,QUESTION 1
Discuss the requirement that the defendant must have been enriched. (10)
If a defendant is to be held liable for enrichment it is not sufficient that the defendant
has been enriched and that the plaintiff has been impoverished. There must also be a
causal link between the enrichment and the impoverishment and this is expressed by
saying that the defendant’s enrichment must be ‘at the expense of the plaintiff’.
Normally this requirement causes little difficulty since in most cases the causal link is
obvious. Problems have, however, arisen in what DH Van Zyl refers to as cases of
‘‘indirect enrichment’’. These are cases where A and B enter into a contract in terms
of which A renders performance to B but the benefit of the performance accrues to C.
For example, if A (as the subcontractor) contracts with B to supply the roof of a house
which B is building for C, then if B renders performance (pays for the work) to A, C will
then be enriched at B’s expense and not at A’s. Does it make a difference, then, if B
becomes insolvent and is unable to pay A or if B disappears so that A is unable to
enforce the contract against B? De Vos’s view is that the fact that B does not render
performance to A cannot affect the juridical position between A and C and that in the
above example C is enriched at B’s expense and not at A’s, with the result that A
cannot bring an enrichment action against C.
This view was endorsed in Gouws v Jester Pools where A had built a swimming pool
for B in terms of a contract between A and B and on land which A believed belonged
to B but the land did in fact belong to C. After B disappeared without paying A for the
pool, A brought an enrichment action against C. The action failed, and the court held
that C had been enriched at B’s expense and not at A’s. Van der Walt, Scholtens and
Van Zyl do not share the above view but are of the opinion that in the circumstances
of the Gouws case, C was indeed enriched at the expense of A and that A’s action
should have succeeded. Van der Walt’s view is that the ‘at-the-expense-of’
requirement is satisfied once there has been a direct transfer of assets from A’s estate
to that of C. ‘‘Direct transfer’’ is that the assets pass directly from A to C and not from
A to B and then from B to C, that is not via the estate of an intermediary person.
, For example, assume that B and C enter into a contract in terms of which B undertakes
to build a swimming pool for C and B now engages A to do the work using A’s own
materials. The moment that A has built the pool C becomes owner thereof by accessio
— the ownership of the materials therefore passes directly from A to C and the at-the-
expense-of requirement, in Van der Walt’s view, is satisfied. In his view, should A now
be unable to obtain payment from B, A should succeed in an enrichment action against
C. If, however, B uses the materials which he purchases from A as the supplier in
order to build the pool himself. C once again becomes owner of the materials by
accessio, but in this case the materials did not pass directly from A to C; they passed,
in fact, from A to B and then from B to C so that the at-the-expense-of requirement is
not satisfied.
In Buzzard Electrical v 158 Jan Smuts Avenue Investments this problem was
addressed and the court made an important distinction between the following two
situations: First instance: where the subcontractor effects improvements to the
property of an owner pursuant to an agreement with the main contractor and not the
owner and then sues the owner for enrichment. Second instance: where the owner
contracts with the developer to effect improvements to his property and the developer
enters into an agreement with sub-contractor to do the work and after sub-contractor
has completed job, the sub-contractor then sues owner (with whom he never
contracted) on the basis of enrichment liability. The court in the Buzzard case makes
it clear that in the second instance, there is no enrichment claim because the various
relationships between the owner, the main contractor and the subcontractor are all
regulated by contract.
The owner is not enriched because he owes a contractual debt to the main contractor
for the improvements. The subcontractor is not unjustifiably impoverished because it
has a contractual claim against the main contractor. The court did not make a decision
on the first type of situation described above. Buzzard’s decision cannot, therefore, be
used to confirm or reject the Gouws decision. The retention issue In certain
circumstances where one person has expended his or her money, materials or labour
on the preservation or improvement of another’s property and at his or her own
expense has thereby enriched that other, such person can retain possession of the
Discuss the requirement that the defendant must have been enriched. (10)
If a defendant is to be held liable for enrichment it is not sufficient that the defendant
has been enriched and that the plaintiff has been impoverished. There must also be a
causal link between the enrichment and the impoverishment and this is expressed by
saying that the defendant’s enrichment must be ‘at the expense of the plaintiff’.
Normally this requirement causes little difficulty since in most cases the causal link is
obvious. Problems have, however, arisen in what DH Van Zyl refers to as cases of
‘‘indirect enrichment’’. These are cases where A and B enter into a contract in terms
of which A renders performance to B but the benefit of the performance accrues to C.
For example, if A (as the subcontractor) contracts with B to supply the roof of a house
which B is building for C, then if B renders performance (pays for the work) to A, C will
then be enriched at B’s expense and not at A’s. Does it make a difference, then, if B
becomes insolvent and is unable to pay A or if B disappears so that A is unable to
enforce the contract against B? De Vos’s view is that the fact that B does not render
performance to A cannot affect the juridical position between A and C and that in the
above example C is enriched at B’s expense and not at A’s, with the result that A
cannot bring an enrichment action against C.
This view was endorsed in Gouws v Jester Pools where A had built a swimming pool
for B in terms of a contract between A and B and on land which A believed belonged
to B but the land did in fact belong to C. After B disappeared without paying A for the
pool, A brought an enrichment action against C. The action failed, and the court held
that C had been enriched at B’s expense and not at A’s. Van der Walt, Scholtens and
Van Zyl do not share the above view but are of the opinion that in the circumstances
of the Gouws case, C was indeed enriched at the expense of A and that A’s action
should have succeeded. Van der Walt’s view is that the ‘at-the-expense-of’
requirement is satisfied once there has been a direct transfer of assets from A’s estate
to that of C. ‘‘Direct transfer’’ is that the assets pass directly from A to C and not from
A to B and then from B to C, that is not via the estate of an intermediary person.
, For example, assume that B and C enter into a contract in terms of which B undertakes
to build a swimming pool for C and B now engages A to do the work using A’s own
materials. The moment that A has built the pool C becomes owner thereof by accessio
— the ownership of the materials therefore passes directly from A to C and the at-the-
expense-of requirement, in Van der Walt’s view, is satisfied. In his view, should A now
be unable to obtain payment from B, A should succeed in an enrichment action against
C. If, however, B uses the materials which he purchases from A as the supplier in
order to build the pool himself. C once again becomes owner of the materials by
accessio, but in this case the materials did not pass directly from A to C; they passed,
in fact, from A to B and then from B to C so that the at-the-expense-of requirement is
not satisfied.
In Buzzard Electrical v 158 Jan Smuts Avenue Investments this problem was
addressed and the court made an important distinction between the following two
situations: First instance: where the subcontractor effects improvements to the
property of an owner pursuant to an agreement with the main contractor and not the
owner and then sues the owner for enrichment. Second instance: where the owner
contracts with the developer to effect improvements to his property and the developer
enters into an agreement with sub-contractor to do the work and after sub-contractor
has completed job, the sub-contractor then sues owner (with whom he never
contracted) on the basis of enrichment liability. The court in the Buzzard case makes
it clear that in the second instance, there is no enrichment claim because the various
relationships between the owner, the main contractor and the subcontractor are all
regulated by contract.
The owner is not enriched because he owes a contractual debt to the main contractor
for the improvements. The subcontractor is not unjustifiably impoverished because it
has a contractual claim against the main contractor. The court did not make a decision
on the first type of situation described above. Buzzard’s decision cannot, therefore, be
used to confirm or reject the Gouws decision. The retention issue In certain
circumstances where one person has expended his or her money, materials or labour
on the preservation or improvement of another’s property and at his or her own
expense has thereby enriched that other, such person can retain possession of the
