In South African law, unjustifiable enrichment occurs when a person receives a benefit without legal cause, and the enrichment becomes unjustified at the moment of receipt, regardless of whether the recipient later disposes of the money; prescription (the statute of limitations) begins running once the claimant is aware of the basic facts of their cause of action, and warnings or knowledge of potential legal issues can interrupt prescription, requiring the claimant to take reasonable steps to protect their claim.
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CCT 151/25 Wanjay Holdings Investments (Pty) Limited v Auckland Park Theological Seminary Part 2Added:
We are presented with a completely bold allegation that we are in possession of the money.
And we respond to that by saying, "No, you're wrong. We don't have it."
In fact, in our letter we wrote to 1 J, but I can't remember the exact words, but with the best will in the world I think we said, "We cannot pay this."
It seems the presumption then does not exist on your on your on your interpretation of it.
It's for the applicant.
>> it should it would have consequences. If there's a presumption >> hear what you're saying, Mr. Botha. The presumption of enrichment kicks in the moment that there is prima facie a payment or transfer of goods or money sine causa.
Yes. Which is the case here.
>> the case here. Yes. Yeah.
Okay. Thank you, Chief Justice. Thank you, sir.
Mr. Mr. Botha, I'm over here.
Um you you say that you're entitled to plead in a sort of vague, general terms because that's the way in which the applicants had pleaded in saying that, without laying any basis, that you are still in possession of the money.
But But surely there's a difference.
>> [sighs] >> Uh be highly unlikely for them to know exactly whether that money was still there, whether it was used to pay debt or whatever. So, they make this allegation, but but your client would know exactly uh what he did with the money.
But But despite that, you say it it was justified in pleading in the manner in which he did.
Th- That is my submission, Justice Froneman.
>> Let's leave it at that. In a trial scenario, it would have been completely different, of course. They would have cross-examined my client for many hours on his bank statements and on all the assets and liabilities, etc. But Okay. My first reaction when I was briefed in this case was thought to I thought to myself you know it's a very brave applicant who tries to run this type of case in the motion court. Okay.
Well, I won't tell you what my first impression was on reading these papers, but anyway.
Um you say in in your plea that I mean your answering affidavit the respondent did not retain the money pending the outcome of the various legal matters referred to above.
There was no legal obligation to do so.
So, from that I read that notwithstanding the the litigation the respondent was entitled to do what it pleased with the money.
That's that's the interpretation I derived.
>> No, the way I understood that Justice Kollapen was um when we received the money we were criticized for not by Wumja in the papers for not hanging on to that money and keeping it safe and secure uh pending all the litigation.
And it's in response to that and in that context >> Okay. that we said there was no obligation on us to hang on to the money. So, you're saying that that while the litigation was pending you were not you were not obliged to hold on to the money.
Is that what you're saying?
I mean that's that's what this plea say I mean this answering affidavit says and that's what you're saying to me now in response to me.
>> to say I don't believe that is exactly what our paper said. But that's what you're saying.
>> That is what I'm submitting.
>> Is reasonable interpretation of that.
Yes.
So, I find that strange because you're saying that despite the warnings that Wumja should have been alerted to which is the letter and the judgments of the courts uh they should have taken some steps to ensure that their claim did not prescribe.
But in the same breath you're saying that all of those warnings entitled you to do as you pleased with the money notwithstanding that in October 2012 about a year after the session was registered you were alerted to to this and you're saying that you were nevertheless entitled to dispose of that money as you pleased. No, the papers don't indicate when we disposed of the money.
>> don't we don't know, but what I'm saying is you you're saying you're entitled to do so even though litigation was pending. I understood maybe I was wrong.
I understood that we had disposed of the money before all of this litigation took place. I'm not sure of what Nobody knows when it actually happened. That's the That's not how I read your answering affidavit. It says clearly the respondent did not retain the money pending the outcome.
I mean I'm not quite sure what that means. I I believe with respect that means that there's no legal obligation. There's nothing in law or that tells us you must hang on to that money. Okay. But it's a different argument to say that you >> [snorts] >> need not interrupt prescription to avoid your claim prescribing. Those are completely two different arguments in our submission. Okay. I want to I want to ask you then would it be reasonable to say that if you had no obligation to hold on to the money uh you were entitled to dispose of it because you were not unjustifiably enriched.
Well, the question whether our enrichment our we were equally unaware at all times. This has never been in dispute, Justice Kunlun.
We were at all times likewise under the impression that we were entitled to have received that money. Okay. We were of the view that the cession was good. I can't argue past that. One J and ATS were both fully aware or under the impression that the cession was good. Good. And so just on that then, Mr. Botha, both both you and and One J took the view that at the time that you received the money including at the time that you disposed of the money there was no unjustifiable enrichment in your minds. We were entitled to receive the money. Right.
And there was no unjustifiable enrichment.
We we all accept here that a fourth element in an unjustifiable enrichment claim must be that the enrichment was unjustified. Correct.
The sine qua non, yeah. Right.
So on these facts, when would the enrichment have as a matter of fact been determined to be unjustified? The question with respect to that is not >> of the receipt of the money, it wasn't at the time of the disposal of the money, it would have been at some point along the line. And let me just clear this. I accept that when when this court found that the nature of the right was a delictus personae and you weren't entitled to receive it, it had the effect of stretching backward.
But but it's determination on that day simply meant that what it said it is that it was void ab initio.
But in the absence of that determination, it was being disputed whether it indeed was void ab initio.
So the determination doesn't mean it's void ab initio from today, but that determination is nevertheless important.
And my question to you is then, as a matter of fact, when can we say that the enrichment would have become unjustified?
The unjustified enrichment took place the moment that the payment seen a cause was made. It is simple as that our case law with respect is very clear on that there's a judgment I think called Van Staden if I remember correctly.
First it also deals with prescription in his textbook but the moment I pay you something that I don't owe you from that moment you are enriched and I am impoverished.
That that is >> our case law.
>> I just want to test that Mr. Bot. So if if I'm if I'm a lessee of an immovable property a sublessee and and and the the lessor writes to me and saying well it's come to our notice that you're in in occupation you may well be in occupation in terms of a sublease. We we say to you now that you have no right to be in occupation because any sublease that would have been entered into would have been unlawful and you're required to vacate. Under those circumstances you're saying even if I go to the sublessor and sublessor says no sublease is valid I'm obliged to vacate. And from that point what whatever would have been paid over would have been an unjustifiable enrichment.
Is it as simple as that? Yes and section 12(3) protects with its rider provided that section 12(3) says with the exercise of reasonable care Sure. the plaintiff could have established the fact at an earlier occasion. But I've read that and and I I I referred to to that in Leroux as well.
I But I mean um The enrichment does this qualify >> that challenge that's being contested may well satisfy the requirement of reasonable care surely.
It's not as if you did nothing and saying, "I'm going to ignore this letter."
But here the party who gives you the right to purport to give you the right says, "I maintain that I gave you this right validly and we're going to challenge this."
>> It's exactly for this reason, with respect, that the three warnings played such a huge role in our case and in the SCA's judgment and played such a huge role in L'Afrique.
Um where it is very clearly said that the moment you suspect something is wrong, you have then been apprised of the basic facts, the basic elements of your cause of action, and then prescription starts running against you.
I I don't understand the rule in those other cases to say you then apprised of the facts. I think it says then you're placed on your guard and you're required to do something as opposed to saying that that would constitute knowledge of the facts.
That being the case then, if you're placed on your guard and you do something, well, the doing something is that the party who purports to give you the right is is challenging this this alleged unlawful conduct. That may well satisfy the requirement of reasonable care. One is not dealing here with with the party who's supine.
So, I just want to put that to you in the context of the determination of when the enrichment Prescription act itself provides a remedy.
It says in section 15 you can interrupt prescription.
You're not without a remedy. You serve a summons.
Okay, thank you.
Just one tiny detail on this aspect, Mr. Botha.
If your client truly believed that it had no obligation to preserve the funds until the litigation was was concluded, what was the purpose of the submission seemingly raised as a defense in this court, that um uh Wonga would reclaim this amount if it were found that the rights were incapable of session, and this would prejudice ATS.
What what should one make of that?
I'm sorry, I don't quite understand the I I do apologize.
>> But at But at 37 of the judgment of this court in UJ against your client, there is that uh sentence. You dealt with it in your submissions, and you mentioned it earlier, and you you dismissed it.
That uh sentence says, "The respondent submit that respondent being your client submit that Wonga would reclaim this amount, the six the 6.5 million, if it were found that the rights were incapable of session, and then it goes on, and this would prejudice ATS." Now, I want to find out from you why this submission would have been made, and it seems to have it was being raised as a defense.
If it believed that it had no obligation to not to dispose of the money.
Yes, that defense was raised in the context of uh an admission of liability which would interrupt prescription in terms of I think section 14 of the Prescription Act.
Uh my learned friend is not relying on that, but and I must say with respect, I'm not surprised because that so-called interruption really cannot have any legs. First of all, we don't know who made that submission. I didn't appear in that court, and I believe my learned friend didn't appear either, but It would have been your client's counsel.
I beg Yes, it would It would have been your client's counsel.
It may well have been my client's previous counsel. Yes. The submission was made that if the rights were not not capable of session and the session was void, then um One J would reclaim the money. That is the sum total of the submission.
Why why that is an admission of liability one fails to understand. I don't see any admission of liability.
I deal with that in my case in my heads in extenso justice Chief Justice.
The the case law is very clear. In order to rely on section 14 as a an interruption of prescription, there are various requirements that have to be met. We must first of all see that the person admitting liability, if he's an agent, as in this case it would have been, that he has a mandate to actually admit on behalf of his principal that his principal owes this money.
But that submission in paragraph 37 doesn't even contain the words admitting liability. The word admit doesn't even appear there. The the submission was that there would be a reclaim. In other words, One J would reclaim.
Fact that they reclaim doesn't amount to an admission of liability. The fact that they reclaim doesn't mean that they're going to succeed in reclaiming.
No, the point I was making relates to the latter part of that sentence. The submission that such a claim would prejudice ATS. Why why would why would it be prejudice? It would be prejudice it would be prejudicial to us if such a claim were made and was successful.
Well Obviously that must be prejudicial if they sue us for 6 and 1/2 million rand and the trial court finds in One J's favor, then that would not be good news in our lives. I understand that that would be prejudicial.
Mr. Botha >> [clears throat] >> There are two approaches.
One is a theological approach.
Two is the legal approach.
The theological approach bases itself on morality and good ethics.
The legal approach is informed by the legal principles.
You can't have somebody somebody else's money and say go through my bank account to see whether I still have the money.
That's a theological approach, not a legal approach.
So, if you have the money and your moral values uh pricks your conscience to say I've got somebody else's money.
And I took the money in good faith.
I now realize it was sine causa.
Uh akin to an inadvertent uh credit in your account by SARS and when you thought you were entitled to a particular rebate and then you suddenly find a windfall.
You're not going to say to SARS once it demands its money, realizes a payment was made into your account inadvertently or estate was in populus enriched to say I no longer have the money.
Fly a kite.
SARS must pursue you and get the money wherever it may be.
The first port of call for SARS would be to look into your account. If the money has been dissipated, SARS must look for payment elsewhere.
What 1J is doing is not looking for payment in that account.
It's simply saying to you, we've paid you condictio, pay back the money.
That's basically it.
But that's not what I'm asking you about.
This argument, it's a fly in the ointment argument.
It's not the substratum of your argument.
Whether there was this impoverishment or not, how does this or that impact on the prescription?
Does it impact on the defense raise on prescription or not?
Does it?
And if so, how does it affect your your your your defense on on on prescription, taking into account the prior warnings and everything that went about?
Our defense on prescription is with respect quite simple, Justice Matope.
We say that they had knowledge of the necessary facts timelessly to interrupt prescription in terms of the Prescription Act by serving a summons on us.
And that is what the whole debate was about. Yeah, but what is this straw man argument that even if you want the money, we no longer have the money, it's gone.
Is that what you came to argue about?
Yes.
>> that's not my case on prescription.
Exactly.
>> Yes, I agree with you, it's a side >> issue. It is indeed a side issue. Yeah, let's not engage more on the side issue.
It it it it deviates your argument far away from from from the kernel of your argument before this court.
>> Yeah, Justice Matope, you with respect you've hit the nail on the head. It's a society issue.
Uh It is relevant in terms of uh defense to the enrichment claim as such.
But if if we succeed on our prescription plea our special plea of prescription, then that becomes academic. And it's for that reason that the SCA said in the last paragraph >> you fail if you fail on the prescription issue.
If we fail If you fail, it's a point worthy of consideration.
Because you can't just say now we fail on prescription.
Uh we no longer have the money. We may have received the money.
Uh take a kite or fly a kite. It's a point.
It's serious. You do not expect this court to say where money has been paid uh in the circumstances this one to say once 85 and then says I no longer have the money in my account. God it, Christ. It cannot be.
If I've made my submissions when Justice Kollapen asked me about that. I can't take that any further. But I respectfully agree with you, Justice Matope, that if we fail on our prescription plea and the court has to look at whether One Jay has made out a proper case for the enrichment.
Of course, they elected cross that bridge as well in before they can succeed.
Uh the SCA never dealt with the enrichment.
They found it unnecessary to deal with it.
>> But if you fail on prescription it's a point worthy of consideration.
Uh the impoverishment. Money went into your account. You considered once it went there your estate was enhanced.
And when the estate is enhanced, sine causa, when the money is demanded, pay back.
No other way. Otherwise, we'll be creating a legal principle that does not exist. I've not heard of it.
Would you agree with my my my my submission?
Justice Matope, if you are not satisfied that we have done enough to satisfy the requirement of the defense that Fisser speaks of, namely loss of enrichment, which is a good defense in our law, then that is how the court will feel about it. I can't I'm not going to concede that.
>> Yeah, but that's what Professor Fisser uh talks about loss of enrichment. I had to look at the book to see loss and the distinction between loss of infringement and no infringement.
Uh with respect, I could not find a clear and discernible distinction between the two vis-à-vis the facts of this case.
Yes, I I think that [laughter] I think the situation >> You and I would agree that there was some enrichment.
There was There was some enrichment. There was 6 and 1/2 million rands worth of enrichment.
>> Exactly. What we would differ or debate about is whether there was a loss of enrichment or non-enrichment. But the non-enrichment part will not fly.
Because once the money is there, once you accept, it tips your balance up.
There is enrichment.
How you decided to lose that money, it's like It's like It's like a thief who has money deposited in his or her account. How this thief decides to blow out the money, it's something else.
If the creditor says, "I want my money."
and chase the thief, the thief, if he's found to have something that the thief can pay back, the thief must pay back.
As I understand it, it's this is the This is the point that distinguishes a damages claim from an enrichment claim.
Um when a plaintiff sues a defendant for damages, uh it's neither here nor there whether the defendant can pay the damages. Uh the court will give a judgment.
>> That's it. In enrichment, you've got to show that your defendant was enriched, we admit that we were, and remains enriched, unless he parted with the enrichment mala fide. That's what Fisser says, and that's what the case law says, which we follow.
>> why can't we find here that uh ATS was enriched and remained enriched?
And how it lost it?
One Jay cannot be expected to know how suddenly it it it lost the enrichment or its values decreased. And even even if it did, what has that got to do with One Jay?
It's neither here nor there.
Yes.
>> You If you have money in your pocket that I've deposited inadvertently, and then your pocket has got money. If for some reason when I look for the money, it's no longer there, there was money there, and you you acknowledge that there was money in your pocket.
Pay it.
But that is not the main focus of of your matter.
The main focus of your case is one on the jurisdiction, two on the merits of the case, and if if you are wrong on those two aspects, we will then go to the loss of enrichment.
I can just add >> Is that so?
Indeed, sir. Yes, Justice Mhlantla, I can just add to that that Fisser seems not to make a distinction between loss of enrichment and non-enrichment when he discusses the question of whether the defendant lost the enrichment bona fide or mala fide.
In your example of a thief, Justice Mogoeng that would obviously be mala fide and that would not be a defense.
Okay, thank you. But I can't take that any further.
Yeah, thank you very much.
Thank you. Thank you, Chief Justice.
Mr. Botha, just one issue and it relates to what the Chief Justice put to you and also to Justice Mogoeng.
If Wanjie was supposed to have been aware that the session was void ab initio, then surely your client too would have been aware in such circumstances and then you would have been required to then take some steps to ensure, given that you were aware then too, that you were not entitled to the 6.5 million rand. Yes, to to preserve it.
And and and let me just finish that off by saying, of course, if we were to find against Wanjie Wanjie on the prescription point, it's it's something of a bitter pill because the justice considerations, as opposed to the hard black letter law considerations, suggest that your client has acted in a manner which is not morally defensible in taking 6 million rand and now claiming that it has no knowledge as to where it cannot explain where the money is or doesn't have to.
Yes. So, it leaves something of a bitter taste in the mouth, doesn't it, in relation to your client's conduct, more so when it's a theological organization.
Yes.
>> [clears throat] >> All I can say, Justice Savage, is that we like Wanjie bona fide believed that we were entitled to that money.
That's why we fought through all of these courts.
But you now say they should have known as at 2012 that they were not entitled to the cession and that's the that's the contradiction.
>> The reason why they should have known was because of the warnings that something was wrong.
>> But you had the warnings, too, is my point. You would have been equally aware that there was a warning that the cession wasn't good.
With respect, Justice Savage, but the difference is that we didn't have a claim against Wamjay that that was in danger of prescribing.
We are arguing the warnings argument in the context of prescription.
From our point of view, there was no looming prescription. There was no threatened prescription down the line in any action that we might have against Wamjay. They We never sued them and there would have been no basis to sue them.
Um so from that perspective the analogy is not a good one with respect.
One is comparing two different cases.
The one faces prescription where there are warnings. The other one, there's no prescription. We We assumed, like Wamjay did, that we were entitled to that money. It was not as if we were a thief and stole the money knowing it wasn't our.
>> But the matter was capable of settlement between the parties knowing that you were not entitled to the 6.5 million rand. You could have made come to an out-of-court agreement with regards to the to the money that was was was paid over to your organization.
But I I make that point simply for no reason other than what I've already said around the market with the >> comment on the moral I really cannot comment on the moral considerations.
That's not my brief.
>> That's quite clear. Thank you. Okay.
Thank you, Mr. Botha.
A reply, Mr. Gcobani.
Thank you, Chief Justice. I will try to be brief. I do have limited time in any event.
Can I just take off from paragraph 37 of the UJ judgment because it has other implications, too.
The first implication that it has is that ATS stood before this court, and under the heading of respondent submissions, it made a submission to this court that it should uphold its estoppel defense on the basis that WMJ was going to reclaim money from it.
That's the That's the actual prejudice that it contends it's going to suffer for purposes of advancing an estoppel argument to this court.
What's the consequence of that for purposes of prescription? It's as It's this simple.
The consequence is that ATS could not have believed that the claim had prescribed when it made that submission to the court because if it believed that the claim had prescribed, it would never have made that submission to the court. So, if ATS could not have believed at the time that it made the submission to the court that WMJ was going to claim that money, it cannot now contend that ATS's that WMJ's claim prescription in respect of that commenced to run as at the date of the cancellation. It really cannot cut both ways because if ATS held the view and held the knowledge that WMJ's claim began to prescribe from the date of cancellation, it would never have made that argument before this court, which is featured in paragraph 37 of the UJ judgment.
The second issue that I would like to dispose of as rapidly as possible, and that's the debate around loss of enrichment, who bears the onus, rebuttal, etc. That debate need not detain this court simply because it's been spoken of quite clearly at paragraph 21 of the Kudu Granite judgment, and it's been spoken of quite clearly in the African Diamond Exporters judgment at passages 713G to H.
The third issue that I would like to deal with is the repeated refrain to the three warning shots.
The concept of the three warning shots is somewhat troubling to me as a lawyer leaving aside the facts of this case for the matter and it should be troubling to this court.
For purposes of delivering a judgment, let's just play this out. Clients walk into lawyers' offices and they say they've received warning shots. They haven't suffered a loss as yet.
Is the lawyer obliged under those circumstances to give them the advice, rush off to court?
I would suggest not for the simple reason our courts are repeatedly complaining about the inadequate resources to handle cases that are brought on the basis of hypotheticals and opinions.
That's That's precisely what the court would be encouraging if it says the moment there's a warning shot, run to court.
The next issue that I would like to deal with is where ATS says, but why didn't they sue us immediately when there was a cancellation? They should have sued us when there was a cancellation.
Well, the answer is simple. It's the proposition is belied by the facts of this matter. The facts of this matter is that WMJ supported you in your litigation.
You, ATS, procured a confirmatory affidavit from them at that point in time to support you in your litigation all the way from the High Court to the Constitutional Court.
The fourth issue that I'd like to deal with is our learned friend saying that this is a new cause of action because we don't speak of dispossession in the founding affidavit.
That's not correct. I referred Justice Majiedt in my founding argument and my first round of questions to paragraph 23 of the founding affidavit and I invite the court to go likewise to paragraphs 25 and 20 6 of the founding affidavit as well. They ought to be read together.
The final issue that I wish to deal with is ATS's argument that the notarial deed was cancelled when we when Webber Wentzel's letter was received and he certainly said that our side is wrong. It didn't happen when the judgment was handed down.
Well, we beg to differ.
If one goes to the judgment of the court a quo, it specifically orders the registrar to cancel the notarial deed of long-term lease and consequently, of course, also the notarial deed of cession. And you would find that also specifically where that is paraphrased in the UJ judgment at paragraph 10.
It tells you ATS and Ramjee in turn disputed UJ's right to cancel the lease agreement. This dispute led to an eviction application in the High Court by UJ for orders evicting ATS and Ramjee from the leased premises and cancelling the registration of the notarial lease against the title deed.
It then tells you that that's what the High Court had done.
And the High Court order, if I may read it, it was ordered only on the the High Court order, of course, being the order that was reinstated by this court, reads as follows: Second paragraph, the first and second defendants and all persons occupying through or under them are evicted from that portion.
Third paragraph, the third defendant is ordered to cancel the registration of the material long-term lease agreement with that registration number.
That's when the third respondent being the registrar was ordered to effect that cancellation.
And of course, like I've said in my final submissions which I ought not to reply I'm not to repeat here in the reply, but that is the central theme of of effectively our argument in so far as prescription goes.
Chief Justice, members of the court, those are my submissions in reply. Thank you.
Mr. Bopape, may I just very briefly, surely you cannot rely on section on paragraph 37 of the judgment of this court to bind as it were ATS into into position. If if that submission they made suggest that they thought prescription wasn't running, but on reflection they realized as a matter of law it may have started running long ago, they they surely entitled to adopt that stance which which they have.
Justice Kollapen, you you are correct and that's not the purpose that we've relied upon paragraph 37 of the UJ judgment. Nor did we seek to rely upon it for purposes of contending for an interruption of prescription as Mr. Bopape alluded to.
Otherwise, that would have been pleaded out fully. The only thing we say is that if a submission of that nature had been made to the court, one would assume that they believed that there was actual prejudice which they stand to suffer for purposes of the estoppel advancing the estoppel argument. And if there was actual prejudice that they believed that they were going to suffer, that would mean that they believed that there was an extant claim by WMJ against them.
Otherwise, they would not have made that submission.
Thank you very much, Mr. Popatlal.
Everyone, judgement is reserved. Court adjourned.
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