Holtzhausen v Absa Bank Ltd

• Jurisdiction: South Africa
• Court: Supreme Court of Appeal
• Judge: Harms JA, Navsa JA, Brand JA, Cloete JA and Heher JA
• Judgment Date: 17 September 2004
• Citation: 2008 (5) SA 630 (SCA)
• Hearing Date: 07 September 2004
• Docket Number: 280/03
• Counsel: CA Human for the appellant. DE van Loggerenberg SC for the respondent.

Cloete JA:

[1] The appellant as the plaintiff sued the respondent bank as the defendant for damages. At the end of the plaintiff's case the learned trial D judge (Van Coppenhagen J) absolved the bank from the instance. The plaintiff was ordered to pay the bank's costs up to the date of delivery of the plea because the court considered that the particulars of claim were excipiable. This appeal is with the leave of the trial court.

[2] The factual background of the claim, as testified to by the plaintiff, E was the following. The plaintiff proposed delivering a quantity of cut diamonds which he owned to a person, whom he had met casually, as the agent for an unidentified purchaser, who would pay R500 000 for them. The plaintiff undertook to pay the agent a commission of R20 000 if the transaction was concluded. In due course the agent advised the plaintiff F that the amount of R500 000 had been paid into a Johannesburg bank for the credit of the plaintiff's bank account. He provided the plaintiff with three telephone numbers to verify the information. The plain- tiff obtained a copy of his bank statement, which showed that such an amount had indeed been credited to his account. He assumed (correctly, G as it transpired) that the deposit in the Johannesburg bank had been by cheque. He then approached the manager of the defendant bank where he kept his account, to ascertain whether he could safely proceed with the transaction and hand over the diamonds. The manager was apprised of the reason for the enquiry. The plaintiff furnished the manager with the three telephone numbers given to him. Although the plaintiff's H evidence was not always consistent on this point, there are passages in his evidence where he said that, after making several telephone calls, the manager gave him the assurance that the money was safe and that he could indeed proceed with the transaction. The manager also personally authorised the withdrawal by the plaintiff of the R20 000 commission I payable to the agent. It subsequently transpired that a fraud had been perpetrated and the credit to the plaintiff's bank account was reversed.

[3] The basis of the plaintiff's pleaded claim is not clear. The plaintiff alleged that the bank manager undertook to, and did, have the cheque cleared. The plaintiff also alleged that the bank manager was under a J

Cloete JA

A legal obligation not to make a misrepresentation to him and that the bank manager did so by representing that the cheque had been honoured, whereas it had not. One thing is, however, clear from the pleadings and the evidence and that is that the plaintiff did not rely on the breach of any contract between himself and the bank as constituting B negligence for a claim based in delict. In this court, the plaintiff's counsel nailed his colours to the mast by disavowing any reliance on a claim based in contract, and advancing only a claim in delict for pure economic loss suffered in consequence of a negligent misstatement.

[4] In its judgment, the trial court stated that according to the plaintiff's C counsel the plaintiff's claim was for damages in delict based on the breach of a contractual term or obligation, and granted absolution because of the decision of this court in Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd 1985 (1) SA 475 (A). But that was neither the plaintiff's pleaded case nor the basis upon which the trial was D conducted.

[5] Counsel who represented the bank when the heads of argument were delivered (not the counsel who appeared to argue the appeal) sought to justify the order made by the trial court by submitting that a claim for pure economic loss is not maintainable in delict when a claim can be E maintained in contract. That, wrote counsel, is the effect of Lillicrap. But it is not, as is apparent from Bayer South Africa (Pty) Ltd v Frost 1991 (4) SA 559 (A). In Bayer this court decided, in principle, that a negligent misstatement inducing the representee to enter into a contract with the respresentor may, depending on the circumstances, give rise to a delictual claim for damages at the suit of the representee. In reaching this F conclusion, Corbett CJ said at 569I - 570D:

Before us appellant's counsel referred to the case of Lillicrap, Wassenaar and Partners v Pilkington Brothers (SA) (Pty) Ltd 1985 (1) SA 475 (A) in which, so it was submitted, a conservative approach to the extension of remedies under the lex Aquilia was stressed; and to the case of Ericsen G v Germie Motors (Edms) Bpk 1986 (4) SA 67 (A) at 91E - G where, counsel said, the 'apparent conflict' between the Kern Trust case supra [...