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Ayo Technology Solutions Limited v Access Bank South Africa Limited (12629/2022) [2022] ZAWCHC 218 (13 October 2022)

80 Reportability
Banking and Finance
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Brief Summary

Banking — Closure of bank accounts — Urgent application for interim relief to reopen accounts closed by bank — Applicant contending closure was unlawful based on the Promotion of Administrative Justice Act and common law principles — Bank asserting closure due to reputational risk linked to findings of impropriety from the Mpati Commission and negative media reports — Court finding that the applicant failed to establish a prima facie right to the relief sought, leading to dismissal of the application.

Comprehensive Summary

Summary of Judgment


1. Introduction


The proceedings were an urgent application for interim relief brought in Part A, pending the determination of a contemplated review application in Part B. The interim relief initially sought an order directing the reopening of two bank accounts previously held by the applicant with the respondent bank, and an interdict preventing the respondent from closing or restricting those accounts pending finalisation of Part B.


The applicant was Ayo Technology Solutions Limited, a holding company within a broader corporate grouping described as the “Ayo Group”, and associated in public discourse with the broader “Sekunjalo Group”. The respondent was Access Bank South Africa Limited.


The application was enrolled and heard on the urgent roll. The respondent raised points in limine, including challenges to urgency and the jurisdiction of the High Court to determine the matter. The applicant also brought an application to strike out portions of the respondent’s answering papers. After the hearing, while judgment was reserved, subsequent events occurred—principally developments in related competition proceedings and the reopening of accounts by another bank—which the court held had overtaken the case as pleaded and materially affected the issue of urgency.


The general subject-matter of the dispute concerned the closure of the applicant’s bank accounts by the respondent and the applicant’s attempt to obtain interim relief compelling reinstatement and continued access to banking facilities, pending a more substantive challenge to the closure. The applicant relied, in the alternative, on the Promotion of Administrative Justice Act 3 of 2000, the doctrine of legality, and common-law contractual principles as bases for relief.


2. Material Facts


The applicant formed part of a broader set of entities commonly described as the Sekunjalo Group, which had attracted significant public scrutiny. A Commission of Inquiry into the Public Investment Corporation, commonly referred to as the Mpati Commission, was appointed in October 2018 under the President’s constitutional powers and the Commissions Act 8 of 1947. The Mpati Commission’s findings were made public on 12 March 2020 and included adverse conclusions about the PIC’s dealings with the Sekunjalo Group. The respondent bank relied on the existence of these findings (and additional adverse media reporting) as context informing its approach to banking relationships associated with the group.


It was common cause that negative publicity led to a number of banks in South Africa, including the respondent, terminating banking services to companies within the Sekunjalo Group, citing reputational risk and contractual termination rights. It was also common cause that this broader “unbanking” context generated multiple strands of litigation in different fora, including proceedings in the Competition Tribunal and the Equality Court.


Chronologically, the applicant’s own banking position was that it had been “unbanked” since 3 May 2021, when First National Bank (FNB) closed its bank accounts. Before that, the applicant had accounts with ABSA, which gave notice of closure in August 2020. The applicant stated that it made attempts to secure alternative bank accounts without success.


Against that background, the applicant (through a consultant, Mr Dowlat) approached the respondent bank’s Sandton branch on 5 May 2022 to open accounts. The relevant documentation was submitted on 6 May 2022. The respondent’s internal process then led to the opening of a current account on 10 May 2022 and a call account on 23 May 2022. By 31 May 2022, the applicant had transferred more than R55 million into the current account.


On 31 May 2022, the respondent’s CEO sent a letter to the applicant advising that the bank had decided to close the accounts with immediate effect. The letter recorded, in substance, that the respondent considered it “perplexing” that the applicant proceeded to open accounts in circumstances where the bank was already involved as a respondent in related Competition Tribunal proceedings brought by Dr Iqbal Surve, Sekunjalo Investment Holdings (Pty) Ltd, and multiple other applicants, including the applicant. The letter also stated that it was “unfortunate and regrettable” that staff had opened the accounts, and that the bank would liaise regarding the return and transfer of deposited funds.


A period of correspondence followed, and the applicant’s funds were transferred out of the respondent’s accounts (the court noted this correspondence but did not consider it necessary to detail it given later developments). The present High Court proceedings were launched on 29 July 2022.


While the Part A application was pending, developments occurred in parallel Competition Tribunal proceedings. After the High Court hearing but before judgment, the Competition Tribunal issued a ruling (dated 16 September 2022) that, for a period of six months (or until earlier conclusion of the Competition Commission investigation), certain banks were required to reinstate/restore accounts for affected applicants. Importantly for the applicant in the present matter, the ruling included an order that First Rand (FNB) was to reinstate/restore bank accounts for applicants who held accounts with it, on the same terms and conditions as existed prior to closure.


After further developments, on 3 October 2022 FNB advised the applicant that it had elected to comply with the Competition Tribunal ruling by reopening the applicant’s accounts, and that even if it later chose to challenge the ruling, it intended to keep the applicant’s accounts open. By 7 October 2022, FNB had not lodged an appeal of the ruling.


These subsequent developments formed the basis of the respondent’s contention that the applicant was no longer “unbanked”, undermining the asserted urgency and the need for interim relief against the respondent bank in Part A.


3. Legal Issues


The central legal question actually determined in this judgment was whether the matter should be entertained on the urgent roll, given intervening events after the hearing, and whether the applicant still met the threshold basis for urgent interim relief in Part A.


Although the application was framed as seeking interim interdictory relief based on PAJA, legality, or contract, the court did not decide the substantive merits of those bases. Instead, the dispute as adjudicated turned primarily on the procedural and remedial question of urgency and the appropriateness of determining the interim interdict at that stage.


The issue before the court was therefore largely one of application of legal standards to an altered factual matrix, particularly whether, in light of the Competition Tribunal relief and FNB’s reopening of accounts, the applicant could still demonstrate the urgency and interim-interdict requirements necessary for Part A to be decided urgently.


4. Court’s Reasoning


The court approached the matter through the established requirements for an interim interdict, namely a prima facie right (even if open to some doubt), a reasonable apprehension of irreparable and imminent harm if the interdict is not granted, a balance of convenience favouring the grant of relief, and the absence of an alternative remedy. The court recorded that if a clear right is established, there is no need to establish apprehension of irreparable harm.


However, the court treated the subsequent Competition Tribunal ruling and the further confirmation that FNB had reopened the applicant’s accounts as decisive developments that had materially changed the context in which Part A was launched. The court reasoned that these developments directly affected the assessment of urgency, because the Competition Tribunal relief afforded the applicant banking access for at least six months. On that footing, the court held that there was no longer justification to determine the matter on the urgent roll, as the applicant could potentially obtain substantial redress in due course if it still wished to pursue proceedings against the respondent bank.


The court acknowledged that the underlying dispute about the respondent’s closure of the accounts had not necessarily “evaporated” and that the applicant might still wish to pursue the substantive relief in Part B. It nevertheless emphasised that the “fluidity” of the broader litigation landscape and the changed position resulting from the Competition Tribunal ruling meant the urgency underpinning Part A had been undermined.


The court further held that it was not appropriate to determine the merits of the interim interdict in light of the need to address urgency upfront and because the issues raised were described as complex and novel, even for interim relief purposes. The court also referred to the respondent’s complaint about the timeframes afforded to it in a matter raising such issues, reinforcing the conclusion that the urgent roll was not the appropriate forum for determination on those papers at that time.


On costs, the court placed weight on the fact that the respondent had warned that the applicant might receive relief through the Competition Tribunal process, which would affect the applicant’s assertion that it had no alternative remedy and its insistence on urgency. Although the Competition Tribunal ruling had not been handed down when the respondent raised these points, the court considered that the applicant should bear the costs because the respondent had been put to the expense of a substantial application that had become effectively futile in the urgent posture adopted.


5. Outcome and Relief


The court struck the application from the roll for want of urgency.


The court ordered the applicant to pay the respondent’s costs, including the costs of two counsel, and including the costs of the hearing of 9 September 2022.


The judgment did not determine the substantive merits of the applicant’s reliance on PAJA, legality, or contract, and did not grant the interim relief sought in Part A.


Cases Cited


No reported cases were cited in the judgment.


Legislation Cited


The judgment referenced the Promotion of Administrative Justice Act 3 of 2000.


The judgment referenced the Financial Intelligence Centre Act 38 of 2001.


The judgment referenced the Commissions Act 8 of 1947.


The judgment referenced the Competition Act 89 of 1999.


The judgment referenced the Competition Act 89 of 1998, including section 49C(5).


Rules of Court Cited


No rules of court were cited in the judgment.


Held


The court held that intervening events after the hearing—particularly the Competition Tribunal’s ruling resulting in the reopening of the applicant’s bank accounts by FNB and the applicant’s resulting access to banking services—materially changed the factual position underlying Part A and removed the basis for urgent enrolment.


The court held that, because urgency must be determined upfront on the urgent roll, and because the applicant could obtain substantial redress in due course if it still wished to pursue relief, the matter should not be determined urgently. The application was therefore struck from the roll for want of urgency, with costs awarded against the applicant (including costs of two counsel).


LEGAL PRINCIPLES


The judgment applied the standard requirements for an interim interdict, namely a prima facie right, a reasonable apprehension of irreparable and imminent harm (unless a clear right is established), a favourable balance of convenience, and the absence of an alternative remedy.


The judgment applied the principle that, on the urgent roll, the court must determine urgency as a threshold issue, and that where subsequent developments materially alter the circumstances underpinning urgency and interim relief, it may be inappropriate to determine the merits of interim interdictory relief on that roll.


The judgment further reflected that where an urgent application becomes effectively unnecessary or is undermined by subsequent events—particularly where a parallel process provides materially similar relief—the court may strike the matter from the roll for want of urgency and may order costs against the party that persisted with urgent relief in circumstances that ultimately proved futile.

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[2022] ZAWCHC 218
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Ayo Technology Solutions Limited v Access Bank South Africa Limited (12629/2022) [2022] ZAWCHC 218 (13 October 2022)

IN
THE HIGH COURT OF SOUTH AFRICA
(WESTERN
CAPE DIVISION, CAPE TOWN)
Case
No.:12629/2022
In
the matter between:
AYO
TECHNOLOGY SOLUTIONS
LIMITED
Applicant
and
ACCESS
BANK SOUTH AFRICA LIMITED
Respondent
JUDGMENT
DELIVERED ELECTRONICALLY ON 13 OCTOBER 2022
MANGCU-LOCKWOOD,
J
A.
INTRODUCTION
[1]
This is an urgent
application for interim relief in Part A,
pending the
outcome of a review application contemplated in Part B. When these
proceedings were launched the applicant sought an
order directing the
respondent (“
the Bank”
) to reopen bank accounts
that the applicant previously held with the Bank (“
the bank
accounts”
), which were closed on 31 May 2022; and
interdicting the Bank from: (a) closing the bank accounts pending the
final determination
of the Part B proceedings, or (b) in any way
limiting the operation of the bank accounts so as to ensure that the
applicant is
permitted to operate the bank accounts as it did
immediately prior to their closure.
[2]
The applicant sought the relief based, in the first instance, on the
provisions
of the Promotion of Administrative Justice Act 3 of 2000
(“
PAJA”
), in the first alternative on the doctrine
of legality and, in the second, on the common law principles of
contract.
[3]
The matter came before me on the urgent roll.
The
respondent raised some points
in
limine,
challenging the urgency of the matter and the jurisdiction of this
Court to determine the matter, and the applicant also brought
an
application to strike out certain matter from the respondent’s
answering papers.
[4]
After the hearing of the
matter, while judgment was reserved, certain events occurred which
have overtaken the case as pleaded.
But first, the background facts.
B.
THE FACTS
[5]
The applicant is the
holding company of several
companies specializing in information and communications technology.
Together with its subsidiaries,
it is informally referred to as the
Ayo Group. In turn, the Ayo Group is part of
the Sekunjalo
Group – also an informal but well-used descriptor – which
is a group of companies in which Sekunjalo Investment
Holdings (Pty)
Ltd holds shares. The Sekunjalo Group is owned primarily by African
Equity Empowerment Investments Limited (“
AEEI”
)
and the Public Investment Corporation (“
PIC”
).
[6]
A
s will become evident shortly, a
feature
of these proceedings is that the name of Dr Iqbal Surve features, and
he is not a party to these proceedings. The applicant’s

position is that Dr Surve does not represent it or speak on its
behalf, since it (applicant) is an independent corporate entity,
with
its own board of directors who do not include him; and he is not its
shareholder.
[7]
On 17
October 2018, the President of the Republic appointed a Commission of
Inquiry, in terms of his constitutional powers and the
Commissions
Act 8 of 1947, to investigate allegations of impropriety regarding
the PIC (“
the
Mpati Commission”
).
One of
the
terms of reference of the Mpati Commission was to enquire, make
findings and recommendations regarding “
[w]hether
any alleged impropriety regarding investment decisions by the PIC
[reported] in media reports in 2017 and 2018 contravened
any
legislation, PIC policy or contractual obligations and resulted
in any undue benefit for any PIC director, or employee
or any
associate or family member of any PIC director or employee at the
time”
.
[1]
The
transactions
that formed the subject of the media reports referred to in the terms
of reference included the applicant as well as
other companies in the
Sekunjalo Group.
[2]
[8]
On 12 March 2020 the findings and recommendations of the Mpati
Commission
were made public. The Commission concluded,
inter alia
,
that the PIC’s interactions with, and investments in, the
Sekunjalo Group were questionable. Some of the findings highlighted

by the Bank are the following: (a) Generous bonuses were given to PSG
Capital, the transactional advisor and sponsor for successfully

listing the applicant; (b) Money was moved around in the applicant's
bank accounts to create the incorrect impression of funds
in bank
accounts but, in reality, this was only the case at specific moments
in time; (c) Dr Surve used his relationship with the
then-CEO of the
PIC, Dr Matjila, to make questionable investments into the Sekunjalo
Group and to pressure teams within the PIC
to approve deals between
the Group and the PIC; (d) Dr Matjila and Dr Surve negotiated with
each other to ensure the PIC bought
shares for a much higher price
than what the shares were worth. This was done without following
internal PIC processes, and internal
teams were not informed of these
negotiations; (e) Dr Surve manipulated the numbers to increase the
applicant’s valuation
from its own initial staff valuation of
R2.3 billion to range between R10 billion and R15 billion, which
drove up the price of
the shares; (f) The Sekunjalo Investments
showed a marked disregard for PIC policy and standard operating
procedures.
[9]
In addition to the Mpati Commission findings, there were a number of
negative
media reports accusing Dr Surve and the Sekunjalo Group of
engaging in a number of financial misdeeds. In this regard the
respondent
has attached to its answering affidavit media reports
dated between 25 November 2019 to 2 June 2021, in which various
accusations
are detailed regarding suspicious dealings, impropriety,
share manipulation and various ongoing serious investigations against
the Sekunjalo Group.
[10]
The Bank states that, whatever the
truth of the adverse
findings and recommendations in the Mpati
Report pertaining to the PIC’s dealings with the Sekunjalo
Group, and the media
reports, they nevertheless informed its decision
to
terminate its banking relationships with the
Sekunjalo Group and to not enter into relationship with the
applicant. In particular
,
the Bank draws
attention to the finding that, of the R4.3 billion invested by the
PIC into the applicant resulting from the alleged
share manipulation
by Dr Surve, approximately R2 billion was invested elsewhere and is
still part of the funds of the applicant.
[11]
It is common cause that the result of this negative
publicity was that a number of South African banks, including the
respondent,
terminated banking services with the companies in the
Sekunjalo Group, including the applicant,
citing
reputational risk and contractual rights to terminate the bank
accounts
. This has resulted in a number of court cases across
the country which have been instituted by companies in the Sekunjalo
Group,
challenging the termination of their banking relationships.
One such case was launched in the Competition Tribunal by entities in

the Sekunjalo Group against nine banks. Another notable case was
launched in the Western Cape High Court sitting as the Equality

Court. But more about the litigation later.
[12]
The applicant has been ‘unbanked’ since 3 May 2021 when
the First National
Bank (“
FNB”
) closed its bank
accounts which were first opened in November 2020. Before that, the
applicant held bank accounts with ABSA until
August 2020 when the
latter gave notice of closure of the bank accounts. Since 3 May 2021,
the applicant says it has made many
attempts to secure alternative
bank accounts, to no avail. It first contacted the Bank on 20 April
2021, and, in June 2021, after
several communications, was informed
by the Bank’s CEO that the Bank did not have the “necessary
risk appetite”
to take the applicant as a client.
[13]
The Bank explains that on 10 June 2021, it had picked up a
Politically Exposed Person (“
PEP”
) alert on Dr
Surve on the World Compliance screening results (“
World
Compliance Report”
), when conducting a customer due
diligence required in terms of the
Financial
Intelligence Centre Act 38 of 2001 (“
FICA”
)
in respect of AEEI, which at that point was a prospective
client of the Bank. The PEP alert was escalated up the Bank’s
hierarchy,
and concerns were raised. An executive decision was taken
to not proceed with establishing a banking relationship with AEEI,
and
to not continue a banking relationship with Afrinat - another
company in the Sekunjalo Group which at that stage had a banking
relationship with the Bank.
[14]
The Bank has attached to its answering affidavit an email from Dr
Surve dated dated 7 July
2021, attaching what he described as a ‘very
long letter’ to the then Chief Executive Officer of the Bank,
attempting
to allay the concerns of the Bank pertaining to the
accusations that had been levelled at the Sekunjalo Group. He wrote
the letter
in his “
capacity as the Chairperson of the
Sekunjalo Group,
a position I have been
privileged to have for the last 24 years
”.
[15]
On 18 March 2022
Dr Surve contacted the new CEO of
the Bank, Ms Reddy, attaching a copy of a report by Judge Heath
(“
Heath Report”
),
whom he said he had appointed to investigate the inferences and
allegations of the Mpati Commission, stating that this later
report
went a long way to dispelling the negative media reports previously
alluded to in his very long letter, which he also attached.
He made
himself available for a meeting or discussion regarding any aspect of
the Heath Report and the Sekunjalo Group. I should
state that in
response to the Bank’s allegations regarding Dr Surve’s
correspondence to the Bank on behalf of the Sekunjalo
Group, the
applicant states that it bears no knowledge. There is likewise no
affidavit deposed by Dr Surve in these proceedings.
[16]
Ms Reddy’s response of 24 March 2022 advised Dr Surve as
follows:
“…
As
you are aware Access SA is currently involved as the Ninth Respondent
in the application brought by yourself
[3]
,
Sekunjalo Investment Holdings (Pty) Limited and 34 further applicants
who form part of the Sekunjalo Group structure, for adjudication
by
the Competition Tribunal. It is my understanding that the hearing of
the application was concluded, and that the ruling of the
Competition
Tribunal is currently being awaited.
As such, it would be
misplaced - at this juncture and under such adversarial circumstances
- for Access SA to engage on the contents
of your said letter, other
than to acknowledge receipt thereof.
Once litigation in
this matter has been concluded it may be more appropriate to resume
our correspondence.”
[17]
On 5 May 2022, Mr Subash Dowlat, a financial advisor and consultant
for various entities
which include the applicant, walked into the
Bank’s Da Vinci branch in Sandton and enquired with the branch
manager about
opening an account for the applicant. He was provided
with the account-opening documentation for completion, which were
submitted
to the Bank on 6 May 2022, fully-completed.
The
application forms and all other relevant forms were completed in the
name of the applicant as the customer and included all
its details,
including a copy of the company registration documentation - the CIPC
certificate. The applicant sought to open two
bank accounts - a
current and a foreign currency account.
[18]
The completed documentation was escalated from the
Da Vinci branch to the Bank's head office, where an employee at the
corporate
banking division was to perform Southern African Fraud
Prevention Service and LexisNexis checks. The applicant disputes that
LexisNexis
screening was conducted at that point. Nevertheless,
according to the Bank, the said employee who performed these checks
failed
to notify anyone regarding negative LexisNexis screening
reports which were readily available at that point or to refer the
adverse
findings to the Bank's compliance department in compliance
with the Bank’s procedure.
[19]
In addition to the above, when the said employee
conducted a screening of the directors and related parties of the
applicant, he
apparently confused the names and surnames -
specifically of Mr Khalid Abdulla, a director of the applicant, whom
he captured as
Khalid Bundo. Mr Tatenda Bundo is the Chief Financial
Officer of the applicant. As a result, the LexisNexis screening
conducted
did not project results that would have been obtained had
the name Khalid Abdullah been captured, which would have included a
PEP
alert.
[20]
The completed screening checks were sent back to
another employee at the Bank, who similarly failed to detect the
negative LexisNexis
screening results.
[21]
On 10 May 2022, the applicant’s c
urrent
account was opened by the Bank, and on 23 May 2022 a call
account was opened
in its name
.
By
31 May 2022 the applicant had transferred in excess of R55 million
into the current account.
[22]
On 31 May 2022 the Bank’s CEO addressed correspondence to Mr
Bundo of the applicant,
informing him that the Bank had decided to
close the two bank accounts with immediate effect (“
the
termination letter”
). The
termination
letter read as follows:
“
As
you should be aware, the Bank is currently involved as the Ninth
Respondent in the application for urgent relief brought by Dr
Iqbal
Surve, Sekunjalo Investment Holdings Pty Limited (‘Sekunjalo’)
and 34 further Applicants (amongst whom your company
is the
Thirteenth Applicant) who form part of the Sekunjalo Group structure,
for adjudication by the Competition Tribunal. The
hearing of the
application was concluded, and the parties involved are currently
awaiting the ruling of the Competition Tribunal.
After the hearing of
the Competition Tribunal was concluded I received a letter from Dr
Surve in which he inter alia explored the
possibility of Sekunjalo
and its subsidiaries entering into a banking relationship with the
Bank. I responded to him on 24 March
2022 indicating that it would be
misplaced at this juncture and under such adversarial circumstances
for the Bank to engage on
the contents of his letter, other than to
acknowledge receipt thereof.
I furthermore
indicated that once litigation in this matter has been concluded, it
may be more appropriate to resume correspondence
regarding the
matters raised in his letter.
I therefore find it
somewhat perplexing that despite this official stance of the bank on
the issue, your company proceeded to approach
the Bank to open
accounts and deposit monies with it.
It is unfortunate and
regrettable that my staff opened the two accounts referenced above,
and I apologise for the inconvenience
caused by the subsequent
closure of these accounts.
My staff will liaise
with you as regards the return and transfer of the funds deposited to
the accounts.”
[23]
There followed a long string of correspondence between
the parties, resuming with a letter from the
applicant’s
CEO (Mr Plaatjies)
on 11 June 2022 and ending with a letter
from the Bank dated 7 July 2022, including notification from the
Bank, on 21 June 2022,
of the return and transfer of the applicant’s
funds from the bank accounts. Because of the turn of events since the
hearing
of the matter, it is not necessary to set out the detail of
that correspondence.
[24]
These proceedings were launched on 29 July 2022.
The respondent’s challenge to the urgency of the matter is that
it is self-created
because the applicant delayed by some two months
before launching these proceedings. Further, the Bank says the
applicant afforded
it unreasonable time periods to note its intention
to oppose and deliver answering papers, whereas it afforded itself
normal time
periods to deliver a reply and thereafter unilaterally
set down the matter on 6 September 2022. This, in a matter raising
complex
and novel issues of law. Given that the applicant has been
unbanked since 3 May 2021, which is the true source of the
applicant’s
problems, the applicant, says the Bank, has failed
to explain why it cannot be afforded substantial redress in due
course.
[25]
Linked to the challenge relating to urgency, the
Bank raised the ongoing litigation against other banks, including
banks with whom
the applicant previously had banking relationships.
The Bank stated that if that litigation was successful, the applicant
would
obtain the same relief that it seeks in these proceedings, and
accordingly has alternative remedy. It is now convenient to discuss

the ongoing litigation.
C.
THE OTHER LITIGATION
[26]
Two interdict applications were instituted by the Talhado
Group, which is also part of the Sekunjalo Group, against FNB in the
Gqeberha
Division of the Eastern Cape High Court and were dismissed.
The dismissals are currently being appealed. There does not appear to

be any direct link between that litigation and this application.
[27]
Another relevant
court case was the Equality Court case already mentioned, which was
filed in January 2022 by a large group of the
Sekunjalo Group
entities against a number of banks. The judgment was handed down on
17 June 2022, and in terms thereof Nedbank
was ordered to restore all
accounts that it had terminated, and was prohibited from terminating
any further accounts and from altering
the terms and conditions of
the contracts with the Sekunjalo entities. That matter is currently
the subject of an appeal. While
the applicant is the seventeeth
complainant in the complaint, the Bank is not a party to those
proceedings, although, according
to the Bank’s latest
submissions, the applicant is currently seeking to join the Bank as
party thereto. Furthermore, it does
not appear that the applicant had
bank accounts with Nedbank at the time that the proceedings were
launched.
[28]
The applicant states that the relief sought
in this application differs materially from the relief sought in the
Equality Court.
The complaint in the Equality Court relates to an
alleged contravention of the complainants’ constitutional
rights including,
inter alia
,
the rights to equality, dignity and freedom of association. The
primary complaint in that matter was that the Sekunjalo Group

entities have been victims of racial discrimination. As a result, the
applicant states that, given the limited jurisdiction of
the Equality
Court, it would be inappropriate to seek the relief that is sought in
Part B of these proceedings. In any event, the
respondent is not a
party to the Equality Court proceedings.
[29]
There was another
interdict application launched in the High Court pending the Equality
Court complaint, seeking relief similar
to that sought in the
Competition Tribunal, which is discussed below. It was dismissed,
based on lack of jurisdiction.
[30]
The last relevant
litigation has become pivotal for the further conduct of these
proceedings. In December 2021, a number of entities
in the Sekunjalo
Group, including the applicant, lodged a complaint in the Competition
Commission, and thereafter an urgent interdict
application at the
Competition Tribunal. In broad terms, the applicants in the interdict
application sought an interdict to restore
the bank accounts already
closed, and to prohibit the closure of any further bank accounts
pending the outcome of the complaint
lodged with the Competition
Commission. Although both parties in this case are parties in the
Competition Tribunal interdict application,
only one entity from the
Sekunjalo Group, Afrinat, held a bank account with the Bank when
those proceedings were launched. In those
proceedings the applicant
directly sought relief only against FNB with whom it held bank
accounts until 3 May 2021.
[31]
The applicant states
that the Competition Tribunal complaint falls squarely within the
limited jurisdiction of the Competition Tribunal,
in terms of the
Competition Act 89 of 1999. In that matter the complainants allege,
inter alia
,
that the banks are abusing their market dominance and are engaging in
collusive conduct. They allege that the banks appear to
have
orchestrated a concerted and uniform plot to unbank the Sekunjalo
Group entities. This has been executed firstly, by terminating
the
existing bank accounts of the entities, and secondly, by refusing to
provide alternative facilities where banks have already
closed the
bank accounts. The applicant states that it would be inappropriate to
seek the relief sought in Part B of these proceedings
in the
Competition Tribunal.
[32]
The Competition
Tribunal matter was argued on 7 and 8 March 2022 and, at the time
that these proceedings were launched and heard
before me the judgment
had not been handed down. However, after judgment was reserved here,
the Competition Tribunal Ruling was
handed down and the parties were
permitted to deliver supplementary submissions regarding the impact
thereof. The relevant parts
of the Ruling read as follows:
“
For a period of
six months from the date of this order
[4]
,
or the conclusion of the investigation by the Commission into the
complaint filed by the Applicants under case number
2021Dec0031
,
whichever is the earlier:
1.1.
Nedbank is
to reinstate/restore the bank accounts including all services that it
provided to the Applicants that held accounts with
it, save for the
exclusions detailed in paragraph 360.1
[5]
and 360.2
[6]
on the same terms
and conditions as existed prior to the closure/termination of the
accounts.
…
1.3.   ABSA is to
reinstate/restore the bank accounts including all services that it
provided to the Applicants that held accounts
with it, save for the
exclusions detailed in paragraph 360.3
[7]
on the same terms and conditions as existed prior to the
closure/termination of the accounts.
1.4.   First Rand is
to reinstate/restore the bank accounts including all services that it
provided to the Applicants that
held accounts with it, on the same
terms and conditions as existed prior to the closure/termination of
the accounts.
…
1.8.   Access Bank
is to reinstate/restore the bank account including all services that
it provided to Afrinat (Pty) Ltd, the
Fourth Applicant, on the same
terms and conditions as existed prior to the closure/termination of
the account…”
[33]
It is therefore
apparent that the applicant has obtained direct relief in terms of
paragraph 1.4 of the Competition Tribunal Ruling,
in terms of which
the First Rand Bank (FNB) is required to reinstate its bank accounts
for six months pending investigation by
the Competition Commission.
Despite this, the applicant states in its further submissions that
there remains great uncertainty
about whether, and for how long, it
will have bank accounts with FNB. This is because FNB may appeal or
review the Ruling, and
it is in any event only in place for six
months. To that end, I was requested to withhold delivering this
judgment by about a week
while the applicant ascertained with FNB
what steps it would take regarding the Competition Tribunal Ruling.
But in any event,
the applicant emphasized that the Ruling has no
connection to the relief it seeks against the Bank in this case. I
should add that
the parties agree that the Ruling has no binding
effect upon this Court.
[34]
The Bank does not
agree with the applicant's approach regarding the impact of the
Competition Tribunal Ruling. It argues that the
Ruling has an impact
on the urgency of the applicant's application in this matter. This is
because it was FNB’s closure of
the applicant's bank accounts
on 3 May 2021 that left the applicant unbanked for about a year
before it opened bank accounts with
the Bank, a relationship which
lasted approximately 3 weeks. And the effect of the Ruling is that it
is no longer unbanked and
without access to banking services.
Accordingly, the basis for the applicant’s application has
fallen away, and the matter
cannot be considered urgent. There is
also no reasonable apprehension of harm if the relief sought is not
granted, and the balance
of convenience does not favour the granting
of the relief sought in Part A of this application.
[35]
The fact that the
matter is not urgent is demonstrated by the applicant’s request
for this Court to wait for FNB to indicate
its intention regarding
the Ruling, says the Bank. In any event, the Bank emphasizes that,
whether FNB lodges an appeal or review
against the Ruling, it (the
Ruling) will not be suspended unless a successful application for
suspension is made to the Competition
Appeal Court. Accordingly, the
respondent argued that this Court should decide the matter based on
the facts as they now exist,
not based on what might happen in the
future.
[36]
There were further
developments, which prompted the parties to deliver yet another set
of submissions. On 3 October 2022 FNB advised
the applicant that,
notwithstanding its misgivings regarding the Ruling, it had elected
to comply with it, including by reopening
the applicant’s bank
accounts. Further, that if it does so decide to challenge the Ruling,
whether by appeal or review, it
intends to keep the applicant’s
bank accounts open. By 7 October 2022, the due date of the filing of
an appeal of the Ruling,
FNB had not lodged an appeal.
[37]
The applicant states
that, after it received this information from FNB, it engaged the
Bank with a view to reaching agreement regarding
the further conduct
of this matter, and no agreement has been reached. The applicant now
submits that, instead of dismissing the
application, the matter
should be removed from the roll, and that, if circumstances should
change, the parties should be permitted
to re-enroll the matter on
the same papers, duly supplemented. The applicant, however, admits
that it now has an alternative remedy.
[38]
The Bank persists with the arguments
previously made that there is no longer a basis for the interim
interdict sought because the
applicant is no longer unbanked, and
will have access to banking facilities for at least 6 months, and if
extended, 12 months.
It argues that the matter should be dismissed,
or in the alternative, struck off the roll for want of urgency. In
either event,
the Bank seeks a costs order in its favour.
D.
DISCUSSION
[39]
The
requirements for an interim interdict are trite.
The applicant must establish (a) a
prima
facie
right even if it is open to some doubt; (b) a reasonable apprehension
of irreparable and imminent harm to the right if the interdict
is not
granted; (c) the balance of convenience must favour the grant of the
interdict; and (d) the applicant must have no other
available remedy.
If
a clear right is established, there is no need to establish element
of the apprehension of irreparable harm.
[8]
[40]
The developments subsequent to the hearing of the
case have indeed overtaken this case. In my view, those developments
have an impact
on the degree of urgency of the case, which I have to
determine upfront given that I became seized the matter on the urgent
roll.
The effect of the Competition Ruling, which affords the
applicant relief by at least six months, is that there is no
justification
for the matter to be determined on the urgent roll. It
indicates that the applicant may be afforded substantial redress at a
hearing
in due course if it still wishes to pursue a case against the
Bank.
[41]
I take note of the fact that the
challenge to the Bank’s closure of the bank accounts has not
evaporated. The applicant may
still wish to pursue the main relief
sought in Part B of this application, in due course. That, however,
may also change given
the fluidity of the factual matrix brought to
bear by the ongoing litigation in the various
fora
.
It may also change as a result of the outcome of the Competition
Tribunal Ruling, given the correspondence of the Bank preceding
these
proceedings of 24 March 2022 and 31 May 2022, in which the Bank
specifically preferred to await the outcome before engaging
the
applicant with regards to the opening of bank accounts. Now that
matters have reached that point, it is not unreasonable to
imagine
that Part B may be resolved. This much is intimated in the Bank’s
latest submissions, although it is not definite.
[42]
It is also not clear at this stage what
will happen after the 6 months’ relief granted by the
Competition Tribunal Ruling,
although I note that the period of six
months may be extended by another six months in terms of
section
49C(5)
of the
Competition Act 89 of 1998
, if the conditions for such
extension are met.
[43]
What is clear is that
the climate in
which Part A was launched has materially changed, including by
affording the applicant alternative relief, thus also
discharging at
least one of the requirements for the interim remedy sought. It is in
dispute whether the remaining requirements
of an interim interdict
have been similarly affected. I, however, do not consider it
appropriate to determine the merits of the
interdict, in light of the
fact that, as I have said, the urgency must be determined upfront. It
is also because of the complexity
of the issues raised as well as the
novelty of some of the issues, even for purposes of the determination
of the interim relief
- a common cause issue between the parties -
which render it inappropriate to deal with the matter on this roll.
In part, these issues were raised by the
respondent in its complaint regarding the timeframes it was afforded
in dealing with this
application.
[44]
The applicant was specifically warned by
the Bank of being awarded possible relief by the Competition Tribunal
when it (the Bank)
challenged, not only the urgency of the matter,
but also the applicant’s assertion that it did not have an
alternative remedy.
I do take into account that, when the Bank’s
challenges were raised the Competition Tribunal Ruling had not yet
been handed
down. However, as the Bank predicted in its answering
papers, it was always a possibility. This is why I consider it
appropriate
that the applicant should bear the costs for the outcome
of these proceedings. The Bank has been put out of pocket for a
substantial
application which, in effect, has proved futile.
[45]
In the result, the following order is
granted;
1.
The application is struck from the roll
for want of urgency; and
2.
The applicant is to bear the
respondent’s costs, including the costs of two counsel. Those
costs include the costs of the
hearing of 9 September 2022.
N.
MANGCU-LOCKWOOD
Judge
of the High Court
APPEARANCES
For
the applicant:
Adv T Golden SC
Adv
M Bishop
Adv
J Moodley
Instructed
by:
N Olivier
Adriaans
Attorneys
For
the respondent:       Adv J Botha SC
Adv
T Pooe
Instructed
by:
V Vurgarellis
Lawtons
Africa
[1]
Mpati
Commission Report
,
page
8, para 1.1.
[2]
See
for example
Mpati
Commission Report
p26,
paras 21-24; pp31-36; pp57 - 58; pp312- 326.
[3]
Dr
Surve is the first applicant in the Competition Tribunal
proceedings.
[4]
The
Ruling is dated 16 September 2022.
[5]
An account held by the applicant held with a Nedbank entity in
Lesotho.
[6]
Personal accounts held by the Dr Surve with Nedbank.
[7]
Nine of the applicants in the Competition Tribunal who accepted a
conditional six-month extension prior to the closure of their

accounts by ABSA.
[8]
E
rasmus,
Superior
Court Practice
at
D6-20.

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