This blog was co-authored by Dylan Hampton, Candidate Attorney.
In the Ross and Another v Nedbank Limited case, the plaintiffs instituted an action against the defendant bank, for breaching its duty of care owed to the plaintiffs. The delictual claim alleged that the bank negligently allowed the withdrawing of money from a third-party account belonging to a person who had defrauded the plaintiffs after the bank became aware of the fraudulent transactions.
The plaintiffs entered into an agreement of the sale of their immovable property wherein a law firm was the appointed conveyancers to attend to the matter on behalf of the plaintiffs. The plaintiffs received a fraudulent email purporting to be from their attorneys instructing them to make payment into the specified but fraudulent bank account, held with the bank.
The fraud was detected on the day the second payment was made into the fraudulent account. The bank responded by freezing the account of the fraudster. However, the bank then allowed the amounts paid by the plaintiffs into the fraudulent account to be withdrawn and ultimately caused the plaintiffs to suffer a loss.
The bank raised a special plea of non-joinder. The bank argued that because an attorneys firm was appointed as conveyancers of the plaintiffs, they had a legal duty to take reasonable steps to ensure that the email correspondence exchanged between the parties was secure and not compromised. The bank alleged that, because the fraudsters must have intercepted the communication between the plaintiffs and their conveyancers due to the negligence of either one of them, the conveyancers had a legal interest in the matter and should have been joined as the second defendant in the matter.
The court found that, although the plaintiffs could join the conveyancers as a joint wrongdoer in the action, they were not obliged to do so. A plaintiff is not obliged to join parties who may have joint and several liability as co-defendants. The plaintiff is allowed to choose its target. In this matter, the plaintiffs only sought relief from the bank and no other joint wrongdoer.
The court found that the conveyancers had no substantial interest in the matter. Unless the plaintiffs wished to do so, the court could not join the conveyancing attorneys to the matter at the request of the defendant. The bank can claim a contribution using the third-party joinder proceedings available to it.