The borderline between delict and enrichment

• Jurisdiction: South Africa
• Published date: 29 May 2019
• Citation: 2000 Acta Juridica 300
• Date: 29 May 2019
• Pages: 300-328
• Author: Daniel Visser

The borderline between delict and enrichment

2000 Acta Juridica 300

Daniel Visser *

University of Cape Town

Duard Kleyn **

University of Pretoria

I Introduction

Both English and German law recognizes that someone against whom another has

committed a delict may, in certain circumstances, claim not only compensation for the

(past and future) harm caused by the deli ct, but also all or a part of the benefit which

accrues to the wrongdoer as a result of the delict. 1 In addi tion, these systems also allow

benefits, which result from wrongs or encroachments that can-not be described as

delicts, to be reclaimed in specific instan ces. In other words, these legal systems accept

that, although the usual remedy for a 'wrong' must be compensatory, situations arise i n

which a proper balancing of the interests of the parties requires the defendant to

disgorge all or a part of the profit that accrued to him or her as a resul t of the wrong.

There i s some overlap between delictual liability and that based on enrichment as a

result of a wrong, but there are also important differences. In both English and German

law the most important difference between tort/delict and 'enrichment based on a wrong

or an encroachment' is this: whereas delict seeks to make good a loss, enrichment seeks

to strip away a benefit. Such 'stripping away' might, of course, occur in a situation in

which the claiman t has also suffered a loss, and if that is so the enri chment claim would

not necessarily exclude a further claim in delict. In stripping the benefit away and giving

it to the claimant, a corresponding impoverishment might also be mad e good

* BIur LLB LLD (Pret) Dr Iur (Leyden), Professor of Private Law, University of Cape Town.

** BA LLB LLD (Pret), Dean and Professor of Law, University of Pretoria.

2000 Acta Juridica 301

at the same time, but that is incidental: in some instances the purpose of the enrichment

remedy is punitive rather than restorative.

In c ountries where the impoverishment of the plaintiff is accepted as a requirement

for all instances of enrichment liability, enrichment based on a wrong or encroach ment

tends to be underdeveloped. Thus the Netherlands does not consciously work with such

a category and in Scotland, too, it does not exist (although it has been convincingly

argued that it can easily be developed). 2 On the other hand, in Engli sh law a mirror loss

has not been seen as an absolute requirement and there the classic division is between

1 As Lord Nicholls of Birkenhead put it in Attorney General v Blake 3 WLR 625 at 632: 'As with breaches of

contract, so with tort, the general principle regarding assessment of damages is that they are compensating for

loss or injury. The general rule is that, in the oft-quoted words of Lord Blackburn, the measure of damages is

to be, as far as possible, the amount of money which will put the injured party in the same position he would

have been in had he not sustained the wrong: Livingstone v Rawyards Coal Co (1880) 5 App Cas 25, 39.

Damages are measured by the plaintiff's loss, not the defendant's gain. But the common law, pragmatic as

ever, has long recognized that there are many commonplace situations where a strict application of this

principle would not do justice between the parties. Their compensation for the wrong done to the plaintiff must

be measured by a different yardstick.'

2 In regard to the Netherlands see Asser's Handleiding tot de Beoefening van het Nederlands Burgerlijk Recht;

Verbintenisrecht Deel III: Verbintenis uit de Wet 10 ed by A S Hartkamp (1998) para 354: 'Tegenover de

verrijking van de één staat een verarming van de ander.' In respect of Scotland, see e g Property Selection and

Investment Trust Ltd v United Friendly Insurance plc 1999 SLT 975 (OH). In regard to the possibility of

developing a category of enrichment based on a wrong or an encroachment, see J Blackie 'Enrichment and

wrongs in Scots law' 1990 Acta Juridica 23 and idem 'Enrichment, wrongs and invasion of rights in Scots law'

1997 Acta Juridica 284.

2000 Acta Juridica 300

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enrichment by subtraction and enrichment by wrongdoing. 3 In Germany , too, a

corresponding impoverishment of the claimant is not always a requirement and thus

enrichment as a result of encroachment on the rights of another form an important

category of enrichment liability.

The question that arises is whether 'enrichment flowing from wrongs' should be

developed as a general category in South Africa. The most convenient place to begi n a

consideration of this question is the copyright case Montres Rolex SA v Kleynhans. 4

After discussing the position in England and the United States , the c ourt came t o the

conclusion that the remedy of an account of profits, as understood there, does not form

a part of South African law. An account of profits in the South African sense is merely a

procedural remedy i n terms of which the defendant must produce a tally of the profi ts

made in the course of the infringement of the claimant's intellectual property as a part of

proving the loss suffered by the claimant. This means, in effect, that Sout h African law

recognizes only a delictual remedy in these circumstances. By way of illustration, the

court quoted the following example from The Law of South Africa: 5

'A prints a number of infringing copies of B's novel, selling such copies to the public at twice

the price of the original copies of B's novel. In the result,

2000 Acta Juridica 302

B is unable to show that the sales of his novel have, in the slightest degree, been affected

by A's infringement. Clearly, A cannot claim, as damages for infringement, the profits which

B made from the sale of his infringing copies.' 6

The most important reason (for our purposes) that the court gave for its finding was that

it would 'run counter to the fundamental precept of our law that the commission of a

delictual act entitles the injured party t o compensation from the wrongdoer for calcul able

pecuniary loss actu ally sustained or likely to be sustained i n consequence of the

wrong'. 7 The court noted that the English remedy of account of profits does allow

unjustified enrichment to be reversed as an alternative to a cl aim in tort, but that this

remedy is not part of our law and could not be employed in South African law:

'It would involve the adoption of principles wholly derived from English rules of equity and

applied by the Common Law Courts after the fusion of law and equity in 1873, yet entirely

foreign to the remedial apparatus of our own system of jurisprudence.' 8

To this the court adde d the practical consideration that South African procedural l aw,

unlike that of England, does not provide the mechanism to effect an account of profits.

However, the fact that th e court was clearly convinced of the need for a remedy of

this kind, leaves the door open to e xplore what such a remedy migh t be. F or, though it

was not possible for a court at that time and at that level to int roduce such an important

change in the law, the Appellate Division is now, in the post-Willers era, in a position to

do just that. 9 In this respect, the approach in England and Germany i s instructive.

3 See Reading v Attorney-General, Attorney-General for Hong Kong v Reid [1951] AC 507 (HL) 569. This

division has recently been problematized by Peter Birks 'Misnomer' in W R Cornish, R Nolan, J O'Sullivan & G

Virgo (eds) Restitution: Past, Present and Future (1988) 1-29, in that he argues that restitution following on a

wrong is not based on unjustified enrichment, but rather on the fact of the wrongdoing — a position in which

he is supported by Graham Virgo 'What is the law of restitution about' in Cornish et al (loc cit) 305-29 and

idem, The Principles of the Law of Restitution (1999) 10. These views have, however, been challenged by

Andrew Burrows 'Quadrating restitution and unjust enrichment: A matter of principle?' [2000] Restitution Law

Review 257ff.

4 1985 (1) SA 55(T).

5 A J Copeling 'Copyright' in LAWSA vol 5, § 373.

6 At 64 in fine-65.

7 At 66.

8 Ibid.

9 See generally Kommissaris van Binnelandse Inkomste v Willers 1994 (3) SA 283 (A) and now McCarthy Retail

Ltd v Shortdistance Carriers CC 2001 (3) SA 482 (SCA).

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