Nortje en 'n Ander v Pool, NO

• Jurisdiction: South Africa
• Judge: Ogilvie Thompson AR, Rumpff AR, Botha AR, Williamson AR en Wessels AR
• Judgment Date: 06 May 1966
• Citation: 1966 (3) SA 96 (A)
• Hearing Date: 22 February 1966
• Court: Appellate Division

Ogilvie Thompson, J.A.:

The facts and the various arguments addressed to H us on behalf of the parties appear fully from the judgments of RUMPFF and BOTHA, JJ.A., which I have had the advantage of reading. I share my Brother RUMPFF'S view that the appeal should be allowed. As I, however, reach that result on somewhat different grounds, and since there is a difference of opinion among the members of the Court, I proceed to state the reasons which have led me to the conclusion that this appeal should succeed.

At the outset I make three preliminary observations. First, I have carefully considered the old authorities referred to by RUMPFF and BOTHA, JJ, A.; but, inasmuch as in my opinion the problem before us

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can be resolved by applying the prior decisions of this Court, I make no attempt, in what follows, to discuss those old authorities. Secondly, on the view that I take of the case, I find it unnecessary to enter upon any examination of the controversial question as to whether or not any A so-called general enrichment action (algemene verrykingsaksie) exists in our law. I accordingly prefer to express no opinion on that question so fully and ably discussed in the above-mentioned judgments of my Brethren. Thirdly, since this case concerns expenditure incurred in relation to the landed property of another whereby the market value of the land is claimed to have been increased to the consequent unjustified B enrichment of its owner, what I hereinafter say regarding enrichment is intended to be, and should thus be regarded as, restricted to that type of case.

It is undoubtedly true that, as my Brother BOTHA's judgment makes clear, the Roman and the Roman-Dutch law refer in terms only to compensation C for tangible (physical) improvements to landed property. It is equally true, as is also pointed out by BOTHA, J.A., and as was stressed by the learned Judge a quo, that in Rubin v Botha, 1911 AD 568, and in the subsequent kindred decisions of this Court wherein compensation was awarded, this Court has hitherto been concerned only with tangible D improvements. The commonest example of a tangible improvement is that of a building erected, by a bona fide possessor or bona fide occupier, upon the land of another; but, as SOLOMON, J.A., remarked in Fletcher's case, 1915 AD 636 at p. 653, 'in principle there is no reason for limiting the rule to such cases'. Having regard to the context in which he made that remark, however, SOLOMON, J.A., probably had in mind only E tangible improvements. Hauman v Nortje, 1914 AD 293, which further extended to a locatio operis the principle previously extended in Rubin v Botha, supra, to include a bona fide occupier, may equally be said to have been concerned with a tangible improvement. For, at p. 300 of the report, INNES, J.A., stressed, as an exception to the general rule F governing bilateral contracts, the 'special position' of contracts for work

'the concrete results of which during the course of performance accrue to the soil and become the property of one of the parties'.

The origins of the equitable rule under consideration were summarised by INNES, J.A., in Rubin v Botha, supra, at p. 578, as follows:

G 'The equitable relief given by Roman-Dutch law, to a person who had made improvements upon the land of another, was the outcome of the modification of the maxim that whatever is affixed to the soil belongs to it, by the further maxim that no man should be allowed to enrich himself at the expense of another.'

In all such cases, however, it appears to me that the tangible improvement is but the means or vehicle whereby, in consequence of the H operation of accessio, the owner of the land acquires an increase in his aggregate assets - that is to say, becomes enriched. Where such enrichment has resulted from expenditure incurred by a bona fide possessor or a bona fide occupier of the land, the enrichment is, caeteris paribus, said to be unjustified, and the claimant is - subject to such considerations as the jus tollendi and the wide discretion of the Court in determining these matters - awarded compensation against the landowner.

It is, however, important, in my judgment, to appreciate that, while

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in the decisions of this Court to date the tangible improvement has been a sine qua non of the right to claim, the compensation has (as previously was also the case in Holland) always been awarded to the A claimant, not necessarily for the actual cost or actual value of the improvement itself, but for what the Court determines to be the extent of the resultant unjustified enrichment of the landowner. Thus in Fletcher's case, supra at p. 648, INNES, C.J., after pointing out that in Holland

'the general basis, in regard to useful expenditure, was the extent to which the property had been enhanced in value thereby',

B went on to say:

'But in the case of costly improvements it is obvious that a rigid application of that general test might sometimes involve very considerable hardship. And the authorities, recognising that an equitable principle should not be so applied as to produce inequitable results, indicated the lines upon which a Court should proceed in order to obviate such results (see Gluck, vol. 6, sec. 592; Voet, 6.1.36). The C measure of enhancement would generally be less than the expenditure actually incurred; but if in any instance it proved to be greater, then only the lesser amount was to be awarded as compensation.'

It is, in this context, therefore, in a sense slightly misleading to speak of compensation 'for improvements'; since the compensation is actually awarded for the enrichment of the landowner resulting from the improvement to the extent that such enrichment is held, on the facts of D the particular case, to be unjustified. Two indispensable factors must always be present, namely, the impoverishment of the plaintiff and the enrichment of the defendant. As INNES, C.J., put it in Fletcher's case, supra at p. 649:

'The equitable principle on which the law awards compensation for improvements is that no man should be allowed to enrich himself at the expense of another. Both elements must concur, benefit to the claimant E and detriment to the improver, and both must be borne in mind in assessing the amount.'

In my view, the principle underlying the above-indicated series of decisions of this Court is, not merely a modification of the consequences of accessio arising by way of tangible physical additions F to landed property, but the principle of unjustified enrichment as above described.

Having regard to the foregoing, I am unable to see any sufficient reason why, in cases where landed property has been rendered more valuable, the equitable principle in question should in our modern law necessarily be confined to cases where a tangible improvement has been annexed to the G soil, or why the concept of impensae utiles should to-day be restricted to tangible additions to landed property. Emphasising that, while this Court has from time to time extended the class of person entitled to claim this type of relief, it has hitherto only granted relief in cases of tangible improvements, counsel for respondent submitted that to H recognise a claim such as the present would constitute an unwarranted, undesirable and, indeed, revolutionary step. I am unable to agree. Many of the claims, labelled anomalous and extraordinary by counsel for respondent, and the door to which, he argued, would be opened by such recognition, would, in my opinion, fail at the outset because of their inability to fulfil the requirement that the enrichment relied upon must be an unjustified enrichment. With the greatest deference to the contrary views of some of my Brethren, what the plaintiffs invite us to do in the present appeal appears to me entail, not an unwarranted extension of an existing remedy, but rather the application of a

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recognised and well established principle to the facts. For, in my judgment, the principle of the above-mentioned decisions of this Court is wide enough to cover, and in an appropriate case does cover, a situation where, as a result of expenditure of money by a bona fide A possessor or bona fide occupier, the market value of landed property is enhanced by means other than the annexation of a tangible improvement and in circumstances which constitute an unjustified enrichment of the owner of the land.

I accordingly now turn to consider whether, on the facts averred in the B declaration, the present is an appropriate case for an application of the above-mentioned principle. Plaintiffs' claim has its origin in the prospecting contract which, because of the absence of notarial attestation, is invalid and to the regularisation of which the defendant now re uses to consent. The provisions of the prospecting contract are thus the background against which the validity or otherwise of plaintiffs' present claim must be determined. In this connection it is, C I think, apposite to recall that in Rubin v Botha, supra at p. 582, INNES, J.A., said that:

'although the contract as such was void, we cannot shut our eyes to the facts which led to the erection of these buildings if we would assess an equitable compensation in respect of them',

D and that those remarks were amplified by the same learned Judge in Hauman v Nortje, supra at p. 301, as follows:

'Turning now to our own law, we find the doctrine well established that no man may enrich himself at the expense or to the detriment of another. Its general operation lies outside the realm of contract, and its most frequent application relates to cases where improvements have been made by a possessor of land. But it was used in Rubin v Botha, 1911 AD 568, to prevent enrichment which had its origin not in possession but in E an agreement which the parties believed to be...