First National Bank v Leeuw

• Jurisdiction: South Africa
• Judge: Beckley J, Van Zyl J
• Judgment Date: 29 March 2007
• Docket Number: A251/05
• Court: Orange Free State Provincial Division
• Hearing Date: 12 March 2007
• Citation: 2007 JDR 0780 (O)

Beckley J et Van Zyl J:

A

Introduction

The appellant, as plaintiff in the court a quo, claimed payment of the amount of R48 000,00 from the respondent (defendant in the court a quo) in an action based on enrichment, more particularly the condictio indebiti. The respondent claimed payment of the amount of R89 000,00 in a counterclaim, based on misrepresentation. The court a quo, after hearing evidence,

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dismissed the main claim and gave judgment in favour of the respondent on the counterclaim. The appellant now appeals against the aforesaid orders in the court a quo.

B

The facts

The relevant facts are briefly as follows: The appellant has a branch at Thaba Nchu. One of its clients at that particular branch was General Foods. Two bearer cheques, indicating that the drawer was General Foods, one dated the 13th May 1999 in an amount of R48 598,60, the other dated 21 May 1999 in the amount of R89 000,00, both made payable to Thabo Mofokeng, were deposited in the account of the respondent, who was also a client of the appellant at that particular branch.

It became apparent after the cheques had been deposited, that those cheques had been fraudulently removed from General Foods' cheque books and that the signatures of Mrs. Du Toit and Nel, on behalf of General Foods, had been forged. It was never contradicted that General Foods did not have a creditor by the name of Thabo Mofokeng and that no money was ever owing to such a person, although the witnesses were cross-examined in this regard. It was also not disputed that the deposit slip relating to

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the deposit of R48 598,60 was completed by a relieving officer in the employment of the appellant, Abram Motaung, but that the deposit slip relating to the amount of R89 000,00 was not completed by Motaung but by another bank official, one Motlhatlhedi. When the appellant learned of the forgery, it reversed the two deposits insofar as they were reflected in the records relating to the respondent's account.

In the main claim, the appellant claims the amount of R48 000,00 which the respondent had withdrawn after the amount of R48 598,60 had been deposited by means of the fraudulent cheque. In the counterclaim, the respondent claims the amount of R89 000,00 as a result of a misrepresentation made by the said Motaung, which representation, so it is alleged, induced the respondent to sell liquor to one Mofokeng and to accept the cheque as payment therefor. The respondent's defence to the main claim is basically that the condictio indebiti was not available to the appellant, being a bank, as the bank "could never be under the mistake that the debt is owing. The bank does not pay out a cheque on the basis of a debt." Furthermore, it is also alleged in the pleadings that the appellant should be estopped from relying on the fact that the cheque had been obtained fraudulently as the appellant

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misrepresented via its employees to the respondent that the cheque was a valid cheque.

C

The condictio indebiti

Regarding the main claim, the first issue that has to be decided, is whether the appellant can rely on the condictio indebiti. In ABSA BANK LTD v DE KLERK 1999 (1) SA 861 (WLD), Leveson J held in a similar case that the proper cause of action was one of the condictio indebiti. (See p. 865 par. A-D.) However, in B & H ENGINEERING v FIRST NATIONAL BANK OF SA LTD 1995 (2) SA 279 (A), E M Grosskopf JA held as follows at p. 284 G - I:

"The Bank's claim is based on unjustified enrichment. In Natal Bank Ltd v G Roorda 1903 TH 298 the Court suggested, in a similar case, that the appropriate common-law remedy was the condictio indebiti (at 303). This was disapproved in Govender v Standard Bank of South Africa Ltd 1984 (4) SA 392 (C) at 398D-E and 400C-D for the following reasons. A condictio indebiti lies to recover a payment made in the mistaken belief that there is a debt owing. However, a bank paying a cheque knows that it owes no debt to the payee. Its mistake lies, not in a belief that it owes money to the payee, but in a belief that it has a mandate from the drawer to make payment. In these circumstances the

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appropriate remedy is not the condictio indebiti but the condictio sine causa. This analysis of the two condictiones was followed in the Court a quo (at 44G-H). It also accords with views expressed by academic writers (see the articles quoted by the Court a quo, ubi sup) and was accepted as well founded (correctly, in my view) by both parties before us."

It was...