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2024
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[2024] ZAGPJHC 218
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Nedbank Ltd v Chlorcape (Pty) Ltd (2022-056297) [2024] ZAGPJHC 218 (4 March 2024)
IN
THE HIGH COURT OF SOUTH AFRICA,
GAUTENG
DIVISION, JOHANNESBURG
CASE
NO: 2022 - 056297
1.REPORTABLE:
NO
2.OF
INTEREST TO OTHER JUDGES: NO
In
the application by
NEDBANK
LTD
Excipient
And
CHLORCAPE (PTY)
LTD
Respondent
In re
CHLORCAPE (PTY)
LTD Plaintiff
And
NEDBANK
LTD First
Defendant
QUENTAIVER MEI
TRADING (PTY) LTD
Second Defendant
PILLAY,
TAREN Third
Defendant
JUDGMENT
MOORCROFT
AJ:
Summary
Exception to
particulars of claim – rule 23 – two basis in the
alternative – that particulars do not disclose
a cause of
action, alternatively that particulars are vague and embarrassing
Three grounds of
exception upheld – particulars do not disclose a cause of
action – plaintiff granted leave to amend
Three grounds
dismissed – excipient not allowed to introduce evidence in
exception
Order
[1]
In this matter I make the following order:
1.
The
first, second and sixth exceptions are upheld;
2.
The
third, fourth and fifth exceptions are dismissed;
3.
The
plaintiff’s claim as against the first defendant as contained
in paragraphs 18 to 25, 31 to 34, and 40 to 44, and the
prayers as
against the first defendant are struck out;
4.
The
plaintiff is granted leave to file amended particulars of claim
within fourteen days of the date of this order;
5.
The
parties shall each pay their own costs.
[2]
The reasons for the order follow below.
Introduction
[3]
The
excipient (referred to as “the bank”) takes an
exception
[1]
to the respondent’s
particulars of claim in the pending action between the respondent
(referred to as “the plaintiff”)
and the bank as first
defendant. The plaintiff is a private company and the bank is a South
African bank trading as such. The second
and third defendants in the
action play no role in these interlocutory proceedings.
[4]
Notice of the intention to except was initially given on the basis
that the particulars of claim lack averments necessary
to sustain a
course of action, alternatively that the particulars are vague and
embarrassing. The notice of exception itself does
not state on which
of these two grounds the exception is being brought but the parties
argued the matter on the basis that the
bank was relying on both
grounds in the alternative.
[5]
Makgoka J
in
Living
Hands (Pty) Ltd and Another v Ditz and Others
[2]
and Maier-Frawley J in
Merb (Pty)
Ltd v Matthews
[3]
summarised the principles
applicable to exceptions. An overly technical approach must be
avoided but at the same time a case must
be pleaded in such a way
that the opponent can react thereto. The exception is therefore a
legal objection to the pleading and
it complains of a defect inherent
in the pleading in the sense that even if all the allegations in the
pleading were proven, the
pleading does not disclose a cause of
action or a defence, or that it is so vague and embarrassing that it
cannot be responded
to meaningfully.
[6]
The court will look only at the pleading concerned and will not take
into account extraneous evidence or allegations of
fact relied upon
by the excipient. It is therefore impermissible to plead facts in a
notice of exception, as the bank attempts
to do.
[7]
The objective is to dispose of a case or a portion of the case, or to
protect a party against embarrassment in presenting
its own case. It
provides a useful mechanism for weeding out cases without legal
merit.
[8]
The plaintiff sets out three claims in the particulars of claim. All
three claims relate to payments made by the plaintiff
into the
account of the second defendant with the bank and the same
allegations are made in respect of the conduct of the bank
in respect
of all three claims.
[9]
The plaintiff’s claim against the bank is based
inter alia
on an alleged failure to comply with the provisions of the
Financial
Intelligence Centre Act 38 of 2001
as well as the regulations made
under the Act when it opened a bank account for the second defendant.
It is alleged that -
9.1 the
application by the second defendant to open its account with the bank
was not accompanied by the documents required
in terms of the
Financial Intelligence Centre Act 38 of 2001
,
9.2 the bank
failed to confirm and verify the details and correctness of the bank
account into which the amounts totalling
R600,000 were paid,
9.3 the bank
failed to adhere to general banking practice by crediting the bank
account,
9.4 the bank
failed to freeze the second defendant’s bank account and
conduct a due diligence investigation into the
receipt of the money,
9.5 the bank
failed to report the transaction when there were reasonable grounds
to suspect that the transaction was unlawful
or related to an
offence,
9.6 the bank
failed to perform its obligations in accordance with the South
African Reserve Bank directions regarding suspicious
transactions or
unusual transactions,
9.7 the bank
failed to perform its obligations without negligence and in a
professional manner in accordance with the prescribed
functions,
processes and safeguards in according with the South African Reserve
Bank rules and procedures, the code of banking
practice, general
banking practice and procedure, and failed to comply with its own
internal rules and procedures.
[10]
The general banking practice, the provisions of the code of banking
practice, and the rules and procedures of the Reserve
Bank relied
upon are not identified. The reasonable grounds that should have
alerted the bank that fraud was being committed are
also not
identified. No facts are pleaded justifying the averment that the
code of banking practice is applicable to the matter,
this being a
claim in delict.
[11]
The question whether the failure of the bank to comply with the
provisions of the Financial Centre Intelligence Act gives
rise to
delictual liability on the part of the bank need not and indeed
should not be decided in this exception. The question was
not argued
and not specifically dealt with by the legal teams. It may very well
be that it is question not suitable to be finally
disposed of on
exception at all.
It
has been held that a failure to comply with statutory duties imposed
by related legislation, namely the
Proceeds of Crime Act 76 of
1996
did not clothe the plaintiff with any rights and that
consequently any breach of the statutory duty did not amount to a
wrongfulness.
A failure to comply with a statutory duty may be
relevant in
determining
wrongfulness but does not provide a basis for civil delictual
liability.
[4]
It may be
therefore that a failure to comply with the Financial Centre
Intelligence Act does not give rise to delictual liability
on the
part of the bank but may be taken into account by a court in
determining wrongfulness, but I expressly refrain from expressing
a
view on this issue.
[12]
It is
alleged
[5]
12.1 that the bank
as the collecting banker was aware or should have been aware that the
second defendant was not entitled
to payment of the proceeds of a
transaction that gave rise to the plaintiff’s claim, and
12.2 the bank as
collecting banker owed a legal duty to the plaintiff to avoid causing
a loss to the plaintiff by dealing
negligently with the payment. It
is then alleged that the plaintiff suffered damages in the amount of
R600,000.
[13]
There are a number of problems with these allegations.
The
allegation that the bank acted as a collecting bank make no sense in
the context of the whole of the claim against the bank.
It is common
cause on the pleadings and between counsel in court that no cheque
was ever deposited that gave rise to duties as
a collecting bank on
the part of the bank.
[6]
The
function of a collecting bank is to act on behalf of its client by
collecting the proceeds of a cheque from the drawee bank.
The
collecting bank might then upon proof of wrongful and negligent
conduct, incur delictual liability to the owner of the cheque.
[7]
A
bank receiving payment into a client’s cheque account is not in
the same position as a bank collecting on a cheque. The
distinction
is not merely a semantic one. The collecting bank takes positive
steps to present the cheque and collect payment on
behalf of its
client; a bank receiving payment (for instance by way of electronic
fund transfer that have largely replaced the
use of cheques) plays a
more passive role. It merely provides the receptacle into which the
money is placed by the payer.
The
allegation that the bank as a collecting bank owed a legal duty to
the plaintiff is therefore devoid of substance. It is not
alleged
that it ever acted as a collecting bank. The plaintiff paid money
into the second defendant’s account with the bank.
No
facts are pleaded in support of the contention that the bank was
aware or ought to have been aware of fraud committed by the
second
defendant.
It
is not clear how the bank ‘dealt negligently’ with the
payment after receiving it.
[14]
What the plaintiff seems to rely on but does not plead is that the
bank owed a duty of care to the public who interact
with the bank’s
clients and that because of the alleged negligent and wrongful
failure of the bank to verify the identity
of its client the
plaintiff suffered a loss by paying money into a bank account at the
bank held by a client of the bank who or
that was acting
fraudulently.
[15]
The bank raises six exceptions and I deal with them individually
below.
First
exception: The material facts relating to the banks alleged knowledge
of fraud are not pleaded
[16]
The plaintiff pleads that the bank was aware or should have been
aware that the second defendant was not entitled to
payment of money
deposited into the second defendant’s account. No facts are
pleaded in substantiation of this averment and
the exception must be
upheld. It must be noted that the three deposits were made by or on
behalf of the plaintiff, and it must
be inferred that when making the
three payments the plaintiff was not aware of anything untoward
and that the plaintiff intended
to pay money into the bank account.
The
plaintiff nevertheless expects the bank to have been aware of
shortcomings that the plaintiff itself was unaware of, without
saying
why the bank should have been so aware.
Second exception: the
basis of the legal duty allegedly owed to the plaintiff is not
pleaded
[17] I have dealt
with the basis of the legal duty above. The plaintiff cannot rely on
the collecting bank line of cases and
no allegations are made to the
effect that the bank owed a duty of care to the plaintiff as a member
of the public who was not
a client of the bank.
This
does not mean that such a duty may not exist, only that it was not
pleaded.
[18]
The second exception must be upheld.
Third
exception: the second defendant has no account with the bank
[19]
The bank impermissibly pleads facts in support of this exception and
the exception must be dismissed. If the second defendant
is not the
holder of the account into which the plaintiff paid money the
necessary facts will have to be pleaded by the bank in
a plea.
Fourth
exception: Vicarious and direct liability conflated
[20]
The bank is a company. It can only act through the agency of people.
It is represented at all times and at all levels
by its officers,
employees, and agents. These range from the chief executive officer,
the board of directors, senior staff, junior
staff, and others.
[21]
The plaintiff alleges in the particulars of claim that persons to the
plaintiff unknown but acting within the course
and scope of their
employment took the actions for which the bank is now sought to be
held liable.
The
question of conflation of vicarious and direct liability does not
arise and the exception is dismissed.
Fifth
exception: it is not clear how the alleged fraudulent tender relate
to the holder of the Nedbank account and the second defendant
[22]
Reading the particulars of claim as a whole and with the intention to
understand the pleading it would appear that the
plaintiff’s
claim against the bank is not based on a fraudulent tender but based
on the fact that the bank permitted an alleged
fraudster to open and
operate an account with the bank. The plaintiff then to its detriment
paid money into the bank account in
the mistaken belief that the
second defendant was a
bona fide
business.
[23]
The crucial causal link between the plaintiff’s loss and the
bank’s actions is not a fraudulent tender but
the alleged
failures in opening the account.
[24]
The plaintiff’s averments are not elegantly pleaded and the
fifth exception would become academic if averments
relating to a duty
of care involving both the elements of negligence and wrongfulness
were properly pleaded together with facts
to establish the causal
connection between the loss and the bank’s conduct.
The
exception is dismissed.
Sixth
exception: the relief claimed is incompetent as the plaintiff claims
the same amount twice
[25]
The plaintiff alleges that it suffered a loss of R600,000 and claims
this amount from the bank. It claims the same amount
from the 2
nd
to 4
th
defendants, jointly and severally the one paying
the other to be absolved. If all these parties pay the amounts
claimed then R1,200,000
will be paid to the plaintiff in terms of a
R600,000 claim.
[26]
The exception is upheld.
Costs
[27]
The bank achieved substantial success in that three of the six
exceptions are being upheld. I am nevertheless of the
view that each
party should bear its own costs in this matter. The three exceptions
that are being dismissed have no merit whatsoever
and can be
described as frivolous.
Conclusion
[28] For all the
reasons as set out above I make the order in paragraph 1.
J
MOORCROFT
ACTING
JUDGE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION
JOHANNESBURG
Electronically
submitted
Delivered:
This judgement was prepared and authored by the Acting Judge whose
name is reflected and is handed down electronically
by circulation to
the Parties / their legal representatives by email and by uploading
it to the electronic file of this matter
on CaseLines. The date of
the judgment is deemed to be
4 MARCH 2024
COUNSEL FOR THE
EXCIPIENT: M
Z GWALA
INSTRUCTED
BY: LOWNDES
DLAMINI INC
COUNSEL FOR THE
RESPONDENT: F A FERREIRA
INSTRUCTED
BY: BOUCHER
ATTORNEYS
DATE OF
ARGUMENT: 20
FEBRUARY 2024
DATE OF
JUDGMENT: 4
MARCH 2024
[1]
In
terms of rule 23 of the uniform rules of court.
[2]
Living
Hands (Pty) Ltd and Another v Ditz and Others
2013 (2) SA 368
(GSJ) para 15.
[3]
Merb (Pty)
Ltd v Matthews
2021 JDR 2889 (GJ),
[2021] JOL 51706
(GJ).
[4]
Commissioner,
South African Revenue Service and Another v ABSA Bank Ltd and
Another
2003 (2) SA 96
(W) paras 21 and 53 to 64.
[5]
Paragraph 24.2 to 25 of the particulars of claim.
Similar allegations are made in respect of the second and third
claim in paragraphs 33.2, 33.3, 33.4, 34, 42.2, 42.3, 43, and 44 of
the particulars of claim.
[6]
It is alleged in respect of the first claim that the
plaintiff paid over a total amount of R240,000 to the account
of the
second defendant held with the bank. In respect of the second and
third claims the plaintiff alleges that it paid the
second
defendant’s invoices and it attaches notifications of payments
by the plaintiff’s banker. (Paras 16, 30, and
39 of the
particulars of claim.)
[7]
Rhostar
(Pvt) Ltd v Netherlands bank of Rhodesia Ltd
1972 (2) SA 703
(R) 715B
;
Indac
Electronics (Pty) Ltd v Volkskas Bank Ltd
[1991] ZASCA 190
;
1992
(1) SA 783
(A).