Unjustified Enrichment refers to the instance where a party’s interest or estate is increased at the expense of another party’s interest or estate, where such increase cannot be justified.
Normally remedied by way of condictio indebiti, unjustified enrichment enjoyed recent judicial attention once again when the Supreme Court of Appeal had to decide whether the actions of Liberty Group Limited was “too slack” to be remedied by operation of condictio indebiti.
To succeed with a claim for unjustified enrichment a claimant would have to satisfy the following elements:
- The other party must have been enriched;
- The claimant must have been impoverished;
- The enrichment must have been at the expense of the claimant;
- The enrichment must have been done in error; and
- That error must be excusable
In Johannes T H Van Niekerk V Liberty Group Limited (1392/18) 2020 [Zasca] 65 (15 June 2020), the decision as to whether the remedy of condictio indebiti would assist Liberty Ltd in this instance hung on their ability to prove that their error was excusable.
The aforementioned matter related to the incorrect payment of the total value of a life insurance policy to the policy owner, were such policy was subject to a cessionary agreement in respects of debts owed by the policy owner.
Once payment was executed, the party entitled to the cessionary payment queried with Liberty Ltd as to why their portion of the policy value was not paid out. It was later discovered that the relevant department of Liberty Ltd was not in possession of the cessionary agreement. Once a copy was acquired, Liberty Ltd attempted to have the policy owner pay back the amount paid out to him in error but was unsuccessful.
In the High Court Liberty Ltd was granted relief in terms of Condictio Indebiti. The matter thereafter went on Appeal to the Supreme Court of Appeal (hereafter “SCA”).
In their decision the SCA considered that the aforementioned elements in determining whether unjustified enrichment occurred and determined that there was an error on the part of Liberty Ltd but the important factor to be determined was whether that error was excusable under the circumstances.
In determining this the SCA cited authority, indicating that whether an error is excusable for the purposes of condictio indebiti is dependent on the circumstances of each matter. There is no rule of thumb and what may be excusable in one instance may not be excusable in another.
On the facts, the SCA highlighted that the policy owner was fully aware of the cessionary arrangement and it was further indicated that he did not submit the cession form. Liberty Ltd admitted that in certain instances their action was slack. However, it was determined by the court that the conduct of the policy owner in this instance directly contributed to the erroneous payment made by Liberty Ltd and given the circumstances the error was excusable.
The Appeal was dismissed with costs.
The aforementioned case goes a long way in portraying how our courts deal with the requirements of proving unjustified enrichment and implementing condictio indebiti. It further serves as an illustration of being governed by ones own conduct and allows a window into the workings of how decisions are made in accordance to the factual circumstances.
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Written by Raeesa Ebrahim Atkinson, Attorney, Schoeman Law