PVL3704
ASSIGNMENT 1 SEMESTER 1 2025
UNIQUE NO.
DUE DATE: 13 MARCH 2025
, PVL3704
Assignment 1 Semester 1 2025
Unique No.
Due Date: 13 March 2025
Enrichment Liability and Estoppel
Question 1: Cheque Countermand and Enrichment Claim
1. Validity of the Debit to C’s Account
C instructed E (the bank) to countermand the cheque, meaning E was legally required
to stop payment. However, despite this instruction, E still paid D when he presented the
cheque. The key issue is whether E acted lawfully in debiting C’s account.
Under South African banking law, when a customer issues a cheque and later
countermand it before payment, the bank must honor the countermand. If the bank
disregards the stop instruction and proceeds with payment, it may be held liable for
wrongful debiting. This principle was established in Gibson v Bank of Scotland (1906),
which held that a bank must follow a customer’s instructions regarding payments.
Since E failed to comply with C’s instruction, C has a right to demand the reversal of the
debit. The bank, having wrongfully paid the cheque, must refund C unless there are
exceptional circumstances justifying the payment.
2. Can C or E Claim Unjustified Enrichment from D?
The general principle of unjustified enrichment requires that:
One party must be enriched.
Another party must be impoverished.
The enrichment must be sine causa (without a valid legal reason).
ASSIGNMENT 1 SEMESTER 1 2025
UNIQUE NO.
DUE DATE: 13 MARCH 2025
, PVL3704
Assignment 1 Semester 1 2025
Unique No.
Due Date: 13 March 2025
Enrichment Liability and Estoppel
Question 1: Cheque Countermand and Enrichment Claim
1. Validity of the Debit to C’s Account
C instructed E (the bank) to countermand the cheque, meaning E was legally required
to stop payment. However, despite this instruction, E still paid D when he presented the
cheque. The key issue is whether E acted lawfully in debiting C’s account.
Under South African banking law, when a customer issues a cheque and later
countermand it before payment, the bank must honor the countermand. If the bank
disregards the stop instruction and proceeds with payment, it may be held liable for
wrongful debiting. This principle was established in Gibson v Bank of Scotland (1906),
which held that a bank must follow a customer’s instructions regarding payments.
Since E failed to comply with C’s instruction, C has a right to demand the reversal of the
debit. The bank, having wrongfully paid the cheque, must refund C unless there are
exceptional circumstances justifying the payment.
2. Can C or E Claim Unjustified Enrichment from D?
The general principle of unjustified enrichment requires that:
One party must be enriched.
Another party must be impoverished.
The enrichment must be sine causa (without a valid legal reason).
