Leathern N.O and Others v Reserve Bank of South Africa (41306/2019) [2020] ZAGPPHC 181 (21 May 2020)

Leathern N.O and Others v Reserve Bank of South Africa (41306/2019) [2020] ZAGPPHC 181 (21 May 2020)

The court found that the applicants, as trustees of the insolvent estate, are entitled to have the blocked funds in the relevant accounts vest in the estate. The blocking order issued under the Exchange Control Regulations does not operate to exclude the funds from the insolvent estate, as there is no statutory...

Source-derived case information.

Citation
[2020] ZAGPPHC 181
Parties
Applicant: Renette Leathern N.O; Applicant: William David Leathern N.O; Applicant: Jerifanos Mashamba N.O; Respondent: Reserve Bank of South Africa; Respondent: Grobank Ltd
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
21 May 2020
Case Number
41306/2019
Procedural Posture
Civil Application / Opposed Motion; Judgment After Oral Hearing
Outcome
Application granted; declaratory and ancillary relief awarded to the applicants.
Judges
Holland-Muter
Legal Topics
Exchange Control Regulations, Blocking Order, Insolvency Trusteeship, Vesting of Property, Review of Administrative Action
Banking and Finance Civil Procedure Land and Property Exchange Control Regulations Blocking Order Insolvency Trusteeship Vesting of Property Review of Administrative Action

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Summary, issues, holding and outcome

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Parties

Renette Leathern N.O

Applicant

William David Leathern N.O

Applicant

Jerifanos Mashamba N.O

Applicant

Reserve Bank of South Africa

Respondent

Grobank Ltd

Respondent

Procedural Posture

Civil Application / Opposed Motion; Judgment After Oral Hearing

Legal Issues

  1. 1 Does the claim to the blocked funds vest in the trustees of the insolvent estate?
  2. 2 Does the blocking order issued under the Exchange Control Regulations override the sequestration order and prevent vesting?
  3. 3 Is the relief sought by the applicants competent in terms of administrative law and the applicable regulations?

Ratio Decidendi

The court found that the applicants, as trustees of the insolvent estate, are entitled to have the blocked funds in the relevant accounts vest in the estate. The blocking order issued under the Exchange Control Regulations does not operate to exclude the funds from the insolvent estate, as there is no statutory exclusion to that effect. The SARB failed to provide sufficient evidence that the funds were obtained by fraud or as agent, and its reliance on confidential information under section 33 of the Reserve Bank Act was not justified in the circumstances. The blocking order merely restricts dealing with the funds, not the vesting of the claim. The relief sought by the applicants is...

Court Disposition

Application granted; declaratory and ancillary relief awarded to the applicants.

Orders

  • All funds and amounts standing to the credit of the insolvent's accounts at the Second Respondent vest in the insolvent estate and in the applicants as trustees.
  • The blocking order made by Mr Malherbe on behalf of the First Respondent on 15 June 2017 is revised and lifted.