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Rationalising the South African Law of Enrichment

Document Cited authorities 7 Cited in Related
Vincent
AuthorHelen Scott
Published date01 September 2014
Date01 September 2014
DOI10.3366/elr.2014.0238
Pages433-451
ENRICHMENT LIABILITY IN SOUTH AFRICA: A SHORT INTRODUCTION

Roman law recognised various claims which we would now regard as arising from the enrichment of the defendant: these included (but were not limited to) the condictio indebiti; condictio causa data causa non secuta; condictio ob turpem vel iniustam causam; condictio sine causa specialis (including the condictio ob causam finitam); the claim against a person having limited legal capacity to act; the actio de in rem verso; the claim to recover the value of labour and materials in case of mistaken improvement to another's property; and the claim modelled on the action of the negotiorum gestor (necessitous intervener) in respect of his expenses. But, as is well known, there was no such thing as a law of enrichment in Roman law. Gaius recognised that obligations could arise from contracts, from delict and “from various types of causes”;1

D 44.7.1 pr.

Pomponius stated that, “by the law of nature it is fair that no-one become richer by the loss and injury of another”;2

D 12.6.14.

 and Justinian grouped together in his Institutes various miscellaneous causes of action as obligations arising quasi ex-contractu (as if upon a contract).3

J Inst 3.27.

 But at no point in Roman law was enrichment recognised as a substantive category alongside contract and delict

This breakthrough occurred only in the seventeenth century, in the work of Hugo Grotius. Indeed, even Grotius did not do much more than identify the principle against unjustified enrichment; the contents of the conceptual unity which he recognised were still essentially Roman, i.e. both fragmentary and dominated by the ancient forms of actions. This was the position in South African law well into the twentieth century. Indeed, it was only with the publication of Wouter de Vos's Verrykingsaanspreeklikheid in 1958 that the difficult work of systematising the law of enrichment – of rationalising the ancient Roman procedural categories in terms of substantive causes of action, organised according to principle – began.4

See W De Vos, Verrykingsaanspreeklikheid in die Suid-Afrikaanse Reg, 3rd edn (1987) ch 7, especially 328–29.

The decision of Schutz JA in the Supreme Court of Appeal in McCarthy Retail Ltd v Shortdistance Carriers CC 5

McCarthy Retail Ltd v Shortdistance Carriers CC [2001] (3) SA 482 (SCA).

 in 2001 represented an invitation and a challenge to South African enrichment lawyers: to lead the way in seeking out new causes of action not previously identified in South African law; and, perhaps more importantly, to attempt the rationalisation of existing causes of action, in order to free them of the shackles imposed by the ancient actional categories.6

McCarthy Retail v Shortdistance Carriers at paras 8 and 10. On the nature of the general enrichment action recognised in the McCarthy case, and on its relationship to the decision of the Inner House of the Court of Session in Shilliday v Smith 1998 SC 725, see N Whitty and D Visser, “Unjustified Enrichment” in R Zimmermann, D Visser and K Reid (eds), Mixed Legal Systems in Comparative Perspective: Property and Obligations in Scotland and South Africa (2004) at 405–406.

 According to the approach adopted by Schutz JA, South African law recognises four general principles of enrichment liability: the defendant must be enriched; the plaintiff must be impoverished; the defendant's enrichment must be at the plaintiff's expense, i.e. there must be an appropriate causal link between the defendant's enrichment and the plaintiff's impoverishment; and the defendant's enrichment must be unsupported by any legal ground/unjustified.7

See D Visser, Unjustified Enrichment (2008) especially ch 3; J du Plessis, The South African Law of Unjustified Enrichment (2012) especially ch 2. De Vos did not list the impoverishment of the plaintiff as one of the requirements of liability, but he did recognise the existence of a “loss-cap”: the plaintiff could claim either his enrichment or his impoverishment, whichever was the lesser.

 Self-evidently, it is the last of these four – the absence of legal ground principle – which gives shape and coherence to the subject.8

See e.g. J du Plessis, “Towards a rational structure of liability for unjustified enrichment: thoughts from two mixed jurisdictions” (2005) 122 SALJ 142 at 143.

 But the bare identification of these principles is only the first step in the rationalisation project. Far more important and difficult is the task of giving expression to these principles at a lower level of generality THE WILBURG-VON CAEMMERER TAXONOMY

Paragraph 812 of the German Civil Code (BGB) begins with a general enrichment action. According to the first sentence of paragraph 812(1), a person who, through the performance of another or in some other way, acquires something at the expense of that other without any legal ground is bound to return it. The “big idea” which holds the subject together is the absence of any legal ground for the defendant's enrichment. Yet the provision also distinguishes between different species of enrichment claim according to the manner in which the enrichment was acquired. In modern German law this distinction is further refined through the so-called Wilburg-Von Caemmerer taxonomy, which distinguishes four species of enrichment claim in respect of:

enrichment by transfer or deliberate conferral (Leistungskondiktion);

enrichment arising from the defendant's unauthorised encroachment on or interference with the plaintiff's rights (Eingriffskondiktion);

enrichment arising from the plaintiff's unauthorised improvement of the defendant's property (Verwendungskondiktion); and

enrichment arising from the plaintiff's discharge of the defendant's debt or fulfilment of his obligation (Rückgriffskondiktion).

Following the sea-change in McCarthy, the Wilburg-Von Caemmerer taxonomy has exercised enormous influence over South African enrichment lawyers, having been adopted first by Danie Visser in his Unjustified Enrichment 9

See n 7 above; foreshadowed by Whitty & Visser (n 6).

and now by Jacques du Plessis in The South African Law of Unjustified Enrichment.10

See n 7 above.

 Visser distinguishes between enrichment by transfer; imposed enrichment (enrichment due to unauthorised expenditure); and enrichment by invasion of rights (or by act of the party enriched). Du Plessis's book is principally divided into sections on enrichment arising from a transfer made to another or “giving”; enrichment imposed on another, which is further divided into sections on the unauthorised improvement of another's property and the unauthorised fulfilment of another's obligation; and enrichment by taking from another or infringement of another's rights. The Wilburg-Von Caemmerer taxonomy has been similarly influential among writers in Scotland.11

See e.g. the division of enrichment “in another way” adopted by Robin Evans-Jones in Unjustified Enrichment Vol II, Enrichment Acquired in any Other Manner (2013). See also H L MacQueen's division of the subject into “transfer”, “imposition” and “taking”, in Unjustified Enrichment, 3rd edn (2013) 17, referred to (in an earlier edition) by M Hogg, “Unjustified enrichment in Scots law” (2006) 14 RLR 1 at 11–14.

 Again, this development – the analysis of the Scottish law of enrichment according to the manner in which the enrichment was acquired, following German law – appears to have been stimulated in large part by a single judicial decision: in this case the decision of Lord President Rodger (as he then was) in Shilliday v Smith.12

1998 SC 725. On the impact of this decision see e.g. R Evan-Jones, Unjustified Enrichment Vol I, Enrichment by Deliberate Conferral: Condictio (2003) 19–24.

The adoption of the German taxonomy matters enormously when it comes to enrichment “in another way”. The analysis of enrichment according to the manner in which it is acquired permits the systematisation of existing claims and the recognition of new ones in areas of law which are seldom litigated. An example of such systematisation in the South African context can be found in du Plessis's innovative treatment of the action modelled on the claim of the negotiorum gestor for his expenses.13

Du Plessis, Unjustified Enrichment (n 7) ch 10. See further my review of his book: (2013) 24 Stell LR 638 at 641–642.

As for the recognition of new claims, here one may refer to Visser and du Plessis’ proposals for a South African Eingriffskondiktion, a claim in respect of enrichment arising from the defendant's unauthorised encroachment on or interference with the plaintiff's rights.14

Visser, Unjustified Enrichment (n 7) ch 11; Du Plessis, Unjustified Enrichment (n 7) ch 11 and 12.

 Yet there is in truth little coherence between these different claims: the plaintiff's cause of action arises by virtue of the fact that she can bring her claim within a particular type of case, whether the Eingriffskondiktion, Verwendungskondiktion or Rückgriffskondiktion. To use Martin Hogg's language, this is an “unjustified if” approach.15

Hogg (n 11) 11–14.

 Of course the classification is not without an anchor, in that it is made by reference to the primary criterion of the nature of the mode of enrichment.16

Hogg (n 11) 12.

 But the “unjustified” nature of the defendant's enrichment is of relatively little importance in this context. Even in German law, in which the absence of legal ground approach to enrichment is most fully realised, no general concept can be formulated which captures the meaning of “legal ground” across all these cases, in the sense that its absence furnishes the central reason for restitution

In the context of enrichment by transfer or deliberate conferral, on the other hand, German law accords the legal ground concept a relatively precise meaning: contractual and statutory obligations; gifts and other transfers made gratuitously; transfers made ob rem, i.e. against an...

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