BANKING

Facts and issue: The matter was brought on an urgent basis, the applicant’s banking account was frozen, pursuant to a judgment and writ which was authorised. Mr Baloyi for the applicant submitted that the applicant suffers a substantial injustice in that it is unable to trade, nor pay any of its service providers, including its employees. He argued that the court must weigh the prejudice suffered, his client has a business to run, and the respondent conceded in its answering papers that it does not suffer prejudice.

Discussion: The applicant has demonstrated at least prima facie right in that the banking account, which is frozen, was used to operate the core functions of its business. The court must weigh the degree of prejudice that the applicant suffers against that suffered by the respondent. The harm it suffers, includes a threat of being sued by employees for salaries, the opportunity to procure more work and even closure of its business, if the order is not granted. It is noteworthy that the respondent agreed it does not suffer prejudice, it can oppose the rescission application and has other legal recourse to recover its debt.

Findings: There is no alternative remedy available to the applicant, which relies on this the only banking account it holds and from the facts, the balance of convenience favours the applicant. The matter is urgent, our law recognises commercial urgency. The applicant has met the requirements of the interim interdict, and it should not be stymied any longer in the running of its business.

Order: The first respondent is ordered to instruct for the removal of the hold on the applicant’s bank account.

Facts and issue: Application to set aside a decision by Absa to refer the applicant’s name for listing on the Register of Dishonest Employees System (REDS). REDS is a database which contains details of employees of banks and other financial institutions that were dismissed for dishonesty-related offences. Although the notice of motion is framed as a review application, the applicant (Shiundlana) however, has not pleaded the legal basis for bringing a review application. The application is a challenge to the lawfulness of the exercise of Absa’s rights to RED list the applicant emanating from their employment relationship.

Discussion: Mr Shiundlana was employed by Absa in the position of Specialist: IT Security Analysis. Llinykh, a CTO Platform Engineer employed by Absa, discovered that Internal Absa Africa Access workgroups metadata was exposed in a publicly available personal GitHub repository. He found that the person with the associated GitHub account profile is Mr Shiundlana, which increases the risks to Absa. The resultant investigation revealed that Mr Shundlana had copied large portions of Absa's proprietary code and technical information to his public GitHub repository, which was open to public viewing and access. The conduct complained of constituted a major leak of highly confidential information. It was feared that the applicant planned to sell sensitive technical information. After being interviewed the applicant failed to provide a satisfactory explanation for his conduct. Mr Shiundlana contends that the timing of his resignation and the discovery of his misconduct are such that it is not competent for Absa to place him on the REDS database.

Findings: Mr Shiundlana’s contention is wrong. The REDS guidelines provide for listing in the event of a disciplinary hearing not being finalised. Absa was not precluded from proceeding with a post termination enquiry, in circumstances where the applicant's employment terminated after the misconduct was first discovered, and where the applicant alleged, he was ill and could not attend a disciplinary hearing on his last day of employment. Mr Shiundlana failed to plead the legal basis for bringing the review application.

Order: The application is dismissed with costs.

Facts and issue: The first respondent is a non-profit company which is registered with the National Credit Regulator in terms of section 43 of the National Credit Act, 34 of 2005. It maintains a fraud data base. The second respondent is a commercial bank which placed an adverse report regarding the applicant on the first respondent's data base. It did so pursuant to two home loan applications that the applicant submitted, which the second respondent believed contained false information. The applicant seeks an order that the first respondent's retention of the listing on its database is unlawful, invalid and incorrect.

Discussion: What is relevant is that it is common cause that the applicant alleged in the applications that at the time of submitting the applications he resided at Street Waterkloof and that he had been at that address for ten years. That was not true, as the applicant had already left that address in 2012 and had not resided there in the four years before he submitted the applications. The applicant provided a false residential address on both applications. The explanation given by the applicant, that he had made a bona fide error out of force of habit when he not only provided his old address to his employer during 2016, but also to second respondent in two separate home loan applications thereafter, is preposterous and is rejected. The applicant had not resided at that address for some four years. He surely knew where he was residing in 2016 and 2017. The second respondent alleges that the listing was justified as the applicant had committed a 'confirmed fraud'. The applicant says that a mere misrepresentation does not amount to fraud. The applicant says that the second respondent must show that he had the intent to mislead the second respondent, and that the misrepresentation was made in bad faith.

Findings: Fraud Is the unlawful and intentional making of a misrepresentation to another, which prejudices, or has the potential to prejudice, the other person. There is no question that the applicant misrepresented his address. There is no doubt that should a lender be provided with misleading information regarding an aspect as crucial as the residential address of the potential borrower, the lender is at least potentially at risk of prejudice. Such conduct is unlawful. The listing was correct since it stated that the pay slips contained incorrect information.

Order: The application is dismissed with costs.

Facts and issue: The applicant is a 67-year-old pensioner who was scammed by fraudsters who obtained control over her bank account and paid an amount of R960,960.19 in 23 different transactions on the same day into bank accounts of the third respondent at Capitec Bank and Absa Bank. In Part A the applicant seeks urgent relief restraining the two banks from releasing the current hold on the third respondent’s bank accounts pending finalisation of the determination of relief sought in Part B. The relief sought in Part B is repayment of the total of the deposits by the third respondent (R934,115) in an action envisaged to be instituted.

Discussion: As the interdict which the applicant seeks is anti-dissipatory, it is a requirement to establish that the third respondent has the intention of dissipating the assets with the intention of defeating the applicant’s claim. The third respondent contends that there was nothing sinister in the large volume of cryptocurrency purchased. He contends that he is an unsuspecting bona fide third party. The applicant fails to allege and substantiate that the third respondent is dealing with his assets with the intention of defeating her claim. The evidence establishes that the scamsters put the applicant through all the steps required to register her identity on Binance without her knowing that she was doing so. The mere presence of mala fides in receiving the funds by virtue of such indifference and in breach of statutory duties, is not enough to establish the risk that the third respondent intends dissipating assets with the view to frustrating the claim of the applicant. In the absence of an allegation to this effect and evidence in support thereof, the applicant can therefore not establish prima facie right for the interdict sought.

Findings and order: The application is dismissed.

Facts and issue: Application for a mandamus against the respondents ordering them to release monies on hold in respect of various accounts held by each of the four applicants with the first respondent. The applicants made certain payments to their Chinese suppliers from their respective bank accounts, but the suppliers did not receive these payments. It appeared that the payments were blocked. The respondent failed to notify any of the applicants that the relevant transactions were blocked and/or on which grounds.

Discussion: The second respondent issued blocking orders in terms of regulations 22A and or 22C of the Exchange Control Regulations. A blocking order may endure for a period of up to 36 months as provided for in section 9(2)(g) of the Act read with regulation 22B. The respondents submitted that the relief sought by the applicants is not competent, given that the 36 months period afforded under section 9(2)(g) of the Act has not yet expired, and the blocking orders remain valid unless and until reviewed and set aside. The second respondent submits that the applicants, jointly or severally, have not demonstrated the grounds contained in section 9(2)(d)(i) of the Act read with regulation 22D, and therefore have failed to make out a proper case for the relief sought. The weight of authority points out emphatically that the applicants’ review application is not founded on a sustainable legal basis and stands to be dismissed.

Findings and order: The application is dismissed with costs.

Facts: Investec and FNB terminated their relationship with Mr Ndudane and TCQ Fisheries due to reputational and business risk. Mr George’s relationship with Absa were exited by the bank, which alleged that his profile did not fit within their internal policy and commitment to complying with all legal and regulatory obligations applicable to anti-bribery laws and regulation both locally and internationally, and he did not fit their risk appetite. FNB terminated its relationship with Mr Moreira and Mota Motor Company. The termination letter also referred to associated reputational and business risk. Democracy in Action was a non-profit company established to advance, support and defend democratic principles and values. It had an account with FNB to receive donations, which were its primary source of income. FNB issued a letter to it indicating that FNB had elected to exercise its contractual right to terminate their banking relationship.

Application: An opposed interlocutory application for access to information in which the applicants sought orders that the Financial Intelligence Centre (FIC) be directed to provide information which was held by the FIC as set out in terms of section 40(1)(e) and section 41(d) and (e) of the Financial Intelligence Centre Act 38 of 2001 (FICA). According to the applicants the information sought would show that while the applicant’s bank accounts were terminated purportedly on account of seeking to comply with the anti-money laundering laws as headlined by FICA, the respondent banking institutions had treated the applicants in a discriminatory and unequal manner when compared to other individuals and organisations which have had negative publicity during the determination of their risk appetite. See para [2] for the information sought, including the banks’ risk management and compliance programmes and reports of suspicious transactions in respect of Sekunjalo Group, EOH Holdings, KPMG Services, Steinhoff and Tongaat Hullet.

Discussion: FIC disputed that this application was brought in terms of section 21(5) of Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (PEPUDA) as the applicants alleged. The applicants’ Equality Court complaint included that the unilateral termination of bank accounts violated constitutional rights enshrined in the Bill of Rights. Without access to financial services such as bank accounts, numerous socio-economic rights were curtailed and could not be meaningfully enjoyed or exercised. The case was that no provisions in the anti-money laundering laws and regulations required banks to unilaterally terminate accounts of customers who fulfilled the customer due diligence or Know Your Customer requirement. The banks were only required to monitor and report suspicious, unusual and transactions and those above the regulated threshold. The banks were thus overreaching and ultra vires in trying to comply with FICA and related legislation by assuming the role of a law enforcement agency and a court of law entitling them to investigate, judge and punish their customers through unbanking them based on innuendo and suspicion of involvement in criminal activity.

Findings: The constitutionally entrenched right to equality will be emaciated and hollow if constitutional institutions, upon request, may not supply information on any measures relating to the achievement of equality including where appropriate, compliance with legislation, codes of practice and programmes within their jurisdiction, in instances where such access did not threaten State security or destabilise, in this instance, the nation’s financial system. The applicants have established their right to their information sought. Fairness and equity, and our constitutional values of openness and transparency, favour that the applicants being granted access to the reports which the respondent banks provided to the FIC as regards reputational and business risk as well as anti-bribery legal and regulatory frameworks. This is part of the portfolio of evidence that is material to determine whether the applicants were unfairly discriminated against, as they allege. The disclosure of this confidential information held by the FIC will help in the proper determination of the issues in the main application.

Order: The application is granted. The FIC is directed to provide the applicants with all the documents within 20 days of the date of this order. The FIC to pay the costs, including the costs of two counsel where so employed.

THULARE J

Facts and issue: Urgent application in which the Applicants seek interim interdictory relief preventing Capitec from terminating certain services provided to them until Amplifin find a replacement bank for the provision of the services, alternatively pending the outcome of an action to be instituted by the applicants for final interdictory relief.

Discussion: The applicants have made out no case whatsoever regarding the termination of the Tripartite POS Agreement. That agreement contains a 60-day notice period. On the applicants version in reply, authentication needs to take place via the POS device in order to be given access for amounts to be pulled from a customer’s account. Given the claimed link, made in the replying affidavit and at the hearing of the matter, the applicants had to establish a prima facie case for challenging the termination of the Tripartite POS Agreement and the AET Agreement. Given that no such case can possibly be made in respect of the POS Agreement, it will serve no purpose to grant interdictory relief in respect of the AET Agreements. The present matter should have been about how long it will take to replace the systems operator or sponsor bank. If credible evidence was presented regarding the period needed and if the bank refused to accommodate the applicants then the granting of interim relief may have been indicated. This was however not the case brought by the applicants and it is apparent that the period contended for by the applicants is far too long and detrimental to the interest of Capitec.

Findings and order: The application for interim relief is dismissed with costs.

Facts: The Mpati Commission of Inquiry investigated allegations of impropriety concerning the Public Investment Corporation (PIC). One aspect of the Commission’s scope of inquiry was the relationship between the PIC and certain companies within the Sekunjalo Group, notably, but not solely, Ayo Technology Solutions. The inquiry and the commission’s report generated significant adverse media attention for Dr Surve and the Sekunjalo Group. Concerned about the possible reputational risk its continued relationship would generate, Nedbank embarked on a process of reviewing that relationship.

Appeal: With the imminent closure of some affected bank accounts, the respondents turned to the courts. They first approached the High Court for an urgent interdict against Nedbank to prohibit the closure on the basis of unfair discrimination on the ground of race. The High Court ruled that it did not have jurisdiction to consider the application as the matter fell within the exclusive jurisdiction of the Equality Court. The respondents sought to prohibit Nedbank from closing certain bank accounts and an order to re-open other accounts. Both categories of relief were to be effective pending the final determination of the Equality Court proceedings. The Equality Court granted an interdict in the terms sought.

Discussion: The key element of the respondents’ case for unfair discrimination was that Nedbank had been selective in its assessment of which customers posed a reputational risk, and that this selective assessment was based on the race of the entities in question. The respondents’ view or perception that it was being discriminated against on the basis of race is not sufficient to establish a prima facie case. Their case was expressly inferential. Consequently, they were required to adduce facts sufficient to satisfy the Equality Court that the inference of unfair racial discrimination they sought to draw from the facts was more plausible than the alternative inference drawn from the facts averred by Nedbank in its defence to the charge. Effectively, the respondents’ case rested on no more than an assumption of racial designation. That assumption was insufficient to establish even a prima facie case that Nedbank had treated the respondents, as black customers, differently from white customers.

Findings: Inexplicably, the Equality Court reversed the onus of proof. Relying on section 13 of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000, the Equality Court found that Nedbank had not proved that its conduct was not based on the prohibited ground of race. The application being for an interim interdict, the court clearly misdirected itself in this respect. It was the respondents that bore the onus of establishing a prima facie case of discrimination before Nedbank attracted an onus. They could not do so based on mere perception of unfair racial discrimination and an inferential case unsupported by facts. It failed to clear that bar. The respondents did not allege the facts necessary to make out a prima facie case. The order of the Equality Court should not have been granted in the first place. For this reason, it is one of those exceptional cases where, despite the interim nature of the order, it falls within the appeal jurisdiction of this court.

Order: The appeal is upheld and the order of the Equality Court is replaced with an order dismissing the application.

KEIGHTLEY AJA (GORVEN JA, MEYER JA, WEINER JA and BINNS-WARD AJA concurring)

Facts and issue: SG launched an application to interdict Standard Bank from discontinuing its banking services pending the final determination of an application to be launched within 15 days for the final relief the applicants deem appropriate concerning the validity or otherwise of the termination notice issued by the respondent. It is that application which is now pursued along with a separate urgent application, recently launched, in terms of s 21(5) of the Equality Act. The main issue to be determine in both is whether Standard Bank should be interdicted from closing SG’s accounts until finalisation of proceedings currently pending. 

Discussion: SG asserts that its prima facie right lies in s 22 and s 34 of the Constitution. If Standard Bank is permitted to close the accounts at this stage, the purpose of the main relief sought will be defeated, because it is the very continuation of those banking facilities which is at the heart of the main dispute. Put differently, SG submits that refusing the interdict would be tantamount to ignoring those rights and permitting Standard Bank to resort to self-help. SG’s contention is straightforward, should Standard Bank terminate its banking facilities, that will render nugatory the entire main proceedings both in the High Court and Equality Court. 

Findings: The interests of justice call for an interim interdict of more limited duration, subject to the parties being given leave to approach court again for an extension or discharge upon good cause shown. 

Order: Standard Bank is interdicted until Wednesday 11 September 2024, or final determination of the applications pending in the High Court and in the Equality Court, from closing the applicants’ banking accounts held with it for the reasons stated in its termination notices.

Facts and issue: The applicant is seeking an order for monetary judgment against the Standard Bank and the Reserve Bank. The applicant having concluded an agreement with a foreign company, based in Israel, instructed the Standard Bank to transfer instalment payment from its account into the foreign creditor’s account. The Reserve Bank directed the Standard Bank not to transfer the payment to the creditor pending an investigation into the transaction between the applicant and the foreign creditor.

Discussion: The applicant contended that the funds in question may have been attached or blocked in terms of section 9(2)(b)(i) of the Currency and Exchanges Act of 1933 read with Section 22A of the Exchange Regulations of 1961. In essence the applicant is seeking the intervention of the court in an incomplete and pending process. This means that the applicant's challenge is brought medias res. It is trite that the courts are extremely reluctant to intervene in a yet to be completed process. It is only in exceptional circumstances that the court will intervene in an incomplete process. The applicant has not challenged the authority of the Reserve Bank to conduct the investigation before making the decision whether to attach the account or block it. The complaint is that there has been a delay in finalising the investigation. There is no evidence that the period within which the investigation is to be conducted has expired.

Findings and order: Applicant’s application is dismissed with costs.

Facts: Application for a final interdict in which the applicant seeks an order that ABSA Bank is authorised and ordered to provide Potgieter with a copy of the bank statement of the overdraft facility. Potgieter seeks the bank statement of the overdraft facility to determine the amount that the Company was indebted to the Bank on the Company’s overdraft facility on 9 February 2021.

Issue: Whether Potgieter is legally entitled to have possession of the bank statement as sought.

Discussion: The applicant was entitled to the statements on 9 February 2021, when she was a director of the Company. The mere fact that the applicant did not deem it necessary at that stage to obtain the bank statements, but purely due to the fact that she is no longer a director and as such not entitled to the bank statements at this belated stage, can not detract from the legal interest that Potgieter has in the bank statement. The applicant has a clear right to the information to establish whether she has prospects of successfully claiming damages against the respondents. 

Findings and order: ABSA Bank is authorised and ordered to provide the applicant with a copy of the bank statement reflecting the amount that the first respondent owed to the second respondent in terms of the overdraft facility on 9 February 2021.

Facts and issue: The applicant and the respondent concluded a series of agreements to permit the applicant to advance a loan to the respondent to allow it to purchase an immovable property. The applicant alleges that the respondent has breached the agreements that were concluded and seeks to terminate its relationship with the respondent and claim the amounts that it is alleged are due to it. This appears is opposed by the respondent which, essentially, denies that it is presently in breach of the agreements concluded with the applicant.

Discussion: The applicant alleges that the respondent failed to pay its monthly instalments regularly. In July 2020 it breached the agreements. As of 7 July 2020, it was in arrears in the amount of R23 985.06. The arrears were not made good, and on 18 November 2021, the applicant elected to terminate the agreements, having given the prescribed one month’s written notice. While this amount appears to be relatively small, this was a repeated failure of the respondent to pay in accordance with its obligations and is the straw that broke the camel’s back. The respondent is a juristic entity, not the deponent to the respondent’s answering affidavit. Court is unconvinced that a juristic entity has a right to housing.

Findings: Relief substantially granted.