Indac Electronics (Pty) Ltd. v Volkskas Bank Ltd. (173/90) [1991] ZASCA 190; 1992 (1) SA 783 (AD); [1992] 1 All SA 411 (A) (29 November 1991)

Indac Electronics (Pty) Ltd. v Volkskas Bank Ltd. (173/90) [1991] ZASCA 190; 1992 (1) SA 783 (AD); [1992] 1 All SA 411 (A) (29 November 1991)

The Supreme Court of Appeal held that the prior South African authorities denying Aquilian liability for collecting bankers acting negligently can no longer be regarded as binding in light of subsequent developments in the law. The Court recognised that Aquilian liability for pure economic loss caused by negligent conduct is now established in South African law. The Court found that, in principle, a collecting banker may owe a legal duty to the true owner of a cheque to avoid causing loss by negligently dealing with the cheque, provided all elements of Aquilian liability are met, including wrongfulness. The Court emphasised that the determination of a legal duty involves a value judgment...

Citation
[1991] ZASCA 190
Parties
Appellant: Indac Electronics (Pty) Ltd.; Respondent: Volkskas Bank Ltd.
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
29 November 1991
Case Number
173/90
Procedural Posture
Civil Appeal / Appeal Against Exception Upheld in the Court a Quo; Appellate Review of Delictual Claim for Damages
Outcome
Appeal upheld; exception dismissed with costs.
Judges
Vivier JA, Joubert JA, Hefer JA, Goldstone JA, Van den Heever JA
Legal Topics
Lex Aquilia, Pure Economic Loss, Duty of Care, Collecting Bankers Liability, Negligence, Unlawfulness
Delict Banking and Finance Civil Procedure Lex Aquilia Pure Economic Loss Duty of Care Collecting Bankers Liability Negligence +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 21 Party arguments 2 Amounts and remedies 1
Sign in to unlock

Parties

Indac Electronics (Pty) Ltd.

Appellant

Volkskas Bank Ltd.

Respondent

Procedural Posture

Civil Appeal / Appeal Against Exception Upheld in the Court a Quo; Appellate Review of Delictual Claim for Damages

Legal Issues

  1. 1 Whether a collecting banker who negligently collects payment of a cheque on behalf of a customer with no title can be held liable under the lex Aquilia for pure economic loss sustained by the true owner of the cheque.
  2. 2 Whether the facts alleged by the plaintiff give rise to a legal duty on the part of the defendant not to act negligently, rendering the conduct unlawful.

Ratio Decidendi

The Supreme Court of Appeal held that the prior South African authorities denying Aquilian liability for collecting bankers acting negligently can no longer be regarded as binding in light of subsequent developments in the law. The Court recognised that Aquilian liability for pure economic loss caused by negligent conduct is now established in South African law. The Court found that, in principle, a collecting banker may owe a legal duty to the true owner of a cheque to avoid causing loss by negligently dealing with the cheque, provided all elements of Aquilian liability are met, including wrongfulness. The Court emphasised that the determination of a legal duty involves a value judgment...

Court Disposition

Appeal upheld; exception dismissed with costs.

Orders

  • The appeal succeeds with costs.
  • The judgment of the court a quo is altered to read: 'The exception is dismissed with costs.'