First National Bank of Southern Africa Ltd v Perry NO and Others

• Jurisdiction: South Africa
• Judge: Hefer ACJ, Schutz JA, Zulman JA, Brand AJA and Nugent AJA
• Judgment Date: 26 March 2001
• Citation: 2001 (3) SA 960 (SCA)
• Docket Number: 100/99
• Hearing Date: 13 March 2001
• Counsel: Z F Joubert SC (with him P F Louw) for the appellant. No appearance for the first, second and third respondents (the heads of argument having been drawn by J J Brett SC and M M Antonie). No appearance for the fourth respondent. M Daley for the fifth respondent.
• Court: Supreme Court of Appeal

Schutz JA:

[1] The appellant, First National Bank of Southern Africa Ltd (FNB), paid a forged cheque. The appeal before us arises out of its B attempt to recover its consequent loss from several defendants. Their roles and the bases of responsibility alleged against each of them differed greatly, leading to a hydra-headed particulars of claim, which included causes of action as widespread as unjustified enrichment (under a variety of different appellations), contract, delict, the actio pauliana and 'quasi-vindication'. These particulars C bore the partly healed scars of several amendments. To read these particulars is an ordeal which I shall not visit on users of the law reports, when I come to examine the allegations made on FNB's behalf, in order to ascertain whether any causes of action are to be found within them. It should be mentioned that the counsel who appeared for D FNB in the appeal were not responsible for them.

[2] The first defendant was one Dambha, who was alleged to have been associated with a fraud, of which the forgery of the cheque formed a part. His estate was later sequestrated and FNB has settled with his trustees in insolvency, who did not take part in the trial or the appeal. The second and third defendants were Dambha and one E Suriaya Dambha in their official capacities as trustees of the Abdul Razac Family Trust (the trust). The estate of the trust also has been sequestrated and is now administered by three trustees in insolvency, Messrs Perry, Cooper and Pretorius, who have resisted the appeal. They are the first, second and third respondents. The fourth F defendant (now fourth respondent) was Republic Stationary (sic) (Pty) Ltd (Repsta), which has been liquidated. Heads of argument resisting the appeal were filed on behalf of the liquidators but there was no appearance for them in the appeal. The fifth defendant (now fifth respondent) was Nedcor Bank Ltd (Nedbank). It resists the appeal. The sixth and seventh defendants, Standard Bank of SA Ltd (Standard) and New Republic Bank Ltd (NRB), did G not enter appearances, nor participate in the trial or appeal. Apparently they await the outcome of the appeal against Nedbank and FNB is content to leave them be until its legal entitlements have been established. H

[3] The parties participating in the trial were accordingly FNB as plaintiff, and the trust, Repsta and Nedbank as defendants. Briefly stated, FNB's case is that after the forged cheque was laundered through the bank of a stockbroker, the latter issued three cheques on Dambha's instructions, which were paid, directly or indirectly, to Nedbank, Standard and NRB to the credit of either Dambha, the trust or Repsta. All of the account holders are insolvent. I Currently the funds are interdicted in the hands of the banks.

[4] The relief sought against the banks, Nedbank, Standard and NRB, was payment of such stolen funds as were traced to each of them. The primary relief sought against Dambha, the trust and Repsta was a J

Schutz JA

declaration that they had no right to the respective funds credited to their accounts by the banks. Alternatively, joint and several payment A was claimed against them of the full amount of the forged cheque (R5 872 501,41). FNB's counsel concede that any such claim will be only a concurrent claim in the respective insolvent estates.

[5] At the commencement of the trial FNB as plaintiff and the remaining defendants, the trust, Repsta and Nedbank, agreed that B the defendants would argue, as on exception, that FNB's particulars of claim disclosed no cause of action at all. Magid J, sitting in the Durban and Coast Local Division, upheld the defendants' exceptions, save that he held that a limited cause of action in enrichment had been made out against Nedbank. The trial Court C granted leave to appeal.

[6] The matter was decided as on exception. This has two relevant consequences. The excipients have to show that the pleading is excipiable on every interpretation that can reasonably be attached to it: Theunissen en Andere v Transvaalse Lewendehawe Koöp Bpk 1988 (2) SA 493 (A) at 500E - F. Then the plaintiff, FNB, is D confined to the facts alleged in the particulars of claim, apart from any further facts which the parties agreed at the trial might be taken into account. These included the fact that the interdicts already mentioned were granted and the terms of the orders. On appeal there was some attempt to question that these facts had been admitted by consent, E but it is quite clear that they were. I now set out in the order selected by myself and partly in my own words the facts alleged in the particulars.

The facts alleged F

[7] During February and March 1995 the Government of KwaZulu-Natal (KwaZulu) and a firm of stockbrokers, Frankel Pollack Vinderine Inc (FPV), were customers of FNB. FPV had an account at FNB's Stock Exchange branch in Johannesburg. Dambha had a managed account with FPV. Dambha and the trust had banking accounts with Standard. A blank cheque form was stolen from KwaZulu and fraudulently G completed and signed so as to reflect FPV as the payee entitled to receive R5 873 501,41. The cheque was paid into FPV's account with FNB. Believing the cheque to be genuine, FNB collected payment thereof on behalf of FPV from KwaZulu by debiting KwaZulu's account and crediting that of FPV. On 17 March 1995 Dambha represented to FPV that he was entitled to the funds. In consequence FPV credited the same H in their books of account in Dambha's name.

[8] On 20 March 1995 Dambha instructed FPV to make out and hand to him three cheques, one for R3m in favour of the trust, one for R1m in favour of Standard and one for the balance of R1 873 381,41 in his own favour. In doing so Dambha represented to FPV that he and the I trust were entitled to be paid the respective amounts (no mention is made of Repsta in the relevant para 21.7). FPV acted in accordance with the instruction and the cheques, which were drawn on Standard, ABC branch, Durban, were deposited with Nedbank, Standard and NRB J

Schutz JA

(para 19) in favour of the various payees. They were collected and in consequence A the account of FPV with Standard was debited with the three amounts. There is no precise statement as to which cheques were deposited at which banks, but para 14 contains the allegations that all the amounts were deposited with either Nedbank or Standard, that R250 000 of what was deposited with it was transferred by Nedbank to NRB and that a B portion of the money has been credited to Repsta's account with Nedbank. From the cheques annexed to the particulars it is apparent that the cheque for R3 000 000 in favour of the trust was deposited with Nedbank and that the cheque for R1 873 351,41 in favour of Dambha was also deposited with Nedbank. One of the orders of Court makes it clear that the account holders of Nedbank were the trust in C respect of the R3 000 000 and Dambha in respect of the R1 873 351,41. Those are the amounts that matter in respect of the enrichment claim against Nedbank. (This is the moment when, according to FNB's argument, Nedbank was prima facie enriched.) The cheque for R1 000 000 in favour of Standard was deposited with D Standard. The interdict against Standard is directed against itself and also Dambha and the trust.

[9] In drawing the cheques FPV acted bona fide, so the particulars proceed, but under the reasonable but mistaken belief that it was obliged to do so against funds held by it on behalf of Dambha. The mistake was, since the funds had been stolen, that FPV was E not obliged to make the payments and Dambha had no right to the funds. Nor had FPV. When FNB became aware of these facts it credited KwaZulu with the amount of the forged cheque, as it had had no right to have debited its account in the first place. At the same time it debited FPV's account with that amount. F

[10] As to the state of mind of Dambha and, possibly, other defendants, FNB alleges in para 20(g) that Dambha 'in his personal capacity and as trustee' (a) at all times knew that neither he...