Authored By: Koketso Taunyane
University of South Africa (UNISA)
Neutral citation: Global & Local Investments Advisors (Pty) Ltd v Nickolaus Ludick Fouché (71/2019) [2019] ZASCA 08 (18 March 2020)
Coram: NAVSA, SALDULKER, MAKGOKA and NICHOLLS JJA and MOJAPELO AJA
Delivered: 18 March 2020
GLOBAL & LOCAL INVESTMENTS ADVISORS (PTY) LTD Appellant
NICKOLAUS LUDICK FOUCHÉ Defendant
Facts of the Case
[1] Mr. Fouché, a client of Global & Local Investment Advisors (Pty) Ltd gave a written mandate to the company to act as his broker and invest money with Investec Bank. Global invested the funds in a Corporate Cash Manager (CCM) account in Mr. Fouche’s’name.
[2] 26 August 2016, Mr. Fouché’s email account was hacked into as fraudsters sent three emails to Global on dates 15, 18, and 24 August 2016 utilizing his email credentials. The ‘Regards, Nick’ and the third ‘Thanks, Nick’ and both had attachments. Global responded not send the emails. Consequently, he claimed the funds transferred to the fraudster on grounds that Global had made payments in breach of the written mandate.
[3] Global in its defense submits that it acted in line with the terms stipulated in the written mandate, on the directive from Mr. Fouché original email address ending with the salutation ‘Nick’ at the end of the email which satisfies signature requirement in terms of s 13 (3) of the Electronic Communications and Transaction Act 25 of 2002 (hereafter the ‘Act’). Global reiterates in its defense that the wording ‘Nick’ justifies their reason for transferring funds as legit as per the instruction because his regular sign-off email goes thus.
Issue Raised
[4] The legal question posed before the court goes thus:
Did Global & Local Investment Advisors (Pty) Ltd (Global) breach a mandate which was falsely authorized by Mr. Nickolaus Ludick Fouché, by issuing payment to a fraudulent email sent by the latter?
Ratio Decidendi
[5] In drafting the written mandate, the court remarks that the context in which it was written must be considered because in the commercial and legal field signatures authenticate a “established purpose” (par. 9). Signature usage serves as an indicator of authority which can be verified. E.g. when a cheque is issued for a payment is because of an authorized signatory whose signature can be confirmed.
[6] The Concise English Oxford Dictionary explains the word ‘signature’ as ‘a person’s name written in a distinctive way as a form of identification or authorization. The Black’s Law Dictionary (5th ed 1239) explains ‘signature’ as to ‘sign’ meaning “to affix one’s name to a writing or instrument, for the purpose of authenticating or executing it, or to give it effect as one’ act; To attach a name or cause it to be attached to a writing by any of the known methods of impressing a name or cause it to be attached to a writing by any of the known methods of impressing a name on paper; To affix a signature to … To make any mark, as upon a document, in token of knowledge, approval, acceptance, or obligation”. In addition, ‘’signature’ is defined as ‘the act of putting one’s name at the end of an instrument to attest its validity; the name thus written…And whatever mark, symbol or device one may choose to employ as representative of himself is sufficient.’
[7] In Goodman v J Eban Ltd [1954] 1 QB 550 (CA) at 561, Lord Denning remarked if a rubber stamp signature was an appropriate signature:
He states that in modern English usage, when a document must be signed by a person, it means he/she must write his/her name by hand. By law, it is permissible to ‘sign’ a document by utilizing a rubber stamp with a facsimile signature. A Facsimile is the exact copy of one’s signature but not his actual signature. Where a person cannot write his/her by themselves, then the person may make his mark (a sign of a cross) to sign a document.
[8] The court found that in Van Vuuren v Van Vuuren (1854) 2 Searle 116 at 121, when a person is expected to ‘sign’ a document, it is for authentication purposes. Furthermore, if an illiterate person or a person with a disability must since, it is sufficient to put a cross or either the initial in caps of the name and surname.
[8] In Da Silva v Janowsky 1982 (3) SA 205 (A) at 218F-219C [1982] All SA 43 (A) and Harpur NO v Givindamall and Another 1993 (4) SA 751 (A) at 756–759, AJ Diemont remarks that: a signature is not the “written characters” documented but the contents of the document where is it affixed. He further referred to ROPER J reported in Sonfred (Pty) Ltd v Papert 1962 (2) SA 140 (W) at 145
[9] Which writes, ‘It is axiomatic that a person is not bound by the mere fact that his signature appears upon a document of debt. The chief significance of a signature to a document of obligation is that it is evidence of the fact of consent by the signatory, and in order that he may be bound it is necessary that he shall have affixed his signature with the intention of binding himself.” Therefore, when a defendant is sued in this regard, the cause of action is not the signature but the willingness to accept liability as indicated by the signature of the plaintiff. In the even when the plaintiff appears before the court for provisional sentencing to either concede or deny his signature, there is no reason for the court to solely think that the written characters are his, and while conceding to that fact, to refuse that the written character were affixed to the specific document- in other words for emphasis, ‘why he should not say “the signature is mine, but I never signed this document and never undertook the liability contained in it”( par. 13).
[10] In the previous paragraph, the main point highlighted relates to the instructions approved in terms of transferring of funds generally within the financial service industry. When it comes to the mandate, instructions must be sent to the specific email address or fax number which prove to be authentic, however, these are not present. The argument here is that the email address of Mr. Fouché with his name signed off at the foot thereof appears to be well orchestrated and the reason for that is because like mentioned above in the financial service industry, a mandate requires a signature’ to authenticate it and for verification purposes. Global may only rely on s [11] 13 (3) of the Act that an electronic signature is a requirement, however, the term ‘electronic’ is not specified in the mandate. Therefore, the court should not be misjudged for presuming that an ordinary handwritten signature was required even in the form of a manuscript and after electronically forwarded for authentication purposes. Thus, the directive from the email was not accompanied by a signature so therefore holds that the funds were indeed transferred contrary to the mandate.
[12] Global referred to the case Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash and Another 2015 (2) SA 118 (SCA) where the matter concerns the legitimacy of canceling agreements via email correspondence. The agreements require that a consensus be reached between both parties prior to any cancellation. The legal argument in this case is whether names of both parties appearing at the end of the emails require that both parties come to a consensus to in terms of cancellation of the agreement.
[13]The difference in this case is that it bases less importance on the authority of the sender whether their names written in the foot of the email but whether email correspondence between parties is adequate to satisfy the requirement stipulated in their mandate that ‘consensual cancellation’ of their contract must put in writing and signed by the parties. There was no conflict in terms of the parties who sent the emails, how accurate the information was or legitimacy of the email itself but in this Global case, the emails are fraudulent. They were not sent by the rightful party from whom it is presumed to be because they were sent by imposters without the authority to do so.
Final Decision
[14] Therefore, the court found in favor of Mr. Fouché. The court ruled that that the fraudulent emails sent by the third party are not binding on him, thus the appeal fails and was dismissed with costs.
BIBLIOGRAPHY
BOOKS
Prof M Swanepoel Ms. N Mabeka “Ethics in Research” in Introduction to Research Methodology IRM1501 (University of South Africa/ 2018) 15, 16, 17.
Concise English Oxford Dictionary (Oxford University Press [12th ed] /2012).
R Jospeh, Nolan & M.J. Collony Black’s Law Dictionary (5th ed 1239).
LEGISLATION
Electronic Communications and Transaction Act 25 of 2002.
CASELAW
Goodman v J Eban Ltd [1954] 1 QB 550 (CA) at 561.
Van Vuuren v Van Vuuren (1854) 2 Searle 116 at 121.
Da Silva v Janowsky 1982 (3) SA 205 (A) at 218F-219C [1982] All SA 43 (A) and Harpur NO v Givindamall and Another 1993 (4) SA 751 (A) at 756–759.
ROPER J reported in Sonfred (Pty) Ltd v Papert 1962 (2) SA 140 (W) at 145.
Global placed reliance on Spring Forest Trading 599 CC v Wilberry (Pty) Ltd t/a Ecowash and Another 2015 (2) SA 118 (SCA).
