PVL3704 - Enrichment Liability And Estoppel EXAM PREP 2022 Multiple Choice Questions (Answered).

PVL3704 - Enrichment Liability And Estoppel EXAM PREP 2022 Multiple Choice Questions (Answered). (d) Make a definite conclusion on the question asked B has an enrichment claim against A amounting to R40, 000 only as the rest of the enrichment amount has been lost on the luxury holiday. (1) See Study Guide 1, par. 2.2.1. [max 10] 1.2 ANSWERS TO ASSIGNMENT 2 The correct answer to each of the questions below is the one blocked. Brief explanations are given as to why each choice is right or wrong. Revert back to that part of the Study Guide if you still do not understand why a certain choice is right and the others wrong. Choose the most correct option in every instance. If there is more than one correct option, choose the appropriate combined option. Question 1 Which one of the following statements cannot be regarded as a general requirement for enrichment liability? 1. The plaintiff must have been impoverished. 2. The enrichment must have taken place without a justifiable cause. 3. The enrichment must have taken place unlawfully. 4. The defendant must have been enriched. 5. The plaintiff is only entitled to the lesser of his impoverishment and the enrichment of the defendant. Feedback: There is no general requirement of unlawfulness when dealing with unjustified enrichment law, although it may be relevant in the case of the condictio ob turpem vel iniustam causam. Make sure that you understand the difference between unlawfulness and the requirement that the enrichment must have taken place unjustifiably, ie without a valid underlying cause. See your Study guide pp 16, 25 ff. (1) Question 2 In order to be successful with a claim based on the condictio indebiti, the plaintiff must prove the following fact(s) or requirement(s): 1. That the impoverished party made a payment that was not due. 2. That the enrichment was unlawful. 3. That the mistake of the impoverished party was excusable. 4. 1 and 3 are correct. 5. 1 and 2 and 3 are correct. Feedback: See the discussion of the requirements for the condictio indebiti on pp 36 as well as theanswertothepreviousquestion(1)lOMoARcPSD| Question 3 A has paid B an amount of R 40,000 by cheque. Before B could present the cheque to his bank, A countermanded the cheque because B had delivered defective goods to him. X, a clerk at A’s bank failed to notice the countermand notice and payment of the amount was made to B. Indicate which statement best explains the nature of the possible claims by A or the bank: 1. B has been enriched at the expense of the bank, because the bank had no mandate to make a payment from A’s account. 2. B has been enriched at the expense of A, from whose account the payment was made. 3. A has an enrichment claim against B for the full amount of R 40,000. 4. A has an enrichment claim against B for a reduced amount. 5. 2 and 4 are both correct. Feedback: If the bank makes a payment on a countermanded cheque, the bank has no mandate from its client to make the payment from the client’s account. The bank has an obligation to reverse the payment under these circumstances. The bank does have a possible enrichment claim against the payee in so far as the payee has been enriched. Where, however, the payment is made to extinguish a debt, there is no enrichment and consequently no action. See your Study guide pp 49; 71 ff. (1) Question 4 E is an employee of M. E is paid a monthly salary of R 20,000. On 15 June M summarily dismissed E because of theft of company assets. The dismissal was lawful in terms of the employment contract and employment law. Indicate which statement best explains the possible claim that E might have against his employer: 1. E has no claim for any part of his salary. 2. E has a contractual claim for the full amount of his salary for June. 3. E has a pro rata claim for half of his salary of June based on the principle of unjustified enrichment. 4. E has a contractual claim for a pro rata part of his salary for June. 5. E has a claim for the full amount of his salary for June based on the principle of unjustified enrichment. 6 lOMoARcPSD| Feedback: Although the approach to award an enrichment claim under these circumstances has been criticized, the leading case of Spencer v Gostelow is authority that the employee has an enrichment claim in these circumstances. See your Study guide pp 123-124. (1) A, an American tourist, has leased a vehicle from B. While travelling in the Northern Cape, the vehicle breaks down. A contracts with C, a garage in Springbok, to repair the vehicle at a cost of R12,000. After two days A leases another vehicle from X and completes his trip. He departs for America. C wants to claim the R12,000 from B. Question 5 Which statement best explains whether C has a claim against B and the authority on which it is based? 1. In terms of the decision in Gouws v Jester Pools (Pty) Ltd 1968 3 SA 63 (T) it was held that C has no claim against B because B had not been enriched. 2. In terms of the decision in Gouws v Jester Pools (Pty) Ltd 1968 3 SA 63 (T) it was held that C has no claim against B because B has not been enriched at C's expense. 3. The decision in the Gouws case was confirmed in Buzzard Electrical v 158 Jan Smuts Avenue Investments 1996 4 SA 19 (A). 4. The decision in the Gouws case was rejected in Buzzard Electrical v 158 Jan Smuts Avenue Investments 1996 4 SA 19 (A). 5. The decision in the Gouws case was overruled in Brooklyn House Furnishers Ltd v Knoetze & Sons 1970 3 SA 264 (A). Feedback: There are two approaches on the issue whether the garage has an enrichment claim under these circumstances: In the Gouws case the court held that the owner of the property was not enriched at the expense of the person making the improvements or attachments, because that person has a contractual claim against the lessee. The decision in the Gouws case was left open in the Buzzard Electrical decision. The Brooklyn House Furnishers decision does not deal with this issue. See also the approach adopted in the Hubby’s Investments case. See your Study guide pp 21 ff. (1) Question 6 Which statement best explains whether C has a retention right or whether he can exercise it? 1. C can exercise a retention right over the vehicle against B until such time as it has been paid for its necessary expenses. 2. C can exercise a retention right over the vehicle against B until it has been paid the full contract price. 3. In terms of the decision in Buzzard Electrical v 158 Jan Smuts Avenue Investments 1996 4 SA 19 (A) C has no retention right because it has no enrichment claim against B. lOMoARcPSD| 4. An enrichment retention right is a personal right and can therefore be exercised only against the creditor. 5. C has no retention right under these circumstances. Feedback: The garage cannot exercise a debtor-creditor lien against the owner as there is no contractual relationship between them. The garage may have an enrichment lien for necessary expenses against the owner in terms of the decision in the Brooklyn House Furnisher’s case. Although one may argue that C has no retention right at all, Answer 1 is in line with the law as it stands. See your Study guide p110 ff. (1) Question 7 A has sold uncut diamonds to B for an amount of R100,000 in contravention of statutory law. B has paid the amount but before the diamonds could be delivered, it was confiscated by the police during a raid of A's house. Which statement best explains the nature of the claim against A? 1. In circumstances like these a court may exercise an equitable judicial discretion to relax the par delictum rule, depending on the relative turpitude of the parties' conduct. 2. B has a claim for damages against A due to a breach of contract. 3. B has a claim against A in terms of the condictio ob turpem vel iniustam causam because it is unfair that he should lose his money and get nothing. 4. B has a claim against A in terms of the condictio sine causa specialis because there is no other enrichment action at his disposal. 5. B has a claim for damages against A based on delict. Feedback: The agreement between the parties is void due to illegality. The appropriate enrichment claim to be applied in these circumstances therefore is the condictio ob turpem vel iniustam causam. Answers 2, 4 and 5 therefore are incorrect. Although Answer 3 correctly identifies the enrichment action, the reason provided for the liability is clearly wrong. Unjustified enrichment liability is not determined on the basis of unfairness. Answer 1 correctly describes the rule that is applicable here. A party’s claim under this action is generally excluded where it acted with moral turpitude, but the court has an equitable discretion to relax this rule. (1) Question 8 In which one of the following circumstances can the condictio sine causa specialis be used? 1. As a general enrichment action. 2. Where property is transferred on the grounds of a valid cause which later falls away. 3. Where a contract is terminated due to a resolutive condition. 4. Where property has been transferred in terms of an illegal agreement. 5. Where undue payment was made due to an excusable error. 8 lOMoARcPSD| Feedback: The courts have been at pains to emphasise that this action is not a general enrichment action, even though there remains a great deal of uncertainty about its requirements or scope. Answer 3 deals with the condictio causa data causa non secuta; Answer 4 deals with the condictio ob turpem vel iniustam causam; and Answer 5 deals with the condictio indebiti. Answer 2 is one of the classical examples where the condictio sine causa specialis has been applied. See your Study guide pp 70 ff. (1) Question 9 Which statement correctly explains the possession or occupation of another's property? 1. A bona fide occupier is someone who lawfully occupies the immovable property of another person. 2. A bona fide occupier is someone who unlawfully occupies the immovable property of another person as if he is the owner thereof. 3. A bona fide possessor is someone who lawfully occupies the property of another person as if he is the owner thereof. 4. A bona fide possessor is someone who unlawfully occupies the property of another person as if he is the owner thereof. 5. A mala fide possessor is someone who unlawfully occupies the property of another person temporarily as if he is entitled to occupy the property as a lessee. Feedback: A bona or mala fide occupier is always unlawfully in occupation. Answers 1 and 3 are accordingly incorrect. Occupiers know that they are not the owners of the immovable property and only occupies temporarily. A possessor occupies as it he or she is the owner of the property. See your Study guide pp 87 ff. (1) Question 10 Which statement best explains the legal position on the recognition of a general enrichment action in South African law? 1. In Nortje v Pool 1966 3 SA 96 (A) the Appellate Division recognised the existence of a general enrichment action in South Africa without any qualifications. 2. In Nortje v Pool 1966 3 SA 96 (A) the Appellate Division recognised the existence of a general enrichment action in South Africa, but with certain qualifications. 3. In Kommissaris van Binnelandse Inkomste v Willers 1994 3 SA 283 (A) the Appellate Division recognised the existence of a general enrichment action in South Africa. 4. In Kommissaris van Binnelandse Inkomste v Willers 1994 3 SA 283 (A) the Appellate Division rejected the existence of a general enrichment action in South Africa but recognised that courts can extend enrichment liability to circumstances where it is deemed necessary. lOMoARcPSD| PVL3704/201 contract (1), but the minority found that where there is payment in such circumstances, the presumption of a donation falls away. (1) (c) Applying the requirements to the facts A made a payment under threat and protest, knowing that the debt wasn’t due. (1) The requirements for the conditio indebiti have thus been complied with. (For A to succeed with the condictio indebiti against the Johannesburg Municipality in these circumstances he, firstly, had to prove that he didn’t owe the Municipality the R300 000. Secondly, that the payment was made involuntarily under the threat that the electricity supply will be suspended if payment wasn’t made. Thirdly, that A protested against the amount to be paid at the time of payment by sending a letter of complaint.) (d) Conclusion A will be able to prove all three requirements under this exception and will therefore be successful with this enrichment action against the Johannesburg Municipality. (1) [max 10] .