Mhlari NO and Others v Nedbank Limited (251/2023) [2024] ZASCA 39 (4 April 2024)

Mhlari NO and Others v Nedbank Limited (251/2023) [2024] ZASCA 39 (4 April 2024)

The Supreme Court of Appeal found that the trust lacked the requisite number of trustees when the loan agreement was concluded, rendering the agreement and mortgage bond null and void. Nedbank's alternative claim for unjust enrichment was not prescribed, as it could not reasonably have discovered the trust's incapacity before the appellants raised it in their plea. The facts pleaded brought Nedbank's claim within the ambit of the condictio indebiti, requiring the bank to prove its mistake was reasonable and excusable. The court held that Nedbank's reliance on the trustees' representations and documents was reasonable, and its failure to conduct further due diligence did not amount to...

Citation
[2024] ZASCA 39
Parties
Appellant: Portia Khensani Mhlari NO; Appellant: Patrick Jealousy Malabela NO; Appellant: Portia Khensani Mhlari; Appellant: Patrick Jealousy Malabela; Appellant: Lulama Business Enterprises CC; Appellant: Mampepu Projects CC; Appellant: Patience Lethabo Mlengana NO; Respondent: Nedbank Limited
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
4 April 2024
Case Number
251/2023
Procedural Posture
Civil Appeal / Appeal and Cross Appeal From the Gauteng Division of the High Court, Johannesburg
Outcome
Appeal upheld; cross-appeal upheld with costs; High Court order set aside and replaced with orders for repayment, mortgage bond cancellation, and costs.
Judges
Gorven, Matojane, Coppin, Smith, Keightley
Legal Topics
Unjust Enrichment, Condictio Indebiti, Condictio Sine Causa Specialis, Trustee Capacity, Prescription Act, Mortgage Bond Cancellation
Civil Procedure Commercial and Corporate Unjust Enrichment Condictio Indebiti Condictio Sine Causa Specialis Trustee Capacity Prescription Act Mortgage Bond Cancellation

Case Brief

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Parties

Portia Khensani Mhlari NO

Appellant

Patrick Jealousy Malabela NO

Appellant

Portia Khensani Mhlari

Appellant

Patrick Jealousy Malabela

Appellant

Lulama Business Enterprises CC

Appellant

Mampepu Projects CC

Appellant

Patience Lethabo Mlengana NO

Appellant

Nedbank Limited

Respondent

Procedural Posture

Civil Appeal / Appeal and Cross Appeal From the Gauteng Division of the High Court, Johannesburg

Legal Issues

  1. 1 Whether the trust had the legal capacity to conclude the loan agreement.
  2. 2 Whether Nedbank's alternative claim based on unjust enrichment had prescribed.
  3. 3 Whether Nedbank's mistake in paying the trust was reasonable and excusable under the condictio indebiti.

Ratio Decidendi

The Supreme Court of Appeal found that the trust lacked the requisite number of trustees when the loan agreement was concluded, rendering the agreement and mortgage bond null and void. Nedbank's alternative claim for unjust enrichment was not prescribed, as it could not reasonably have discovered the trust's incapacity before the appellants raised it in their plea. The facts pleaded brought Nedbank's claim within the ambit of the condictio indebiti, requiring the bank to prove its mistake was reasonable and excusable. The court held that Nedbank's reliance on the trustees' representations and documents was reasonable, and its failure to conduct further due diligence did not amount to...

Court Disposition

Appeal upheld; cross-appeal upheld with costs; High Court order set aside and replaced with orders for repayment, mortgage bond cancellation, and costs.

Orders

  • The trustees of the Patrick Malabela Family Trust are ordered to pay the amount of R5,436,347.57 to Nedbank, together with mora interest from 12 September 2019 to date of final payment.
  • Nedbank is directed to take necessary steps for cancellation of the covering mortgage bond registered with the Registrar of Deeds, Pretoria, registration number B2260/2023.