Abstract

According to the headnote attached to the most recent decision under discussion, the litigation turned on the quantification of the total loss suffered by M as alleged holder of a right of habitatio after S as reputed owner of the farm revoked the verbal agreement between the parties entitling M to occupy the dwelling ad infinitum on condition that he renovates the dwelling to a habitable state. Notwithstanding the conviction of the judges involved, it is clear that at no stage were any of the requirements for the acquisition or vesting of a limited real right of habitatio complied with. No limited real right was registered against the farm and S as the alleged grantor of the limited real right was at no stage the owner of the property. He could not have been entitled to burden the property of another with such limited real right. A contractual arrangement between the parties, however, did exist granting the claimant an entitlement to occupy the dwelling. The initially friendly relations between the litigants soured abruptly in February 2013 when S evicted M from the farm because of a supposed blasphemous comment by M. This happened after the claimant had already invested significantly in the restoration and modernisation of the old dilapidated dwelling. “The plaintiff regarded this as a repudiation of the contract between him and the defendant, accepted it as such and left the farm, effectively halting the renovation project” (par 14 read with par 5.4 of the 2016-decision). His claim for compensation of the loss suffered was held by the court to be limited to the amounts reflected in the receipts representing the cost of building material when it was acquired. It is submitted that the court should also have taken note of the loss suffered as positive interest, because the claimant forfeited the calculated benefit of life-long free occupation in the restored dwelling. Because of the underlying agreement between the parties to the litigation, the patrimonial benefit that accrued to the estate of the owner of the farm due to the objective rules of accessio cannot be classified as actionable unjustified enrichment. The principles of unjustified enrichment do not apply – the resulting detriment or loss of M was cum causa and not sine causa. The remarks of the court pointing to unjustified enrichment do not convince. Damages should have been calculated to cover the loss in positive interest of the claimant and not merely his negative interest, ie the amounts paid for the building material used in the renovation. The court, however, held: “I’m satisfied that the plaintiff has adduced sufficient evidence to prove his claim for the costs of renovating the farmhouse on a balance of probabilities” (par 23). The last mentioned mode of quantification of the loss suffered would have been more in place where merely a delict was involved, as eg where the damaged motor vehicle should be repaired to the state it was in before the accident occurred. Had the judges in this case done a correct assessment of loss upon cancellation for breach of contract, it would have led to a respect of the rule of law and would not have been to the detriment of the claimant. The legal principles that should have been applied had already been clearly formulated more than a century ago: “The sufferer by such a breach should be placed in the position he would have occupied had the contract been performed, so far as that can be done by the payment of money, and without undue hardship to the defaulting party …” Victoria Falls & Transvaal Power Co Ltd v Consolidated Langlaagte Mines Ltd (1915 AD 1 22).