Absa Bank Ltd. v Standard Bank of SA Ltd. (578/95) [1997] ZASCA 71; 1998 (1) SA 242 (SCA); [1997] 4 All SA 673 (A); (14 September 1997)

Absa Bank Ltd. v Standard Bank of SA Ltd. (578/95) [1997] ZASCA 71; 1998 (1) SA 242 (SCA); [1997] 4 All SA 673 (A); (14 September 1997)

The Supreme Court of Appeal held that the appellant was enriched by the respondent's payment of R150,000 on a forged cheque, to the extent that Horn's overdraft was reduced. The provisional credit to Horn's account never became final, as the forgery was discovered during the clearing period and the account was frozen. The appellant failed to prove that Horn's debt was extinguished, and the argument that payment was made to the appellant as agent for Horn was rejected. Set-off did not apply, as the payment simply reduced the overdraft. The appeal was dismissed, confirming the High Court's award to the respondent.

Citation
[1997] ZASCA 71
Parties
Appellant: Absa Bank Ltd.; Respondent: Standard Bank of SA Ltd.
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
14 September 1997
Case Number
578/95
Procedural Posture
Civil Appeal / Appeal From High Court Judgment
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
HJO van Heerden, Mahomed, Eksteen, Nienaber, van Coller
Legal Topics
Unjust Enrichment, Banking Liability, Cheque Fraud, Agency Relationship
Commercial and Corporate Civil Procedure Unjust Enrichment Banking Liability Cheque Fraud Agency Relationship

Case Brief

Summary, issues, holding and outcome

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Parties

Absa Bank Ltd.

Appellant

Standard Bank of SA Ltd.

Respondent

Procedural Posture

Civil Appeal / Appeal From High Court Judgment

Legal Issues

  1. 1 Whether the appellant was unjustly enriched by the respondent's payment of R150,000 on a forged cheque.
  2. 2 Whether the provisional credit to Horn's account became final and extinguished his overdraft.
  3. 3 Whether set-off operated to extinguish Horn's debt to the appellant.

Ratio Decidendi

The Supreme Court of Appeal held that the appellant was enriched by the respondent's payment of R150,000 on a forged cheque, to the extent that Horn's overdraft was reduced. The provisional credit to Horn's account never became final, as the forgery was discovered during the clearing period and the account was frozen. The appellant failed to prove that Horn's debt was extinguished, and the argument that payment was made to the appellant as agent for Horn was rejected. Set-off did not apply, as the payment simply reduced the overdraft. The appeal was dismissed, confirming the High Court's award to the respondent.

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed with costs, including the costs of two counsel.