MLONDO
LUYANDA
UNJUSTIFIED
ENRICHMENT
LIABILITY
AND
ESTOPPEL.
PVL3704
2024 REVISION PACK
,1. Discuss the causality (at the expense of requirement) requirement of
enrichment liability.(10)
• If a defendant is to be held liable for enrichment, it is not sufficient
that he or she has been enriched, and that the plaintiff has been
impoverished.
• A causal link must also exist between the enrichment and the
impoverishment concerned, the defendant’s enrichment must be
at the expense of the plaintiff.
• Normally, the requirement involved causes little difficulty, as, in
most cases, the causal link between the different elements is
obvious.
• Problems have, however, arisen in cases of indirect enrichment.
In certain such cases, 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.
• Gouws v Jester Pools (Pty) Ltd 1968 3 SA 653 (T) (hereinafter the
Gouws case) and Buzzard Electrical case it was held that the
resulting prejudice must not be too remote a consequences of
misrepresentation. In other words misrepresentation must be a
real and direct cause of prejudice suffered by the plaintiff. The
court however emphasized that the proximate test does not
require that the misrepresentation be the only or sole cause of the
prejudice, it may be part of the causes.
• This therefore may mean that the proximate test may sometimes
not be invoked where the estoppel-denier makes use of an
intermediary to mislead third parties as this may not be this may
, be an intervenes actus (intervening event) which is not the direct
cause of prejudice.
2. The test for negligence.
• If a reasonable person, in the position of the deceiver (estoppel-
denier), would have foreseen loss or prejudice to the deceived
(estoppelasserter), and would have taken steps to prevent the
loss, and if the deceiver either did not foresee loss, or did not take
the necessary steps to prevent it, the deceiver is regarded as
having been negligent.
3. Discuss the nature and extent of enrichment claim without referring to
any specific action (10)
• A claim that is based on unjustified enrichment is, first and
foremost, a claim to have the specific item concerned transferred
in ownership, or for the occupation or possession to be
retransferred to the original owner, occupier or holder.
• In terms of the unjustified enrichment claim, ownership is then
retransferred to the original owner.
• where land is transferred in ownership to another person in terms
of an invalid contract, where the new owner has, in turn, sold the
land on to a third party, the ownership of the innocent third party is
protected, and no claim may be made against it. In such a case,
the enrichment claim is aimed at claiming the value that is still left
in the estate, or in the patrimony, of the enriched party.
• ACTUAL KNOWLEGDE -From the moment that the defendant
becomes aware that he or she has been unjustifiably enriched at
, the expense of another, his or her liability is reduced or
extinguished only if he or she can prove that the diminution, or
loss, of his or her enrichment was not his or her fault. He or she
must, therefore, prove that the loss or destruction would have
taken place in any event. Where the enriched party is negligent as
to the cause of the loss or destruction, he or she remains liable for
the original amount with which he or she was enriched at the time
that he or she became aware of such enrichment.
• IMPLIED KNOWLEDGE - where the impoverished party has given
notice of the unowed performance, or has made an attendant
demand, there will have been actual or implied knowledge of the
enrichment on the part of the enriched party.
• MORA DEBITORS- From the moment that the defendant falls into
default (mora debitoris), his or her liability is reduced or
extinguished only if he or she can prove that the event that
diminished or extinguished his or her enrichment would also have
operated against the plaintiff, if the retransfer had been made
timeously. A distinction must be made between where it leads to
the actual or implied knowledge of the enrichment on the part of
the enriched party, and mora, for the purposes of payment of
interest. In enrichment cases, a party only falls into mora when
there has been an actual demand for the retransfer of the thing, or
for the repayment of the amount of money, or value, involved. In
the second sense, mora only occurs when the debt is liquidated.
CIR v First National Industrial Bank Ltd 1990 3 SA 641 (A)
(hereinafter the CIR case).
LUYANDA
UNJUSTIFIED
ENRICHMENT
LIABILITY
AND
ESTOPPEL.
PVL3704
2024 REVISION PACK
,1. Discuss the causality (at the expense of requirement) requirement of
enrichment liability.(10)
• If a defendant is to be held liable for enrichment, it is not sufficient
that he or she has been enriched, and that the plaintiff has been
impoverished.
• A causal link must also exist between the enrichment and the
impoverishment concerned, the defendant’s enrichment must be
at the expense of the plaintiff.
• Normally, the requirement involved causes little difficulty, as, in
most cases, the causal link between the different elements is
obvious.
• Problems have, however, arisen in cases of indirect enrichment.
In certain such cases, 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.
• Gouws v Jester Pools (Pty) Ltd 1968 3 SA 653 (T) (hereinafter the
Gouws case) and Buzzard Electrical case it was held that the
resulting prejudice must not be too remote a consequences of
misrepresentation. In other words misrepresentation must be a
real and direct cause of prejudice suffered by the plaintiff. The
court however emphasized that the proximate test does not
require that the misrepresentation be the only or sole cause of the
prejudice, it may be part of the causes.
• This therefore may mean that the proximate test may sometimes
not be invoked where the estoppel-denier makes use of an
intermediary to mislead third parties as this may not be this may
, be an intervenes actus (intervening event) which is not the direct
cause of prejudice.
2. The test for negligence.
• If a reasonable person, in the position of the deceiver (estoppel-
denier), would have foreseen loss or prejudice to the deceived
(estoppelasserter), and would have taken steps to prevent the
loss, and if the deceiver either did not foresee loss, or did not take
the necessary steps to prevent it, the deceiver is regarded as
having been negligent.
3. Discuss the nature and extent of enrichment claim without referring to
any specific action (10)
• A claim that is based on unjustified enrichment is, first and
foremost, a claim to have the specific item concerned transferred
in ownership, or for the occupation or possession to be
retransferred to the original owner, occupier or holder.
• In terms of the unjustified enrichment claim, ownership is then
retransferred to the original owner.
• where land is transferred in ownership to another person in terms
of an invalid contract, where the new owner has, in turn, sold the
land on to a third party, the ownership of the innocent third party is
protected, and no claim may be made against it. In such a case,
the enrichment claim is aimed at claiming the value that is still left
in the estate, or in the patrimony, of the enriched party.
• ACTUAL KNOWLEGDE -From the moment that the defendant
becomes aware that he or she has been unjustifiably enriched at
, the expense of another, his or her liability is reduced or
extinguished only if he or she can prove that the diminution, or
loss, of his or her enrichment was not his or her fault. He or she
must, therefore, prove that the loss or destruction would have
taken place in any event. Where the enriched party is negligent as
to the cause of the loss or destruction, he or she remains liable for
the original amount with which he or she was enriched at the time
that he or she became aware of such enrichment.
• IMPLIED KNOWLEDGE - where the impoverished party has given
notice of the unowed performance, or has made an attendant
demand, there will have been actual or implied knowledge of the
enrichment on the part of the enriched party.
• MORA DEBITORS- From the moment that the defendant falls into
default (mora debitoris), his or her liability is reduced or
extinguished only if he or she can prove that the event that
diminished or extinguished his or her enrichment would also have
operated against the plaintiff, if the retransfer had been made
timeously. A distinction must be made between where it leads to
the actual or implied knowledge of the enrichment on the part of
the enriched party, and mora, for the purposes of payment of
interest. In enrichment cases, a party only falls into mora when
there has been an actual demand for the retransfer of the thing, or
for the repayment of the amount of money, or value, involved. In
the second sense, mora only occurs when the debt is liquidated.
CIR v First National Industrial Bank Ltd 1990 3 SA 641 (A)
(hereinafter the CIR case).
