COUWS v JESTER POOLS (PTY) LTD[1968] 4 All SA 46 (T)
Division:
Transvaal Provincial Division
Judgment Date:
5 July 1968
Case No:
not recorded
Before:
Cillié J and Jansen J
Parallel Citation:
1968 (3) SA563 (T)
• Keywords • Cases referred to • Judgment •
Keywords
Condictio indebiti - Expenditure of money in error - Benefit to
land owner - Land owner not recipient
Condictio Sine Causa - Land owner - Builder improving site in
error - Loss of materials by accessio
Enrichment - Mistaken improvement of property - Landowner's
obligation to compensate
Improvement - Useful - Unauthorised - Benefits - Builder
improving site in error
Negotiorum gestio - Landowner - Useful improvements - Builder
expending money on improving site in error
Possession - Bona fide occupier - Builder - Compensation for
improvements erected in error
Cases referred to:
Frame v Palmer 1950 (3) SA 340 (C) - Considered
Gillingham v Harris and Morgan 1905 TS 94 - Considered
Klug and Klug v Penkin 1932 CPD 401 - Distinguished
Knoll v SA Flooring Industries Ltd1951 (1) SA 404 (T) -
Considered
New Club Garage v Milborrow and Son 1931 GWLD 86 -
Considered
Nortjé v Pool, NO 1966 (3) SA 96 (AD) - Applied
Scholtz v Faifer 1910 TPD 243 - Referred to
United Building Society v Smookler’s Trustees and Golombick’s
Trustee 1906 TS 623 - Considered
Vadas (Pty) Limited v Philip 1940 CPD 267 - Referred to
Williams’ Estate v Molenschoot and Schep (Pty) Limited 1939 CPD
360 - Distinguished
Page 47 of [1968] 4 All SA 46 (T) View Parallel Citation
Judgment
JANSEN, J.: The appellant and respondent were defendant and
plaintiff respectively in the magistrate's court. The defendant
appeals against a judgment given in favour of the plaintiff in the
sum of R1,000 and costs.
The plaintiff's particulars of claim read as follows :
“1.
At all material times hereto, the plaintiff was under the bona
fide and reasonable belief that one M. Wolf was the owner of
certain Stand 1857, Bryanston, Johannesburg, situate at the corner
of St. Audrey and Grosvernor Roads, Bryanston (hereinafter referred
to as the said 'stand').
2.
On 12th November, 1964, the plaintiff and the aforesaid M. Wolf
entered into a written agreement in terms whereof the plaintiff
undertook to construct a swimming pool on the said stand for the
sum of R1,640.
3.
The plaintiff duly constructed a swimming pool on the said stand
in accordance with the aforesaid agreement.
4.
The defendant on or about the month of January, 1965, as the
owner of the said stand, repudiated the authority of the aforesaid
Wolf and took possession of the said stand.
5.
The construction of the swimming pool by the plaintiff as
aforesaid was a useful improvement to the said stand in an amount
of R1,000, the said sum being the amount of the plaintiff's actual
expenditure in constructing the said swimming pool and the amount
by which the said stand has been enhanced in value by reason of the
construction of the swimming pool thereon.
6.
The defendant has accepted the benefit of the construction of
the aforesaid swimming pool on the said stand and in the premises
the defendant has been unjustly enriched at the plaintiff's expense
in the sum of R1,000 but notwithstanding demand the defendant has
failed, refused or neglected to pay to the plaintiff the said sum
of R1,000 or any portion thereof,
Wherefore the plaintiff prays for judgment against the defendant
for :
(a)
payment of the sum of R1,000,
(b)
costs of suit.”
To these particulars the defendant pleaded no knowledge of the
allegations in the first three paragraphs and put the plaintiff to
the proof thereof; the remaining paragraphs (in terms of an amended
plea) he denied.
On the evidence the magistrate found the following facts proved
:
“1.
At all material times the defendant was the registered owner of
Stand No. 1857, Bryanston, until 5/4/1965 when it was transferred
into the name of Mrs. Cogen.
2.
On 12/11/1964 the plaintiff firm represented by Mr. Lang entered
into a contract with Mr. M. Wolf for the construction of a swimming
pool on Stand 1857.
3.
This contract was signed by Mr. Wolf as owner of the stand and
at all
Page 48 of [1968] 4 All SA 46 (T) View Parallel Citation
times during the construction of the pool and until it had been
completed the plaintiff company bona fide and reasonably believed
Mr. Wolf to be the owner of this stand.
4.
The defendant was not a party to the contract and had nothing to
do with the construction of the swimming pool.
5.
The pool was duly constructed in terms of the contract, exh.
'C'.
6.
Plaintiff's actual expenses in constructing the pool amount to
R1,249.59.
7.
Construction of the swimming pool is a useful improvement which
enhances the value of the stand by at least R1,000.
8.
The defendant accepted the benefits of the construction of the
swimming pool.
9.
After completion of the swimming pool and by virtue of a deed of
sale dated 16/1/1965, the defendant sold the said Stand 1857 to a
Mrs. Cogen, transfer being passed in her name on 5/4/1965.
10.
The defendant was unjustly enriched to the extent of at least
R1,000 at the expense of the plaintiff.”
On this factual basis the magistrate gave the judgment mentioned
above. But for a full understanding of the problems involved it is
necessary to refer to some of the circumstances in greater
detail.
In this regard the defendant's evidence, which has not been
contradicted, is of some importance. The gist of it, in the light
of certain accepted facts, is as follows: In 1963 he and his two
brothers, J. F. and L. M. Gouws, each had an interest in and was a
director of Riteway Construction Company, a company formed to
construct dwelling houses for the purpose of speculation. The
directors bought “plots in their personal names as it was easier to
obtain bonds from the building society in one's private name” ,
although they were actually the nominees of the company. One such
plot (out of a total of about 100) was Stand 1857, the stand in
question, purchased in about October, 1963. The purchase price of
about R2,000 was paid by the company, but the defendant, in his own
name, took transfer and obtained a bond in the vicinity of R12,000
from a building society. He is not certain as to when he applied
for the bond, but is of the opinion that the bond and transfer into
his name occurred simultaneously. In any event it is clear (see
exh. “D” ) that transfer was registered on 4th March, 1964. During
the first half of March, 1964, the defendant, by verbal agreement,
severed his connection with the company and sold his interest.
Apparently his brother, L. M. Gouws, did the same, as “J. F. Gouws
remained the sole interested party” . The defendant was to share in
the profits from “completed projects” but not from “uncompleted
projects” . These “were to be left to Mr. J. F. Gouws to be
completed and all the proceeds were to be his” . The defendant
“had an undertaking with Mr. J. F. Gouws that when the plots
registered in my name are sold I would sign all the documents and
deeds of sale” .
It is clear that the defendant would have remained personally
liable under any bond vis-à-vis the building society, but he had
the security of the property being registered in his name. The
arrangement was apparently that the bond would be paid out of the
proceeds of any sale and the balance paid over to J. F. Gouws or
Riteway Construction Company or Probro Company (a further company
of which J. F. Gouws became a director). Under this arrangement the
defendant's only practical concern with “uncompleted projects”
would have been to see that the purchase price in any deed of sale
in respect of a stand registered in his name as nominee of Riteway
Construction Company and bonded to a building society, was
sufficient to cover the bond :
“The stands registered in my name were his (J. F. Gouws') houses
on stands
Page 49 of [1968] 4 All SA 46 (T) View Parallel Citation
and he could do with them what he pleased. All interest I had
was to see that bonds were redeemed.”
It is not clear who paid interest on any such bond or any
instalments, but it seems probable on the defendant's evidence that
he did not do so and it was never suggested to him that he did. On
the defendant's evidence Stand 1857 was one of the uncompleted
projects. He was informed that the house on it had been completed
“towards November, 1964” . On 3rd December, 1964, he signed a deed
of sale in respect of Stand 1857 at the request of J. F. Gouws.
This deed is exh. “A” ; the purchaser is Max Wolf; the price
R17,000; possession and occupation to be given on 7th December,
1964; a building society or bank guarantee to be provided within 21
days, subject to cancellation if it be not done. A condition
precedent was that Max Wolf sell to Messrs. Probro Limited “his
entire shareholding in a certain company known as Drumma-Drochit
Investments (Pty.) Ltd.” (Ex facie the contract imposes this
obligation on the “seller” ; but this is obviously a mistake: a
draft agreement between Wolf and Probro re these shares appears as
exh. E, also signed by M. Wolf on 3rd December, 1964). The
defendant was subsequently asked to sign a further deed of sale in
respect of the property. In regard to the previous sale to Wolf he
says :
“I believe the sale was cancelled because the transaction
between me and Wolf fell through. I never cancelled the sale. Yes,
I did enquire from my brother what happened to the sale to Wolf.
Yes, I was told that he had disappeared . . . No, I don't
know what had happened to the sale to Wolf. It is obvious he has no
claim to the property at this stage because the guarantees were
never supplied. I don't know whether guarantees were supplied. If
the guarantees were supplied and Wolf calls on me to transfer I
would be in trouble.”
This further deed was an “offer to purchase, through the agency
of Riteway Estates (Pty.) Ltd.” , Stand 1857, for the sum of
R16,350, an offer by Mrs. L. V. Cogen. The defendant accepted this
“offer” by signing as “owner” on 16th January, 1965. Clause 10,
handwritten in ink and initialled by the defendant, provided :
“Property is purchased with existing swimming pool and filter
plant.”
The defendant says :
“It did not strike me as strange that it had a swimming pool on
it.”
He explains that pools were constructed on other properties
bought on behalf of Riteway Construction Company.
Transfer was given to Mrs. Cogen on 5th April, 1965. According
to the defendant the bond was paid out of the proceeds and, as to
the balance, he remembers
“signing a letter making over the proceeds of the sale less
amount of the bond to either my brother, Probro or Riteway
Construction Co.”
On the defendant's evidence he was in no way directly concerned
with any improvements on Stand 1857 or with any of the two sales of
the property. His only concern was that the bond be paid—-otherwise
he left everything to his brother, J. F. Gouws, and signed whatever
documents were required by the latter. He never saw Wolf, Mrs.
Cogen or the pool at any material time.
It is against this background that the magistrate found that the
defendant was not a party to the contract with the plaintiff “and
had nothing to do with the construction of the swimming pool” . In
regard to his finding that the defendant “accepted the benefits of
the construction of the swimming pool” , the magistrate points out
that
“though the defendant was never in occupation he was at all
times the owner of the property until he sold it to Mrs. Cogen”
;
Page 50 of [1968] 4 All SA 46 (T) View Parallel Citation
he refers to clause 10 (quoted above) and remarks that it
“is handwritten in addition to the printed clauses and it is
initialled by the defendant” .
He then says :
“From this clause the court can come to one reasonable
conclusion only and that is that the defendant has associated
himself with the construction of the pool and that he has accepted
it with all its benefits.”
Wolf's role vis-à-vis J. F. Gouws or the latter's companies is
not at all clear. It is true he signed the contract for the
purchase of Stand 1857 and the agreement for the sale of shares on
3rd December, 1964, but before that he was conducting himself as
the owner of the stand. No doubt there had been some agreement not
yet finalised with J. F. Gouws.
According to Mr. Cogen, Wolf was in control of the house in mid
November, 1964. Mr. Cogen assumed that Wolf was the owner of the
property and entered into a lease with him as from 1st December,
1964, and paid two months' rent in advance.
“One of the conditions of renting the house was that a swimming
pool be built and be ready for use before our occupation on
15.12.1964.”
Wolf spoke to Mr. Lang, representing the plaintiff company, over
the telephone. According to Lang :
“He told me he had rented the property out to a tenant and that
the tenant had made it a condition that he wanted a pool on the
property. He gave me the address—that is 1857 Bryanston—in St.
Audrey Road. He told me the size of the pool he wanted. I gave Mr.
Wolf a quotation in his own offices in Fleetway House. Mr. Wolf was
conducting the business of estate agency under the name Farmer's
Mart, as far as I can recall. Mr. Wolf was satisfied with my
quotation and then a contract was drawn up which he signed in my
presence.”
This contract (exh. “C”) was signed on 12th November 1964, by
Lang on behalf of the plaintiff, and by Wolf as “owner” . The
contract price was R1,640. A few excerpts from Lang's evidence may
be relevant:
“I did not make enquiries as to Mr. Wolf's credit-worthiness. I
never investigated whether Mr. Wolf had a bond over this property
or the value of it. The appearance of Mr. Wolf and the fact that he
operated a substantial business and that he occupied a nice suite
of offices and he controlled a large staff and gave every
appearance of being a prosperous businessman, I had no doubt
whatsoever that he would be able to meet his commitments. One has
to rely on appearances . . .
No, I would not check ownership and bonds to-day when I do a
transaction like this. No, I would not check the bond.
Yes, the plaintiff has at all times looked to Mr. Wolf for
payment. I had no idea that the plaintiff sued somebody else
besides this defendant. Yes, as far as I was concerned Mr. Wolf was
the possessor of that house at the time. . . .
Mr. Wolf told me it was his property, I had no reason whatsoever
to doubt whether Wolf was the owner of the property.”
Mr. Esterhuyzen, a director of the plaintiff company, conceded
under cross-examination :
“Correct, when I did this work I did it for Mr. Wolf. Yes,
before and during construction of the pool I had no negotiations
with a Mr. Gouws at all. I sent a quotation for the work to Mr.
Wolf and not to this defendant. I never made any offer to the
defendant to accept. Yes, Mr. Wolf accepted the work when finished
and not the defendant.
If Mr. Wolf was in Johannesburg, I would sue him for my money.
Yes, he owes me R1,640. Correct I relied on it that Mr. Wolf was
credit-worthy. Yes, when I built this pool, I was satisfied Mr.
Wolf was the owner and possessor of that property. I don't check on
whether the applicant is the registered owner-I still accept their
word for it.”
The pool was completed on 11th December, 1964. Payment was not
made by Wolf in terms of the contract and in January, 1965, it was
discovered that he had apparently left the country.
Page 51 of [1968] 4 All SA 46 (T) View Parallel Citation
The disappearance of Wolf embarrassed not only the plaintiff but
also the Cogens. Their lease was with Wolf. They then, through an
attorney Wolf had on some occasion mentioned, were brought into
touch with “Mr. Gouws” (apparently J. F.) and, after negotiations
with him, Mrs. Cogen purchased the property as aforesaid.
One final aspect should be mentioned at this stage. It was
agreed between counsel that
“in constructing this pool plaintiff used material to the value
of R882.59 and disbursed R97 for the labour of independent
contractors employed by the plaintiff in the construction of the
pool, and the plaintiff paid R270 as and for wages to its own
employees in the construction of this pool”.
The findings of fact considered to be unfavourable to the
defendant, as also the magistrate's view and application of the
law, are now attacked on a number of grounds. But, for purposes of
dealing with the general legal principles involved, the problem
involved may be stated briefly as follows: A enters into a contract
with B, the performance of which involves expenditure or labour by
A in respect of property which A believes to be that of B; in fact
C is the owner and not B; being unaware of this and looking solely
to the credit of B (and no other person), A performs the contract;
having performed, A is entitled in terms of the contract to claim
counter-performance (payment) from B in terms of the contract; for
some reason (e.g. B is a man of straw, or disappears) A's
contractual claim against B is useless; is C in any way liable to
A? If so, what are the precise requisites for and the limits of
such liability? Obviously there can be no question of contractual
liability (in the absence of, e.g., C standing by in certain
circumstances); the problem is whether there is any liability based
on quasi-contract or the so-called doctrine of unjust enrichment
(if the two may legitimately be distinguished).
The brevity with which the problem may be stated is hardly
commensurate with the difficulties involved. To some extent the
latter are reflected by the number of different actions that have
been mentioned as being appropriate in the present instance.
In dealing with the 10th fact he found proved (mentioned above)
the magistrate refers to the cases of Klug and Klug v. Penkin, 1932
C.P.D. 401, and Williams' Estate v. Molenschoot & Schep (Pty.)
Ltd., 1939 C.P.D. 360, and states:
“Both cases quoted from were decided on the principles of
negotiorum gestorum.
In the instant case also the plaintiff acted on the instructions
of a third person, Mr. Wolf, whereas he was building it on the
property of the defendant. The position of the plaintiff in this
matter is in the mind of the court virtually the same as that of a
negotiorum gestor.”
He continues, however, by referring to the following passage,
dealing with the case of Williams' Estate, supra, from Knoll v.
S.A. Flooring Industries Ltd., 1951 (1) S.A. 404 (T), DE VILLIERS,
J., at p. 408 :
“I have some doubt whether it was necessary, in that case, to
rely on the principles of negotiorum gestor at all. It seems to me
if a person, thinking that he was authorised to do so, that he had
been engaged by the owner, bona fide does certain work to his house
by which he has benefited—been enriched—in a certain amount it
would be unjust for the owner to be enriched at the expense of the
builder, and the latter could in equity claim the amount by which
the owner has been enriched. That seems to me to be a perfectly
good cause of action and, although one may bring it under the
principles of negotiorum gestor, it does not seem to me that it is
essential, for success in an action, to bring in that
principle.
Page 52 of [1968] 4 All SA 46 (T) View Parallel Citation
The equitable doctrine of unjust enrichment is wide enough to
cover the facts in Williams' case to my mind.”
The magistrate then says :
“In Hauman v. Nortje, 1914 A.D. at p. 298, Lord DE VILLIERS is
reported to have said that the mode of enrichment provided against
is the unjust absorption by one party of the expenditure or of the
fruits of labour of the other party. In the instant case the
defendant has absorbed the expenditure incurred by the plaintiff.
At the time the pool was constructed on the property dominion
vested in the defendant. He specifically sold this pool to Mrs.
Cogen together with the stand. This court therefore cannot find
that the defendant has received no benefit, notwithstanding his
evidence of a contract between himself and J. F. Gouws, the
remaining director of Riteway Construction.”
It is not quite clear which action the magistrate sought to
enforce. The fact that he found it necessary to investigate whether
the swimming pool constituted “a useful improvement” is no specific
indication. In referring to Klug and Klug v. Penkin, supra, he
quotes from the judgment at p. 404 :
“It seems to be clear law that a person who manages the affairs
of another without mandate from him, has as a general rule a right
of action to recover from him, inter alia, necessary and useful
expenses incurred if the person whose affairs have been so managed
has accepted the benefit of such management.”
In many respects the magistrate's approach seems to be based on
this passage. But, on the other hand, he refers to the plaintiff
being “virtually” a negotiorum gestor and then refers to the
passage from Knoll v. S.A. Flooring Industries Ltd., supra, which
speaks generally of “the equitable doctrine of unjust enrichment” .
In effect the magistrate seems to apply the latter, viz. to
recognise a general action based on enrichment. His preoccupation
with the “usefulness” of the improvement enhancing the value of the
stand may, perhaps, have flowed from the importance attached to
this quality in the cases dealing with the right of a bona fide
possessor or occupier to claim compensation for improvements.
In argument before us it was accepted that in our law there is
no general action based on enrichment, in view of the decision in
Nortje en 'n Ander v. Pool, N.O., 1966 (3) S.A. 96 (A.D.) (reported
after the magistrate had given his reasons). In an attempt to bring
the plaintiff's claim within the scope of one of the recognised
actions for enrichment in our law, it was not contended that the
liability of the defendant (C, in the general statement of the
problem) rested on negotiorum gestio: it was suggested that the
plaintiff (A, in the statement of the problem) was entitled to
relief by way of the condictio indebiti or the condictio sine causa
or “the action of the bona fide occupier” .
In view of the many difficulties involved the Court is indebted
to Mr. King and Mr. Zar, on behalf of the defendant (now appellant)
and plaintiff (now respondent), respectively, for their able
arguments which have been of considerable assistance.
As negotiorum gestio, however, figures so prominently in the
magistrate's reasons and in a number of relevant cases, it is
desirable, at the very outset, to attempt to obtain some clarity in
this regard. It appears that negotiorum gestio is a label often
indiscriminately used to designate investitive facts giving rise to
actions of a different nature and flowing from different
considerations : there is the true negotiorum gestio, the
quasi-contract dealt with, e.g., in Inst.3.27.1, giving rise to
reciprocal rights and obligations between dominus and gestor; there
is the negotiorum gestio giving rise to an action based on
enrichment, which John,
Page 53 of [1968] 4 All SA 46 (T) View Parallel Citation
'n Oorsig van Onregverdige Verryking as Gedingsoorsaak in die
Suid-Afrikaanse Reg, calls “die abnormale of quasi negotiorum
gestio” . At p. 57 John writes :
“Ons het in die vorige gedeelte van hierdie hoofstuk gesien hoe
dikwels die skrywers wanneer hulle die besitter wat retensie
verloor het wou help, hom 'n ,utilis negotiorum gestorum actio'
verleen het; en inderdaad, die figuur van negotiorum gestio is nou
aan onregverdige verryking verwant. Dog in die normale geval van
negotiorum gestio, waar die gestor bona fide, en met die bedoeling
om sy onkoste van die dominus vergoed te kry, die saak van die
afwesige of onwetende mondige dominus waarneem—om dit in stand te
hou—en gewoonlik ex necessitate die omstandighede, wat van so 'n
aard was dat, as hy nie sou ingegryp het nie, die dominus 'n
verlies sou gely het, is dit nie op grond van verryking dat die reg
'n actio contraria aan die gestor teen die dominus vir vergoeding
van sy onkoste verleen nie, maar omdat, as die reg dit nie sou
verleen nie, niemand die onkoste en verantwoordelikheid op hom sou
neem om die saak van 'n ander te beskerm nie.
In hierdie normale geval kry die gestor vergoeding vir al die
onkoste wat hy redelik aangegaan het, in alle gevalle, dus selfs as
die saak later, sonder sy culpa, vergaan. Maar so gou as een van
die elemente wat nodig is om die normale negotiorum gestio
verhouding te skep ontbreek, bv. as die gestor mala fide is, of
eintlik nie op vergoeding gereken het nie toe hy die saakwaarneming
verrig het (dog nie met 'n skenkings-bedoeling gehandel het nie),
of as die dominus onmondig is, verdwyn die reëls van die normale
negotiorum gestio ten opsigte van vergoeding van die toneel, en die
begrip van onregverdige verryking tree in. In hierdie geval kry die
,gestor' alleen vergoeding tot die mate waarin die dominus deur die
gestor se handeling verryk is.”
At p. 69 John refers to Pothier, Pandectae Justinianeae, ad
D.3.5, De Negotiis Gestis:
“Pothier maak 'n onderskeid tussen die gewone
negotiorum-gestio-geval, waarin die gewone actio contraria aan die
gestor toekom, en die quasi geval waar die gestor 'n utilis aksie
kry. Daar is eintlik twee soorte van utilis aksies. Die een is 'n
ware verrykingsaksie. Die ander is 'n egte utilis negotiorum
gestorum aksie wat prakties geen verskil vertoon met die gewone
negotiorum gestorum aksie nie, en waarin die verrykingsreël alleen
die rol van beweegrede speel; nie self die grondslag vorm nie.”
Rubin, Unauthorised Administration in South Africa, pp. 72-73,
also emphasises the distinction between the true action based on
negotiorum gestio and an action based on enrichment :
“There can be little doubt that in most cases a negotiorum
gestio results in actual enrichment of the dominus. The destruction
of the beneficial service rendered by the gestor before the dominus
could enjoy it may safely be regarded as a rare occurrence. It is
clear, also, that in some cases the same result would be achieved
whether the person rendering the service claimed as a gestor or
relied on the principle of unjust enrichment; furthermore, that in
such cases, the latter course must be recommended because the
intention of the plaintiff would be irrelevant, and to that extent
the proceedings would be simplified. It must be borne in mind,
however, that in the one case the claim is for all the useful and
necessary expenses incurred; in the other, it is based upon an
entirely different criterion, namely, the extent to which the
dominus has been enriched. In the first case the question is
whether they are expenses which the dominus would, himself, have
incurred, whether the amount thereof represents his actual
enrichment or not; in the second case all considerations other than
the actual enrichment of the dominus fall away. It follows,
therefore, that there are circumstances in which a plaintiff who,
able to base his claim on negotiorum gestio, nevertheless chose to
rely on the principle of unjust enrichment, would, thereby, deprive
himself of the right to recover part of the amount which he had
expended in the course of the gestio. In fact, such a plaintiff
would be ill advised to base his claim on the principle of unjust
enrichment, unless he had first satisfied himself that he would be
entitled to recover no less on that basis than on the basis of
negotiorum gestio.”
The use of the same label (negotiorum gestio) for facts giving
rise to actions of different nature creates the risk of confusion :
their peculiar requisites may be confused, their distinction
blurred. It is not surprising that some contemporary writers have
misgivings in this regard. (Cf., e.g., De Villiers and Macintosh,
Agency, 2nd ed., pp. 103-104; Hahlo
Page 54 of [1968] 4 All SA 46 (T) View Parallel Citation
and Kahn, The Union of South Africa, pp. 562, 698-9; Scholtens,
1951 S.A.L.J. 134; Rubin, op. cit., p. 26, n. 9). For the purposes
of this judgment negotiorum gestio will be used to designate the
quasi-contract giving rise to the reciprocal actions not based on
enrichment; if necessary to refer to cognate investitive facts
giving rise to an action based purely on enrichment, the term quasi
negotiorum gestio will be used.
Reverting to the problem as generally stated above, it seems
clear enough that the performance by A of his contract with B
cannot constitute a true negotiorum gestio vis-à-vis C, despite the
fact that the latter's property is involved. The intention of A can
hardly be described as an animus negotia aliena gerendi: his
intention is to further his own interests by performance of his
contract with B and he does not look to the credit of C for
compensation. This seems to have been assumed in Knoll v. S.A.
Flooring Industries, supra. In a note dealing with this case Prof.
Scholtens (1951 S.A.L.J. at p. 137) writes:
“It is submitted that the actio negotiorum gestorum should not
lie where an act done by a person finds its justification in his
furthering exclusively his own interests under a bilateral contract
with another person, even although a third party may have derived
some benefit therefrom. The question whether an action can be
brought against such a third party should be decided on the basis
of unjust enrichment only.”
Hahlo and Kahn, op. cit., pp. 564-565, are of the same view.
In Knoll v. S.A. Flooring Industries, supra, A was in reality a
subcontractor, but the facts fall within the framework of the
problem as stated above : A was under the impression that B was the
building owner and only later discovered that B was the contractor
and C the owner. But in any event it is difficult to see how the
knowledge or ignorance of the fact that he (A) was entering into a
sub-contract could affect the question of the animus negotia aliena
gerendi—his intention remains the same—to perform his contract with
B. It follows that decisions dealing with ordinary sub-contractors,
aware of the fact that they are such, are apposite to the present
aspect under discussion. Such a case is Vadas (Pty.) Ltd. v. Philp,
1940 C.P.D. 267, where it was also assumed that A, a
sub-contractor, was not a negotiorum gestor of C.
The case of Williams' Estate v. Molenschoot & Schep (Pty.)
Ltd., 1939 C.P.D. 360, is not in conflict with this approach. It is
true that it can be said that A in this case incurred expenditure
in respect of the property of C upon instructions of B, and yet C
was held liable on the basis of negotiorum gestio (according to
John, loc. cit., pp. 135-6, not a quasi negotiorum gestio). But
there was no contract between A and B: B, with no authority,
professed to act as agent for C and A always looked to C for
payment (see p. 363, the last paragraph of the report). A intended
to manage the affairs of C, with the intention of obtaining
compensation from him in respect of such administration, and A did
not have C's authority. (The mere fact that he had some remedy
against B did not exclude, upon abundant authority quoted by DAVIS,
J., his action against C). That there is a clear distinction
between these facts and those referred to above is accentuated by
the fact that DAVIS, J., who gave the judgment in the case of
Williams' Estate, was a party to the judgment in the case of Vadas
(Pty.) Ltd., supra, and that in Knoll v. S.A. Flooring Idustries,
supra, the Court did not consider Williams' Estate v.
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Molenschoot & Schep (Pty.) Ltd., supra at pp. 408-9,
apposite to the facts of that case.
In Klug and Klug v. Penkin, 1932 C.P.D. 401, it was found that
A, without authority, intended to conduct the affairs of B but in
fact conducted the affairs of C. John, p. 135, suggests that it is
really a case where A was under the impression that he was managing
his own affairs whereas in fact he was managing the affairs of B. C
was held liable to A on the basis of negotiorum gestio. Voet,
3.5.12, is clear authority for recognising this liability and the
Court applied his statement of the law. Gane's translation of the
relevant passage reads :
“For the rest to give room for this action there is no need for
the manager to have a clear-cut intention to bind the person whose
affair was in fact managed. It is enough that he had the belief
that he was conducting and was of the intention to conduct the
affairs of another. What if he considered that he was managing the
affairs of Titius, when they were not those of Titius but those of
Maevius? The opinion given was that in such case he proceeds
effectively against Maevius.”
Here again the animus negotia aliena gerendi was present—not the
intention to perform a contract.
The case of New Club Garage v. Milborrow and Son, 1931 G.W.L.D.
86, is more difficult to fit into the general picture. Upon
instructions of B, A fetched a motor car that had broken down and
effected certain repairs; B disappeared and A could not sue him; in
fact the car was the property of C from whom B had hired it. Upon
the basis of negotiorum gestio C was held liable to A. On the
pleadings A did not allege a contract with B—merely that upon
information received he had managed the affairs of C; C pleaded
that A had merely performed his contract with B. The report does
not reflect any finding on this aspect, but it seems clear enough
that A considered B to be the owner, that he had looked solely to
his credit, was unaware of the existence and interest of C, that in
fact he had entered into a contract with B and merely performed
that contract. There was no question of any intention on his part
to manage the affairs of another without authority and to hold him
liable. On the other hand it also seems clear that C had no
knowledge of the activities of B. In essence the position here was
the same as in Knoll's case, supra, where C was held not liable on
the basis of negotiorum gestio. As has been mentioned, the Court
did not deal with the plea that A was merely performing his
contract with B; the Court held that Voet, 3.5.12 (the passage
quoted above), covered the case. With respect, Voet's language in
the context does not seem appropriate to the case of a person who
does not contemplate at all the managing of another's affair
without authority, but merely intends performing a valid contract
he has entered into with a particular person. In view of the
considerations mentioned in the discussion above, and particularly
the decision in Knoll's case, it would appear that the granting of
an action based on negotiorum gestio to A in the circumstances of
New Club Garage v. Milborrow and Son, supra, is not justified, in
any event not on the basis of a true negotiorum gestio.
In the premises the conclusion is justified that, reverting to
the original statement of the problem, A cannot hold C liable on
the basis of negotiorum gestio. By some of the contemporary writers
referred to above (e.g. Professor Scholtens) it is assumed that
there is, however,
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scope for an action based on enrichment (presumably a general
action)—but this was before the decision in Nortje en 'n Ander v.
Pool, N.O., supra. In the circumstances the matter must be reviewed
afresh.
In Knoll v. S.A. Flooring Industries Ltd., supra, A did not
succeed in an action based on enrichment against C. The ratio is
bound up with the fact that A was a sub-contractor (although A was
not aware of it at the material time). At p. 408 of the report DE
VILLIERS, J., states :
“It is clear in this case that she was not enriched; if she paid
she would be paying for flooring done by them twice over” (viz. C
would be paying both B and A)” .
On this reasoning the sub-contractor who is aware of the fact
that he is such constitutes an a fortiori case and also cannot
succeed on the basis of enrichment against C—he is confined to his
claim against B with whom he contracted (cf. Vadas (Pty.) Ltd. v.
Philp, supra at p. 276). Frame v. Palmer, 1950 (3) S.A. 340 (C),
was such a case. A, a subcontractor of B, instituted what was taken
to be a condictio indebiti against C. He failed :
“. . . it is not sufficient for plaintiff to prove
that the defendant has had the benefit of the materials supplied
and the work and labour done; he must go further and prove that he
himself was the solvens and the dependant the recipiens”
(at p. 347).
Commenting on this case Professor Scholtens said (1950 S.A.L.J.
at p. 329):
“. . . it would be unfortunate if the impression were
conveyed that an action for unjust enrichment as brought by the
plaintiff is of necessity identical with the condictio indebiti”
.
But, in approving of the result, he continued (at p. 331) :
“Notwithstanding its possibilities as an equitable remedy it
seems that in the present case the action for unjust enrichment
could not succeed for the simple reason that the defendant was not
enriched without cause as she was liable to F under her contract
with him.”
(Viz. under the nomenclature adopted above, C was not enriched
without cause as she was liable to B).
Prof. Lee, Introduction to Roman-Dutch Law, 5th ed., pp. 347-8,
referring, inter alia, to this article by Prof. Scholtens, Frame v.
Palmer, supra, and Knoll v. S.A. Flooring Industries Ltd., supra,
puts the position somewhat differently :
“Enrichment, then, is not without cause (unjustified) if it is
permitted by law. Nor is it without cause when it is a consequence
of a contract, no matter how disadvantageous it may be to one or
other of the parties. Further, it would seem that if the doctrine
of unjustified enrichment is to be kept within reasonable limits it
should be confined to cases in which there is an antecedent legal
relation between the persons concerned. Suppose I employ a firm to
effect repairs to my house—the repairs are effected. The firm
becomes insolvent and a sub-contractor or servants of the firm seek
to be indemnified on the alleged ground that I have been enriched
by their labour. The simple answer to such a claim is that my
enrichment is not without cause. It is a consequence of my contract
with the firm. The firm's relations with third parties are no
concern of mine.”
There is, therefore, ample authority for holding that, in the
problem as stated, A would not have an action against C on the
basis of enrichment if C were bound to B under contract, and A was
a sub-contractor, having contracted with B. Whether A knew that he
was a sub-contractor or not would be immaterial : an action for
enrichment would be excluded on the basis that C's enrichment
flowed from his contract with B and was, therefore, not without
cause. (This reasoning may even be extended to cases where A is not
strictly speaking a sub-contractor. Cf. “The
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Doctrine of Unjustified Enrichment” by Gutteridge and David in
1934 Cambridge Law Journal. In discussing the French law David, at
pp. 217-218, mentions a number of decisions which
“illustrate a definite principle, i.e. that an enrichment is not
unjustified when it proceeds from a contract between the defendant
and another party.” )
But this authority does not solve the problem where A is not a
subcontractor (as in the instant case).
The passage quoted from Lee, supra, may, however, have a wider
connotation where it states that the doctrine of unjustified
enrichment
“should be confined to cases in which there is an antecedent
legal relation between the persons concerned” .
If this is so, A would not have an action based on enrichment
against C, whether he was a sub-contractor or not, because there
was no antecedent legal relation between him and C. But whether
this conclusion reflects the intention of the learned author is
doubtful.
Professor de Vos, Verrykingsaanspreeklikheid in die
Suid-Afrikaanse Reg, would deny A a general action based on
unjustified enrichment against C, because the enrichment of C flows
from the performance by A of his contract with B, and is not “ten
koste” of A (pp. 192-201 and those mentioned in footnote 64). He
concedes that in certain circumstances the logical application of
the “ten kostevereiste” may lead to an inequitable result (pp.
200-1). This requisite is, however, also accepted by J. C. van der
Walt, “Die Condictio Indebiti as Verrykingsaksie” , 1966 T.H.R.H.R.
at pp. 221-2). He deals with the requisite as follows :
“Die blote feit dat daar verryking en verarming was, is nie
genoegsaam vir aanspreeklikheid nie: daar moet ook 'n kousale
verband tussen die verryking en die verarming wees in die sin dat
die verryking uit verarming voortgevloei het of vice versa. Anders
as . . . moet 'n mens aanvaar dat 'n juridies-relevante
kousale verband ontbreek waar nie 'n direkte of onmiddellike
vermoënsverskuiwing plaasgevind het nie. Met 'n direkte
vermoënsverskuiwing word bedoel dat die verskuiwing van 'n bepaalde
vermoënsdeel uit die boedel van die verarmde nie via die boedel of
vermoë van 'n tussenpersoon in die boedel van die verrykte te lande
kom nie.”
Although the matter is not free of difficulty and there are
writers propounding other views, Professor de Vos' reasoning is
cogent. In my view the requisite that in an action based on
unjustified enrichment the enrichment should be at the expense of
the plaintiff, with its logical consequences, should be accepted.
De Vos considers (at p. 180) this requisite to be the second of
five for the general action which he concluded (erroneously, as it
now appears, in view of the majority judgment in Nortje en 'n Ander
v. Pool, N.O.) exists in our law. It is, however, clear from his
thesis that it is a fundamental requisite appertaining even to the
various specific actions based on enrichment. On this basis A, in
the statement of the problem, has no action based on enrichment
against C. C is enriched, not at the expense of A, but at the
expense of B. This should be the end of the present enquiry but it
may be as well to deal specifically with certain aspects flowing
from the argument.
It was suggested, as has been mentioned, that the plaintiff is
entitled to relief by way of the condictio indebiti, the condictio
sine causa or “the action of the bona fide occupier” . The
condictio indebiti may be summarily disregarded on the authority of
Frame v. Palmer, supra: the work was rendered to Wolf—he was the
recipiens, not the defendant. Neither does the condictio sine causa
(specialis in the context) seem
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apposite. De Vos points out, op. cit., pp. 54-55, that, despite
the disregard in the Roman-Dutch Law of a negotium as a
prerequisite for this condictio, as opposed to the Roman Law, the
condictio sine causa specialis was never invoked to compensate an
owner who lost his materials by accessio. Moreover, the prevalent
view appears to be that the value of a factum cannot be claimed by
any of the condictiones sine causa (Nortje en 'n Ander v. Pool,
N.O., supra at p. 134E-F).
The only specific action which merits careful consideration is
the action of the bona fide occupier for compensation in respect of
his utiles impensae. De Vos considers this a manifestation of a
general action based on unjustified enrichment (op. cit., pp.
140-148), but it must now be seen merely as a modern extension of
the specific action given to the bona fide possessor in Roman-Dutch
Law, which, in turn, according to De Vos (p. 60), could be
construed as “'n uitgebreide actio negotiorum gestorum” (therefore
based on quasi negotiorum gestio, in the terminology initially
adopted above). The question then arises whether the plaintiff was
“a bona fide occupier” . The investigation is a process of
classification (which, as De Vos points out at p. 148, is
unnecessary if a general action exists). We have been referred to
no case directly in point. But it has been argued that a builder
has naturalis possessio of the building he is erecting (Scholtz v.
Faifer, 1910 T.S. 243 at p. 246) and, therefore, would qualify as
an “occupier” . But it does not follow that a detentor who is
safeguarded against spoliation, even has a right of retention, must
necessarily have the action conferred upon an “occupier” . It is
perhaps significant that counsel has been unable to point out a
case equating a builder to a “bona fide occupier” and investing him
with the action of the latter against the owner for utiles
impensae. The dearth of cases in this regard may be owing to the
fact that it probably seldom occurs that a builder (unless he is a
subcontractor) is not employed by the owner of the ground or, if
employed by someone else, cannot recover from the latter.
Gillingham v. Harris & Morgan, 1905 T.S. 94, was such a case
and would seem to be against the contention on behalf of the
plaintiff. But in United Building Society v. Smookler's Trustees
and Others, 1906 T.S. 623 at p. 634, this decision was approached
with some reservation and in any event it was only later that the
action of the bona fide occupier was authoritatively recognised. In
a number of instances, however, sub-contractors have instituted
actions against the building owner, but not in any of the cases to
which we have been referred under the guise of a bona fide
occupier.
Assuming, however, that a builder may proceed as a bona fide
occupier against the owner of the land upon which he builds for
reimbursement of utiles impensae, it is obvious that in practice he
will only do so where his work was done under a contract with
someone other than the owner of the land and he for some reason
cannot recover the contract price from him. The existence of this
third party immediately introduces complications and the
enhancement in value of the land cannot per se give rise to an
action against the owner. The third party may, e.g., be a lessee, a
purchaser in possession who has not yet taken transfer for any
number of reasons (the contract being conditional, the purchase
price payable in instalments, etc.), or a contractor (thereby
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constituting the builder a sub-contractor). In such cases
recourse necessarily must be had to the fundamental principles
underlying an action based upon unjustified enrichment to determine
the liability of the owner of the land.
Along these lines the investigation of the specific actions
based on enrichment has come full circle, back to consideration of
general principles. With the acceptance above of the requisite that
the enrichment should be at the expense of the plaintiff, as
understood by Prof. de Vos, the plaintiff cannot succeed with the
“action of the bona fide occupier” even if he qualified as
such.
Mr. Zar placed great reliance on the result in New Club Garage
v. Milborrow and Son, supra, viz. that the plaintiff recovered
“useful and necessary expenses” . He argued that no undue
importance should be given to the label attached by the court to
the action, viz. one based on negotiorum gestio, that the result
indicates the existence of an action in such circumstances by
whatever name. It has been pointed out above, with respect, that
the action (if any) could not be based upon negotiorum gestio. That
it cannot flow from unjustified enrichment on general principles is
amply demonstrated by Prof. de Vos, op. cit., pp. 193 et seq.
Mr. Zar also referred to Bijnkershoek, Observationes
Tumultuariae, No. 303, which is summarised by Prof. Scholtens in
1950 S.A.L.J. at pp. 330-1 as follows :
“A carpenter had made necessary and useful alterations to a
house under a contract with the buyer of the house to whom the
house had not yet been transferred and who had not yet paid the
purchase price. The buyer went bankrupt and the seller retained the
house. The carpenter brought an action against the seller claiming
that the seller should either pay the price for the improvements or
transfer the house to him against payment of the original purchase
price. The Hooge Raad found for the carpenter although the seller
had not given any instructions for the alterations to the
house.”
As to the general significance of this decision, Prof. de Vos,
op. cit., pp. 66 and 76, considers it to be a single instance
“waar die Hoë Raad eenvoudig 'n aksie ex aequitate toegestaan
het, omdat hulle die geval nie onder 'n bekende aksie kon tuisbring
nie” .
Professor Scholtens in dealing with “The General Enrichment
Action That Was” (1966 S.A.L.J. 391 at p. 395) refers to this and
some additional decisions of the Hooge Raad as reflecting the
existence of the general enrichment action. Whether, however, this
Observatio No. 303 could be of assistance in the present case is
not at all clear. It is difficult to reconcile the alternative
claim of the carpenter for transfer of the house against payment of
the original purchase price with a mere enrichment action. That
this alternative claim was of particular importance and may be
related to insolvency appears from the following excerpt :
“Quia autem venditor ipse nihil jusserat fabrefieri, negabat se
ad refundendas impensas teneri, en wilde ook het huys voor die
cooppenningen niet transporteren aan den eyscher of eenige andere
credd., die het regt van den insolventen had gekregen, omdat sulks
al voor eenige tijt had gepraesenteert, maar bij de credd.
gerefuseert was. Neque tamen non plane constabat, sed quicquid ejus
rei sit, quia tamen impensae fuerant necessariae et utiles, non
visum est eas lucrari posse venditorem cum damno fabri, maxime cum
accederet oblatio ejus pretii, quo ille äopoemerat.”
The emphasis on the tender of the purchase price seems
significant. Was the judgment merely for an amount co-extensive
with the unjusti-
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fied enrichment of the seller or was it a judgment in the
alternative for the price of the work or transfer of the property
as against payment of the original purchase price? In the one case
enrichment would be the basis of the judgment; in the other perhaps
merely an inducement. But in any event it would appear that the
decision rested upon special circumstances not present in the
instant case. One may well speculate on what the position would
have been had, in the present case, Wolf become insolvent (and his
estate sequestrated) instead of merely disappearing. The plaintiff
would certainly not have had a claim for transfer of the stand
against the defendant. Would he not have been a concurrent creditor
of Wolf whilst the trustee would have had a claim based on
unjustified enrichment against the defendant? Or would the trustee
not have come into the picture at all, the plaintiff having his
action against the defendant directly? The decision of the Hooge
Raad could hardly resolve these questions—the underlying principles
of an action based on unjustified enrichment would still have to be
investigated.
In the article referred to above (1966 S.A.L.J. 391 at p. 392)
Professor Scholtens, dealing with Nortje en 'n Ander v. Pool, N.O.,
supra, remarks :
“As regards applying an existing action in the present case, it
is somewhat surprising that the plaintiffs sought an existing
action on unjust enrichment only in the action of the bona fide
occupier. The interpolated text of D.3.5.5 (D.3.5.6.3 in old
editions) gives an action to a person who has managed another's
affairs to his own advantage. In this case the actio negotiorum
gestorum will lie, but only to the extent of the enrichment of the
dominus . . . As a special application of the actio
negotiorum gestorum this action would not be confined to a bona
fide possessor or occupier, nor would it be limited to the recovery
of tangible improvements . . .”
The learned author refers to John, Rubin and De Vos (the works
referred to above) and also John P. Dawson, Unjust Enrichment. The
assumption of the existence of a distinct quasi negotiorum gestio
along these lines, again, does not assist in the solution of the
instant problem. The presence of the intermediary, Wolf, and the
construction of the swimming pool in performance of a contract with
him, again complicates the position and necessitates the
investigation of fundamental principles.
In the premises the acceptance of the “at-the-expense-of”
requisite for an action based on unjustified enrichment constitutes
an insurmountable hurdle for the plaintiff. It is, therefore,
unnecessary to deal with a number of other matters raised by Mr.
King, inter alia, whether the costs in respect of the swimming pool
on the evidence constituted impensae utiles, whether the owner at
the time the action was instituted, Mrs. Cogen, should not have
been sued, and whether the defendant was in fact enriched,
particularly in view of his position vis-à-vis J. F. Gouws.
To sum up: Plaintiff was not a negotiorum gestor of the
defendant: he did not have the animus negotia aliena gerendi as
qualified above (and the building of the swimming pool could hardly
constitute “a reasonable management” of the defendant's affairs—cf.
Prof. Scholtens, 1951 S.A.L.J. at p. 136). The condictiones are not
apposite to the case; and as for the action of the bona fide
possessor for compensation for impensae utiles and any other action
based on quasi negotiorum gestio, they are precluded because the
defendant, if enriched, was not enriched at the expense of the
plaintiff but at the expense of Wolf, as the enrichment
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flowed from the performance by the plaintiff of a contract with
Wolf and a prestation to him.
The appeal is upheld with costs and the judgment of the Court a
quo altered to: “Judgment for the defendant with costs.”
CILLI, J., concurred.
Appearances
ME King - Advocate/s for the Appellant/s
E Zar - Advocate/s for the Respondent/s
Getz, Behr, Ogus and Jaffit - Attorney/s for the Appellant/s
Garb and Lazerson - Attorney/s for the Respondent/s
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