McCarthy Ltd v ABSA Bank Ltd (511/08) [2009] ZASCA 118; 2010 (2) SA 321 (SCA) ; [2010] 1 All SA 435 (SCA) (25 September 2009)

McCarthy Ltd v ABSA Bank Ltd (511/08) [2009] ZASCA 118; 2010 (2) SA 321 (SCA) ; [2010] 1 All SA 435 (SCA) (25 September 2009)

The Supreme Court of Appeal held that the trial court misdirected itself by focusing on whether the bank was contractually bound to avoid negligence in its collecting function, rather than considering whether the bank was negligent in paying the cheques. The appellant's claim was properly construed as alleging breach of the mandate to exercise reasonable care when paying cheques. The evidence presented was sufficient for a reasonable court to find that ABSA ought to have made further enquiry before paying the cheques, and its failure to do so could be considered negligent. The knowledge acquired by ABSA's employees during the collection process should not be disregarded when assessing...

Citation
[2009] ZASCA 118
Parties
Appellant: McCarthy Limited; Respondent: ABSA Bank Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
25 September 2009
Case Number
511/08
Procedural Posture
Civil Appeal / Appeal Against Absolution From the Instance at Close of Plaintiff's Case
Outcome
Appeal upheld; absolution from the instance refused; costs awarded to appellant including costs of two counsel.
Judges
Nugent, Lewis, Van Heerden, Leach, Tshiqi
Legal Topics
Negligent Payment of Cheques, Banker Customer Relationship, Implied Terms of Contract, Standard of Care, Absolution From the Instance, Causation of Loss
Banking and Finance Civil Procedure Delict Negligent Payment of Cheques Banker Customer Relationship Implied Terms of Contract Standard of Care Absolution From the Instance +1 more

Case Brief

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Parties

McCarthy Limited

Appellant

ABSA Bank Limited

Respondent

Procedural Posture

Civil Appeal / Appeal Against Absolution From the Instance at Close of Plaintiff's Case

Legal Issues

  1. 1 Whether the bank owed a contractual duty to exercise reasonable care when paying cheques drawn by its customer.
  2. 2 Whether the bank's knowledge acquired during collection should be attributed to it when paying cheques.
  3. 3 Whether absolution from the instance was correctly granted at the close of the plaintiff's case.

Ratio Decidendi

The Supreme Court of Appeal held that the trial court misdirected itself by focusing on whether the bank was contractually bound to avoid negligence in its collecting function, rather than considering whether the bank was negligent in paying the cheques. The appellant's claim was properly construed as alleging breach of the mandate to exercise reasonable care when paying cheques. The evidence presented was sufficient for a reasonable court to find that ABSA ought to have made further enquiry before paying the cheques, and its failure to do so could be considered negligent. The knowledge acquired by ABSA's employees during the collection process should not be disregarded when assessing...

Court Disposition

Appeal upheld; absolution from the instance refused; costs awarded to appellant including costs of two counsel.

Orders

  • The appeal is upheld with costs, including the costs of two counsel.
  • The order of the court below is set aside.