Absa Bank Ltd v Bond Equipment (Pretoria) (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Smalberger JA, Harms JA, Schutz JA, Zulman JA and Mpati AJA
• Judgment Date: 29 September 2000
• Citation: 2001 (1) SA 372 (SCA)
• Docket Number: 580/98
• Hearing Date: 08 September 2000
• Counsel: P G Robinson SC (with him H van Eeden) for the appellant. J F Roos for the respondent.
• Court: Supreme Court of Appeal

Zulman JA:

[1] The respondent (the plaintiff), a customer of the appellant D bank (the defendant), instituted an action for damages against the defendant. In its particulars of claim the plaintiff alleged that it was the true owner of 13 crossed cheques endorsed either 'not transferable' or 'not negotiable'. Possession of the cheques was obtained by an employee of the plaintiff (Steyn) who unlawfully E deposited them to an account conducted by Steyn under the name of Bond Equipment (Pretoria). The plaintiff's name is Bond Equipment (Pretoria) (Pty) Ltd. The cheques were collected for payment by the defendant not for the plaintiff but for Bond Equipment (Pretoria), notwithstanding the absence of any endorsement by the plaintiff. The F action was founded in delict and based on the defendant's negligent conduct in collecting payment as aforesaid. (Compare Indac Electronics (Pty) Ltd v Volkskas Bank Ltd 1992 (1) SA 783 (A).) The essential defence was ultimately that the defendant was absolved from liability for its negligence because the plaintiff was vicariously liable for Steyn's conduct.

[2] The parties reached agreement on certain facts which were G recorded in a written statement. The Court a quo was requested to answer various questions arising from these facts in terms of Rule 33(4). Willis AJ granted judgment for the plaintiff for the full amount of its agreed loss, being the face value of the cheques. H The judgment is reported sub nom Bond Equipment (Pretoria) (Pty) Ltd v ABSA Bank Ltd 1999 (2) SA 63 (W). The present appeal is with the leave of the Court a quo.

[3] The statement of agreed facts reads as follows:

'1.

The South African Defence Force/National Defence Force/the defendant (''the debtors'') were indebted to pay certain amounts to I the plaintiff (''the debts'').

2.

In settlement of the debts, the debtors drew cheques annexures B to N to the summons. All the cheques except annexure D were delivered to A J Steyn (Steyn), plaintiff's duly authorised employee at the office of the Chief Payment Officer, Department of J

Zulman JA

Finance, Poyntons Building, Kerk Street West, Pretoria. Annexure D was delivered to Steyn A at Trust Bank, Andries Street, Pretoria.

3.

The particulars of these cheques are as follows:

3.1

They were all drawn as reflected on the copies of the cheques which are annexed as annexures B to N to the summons respectively. B

3.2

They were all crossed and endorsed either ''not transferable'' or ''not negotiable''.

3.3

The cheques crossed and endorsed ''not negotiable'' were at no stage endorsed or negotiated by the plaintiff. C

3.4

The cheque annexure I was endorsed by Steyn without plaintiff's knowledge or authority.

4.

Steyn obtained possession of the cheques and unlawfully caused them to be deposited to the account of ''Bond Equipment (Pretoria)'', an account conducted by Steyn under this name with the defendant. D

5.

The defendant as collecting bank owed the true owner of the cheques a duty to take care that it did not negligently collect payment of the cheques for the benefit of anyone not entitled thereto.

6.

The defendant collected payment of all of the cheques for Bond Equipment (Pretoria). E

7.

The banks on which the cheques were drawn honoured the cheques in circumstances which do not render these banks liable against the plaintiff or the debtors.

8.

The depositing for collection of the cheques by Steyn and the unlawful appropriation by him of the proceeds thereof were delicts F committed by Steyn.

9.

Should the first question of law be answered affirmatively then the quantum of the plaintiff's loss suffered as a result of the aforementioned facts is the aggregate total of the face value of the cheques being an amount of R219 783,74. G

10.

The plaintiff has instituted action against the defendant. Steyn is not a party to these proceedings and the plaintiff has not instituted any civil action against Steyn.

11.

When Steyn stole the cheques from the plaintiff he was an employee of the (plaintiff) and the opportunity to steal the cheques H arose during the course and scope of such employment. The cheques so received and stolen by Steyn were not reflected in the plaintiff's records as having been received by the plaintiff and it was only between March and April 1996 that plaintiff became aware of the thefts.' I

[4] Six questions of law arising from the agreed statement of facts were formulated by the parties. Only the answers given by the Court a quo to three of these questions are challenged on appeal. The three questions are:

1.

Is the plaintiff in law vicariously liable for the actions of Steyn? J

Zulman JA

2.

Is the defendant's conduct as set out above the proximate cause A of the plaintiff's loss?

3.

Is the defendant liable to the plaintiff for any negligent actions performed by its employees in view of Steyn's conduct as aforesaid?

The Court a quo answered the second question affirmatively B and the first and third negatively.

[5] The standard test for vicarious liability of a master for the delict of a servant is whether the delict was committed by the employee while acting in the course and scope of his employment. The inquiry is frequently said to be whether at the relevant time the employee was C about the affairs, or business, or doing the work of, the employer (see, for example, Minister of Police v Rabie 1986 (1) SA 117 (A) at 132G; Minister of Law and Order v Ngobo 1992 (4) SA 822 (A) at 827B). It should not be overlooked, however, that the affairs of the employer must relate to what the employee was generally employed or specifically instructed to do. Provided that the employee D was engaged in activity reasonably necessary to achieve either objective, the employer will be liable, even where the employee acts contrary to express instructions (see, for example, Estate Van der Byl v Swanepoel 1927 AD 141 at 145 - 6, 151 - 2). It is also clear that it is not every act committed by an employee during the time of his employment which is for his own benefit or the achievement of his own goals which falls outside the course and scope of his E employment. (Viljoen v Smith 1997 (1) SA 309 (A) at 315F - G.) A master is not responsible for the private and personal acts of his servant, unconnected with the latter's employment, even if done during the time of his employment and with the permission of the employer. The act causing damage must have been done by the servant in F his capacity qua servant and not as an independent individual. (See, for example, Feldman (Pty) Ltd v Mall 1945 AD 733 at 742 and H...