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[2001] ZASCA 123
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Van Hulsteyns Attorneys v Government RSA and Another (506/99) [2001] ZASCA 123; [2002] 3 All SA 64 (A); 2002 (2) SA 295 (SCA) (19 November 2001)
Reportable
THE SUPREME COURT OF APPEAL
OF SOUTH AFRICA
Case no: 506/1999
In the matter between
VAN HULSTEYNS ATTORNEYS APPELLANT
and
THE GOVERNMENT OF THE REPUBLICOF SOUTH AFRICA FIRST
RESPONDENT
FIRST NATIONAL BANK OF
SOUTHERN
AFRICA LTD SECOND
RESPONDENT
CORAM:
HEFER ACJ, NIENABER, SCHUTZ,
CAMERON JJA, BRAND AJA
HEARD:
8 November
2001
DELIVERED:
19 November
2001
Stolen cheque - posssession through a collecting bank
for purposes of liability in terms of sec 81 of the Bills of Exchange Act.
JUDGMENT
HEFER ACJ
[1]
Section 81 of the Bills of Exchange Act 34 of 1964 entitles
the true owner of a crossed cheque marked “not negotiable”
which is
stolen or lost and subsequently paid by the bank upon which it is drawn to
recover any loss he may have suffered from any
person who possessed the cheque
after the theft or loss and either gave consideration for it or took it as a
donee.
[2]
The present case relates to a cheque drawn on 11
October 1994 by the Department of Customs and Excise in favour of OTK
(Kooperatief)
Beperk (“OTK”) or order. It was
crossed and
marked “not negotiable”
and posted to OTK but stolen
en
route.
The appellant is a firm of attorneys practising in Johannesburg. On
28 October 1994, in a manner that will presently be described,
the stolen
cheque found its way into the appellant’s trust bank account at the second
respondent’s Sandton City branch.
The account was credited with the amount
in question and the cheque was subsequently presented for payment and paid by
the drawee
bank.
[3]
After discovering what had happened the first
respondent instituted action in the Transvaal Provincial Division of the High
Court
for the recovery of the loss it had allegedly suffered. Its main claim was
against the appellant and based on the provisions of
s 81. To this was added an
alternative delictual claim against the second respondent as collecting bank.
Eventually, in a judgment
reported as
Government of the Republic of South
Africa v Van Hulsteyns Attorneys & Another
[1999] 2 All SA 29
(T), Le
Roux J upheld the claim against the appellant and dismissed the claim against
the second respondent . With the necessary
leave the appellant has now
appealed to this court.
[4]
There is no need to examine the
requirements for a successful invocation of s 81 because the appellant has made
a number of admissions
so that the single question remaining for decision is
whether the appellant possessed the stolen cheque as envisaged in s 81. Since
counsel are largely agreed on the applicable law and the facts are also common
cause the dispute is about the application of the
law to the
facts.
[5]
On 14 October 1994 Mr Carl Boden, a partner in the
appellant firm, received a telephone call from a person who introduced himself
as Roy Laasen. (I will refer to this person as Laasen although it is not known
whether that was indeed his name). Laasen professed
to be a Zimbabwean
businessman who intended investing in South Africa and wished to engage the
appellant as his attorneys. He intimated
that the firm would
inter alia
be required to channel funds through its trust account to certain nominated
recipients. Boden agreed but told Laasen that he would
require written
instructions and that nothing would be paid from the trust account until the
incoming funds had been cleared.
Thereafter Boden had several further
telephone discussions with Laasen. On 20 October 1994, when the latter informed
him that funds
would soon become available to be deposited, he gave Laasen the
number of the firm’s trust bank account. Later the same day
Laasen sent
him a fax containing particulars of an account with a bank in Durban into which
he was required to pay the funds.
On a date, probably between 28 October
and 2 November 1994, Laasen informed Boden that a deposit had been made and
gave him the
amount thereof. Upon checking with the second respondent Boden
learnt that a cheque issued by Customs and Excise had indeed been
deposited. He
telephoned Laasen, confirmed the deposit and promised to make payment into the
designated Durban account once the cheque
had been cleared. On 8 November 1994,
having allowed what he regarded as a reasonable time for clearance, Boden paid
the full amount
deposited less his fee into the designated account. During
December 1994 he was informed that the Customs and Excise cheque had
been
stolen. He tried to telephone Laasen but found that the Zimbabwean number he had
used in the past was no longer functioning.
Investigations after the
discovery of the theft revealed that the stolen cheque was not deposited in the
conventional manner. The
second respondent did discover a deposit slip
purporting to reflect the deposit of the cheque to the appellant’s account
on
28 October 1994; but what purported to be bank stamps on the slip were
forgeries and it became clear that the slip could not have
passed through a
teller’s hands. There is only one feasible explanation: cheques and
deposit slips received by the tellers
after passing scrutiny were collected in
courier bags and conveyed in batches to the bank’s Centralized Bookkeeping
Centre
(the “CBC”) for processing. The stolen cheque and deposit
slip must have been placed surreptitiously into one of these
bags and conveyed
to the CBC where the cheque was credited to the appellant’s
account.
[6]
In order to decide whether the appellant, on these
facts, possessed the cheque as contemplated in s 81, two observations are called
for.
(a) The liability for the true owner’s loss attaches in terms of s 81(1)
to persons who were in actual possession of the cheque
after its theft or loss
and is extended in ss (2) to persons who are deemed in certain circumstances to
have been in possession thereof.
Because it is trite that a statute must as far
as possible be construed in accordance with the common law and there is no
indication
in the provision or any other relevant part of the Act that this is
not how ss (1) should be construed, it may safely be accepted
that the possessor
envisaged therein is the possessor in terms of the common law concept of
possession.
(b) From this it follows that full effect must be given in the application of ss
(1) to the recognition at common law of mediate
possession. The
appellant’s counsel was accordingly quite correct in accepting that a bank
holding a cheque for collection
only, does not possess it for purposes of s 81
(since the mental element of common law possession is lacking); but that the
customer
on whose behalf it is to be collected, does. (
Barlow Motors
Investments Ltd v Smart
1993(1) SA 347 (W);
Malan and Pretorius
:
“Holders, Collecting Banks and Payment”
1993 TSAR
456).
[7]
The only ground advanced by the
appellant’s counsel for submitting that his client did not possess the
cheque as envisaged in
s 81(1) is the irregular manner in which it was
introduced into the second respondent’s system. The deviation from the
normal
procedure was so gross, he argued, that the second respondent’s
officials cannot be said to have intended to hold the cheque
for the appellant.
[8]
I do not agree. The second respondent’s officials at
the CBC must have seen the deposit slip for it was plainly on the strength
of
it that the appellant’s account was credited. And, having seen the
deposit slip and having been unaware of any irregularity
or of any other person
who might have been involved, the intention could only have been to hold the
cheque for the person reflected
in the slip as the depositee. Moreover, the
second respondent’s officials presented the cheque for payment. Since the
appellant’s
account had already been credited with the proceeds the
intention could only have been to present it on the latter’s behalf.
The
conclusion is unavoidable that second respondent held the cheque for the
appellant and that the latter was accordingly in mediate
possession thereof.
[9]
The appeal must accordingly be dismissed. But before I make
an order to that effect two further matters have to be mentioned. Both
relate
to costs.
(a) The first respondent was represented in the appeal by senior and junior
counsel but the appellant’s counsel submitted
that the fees of two
counsel should not be allowed. In my judgment the employment of two counsel was
perfectly reasonable bearing
in mind the amount involved and the importance of
the matter to all the parties.
(i) After receipt of the summons the second respondent served a third party
notice on the appellant claiming a declaration that the
latter was liable to
indemnify the second respondent against any amount that it might be ordered to
pay to the first respondent.
When the first respondent’s claim against
the second respondent was dismissed the entire third party procedure became
redundant
and the only order that the trial judge made in that regard was to
direct the second respondent to pay the costs of the third party
notice.
(ii) After the appellant had obtained leave to appeal the respondents by
agreement obtained an order granting the first respondent
leave to appeal
against the dismissal of its claim against the second respondent, and granting
the latter leave to appeal against
“that portion of the judgment whereby
judgment in favour of [the second respondent] against the third party is refused
with
costs.” The second respondent soon had second thoughts and abandoned
its appeal. The first respondent on its part failed to
file a notice of appeal
and was compelled to submit an application for condonation. This placed the
second respondent in an invidious
position in view of the possibility that the
appellant’s appeal might succeed. It accordingly (1) decided to oppose
the appellant’s
appeal; (2) filed papers opposing first
respondent’s application for condonation and requesting (as a conditional
counter-application)
that the matter be remitted to the trial court in the
event of the application for condonation and the appellant’s appeal
both
succeeding and (3) eventually appeared through counsel at the hearing of the
appeal. The second respondent’s counsel
addressed us on the allocation of
costs between the respondents
inter se
but declined to present argument
on the merits of the appellant’s appeal.
(iii) Since the appellant’s appeal must fail no order is required on the
application for condonation and the counter-application.
But there remains the
costs relating to both applications and to the second respondent’s costs
of appeal.
(iv) It is perfectly clear that the
second respondent’s actions were brought about by the first
respondent’s application
for condonation. It will only be reasonable to
direct the latter to pay the attendant costs.
[10]
For these reasons the following order is made:
The appeal is dismissed with costs including the costs of two counsel.
The first respondent is directed to the pay the appellant’s and the second
respondent’s costs relating to the application
for condonation and the
second respondent’s costs of appeal including the costs of the
counter-application.
JJF HEFER
Concur:
Nienaber
JA
Schutz JA
Cameron JA
Brand
AJA