Commissioner of Customs and Excise v Bank of Lisbon International Ltd and Another

• Jurisdiction: South Africa

Commissioner of Customs and Excise v Bank of Lisbon International Ltd and Another
1994 (1) SA 205 (N)

1994 (1) SA p205

Citation	1994 (1) SA 205 (N)
Case No	AR 655/93
Court	Natal Provincial Division
Judge	Thirion J, WILSON J and McLAREN J
Heard	February 11, 1993
Judgment	August 17, 1993

Flynote : Sleutelwoorde B

Vindication — Money stolen or obtained by fraud and paid into bank account — Money res fungibles — Bank receiving money without reason to believe it was stolen or obtained by fraud — Owner (creditor) cannot reclaim such C money by vindicatory action — But money recoverable under actio Pauliana where it was received with knowledge of fraud or where bank did not give value therefor — Defrauded creditor also entitled to employ condictio sine causa to recover moneys from bank unless bank can show that it gave value therefor.

D Debtor and creditor — Recovery by creditor of property alienated in fraudem creditorum — Individual creditor entitled to invoke actio Pauliana in order to recover such property from third persons where they received property with knowledge of the fraud or did not give value therefor.

E Banker — Liability of bank to third parties — Moneys paid into bank account which customer had acquired by fraudulent means — Unless bank acquired moneys titulo onerosa at time when it was ignorant of fraud, defrauded creditor entitled to recover amount from bank by way of actio Pauliana — Defrauded creditor also entitled to employ condictio sine causa to recover moneys.

F Enrichment — Condictio sine causa — Customer having paid moneys which he procured by fraudulent means into his bank account — Defrauded creditor entitled to employ condictio sine causa to recover moneys from bank unless bank can show that it gave value therefor — Defrauded creditor also entitled to employ actio Pauliana. G

Headnote : Kopnota

The appellant (the Commissioner) appealed against a judgment in a Local Division dismissing his claim against the first respondent (the Bank) for the payment of a sum of money which the second respondent, R (Pty) Ltd, had fraudulently obtained from the Commissioner and which R (Pty) Ltd had thereafter paid into its account with the Bank. At the hearing of the H application the Commissioner had applied for an order that the conflict of fact which had arisen on the papers between him and the Bank be referred for the hearing of oral evidence. The Court a quo dismissed this application and in consequence thereof also dismissed the main application. The instant appeal was directed against the refusal to refer the application for the hearing of oral evidence. It appeared that the account into which R (Pty) Ltd had paid the money had at one stage shown a credit balance of around R210 000. Later, the Bank had transferred amounts I totalling about R196 000 from this account to various other accounts. In respect of the R196 000, the Bank had subsequently paid the Commissioner about R100 000. The Commissioner's claim against the Bank was in respect of the balance.

Held, that the circumstances under which R (Pty) Ltd had obtained the money from the Commissioner were such as to deprive its delivery to R (Pty) Ltd of any legal effect (the taking of the moneys having been J nothing short of theft), which meant that

1994 (1) SA p206

A immediately before the payment of the money into R (Pty) Ltd's account with the Bank, it had been the property of the Commissioner. (At 208G-H.)

Held, further, that it was however equally clear that inasmuch as the money was res fungibiles and the Bank had received it without reason to believe that it had been stolen or obtained by fraud, ownership thereof had passed to the Bank when it was paid into the account of R (Pty) Ltd, which meant that the Commissioner could not reclaim from the Bank by vindicatory action. (At 208H-J.) B

Held, further, as to whether the Commissioner had any other remedies against the Bank, that the Court had to enquire, firstly, whether the Commissioner had a remedy in our law, and secondly, if he had, whether the Commissioner's founding affidavit sufficiently disclosed such remedy. (At 209D.)

Held, as to the first issue, that it would seem that in its developed form the actio Pauliana had become a personal action of general application which even an individual creditor could invoke in order to recover from C third persons property which the debtor had alienated in fraudem creditorem and which the third party had received with knowledge of the fraud or for which he had not given value. (At 213E/F-F/G.)

Held, further, that the actio Pauliana found application in a case such as the present, where the debtor had paid into his bank account money which he had obtained by fraud and which money, on being paid into the bank, became the property of the bank: when R (Pty) Ltd had obtained the money D by fraud from the Commissioner it had become indebted to the Commissioner in the amount so obtained and thus became obligated to the Commissioner to repay him the like amount. (At 213G-H/I.)

Held, further, that just as a bank would not, in the ordinary banker-customer relationship and in the absence of special provisions governing the customer's rights, be in a position to resist a customer's demand for payment to him of the balance standing to his credit in his account with the bank, so the bank would not be in a position to resist the claim of a person in respect of money which had been stolen from that E person and which the thief had deposited in the thief's account with the bank: unless the Bank had acquired the money titulo onerosa at a time when it was ignorant of the fraud, the defrauded creditor (the Commissioner) was entitled to recover the amount from the Bank by the actio Pauliana. (At 214A-C.)

Held, further, that the Commissioner was also entitled to recover the money with the condictio sine causa, provided that the Bank was not able to show that it had given value therefor. (At 214C and 215A-B.)

F Held, further, as to the second issue, that, although there was no evidence that when R (Pty) Ltd had paid the money into its account the Bank had had knowledge of the fraud, it was clear that, when a client paid money into his bank account, the bank did not under normal business practice give a counter-prestation, so that the mere fact that R (Pty) Ltd had paid the money into its current bank account was prima facie evidence that the Bank had received the money ex titulo lucrativo. (At 215G/H and H-I.) G

Held, further, that there was therefore in the circumstances sufficient evidence on the Commissioner's founding affidavit to support a claim based on the actio Pauliana and thus saddle the Bank with an evidential burden of establishing facts which would entitle it to retain the money against the Commissioner. (At 215I-J.)

Held, further, that it appeared from the affidavits that there was indeed a dispute of fact on the papers as to whether or not the Bank had in fact H given consideration for the money it had received (in which case the Commissioner would not be entitled to recover it from the Bank), and that there was therefore ample reason for referring the matter for the hearing of oral evidence. (At 219I/J read with 217G-218C/D.)

Held, further, that, although this conclusion made it unnecessary to consider whether the Commissioner could invoke the condictio sine causa, it did however appear that, on the facts stated in the Commissioner's founding affidavit, he was entitled to invoke this remedy. (At 219J-220A/B.)

I Held, accordingly, that the appeal had to be allowed with costs, and that the matter therefore had to be referred for the hearing of evidence. (At 220E-F.)

The decision in the Durban and Coast Local Division in Kommissaris van Doeane en Aksyns v Bank van Lissabon Internasionaal Bpk en 'n Ander reversed.

Case Information

Appeal from a decision in the Durban and Coast Local Division (Combrinck J J), dismissing an application for the referral of a dispute of

1994 (1) SA p207

A fact for the hearing of oral evidence. The facts appear from the judgment of Thirion J.

A Joubert for the appellant.

S Alkema SC for the respondents.

Cur adv vult. B

Postea (August 17).

Judgment

Thirion J:

The appellant appeals against the judgment in the Durban and Coast Local Division dismissing the appellant's claim against the first C respondent for the payment of a sum of money which second respondent had fraudulently obtained from the appellant and which second respondent had thereafter paid into its bank account with first respondent. At the hearing of the application the appellant had applied that the conflict of fact which had arisen on the papers between the appellant and the first respondent be referred for the hearing of oral evidence. The Court a quo D dismissed the application for the matter to be referred for the hearing of oral evidence and in consequence thereof also dismissed the application itself.

In essence the appeal is directed against the refusal by the Court a quo to refer the application for the hearing of oral evidence. E

I shall refer in this judgment to the appellant as the Commissioner; to the first respondent in the appeal as the Bank of Lisbon or simply as the Bank and to the second respondent as Reob.

Reob obtained by fraud from the Commissioner large sums of money. Certain F of the moneys of which Reob had defrauded the Commissioner were paid into Reob's bank account with the Bank of Lisbon, which at all relevant times had a credit balance. On 6 July 1990 there was a credit balance of R210 728,09 in the account. On that date the Bank transferred amounts totalling R195 914,44 from Reob's bank account to certain other accounts of companies and firms and of a certain Passamonte. These transfers were made G in order to liquidate the indebtedness of...