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n Tydskrif vir die Suid-Afrikaanse Reg - Ongeregverdigde verryking van 'n derde uit 'n kontrak
Unjustified enrichment of a third party arising from contract
The question that is considered in this contribution is whether a plaintiff (A) who effected improvements to the property of C (the owner or third party) in terms of a contract he (A) had concluded with B (the intermediary) may institute a claim against C arising from the latter's unjustified enrichment. Put differently, apart from A's primary contractual claim against B, does he also have a subsidiary or even concurrent claim against C arising from the latter's indirect enrichment? The discussion takes place against the backdrop of Buzzard Electrical (Pty) Ltd v 158 Jan Smuts Avenue Investments (Pty) Ltd 1996 4 SA 19 (A) in which a distinction was drawn between situations where A was a subcontractor (or something less) of B (type 2 cases) and instances where he was not (type 1 cases). In the type 2 case the owner (C) acquired nothing more (from A) than that for which he had contracted with the main contractor (B). Hence the owner's enrichment is not sine causa and the plaintiff (A) can enforce neither an enrichment lien nor a claim for compensation arising from unjustified enrichment against the owner (C). Enrichment liens have been recognised for nearly a hundred years in type 1 cases, whilst claims for compensation have succeeded on occasion. The supreme court of appeal appears to be in favour of the recognition of claims in type 1 cases.
The first issue that is addressed, is whether it is possible to accommodate the indirect enrichment claim within the framework of the four recognised elements of (requirements for) enrichment liability, namely the sine causa requirement, the "at the expense of" requirement, and the requirements of enrichment and impoverishment respectively. It is indicated that while it is possible to formulate the requirements for enrichment liability in such a way as to exclude a claim for indirect enrichment from the outset, it is also possible to formulate them to accommodate such a claim.
Three models are identified that may be used to deal with indirect enrichment. The abstract model excludes, as a matter of policy, liability for indirect enrichment without considering the merits of individual or concrete cases. The concrete model subject to subsidiarity requires the plaintiff to primarily direct his contractual claim against the intermediary, but leaves scope for the plaintiff to institute, in an individual or concrete case, an enrichment claim against the owner subject to the principle of subsidiarity. In applying the principle of subsidiarity , an enrichment claim may be excluded in an individual or concrete case by reason of public policy. The third possible model is a concrete model free from subsidiarity.
The author submits that in view of Buzzard's case, the first model (abstract model) applies to type 2 cases. As far as the proposed model in respect of type 1 cases is concerned, an analysis is given of a number of policy considerations which are usually relied upon to motivate the denial of liability for indirect enrichment. The author concludes that these considerations are not of such a nature as to exclude the indirect enrichment claim from the outset, but that the legitimate fears of the unacceptable consequences that may arise from the recognition of such a claim can be taken care of by applying the proposed principle of subsidiarity . He thus proposes that the second model (concrete model subject to subsidiarity) be used for type 1 cases.
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