The court ordered a client who received a payment in error must pay it back.
BANK transfers made in error are not gifts which can be spent, a judge once again reminded clients who suddenly receive unaccounted money in their accounts.
In a case before the Northern Cape High Court, sitting in Kimberley, First Rand Bank approached the court for an order that one of its clients, who holds an academic doctorate degree, pay an amount of R935 949.83 back to the bank.
The court was told that in August 2020, the bank’s representative, who is a private client banker, telephonically contacted the client, on a recorded call, to advise him about a more beneficial investment product in the form of a Money Maximiser.
This was said to accumulate more interest than the Money-On-Call account.
The respondent (the client) was the treasurer of a trust and he was also a client of the same bank holding various accounts in his personal capacity.
By virtue of being a joint administrator on the trust’s account, the trust’s Money-On-Call account was linked to the respondent’s personal profile as a joint cheque holder.
The respondent authorised the bank official to proceed with the investment product. A balance of R962,449.83 was transferred into the respondent’s personal cheque account and later an amount of R962,149.00 from the respondent’s personal cheque account into the new Money Maximiser account.
The bank said that when the official effected the transfer of the R962,449.83 from the Trust’s account to the respondent’s Money Maximiser account, it was made in error.
The respondent, however, used the funds held in the Money Maximiser account until only R5,911.52 was left.
The bank maintained that the respondent was neither legally nor factually entitled to withdraw, use, or disburse the funds.
The respondent admitted receiving the money and confessed to having used the funds mainly for the renovation of his home.
He, however, contended that the impression he gained was that the money was made available to him by the bank as a revolving credit or loan facility.
The bank, meanwhile, concluded a settlement with the trust and offered to pay R987,769.76 in full and final settlement of any claims that the trust may have against the bank emanating from the erroneous payment of the money into the wrong bank account.
The respondent does not deny receiving the amount of R935,949.83 in his personal bank account, but explained that he thought the bank had given him “a sort of revolving credit facility”.
While he had already spent the money, he accepted that he would have to repay the bank the money as he knew it was not a gift.
He wanted to repay R6,000 a month, which the bank did not accept.
The court said the respondent knew where the money came from as he had earlier had a discussion with the bank official, thus he could not have assumed it was as a result of some revolving credit.
“From the foregoing, there can be no doubt that enrichment took place at the expense of the applicant (the bank). The respondent received and used the money that was deposited into his bank account well knowing that it was not due to him. There is no justification for his use of the transferred amount,” the court said in ordering the client to reimburse the bank.
Cape A