COLLECTING BANKER'S DUTY OF CARE In a series of recent decisions, our courts have recognised the principle that a collecting

bank does in fact owe a duty of care to the true owner of a cheque, not to act negligently when dealing with the cheque (Indac Electronics (Pty) Ltd v Volkskas Bank Ltd 1992 1 SA 783 (A), Kwamashu Bakery Ltd v Standard Bank of South Africa Limited 1995 1 SA 377 (D)). This does not mean that a collecting bank will automatically be liable in each instance, as its liability is based in delict, and accordingly the requirements for delictual liability must first be met. As bankers are considered to render a professional service, the standard of care to which they will be held, is that of the bonus argentarius, or reasonable banker. Negligence in this context is present if (i) a reasonable banker would have foreseen that his conduct might reasonably cause another to sustain a patrimonial loss, (ii) would have taken reasonable steps to guard against such an occurrence, and (iii) the defendant banker failed to take such steps (Kruger v Coetzee 1966 2 SA 428 (A) 430 E-F). As regards the duty of care imposed on banks when opening accounts for clients, the courts draw a distinction between new and existing clients of the bank. When dealing with new clients, a reasonable banker should not only satisfy himself as to the identity of the new client, but should also gather sufficient information to enable him to establish whether the person is the actual person or entity which he or she purports to be. Whilst bankers should constantly guard against offending potential new clients, the latter should reasonably expect a thorough probe into their financial affairs (see the Kwamashu case above). When dealing with existing clients wishing to open new accounts, the position is somewhat different. In this instance the bank need not repeat the enquiry process unless there are compelling circumstances justifying such enquiry. A bank would be under a duty to make enquiries where it is put on enquiry or where a transaction is out of the ordinary. The bank is not however required to cross-examine the client to determine whether the customer is lying, nor need the bank enquire as to the source of the client's funds in the absence of compelling reasons to do so (Columbus Joint Venture v Absa Bank Ltd 2000 (2) SA 491 (W)). In terms of section 1 of the Apportionment of Damages Act, 1956 (the "Act"), a plaintiff's claim must be reduced in accordance with his own degree of fault. The concept of "fault" within this context has given rise to uncertainty and it is presently unclear whether section 1 is applicable to intentional or negligent conduct. The South African Law Commission has supported the view that "fault" in section 1 of the Act means "negligence", and has made certain recommendations in this regard. Fault does however include vicarious liability. A party may therefore be held strictly liable for the wrongful conduct of an employee or agent committed in the course and scope of the latter's employment or mandate.

Page 2 In terms of section 2 of the Act, persons who are delictually liable to the plaintiff for the same damage, are considered to be joint wrongdoers, and may be sued in the same action by the plaintiff. An employer who becomes vicariously liable for the delict of an employee may therefore be sued together with the employee in the same action. The question whether apportionment can take place where one wrongdoer acts negligently and the other intentionally has been the subject of much debate. Where for example a collecting banker's negligent conduct and a thief's intentional conduct both cause the true owner of a cheque to suffer patrimonial loss, it is uncertain whether they may be treated as joint wrongdoers in terms of section 2 of the Act. Although the court in Lloyd-Gray Lithographers (Pty) Ltd v Nedcor Bank Ltd t/a Nedbank 1998 (2) SA 667 (W) answered this question in the affirmative, the issue is at present far from resolved.