Responsibility To Protect Yourself Against A Known Risk
Protect yourself from economic loss by verifying account details, obtaining proof, and making a small test payment before any transaction.
On 16 January 2023 shock waves when through the Conveyancing fraternity when ENS Inc were ordered to pay a sum of R5 500 000,00 to the plaintiff in the case Hawarden v Edward Nathan Sonneberg Inc (13849/2020)[2023] ZAGPJHC 14, for the pure economic loss suffered as the result of the plaintiff’s email being hacked and funds paid into the fraudulent account as a result thereof.
On 10 June 2024 the Supreme Court of Appeal of South Africa delivered its judgment on the appeal brought by ENS in the case Edward Nathan Sonneberg Inc v Hawarden [2024] ZASCA 90 in which the Supreme Court of Appeal found that the respondent (Hawarden) “had ample means available to her, she must in the circumstances take responsibility for her failure to protect herself against a known risk.” 1
In the matter the Supreme Court of Appeal looked at the test for wrongfulness and quoted from the case between Roux and Others v Dey in which it was determined that “the test assumes that the defendant acted negligently or willfully and asks whether in the light thereof, if liability should follow.”
The Supreme Court of Appeal stated at paragraph 21 that “In this case, a finding that ENS’s failure to warn Ms Hawarden attracts liability would have profound implications not just for the attorneys’ profession, but all creditors who send their bank details by email to their debtors. The ratio of the high court judgment that all creditors in the position of ENS owe a legal duty to their debtors to protect them from the possibility of their accounts being hacked is untenable…” 2
The Supreme Court of Appeal in its order quoted the case between Country Cloud Trading CC v MEC, Department of Infrastructure Development in which it was tested and confirmed that “where a plaintiff has taken, or could reasonably have taken, steps to protect itself from or to avoid loss, …the plaintiff is not “vulnerable to risk” and, so it is reasoned, therefor is no pressing need for the law of delict to step in to protect the plaintiff against loss.” 3
The Supreme Court of Appeal went further and quoted the case between Cape Empowerment Trust Limited v Fisher Hoffman Sithole wherein the court stated that “…If the plaintiff has taken or could have taken steps to protect itself form the defendant’s conduct and was not induced by the defendant’s conduct from taking such steps, there is no reason why the law should step in and impose a duty on the defendant to protect the plaintiff from the risk of pure economic loss.” 4
It is clear from this decision that a person has a duty to protect yourself from possible damage.
You can protect yourself by:
1. Call to verify the account details before any payment is made – make sure that you are calling the correct number.
2. Obtain proof of bank account details and verify the account details with your bank before any payment is made.
3. Make a test payment of a small amount and ask for confirmation and proof of receipt of the deposit amount with payment reference and amount – follow this up telephonically.
Written by: Jean-Mari De Beer – Le Grange
Moderated and approved by: Glenda Nell
1 Edward Nathan Sonneberg Inc v Hawarden [2024] ZASCA 90
2 Edward Nathan Sonneberg Inc v Hawarden [2024] ZASCA 90
3 Country Cloud Trading CC v MEC, Department of Infrastructure Development, Gauteng [2014] ZACC 28; 2015 (1) SA 1 (CC); 2014 (12) BCLR 1397 (CC) para 51
4 Cape Empowerment Trust Limited v Fisher Hoffman Sithole [2013] ZASCA 16; [2013] 2 All SA 629 (SCA); 2013 (5) SA 183 (SCA) para 28
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