First National Bank v Leeu (A251/05) [2007] ZAFSHC 31 (29 March 2007)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: Free State High Court, Bloemfontein
SAFLII
>>
Databases
>>
South Africa: Free State High Court, Bloemfontein
>>
2007
>>
[2007] ZAFSHC 31
|

|

First National Bank v Leeu (A251/05) [2007] ZAFSHC 31 (29 March 2007)

IN THE HIGH COURT
OF SOUTH AFRICA
(ORANGE FREE STATE
PROVINCIAL DIVISION)
Appeal No. : A251/05
In
the appeal between:-
FIRST
NATIONAL BANK
Appellant
and
TSHIDISO
ISAAC LEEUW
Respondent
_____________________________________________________
CORAM:
BECKLEY
J
et
VAN ZYL
J
_____________________________________________________
HEARD
ON:
12
MARCH 2007
_____________________________________________________
JUDGMENT
BY:
BECKLEY
J
_____________________
________________________________
DELIVERED ON:
29
MARCH 2007
_____________________________________________________
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, 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
13
th
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 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 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
[1994] ZASCA 152
;
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 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 conceded that the
proper cause of action
in
casu
may well not be the
condictio
indebiti
,
as pleaded, but the
condictio
sine causa
.
Mr. Cronje’s submission on behalf of the appellant, was that,
despite the fact that there was no reference to the
condictio
sine causa
in the pleadings, the requirements for the
condictio
sine causa
had been fully canvassed in evidence in the course of the trial, and
that the appellant is not unsuited, having regard to the following:
The scope of the
condictio
indebiti
is to recover money (or other property) transferred in intended
payment or performance of a non-existing debt. The
condictio
sine causa
(
generalis
)
has been held to be the appropriate remedy where, for example, a
bank seeks to recover an amount paid to the payee of a cheque
after
the cheque had been countermanded by the drawer. It would seem as
if the fundamental difference is to be found in the fact
that the
mistaken belief that there is a debt owing is required to rely on
the
condictio
indebiti
,
whereas such a belief regarding a debt owing is not a requisite for
the
condictio
sine causa
.
Both
condictiones
are specimen of actions for enrichment, and both require proof
that the defendant has
be enriched, that
the plaintiff has be
impoverished, that
the defendant’s
enrichment must be at the expense of the plaintiff and
that the enrichment
must be unjustified.
(See LAWSA, Vol. 9 par.
209.)
In the pleadings,
specific reference is made to enrichment.
(iv) The evidence
required to prove the
condictio
indebiti
also proves the
condictio
sine causa
.
It is difficult to see in what manner the evidence on behalf of the
respondent would have differed, or how the cross-examination
would
have been affected, if the correct specimen of the
condictio
had been referred to in the pleadings and moreover, as to how the
respondent has been prejudiced by the reference to the incorrect
condictio
.
(v) The dictum of Schuts
JA in
McCARTHY
RETAIL LTD v SHORTDISTANCE CARRIERS CC
2001 (3) SA 482
(SCA) at 489 A – C endorses the undesirability of
having separate
condictiones
.
Given the similarities
between the two respective
condictiones
,
I agree with Mr. Cronje that the requirements for the
condictio
sine causa
have been fully canvassed in the evidence, that there can be no
prejudice to the respondent, and that the appeal should not be
dismissed
simply because of the reliance on the incorrect
condictio
in the pleadings. I invited Mr. Phalatsi, on behalf of the
respondent, to address the Court on any possible prejudice that this
may have entailed insofar as the respondent is concerned, and he was
unable to refer to any specific prejudice.
Regarding the discrepancy
between the pleadings in which it is alleged that the appellant
relies on the
condictio
indebiti
,
and the concession by Mr. Cronje that the correct cause of action
would actually be the
condictio
sine causa
,
Mr. Phalatsi relied on the well known decision
ROBINSON
v RANDFONTEIN ESTATES G.M. CO. LTD.
1925 AD 173
(A). The court
a
quo
correctly referred to this decision, but unfortunately only referred
to part of the relevant section. The entire approach of Innes
CJ, is
clearly set out as follows at 198:
“
The object of pleading is to define
the issues; and parties will be kept strictly to their pleas where
any departure would cause prejudice
or would prevent full enquiry.
But within those limits the Court has a wide discretion. For
pleadings are made for the Court, not
the Court for pleadings. And
where a party has had every facility to place all the facts before
the trial Court and the investigation
into all these circumstances
has been as thorough and as patient as in this instance, there is no
justification for interference
by an appellate tribunal, merely
because the pleading of the appellant has not been as explicit as it
might have been.”
I therefore hold that the
fact that the appellant relies in its pleadings on the
condictio
indebiti
is not fatal.
D Estoppel
Regarding estoppel, Mr.
Phalatsi submitted that all the elements of estoppel are present and
that the appellant should be estopped
from recovering the amount of
R48 000,00 from the respondent. In the pleadings it is alleged that,
prior to a sale of liquor which
was sold by the respondent to one
Thabo Mofokeng, the respondent had enquired from an employee of the
respondent “about veracity
of a cheque dated 21 May 1999” and
that the employee “represented to defendant that the cheque was
good” whereupon the respondent
delivered goods to Mofokeng. It is
furthermore alleged that the appellant’s employee “knew the
defendant would act on the assumption
that the representation is
factually correct”. The employee of the appellant, Motaung,
testified as follows in this regard:
“
If I remember the owner of the
account came to me with a cheque and asked me if the cheque was good.
I then had to check if the cheque
was not postdated and if the
amounts corresponded with figures. I then checked in the computer if
there was not stop payment on
the cheque. I confirmed that the
cheque was ok. I was not asked to check if there were funds in the
account. I did not check if
the signatures on the cheque
corresponded. I did not go and look if there were funds in the
account of Gen Foods. The document
Exhibit A is known to me. When I
received the cheque I did not go and look if the Exhibit A if the
signatures on the cheque corresponds
with those on the Exhibit A.”
Later in the course of
his testimony, he stated that he never told the respondent that the
deposit amount was guaranteed. Motaung
also referred to a telephone
conversation with the respondent regarding the cheque a few days
after the cheque had been deposited,
which is denied by the
respondent. In the course of this conversation, Motaung, according
to his own evidence, advised the respondent
that the funds are not
available yet.
The
respondent’s evidence regarding the conversation he had at the bank
with Motaung is to the effect that he spoke to Motaung in
the
presence of Mofokeng and asked him to verify the cheque. His further
evidence is as follows:
“
Motaung took the cheque, went to
the back. When he came back, he said the cheque was genuine and I
could deposit the cheque.”
The branch manager of FNB
at Thaba Nchu, Mr. Galadamin, testified regarding the procedure that
applies in the bank relating to the
clearance of cheques. According
to his evidence a cheque which is deposited into an account is
subject to a clearance period of
seven days. The account is
provisionally credited upon deposit of a cheque, and the deposit is
deemed to be final once the cheque
has been cleared. Should the
cheque not be cleared, the credit is then reversed. The witness
conceded that, if this particular
cheque in the amount of R48 000,00
had been cleared within only three days after been deposited, it
presupposes that special arrangements
were in place in respect of the
particular cheque. It was, however, never put to Motaung that such
arrangements for special clearance
had been made, and that this
particular cheque had therefore been cleared in less than the usual
period of seven days in terms of
such an arrangement. Respondent’s
evidence, on the other hand, is that the assurance was given to him
prior to depositing the
cheque, that the cheque was genuine and that
he could deposit the cheque.
It
must be borne in mind that the respondent was aware of the seven day
period that was required for a cheque to be cleared, and that
he
specifically testified that he never requested anybody at the bank to
clear this particular cheque. It is also important to refer
to the
specific evidence of Motaung and the respondent in this regard.
Motaung testified that he never advised the respondent that
the
cheque had been cleared or that he guaranteed that the cheque would
be paid. In fact, he never cleared the cheque, as he was
never
required to do so. He satisfied himself that the cheque complied
with the requirements for a cheque to be deposited, and it
is common
cause that that is exactly what he conveyed to the respondent.
In
order to succeed with the plea of estoppel, the onus was on the
respondent to show that the representation made by Motaung was
tantamount to a guarantee. That, to my mind, he failed to prove. In
the result, the defence of estoppel fails.
E The Counterclaim
The court
a
quo
by
implication accepted the evidence of the respondent that he dealt
with Motaung and rejected the evidence of Motaung that the had
nothing to do with the cheque in the amount of R89 000,00, simply on
the basis that the respondent knew Motaung very well and that
there
is no reason why the respondent should say that he was helped by
Motaung whereas he had been helped by someone else. The court
a
quo
considered the fact that it was Motaung who went to look for Mofokeng
in Botshabelo as corroboration. It is common cause that Motaung
was
involved in the first cheque in the amount of R48 000,00 and it is
therefore understandable why he was requested to look for
Mofokeng.
It was never suggested that Motaung’s visit to Botshabelo was in
connection with the cheque for R89 000,00 only. The
court
a
quo
,
however, did not take other aspects into consideration and failed to
apply its mind to other factors in finding that the evidence
of the
respondent was to be preferred over and above the evidence of
Motaung. In this regard, the following aspects were never considered
by the magistrate and are certainly relevant:
(i) Whereas Motaung
completed the deposit slip in respect of the R48 000,00 cheque, it
was common cause between the parties that the
handwriting on the
deposit slip in respect of the R89 000,00 cheque was not that of
Motaung.
(ii) The
respondent’s credibility is questionable, having regard to the fact
that a relevant and important aspect was never put
to Motaung during
cross-examination, namely that Mofokeng was present during the
discussions at the bank between Motaung and the
respondent in respect
of both cheques. It is extremely unlikely that Motaung (if such a
person actually existed) and who would on
all probability know that
the cheques were stolen, would accompany the respondent to the bank
to deposit the cheques. (The respondent
in his evidence actually
conceded this.)
(iii) The
respondent testified that Motaung actually contacted General Foods
telephonically regarding one of the two cheques whilst
he was present
at the bank and at the occasion when the respondent made certain
enquiries regarding the cheque. This was never put
to Motaung in the
course of cross-examination. Apart from the fact that it was never
put to Motaung in cross-examination, as it
should have been, it is
inconceivable that, as General Foods would have realised that the
cheques were stolen, they would not have
advised Motaung accordingly.
It was likewise never put to the employees of General Foods during
cross-examination that such a conversation
had ever taken place. The
fact that these aspects were never raised in the course of
cross-examination, raises questions regarding
the credibility of the
respondent, more so when the unconvincing reasons that he furnished
for the failure to put these questions
are taken into account.
(iv) It
is unlikely that Mofokeng would conveniently disappear in a very
short period of time after buying liquor for more than R137
000,00
from the respondent and leave no trace of his whereabouts. It is
simply not acceptable that the respondent took no steps
to get in
touch with Mofokeng.
(v) The
respondent contradicted his pleadings by testifying that he sold beer
to Thabo Mofokeng, whereas the pleadings referred to
beer, ciders and
liquors; he also contradicted his pleadings by testifying that Thabo
Mofokeng stayed at S Section, Botshabelo, whereas
the pleadings
referred to G Section, Botshabelo.
(vi) The
respondent was unable to provide any documentary proof that he sold
liquor to Mofokeng in the amount of R137 000,00 within
a matter of
days, despite the fact that he was challenged in cross-examination to
do so. He could at least have provided documentary
proof of the fact
that he had purchased stock in excess of that amount prior to 21 may
1999.
Regarding Motaung’s
evidence, Mr. Phalatsi was invited to refer the court to any
unsatisfactory aspects or contradictions in his
evidence, but was
unable to do so. In the light of the aforementioned unsatisfactory
aspects in the respondent’s evidence, the
court
a
quo
erred to my mind in accepting the evidence of respondent.
The versions of Motaung
and the respondent are mutually destructive, as to whether the
respondent spoke to Motaung regarding the cheque
in the amount of R89
000,00. In
NATIONAL
EMPLOYERS MUTUAL GENERAL INSURANCE ASSOCIATION v GANY
1931 AD 187
at 199, Wessels JA correctly, with respect, set out how
such a situation is to be resolved:
“
Where there are two stories
mutually destructive, before the
onus
is discharged, the Court must be satisfied that the story of the
litigant upon whom the
onus
rests is true and the other false. It is not enough to say that the
story told by Clark is not satisfactory in every respect. It
must be
clear to the Court of first instance that the version of the litigant
upon which the
onus
rests is the true version, and that in this case absolute reliance
can be placed upon the story as told by A. Gany ...”
In casu
it cannot be said that the version of the respondent, on whom the
onus rests, is the true version and that absolute reliance can
be
placed on his story. It follows in my view therefore that the appeal
should succeed.
The
following order is made:
1. The appeal is upheld
with costs, and the judgment of the court
a
quo
is
ordered to read:
1.1 In the main claim,
judgment is granted in the amount of R48 000,00 together with
interest on the amount of R48 000,00
tempore
morae
at
the rate of 15,5% per annum as well as costs of suit;
In the counterclaim,
absolution from the instance is granted with costs.
_______________
A.P. BECKLEY, J
I agree.
____________
VAN ZYL, J
On
behalf of appellant:
On
behalf of respondent:
/sp