South Africa Case Law

Absa Bank Ltd v Lombard Insurance Company Ltd, Firstrand Bank Ltd v Lombard Insurance Company Ltd (629/2011, 684/2011)

Absa Bank Ltd v Lombard Insurance Company Ltd, Firstrand Bank Ltd v Lombard Insurance Company Ltd (629/2011, 684/2011) [2012] ZASCA 139; 2012 (6) SA 569 (SCA); [2012] 4 All SA 485 (SCA) (28 September 2012)

Court

Supreme Court of Appeal

Case number

629/2011, 684/2011

Judges

Mthiyane DP, Cloete JA, Malan JA, Pillay JA, Petse JA

The Supreme Court of Appeal held that when stolen funds are paid into a thief's bank accounts and used to discharge overdraft, credit card, and home loan debts, those debts are extinguished. The banks, acting in good faith and without knowledge of the theft at the time of receipt, were entitled to appropriate the funds to settle the debts. The principle of suum recipit applies: a creditor who receives payment of a debt is not enriched, as the payment merely replaces one form of wealth with another. The condictio ob turpem vel iniustam causam does not entitle the owner of the stolen funds to r…

Source excerpt

• Unjustified Enrichment
• Condictio Ob Turpem Vel Iniustam Causam
• Suum Recipit
• Electronic Funds Transfer
• Discharge Of Debt