First National Bank of Southern Africa Ltd v Rosenblum and Another

The respondents, a husband and wife, sued the appellant bank for damages arising from the theft of the contents of a safe deposit box hired by the first respondent at the bank’s Auckland Park branch. The safe deposit box and its contents were stolen in October 1996. It was assumed for purposes of a stated case that one or more bank employees either stole the box themselves or negligently (or grossly negligently) failed to control the keys safeguarding the vault, thereby enabling the theft, and that such employees acted within the course and scope of their employment. The bank relied on clause 2 of the standard safe deposit box agreement, which purported to exclude liability for loss or damage caused by theft or negligence, to avoid liability.

The appeal was upheld with costs. The order of the court a quo was set aside and replaced with an order dismissing the claims of both plaintiffs with costs, jointly and severally.

The case is significant for clarifying South African law on the interpretation and enforceability of exemption clauses in banking contracts, particularly in relation to theft and negligence by employees. It confirms that, where clearly worded, such clauses may exclude liability for vicarious negligence and even employee dishonesty, subject to public policy limitations, and it reinforces orthodox principles of contractual interpretation in South African law.