Nedbank Limited v Houtbosplaas (Pty) Ltd and Another (164/2021) [2022] ZASCA 69; [2022] 3 All SA 361 (SCA); 2022 (6) SA 140 (SCA) (19 May 2022)

Nedbank Limited v Houtbosplaas (Pty) Ltd and Another (164/2021) [2022] ZASCA 69; [2022] 3 All SA 361 (SCA); 2022 (6) SA 140 (SCA) (19 May 2022)

The Supreme Court of Appeal held that Nedbank was not entitled under FICA or its regulations to demand trust deeds from the applicants, as none of the trusts held 25% or more of the voting rights at general meetings. The memoranda of incorporation made clear that preference shareholders retained voting rights on...

Source-derived case information.

Citation
[2022] ZASCA 69
Parties
Appellant: Nedbank Limited; Respondent: Houtbosplaas (Pty) Ltd; Respondent: TBS Alpha Beleggings (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
19 May 2022
Case Number
164/2021
Procedural Posture
Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria
Outcome
Appeal dismissed with costs.
Judges
Petse, Zondi, Gorven, Tsoka, Makaula
Legal Topics
Banker Client Relationship, Financial Intelligence Centre Act, Mora Interest, Summary Closure of Accounts, Shareholder Voting Rights, Contractual Termination
Banking and Finance Civil Procedure Commercial and Corporate Banker Client Relationship Financial Intelligence Centre Act Mora Interest Summary Closure of Accounts Shareholder Voting Rights +1 more

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Summary, issues, holding and outcome

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Parties

Nedbank Limited

Appellant

Houtbosplaas (Pty) Ltd

Respondent

TBS Alpha Beleggings (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From Gauteng Division of the High Court, Pretoria

Legal Issues

  1. 1 Whether Nedbank was lawfully entitled to restrict or freeze the applicants' accounts under FICA.
  2. 2 Whether Nedbank could refuse to close the accounts after the applicants terminated the banker-client relationship.
  3. 3 Whether the trusts held 25% or more of the voting rights, triggering FICA's verification requirements.

Ratio Decidendi

The Supreme Court of Appeal held that Nedbank was not entitled under FICA or its regulations to demand trust deeds from the applicants, as none of the trusts held 25% or more of the voting rights at general meetings. The memoranda of incorporation made clear that preference shareholders retained voting rights on matters within the normal scope of company powers, and only in limited circumstances were they excluded. Thus, the threshold for Regulation 7(f)(ii) was not met. FICA's verification requirements applied only at the inception of the business relationship, not to existing clients for every transaction. Nedbank's refusal to close the accounts and transfer funds after the applicants...

Court Disposition

Appeal dismissed with costs.

Orders

  • Nedbank Limited's appeal is dismissed with costs.
  • Nedbank Limited is ordered to pay mora interest to Houtbosplaas (Pty) Ltd and TBS Alpha Beleggings (Pty) Ltd as claimed.