[Home] [Databases] [WorldLII] [Search] [Feedback] South Africa: Supreme Court of Appeal

You are here:  SAFLII >> Databases >> South Africa: Supreme Court of Appeal >> 2001 >> [2001] ZASCA 16

[Database Search] [Name Search] [Recent Decisions] [Noteup] [Help]

McCarthy Retail Ltd v Shortdistance Carriers CC (2) (110/99) [2001] ZASCA 16 (16 March 2001)

THE SUPREME COURT OF APPEAL

OF SOUTH AFRICA

Reportable
Case No.110/99


In the matter between:



McCARTHY RETAIL LTD Appellant


and


SHORTDISTANCE CARRIERS CC Respondent

Coram: SMALBERGER ADCJ, HARMS, OLIVIER, SCHUTZ and CAMERON JJA

Heard: 27 FEBRUARY 2001

Delivered: 16 MARCH 2001

JUDGMENT

HARMS JA/

HARMS JA:
[1] Although I agree with the order proposed I am, with some diffidence, unwilling to concur with everything said in the judgment of Schutz JA. My hesitation flows from a number of considerations. Counsel were prepared to argue the condictio sine causa and little else; although seemingly an unusual case, upon reflection it becomes clear that the matter can be accommodated under well-established principles; and, I believe, this area of the law should develop incrementally and not in leaps and bounds. That does not mean, however, that Schutz JA's prophetic views are incorrect.
[2] I agree with him that the garage's case fits neatly within the niche of the action of the bona fide occupier who expended money and material on the improvement of another's property (9 Lawsa re-issue par 102). There appears to me to be no logical reason why A, who mistakenly believed that he had a contract with B, is entitled to an enrichment claim in respect of what he has expended on improving B's property (Rubin v Botha 1911 AD 568) but not if he believed that he had a contract with C (the effect of the judgment a quo). The remaining question is whether the general requirements underlying all enrichment actions are present. They are that (a) the defendant must be enriched, (b) the plaintiff must be impoverished, (c) the defendant's enrichment must be at the expense of the plaintiff and (d) the enrichment must be without cause (sine causa), i e unjustified (op cit par 76).
[3] The owner did not place the first two requirements in issue but concentrated on (d), as did the trial Judge, and relied to a lesser extent on (c). The Court below postulated two scenarios. The first was based upon the finding (which is now accepted by both parties) that the repudiation of liability under the insurance policy was not justified. In that event, it held that the garage -
“. . . would have repaired the vehicle under the mistaken impression that it was doing so at the request of the insurance company, and the [owner] on the other hand received the repaired vehicle in terms of its contract with the insurance company. It thus received the benefit for which it had paid its premiums and was not unjustly enriched or enriched sine causa.”
In the alternative and on the assumption that the insurer was entitled to repudiate, the same would apply because -
“(t)he [owner] accepted delivery of the repaired vehicle acting in terms of its contract with the insurance company. When delivery was taken the insurance company had not repudiated liability. The insurance policy was the primary source of the performance of the work and enrichment.”
[4] These findings may by implication equate the sine causa requirement with causation. Since the owner (or for that matter, the insurer) had no right against the garage to have the vehicle repaired and because the garage had no other claim against either of them, the shift of assets was without any legal ground and therefore sine causa. We are not concerned with what the position would have been had there been no repudiation or if the insurer had given the garage an instruction to repair because -
“[d]ie vraag of appellant deur die bewaring van die meubels deur die respondent verryk is, moet in die lig van die omstandighede wat in werklikheid geheers het, bepaal word, en nie in die lig van omstandighede wat sou geheers het indien mev. Bond nie in gebreke sou gebly het om haar kontraktuele verpligtings na te kom nie.
Waar, byvoorbeeld, die eienaar van 'n saak dit in die sorg van 'n opsigter laat wat teenoor die eienaar teen vergoeding kontraktueel verbind is om dit te bewaar, en in gebreke bly om sy verpligtings behoorlik na te kom, met die gevolg dat die saak aan beskadiging blootgestel word, kan die eienaar klaarblyklik nie teenoor die negotiorum gestor, wat die saak in bewaring neem en uitgawes aangaan vir die behoud en beskerming daarvan, aanvoer dat hy nie deur die bewaarneming van die saak deur die gestor verryk is nie aangesien hy die opsigter, wat kontraktueel verplig was om die saak teen beskadiging te bewaar, reeds ten volle vir sy bewaarneming vergoed het. Hy sou ewe min kon beweer dat die bewaarneming deur die gestor onnodig sou gewees het indien die opsigter nie in gebreke sou gebly het nie om sy verpligtings na te kom.”
Per Botha JA in Brooklyn House Furnishers (Pty) Ltd v Knoetze & Sons 1970 (3) SA 264 (A) 272A-D. The facts of that case are instructive. Mrs Bond had purchased goods on hire-purchase from the appellant. In breach of this contract she entered into a storage agreement with the respondent. The latter was entitled to assert a right of retention (since Mrs Bond had failed to pay the storage fees) against the appellant although, had Mrs Bond complied with her contract with the appellant, the appellant would have stored the goods at less cost.
[5] As far as causation is concerned, I agree with Schutz JA that the enrichment of the owner was not juridically connected to the insurance policy. It took place regardless, and not because, of the existence of the policy. The shift of assets occurred between the garage and the owner and that indicates that the owner was enriched at the expense of the garage. This view is in conformity with Brooklyn House (at 273 in fine - 274A):
“Dat verryking van die eienaar ten koste van die besitter, wat die noodsaaklike of nuttige uitgawes aangegaan het, 'n vereiste vir die totstandkoming van so 'n rentensiereg is, moet toegegee word. Dit is byna vanselfsprekend dat verryking van die eienaar deur die besteding van nuttige of noodsaaklike uitgawes aan die saak, ten koste is van die persoon wat die uitgawes aangegaan het, en na my oordeel is dit, met betrekking altans tot die bestaan, al dan nie, van so 'n retensiereg, nie ter sake nie dat die uitgawes aangegaan is ingevolge 'n geldige kontrak met 'n derde teen vergoeding.”
And at 275G-H:
“Dit sou dus, met betrekking tot die vraag of 'n retensiereg teen die eienaar tot stand gekom het, nie verkeerd wees nie om te aanvaar dat, totdat die besitter deur òf die eienaar òf die derde persoon behoorlik vergoed word, die verryking van die eienaar in werklikheid ten koste van die besitter is wat die saak verbeter of bewaar het. In iedere geval, 'n besitter wat, ingevolge so 'n ooreenkoms met 'n derde, besit van die saak vir verbeterings of bewaring kry, kom nie op onregmatige wyse in besit daarvan nie, en bewaar of verbeter hy die saak ten voordele van die eienaar, voldoen hy aan al die vereistes vir die totstandkoming van 'n retensiereg teen die eienaar.”
[6] The fact that Brooklyn House was wrong to the extent that it held that a lien could exist independently of an enrichment action (cf Buzzard Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd en 'n Ander 1996 (4) SA 19 (A) 26I-27C) and that these passages focus on liens, does not affect the validity of the underlying principles. At the end of the day the owner had the repaired vehicle as well as a claim under the policy. His failure to have pursued the claim cannot be laid at the door of the garage.

_____________________

L T C HARMS
JUDGE OF APPEAL