Absa Bank Limited v Moore and Another (CCT03/16) [2016] ZACC 34; 2017 (1) SA 255 (CC); 2017 (2) BCLR 131 (CC) (21 October 2016)

Absa Bank Limited v Moore and Another (CCT03/16) [2016] ZACC 34; 2017 (1) SA 255 (CC); 2017 (2) BCLR 131 (CC) (21 October 2016)

The Constitutional Court held that the discharge of the Moores' bond debt to Absa Bank was valid and effectual, even though it occurred as part of a fraudulent scheme. South African law allows payment of a debt by a third party without the debtor's knowledge or consent, provided the creditor accepts payment. The fraud did not automatically invalidate the loan agreement under which the bond debt was discharged; it was voidable at the Moores' option, but they did not elect to rescind it. The mortgage bonds, being accessory to the principal debt, were also validly cancelled. The Bank's claim for unjust enrichment failed because there was insufficient evidence that the Moores were enriched at...

Citation
[2016] ZACC 34
Parties
Applicant: Absa Bank Limited; Respondent: Christina Martha Moore; Respondent: Jacques Moore
Court
Constitutional Court
Jurisdiction
South Africa
Judgment Date
21 October 2016
Case Number
CCT03/16
Procedural Posture
Leave to Appeal / Application for Leave to Appeal to the Constitutional Court Following Dismissal of Appeal by the Supreme Court of Appeal
Outcome
Leave to appeal is refused, with costs, including the costs of two counsel.
Judges
Nkabinde, Cameron, Froneman, Jafta, Khampepe, Madlanga, Mbha, Mhlantla, Musi
Legal Topics
Mortgage Bond Cancellation, Unjustified Enrichment, Fraudulent Transfer, Accessory Obligation, Restitution, Property Rights
Land and Property Civil Procedure Commercial and Corporate Mortgage Bond Cancellation Unjustified Enrichment Fraudulent Transfer Accessory Obligation Restitution +1 more

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Parties

Absa Bank Limited

Applicant

Christina Martha Moore

Respondent

Jacques Moore

Respondent

Procedural Posture

Leave to Appeal / Application for Leave to Appeal to the Constitutional Court Following Dismissal of Appeal by the Supreme Court of Appeal

Legal Issues

  1. 1 Whether the cancellation of the Moores' mortgage bonds as part of a fraudulent scheme should be unwound.
  2. 2 Whether the discharge of the Moores' debt to Absa Bank was valid and effectual.
  3. 3 Whether Absa Bank has a proprietary remedy for unjustified enrichment against the Moores.

Ratio Decidendi

The Constitutional Court held that the discharge of the Moores' bond debt to Absa Bank was valid and effectual, even though it occurred as part of a fraudulent scheme. South African law allows payment of a debt by a third party without the debtor's knowledge or consent, provided the creditor accepts payment. The fraud did not automatically invalidate the loan agreement under which the bond debt was discharged; it was voidable at the Moores' option, but they did not elect to rescind it. The mortgage bonds, being accessory to the principal debt, were also validly cancelled. The Bank's claim for unjust enrichment failed because there was insufficient evidence that the Moores were enriched at...

Court Disposition

Leave to appeal is refused, with costs, including the costs of two counsel.

Orders

  • Leave to appeal is refused.
  • The applicant is ordered to pay the costs, including the costs of two counsel.