when it had paid the insolvent the bank had paid in accordance with a guarantee

When it had paid the insolvent the bank had paid in

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when it had paid the insolvent, the bank had paid in accordance with a guarantee it had issued to the insolvent on 19 June 1986 For the Trustee to succeed with its CI claim, the Trustee had to prove: (a) the amount had been transferred or paid by him or his agent to the bank;
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(b) that such payment had been indebite (i.e. that there had been no legal or natural obligation or any reasonable cause for the payment); and (c) That it had been paid by mistake. RATIO : The Trustee failed on the following requirements : The bank did not make payment under a mistaken belief that the payment was owed. The bank did not act as an agent of the insolvent or Trustee at time of insolvency but rather made payment/transfer based on a guarantee (legal obligation/natural obligation existed) that was issued one year earlier (guarantee). The payment was not indebite, but owed (guarantee). Nkosi v Totalizator Agency Board – (illustrates indebite performance) Facts : Clerk mistakenly thought that the ticket contained all the winning numbers and paid out the dividend due to the winner. Incorrect number mistake discovered, the respondent claimed the amount paid in error. A magistrate had found that the mistake of the clerk was reasonable and entered judgment in respondent's favour. Ratio: that all the elements of the condictio indebiti had been satisfied, that the appeal had to be dismissed with costs.
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If something was due as a natural obligation and it was paid, it could not be recovered but if it is proved that it was undue/indebite as a natural obligation it CAN be recovered by the condictio indebiti. EXPLANATION: The obligation to pay comes into existence as a ticket with correct sequence is presented. BUT the presented ticket did not contain the correct winning sequence. Therefore no natural agreement/obligation (no real debt) and payment was therefore made without it being due and the CI was applicable. Union Goverment v Gowar – (intent and involuntary performance) DURESS: Performance under duress formed a new development in the form of an exception to the error/mistake requirement: In this instance payment was not done in the mistaken belief that it is due BUT payment was made because there was no other way out, well aware that it was not due Underline of exception is that performance was made unwillingly. When debt is paid knowing it is not due = onus rests on the plaintiff to prove that the performance was made under duress or protest. If plaintiff cannot discharge onus, then it is presumed to have been intended and CI will not be applicable. Type of mistake?
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Until 1992 (Willis Faber (A)) it had been held that only a mistake of fact would allow a plaintiff to use the CI. A mistake of law excluded the operation of the CI. In 1992 the Appeal Court brought an end to the distinction error in fact or law in the case of Willis Faber!! [Judge: “legal policy would seem to demand, the abolition of a principle that is manifestly unjust in the majority of cases”] An error in itself is not sufficient to ensure the success of the CI, the error has to be excusable as well!
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