Enrichment liability and estoppel
Assignment 01
Question one
There must be a casual link between the enrichment and impoverishment if a defendant is held liable
for enrichment, it would not be sufficient that the defendant was enriched and the plaintiff
impoverished. There are problems that arise in cases of indirect enrichment, where two people enter
into a contract (A and B) and where A renders a performance for B but the benefit of that
performance actually accrues to C, an example of this would be where A contracts with B to build a
swimming pool on a property that A believes to be B’s but which later turns out to be C’s. In a case
where B becomes insolvent and unable to pay A or if B flees, the view of De Vos is that the fact that B
is insolvent, it would not affect the juridical relationship between A and C , C would be enriched at
the expense of B and not C and A would not be able to bring an action against C. This view was
endorsed by the gouws case, with the facts of the case being that A built a pool for B on a property
that he believed belonged to B, which later turned out to be the property of C, after the pool was
built B has absconded and not heard of, A tried bringing an action against C but the action failed due
to the view that C has been enriched at the expense of B and not C. On the other hand academic Van
De Walt was of the view that C had been enriched at the expense of A and the action by A should
have exceeded based on the fact that the assets from Az estate was directly transferred to C and not
passed through B before getting to C ,satisfying the at-the-expense-of-requirement. In the legal
experts view, if A can not bring an action against B for any valid reason, then A should succeed with
his action against C but if B does pay A then A has no action against C. in the case of a subcontractor
as explained in the buzzard electrical case, no enrichment claim exists because the owner C is not
enriched because they still owe the main contractor B a contractual debt, and the subcontractor is
not unjustifiably impoverished because he/she still has a contractual claim against the main
contractor. According to the law of property there is a right of retention, which provides a person
who has made improvements to another’s property by expending their money, materials or labor,
they have a right of retention to possess the property until they are compensated for, however the
requirements for this right of retention would be exactly the same as those that would provide the
basis for an enrichment action in the same circumstances. In the Brooklyn case the court has allowed
a right of retention to take place in circumstances that were similar to those in which the enrichment
action in the gouws case refused. In the Brooklyn case B has purchase furniture from C on hire
purchase, in terms of which C reserved the furniture until B has made a final payment, B enters into a
contract with A who stored the furniture in her warehouse. C cancelled the hire purchase contract
with B and laid an Action to recover the furniture from A, A argued that she had a right of retention
until B has paid for the storage, the court found in A’s favor. Finally, in the Mccarthy case, the
supreme court of appeal rejected approach of Gouws view of indirect enrichment and they were of
their own opposing view that a type one improver may in-fact exercise an enrichment lien against
the owner in order to procure payment of their expense. Therefore, it depends on the circumstances
of each and every case and whether the defendant can be enriched at the expense of the plaintiff. 1
1
Unjustified enrichment liability and estopel: study guide 1 for PVL3704( university of south Africa 2018) 21.
Assignment 01
Question one
There must be a casual link between the enrichment and impoverishment if a defendant is held liable
for enrichment, it would not be sufficient that the defendant was enriched and the plaintiff
impoverished. There are problems that arise in cases of indirect enrichment, where two people enter
into a contract (A and B) and where A renders a performance for B but the benefit of that
performance actually accrues to C, an example of this would be where A contracts with B to build a
swimming pool on a property that A believes to be B’s but which later turns out to be C’s. In a case
where B becomes insolvent and unable to pay A or if B flees, the view of De Vos is that the fact that B
is insolvent, it would not affect the juridical relationship between A and C , C would be enriched at
the expense of B and not C and A would not be able to bring an action against C. This view was
endorsed by the gouws case, with the facts of the case being that A built a pool for B on a property
that he believed belonged to B, which later turned out to be the property of C, after the pool was
built B has absconded and not heard of, A tried bringing an action against C but the action failed due
to the view that C has been enriched at the expense of B and not C. On the other hand academic Van
De Walt was of the view that C had been enriched at the expense of A and the action by A should
have exceeded based on the fact that the assets from Az estate was directly transferred to C and not
passed through B before getting to C ,satisfying the at-the-expense-of-requirement. In the legal
experts view, if A can not bring an action against B for any valid reason, then A should succeed with
his action against C but if B does pay A then A has no action against C. in the case of a subcontractor
as explained in the buzzard electrical case, no enrichment claim exists because the owner C is not
enriched because they still owe the main contractor B a contractual debt, and the subcontractor is
not unjustifiably impoverished because he/she still has a contractual claim against the main
contractor. According to the law of property there is a right of retention, which provides a person
who has made improvements to another’s property by expending their money, materials or labor,
they have a right of retention to possess the property until they are compensated for, however the
requirements for this right of retention would be exactly the same as those that would provide the
basis for an enrichment action in the same circumstances. In the Brooklyn case the court has allowed
a right of retention to take place in circumstances that were similar to those in which the enrichment
action in the gouws case refused. In the Brooklyn case B has purchase furniture from C on hire
purchase, in terms of which C reserved the furniture until B has made a final payment, B enters into a
contract with A who stored the furniture in her warehouse. C cancelled the hire purchase contract
with B and laid an Action to recover the furniture from A, A argued that she had a right of retention
until B has paid for the storage, the court found in A’s favor. Finally, in the Mccarthy case, the
supreme court of appeal rejected approach of Gouws view of indirect enrichment and they were of
their own opposing view that a type one improver may in-fact exercise an enrichment lien against
the owner in order to procure payment of their expense. Therefore, it depends on the circumstances
of each and every case and whether the defendant can be enriched at the expense of the plaintiff. 1
1
Unjustified enrichment liability and estopel: study guide 1 for PVL3704( university of south Africa 2018) 21.
