(53)  South African authorities in Edinburgh Sheriff Court

The Scots Law Times of 19 March 1999 reports at 1999 SLT (Sh Ct) 10 the decision of Sheriff D J B Robertson in First National Bank plc v Bank of Scotland, 2 September 1997, a case about the liability for negligence of a collecting bank to an issuing bank. Sheriff Robertson’s judgement includes the following comments (at 12G-I, 15H): Counsel for the defenders .. referred to two South African cases .. as having persuasive effect. The South African cases were Yorkshire Insurance Co Ltd v Standard Bank of South Africa Ltd 1928 WLD 251 and John Bell & Co Ltd v Esselen SA Law Reports, February 1954 (1) 147. He placed particular emphasis on these cases because of the similarities between South African law based on Roman-Dutch law and Scots law based on Roman law. The tort of conversion was unknown in either system, but in South Africa there was a statutory provision in similar terms to s 82 [of the Bills of Exchange Act 1882] providing similar protection to a collecting bank. Counsel commended the approach taken by the judge in Yorkshire Insurance Co Ltd, which was to treat the statutory provision as superfluous as it simply provided a defence to a tort which did not exist in South Africa, and could not be taken as imposing any liability on the collecting banker. The case of John Bell & Co v Esselen, though not directly in point because it did not involve a collecting bank, was an appeal court decision in South Africa and confirmed that the doctrine of conversion was unknown. The action was a claim under the condictio indebiti on the basis of unjust enrichment where a company’s cheque had been fraudulently used to pay a personal debt. There was no allegation that the payee knew of the fraud and was in bad faith, and it was held that he had no duty to restore the sum involved to the company. Counsel again suggested that a Scottish court would take a similar approach. … I accept that the South African decisions were of interest as demonstrating the approach taken in analogous situations to the present case in a jurisdiction where the doctrine of conversion is unknown and whose legal system also derives from Roman law. These cases .. were of persuasive effect.