In the case of Mhlari NO and Others v Nedbank Limited,
the Supreme Court of Appeal ("the SCA")
clarified the circumstances that constitute an "excusable
mistake" under the conditio indebiti. Additionally,
the court outlined the specific situations in which the
conditio indebiti applies.
Background
A trust concluded a loan agreement with Nedbank. In terms of the
agreement, Nedbank was to loan ZAR14 million to the trust. The
trust made regular payments but subsequently defaulted. The trust
deed stipulated that a certain number of trustees had to be in
office for agreements to be legally binding on the trust.
When this loan agreement was concluded with Nedbank, there was
an insufficient number of trustees in office. In light of this, the
SCA found the agreement to be void. There was therefore no
contractual claim that Nedbank could rely on, and instead, Nedbank
had to base its claim on unjustified enrichment.
