment arose only
after Siyenza had secured a so-called ‘happy letter.’10
32. Regarding enrichment, the court a quo pointed out that the appellants had
reserved ownership in the components until full and final payment. It had
always been an option for the appellants to have collected the components
after cancellation of the sub -contracts with Siyenza. Ownership never vested in
the ADM. This would have occurred only if it had purchased the components
from the appellants, which it never did. It was irrelevant that the ADM may well
have had the funds at the time to have made such a purchase, and that it was
constitutionally and statutorily obliged to have provided sanitation services to
the communities falling under its jurisdiction.
33. The court a quo decided, in the end, that the ADM had never been enriched at
the expense of the appellants. It had never acquired ownership or used the
components. The appellants fail ed to satisfy the requirements for the condictio
indebiti, which would otherwise have been available against the ADM if the
latter had been the true recipiens. The claim was dismissed with costs.
On appeal
10 This is understood as a reference to written confirmation that a VIP latrine had been successfully assembled
for the designated beneficiary.
34. There are several grounds of appeal. The appellants argued, inter alia, that the
court a quo had erred in relying on the underlying contractual relationships
amongst the parties to find that the true recipiens of the components was
Siyenza. The appellants had brought an enrichment action, based on the
condictio ob causam finitam , alternatively the condictio indebiti. The underlying
contractual provisions were irrelevant. For the same reason, no reliance could
have been placed on the reservation of ownership clause to find that the ADM
had not been enriched. The court a quo ignored the ADM’s previous
undertakings to pay for the components that had been delivered, which would
have obviated the need for the appellants to have collected the items.
35. The ADM had a constitutional obligation, said the appellants, to provide
sanitation services to the communities within its jurisdiction. The delivery of the
components had disposed of the obligation, notwithstanding that the ADM had
never acquired ownership. The items remained available for assembly and use,
enabling the ADM to avoid the cost of purchasing them at present day values.
The appellants contended further that the court a quo had erred in finding that,
because ownership of the components never vested in the ADM, the
presumption of enrichment never arose. The passing of ownership was not a
requirement to trigger the presumption. It arose once it was proved that the
items had been supplied.
36. At the commencement of appeal proceedings, the issues relating to the total
unpaid value of the components and the compensation to which the appellants
would be entitled, if successful, remained common cause. The issues for
determination were reduced to the following: (a) who was the true recipiens of
the components; and (b) have the appellants been impoverished and the ADM
enriched at their expense? It is necessary, at this stage, to explore and outline
the legal principles that inform the dispute.
Legal framework
37. The appellants’ claim is based on the remedies available for unjustified
enrichment. In this regard, Du Plessis comments that:
‘Unjustified enrichment, like contract and delict, is a source of obligations. But
unlike contract, u njustified enrichment creates obligations by force of law, and
not by virtue of the actual or deemed consent of the parties. And unlike delict,
the purpose of imposing liability is not to balance out a loss with an award of
damages, but to correct a gain b y obliging the defendant to return or surrender
enrichment to the plaintiff. Put more simply, unjustified enrichment gives rise to
an obligation to provide restitution.’11
38. It is trite that there is no general action based on enrichment in our law. 12 A
plaintiff must rely on one or more of the available remedies (ie the
condictiones). Du Plessis remarks as follows:
‘The most prominent situation giving rise to enrichment liability is where one
person enriches another by transferring or deliberately giving so mething to him,
but no legal ground supports retention of the enrichment. Enrichment actions
called the condictiones may then be used to obtain restitution.’13
39. The learned writer continues:
11 Jacques du Plessis The South African Law of Unjustified Enrichment (2012) at 1. Footnotes omitted.
12 See DP Visser’s title on ‘Enrichment’ in 17 Lawsa 3 ed para 209.
13 Du Plessis, at 60.
‘South African law of unjustified enrichment traditionally disti nguishes between
the following types of transfer, each giving rise to a specific condictio:
1. the transfer that fails to fulfil an obligation (the domain of the
condictio indebiti); a typical example is the overpayment;
2. the transfer that fails to achieve a lawful purpose other than fulfilling
an enforceable obligation (the domain of the condictio causa data
causa non secuta or condictio ob rem ); a typical example is the
transfer that fails to achieve the purpose of ensuri ng that the
transferor’s spouse does not leave him or her;
3. the transfer made for an unlawful purpose (the domain of the
condictio ob turpem vel iniustam causam ); a typical example is the
transfer made in fulfilment of an illegal agreement; and
4. other transf ers made without legal ground (the domain of the
condictio sine causa specialis ); a typical example is the transfer
supported by a legal ground that fell away after it was made.
It is unnecessary to plead the name of a specific condictio. What matters is
meeting the substantive requirements for relief relating to certain fact patterns
associated with specific condictiones.’14
40. Having pleaded the facts that gave rise to a specific condictio, a claimant must
also demonstrate to the court that he or she has sa tisfied the general
requirements for enrichment liability. 15 The Supreme Court of Appeal, in
McCarthy Retail Ltd v Shortdistance Carriers CC ,16 set out the requirements
as follows: (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 unjustified.17
14 Ibid.
15 Du Plessis, at 2 –3. See, too, PRASA Corporate Real Estate Solutions v Community Property Company Ltd
and Another (384/2023) [2024] ZASCA 35 (28 March 2024), paras 24 to 27.
16 2001 (3) SA 482 (SCA).
16 2001 (3) SA 482 (SCA).
17 Para 15. See, too, Mhlari NO and Others v Nedbank Limited (251/2023) [2024] ZASCA 39 (4 April 2024),
para 17; and Visser, n 12 above. Interestingly, the learned writer refers to three, not four, requirements in his
seminal work, Unjustified Enrichment (2008) at 157. These are: (a) enrichment of the defendant, (b) at the
expense of the plaintiff, which is (c) unjustified.
41. In the present matter, the appellants have relied on the condictio ob causam
finitam, alternatively the condictio indebiti . The Supreme Court of Appeal
confirmed, in Kudu Granite Operations (Pty) Ltd v Caterna Ltd ,18 that the
condictio ob causam finitam is available to recover money or property
transferred under a valid causa which subsequently fell away.19 The condictio is
regarded as an ‘offshoot’ of the condictio sine causa specialis .20 In Legator
McKenna Inc and Another v Shea and Others, 21 the court held that the
condictio indebiti is available when the transfer of money or property was
motivated by a mistaken belief rela ting to the validity or existence of the
underlying agreement.22 In other words, the transfer was not due or owed.23
42. There is no dispute about whether the appellants have relied on the correct
condictiones. Considering the evidence, it is apparent that e ither the condictio
ob causam finitam or the condictio indebiti finds application. The focus of the
appeal is chiefly on the identity of the true recipiens of the components; if it was
the ADM, as the appellants contend, then it must still be decided wheth er the
appellants were impoverished — and the ADM enriched at their expense.
Overall, the court must determine whether the appellants have satisfied the
general requirements for enrichment liability before this can be imputed to the
ADM.
The true recipiens
18 2003 (5) SA 193 (SCA).
19 Para 15. See, too, Visser, para 222, n 12 above.
20 Ibid.
21 2010 (1) SA 35 (SCA).
22 Para 28.
23 Du Plessis, at 97.
43. A necessary condition for enrichment is the transfer or delivery of property. The
parties agreed that delivery of the components took place, but the question
was: to whom? The issue is important because it determines where the onus
lies for demonstrating that enrichment occurred — or, conversely, that there
was no enrichment at all. In Kudu Granite, the Supreme Court of Appeal held
that:
‘A presumption of enrichment arises when money is paid or goods are
delivered. A defendant then bears the onus to prove that he has not been
enriched.’24
44. The court a quo , with which the main judgment agrees, found that the true
recipiens had been Siyenza, via its representatives. The ADM played no part in
the delivery of the components; Siyenza had been both the factual and legal
recipient, the latter by virtue of the appellants’ fulfilment of their sub -contractual
obligations. Much was m ade in argument, however, of the court a quo’s
interpretation of the testimony of Ms Mjo, who had been a ward councillor at the
time and who had assisted the ADM by identifying beneficiary households for
installation of the VIP latrines. It appears that th e court a quo understood her
evidence to have been that Siyenza’s representatives would inform her about
the imminent arrival of the components and indicate to her ‘the names of the
persons who had been appointed by Siyenza to receive the deliveries’. 25 The
record indicates, nevertheless, that it was in fact Ms Mjo who provided
Siyenza’s representatives with the details of the beneficiaries or the community
24 Kudu Granite, para 21.
25 Eldofox (Pty) Ltd and Another v Amathole District Municipality (unreported, case no. EL 1182/2017, ECD
2682/2017, East London Circuit Local Division, 22 August 2024), para 12.
representatives to whom the components should be delivered. The question
that arises is the extent to which the court a quo’s error in this regard had any
impact on the identity of the true recipiens.
45. The present matter involves a multi -party situation, which can, as Visser notes,
prove notoriously intractable. 26 In Phillips v Hughes; Hughes v
Maphumulo,27 Didcott J considered the subject within the context of a cause of
action based on the condictio indebiti, finding that:
‘The condictio indebiti does not entitle the solvens to pursue what was
mistakenly paid, wherever it goes. The recovery of the undue payment from its
recipiens is the action’s sole objective . . .’28
46. The learned judge continued:
‘This means that the condictio indebiti is enforceable against the recipiens of the
undue payment, but nobody else. The recipiens is not necessarily the person
into whose hands the money was actually put when it was paid. He is the one
who must be considered, in all the circumstances of the case, truly to have
received payment. Wh enever a payment is made to an agent with authority to
accept it, for instance, the recipiens is the principal, not the agent. A conduit
through whom payment passes is likewise not its recipiens. Instead he who
obtains payment by such means is. One is not the recipiens of a payment, on the
other hand, merely because it was intended or happens in the result to benefit
one. That, on its own, does not count. All that matters is whether one can
appropriately be said to have received the payment in some or other way.
26 See Visser’s chapter on ‘ Unjustified Enrichment’ in F du Bois (et al) Wille’s Principles of South African Law 9
ed (2007) at 1083–1087.
27 1979 (1) SA 225 (NPD).
28 At 228H–229A.
Unless one has done so, one is beyond the range of the condictio indebiti, for all
the payment’s auxiliary advantages to one.’29
47. The legal nuances of a multi -party situation are not immediately obvious but
must be recognized for a better understandi ng of where the claim lies. The
subject is illustrated in Minister van Justisie v Jaffer ,30 where a certain H had
deposited R 30 000 as bail, pending the outcome of his brother’s appeal
proceedings in relation to the latter’s conviction of dealing in drugs. The
respondent had previously lent R 30 000 to H’s brother. When the appeal was
dismissed, H claimed a refund of the bail from the registrar but endorsed the
receipt to the effect that payment should be made to the respondent. The
registrar paid accordingly, only to discover that the money had been wrongfully
refunded because H’s brother was s till at liberty. The appellant brought a claim
against the respondent, based on the condictio indebiti . In answer to the
question against whom the claim ought to have been brought, the erstwhile
Appellate Division referred to the following extract from Pot hier’s work on the
subject:
‘The condictio indebiti is given against him to whom the payment has been
made. . . . The payment is deemed to have been made to me whether it was
made to myself or to another at my instruction . . . That is why . . . it is not
against the one to whom the sum which was erroneously believed to be due to
me, was paid at my instruction, that the condictio indebiti must be given, but it is
against me.’31
29 At 229B–D.
30 1995 (1) SA 273 (A).
31 At 280D –F. The court referred to Pothier Treatise on the Quasi -Contract called Promutuum and on the
Condictio Indebiti para 167 (translated by Hosten et al, at 25).
48. In Randcoal Services Ltd and Others v Randgold and Exploration Co
Ltd, 32 the S upreme Court of Appeal confirmed that a claim for unjustified
enrichment, based on the condictio indebiti, lay against the person who in law
is considered to have received payment, rather than a third party who was the
factual recipient. 33 The court emphas ised, however, that it was necessary for
the defendant to have instructed the claimant to have made payment to the
third party before the claim could be brought.34
49. Visser summarises the position as follows:
‘The condictio indebiti lies only against the recipiens of the indebitum. Of course,
the person who physically received the money or property is not necessarily in
law regarded as the recipiens. So, for example, the person who physically
received the transfer could be a mere con duit or an agent of the recipiens. Such
person can also be someone nominated by the recipiens as the one to whom
payment should be made. On the other hand, one is not the recipiens of a
payment merely because it was intended or happens in the result to ben efit one.
In every case the action lies against the true recipiens.’35
50. The appellants contended that the ADM was the true recipiens. This is not
completely without merit; it was the ADM that needed the components in the
first place. From the testimonies o f both Ms Mjo and a general manager in the
ADM’s engineering services directorate, Ms Nompucuko Badi, the present
matter seems to have given rise to a multi -party situation like those described
32 1998 (4) SA 825 (SCA).
33 At 843A–E. The court cited, in this regard, the decision in Licences and General Insurance Co v Ismay 1951
(2) SA 456 (E).
34 At 843F–G. See, too, Besselaar v Registrar, Durban and Coast Local Division, and Others 2002 (1) SA 191
(D), at 197I–198C.
35 Visser, para 214 (b), n 12 above.
in the authorities mentioned earlier. Siyenza concluded a contract with the ADM
for the supply and installation of VIP latrines; it concluded, at the same time,
sub-contracts with the appellants for the delivery of the components because it
was unable to supply the goods on its own. The appellants performed as
required. It could well be said that the appellants’ delivery of the components to
rural communities in the Eastern Cape was done upon the instruction of the
ADM via the conduit or agency of Siyenza’s representatives, alternatively Ms
Mjo. Once the contract betw een the ADM and Siyenza was declared invalid
and unenforceable, the appellants’ performance was rendered sine causa. The
appropriate legal remedies were indeed either the condictio ob causam finitam
or the condictio indebiti, but the appellants would have to have demonstrated
that the ADM had been enriched — and that is, as I shall discuss further, where
the problem lies. The ADM benefitted to the extent that the delivery of the
components assisted in addressing the municipality’s statutory duty to provide
water and sanitation services. To say, however, that this amounted to
enrichment sits uncomfortably within the context of the matter.
Whether the defendant was enriched
51. Enrichment must be understood as the acquisition of an economic benefit. 36
The usual a pproach for deciding how enrichment may be constituted is to
evaluate whether there was: (a) an increase in the defendant’s assets which
would not have taken place but for the enriching fact; (b) a non -decrease in his
or her assets which would have taken p lace but for that fact; (c) a decrease of
36 Visser Unjustified Enrichment at 158, n 17 above.
liabilities which would not have taken place; or (d) a non -increase of liabilities
which would have taken place.37
52. The ADM is required, in terms of section 152 (2) of the Constitution, to strive to
achieve the objects of local government. These include ensuring the provision
of services to communities in a sustainable manner, and the promotion of
social and economic de velopment. Under section 156 (1) (a) of the
Constitution, the ADM has executive authority and the right to administer the
local government matters listed in Part B of Schedule 4, such as water and
sanitation services, but limited to potable water supply sy stems and domestic
wastewater and sewage disposal systems. The provisions of section 84 (1) (d)
of the Local Government: Municipal Structures Act 117 of 1998 (‘MStr’) grant
functions and powers to a district municipality in this regard. Furthermore, as
both a water services authority and a water services provider under the Water
Services Act 108 of 1997 (‘WSA’), 38 the ADM has a duty to ensure access to 39
and to provide water services. The term refers to both water supply services
and sanitation services.40 The latter is defined as:
‘ . . . the collection, removal, disposal or purification of human excreta, domestic
wastewater, sewage, and effluent resulting from the use of water for commercial
purposes.’41
37 Visser, para 209, n 12 above.
38 This was confirmed by Ms Badi during her testimony.
39 Section 11 (1) of the Water Services Act 108 of 1997 provides that ‘[E]very water services authority has a
duty to all consumers or potential consumer s in its area of jurisdiction to progressively ensure efficient,
affordable, economical and sustainable access to water services.’
40 Section 1.
41 Ibid.
53. Although the parties seemed to agree that the suppl y and installation of VIP
latrines came within the ambit of the WSA, it would be accurate to say that this
fell under the more general description attached to the relevant local
government matter listed in Part B of Schedule 4 of the Constitution and
section 84 (1) (d) of the MStr.42 In other words, it comprised a sewage disposal
system, nothing more.
54. A general manager in the ADM’s budget and treasury office, Ms Sonia Kieck,
testified that the project had its origins in the municipality’s integrated
development plan (‘IDP’). The budget for the project was funded by a municipal
infrastructure grant (‘MIG’) from the National Treasury, accompanied by certain
conditions, including the stipulation that the funds be spent only on the project,
as finally approved. It was an accelerated project, said Ms Kieck, meaning that
the ADM required its completion within 12 months at most. To avoid the delay
in waiting for payment from the National Treasury, the ADM secured an
arrangement with the Development Bank of South A frica (‘DBSA’) to ‘frontload’
the project; in other words, the DBSA extended a loan for the prompt payment
of the goods and services required, which the ADM would eventually repay
from the MIG. The project proceeded accordingly. Ms Badi testified that the
ADM cancelled the contract with Siyenza on or about 10 June 2015 after
identifying irregularities in its appointment. 43 No further work was done. She
indicated that the ADM had been willing, at the time, to accommodate suppliers
such as the appellants but only if additional funding could be obtained. This
42 There was no evidence to the effect that the supply and installation of VIP latrines also entailed ‘th e
collection, removal, disposal or purification of human excreta,’ in accordance with the definition of sanitation
services under section 1 of the WSA.
43 The background is set out in Blue Nightingale Trading 397 (Pty) Ltd v Amathole District Municipality 2017
(1) SA 172 (ECG).
never materialised and the project was abandoned. Ms Badi went on to say
that the ADM could not simply allocate to the unfinished project a portion of the
annual grant that it continued to receive for wate r and sanitation services from
the National Treasury. The funds had already been allocated to other projects,
as approved.
55. Even if, in the circumstances, the court a quo had been wrong in finding that
Siyenza was the true recipiens of the components, the n it remains difficult to
contend that the ADM was enriched. This is so for the following reasons.
Ownership
56. Firstly (and foremostly), there is the aspect of ownership. The quotations and
delivery notes stated unambiguously that the components remained the
property of the appellants until the latter had received full and final payment.
There was extensive debate about the impact of the reservation of ownership
provisions, with counsel contending that these were enforceable only between
the parties to the sub-contracts; they had nothing to do with the ADM. In any
event, said counsel, the Supreme Court of Appeal had held, in Kudu Granite,
that the remedies available for an action based on unjustified enrichment were
equitable in nature and ‘the [underlying] contractual provisions are largely
irrelevant.’44
44 Kudu Granite, para 15. See S Eiselen ‘Quantifying Unjustified Enrichment Claims’ THRHR 2004 (67) 524 at
526, where the writer remarked that the contractual provisions are wholly irrelevant and should be ignored.
57. The concept of ownership gives rise to what is regarded as the widest right that
a person can have in relation to a corporeal thing. 45 As Van der Merwe
remarks:
‘In principle, ownership entit les the owner to deal with his or her thing as he or
she pleases within the limits allowed by law.’46
58. In the present matter, the evidence of Mr Viljoen and Mr Burmeister cannot be
ignored. Both admitted that the appellants could have collected the
components at any time. The appellants declined to do so in the hope of
resolving the matter, especially after the ADM displayed a willingness to
purchase the components if further funding became available. Whereas any
effort made to retrieve the items would have encountered formidable logistical
and financial hurdles, there was no evidence that the components had ever
been abandoned. In any event, the appellants never pleaded res derelictae. It
was also clear that the ADM never viewed the owners as anyone other than the
appellants; Ms Badi testified that the ADM had attempted to obtain further
funding from the Nat ional Treasury, alternatively the Department of Water and
Sanitation, to purchase the unpaid -for components. Counsel conceded, in the
end, that ownership remained vested in the appellants.
Possession
59. Secondly, there is the aspect of possession. Counsel submitted that there was
no duty on the part of a plaintiff to demonstrate that the transfer of ownership
45 See CG van der Merwe’s title on ‘Things’ in 27 Lawsa 2 ed, para 134.
46 Ibid. See, too, Regal v African Superslate (Pty) Ltd 1963 (1) SA 102 (A), at 106H.
had taken place. In that regard, King v Cohen Benjamin & Co 47 was authority
for the principle that an enrichment claim can succeed even against a bona fide
possessor, provided that the latter has been enriched. 48 Whether the ADM was
placed in possession of the components, however, is another matter altogether.
In this regard, Van der Merwe observes that:
‘It is trite law that possession consists of both an objective and subjective
element, namely the objective or physical element ( corpus, detentio) and the
subjective or mental element ( animus). . . . Literally, a possessor must control
the article with both body and mind. The physical element consists in the factual
control exercised over the article. The mental element concerns the state of mind
of the possessor. Whereas a minimum of factual control is required for these
classes of possession, the content of the state of mind required for poss ession
differs according to the function served by possession in a particular case.’49
60. The unpaid-for components were never assembled; they were never integrated
into a sewage disposal system. There was, moreover, no indication that the
ADM ever moved the components to a depot, fenced them off, stationed
security personnel on site, or attempted in any other way to secure control over
them. The components lie scattered across various rural locations in the
Eastern Cape. There is nothing to demonstrate that the ADM ever regarded
itself as a possessor.
61. In the absence of the transfer of either ownership or possession, it cannot be
said, with reference to the usual approach for deciding enrichment, that there
has been any increase (or, conversely, a non-decrease) in the ADM’s assets.
47 1953 (4) SA 641 (WLD).
48 At 649B–E.
49 Van der Merwe, para 74, n 45 above.
Benefit derived
62. Thirdly, the evidence of the ADM’s witnesses was that the components were
not simply there for the taking. They cannot be put to immediate use. Ms Badi
conceded that the ADM could appoint another contractor to as semble the
components, but she qualified her concession by stating that funding would
have to be available for such purposes. The project has been abandoned. After
a considerable period of dormancy, any attempt to complete it would
undoubtedly require prov ision to that effect in the IDP, an appropriate budget,
and the approval of the National Treasury accompanied by the necessary
funding. It would, of course, also be necessary for the ADM to implement its
supply chain management policy for the appointment o f a suitable contractor
for the services required. This would entail further costs and delay.
63. The testimony of the expert witness, Mr Ian Pearson, was that the price at
which the appellants had sold the components to Siyenza was below market
value. To say , however, that the delivery thereof resulted in a decrease (or,
conversely, a non-increase) in the ADM’s liabilities is without merit. The ADM’s
constitutional obligation to achieve the objects of local government, including
the provision of water and sanitation services, is ongoing. It can discharge such
obligation in any number of ways, including but not limited to the supply and
installation of VIP latrines. There was no suggestion that the ADM has resolved
to complete the project or to embark upon a fr esh undertaking, using the
components in question. The items may — or may not — be required. In that
regard, the project may well be affected by future ministerial authorizations to
local municipalities regarding the exercise and performance of powers and
functions in relation to sewage disposal systems; these could include the
removal of the obligation from the ADM altogether or at least the adjustment of
its extent.50 There are too many uncertainties, too many contingencies, to allow
for a finding that th e ADM has obtained any financial advantage from the
delivery of the components. The evidence, as presented by the ADM,
demonstrates that it was not enriched. The authorities indicate unambiguously
that the condictiones available to the appellants are to co rrect a gain, already
secured, by obliging the defendant to make restitution. 51 The remedies do not
extend to possible unjustified enrichment in the future.
The remaining general requirements
64. If the ADM has not been enriched, then that ought to be the end of the matter,
but if I am wrong, then the appellants face further obstacles. While they remain
the owners of the components it is far from easy to assert that they have been
impoverished. Ret rieval may not be an available option for practical reasons,
yet there seems to be nothing in law that would prevent the appellants from
collecting their property from wherever it may be found, barring the possible
application of spoliation principles or s imilar where members of the relevant
communities have already taken the components into their possession. The
picture of gross inequity painted by the appellants would look quite different
50 Section 84 (3) (a) of the MStr.
51 See, in general, McCarthy Retail, paras 15–16 and 19–20; Kudu Granite, para 15; and Legator McKenna, para
28.
where, for example, the appellants had delivered a single truckload of cement
blocks to an urban development. Retrieval would have been more
straightforward. That it is otherwise in the circumstances of the present matter
should not be made the problem of the ADM.
65. Consequently, the remaining issue identified by the part ies can be determined.
It cannot be said that the appellants have been impoverished and the ADM
enriched at their expense. There is no need to consider the last and final of the
general requirements, ie whether any enrichment on the part of the ADM was
unjustified.
Relief and order
66. Even if the court a quo had been wrong in deciding that Siyenza was the true
recipiens of the components, then I am nevertheless satisfied that the ADM has
discharged the onus of proving that it was not enriched. Neither owner ship nor
possession of the components was transferred. It cannot be said, moreover,
that the ADM derived any financial advantage from the delivery thereof other
than to assist it in the fulfilment of its local government obligations. It did not
equate to the acquisition of an economic benefit; the assets and liabilities of the
ADM remained unchanged. As inequitable as the situation seems to appear,
the remedies chosen by the appellants cannot succeed where the ADM has
demonstrated that it was not enriched. There is no reason to interfere with the
decision of the court a quo.
67. Regarding costs, there is no reason why the general rule should not be applied.
Considering the complexity of the matter, the value of the claim, and the
importance to the parties of the relief sought, the order in this regard must
incorporate the appropriate scale.
68. Consequently, I agree with the order in the main judgment.
_________________________
JGA LAING
JUDGE OF THE HIGH COURT
APPEARANCES
For the appellants: Adv MW Collins SC and Adv S Hoar
Instructed by: LOTT ATTORNEYS
Office 8 Dias Block, Fairway Green
3 Abrey Road, Kloof, Kwa-Zulu Natal
Ref: EA/tk/EDX-01 & EDT-01
Tel: 031 940 7047; email: cuan@lottattorneys.co.za
c/o McCALLUM ATTORNEYS
Office no. 10, Fidelity Building
87 High Street, Makhanda
For the respondent: Adv JG Richards SC and Adv N Mdunyelwa
Instructed by: Y TSIPA ATTORNEYS
16A Kilimanjaro Building, King Street, Butterworth
Ref: A56/CL/2023
Tel: 072 784 4430; email: dazanatsipa@gmail.com
c/o YOKWANA ATTORNEYS
10 New Street, Makhanda
Date heard: 1 September 2025.
Date delivered: 24 February 2026.