Joubert Scholtz Inc v Elandsfontein Beverage Marketing (Pty) Ltd

The respondent (Elandsfontein Beverage Marketing (Pty) Ltd, formerly Melton Trading) acquired businesses and property from Pieter Goosen and related entities, assuming liability for certain secured debts up to R12 million. The respondent paid substantial funds into the trust account of the first appellant, a firm of attorneys (Joubert Scholtz Inc), allegedly with a limited mandate to negotiate, settle and pay the debts owed to FNB and Standard Bank. After settlement of those debts, surplus funds remained. Acting on instructions from Goosen, Joubert Scholtz paid out the surplus to Goosen, his creditors, and related close corporations (third and fourth appellants). The respondent contended that these payments breached the attorneys’ mandate and resulted in unjustified enrichment of the appellants. The trial court dismissed the respondent’s claims, but the Full Court overturned that decision and granted money judgments against the appellants. The appellants then appealed to the Supreme Court of Appeal.

The appeals of all appellants were upheld with costs. The Full Court’s order was set aside and replaced with an order dismissing the respondent’s appeal and cross-appeal with costs.

The case clarifies the scope of an attorney’s authority when holding and disbursing trust funds, particularly where instructions are received from an agent or co-director. It reinforces principles governing mandates, the assessment of probabilities in factual disputes, and the requirements for unjustified enrichment claims, especially the elements of lawful causa and impoverishment.