Nedbank Ltd v P U Injection Manufacturing (Pty) Ltd and Another (686/08) [2009] ZASCA 61; [2009] 4 All SA 334 (SCA) (29 May 2009)

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[2009] ZASCA 61
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Nedbank Ltd v P U Injection Manufacturing (Pty) Ltd and Another (686/08) [2009] ZASCA 61; [2009] 4 All SA 334 (SCA) (29 May 2009)

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THE
SUPREME COURT OF APPEAL
REPUBLIC
OF SOUTH AFRICA
JUDGMENT
No precedential significance
Case No: 686/08
NEDBANK LIMITED Appellant
and
P U INJECTION MANUFACTURING (PTY) LTD First Respondent
SOUTH AFRICAN RESERVE BANK Second
Respondent
Neutral citation
:
Nedbank Ltd v P U Injection
Manufacturing
(686/2008)
[2009] ZASCA 61
(29 May 2009)
Coram:
STREICHER ADP, CLOETE and LEWIS JJA and LEACH and
TSHIQI AJJA
Heard:
22 May 2009
Delivered:
29 May 2009
Summary:
Claim
for payment of money from a bank account in which financial rand had
been held refused where applicant unable to prove any
right to the
money.
ORDER
On appeal from: Pretoria High Court (Pretorius and Preller JJ and
Makhafola AJ, sitting as a full court on appeal).
1
The appeal is upheld
with costs, including the costs of two counsel where so employed.
2 The order of the court of first instance is
altered to read:
‘The application is dismissed with costs.’
JUDGMENT
LEWIS JA (STREICHER ADP, CLOETE JA AND LEACH AND
TSHIQI AJJA concurring)
[1] The question in this appeal is simple: did the
first respondent, PU Injection Manufacturing (Pty) Ltd (PUI) have a
claim against
the appellant, Nedbank Ltd, for payment of the sum of
R4 3242 817.16 plus interest? Its application for an order for
payment was
granted by the court of first instance, and that order
was confirmed on appeal to a full court. Nedbank appeals with the
special
leave of this court.
[2]
The undisputed facts
relevant to the determination of the question are these. PUI required
funding for a manufacturing business.
The funding was to be provided
by a company, Olympus Investments Ltd (Olympus), registered in
Guernsey, the sole purpose of which,
allegedly, was to make financial
rand available for the benefit of PUI and another company.
[3]
On 22 November 1988
Nedbank, an authorized dealer in terms of the Exchange Control
Regulations (RG 45,
GG
123, 1 December 1961) as amended, submitted an application on behalf
of Olympus to the South African Reserve Bank for the release
of
financial rand to the value of some R12.5m. (Curiously, Olympus was
incorporated only on 30 November, after its application
was made, but
nothing in this appeal turns on this.) On 12 January 1989, pursuant
to the application, the Reserve Bank approved
the release of
financial rand in the sum of R12.5m. The beneficiary of the
application was said to be PUI. The approval was, however,
subject to
various conditions, in particular that the financial rand could be
released only against the issuing of ordinary shares
at a premium in
PUI.
[4]
Funds introduced
from overseas were converted into financial rand and deposited in a
financial rand suspense account in the name
of P U Injection
Manufacturing Pty Ltd / Olympus Ltd at Standard Corporate Bank,
Bramley. Some of the financial rand were paid
out, amongst others to
PUI’s account with Standard Merchant Bank, Bramley, leaving a
balance of R2 497 793,80 in the financial
rand suspense account and
R415 027,54 in PUI’s account. The papers do not disclose whether
shares in the required form were ever
issued. On 5 May 1989 the
Reserve Bank issued an order to the Standard Bank of South Africa Ltd
attaching all funds held in the
name of P U Injection Manufacturing /
Olympus Ltd in terms of reg 22A(1)(a)(i), pending an investigation by
the Reserve Bank. We
are not told why the attachment was ordered nor
whether there was an investigation, let alone its outcome. Pursuant
to the attachment
the funds were transferred to the Reserve Bank’s
account at Standard Bank.
[5]
Attachments in terms
of reg 22A are, however, subject to the provisions of reg 22A(3)
which in effect provides that the Treasury
must release funds from
attachment, unless they are forfeited in terms of reg 22B, within a
period of three years of the attachment.
Regulation 22A(3) requires
that the Treasury must return the money to the person ‘in whose
possession it has been found or the
person entitled thereto’.
[6]
The financial rand
attached were in fact released on 22 October 1992, three years and
five months after attachment. The funds, plus
interest, were
transferred by Standard Bank to Nedbank (on the instruction of the
Reserve Bank) by means of a SWIFT (Society for
World Wide Interbank
Financial Telecommunication) message. The beneficiary customer was
stated to be Olympus. It is not disputed
that SWIFT messages inter
banks are binding. Since the money was regarded as foreign currency,
being financial rand, it could be
paid out only with the permission
of the Reserve Bank.
[7]
Some ten years later
PUI finally settled its dispute with the Reserve Bank and the Reserve
Bank wrote to Nedbank on 25 September
2002 advising that the funds
could be released. I shall revert to this letter. When PUI
subsequently requested payment of the funds
in the Nedbank Olympus
account it was advised that all moneys in the account had been paid
out to two other entities. PUI maintains
that Nedbank is nonetheless
obliged to pay to it the sum transferred by Standard Bank in 1992
since it, and not Olympus, should
have been the beneficiary of the
payment.
[8]
PUI’s claim is
founded on the assertion, made in the founding affidavit, that the
SWIFT message ought to have referred not to
Olympus, but to PUI
Manufacturing (Pty) Ltd/ Olympus. PUI contends that this is so since
the sole purpose of Olympus was to pay
funds into an account for the
benefit of PUI. The assertion is not substantiated by anything else.
There is no such entity as PUI
Manufacturing (Pty) Ltd/Olympus. And
of course the entitlement of PUI to the funds paid by Olympus was
dependent on the issue
of shares in the company to Olympus. There is
no evidence – and not even an allegation – that those shares were
issued. There
is thus nothing to suggest that PUI was entitled to the
funds at any stage.
[9]
PUI nonetheless
contends that the Reserve Bank letter of 25 September 2002 to
Nedbank’s legal adviser amounted to an instruction
to Nedbank to
pay the moneys in the Olympus account to PUI. The letter stated that
the matter between the Exchange Control Department
of the Reserve
Bank and PUI/Olympus had been ‘settled’, and that the funds paid
in to Nedbank in October 1992, plus interest,
should be transferred
to the trust account of PUI’s attorney.
[10]
The letter does
not, contrary to PUI’s contention, confer any right on PUI. It does
no more than indicate that the funds may be
released in view of the
settlement. The Reserve Bank, in the letter, does not purport to give
any right to PUI to claim payment,
nor could it do so. After all, it
had some ten years previously, released the funds from attachment,
hence the SWIFT transfer from
Standard Bank to Nedbank.
[11]
In view of the fact
that PUI has shown no right to the funds that were transferred into
the Nedbank Olympus account, its claim should
have failed and the
appeal must succeed.
[12]
It is thus ordered
that:
1 The appeal is upheld with costs, including the
costs of two counsel where so employed.
2 The order of the court of first instance is
altered to read:
‘
The application is dismissed with costs.’
______________
C H Lewis
Judge of Appeal
APPEARANCES:
FOR
APPELLANT: J G Wasserman SC
P T
Rood
Cliffe
Dekker Hofmeyer Inc
Pretoria
Instructed
by
Webbers
Attorneys
Bloemfontein
FOR
RESPONDENT: D A Gordon SC
H C
Janse van Rensburg
Julian
Pokroy Attorneys
Pretoria
Instructed
by
Horn &
van Rensburg Attorneys
Bloemfontein