Exam Notes - PVL 3704
UNJUSTIFIED ENRICHMENT LIABILITY
STUDY UNIT 1 - Overview
Explain why there is a need for unjustified enrichment liability in any developed system of law? Liability for enrichment is necessary in any developed legal system. There are cases in which one person obtains assets belonging to another person in circumstances where there are no grounds for the transfer of such assets and where there is nothing to justify their retention by the receiver.
Example 1: In accordance with the rules relating to accessio anything affixed to the land becomes part of the land and consequently the property of the owner of the land. This means that should the bona fide possessor of a farm build a house and outbuildings on that farm, all the buildings become the property of the owner of the farm and such owner is entitled to eject the bona fide possessor at any time leaving the occupier out of pocket and the owner with a property which is worth more than it had been before the improvements. There is no legal reason (no contract or delict) for the enrichment of the owner’s estate and the impoverishment of that of the occupier that would justify the retention of the enrichment by the owner. Unjustified enrichment liability is aimed at redressing this type of situation.
Example 2: all that is necessary for the transfer of ownership is delivery of a thing (res) with the intention on the part of the transferor to transfer ownership, and the intention on the part of the transferee to become the owner. This could result in, for example, a seller’s transferring ownership of the merx to the buyer in the genuine belief that the contract of sale was valid and only later learning that the contract was void and that he or she has no action for the purchase price against the buyer. Again the one party has benefited by the transfer of the property when there was no legal reason for such transfer.
It would be unfair in these examples to leave the bona fide possessor and the seller without a remedy. This would mean that they would be impoverished through no fault of their own and that the owner and the buyer would be enriched without any good cause, hence the necessity for liability on the ground of unjustified enrichment.
Explain why reference to Roman law is applicable today with reference to enrichment liability? Roman law had specific enrichment actions, each with their own requirements, but there was no general liability for unjustified enrichment. Relief was granted to a plaintiff in specific circumstances based on very broad principles stated in two texts which could not possibly provide a basis for liability. The enrichment actions of Roman law were received into Roman-Dutch law where they were developed and extended over time and are still available in South African law. Our courts have also recognised liability for enrichment in a number of circumstances where none of the old actions was applicable, thereby further extending the scope of unjustified enrichment liability in South African law.
In Mccarthy Retail Ltd v Shortdistance Carriers the court stated that unlike other branches of our law, the rich Roman source material has not led to an unqualified judicial recognition (with a few exceptions) of a unified general principle of unjustified enrichment.
Having regard to such extensions of enrichment liability, South African academics had concluded that a general subsidiary enrichment action had developed in South African law which would lie in any case of unjustified enrichment where none of the old actions would lie. The view was that a general action had been developed which was additional and subsidiary to the existing actions. Unjustified enrichment liability is still underdeveloped in comparison with contract and delict and therefore remains closer to Roman and Roman-Dutch law sources from which, it, and the greater part of our private law, including contract and delict is sourced.
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