Nashua Mobile (Pty) Ltd v GC Pale CC t/a Invasive Plant Solutions

• Jurisdiction: South Africa
• Judge: CJ Claassen J and Ngalwana AJ
• Judgment Date: 18 November 2010
• Citation: 2012 (1) SA 615 (GSJ)
• Docket Number: A 3044/2010
• Hearing Date: 15 November 2010
• Counsel: RWM Kujawa for the appellant. H van Tonder for the respondent.
• Court: South Gauteng High Court, Johannesburg

Ngalwana AJ (CJ Claassen J concurring): A

Introduction

[1] This is an appeal against the order of the additional magistrate who presided in the civil court for the district of Randburg. The order was B handed down on 3 December 2009.

[2] In this judgment I shall, for the sake of convenience, refer to the appellant as 'the defendant' and to the respondent as 'the plaintiff'.

[3] The plaintiff had instituted a delictual action against the defendant [1] for losses suffered when unauthorised money transfers were effected out C of the plaintiff's internet bank account by a person (unknown to the plaintiff and unauthorised by it to do so) who managed to obtain from the defendant a SIM card (through a process known as 'SIM swap') containing the cellphone number of an employee of the plaintiff.

[4] The bank account out of which these unauthorised transactions were D effected was held with Nedbank. The plaintiff was at all material times the defendant's customer, and had numerous cellphone contracts with the defendant.

[5] The defendant, by notice of motion and founding affidavit, also seeks condonation for the late filing of the record and late prosecution of this E appeal. The plaintiff filed opposing papers resisting the condonation application, and in turn sought condonation for the late filing of its opposing papers. At the hearing of the appeal, counsel sensibly agreed that indulgence be granted in both instances and that no costs be ordered in either.

F [6] Other issues have been raised concerning the admissibility of certain documents, and whether or not the defendant's staff who negligently acquiesced in the unauthorised request for a SIM swap did so in the course and scope of their employment. This line was not pursued in argument and so I say nothing further thereon. In any event, because of the view I take of this matter it is not necessary to decide those issues.

G [7] This court knows of no similar case that has previously been decided by our courts, and counsel has pointed us to none, particularly in relation to the cellphone industry.

The facts

H [8] The salient facts are largely common cause. The defendant called no witnesses and adduced no evidence in resisting the plaintiff's claim. The version put up by the plaintiff's three witnesses was not challenged. Thus, on the uncontested evidence, the following facts emerge.

[9] Early in January 2008 [2] a man walked into a Nashua Mobile outlet in I Musgrave, Durban, and requested a SIM card for a certain cellphone

Ngalwana AJ (Cj Claassen J concurring)

number. It was given to him. That cellphone number belonged to one A Hilda Barnard (Barnard) who worked for the plaintiff in George. She had registered it with Nedbank, George, as the number through which her internet banking transactions on the plaintiff's bank account would be verified and notified. The man in question was unknown to her and the plaintiff. B

[10] On Thursday 10 January 2008 amounts in excess of R160 000 were fraudulently transferred from the plaintiff's Nedbank account (through a series of internet banking transactions) to beneficiaries unknown to Barnard and the plaintiff. (I pause here to point out that according to a Nedbank employee who testified for the plaintiff (Albertyn), a Nedbank C account holder would require a reference number, sent by the bank by SMS exclusively to the registered cellphone number, in order to complete an internet banking transaction involving (a) the addition of a new payment beneficiary; (b) amendment of details of an existing payment beneficiary; and (c) making a one-off payment to a new beneficiary.) D

[11] Since the fraudulent internet banking transactions involved, on the face of it, one-off payments to new beneficiaries, the first of these SMS reference numbers was sent by Nedbank to Barnard's cellphone number at 18h43 on 10 January 2008, according to a statement of facts that was admitted into evidence by agreement between the parties. By that time, E Barnard was at home where she did not have access to a land-line telephone. She noticed that she could not make calls on her cellphone, but thought nothing of it.

[12] At about 08h00 the following morning (Friday 11 January 2008) she called the defendant from her work-telephone land line to ascertain why she could not make calls from her cellphone. She was told by one F Tyrone that a SIM swap had been authorised on her cellphone number the previous day.

[13] When her boss (Kuyler) asked her around 09h00 that morning to make an internet payment out of the plaintiff's Nedbank account to a new beneficiary, she was not able to access the account. Kuyler then G called the George Nedbank branch, was invited to a meeting, and was informed that the details he required to access the internet account had been fraudulently altered, and that some R160 940 had been transferred out of the plaintiff's account. The bank managed to recover or reverse R24 786,19 of the fraudulent transfers. Kuyler reported the matter to the police. H

[14] On Thursday 17 January 2008 Kuyler wrote a letter to Nedbank expressing a suspicion that Nedbank employees may be involved in the fraudulent transactions, and demanding full...