Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue and Another

• Jurisdiction: South Africa
• Judge: Joubert JA, Hefer JA, Nienaber JA, Van den Heever JA and Kriegler AJA
• Judgment Date: 26 November 1991
• Citation: 1992 (4) SA 202 (A)
• Hearing Date: 06 September 1991
• Court: Appellate Division

Willis Faber Enthoven (Pty) Ltd v Receiver of Revenue and Another
1992 (4) SA 202 (A)

1992 (4) SA p202

Citation	1992 (4) SA 202 (A)
Court	Appellate Division
Judge	Joubert JA, Hefer JA, Nienaber JA, Van den Heever JA and Kriegler AJA
Heard	September 6, 1991
Judgment	November 26, 1991

Flynote : Sleutelwoorde G

Insurance — Tax payable in terms of s 60(1)(f) of Insurance Act 27 of 1943 by person carrying on insurance business on aggregate of all premiums H paid during preceding year on policies effected through his agency — Such tax not payable in respect of premiums on policies effected or renewed through a broker at Lloyds but which are not underwritten by an underwriter at Lloyds as intended in s 60(2) of Act.

Enrichment — Condictio indebiti — Claim for recovery of amount paid in I error of law — Having regard to legal policy and the complexities of contemporary legal and commercial practices, distinction between payments made in error of law and in error of fact no longer justifiable — Fact that money paid in error of law not by itself a bar to its recovery by condictio indebiti — Mistake of law and mistakes of fact to be treated in J similar fashion and, where mistake the result

1992 (4) SA p203

A of payer's slackness, payment not recoverable — Not possible or prudent to define circumstances in which error of law can be said to be excusable or not — Can only be said that if payer's conduct so slack that he does not in Court's view deserve protection of the law, he should, as matter of policy, not receive it.

Enrichment — Condictio indebiti — Claim for recovery of amount paid in B error of law — Onus of proof — Onus on plaintiff to prove every element of his cause of action — Such includes proof of excusability of his error in making payment.

Headnote : Kopnota

The tax imposed by s 60(1)(f) of the Insurance Act 27 of 1943 on a person C who carries on insurance business, namely to pay to the Receiver of Revenue 'a sum equal to 21/2% of the aggregate of all premiums paid during the preceding calendar year on policies which were effected through his agency in terms of this section', although payable in respect of the premiums on policies effected or renewed by such person through a broker at Lloyds and underwritten by an underwriter at Lloyds, is not payable in respect of policies effected or renewed through a broker at Lloyds but not D underwritten by an underwriter at Lloyds as intended in s 60(2) of the Act.

Legal policy cannot stand in the way of the abolition of the distinction between payments made in error of law and payments made in error of fact for the purposes of the condictio indebiti; on the contrary, legal policy would seem to demand, rather than preclude, the abolition of a principle that is manifestly unjust in the majority of cases. Furthermore, taking account of the complexities of contemporary legal and commercial practices which differ toto caelo from those followed in earlier times, the fact E that money was unduly paid in error of law is not by itself a bar to its recovery by way of the condictio indebiti. It does not follow, however, that any error of law would be sufficient ground for a successful condiction. It has been held that an amount of money paid indebite in mistake of fact could not be recovered by means of the condictio indebiti where the conduct of the payer was found to have been 'inexcusably slack' and that 'the ignorance of fact should appear to be neither slack nor F studied (nec supina nec affectata)'. Mistakes of law should be treated in similar fashion so that the assimilation between the two kinds of error be complete. Accordingly, our law is to be adapted in such a manner as to allow no distinction to be drawn in the application of the condictio indebiti between mistake of law (error juris) and mistake of fact (error facti). It follows that an indebitum paid as a result of a mistake of law can be recovered, provided that the mistake is found to be excusable in G the circumstances of the particular case.

It is not possible nor would it be prudent to define the circumstances in which an error of law can be said to be excusable or, conversely, to supply a compendium of instances where it is not. All that needs to be said is that, if the payer's conduct is so slack that he does not in the Court's view deserve the protection of the law, he should, as a matter of policy, not receive it. There can obviously be no rules of thumb; conduct regarded as inexcusably slack in one case need not necessarily be so H regarded in others, and vice versa. Much will depend on the relationship between the parties; on the conduct of the defendant who may or may not have been aware that there was no debitum and whose conduct may or may not have contributed to the plaintiff's decision to pay; and on the plaintiff's state of mind and the culpability of his ignorance in making the payment.

The onus, in a condictio indebiti, lies on the plaintiff to prove every I element constituting his cause of action. This includes the excusability of the error in making the payment. There is nothing unfair in, and there is no consideration of policy or practice militating against, expecting of a plaintiff who alleges that he paid an amount of money in mistake of law to prove sufficient facts to justify a finding that his error was excusable.

The decision in the Transvaal Provincial Division in Willis Faber Enthoven J (Pty) Ltd v Receiver of Revenue and Another reversed.

1992 (4) SA p204

Case Information

Appeal from a decision in the Transvaal Provincial Division (Spoelstra J). The facts appear from the judgment of A Hefer JA.

J Browde SC (with him C D A Loxton) for the appellant: The two issues which arise for determination in the case can be crisply put as follows: Does the Insurance Act 27 of 1943 require 21/2% of the premiums referred to B in s 60(1)(f) to be paid to the Receiver of Revenue (the first respondent) if the policies from which the premiums are derived are not underwritten by underwriters are Lloyds but are effected or renewed in terms of s 60(2) of the Act? The first respondent adopted the attitude that, if the payments were made in error, the error was one of law and the money was therefore irrecoverable. The appellant contended however that the error C was not purely one of law, but, even if it was, that in the circumstances of the case the Court would order repayment of the amounts so paid by the first respondent to the appellant. The first of the two issues was decided by the learned Judge a quo, correctly, in favour of the appellant. In regard to the second issue the learned Judge considered himself bound by D the decisions in Rooth v The State (1888) 2 SAR 259 and Benning v Union Government 1914 AD 420, and consequently came to the conclusion that, because the appellant's mistake in paying the first respondent was a mistake of law, it was precluded from recovering the amounts paid. The learned Judge's finding is wrong in law for the reasons which follow. In the first instance the mistake was one of fact. The error arose not E because the appellant wrongly interpreted the Act but because it mistakenly believed an assertion by the second respondent that a debt was due when it was not due. This assertion was made in a circular which emanated from the office of the second respondent. The witness Vaux stated that he was the financial manager of Robert Enthoven & Co and that he F telephoned the second respondent (the Registrar of Insurance) in connection with the circular and the latter confirmed that the tax was payable as set out in the circular. Therefore, the appellant's error in making the payments was due to its reasonable belief that they were payable, which belief was based on what it considered was the most authoritative statement available, namely that of the second respondent. Further, an examination of the authorities reveals that the distinction G between a mistake of fact and a mistake of law is often tenuous. Where, for example, a tenant paid rental in excess of what was due because he was unaware that the property was not controlled, his mistake was held to be one of fact. Barker v Bentley 1978 (4) SA 204 (N) at 206H-207C. See, too, H Miller and Others v Bellville Municipality 1971 (4) SA 544 (C) at 546F-548B; Nkosi v Totalisator Agency Board (Transvaal) 1980 (1) SA 122 (T). In the alternative, the mistake was one of mixed law and fact or, put differently, was not purely one of law but included some other element. That element is provided by the circular from the second respondent and the circumstances of the payment generally to the first respondent. Even I if it is held that the mistake was purely one of law, the condictio indebiti should be available to the appellant. The case of Rooth v The State (supra) is the fons et origo of many of the later judgments which assumed, wrongly, that Kotze CJ made an unequivocal finding that a mistake of law was fatal to the condictio indebiti. The learned Judge stated (at 265) that the rule that an action for the recovery of money paid in J mistake of law

1992 (4) SA p205

'cannot, as a rule, be allowed. It is, indeed, true that this rule is not without exceptions, not merely in the case of the so-called privileged persons, as women, minors, soldiers, etc, but also in the case of those to whom otherwise the rule ignorantia juris neminem excusat would be applicable. In such exceptional instances, however, there is always some special equity, the admission of which is not contrary to the rule as laid down in the Corpus Juris.'

B In this case there are special equities which favour the appellant. Quite apart from the question of morality involved in the first respondent keeping money received from the appellant to which he is not entitled, the circular sent, as it was, to laymen induced...