On 27-28 April 2014, robbers stole approximately R100 million from SBV Services (Pty) Ltd's premises in Witbank. The money belonged to several banks that SBV was holding. Investigation revealed that two police officers (Warrant Officer Khubeka and Detective Constable Lekola) were involved in planning and executing the robbery, along with an SBV employee, Ms Gift Nkosi (a security compliance officer), who conspired with them and provided information to facilitate the crime. Underwriters at Lloyds of London had insured SBV against such losses and paid out under the insurance policy. The Underwriters then took cession of the banks' claims against SBV and third parties (including the Minister of Police), as well as SBV's own claims arising from the robbery. The Underwriters sued the Minister for over R100 million in damages based on vicarious liability for the conduct of the two police officers who failed in their legal duties to prevent crime and not participate in criminal activity. Shortly before trial, the Minister sought to amend its plea to introduce a defence based on the principles of ex turpi causa non oritur actio and in pari delicto, arguing that SBV was vicariously liable for Ms Nkosi's conduct and therefore participated in the illegal robbery, thus barring the claim. The high court (Mavundla J) dismissed the application to amend.
The appeal was dismissed with costs, including costs consequent upon the employment of two counsel. The high court's order refusing leave to amend the plea was upheld.
1. An employer cannot be vicariously liable to itself for a delict committed against it by its employee - the employee's wrongful act against the employer is not a delict vis-à-vis third parties for purposes of establishing the employer's vicarious liability. 2. Vicarious liability is strict liability based on the relationship between wrongdoer and the liable party - it does not involve attribution of fault or intention from the primary wrongdoer to the vicariously liable party. 3. Since vicarious liability is not fault-based, the intention to commit unlawful conduct on the part of the primary wrongdoer cannot be attributed to the party secondarily liable for purposes of establishing participation in illegal conduct. 4. The proper question when an employee's conduct causes harm to the employer is not whether the employer is vicariously liable for that conduct, but whether the employee's conduct can be taken into account in reducing or expunging the liability of a concurrent wrongdoer. 5. A proposed amendment to pleadings that is fundamentally misconceived and bad in law will be refused as it would render the plea excipiable.
1. The court noted but did not decide whether the maxims ex turpi causa non oritur actio and in pari delicto potior est conditio defenditis, which traditionally apply in contract and restitution (condictiones), extend to delictual claims in South African law. No South African authority was found applying these maxims outside contract and enrichment law. 2. The court observed that the Underwriters' pleading of a direct claim by the banks against the Minister was unclear - no separate legal duty to the banks was alleged, only a duty to SBV, yet the Underwriters contended the Minister was vicariously liable to the banks. 3. The court noted that difficult issues arise regarding the application of the Apportionment of Damages Act 1956 to intentional conduct and concurrent wrongdoers, but declined to address these as they were not properly raised in the pleadings and had not been fully debated. 4. The court mentioned that the distinction between joint and concurrent wrongdoers is now largely academic given the Apportionment of Damages Act's broad definition of "joint wrongdoers" which encompasses both categories. 5. The court noted (without deciding) that attention might need to be given to the implications of Thoroughbred Breeders' Association v Price Waterhouse in any proceedings involving apportionment issues.
This case clarifies important principles regarding vicarious liability in South African law: 1. It confirms that vicarious liability is strict liability based on relationship, not fault - it does not involve attribution of the primary wrongdoer's intention or fault to the vicariously liable party. 2. It establishes that an employer cannot be vicariously liable to itself for harm caused by an employee's delictual conduct against the employer. 3. It clarifies the distinction between joint wrongdoers (acting in concert or in furtherance of common design) and concurrent wrongdoers (independent acts combining to produce same damage), particularly in the context of vicarious liability. 4. It reaffirms the principles from Absa Bank v Bond Equipment regarding when an employer's vicarious liability for an employee's conduct can affect claims against third parties. 5. It provides guidance on when proposed amendments to pleadings will be refused as introducing excipiable defences that are bad in law. The case is significant for claims involving multiple wrongdoers and vicarious liability, particularly in the insurance and delictual liability contexts.
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