Concor Construction (Cape) (Pty) Ltd v Santambank Ltd 1993 (3) SA 930 (A)

Concor Construction (Cape) (Pty) Ltd v Santambank Ltd 1993 (3) SA 930 (A)

Issue: Whether a bank is liable for the delictual act of its employee committed in the course of their employment, even if the bank did not authorize or ratify the employee's actions.

Facts:

Concor Construction (Cape) (Pty) Ltd (Concor) was a construction company. Santambank Ltd (Santambank) was Concor's banker.

Concor's accountant, who was also a signatory to Concor's bank account, defrauded Concor by transferring money from Concor's bank account to his own bank account. The accountant used the money to pay off his personal debts.

Concor sued Santambank for damages, alleging that Santambank was vicariously liable for the accountant's actions. Santambank argued that it was not vicariously liable for the accountant's actions because it had not authorized or ratified the accountant's actions.

Key Facts:

• Concor was a construction company.
• Santambank was Concor's banker.
• Concor's accountant defrauded Concor by transferring money from Concor's bank account to his own bank account.
• The accountant used the money to pay off his personal debts.
• Concor sued Santambank for damages, alleging that Santambank was vicariously liable for the accountant's actions.
• Santambank argued that it was not vicariously liable for the accountant's actions because it had not authorized or ratified the accountant's actions.

Court's Decision:

The Appellate Division of the Supreme Court of South Africa (AD) held that Santambank was vicariously liable for the accountant's actions. The AD reasoned that a bank is vicariously liable for the delictual acts of its employees committed in the course of their employment, even if the bank did not authorize or ratify the employee's actions.

The AD also reasoned that it would be unfair to Concor if Santambank was not held vicariously liable for the accountant's actions. The AD found that Concor had entrusted Santambank with its money and that Santambank had a duty to protect Concor's money from fraud.

Application of the Law to the Facts of the Case:

The AD applied the law to the facts of the case and found that Santambank was vicariously liable for the accountant's actions. The AD ordered Santambank to pay damages to Concor.

Conclusion:

The AD's decision in Concor Construction (Cape) (Pty) Ltd v Santambank Ltd 1993 (3) SA 930 (A) is a significant case because it clarifies the law relating to the vicarious liability of banks for the delictual acts of their employees. The decision emphasizes that a bank is vicariously liable for the delictual acts of its employees committed in the course of their employment, even if the bank did not authorize or ratify the employee's actions.

The decision also provides guidance to banks and their customers on their rights and obligations. Banks should be aware that they may be vicariously liable for the delictual acts of their employees committed in the course of their employment. Customers of banks should be aware that they may be able to recover damages from a bank if they suffer losses as a result of the delictual acts of the bank's employees.