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

• Jurisdiction: South Africa

Absa Bank Ltd v Bond Equipment (Pretoria) (Pty) Ltd
2001 (1) SA 372 (SCA)

2001 (1) SA p372

Citation	2001 (1) SA 372 (SCA)
Case No	580/98
Court	Supreme Court of Appeal
Judge	Smalberger JA, Harms JA, Schutz JA, Zulman JA and Mpati AJA
Heard	September 8, 2000
Judgment	September 29, 2000
Counsel	P G Robinson SC (with him H van Eeden) for the appellant.; J F Roos for the respondent.

Flynote : Sleutelwoorde E

Banker — Collecting banker — Liability of to true owner of lost or stolen cheque — Employee stealing cheques delivered by employer's debtors — Collecting banker negligently collecting payment of cheques for employee — Whether collecting banker absolved from its negligence because employer vicariously liable for employee's conduct — Impossible for plaintiff to be 'liable' to someone for delict committed against him — Employee's theft not delict vis-à-vis bank and G vicarious liability on part of employer therefore not arising — Question really whether employee's wrongdoing may be taken into account in reducing or expunging liability of bank — Theft per se not having caused employer loss — Subsequent deposit and appropriation of proceeds of cheques outside course and scope of his authority not H attributable to employer — Actual cause of employer's loss not something for which he could be held responsible.

Delict — Liability for — Vicarious liability — Vicarious liability of employer for delictual acts of employee — General principles reiterated.

Bills of exchange — Cheque — Liability of collecting banker — Liability to true owner of cheque — Employee stealing cheques delivered by employer's debtors — Collecting banker negligently collecting payment of cheques for employee — Whether collecting banker absolved from its negligence because employer vicariously liable for employee's conduct — Impossible for plaintiff to be 'liable' to another for delict committed against him — Employee's theft not delict vis-à-vis bank and vicarious liability on part of employer cannot arise — Question really whether employee's wrongdoing may be taken into account in reducing or expunging liability of bank — Theft per se not having caused employer loss — Subsequent deposit and appropriation of proceeds of cheques outside course and scope of his authority not attributable to employer — Actual cause of employer's loss not something for which he could be held responsible for its loss.

Delict — Liability for — Vicarious liability — Vicarious liability of employer for delictual acts of employee — Employee stealing cheques delivered by employer's debtors — Collecting banker negligently collecting payment of cheques for employee — Whether collecting banker absolved from its negligence because employer vicariously liable for employee's conduct — Impossible for plaintiff to be 'liable' to another for delict committed against him — Employee's theft not delict vis-à-vis bank and vicarious liability on part of employer cannot arise — Question really whether employee's wrongdoing may be taken into account in reducing or expunging liability of bank — Theft per se not having caused employer loss — Subsequent deposit and appropriation of proceeds of cheques outside course and scope of his authority not attributable to employer — Actual cause of employer's loss not something for which he could be held responsible.

Headnote : Kopnota

The standard test for vicarious liability of an employer for I the delict of an employee is whether the delict was committed by the employee while acting in the course and scope of his employment. The enquiry is frequently said to be whether at the relevant time the employee was about the affairs, or business, or doing the work of, the employer. It should not be overlooked, J

2001 (1) SA p373

however, that the affairs of the employer must relate to what the employee was generally employed or A specifically instructed to do. Provided that the employee was engaged in activity reasonably necessary to achieve either objective, the employer will be liable even where the employee acts contrary to express instructions. 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 that falls outside the course and scope of his employment. An employer is not responsible B for the private and personal acts of his employee, 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 employee in his capacity qua servant and not as an independent individual. In Minister of Police v Rabie 1986 (1) SA 117 (A) at 134D - E a two-tier test was adopted C to decide whether an act done by an employee solely for his own interests fell outside the course of his employment: first, the subjective intention of the employee had to be considered: did he have the subjective intention of promoting solely his own interests? And, secondly, was there nevertheless a sufficiently close link between the employee's act for his own interest and the purposes and business of the employer? The effect was that the employer would escape liability D only if the employee had had the subjective intention of promoting solely his own interests and that the employee, objectively speaking, completely disassociated himself from the affairs of his employer when committing the act. The nature and extent of this deviation is critical: once it is such that it could not reasonably be held that the employee was still exercising the functions to which he was appointed, or still carrying out some instruction of his employer, the latter will E cease to be liable. Whether that stage has been reached is essentially a question of fact. It would in addition not amount to sound social policy to hold an innocent employer liable to a third party where his dishonest employee stole the employer's own property. This was especially so where there was no suggestion that the employer had been negligent in his selection of the employee. (Per Zulman JA, para [5] at 378B/C - 379F/G.) F

The respondent, a customer of the appellant bank, had instituted an action for damages against the bank in a Local Division. Certain of the respondent's debtors had drawn cheques in settlement of their debts and delivered them to S, an employee of the respondent, who had opened an account with the bank under a name that was very similar to that of the respondent. S had unlawfully deposited the cheques into G this account and the bank collected payment of all of them not for the respondent but for S, notwithstanding the absence of any endorsement by the respondent. The action was founded in delict and based on the bank's negligent conduct in collecting payment as aforesaid. The bank's defence was essentially that it was absolved from liability for its mere negligence because the respondent was vicariously liable for S's intentional wrongful conduct since a H plaintiff who acted with dolus (albeit through an employee) could not claim damages from a negligent defendant. In the Court a quo six questions of law arising from an agreed statement of facts were formulated by the parties and the answers to three of them were challenged on appeal. These were: (1) was the respondent vicariously liable to the bank for the actions of S?; (2) was the I bank's conduct the proximate cause for the respondent's loss?; (3) was the bank liable to the respondent for any negligent actions performed by its employees in view of S's conduct? The Court a quo had answered the second question affirmatively and the first and third negatively.

Held (per Harms JA; Smalberger JA, Schutz JA and Mpati AJA concurring) that the formulation of the first question above tended to obscure the issue: a J

2001 (1) SA p374

plaintiff could never be 'liable' to A another for a delict committed against him. The theft was not a delict vis-à-vis the bank and vicarious liability on the part of the respondent could thus not arise. The question that should have been posed was whether the respondent was answerable or responsible for the theft by S; in other words whether his intentional wrongdoing could be taken into account in reducing or expunging the liability of the concurrent wrongdoer (the bank). (Paragraph [4] of Harms JA's judgment at 382D - F.) B

Held, further, that the theft per se had brought about no loss to the respondent, only a potential loss. If S's involvement had ended there and the cheques deposited and the proceeds appropriated by a third party, no responsibility for any ensuing loss could have been attributed to the respondent and the position was no different where S had appropriated the proceeds of the cheques outside C the course and scope of his authority. The actual cause of the respondent's loss was not something for which it could be held responsible. (Paragraph [7] of Harms JA's judgment at 383E/F - G.) Appeal dismissed.

The decision in Bond Equipment (Pretoria) (Pty) Ltd v ABSA Bank Ltd 1999 (2) SA 63 (W) confirmed. D

Cases Considered

Annotations

Reported cases

Bond Equipment (Pretoria) (Pty) Ltd v ABSA Bank Ltd 1999 (2) SA 63 (W): confirmed on appeal

Cheshire v Bailey [1905] 1 KB 237: E compared

Columbus Joint Venture v ABSA Bank Ltd 2000 (2) SA 491 (W): dictum at 512F - I applied

Energy Measurements (Pty) Ltd v First National Bank of South Africa Ltd [2000] 2 B All SA 396 (W): dictum paras [144] - [155] applied

Ess Kay Electronics Pte Ltd and Another v F First National Bank of Southern Africa Ltd 1998 (4) SA 1102 (W): dictum at 1109F - G applied

Estate Van der Byl v Swanepoel 1927 AD 141: dicta at 145 - 6 and 151 - 2 applied

Feldman (Pty) Ltd v Mall 1945 AD 733: dicta at 742, 756 - 7 and 784 applied

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