Court name
Supreme Court
Case number
SA 30 of 2012
Case name
Paschke v Frans
Media neutral citation
[2015] NASC 9
Judge
O'Regan AJA










IN
THE SUPREME COURT OF NAMIBIA


CASE
NO: SA 30/2012


DATE:
30 APRIL 2015


REPORTABLE


In
the matter between


INGE
PASCHKE
......................................................................................................................Appellant


And


LOTTA
FRANS
......................................................................................................................Respondent


Coram:
SHIVUTE CJ, CHOMBA AJA and O’REGAN AJA


Heard:
5 November 2013


Delivered:
30 April 2015


APPEAL
JUDGMENT


O’REGAN
AJA (SHIVUTE CJ and CHOMBA AJA concurring)


[1]
This appeal arises from an order made by
the High Court in a matter in which the parties had agreed to place a
stated case before the court.


[2]
The facts set out in the stated case are as
follows. The respondent, Lotta Frans, is the biological child of the
late Mr Jürgen Eichhorn (the deceased). The respondent’s
mother was not married to the deceased, and the respondent was
according to the law classified as an 'illegitimate' child. The
appellant is the sister of the deceased. The deceased died intestate
on 30 May 1991 and his estate was administered in terms of the law of
intestate succession. Because the respondent was classified as an
'illegitimate' child of the deceased, she was not considered eligible
to inherit from her father’s estate.


[3]
Sometime
later, the respondent challenged the constitutionality of the
common-law rule, in terms of which she had been prohibited from
inheriting from her father’s estate, and the rule was declared
unconstitutional by the High Court on 11 July 2007.[1]
The respondent issued summons in April 2005 against the appellant
based on the principles of unjustified enrichment. The respondent’s
claim, as later amended, is for 50% of the value of the deceased
estate as at the date of judgment, alternatively transfer of 50% of
the property awarded to appellant from the deceased estate. The
appellant admits that the respondent is a child of the deceased. The
appellant counterclaims for compensation for improvements that she
has made to the property she inherited from the deceased.


[4]
In the light of these facts, the parties
asserted that it would be 'desirable' for the following issue to be
determined before the trial: whether the amount or value by which the
appellant is alleged to be enriched is to be determined as at the
date of issue of summons (11 July 2005) or as at the date of judgment
as pleaded by the respondent.  According to the stated case, the
relevance of determining this issue in advance arose because the
value of farms in Namibia has increased between the date of summons
and the date of judgment and 'that has a bearing on the valuations
obtainable from the experts engaged by the parties as valuators'.


[5]
After
hearing argument, the High Court held that to determine the value of
enrichment as at the date of summons would not 'recompense the
plaintiff to the fullest possible extent' which would have the result
that the appellant would benefit from her unjustified enrichment to
the detriment of the respondent.[2]
After a consideration of the circumstances, the High Court concluded
that the value of the enrichment should be determined on the date on
which the court reserves judgment. 


[6]
The High Court did not consider the
question whether the matter was an appropriate matter for
determination by way of a stated case in terms of rule 33.  In
my view, this is an important question that should be addressed
first.


[7]
Rule
33(1) - (4) of the Rules of the High Court of Namibia provided
that[3]


'(1)
The parties to any dispute may, after institution of proceedings,
agree upon a written statement of facts in the form of a special case
for the adjudication of the court.


(2)(a)
Such statement shall set forth the facts agreed upon, the questions
of law in dispute between the parties and their contentions thereon,
and such statement shall be divided into consecutively numbered
paragraphs and there shall be annexed thereto copies of documents
necessary to enable the court to decide upon such questions, and it
shall be signed by counsel on behalf of each party or, where a party
sues or defends personally, by such party.


(2)(b)
Such special case shall be set down for hearing in the manner
provided for trials or opposed applications, whichever may be more
convenient.


(2)(c)
If a minor or person of unsound mind is a party to such proceedings
the court may, before determining the questions of law in dispute,
require proof that the statements in such special case so far as
concerns the minor or person of unsound mind are true.


(3)
At the hearing thereof the court and the parties may refer to the
whole of the contents of such documents and the court may draw any
inference of fact or of law from the facts and documents as if proved
at a trial.






(4)
If it appears to the court
mero motu
or on the application of any party that there is, in any pending
action, a question of law or fact which may conveniently be decided
either before any evidence is led or separately from any other
question, the court may make an order directing the trial of such
question in such manner as it may deem fit, and may order that all
further proceedings be stayed until such question has been disposed
of . . . .'


[8]
It is clear from a reading of these rules
that they contemplate two different processes. The first, the stated
case process, is provided for by rules 33(1) – (3). The second
is the 'separation of issues' process governed by rule 33(4). 
The second process contemplates either the
mero
motu
decision of a court, or an
application by a party for the separation of issues.  The first
process, the stated case process, contemplates agreement between the
parties as to the facts upon which a stated case will be determined.
The High Court did not consider which of the two processes was
followed here. The stated case itself does not cite to the relevant
rule.  Yet its language and structure comports with the rule
33(1) process, as it is clearly based on an agreement between the
parties, and contains the necessary agreed facts.  Moreover,
there does not seem to have been an application to the court for a
separation of issues. Accordingly, it is the view of this court, that
the process adopted was a 'stated case' as regulated by rule 33(1).


[9]
The
Namibian rules in force at the time are in identical terms to the
South African rules on stated cases, also numbered rules 33(1) –
(3). The view of the South African courts has generally been that a
stated case under rule 33(1) should dispose of the litigation, or a
significant aspect of the litigation between the parties.[4] 
The courts have understandably been wary of use of the procedure
prescribed in rule 33(1) – (3) for the purpose of parties
obtaining 'advice on possibly abstract questions'.[5] 
Nevertheless, where a court of first instance has permitted use of
the rule 33(1) procedure and decided an issue on a stated case, even
where the appellate court has reservations as to whether the
procedure should have been followed, appellate courts have generally
determined the appeal on the merits.[6]


[10]
Determination
of the question of law posed in the stated case at issue here will
not
determine
finally the dispute between the parties. The respondent’s
primary claim as set out in the amended particulars of claim was for
'one share' of the deceased estate, alternatively transfer of one
half of the property awarded to the appellant from the estate. If the
respondent succeeds with her primary claim, the legal question
stipulated in the stated case may never arise. A relevant question in
this regard is whether the South African decision in
Kudu
Granite Operations (Pty) Ltd v Caterna Ltd
[7]
was properly decided.  That case held that in a claim based on
the principles of unjustified enrichment, a plaintiff is only
entitled to claim the value of the unjustified enrichment of the
defendant, and not the physical thing.[8]
The High Court considered it unnecessary to decide this issue. 
It is clear that the High Court was correct in deciding that it is
not necessary to decide the legal question posed by the stated case
whether the decision in the
Kudu
Granite Operations
case
was correct.  Given that it is unnecessary to do so, and given
that the High Court did not decide the issue, this Court also
refrains from addressing the question of whether the
Kudu
Granite
decision
is correct
.


[11]
According to the parties, the reason that
it was desirable to obtain a determination of the legal question
stipulated in the stated case was that a determination of that
question would have 'a bearing on the valuations obtainable from the
experts engaged by the parties as valuators' because land in Namibia
had increased in value between the date of issue of summons (2005)
and the date upon which judgment will be given.  Even assuming
that the rule 33(1) procedure could be used to provide guidance in
relation to issues of evidence as sought here, something we certainly
do not decide, it would only be permitted to do so where it was
necessary or would result in a significant curtailment of a trial. 
It may be that property has increased in value in Namibia in the last
ten years, but no reason was proffered by the parties as to why
expert appraisers could not be asked to provide both the contemporary
value of the property and the value of the property as at 2005. 
Such a task does not seem unduly onerous or challenging. Nor would it
have unduly extended the length of their reports or the leading of
evidence.  


[12]
The legal question posed in the stated case
here thus neither finally determines any aspect of the litigation,
nor makes a significant contribution to accelerating the trial. 
In the circumstances, there must be grave doubts as to whether it is
an appropriate matter for a stated case in terms of rule 33.  Be
that as it may, now that the High Court determined the question
stipulated in the stated case, it would not be appropriate to refer
the matter back to the High Court for the trial to take its course
without an answer being provided to the stated case.


[13]
The
issue for decision is whether the amount or value by which the
appellant is alleged to be enriched is to be determined as the date
of issue of summons or as at the date of judgment.  The High
Court determined that the appropriate time is the date upon which the
court reserves judgment.  In reaching its conclusion, the High
Court took the view that the remedy in unjustified enrichment should
be informed by the principles that underlie awards of damages, and,
in particular, the principle that in calculating damages a successful
plaintiff should receive 'the fullest possible compensation of the
plaintiff’s damages'.[9] 
The High Court then reasoned that determining the quantum of
enrichment on the date of judgment would give rise to uncertainty
because there is often a delay between reserving judgment and handing
down judgment.[10]  For
these reasons, the High Court decided that the quantum of enrichment
should be determined at the date that the court reserves judgment. 
The High Court did not cite authority for its conclusions, presumably
because none was cited to it.  


[14]
The
High Court’s proposition that in calculating damages the
principle that a plaintiff should receive 'the fullest compensation'
is not a principle that can properly be said to underpin the law of
unjustified enrichment. The law of unjustified enrichment in Namibia,
and in South Africa, contains a complex web of overlapping remedies. 
The key general principle is that a plaintiff who asserts that
another’s estate has been unjustifiably enriched to the
detriment of the plaintiff is entitled to recover the extent of his
or her impoverishment, or the extent of the defendant’s
enrichment,
whichever
is the lesser

amount.[11] 
It is clear that, save in certain exceptional circumstances, a
plaintiff is not entitled to recovery, even where he or she can
demonstrate impoverishment, if the defendant is no longer enriched at
the time of the action.[12] 
Accordingly, the law of unjustified enrichment does not seek to
ensure that a plaintiff receives 'the fullest compensation possible',
as suggested by the High Court and its reasoning can accordingly not
be sustained.


[15]
In written argument lodged in this court,
counsel for the appellant referred to a passage in a leading South
African textbook on unjustified enrichment, as well as the
authorities quoted in support thereof, regarding the date upon which
the extent of enrichment should be calculated
.
The quoted passage reads as follows:


'When
the return of a specific object is not in issue, the quantum of
enrichment is calculated with reference to the date of the
commencement of the action (
litis
contestatio
). 
If at this date, the defendant’s enrichment has been
extinguished, he or she is not obliged to restore anything to the
plaintiff; if a portion of the enrichment has fallen away, only the
remaining enrichment need be restored.'[13]


[16]
In
support of this statement, the author refers, amongst others, to JG
Lotz and F D J Brand who state: 'In an enrichment action the
defendant’s liability is confined to the amount of his or her
actual enrichment at the time of the commencement of the
action.'[14]  The author
also refers to the work of W de Vos who states that the defendant
will only be liable to the extent of his enrichment at the time of
demand.[15]  The author
also cites to Eiselen and Pienaar who state that: 'The
quantum
of enrichment is usually determined with reference to the date of the
commencement of the action (
litis
contestatio
).'[16] 
I
should add that Prof J C Sonnekus asserts firmly that the stage of
litis
contestatio

is the appropriate time for determining the quantum of
enrichment.[17] His view is
consistent with the analysis of the Roman law of obligations as
described by Prof Reinhard Zimmerman.[18]


[17]
There
is therefore considerable disagreement amongst academic authors as to
the date upon which the extent of the enrichment will be calculated. 
Lotz and Brand suggest it should be the date of the commencement of
the action; De Vos suggests it should be the date of demand; Visser,
as well as Eiselen and Pienaar, suggest it should be the date of the
commencement of the action which (they state) is the stage of
litis
contestatio,
and
Prof Sonnekus asserts that it should be the stage of
litis
contestatio

None suggests that it should be the date of judgment (as respondent
asserted in the court below), or the date upon which the court
reserves judgment (as the High Court held).  Moreover, a reading
of the key texts of the Roman Law suggests different approaches as
well.[19]


[18]
It
will be helpful to define and explain these different dates or stages
of litigation.
An
action is commenced on the date of issue of summons,[20]
whilst the stage of
litis
contestatio

is reached later in the litigation process when the pleadings are
closed, and 'when the issue is crystallised and joined'.[21]
As recently explained by the South African Supreme Court of Appeal,
the concept of
litis
contestatio
has
its origins in 'the formulary procedure of the Roman Law in which the
litigants appeared before the praetor who formulated the issues that
the judge had to decide.'[22] 
Once the stage of
litis
contestatio

is reached, the effect is 'to freeze' the plaintiffs rights at that
moment.[23]
 The
date of the commencement of the action will thus ordinarily not
coincide with the stage of
litis
contestatio.
A
demand may be made by a plaintiff prior to the commencement of an
action, but may not necessarily be made in every case. There may be a
difference therefore between the date of demand and the date of issue
of summons, but that will depend as to whether a demand is made prior
to summons.


[19]
The
question, then, is whether the appropriate date for quantifying the
extent of the defendant’s unjustified enrichment is the date of
demand, the date of summons or the stage of
litis
contestatio
.
 The question is important, for as Prof de Vos noted the amount
of unjustifiable enrichment shifts over time.[24]
The shifting quantum of the claim arises because the amount of
unjustifiable enrichment recoverable by a plaintiff at any time
depends in large part on the extent of enrichment of the defendant.
Accordingly, if the defendant is no longer enriched, no claim will
lie. Unlike in the law of delict, the focus is not on the plaintiff’s
loss. It is, in the first place, on the extent of the defendant’s
enrichment.[25]


[20]
In my view, the appropriate date for the
determination of the quantum of damages is when the stage of
litis
contestatio
is reached, rather than the
date action is commenced or a demand is made. This approach is
consistent with the view of Prof Sonnekus and also to some extent
with the views of Prof Visser, and Profs Eiselen and Pienaar.
However, I have not been able to find clear judicial authority for
this approach either in Namibia or South Africa.  Yet it seems
to me that the approach is both practical and principled.


[21]
Adopting the approach will have the effect
that the question of whether there has been enrichment (and
corresponding impoverishment), will be determined once issue has been
joined between the parties. At that stage, the defendant will have
pleaded and lodged a counterclaim, if any, and the evidence in the
trial should be directed at determining whether there was unjustified
enrichment (and consequent impoverishment of the plaintiff) at the
time pleadings closed. The content of the pleadings lodged by both
the plaintiff and defendant will provide direction and content to the
evidence to be led in the trial and will enable expert witnesses to
prepare reports appropriately.  Were the enrichment to be
calculated on the basis of the date of issue of summons (or date of
demand were that to be earlier), the quantum would be calculated at a
time before the defendant has pleaded (and, where appropriate, lodged
a counterclaim). Given that in an enrichment claim, the overall
purpose is to determine the extent of the defendant’s
unjustified enrichment, and the plaintiff’s consequential
impoverishment, the facts pleaded by the defendant in a plea and any
counterclaim will be of crucial importance in determining the extent
of enrichment. It seems to make good sense, then, that the time when
the quantum of enrichment is to be determined is the time when the
pleadings close at
litis contestatio.


[22]
The
further question as to whether any interest should run in relation to
the quantum of enrichment once determined (and the date from which it
should run) is a separate and different question, as was correctly
pointed out by Nicholas AJA in
Commissioner
for Inland Revenue v First National Industrial Bank Ltd.
[26]
The question of whether interest will be payable on the amount the
court finds to be the amount of unjustified enrichment must be
determined according to the principles of
mora,
and the answer to the question will depend on whether there is
default or
mora
on
the part of the appellant.  The question will thus be whether
the appellant has been placed in
mora
in
relation to the extent of her enrichment by the respondent. This is
not a matter that can be determined on the facts agreed in the stated
case.


[23]
Accordingly, the appeal must be upheld in
part.  Should the issue arise in these proceedings, the date
upon which the quantum of enrichment should be determined is the
stage of
litis contestatio,
and the question of whether any interest will be payable on the
quantum of enrichment will be determined according to the principles
of
mora.


[24]
Counsel for the appellant suggested that if
the appellant succeeded on appeal, costs should be awarded to the
appellant only in relation to the appearance in this court and not
for the preparation of heads. The appellant has succeeded in part,
and yet, as indicated in the early paragraphs, this issue may yet not
be determinative of the dispute between the parties. Accordingly, it
does not seem appropriate to make a costs order on appeal. The costs
should rather be costs in the cause of the litigation that will
follow.


[25]
The following order is made:


1.
The appeal succeeds in part.


2.
Part A of the order of the High Court is
set aside and replaced with the following order: 'The value of the
enrichment to the first defendant from the estate of the deceased, Mr
Jürgen Eichhorn, to the plaintiff’s impoverishment, is to
be determined as at the date of
litis
contestatio.
'


3.
The costs of the appeal shall be costs in the cause.






O’REGAN
AJA






SHIVUTE
CJ






CHOMBA
AJA


APPEARANCES


APPELLANT:
A Vaatz


Instructed
by Andreas Vaatz & Partners


RESPONDENT:
N Tjombe


Instructed
by Tjombe-Elago Law Firm Inc



[1]
The judgment is reported as
Frans
v Paschke and Others

2007 (2) NR 520 (HC).




[2]
The
judgment of the High Court is reported as
Frans
v Paschke and Others

2012 (2) NR 560 (HC).




[3]
New
Rules of the High Court were introduced with effect from 16 April
2014. The equivalent of rule 33 is now rule 63.




[4]
See, for example,
Sibeka
and Another v Minister of Police and Others
1984
(1) SA 792 (W) at 795A–C. See also
Bane
and Others v D’Ambrosi
2010
(2) SA 539 (SCA
)
at
543E–H.




[5]
See
Bane
and Others v D’Ambrosi
,
cited above n 2, at 543 G.




[6]
See, for example,
Bane
and Others v D’Ambrosi,
cited
above n 2, and
Montsisi
v Minister van Polisie
1984
(1) SA 619 (A) at 631B–E.




[7]
2003 (5) SA 193 (SCA).




[8]
See for criticism of the SCA decision, D Visser
Unjustified
Enrichment
(2008:
Juta) at 162–163.




[9]
 
Para
11 of
High
Court judgment, cited above n 2.




[10]
Id. Para 12.




[11]
See D Visser 'Unjustified Enrichment' in Du Bois (ed)
Wille’s
Principles of South African
Law
9 ed (Juta, 2007) at 1052; JC Sonnekus
Unjustified
Enrichment in South African Law
(2008:
Lexis Nexis) at 13; and S Eiselen and G Pienaar
Unjustified
Enrichment: A Casebook
(1999:
Butterworths) at 31.




[12]
The exceptions by and large relate to circumstances where the
enriched party (ordinarily the defendant) has acted
mala
fide
.
See S Eiselen and G Pienaar
Unjustified
Enrichment: A Casebook,
cited
above n 45; JC Sonnekus
Unjustified
Enrichment in South African Law,
cited
above n 9, at 14 – 15.  Reinhard Zimmermann in his
magisterial text
The
Law of Obligations – Roman Foundations of the Civilian
Tradition
(1990:
Juta, Cape Town) points out that this rule may best be understood as
a pandectist gloss on the Roman Law that was introduced in the 19
th
century (at 900 – 901). Be that as it may, it is a gloss that
has been firmly entrenched in our law.




[13]
See D Visser, cited above n 6, at p 163, a similar statement is to
be found at 173. And also in the same author’s chapter in Du
Bois (ed)
Wille’s
Principles of South African
Law
9 ed, (Juta, 2007), at 1048–1049.




[14]
See 'Enrichment' in 
LAWSA
Vol 9 2d edition para 209




[15]
See
W
De
Vos
Verrykingsaanspreeklikheid
(Juta, 1987) at 201.




[16]
See S Eiselen and G Pienaar
Unjustified
Enrichment: A Casebook
,
cited above n 9, at 29.




[17]
JC Sonnekus
Unjustified
Enrichment in South African Law,
cited
above n 9,
seriatim,
including
at 13 – 15, 27 – 28, 54 - 57.




[18]
R Zimmermann
The
Law of Obligations
at
896 and 899.  Prof Zimmermann cites D46.3.47 as authority.




[19]
Cf, for example, D. 46.3.47 'the time of the proceedings is to be
looked at' (tempus quo agitur inspicitur) and D.24.1.7 pr 'the time
when issue is joined is the relevant one' (verum est litis
contestatae tempus spectari oportere) and fuller discussion in R.
Zimmermann, cited above n 10 at 895–901.




[20]
See, for example,
Marine
and Trade Insurance Co Ltd v Reddinger
1966
(2) SA 407 (A) at 413D.




[21]
See
Government
of the Republic of South Africa v Ngubane

1972 (20 SA 601 (A) at 608D–E; and see the fuller discussion
in the recent decision of the South African Supreme Court of Appeal,
Natal
Joint Municipal Pension Fund v Endumeni Municipality

2012 (4) SA 593 (SCA) paras 14–15.




[22]
Natal
Joint Municipal Pension Fund v Endumeni Municipality,
cited
above n 11, para 14.




[23]
Id. See also
Government
of the Republic of South Africa v Ngubane

1972 (2) SA 601 (A) at 608 D–E.




[24]
It has a 'wisselende inhoud' (shifting content). See De Vos
Verrykingsaanspreeklikheid,
cited
above n13, at 335.




[25]
See the discussion in JC Sonnekus
Unjustified
Enrichment in South African Law,
cited
above n 9, at 27–28.




[26]
1990
(3) SA 641 (A) at 659 A–C.