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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


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


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” ;


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.


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.


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,


'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


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.


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,


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


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


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


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-


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


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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