pvl3704- Enrichment Liability and Estoppel mcq-exam-prep-mcq-from-past-papers-with-answers-in-preparation-for-examination-purposes

PVL3704 MCQ – Exam Prep Question 1 to 3. The following facts are relevant for questions 1 to 3. A has demanded payment from B of an amount of R50,000 which he believes B is owing. B has checked its records and has paid the amount in the bona fide belief that the amount is owing in terms of their contract. Unbeknown to B, his bookkeeper, C had already paid the amount a week earlier by way of an electronic funds transfer in to the account of A. At the time of the second payment A's account was overdrawn in the amount of R30,000 and was therefore in credit of R20,000 after the payment. A has taken R15,000 out of his account to pay his employees their monthly wages. He has also paid R10,000 for a luxury weekend after realising that his account was in credit. Answer: These questions deal with the condictio indebiti and its requirements. The claim cannot be delictual because A's misrepresentation was innocently made. The claim can also not be based on the contract, because there had already been payment which extinguished the duty to pay in terms of the contract. Next evaluate the answers against the requirements of the condictio indebiti. Here the one party made a bona fide payment that was not owing and under circumstances that was excusable, partly because the mistake was induced by A's misrepresentation. Question 1 Which statement best explains the nature of the claim against A? 1. B has a claim against A based on delict for a fraudulent misstatement. 2. B has contractual claim against A based on their contract. 3. B has an enrichment claim against A based on the condictio causa data causa non secuta. 4. B has an enrichment claim against A based on the condictio indebiti. 5. B has no claim against A because he paid the amount voluntarily. 6. B has an enrichment claim against A based on the actio negotiorum gestorum utilis. Question 2 Answer: A's enrichment took place at the expense of B because B was the person who in law is regarded as the person who made the payment, even if C physically made the payment. At the time of the payment, the duty to pay had already been extinguished – the payment therefore cannot be in terms of the agreement, even if B thought so. The enrichment is not unlawful because B's conduct was not delictual in nature. The bank made payment in terms of its agreement with B and is therefore entitled to debit B's account. Accordingly it was not impoverished. Consider whether all of the other requirements for enrichment liability and the condictio indebiti have been complied with. Which statement regarding the requirements for an enrichment action is correct? 1. A has been enriched at the expense of B. 2. A has been enriched at the expense of C, who made the payment. 3. A's enrichment is not unjustified as there was a contract between A and B. 4. A's enrichment is unlawful because he made a demand for payment at a time that it was not due. 5. B has been impoverished at the expense of the bank. 6. B has no claim because the requirements have not been met. Question 3 Answer: A was initially enriched by an amount of R 50,000 on receipt of the money. The fact that his overdraft was extinguished, does not diminish his enrichment as his debts have decreased by R 20,000. The payment of the wages also does not cause his enrichment to diminish as those are expense he would have had in any event. The cost of the luxury holiday, however, does constitute an extinction of his enrichment, as he would probably not have made Downloaded by abram nthoba () lOMoARcPSD| 2 these expense if his account had not been in credit. There is no indication on the facts provided that A should have realised that he was enriched. Which statement best explains the calculation of the enrichment claim? 1. B can claim an amount of R50,000 from A with an enrichment action. 2. B can only claim R20,000 from A because his account was overdrawn and the bank received the benefit of the other R30,000. 3. B can claim nothing as A has not been unjustifiably enriched at his expense. 4. B can claim only R25,000 because the rest of the enrichment amount has been spent on the wages and A's holiday. 5. B can claim only R40,000 because the rest of the enrichment amount has been lost on the luxury holiday. 6. B can claim only R35,000 because the rest of the enrichment has been lost on the wages paid. Question 4 Answer: Have another look at the requirements for the condictio indebiti. Unlawfulness is not a requirement. For the condictio indebiti it is required that the impoverished party must have made a payment that was not owing as a result of an excusable mistake. 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 2 and 3 are correct 5. 1 and 2 are correct 6. 1 and 3 are correct. Question 5 Answer: In the case of stopped checks the appropriate action is the condictio sine causa specialis. Where a contract is terminated due to breach, the action ground is contractual and not in enrichment. Where one is dealing with illegal contracts, the appropriate action is the condictio ob turpem vel iniustam causam. In instance number 5 the correct action is the condictio causa data causa non secuta. In number 6 the correct action is the extended action negotiorum gestio. In which one of the following circumstances can the condictio indebiti be used? 1. Where a bank has made payment in terms of countermanded cheque. 2. Where a party knowingly makes a payment that is not due, but under duress and protest. 3. Where a contract is rescinded due to a breach of contract. 4. Where a party has made an undue payment in terms of an illegal contract. 5. Where a party has made payment which is due but where the cause for the payment later falls away. 6. Where a party has paid the debt of a third party for purposes which benefits the paying party. Question 6-7 The following facts are relevant for Question 6 and 7. X has concluded a contract with Y to build a tennis court at a cost of R40,000 on the property it is renting from Z. It can be shown that the value of the property has increased by R20,000 due to the improvement. X has disappeared before paying Y for the work done. Y now wants to lodge a claim against Z, the owner of the property. Downloaded by abram nthoba () lOMoARcPSD| 3 Answer: This case deals with indirect enrichment. Have another look at the decisions in Gouws v Jester Pools and the Buzzard Electrical case. In the Gouws case it was decided that Y only had a contractual claim against the lessee, X and no enrichment action against the owner, Z. In the Buzzard Electrical case this issue was left undecided by the appellate division. Question 6 Which statement best explains the ground on which and amount that Y can claim? 1. Y has an enrichment claim against Z for an amount of R40,000. 2. Y has an enrichment claim against Z for an amount of R20,000. 3. Y has a contractual claim against X for R40,000. 4. X has an enrichment claim against Z for R40,000. 5. Y has an enrichment claim against X R 20,000. Question 7 Answer: T Which statement best explains the authority on which you based your answer in question 6? 1. In terms of the decision in Gouws v Jester Pools (Pty) Ltd 1968 3 SA 63 (T) it was held that Y has no claim against Z because Z had not been enriched at his expense. 2. In terms of the decision in Gouws v Jester Pools (Pty) Ltd 1968 3 SA 63 (T) it was held that Y has a claim against Z because Z had been enriched at his expense. 3. The decision in the Gouws case was confirmed 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 confirmed in Brooklyn House Furnishers Ltd v Knoetze & Sons 1970 3 SA 264 (A) Question 8 G has noticed that his neighbour's (H) stud bull is seriously ill. The neighbour is currently on a hiking trip in Nepal and cannot be reached. G has called out a veterinary doctor to attend to the bull and has paid all his bills as well as for the medication. The total cost was R12,000. Despite the treatment the bull has died. Which statement best explains the basis of G's possible claim against H? Answer: In this case G does not have to rely on an enrichment claim, because in that case he would have no claim as the neighbour is no longer enriched. G can rely on the true action for tending to another's property, namely the actio negotiorum gestorum contraria. In terms of this action he can reclaim all expenses reasonably made in the attempt to preserve his neighbour's property. 1. G has no claim against H because the bull has died and the expenses have been wasted. 2. G has an enrichment claim against H for his expenses as necessary expenses. 3. G has a claim against H in terms of the actio negotiorum gestorum contraria for R12,000. 4. G has a claim against H in terms of the actio negotiorum gestorum utilis for R12,000. 5. G's claim against H in terms of the actio negotiorum gestorum contraria will fail because the bull died. 6. G has a claim against H as the agent of H. Question 9 G has noticed that his neighbour's (H) stud bull is seriously ill. The neighbour is currently on a hiking trip in Nepal and cannot be reached. G has called out a veterinary doctor to attend to the bull and has paid all his bills as well as for the medication. The total cost was R12,000. Despite the treatment the bull has died. G is a meddlesome