Louis Case Reports

ATTORNEY PAYS FRAUDSTER AFTER FAKE EMAIL   

PRACTITIONER – Conveyancer – Mandate – Payment of proceeds of sale – Fraudster intercepting emails – Attorney paying into wrong account and money stolen – Attorney breaching mandate and liable for payment – Insufficient evidence to find wrongfulness or negligence on part of bank.

Hartog v Daly [2023] ZAGPJHC 40 at [69]-[119]

Facts: The appellant is an attorney practising for his own account. The respondents provided him with an oral mandate to act as the conveyancer to transfer their property which they later sold. R100,000 was correctly paid but the balance of some R1,4 million was never received into another account because it was paid into the account of a fraudster who stole the money. The fraudster had intercepted emails and sent the appellant an email to pay the money into the incorrect account.        

Appeal: Against the judgment of the High Court finding the appellant liable to pay the respondents the R1,4 million claimed, plus interest and costs.

Discussion: The telephone calls and emails leading up to the payment; how appellant received an email which appeared to be from the third respondent which had attached a purported account confirmation letter from the bank; that there is no indication that the parties expressly agreed that the bank account particulars would be provided by way of email; and that the appellant relied on a tacit term of the mandate which was allegedly breached by the respondents.

Findings: The allegation regarding the tacit term on the use of emails was bald and unsubstantiated. It was the appellant who invited the respondents to “send” the instructions and bank details. This invitation was done by email and there was a response to this email using the same means. Appellant breached the mandate agreement by not making payment of the proceeds of the sale into the account of third respondent and remains responsible for such payment. Insufficient evidence was placed before the court a quo to find wrongfulness or negligence on the part of Standard Bank to establish a delictual liability in favour of appellant.

Order: The appeal is dismissed with costs.

STRYDOM J (MABESELE J and STRIJDOM AJ concurring.)

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RAF CLAIMS AND CASE MANAGEMENT  

CIVIL PROCEDURE – Judicial case management – Pre-trial conferences – Road Accident Fund matters – Failure to promote the effective disposal of the litigation – Late settlement incurring costs – Failure of Fund to timeously investigate, settle and pay claims – Overworked claims handlers –  Unworkable procedure, policy and system after disposal of Fund’s panel attorneys – Uniform Rules 37 and 37A.

Hlatshwayo v Road Accident Fund [2023] 1741-2019 (MM) at [118]-[227]

Facts: The two cases of Mr Hlatswayo and Mr Masilela separately instituted against the Road Accident Fund were settled on the date of trial or partly settled close to the date of trial.           

Issue: Whether it is appropriate to make a special order as to costs against a party or such party’s attorney, because such party or party’s attorney did not attend a pre-trial conference or failed to a material degree to promote the effective disposal of the litigation.

Discussion: Adverse costs orders for frustrating the judicial case management process of Uniform Rule 37A; the explanation why the claim handlers did not cooperate in having a meaningful pre-trial conference with the plaintiff attorneys and why they did nothing about the judicial case management and why they did not attend court; the procedures that the Fund follows for pre-trial proceedings and judicial management conferences; the letter of Mr Letsoalo to the court “in his personal capacity” (see para [14]); the mandate of the Fund under legislation; the purposes and requirements of the pre-trial conferences and judicial case management; the consequences of failure to comply with the Rules of Court; the late settlements when enormous costs of litigation were already incurred or not preventable; and the evidence of the high work load of the claims handlers.

Findings: The system of the Fund implemented after the disposal of their panel attorneys appeared to be the cause of the problem. The prognostication by the Fund in doing nothing to investigate, settle and pay after lodgement, or at least immediately after service of the summons, results in settlements at the doorstep of trial when costs are already incurred. This seems to be a trend and is in conflict with the main object, powers and functions of the Fund. The buck stops with the CEO as to what happens to the staff and the conditions of their employment. The blame cannot be put on the claims handlers who are faced with imposed unworkable procedure, policy and systems employed by the Fund through the CEO and the Board since June 2020.

Order: The CEO (Mr Letsoalo) and the Board are directed to pay out of their own pockets the costs occasioned by the late settlement in each matter.

LEGODI JP (MPHAHLELE DJP and MASHILE J concurring.)

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“ON THE ROAD” FEES – NCA

CONSUMER – Finance – Vehicle – On-the-road fee – Financial service providers not charging the consumer these fees when included in credit agreements – Dealer imposes the monetary liability – Financier merely finances the principal debt which includes purchase price, extras including on-the-road fee plus other services – National Credit Act 34 of 2005, ss 100, 101, 102.

National Credit Regulator v National Consumer Tribunal [2023] ZAGPPHC 24 at [36]-[45]

Facts: The National Credit Regulator (NCR) issued compliance notices against three vehicle financiers in which they were found to have charged consumers an “on the road, admin fee and handling fee” on credit agreements, which were disguised or inaccurately described as service and delivery fees in credit agreements, in contravention of various sections of the National Credit Act 34 of 2005 (NCA). The financiers approached the National Consumer Tribunal in terms of section 56 of the NCA to have the compliance notices reviewed and set aside. Having adjudicated the matters, the Tribunal issued conflicting decisions in respect of Mercedes, BMW and Volkswagen Financial Services.

Appeal: Four interrelated appeals were consolidated into a single appeal.

Discussion: The submission by the NCR that sections 101(1) and 102(1) contain a closed list of the permissible charges and the on-the-road fee is not contained in the list; the contention that the consumer is aware that the fees are being charged by the dealer and can choose to pay the dealer or have the costs financed; and the concepts of “prohibited charges” and “cost of credit”.

Findings: The financiers have correctly argued that the NCA does not contain any prohibition on what amounts may be financed by the credit provider at the request of the consumer. The financiers have not charged consumers the on-the-road fees when they included these fees and services in the credit agreements. The dealer imposes the monetary liability on the value of the fees and services which it provides to the consumer at the initial stage of the sale process. The financing of the on-the-road fee in credit agreements will enhance accessibility by vulnerable consumers to the credit market. There is no merit in the NCR’s argument that the credit provider had charged consumers on-the-road fees in contravention of the provisions of the NCA.

MALUNGANA AJ (MILLAR J concurring.)

MOSHOANA J dissenting.

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ABOUT THE EDITOR

Louis Podbielski spent ten years at Juta working on various law reports and has read many thousands of judgments for case selection. He has considerable experience in writing flynotes and headnotes, compiling case annotations, and in refining subject indexes.​ During his four years at LexisNexis he was involved with legal data, analytics and in developing various legal tech solutions. He now runs his own case law service Louis Case Law

You can read his full CV and more about Louis on his LinkedIn profile where he shares interesting and recent cases.

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