LML4807
Assignment 01
Semester 02 2025
Due September 2025
, LML4807
Assignment 01
Semester 02 2025
Due September 2025
Banking Law and Usage
Nedbank Ltd v Pestana 2009 (2) SA 189 (SCA)
Introduction
The case of Nedbank Ltd v Pestana 2009 (2) SA 189 (SCA) engages critical principles
of South African banking law, particularly concerning the irrevocability of electronic
funds transfers and the effect of section 99 notices issued under the Income Tax Act 58
of 1962. The Supreme Court of Appeal (SCA) was tasked with determining whether a
bank, upon receiving a statutory notice from the South African Revenue Service
(SARS), could retrospectively reverse a transfer already executed and credited to a
customer’s account. This case is significant in clarifying the legal finality of unconditional
credits and the proper scope of statutory enforcement tools within the banking context.
1. Facts of the case
The respondent, Jose Manuel Pestana (the plaintiff), had held a current account with
Nedbank Limited’s Carletonville branch since 1969. Another individual, Joseph Michael
Pestana (Pestana), maintained a separate account at the same branch. On 4 February
2004, Pestana’s account reflected a credit balance of R496,546.40. That morning, he
instructed the branch to transfer R480,000 to the plaintiff’s account. The instruction was
carried out at 11:33, with the plaintiff’s account duly credited and Pestana’s account
debited (paras 3, 6).
Assignment 01
Semester 02 2025
Due September 2025
, LML4807
Assignment 01
Semester 02 2025
Due September 2025
Banking Law and Usage
Nedbank Ltd v Pestana 2009 (2) SA 189 (SCA)
Introduction
The case of Nedbank Ltd v Pestana 2009 (2) SA 189 (SCA) engages critical principles
of South African banking law, particularly concerning the irrevocability of electronic
funds transfers and the effect of section 99 notices issued under the Income Tax Act 58
of 1962. The Supreme Court of Appeal (SCA) was tasked with determining whether a
bank, upon receiving a statutory notice from the South African Revenue Service
(SARS), could retrospectively reverse a transfer already executed and credited to a
customer’s account. This case is significant in clarifying the legal finality of unconditional
credits and the proper scope of statutory enforcement tools within the banking context.
1. Facts of the case
The respondent, Jose Manuel Pestana (the plaintiff), had held a current account with
Nedbank Limited’s Carletonville branch since 1969. Another individual, Joseph Michael
Pestana (Pestana), maintained a separate account at the same branch. On 4 February
2004, Pestana’s account reflected a credit balance of R496,546.40. That morning, he
instructed the branch to transfer R480,000 to the plaintiff’s account. The instruction was
carried out at 11:33, with the plaintiff’s account duly credited and Pestana’s account
debited (paras 3, 6).
