The Trustees of the Insolvent Estate of Grahame Whitehead v Dumas (323/12)  ZASCA 19
26 March 2013
Posted by: Herman van Dyk
The Supreme Court of Appeal (SCA) heard the matter between The Trustees
of the Insolvent Estate of Grahame Whitehead and Dr Leon Dumas on 1 March 2013.
The judgment was delivered on 20 March 2013 by Cachalia JA (with Lewis,
Ponnan, Theron and Petse JJA concurring).
This matter is an appeal from the North Gauteng High Court and concerns
a dispute of R3 million between the trustees of a fraudster’s insolvent estate
and a disgruntled investor.
The investor, Dr Leon Dumas ("First Respondent”) had been induced to
pay the money into the bank account of the fraudster, Mr Grahame Whitehead, in
contemplation of participating in the latter’s illegal financial scheme (Ponzi
The First Respondent was duped through representations made by an agent
acting on behalf of Mr Whitehead that the scheme was legitimate and instructed
his bank to transfer R3 million into Whitehead’s ABSA Bank account on 23 April
to both the agent and Dumas, Whitehead had been under arrest for fraud in the
United Kingdom at the time and was later convicted and given a ten year prison
The First Respondent
(Dumas) lays claim to the money on the ground that it was obtained from him fraudulently,
and therefore cannot form part of the insolvent estate.
trustees ("Appellant”), on the other hand, contend that the funds became part of
the estate on sequestration, and thus subject to the concursus creditorum.
Issue/matter to consider
enquiry in this case turns on whether or not Whitehead acquired a personal
right to the credit when Dumas transferred money to Whitehead’s
If he did
the funds accrued to Whitehead’s estate upon sequestration. However, if
Whitehead himself did not acquire a personal right to the funds, neither would
his estate have upon sequestration (which would result in the bank being
unjustly enriched at the expense of Dumas).
held that as soon as the money was credited to Whitehead’s bank account, the
bank had the obligation to account to him in accordance with their bank-client
relationship. The bank became obliged to account to the trustees of the
insolvent estate, who stepped into Whitehead’s shoes upon his sequestration.
it was held that where a person transfers money from his bank account to the
bank account of another after being induced to enter into an agreement by the
latter’s fraudulent misrepresentation the money cannot be reclaimed from the
receiving bank, but instead falls into the estate of the fraudster upon
was upheld with costs, including the costs of two counsel.