Last week in commercial law: a civil procedure quiz, things we don’t do in South African law, and what Homer teaches us about unjustified enrichment

Civil procedure pop quiz! Is an order dismissing an application for summary judgment appealable? [Your summarist is a strict marker, so you get one mark for “no” but a straight fail if you then add “because of Zweni”]. Gauteng Division, Johannesburg (getting it right): the test for appealability is the interests of justice, with the Zweni factors just having some gravitational pull (and an appeal against a garden-variety dismissal of a summary judgment application is not in the interests of justice because the plaintiff will still have its day(s) in court at trial). 

[Your summarist has not seen The Odyssey, mostly because three hours is far too much time for your summarist to be away from the diligent preparation of this newsletter. But your summarist knows enough about Homer to know to resist the siren song. For more than two decades, the SCA has flirted with the heady promise of a general enrichment action. A few years ago, the SCA seemed to close the door on a general action. But now, says the SCA, it’s still open for the right case: there is “much to be said” about a general enrichment action, either as a “residual action” or as an “overarching action that seeks to unify this branch of the law.” Your summarist is not so sure. Yes, our law of unjustified enrichment often calls for difficult rummaging through dusty attics of the conditiones, but just because the law is hard doesn’t mean we should sweep away the careful wisdom of the common law for broad ‘requirements’ that tell us nothing much of anything. And those rooting for the unifying force of a general enrichment action should look at how well that project is going in England—a “disaster”, says the leading modern enrichment scholar (and a former disciple of the great unifier Peter Birks)]. Kapa hires security company Millennium Bodyguards. About a year into their contract, Kapa asks Millennium Bodyguards to confirm that it’s registered under the Private Security Industry Regulation Act. Millennium Bodyguards declines to confirm that it’s registered. Kapa doesn’t pay. Millennium Bodyguards sues. Kapa counterclaims in unjustified enrichment to recover what it paid Millennium Bodyguards, arguing that Millennium Bodyguards is not registered and so their contract is invalid under the Act [and, as a legal writing aside, your summarist is trusting you, dear reader, to summon your awesome powers of inference to know what “the Act” means without needing the life raft of a definition]. SCA: Millennium Bodyguards’ claim fails because the contract is illegal (and so void) under the Act; but Kapa’s counterclaim in unjustified enrichment must go to trial (and cannot be decided on a stated case) because Kapa’s claim can succeed only under the condictio ob turpem, not under the condictio indebiti. The magistrate was right that the rule in Wilken v Kohler—that if both parties to an invalid agreement have performed in full, neither party can recover what they performed—doesn’t help Millennium Bodyguards because it doesn’t apply to a claim under the condictio ob turpem. But the magistrate was wrong to then conclude that Kapa’s counterclaim should succeed. There’s more work to be done, because there’s no claim under the condictio ob turpem if the par delictum rule applies, and if the par delictum rule applies it could be relaxed. So back to trial Kapa’s counterclaim must go [dedicated readers may wish to consider how English law now deals with illegality, including Lord Sumption’s hypothetical about an enrichment claim against a hitman].

Mr Maritz worked for Truworths in their consumer credit department. He got to know a lot about Truworths’s consumer credit strategy [or, as Truworths puts it, “targeting and onboarding of high-risk customers”, which is what people used to call usury why corporates pay consultants]. Mr Maritz signed a year-long restraint. After ten years at the Truworths consumer credit coalface, Mr Maritz resigns in mid-2025 and goes to work for Tymebank [or for one of the Tymebank companies—more on that later]. Tymebank is presumably not much interested in selling tops and t shirts, but very interested in selling consumer credit—and, to that end, Tymebank has a partnership with Truworths’s arch-rival, Foschini. Truworths rushes off to urgent court to enforce the restraint. The High Court interdicts Mr Maritz from starting his new job. The High Court grants Mr Maritz leave to appeal but grants Truworths’s interim enforcement application pending that appeal (a full court later partially upholds an appeal of the interim enforcement application). Meanwhile, Mr Maritz argues that he isn’t going to work for Tymebank the bank but some other company that’s just Tyme (no bank), which falls outside the restraint. This argument is not helped when Mr Maritz’s attorneys boast in a LinkedIn post about having “successfully represented Mr Pieter Maritz, on behalf of our client, Tymebank [the bank], in his appeal against Truworths”. Awkward. SCA: all this is very interesting but the year-long restraint is just about over so an appeal has no practical effect [which is a long and unnecessary lead up to your summarist’s hot take: when, like here, an appeal becomes moot through no fault of the parties—and the appellant is deprived of appellate review—the standard order should be to set aside the High Court’s judgment (or the SCA’s judgment, if the appeal is pending in the Concourt), like the Americans do].

Witvlei Meat has a credit facility with Kempston. Witvlei Meat doesn’t pay. Kempston sues Mr Badenhorst, alleging that he signed a suretyship [rule number one in your summarist’s big book of life rules is never sign a suretyship; rule two is never sign a suretyship; rule three is never use abbreviations or definitions in legal writing; rules four, five, and six are never sign a suretyship]. It turns out that the suretyship says that Mr Badenhorst is both the debtor and the surety. Western Cape Division: claim dismissed because the suretyship does not comply with the statutory formalities and cannot be rectified [your summarist doubts that’s right: the SCA says you can rectify a suretyship if, at step one, the written document, on its face, constitutes a valid suretyship and if so, at step two, a case for rectification is made out—and, importantly, the SCA held that a suretyship that has the same name for the debtor and the surety complies with step one (and is, on its face, formally valid) because [and your summarist promises he’s not making this up] the debtor and the surety could be “two parties with identical names”].

Ubuntu Family Health Centre runs a doctor’s practice. It buys a Porsche on instalments from Capitec [an odd totally normal thing for a doctor’s practice to buy]. Ubuntu Family Health Centre doesn’t keep up with the payments. Capitec cancels the sale and sues to get the Porsche back. Ubuntu Family Health Centre goes into business rescue. High Court: Capitec’s application cannot go ahead because, under section 133 of the Companies Act, “no legal proceeding, including enforcement action, against the company, or in relation to any property belonging to the company, or lawfully in its possession, may be commenced or proceeded with in any forum”. SCA: section 133 doesn’t apply because Ubuntu Family Health Centre doesn’t own the Porsche and is no longer “lawfully in its possession” because Capitec cancelled the sale.

Mr Geldenhuys claims from his insurer, Santam, for damage to his car. He tells Santam that the car was parked outside his office when bricks fell on it. Santam has seen this movie before: the year before, Mr Geldenhuys claimed for the same brick-induced damage to the same car for the same amount. Mr Geldenhuys calls it a coincidence, Santam says it’ll believe him when bricks fly [get it?] and reports Mr Geldenhuys to the Southern African Fraud Prevention Service. The Southern African Fraud Prevention Service [you’ll note your summarist’s observance of rule three despite the temptation to litter this newsletter with “SAFPS”] lists Mr Geldenhuys on its database of dodginess, which makes Mr Geldenhuys’s life difficult. Mr Geldenhuys sues Santam and the Southern African Fraud Prevention Service. He asks for an interim interdict to have his name taken off the database in the meantime. High Court: Mr Geldenhuys does not have a prima facie right, applying the test in Webster, read with Gool [civil procedure recap: take the facts that the applicant alleges and any facts that the respondent alleges that the applicant cannot dispute, and ask whether, on those facts, the applicant should (not could) get final relief, and, if so, then consider the respondent’s facts and if the respondent’s facts raise serious doubt about the applicant’s case, then the applicant loses]. On appeal, Mr Geldenhuys argues, amongst other things, that a “lesser test” for a prima facie right applies when an applicant “seeks to protect … a fundamental right protected by the Bill of Rights”, and that “lesser test” is the one that English law applies for interim relief: a serious issue to be tried (from a case called American Cyanamid). Western Cape Division (full court): the ordinary test (Webster, read with Gool) applies, and the few South African judgments that mention American Cyanamid and a serious issue to be tried are really applying the Olympic Passenger Service and Eriksen Motors approach to how the requirements for interim relief interact with each other—and Mr Geldenhuys fails the ordinary test because bricks don’t fly [which is a good occasion for your summarist to lament judgments, mostly in reviews, that say there is a prima facie right if there are “prospects of success in the review”, which is not what Webster, Gool, Olympic Passenger Service and Eriksen Motors say and seems to be the fault of the High Court in Ferreira v Levin].

Someone tried to appeal something so here’s another long judgment on why the new and improved test for leave to appeal is higher than it’s ever been before [and poor Mont Chevaux Trust still can’t rest].

A timely reminder from the Gauteng Division, Johannesburg, that, mercifully, South African law doesn’t do constructive trusts.

And speaking of things that South African law (mercifully) doesn’t do, a long time ago in a galaxy far, far away, the Appellate Division decided that South African law does not require consideration for a valid contract. Consideration is the idea that a valid contract requires a party to provide something in exchange for a promise, so a gratuitous promise like a gift is not a valid contract. Consideration is “wholly foreign” to Roman-Dutch law, said one judge, and it was “a serious mistake in English law when what was merely required as proof of a serious mind was converted into an essential of every contract”, said another. But fans of confusing common law doctrine rejoice! Because consideration is alive and well in England. Mr Denning loans money to Arcem Resources. Mr Main guarantees Arcem Resources’ obligation to repay the loan. English law governs the loan, but the loan doesn’t have a choice of court agreement. The parties later conclude a second agreement, called the security letter, that has an exclusive choice of court agreement in favour of England. Mr Denning sues Arcem Resources and Mr Main, who are both outside England. A claimant usually needs permission to serve a claim form outside England, but not if the claim is based on “a contract which contains a term to the effect that the court shall have jurisdiction to determine that claim”. Arcem Resources and Mr Main object to the English court’s jurisdiction, arguing that the security letter is not a “contract” because there was no consideration: the security letter purports to impose obligations on Arcem Resources and Mr Main (or, said differently, Arcem Resources and Mr Main made promises) but Mr Denning gave nothing in return. Business and Property Division of the High Court: no consideration means no contract, so Mr Denning cannot serve outside the jurisdiction without permission based on the choice of court agreement in the security letter, but Mr Denning gets permission to serve outside the jurisdiction anyway, based mainly on English law governing the loan.  

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