Firstrand Bank Limited v Phalang Business Enterprise CC and Others (3084/2015) [2020] ZAGPPHC 321 (28 May 2020)

REPUBLIC OF SOUTH AFRICA

IN THE HIGH COURT OF SOUTH AFRICA

(NORTH GAUTENG HIGH COURT, PRETORIA)

Case No: 3084/2015

28/5/2020

In the matter between:

Firstrand Bank Limited

Applicant

and

Phalalang Business Enterprise CC

First Respondent

Malebana, Shirley

Second Respondent

Thantsha, Thaboo Emmanuel

Third Respondent

Thalema Trading Enterprise CC

Fourth Respondent

Poopedi, Komotso Licians

Fifth Respondent

Hlogile Trading Enterprise CC

Sixth Respondent

JUDGMENT

Maumela J.

1. This is an application to join the Third to Sixth Respondents as the Third to Sixth Defendants in a case under case number 3084/2015. Initially, none of the respondents delivered an intention to oppose and accordingly this application was set down for hearing on 2 May 2019 in the unopposed motion court. The application is opposed.

BACKGROUND.

2. On the 2nd of May 2019, the application came before Davis J who granted an order,[1] in terms of which the third and Fourth Respondents were joined as the third and fourth defendants in the action under the above case number. In the light of the Fifth and Sixth respondents’ indication of intention to oppose the application, the relief sought against them was postponed and they were afforded an opportunity to file their answering affidavits. The applicant’s prayer for leave to amend its particulars of claim was not expressly dealt with by Davis J.

3. The order by Davis J’s order implies that that portion of the relief sought by the applicant is also postponed. The Fifth and Sixth respondents then delivered their answering affidavit. The Applicant replied to it.THE MATERIAL FACTS AND ALLEGATIONS.

4. The following is not disputed by the and Sixth Respondents:4.1. That during the period of October 2012 to March 2013, an error occurred in the applicant’s internet banking and/or FNB banking app.4.2. When the applicant’s account holders utilised internet banking or the FNB banking app to transfer monies to third party accounts, held at banks (other than FNB), an amount equal to such specified payment, was also simultaneously transferred from the applicant’s own funds.[2]4.3. As such, the intended beneficiary received one payment from the transferor and a second unintended payment from the FNB depository i.e. from the applicant itself.4.4. The First Respondent was a holder of a bank account with the applicant’s FNB division with account number 622 5262 2298.4.5. The Second Respondent was at all times the sole member of the First Respondent.4.6. The First Respondent utilised the applicant’s internet banking and/or FNB banking app.4.7. During the period 5th March 2013 to 14th March 2013, a number of deposits were made into the First Respondent’s aforementioned bank account.4.8. During that same period, (5th March 2013 to 14th March 2013), 230 amounts of R1,500.00 and ten amounts of R500.00 were transferred from the First Respondent’s account to an account held at ABSA Bank under the account number 9281131736 (“the ABSA bank account”).4.9. As a result of the 230 transfers of R1,500.00 each, and ten transfers of R500.00 each, an amount of R350,000.00 was effectively misappropriated from the applicant and deposited into the ABSA bank account.4.10. In light of the above facts, in January 2015, the applicant instituted an application out of the above Court under the case number indicated in paragraph 1 in order to recover the R350,000.00 from the First and/or Second Respondents on the following grounds: (a). the use of the First Respondent’s account in the

aforementioned manner constituted a breach of the applicant’s terms and conditions and in particular

the obligation not to use the account for fraudulent

or unlawful purposes; or (b). the transactions resulted in the First and/or Second

Respondents being unduly enriched at the applicant’s expense; or (c ). the appropriation of the funds was unlawful and in

essence constituted theft.4.11. The First and Second Respondents opposed the application and ultimately in light of disputes raised by them and by agreement between the parties the application was referred to trial.4.12. In terms of the order referring the matter to trial the notice of motion and founding affidavit were to stand as the summons and particulars of claim and the opposing affidavit filed by the First and Second Respondents stand as the plea.4.13. The applicant contends that after the application had been referred to trial, in a reply to a request for further particulars, the First and Second Respondents advised it, (the applicant), that: (a). the ABSA account to which the 230 transfers were made was held by the Third Respondent; and (b). the transfers were effected by the Third Respondent

who “got illegal access to the second defendant’s platform”.4.14. Having ascertained that the Third Respondent was the holder of the ABSA bank account to which the transfers had been made, the applicant was then able to ascertain that: (a). the Third Respondent is the sole member of the Fourth Respondent; and (b). the deposits which had been made into the First Respondent’s bank account and which funded the transfers from the First Respondent’s bank account

to the ABSA bank account (i.e. the Third Respondent’s bank account) emanated from the Fourth Respondent’s bank account.

5. The applicant furthermore ascertained that:(a). the Fifth Respondent, who is employed as a branch consultant at the applicant’s First National Bank branch in Polokwane, is the sole member of the Sixth Respondent;(b). during July 2013 the Fifth Respondent opened a bank account for the sixth respondent at its FNB branch;(c). during the period 17th July 2014 to 1st August 2014, the Third Respondent then transferred an amount of R350,000.00 to a Standard Bank account, utilising the reference “Phalalang Business Enterprise CC”; which is the name of the First Respondent.

6. While all the above facts are either admitted or not denied by the Fifth and Sixth respondents, the two deny that they had any involvement in the scheme itself.LEGAL PRINCIPLES.

7. In terms of Uniform Rule 10(3) several defendants may be sued in one action either jointly, jointly and severally, separately or in the alternative, whenever the question arising between them, or any of them, and the plaintiff, or any of the plaintiffs, depend upon the determination of substantially the same question of law or fact which, if such defendants were sued separately, would arise in each separate action.

8. The test for joinder under Rule 10(1), is: whether or not the right to relief depends upon the determination of substantially the same questions of law or fact and it is therefore not necessary that the party has a direct and substantial interest in the subject matter of the litigation which could be prejudiced by the judgment.

9. The use of the word substantially appears to indicate that the sub-rule is concerned with the essential features to the right to relief which can be claimed. The questions of law and fact must, in the main or in the principal essentials, be essentially the same.

10. The provisions of Rule 10 are not exhaustive. Under the common law, a number of defendants may be joined on grounds of convenience, equity, saving of costs and the avoidance of multiplicity of actions.

11. Having regard to the above facts and the applicant’s intended amended particulars of claim, it is clear that the applicant intends pursuing claims against the First and/or Second and/or Third and/or Fourth and/or Fifth and/or Sixth respondents on the following basis:11.1. They unlawfully and intentionally misappropriated the sum of R350,000.00 from it, (the applicant);11.2. Alternatively, on the basis that they were unduly enriched at the expense of the plaintiff.

12. Given the nature of the claims and the factual matrix the applicant set out above, whether any of the respondents or any combination of the respondents is liable to the applicant in delict will involve a determination and consideration of the following, among others: (a). The circumstances under which the R350,000.00 was misappropriated;(b). If there was indeed a misappropriation, as the applicant believes, then a determination of who was involved in that misappropriation and whether or not they were culpable, meaning, whether or not they acted intentionally; and(c). If there was culpable conduct on the part of any of the respondents whether or not it was the cause of the alleged misappropriation.

13. Concerning claims founded in enrichment, a court will have to consider:(a). Whether or not the applicant was in fact impoverished; and(b). If so, whether the respondents were enriched at the applicant’s expense.

14. These questions have to be considered regardless of whether or not a further separate action is instituted against the Fifth and Sixth respondents. Applicant contends that in the event where a separate action is instituted, it will result in the following: (a). a duplication of costs; and(b). the possibility of different courts making different findings in regard to the same facts.

15. Instances where different courts make different findings regarding the same facts, are demonstrative of lack of uniformity in the application of the law to given facts. They bring the justice system into disrepute and are undesired.

16. The Fifth and Sixth respondents deny any involvement in the alleged misappropriation of the R350,000.00. The court finds that this is irrelevant for purposes of these proceedings. Regardless of whether or not the Fifth and Sixth respondents are joined to these

proceedings or the applicant is forced to enter a separate action against them, the question of their liability will still have to be considered.

17. The Fifth and Sixth dispute that they have any direct and substantial interest in case number 3084/2015. They deny any involvement in the alleged misappropriation of the R350,000.00. They also contend that they are not part of the dispute

between the applicant and the other respondents. However, the Fifth Respondent admits that he is a Director of the Sixth Respondent.

18. However, the applicant contends that during the period 17th July 2014 to 1st August 2014, the Third Respondent then transferred an amount of R350,000.00 to a Standard Bank account, utilising the reference;

“Phalalang Business Enterprise CC” which is the name of the First Respondent. The fifth and the Sixth respondents stand to be affected by what happens to all of the

respindents.

19. The court finds that the issues which arise between the plaintiff and all the respondents turn on essentially the same questions of fact and/or law. In the result, it is convenient and in the interest of justice that the Fifth and Sixth respondents be joined.

20. In the case of Service Commission and Another Cape Bar Council and Another[3], the court held as follows: “[12] It has by now become settled law that the joinder of a party is only required as a matter of necessity – as opposed to a matter of convenience – if a party has a direct and substantial interest which may be affected prejudicially by the judgment of the court in the proceedings concerned.”

21. The court finds that a proper case has been made out for the joinder of the Fifth and Sixth respondents as Fifth and Sixth defendants and for leave to amend.

22. In the result, the following order is made: IT IS ORDERED THAT:22.1. The Fifth and Sixth respondents are joined as the Fifth and Sixth defendants in the action under case number 3084/2015 (“the action”).22.2. The applicant, as plaintiff in the action, is granted leave to amend its claim by replacing the founding affidavit, which currently stands as the particulars of claim, with particulars of claim substantially in accordance with annexure “FN11” of the founding affidavit.22.3. This order and the amended particulars and all notices, affidavits and processes filed of record to date shall be served on the third to sixth respondents within ten days from the date of the order.22.4. The First to Sixth respondents as First to Sixth defendants in the action shall be afforded twenty days from the date of delivery of the amended particulars of claim and other documents as aforesaid in which to deliver an amended plea or plea as the case may be.22.5. The costs of this application shall be paid by the fifth and sixth respondents jointly and/or severally.

T.A. Maumela.Judge of the High Court of South Africa.

[1]

Vol. 2, Court order, p189.

[2]. See Vol 1, FA, para 18.1 at p11 / Vol 2, AA, para 15 at p170.

[3]. (2013) (1) SA 170 (SCA), in paragraph [12].