African Diamond Exporters (Pty) Ltd v Barclays Bank International Ltd 1978 (3) SA 699 (A)

African Diamond Exporters (Pty) Ltd v Barclays Bank International Ltd 1978 (3) SA 699 (A)

Issue: Whether a bank has a right to recover money that it has paid out by mistake.

Facts:

African Diamond Exporters (Pty) Ltd (African Diamond) was a customer of Barclays Bank International Ltd (Barclays). African Diamond had a standing order with Barclays to pay a certain amount of money to a third party every month.

One month, Barclays mistakenly paid the standing order twice. African Diamond did not realize that the payment had been made twice and did not inform Barclays of the error.

A few months later, Barclays discovered the error and demanded that African Diamond repay the money that had been paid out twice. African Diamond refused, arguing that it had not been enriched by the mistake and therefore did not have to repay the money.

Held:

The court held that Barclays had a right to recover the money that it had paid out by mistake. The court reasoned that African Diamond had been enriched by the mistake and was therefore liable to repay the money.

Key Facts:

• A bank made a mistake and paid a customer's standing order twice.
• The customer did not realize that the payment had been made twice and did not inform the bank of the error.
• A few months later, the bank discovered the error and demanded that the customer repay the money that had been paid out twice.
• The customer refused, arguing that it had not been enriched by the mistake and therefore did not have to repay the money.

Reasons:

• The court found that the customer had been enriched by the mistake because it had received money to which it was not entitled.
• The court reasoned that the customer had been able to use the money for its own purposes and that it had therefore been unjustly enriched.
• The court also found that the customer had not been able to show that it had suffered any loss as a result of the mistake.
• The court concluded that the customer was liable to repay the money that it had received by mistake.

Conclusion:

The court's decision in African Diamond Exporters (Pty) Ltd v Barclays Bank International Ltd 1978 (3) SA 699 (A) is a significant case in South African law. The court's decision clarified the law of unjust enrichment and made it clear that a person who has been enriched by a mistake is liable to repay the money that they have received.