Court name
Bulawayo High Court
Case number
XREF HC 2223 of 2001
HC 2223 of 2001

Knight and Anor v Standard Chartered Bank (XREF HC 2223 of 2001, HC 2223 of 2001) [2002] ZWBHC 123 (16 October 2002);

Law report citations
Media neutral citation
[2002] ZWBHC 123

                                                                                    Judgment No. HB 123/2002

                                                                                    Case No. HC 2844/2001

                                                                                    X-ref HC 2223/2001

 

 

JOHN ANTHONY KNIGHT                                  1st Applicant

 

And

 

OZLEWELL INVESTMENTS (PVT) LTD         2ND Applicant

 

Versus

 

STANDARD CHARTERED BANK                     Respondent

 

IN THE HIGH COURT OF ZIMBABWE

CHIWESHE J

BULAWAYO 26 JULY & 17 OCTOBER 2002

 

Adv. P Nhererefor the applicants

Mellinfor the respondent

 

Application for Summary Judgment

 

            CHIWESHE J:          Both first and second plaintiffs were customers of the

 

Fife Street Branch of the defendant in Bulawayo, where each operated a current

 

banking account.

 

            During the period extending from 10 January 2000 to 22 February 2001 the

 

defendant bank on diverse occasions paid and debited to the current account of the

 

first plaintiff cheques totalling $984 990,93.  The first plaintiff avers that the

 

signature on each of these cheques had been forged by one Thandiwe Makalima, who

 

was not an authorised signatory on that account.

 

            Further during the period extending from 8 April 2000 to 9 October 2000 the

 

defendant bank paid and debited to the current account of second plaintiff on three

 

occasions cheques totalling $16 800,00.  The second plaintiff avers that the signatures

 

on each of these cheques had been forged by one Thandiwe Makalima who was not

 

an authorised signatory on that account.

 

                                                                                                            HB 123/02                                                                  -2-

 

            The plaintiffs issued summons against the defendant bank in order to recover

 

these sums of money on the basis that as the cheques so paid out and debited to their

 

respective accounts were forged, the defendant bank had no mandate to debit these

 

accounts for the amount of such cheques and is accordingly obligated in law to

 

reimburse the plaintiffs the amount of such debit.  The defendant bank has entered

 

appearance to defend both claims.  In response the plaintiffs filed an application for

 

summary judgment on the grounds that the defendant bank does not have a bona fide

 

defence to their claims and that it has entered appearance to defend solely for the

 

purpose of delaying the conclusion of the matter.  In this regard the applicants relied

 

on the founding affidavit of one Oliver Knight who is a director of the second

 

applicant and holder of a general power of attorney to manage the affairs of first

 

applicant.  The facts to which he deposed are within his personal knowledge as he was

 

personally involved in the compilation of the financial data relating to this case.  His

 

locus standi in respect of second applicant has been challenged in limine on the

 

grounds that he is not a director of the second applicant.  The objection in limine has

 

no merit given the existence of the power of attorney as well as the fact that the

 

deponent has personal knowledge of the facts giving rise to this action.  It must be

 

dismissed.

 

            In opposing the application the respondent relies on the affidavit of its

 

manager, fraud/risk cards, one Lionel Peters.  The respondent concedes that the

 

applicants are its customers at its Fife Street Branch, Bulawayo and that it paid and

 

debited cheques totalling $984 990,93 and $16 800,00 respectively.  The respondent

 

argues that the authentic signatories to the accounts have not filed affidavits

 

 

                                                                                                            HB123/02

                                                            -3-

 

confirming that indeed the signatures complained of are not theirs and were therefore

 

forgeries.  Neither has it been established by way of affidavit or otherwise whether

 

Thandiwe Makalima admitted the forgery or whether she is merely assumed to have

 

forged the signatures.  The respondent also relied on the preliminary report from Mr L

 

T Nhari, a questioned document expert.  In it Mr Nhari is of the view that not all the

 

signatures are forged and that at least cheques to the value of $191 326,95 bear

 

authentic signatures.

 

            Respondent intends to obtain a further report from Mr Nhari and needs more

 

time to pursue this part of his internal investigation.  For that reason respondent

 

makes no admissions at this stage.  The respondent also contends that the applicants

 

may have been contributorily negligent as shown by the delay on their part in

 

detecting the fraud.  That delay would tend to suggest applicants’ audit control system

 

is weak.  There is also a possibility that the authentic signatories who at the time were

 

out of the country could have signed blank cheques for use during their absence. 

 

Whilst conceding that applicants would not normally be liable for a forged cheque the

 

respondent argues that the bank’s liability is not absolute, particularly where it can be

 

shown that the client caused it to pay the amount on the cheque or misled the bank by

 

his conduct.

 

            Does the respondent bank’s opposing affidavit disclose any good bona fide

 

defence?  In Jena v Nechipote 1986 (1) ZLR 29 SC at page 30 GUBBAYJA (as he

 

then was) said:

“All that a defendant has to establish in order to succeed in having an application for summary judgment dismissed is that there is a mere possibility of success, he has a plausible case, there is a triable issue or there is a reasonable possibility that an injustice may be done if summary judgment is granted.”

           

                                                                                                            HB123/02

                                                            -4-

 

            It appears to me generally speaking that an application of this nature cannot

 

succeed where the respondent has revealed a prima facie defence.  An application

 

such as this is by its very nature drastic.  It can only be granted when the defences

 

proffered by the respondent are clearly unarguable.

 

            The thrust of the respondent’s defence is that these cheques or at least a good

 

number of them were not forged.  This defence is not far fetched.  An expert’s report

 

is relied upon in this regard.  It is intended to put the cheques under further scrutiny in

 

order to establish this fact.  The evidence in this regard is technical and involving.  In

 

the same vein the signatories of the two accounts have not filed affidavits denying the

 

authenticity of the signatures on the cheques.  The factual basis upon which it is

 

alleged that Thandiwe Makalima forged the cheques has not been established.

 

            In my view the respondent has established a prima facie defence.  The

 

question raised, whether the signature on the cheques were in fact forged is a triable

 

issue and one that is central to the applicant’s case.  The respondent must be given the

 

opportunity to conduct its defence.  A point of law has also been raised which

 

deserves attention, that is, whether the liability of the bank in cases where the client

 

has by word or conduct contributed to the resultant fraud, should remain strict and

 

absolute.

 

            I am satisfied that it would not be in the interest of justice to grant this

 

application.  Accordingly it is ordered as follows:

 

            The application is dismissed and leave is granted to the respondent to defend

 

the action.  The costs of this application shall be met by the applicants.

 

 

Lazarus & Sarifapplicants’ legal practitioners

Ben Baron & Partnersrespondent’s legal practitioners