112. Flexi Fuel Logistics (Pty) Ltd v Nedbank Ltd [2023] ZAGPJHC 586 (Moorcroft AJ)

Double payment of debt—first payment accruing to benefit of creditor—creditor’s 
account in deficit—amount of deficit reduced by the payment through set-off—no claim in unjust enrichment against bank

Over many years, Flexifuel purchased fuel from Y&N and paid on Y&N’s invoices by transferring funds from its own bank account to Y&N’s Nedbank account. Around 2019, Y&N furnished the applicant with new bank account details at FNB. While Y&N sometimes requested payment into its Nedbank account, most payments were made into the FNB account. In 2022, in the process of settling two invoices reflecting the FNB bank account as the account for payment, the responsible functionary at Flexifuel inadvertently transferred the amount of the invoices (R1,117,649.60) to Y&N’s Nedbank account. When informed of the mistake by a Director of Y&N, the functionary immediately logged back in and made a further payment of R1,117,649.60 into Y&N’s FNB account, thus paying the debt twice. Flexifuel sued Nedbank for the return of that amount in the Gauteng Division of the High Court at Johannesburg, alleging that Nedbank has no lawful basis to retain the funds and had been unjustly enriched in that amount.

Decision: Flexifuel’s claim for the repayment was dismissed.

Held: When an electronic transfer is made into a bank account, as a result of the South African law treating electronic funds in the same way as physical money, the bank becomes owner of the money represented by the transfer through commixtio: see Trustees, Estate Whitehead v Dumas 2013 (3) SA 331 (SCA), [13]. When this happens, the depositor has no right to the money and cannot reclaim the money with the rei vindicatio and the depositee acquires a personal right against the bank in respect of those funds in terms of the banker-client contract. Since in this case the account was overdrawn to an extent greater than the amount transferred, Y&N’s indebtedness to Nedbank was reduced by that amount through set-off (ibid, [6.2–6.6])

Comment: Flexifuel made a double payment of due debt to Y&N. Although it did not make the first payment into the account designated by Y&N, there can be no question that that payment was owed and that Y&N was therefore entitled to the payment. Through the