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.
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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
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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.”
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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