Govender v Standard Bank of South Africa Limited 1984 (4) SA 392 (C)

 Govender v Standard Bank of South Africa Limited 1984 (4) SA 392 (C)

Issue:Whether a bank that mistakenly pays a cheque after the drawer has countermanded payment can recover the amount paid from the payee.

Facts:

Standard Bank of South Africa Limited (Standard Bank) was a commercial bank in South Africa. In 1982, Govender, a customer of Standard Bank, drew a cheque for R20,000 in favor of a third party. The cheque was stolen from Govender's office and presented for payment at a Standard Bank branch.

Despite the fact that Govender had countermanded payment on the cheque before it was presented for payment, Standard Bank mistakenly paid the cheque into the account of the person who presented it. Govender then demanded that Standard Bank repay the amount of the cheque.

Standard Bank refused to repay the amount, arguing that it was not liable for the consequences of its mistake. The bank claimed that it had paid the cheque in good faith and that it was not aware that the cheque had been stolen or that payment had been countermanded.

Held:

The Court held that Standard Bank was entitled to recover the amount of the cheque from Govender. The Court reasoned that Govender had been unjustly enriched as a result of the payment of the cheque.

The court also found that Govender had not changed its position in reliance on the payment of the cheque.

Key Facts:

• A bank mistakenly paid out a cheque after the drawer had countermanded payment.
• The drawer demanded that the bank repay the amount of the cheque.
• The bank refused to repay the amount, arguing that it was not liable for the consequences of its mistake.

Reasons:

• The Court held that the bank was entitled to recover the amount of the cheque from the drawer.
• The Court reasoned that the drawer had been unjustly enriched as a result of the payment of the cheque.
• The court also found that the drawer had not changed its position in reliance on the payment of the cheque.

Conclusion:

The Court's decision in Govender v Standard Bank of South Africa Limited 1984 (4) SA 392 (C) is a significant case in South African law. The Court's decision clarified the law relating to the rights of banks that mistakenly pay out cheques after the drawer has countermanded payment.