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[2016] ZAGPPHC 938
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Hlongwane and Others v Absa Bank Limited and Another (75782/13) [2016] ZAGPPHC 938 (10 November 2016)
REPUBLIC OF SOUTH ARICA
IN THE OF THE HIGH COURT OF SOUTH AFRICA
GAUTENG HIGH COURT DIVISION, PRETORIA
Case number: 75782/13
Reportable: No
Of interest to other judges: No
Revised.
10/11/2016
FANA
HLONGWANE
1st
Applicant
NGWANE AEROSPACE (PTY)
LTD
2nd
Applicant
HLONGWANE CONSULTING (PTY)
LTD
3rd
Applicant
NGWANE DEFENCE (PTY)
LTD
4th
Applicant
NGWANE PROPERTIES (PTY)
LTD
5th
Applicant
NGWANE MINING (PTY)
LTD
6th
Applicant
SPARUS CONSULTING
CC
7th
Applicant
and
ABSA BANK
LIMITED
1st
Respondent
MARTHINUS VAN RENSBURG
N.O
2nd
Respondent
JUDGMENT
MNGQIBISA-THUSI, J:
[1] The relief sought by the applicants in the
notice of motion is the following:
1.1
That
the respondents' decision to refuse to grant the applicants access to
all the records as described in paragraph 1 of Annexure
"B
"
of the applicants' request in terms of
the Promotion of Access to Information Act
[1]
("the Act"), be set aside.
1.2
That
the respondents be ordered to make all the records referred to in
paragraph 1 of the said annexure which have not yet been
provided to
the applicants, available to the applicants within four weeks of the
date of this order.
1.3
In
the alternative to prayer 1
.
2,
that the respondents be ordered to disclose to the above Honourable
Court for its examination such records set out in paragraph
1 of
annexure "B" of the applicants' request in terms of the Act
as the Honourable Court may require, so that the Honourable
Court may
determine whether the applicants ought to be granted access to the
said records.
1.4
That
the respondents be ordered to pay the costs of this application.
[2] The first applicant brings this application
in his personal capacity and also in a representative capacity as
director of second
to seventh applicants
.
[3] The first respondent is a registered
financial institution in which the applicants hold various banking
accounts
.
The
second respondent is employed by the first respondent as an
information officer
.
Legal framework
[4] The applicants brought this application in
terms of section 78(2) (d) (i)
[2]
of the Act. The relief sought is contained in section 82
[3]
of the Act.
[5] The objects of the Act are set out in
section 9 as follows:
"(a) to give effect to the constitutional
right of access to-
(i)
any information held by the State ; and
(ii)
any information that is held by another
person and that is required for the exercise or protection of any
rights
;
(b) to give effect to that right-
(i) subject to justifiable limitations,
including, but not limited to, limitations aimed at the reasonable
protection of privacy,
commercial confidentiality and effective,
efficient and good governance; and
(ii)
in a manner
which balances that right with any other rights, including the rights
in the Bill of Rights in Chapter 2 of the Constitution;
(c) to give effect to the constitutional
obligations of the State of promoting a human rights culture and
social justice, by including
public bodies in the definition of
'requester', allowing them
,
amongst
others, to access information from private bodies upon compliance
with the four requirements in this Act, including an additional
obligation for certain public bodies in certain instances to act in
the public interest;
(d) to establish a voluntary and mandatory
mechanisms or procedures to give effect to that right in a manner
which enables persons
to obtain access to records of public and
private bodies as swiftly, inexpensively and effortlessly as
reasonably possible
;
and
(e)
generally, to
promote transparency, accountability and effective governance of all
public and private bodies by, including, but
not limited to,
empowering and educating everyone-
(i)
to understand their rights in terms of this Act in order to exercise
their rights in relation to public and private bodies;
(ii)
to understand the functions and
operation of public bodies; and
(iii)
to effectively scrutinise, and
participate in, decision-making by public bodies that affects their
rights".
[6] In terms of section 50(1) (a) private
entities, just like public bodies, in order to promote transparency,
accountability and
effective governance in private entities, are
expected to provide information in their possession to a person who
requests such
information in order to exercise or protect his
rights
[4]
.
[7] In
Cape
Metropolitan Council v Metropolitan Council v Metro Inspection
Services (Western Cape)
CC
and
Others
[5]
the court stated that:
"In order to make out a case for access to
information ..
.
an
applicant had to state the right it wished to exercise or protect
,
what the information was and how that
information would assist it in the exercise or protection of that
right."
[8] The following issues need to be determined:
8.1
whether
the documents sought by the applicants are required for the exercise
or protection of a right;
8.2
what
rights the applicants seek to exercise or protect; and
8.3
whether
the reasons proffered by the respondents for the refusal to give
access to the information required by the applicants are
valid in
terms of sections 62-70 of the Act.
[9] In dealing with phrase 'required for the
exercise or protection of any rights in section 50(1)(a) of the Act,
the Supreme Court
of Appeal in
Clutcho
(Pty) Ltd v Davis
[6]
said the following:
"[13] I think that
'reasonably
required' in the circumstances is about
as precise a formulation as can be achieved provided that it is
understood to connote a
substantial advantage or an element of need
.
It appears to me, with respect, that
this interpretation correctly reflects the intention of the
legislature in section 50(1) (a)."
See also In
Unitas
Hospital v Van Wyk and Another
[7]
.
Factual background
[10] As indicated above, the applicants were
holders of bank accounts in the first respondent. During November
2012 the first respondent,
through the second respondent informed the
first applicant that a decision had been take to close the bank
accounts of the first
to sixth applicants as a result of a review of
its bank's business. Notice of the closure of the bank account of the
seventh applicant
only came later
.
After
various communications between the
applicants' attorneys and the first
respondent, on 3 May 2013 the first respondent responded to an
inquiry from first applicant's
attorneys as to the reason for the
closure of the bank accounts, the first respondent responded by
informing the applicants' attorneys
that: "Absa in the normal
course of its business regularly performs reviews of its underlying
businesses, and their related
client bases, to analyse their
alignment to the organisation's overall strategy. On occasion this
analysis suggests that there
are clients that we cannot serve
optimally. In these instances it is best to stop providing banking
services. This decision was
taken with regards to Adv Hlongwane."
[11] After a flurry of communication between
ABSA and first applicant's attorneys and the deadline for the closing
of the accounts
being shifted, the first respondent finally closed
the bank accounts during December 2013, including the bank account of
the seventh
applicant.
[12] As a result of the closure of the bank
accounts, the applicants lodged a complaint with the Ombudsman for
the Banking Services
("the Ombud") against the first
respondent on the ground that first respondent based its decision to
close the applicants'
accounts on the basis of the first applicant's
political affiliation and/or profile which was a violation of the
applicants' human
rights under the Constitution. The relief the
applicants sought from the Ombud was for first respondent to be
directed to reverse
its decision to close the accounts. After
investigating the matter, the Ombud responded to the applicant's
complaint and informed
them that "he could not find any
maladministration on the part of Absa."
[13] Subsequent to receiving the Ombud's
ruling, the applicants lodged a request in terms of section 53 (1) of
the Act with the
second respondent in which they sought to be
provided with the following documents:
"10.1 All documentation, statements,
financial statements, records, correspondence, internal
communications, documentation
and memorandums, internal e-mails,
notices of meetings, minutes of meetings, transcriptions of meetings
relating to the above and
to:
10.1.1
The
identification of the Accounts listed in annexure A for a review
.
10.1.2
The
recommendation to perform a review of your business and the Accounts'
profile.
10.1.3
The
decision to perform a review of your business relating to the
Accounts.
10.1.4
The
investigation performed regarding the review of your business.
10.1.5
The
decision to close the Accounts.
10.1.6
The
confirmation by Mr Stuart-Reckling in his email dated 3 May 2013 in
which he confirmed that ABSA cannot serve its client optimally.
10.1.7
The
confirmation by Ms Marsha Davids during a telephonic discussion that
a "Political Exposure Review" was performed on
Mr Hlongwane
and his related entities, which discussion was confirmed in an email
of 20 May 2013.
10.2 All criteria and factors considered by
ABSA to close the Accounts and to give formal notice thereof.
10.3 All the submissions by ASSA to the
Ombudsman for Banking Services relating to the Accounts and all the
correspondence between
ABSA and the Ombudsman for Banking Services
regard
i
ng
this matter"
.
[14] In the above request
,
the applicants averred that the closure
of the accounts was unreasonable and unfair and that it was a
violation of their constitutional
rights. Furthermore, the applicants
indicated that they needed the information so that they could
properly consider and evaluate
the affected rights and obtain legal
advice thereon, before potentially instituting legal action.
[15] The first respondent provided the
applicants with the documents requested in sub-paragraphs 10.1.5;
10.1.6, 10.1
.
7
and 10
.
2
above. With regard to the rest of the information requested, the
first respondent informed the applicants that the information
was
either 'confidential
,
alternatively
legally privileged, further alternatively, that it is not required or
related to the alleged rights that your client
seeks to establish'.
[16] The reasons given by the respondents to
the applicants necessitating the closing of their accounts are, inter
alia
,
the
following:
16.1.
that
the first respondent is bound, in terms of legislation in prevention
of money laundering to put in place policies in order
to manage its
money laundering risk and to put in place measures, in terms of the
Financial
Intelligence
Centre Act
[8]
("FICA") to facilitate the detection and investigation of
money laundering;
16.2.
that
the policies it has formulated and are implementing take into account
the risk level of their customers to money laundering;
16.3.
that
in terms of their high profile clients its due diligence obligations
are more onerous in order to comply with the requirements
of FICA;
16.4.
that
the first applicant was identified as a Politically Exposed Person
("PEP");
16.5.
that
in 2012 the Arms Procurement Commission ("the Commission")
had requested information about some of the applicants;
16.6.
that
in the light of revelations that the first applicant was implicated
in the arms procurement contracts, the first applicant
became a high
risk client and exposed it to some risks relating to money laundering
which was not commensurate to the benefit it
received in having the
first applicant as a client;
16.7.
that
they were prohibited from disclosing to the applicants that they were
being investigated by the Commission
;
and
16.8.
that
the first respondent was entitled
,
in
terms of the contract and each of the applicants to close their
banking facilities on notice.
Submissions on behalf of applicants
[17] The following submissions were made on
behalf of the applicants. That the applicants needed the requested
information for the
purpose of receiving informed advice from their
legal representatives as to whether to proceed and
to institute action against the first
respondent which potentially could include
,
a declaratory order that first
respondent's decision to close the accounts constitutes unlawful and
unconstitutional conduct, alternatively,
breach of contract and
compel the first respondent to reopen the accounts; payment of
damages consequent upon the infringement
of the right to dignity
.
[18] Although it was submitted on behalf of the
respondents that since the applicants were seeking final relief
,
in the light of the court being faced
with two opposing versions, the principles as set out in
Plascon-Evans Paints Ltd v Van
Riebeeck Paints (Pty) Ltd
[9]
should apply. However, I am of the
view, as correctly pointed out by Counsel for the applicants, that
all that was required of the
applicants in order to succeed was for
them to present facts which prima facie
,
though open to some doubt
,
established that they have the right
,
to which access to the record is
required, to exercise or protect
[10]
.
Further it was submitted on behalf of the applicants that the merits
or demerits of the applicants' case was irrelevant to their
entitlement to the information requested
.
[19] It was contended on behalf of the
applicants that the respondents bore the onus of proving on a balance
of probabilities, why
the information should not be made available to
applicants
.
Counsel
for the applicants argued that it was for the respondents to convince
the court that
,
inasmuch
as the information requested was in the possession of the first
respondent and despite the fact that the information might
be
necessary for the exercise or protection of a right, the
information should not be made available
the applicants as there are other considerations militating against
such information being
made available to the applicants.
[20] It was further submitted on behalf of the
applicants that the documents sought from the first respondent were
of critical importance
in determining whether the first respondent
had good cause and acted in good faith when it made the decision to
close the accounts.
It was argued that once the information was made
available the court would be in a position to determine whether a
valid commercial
reason exists for first respondent to terminate its
relationship with the applicants.
[21] In the alternative, it was argued if the
curt was not inclined to allow the applicants to have the requested
information, the
court have what is termed a judicial peak into the
required documents.
Submissions on behalf of the respondents
[22] Counsel for the respondents raised two
preliminary points. Firstly, it was submitted that the applicants,
contrary to normal
motion procedure had in argument raised the issue
of confidentiality when
it
was
never raised either in the founding affidavit or their replying
affidavit. Furthermore that the applicants' argument was based
on
annexures to the founding affidavit which were never canvassed in the
affidavit
[11]
.
Secondly counsel raised the issue of onus which I have already dealt
with.
[23] On the merits counsel for the respondents
submitted that what the applicants are seeking is to be granted
unfettered and unrestricted
access to all the documents the first
respondent had in its possession as set out in its request, without
setting out what it is
actually looking for and the reasons why it
required access to those documents. It was argued on behalf of the
respondents that
the onus was on the applicants to show the need for
the documents. It was submitted that the applicants could not be
allowed to
embark on a speculative jaunt of its own. The applicants
had to show that whatever document they required was reasonably
required
to enable the applicants to exercise their rights. It was
submitted that the applicant wanted to convey to this court that the
first respondent's real reason for closing the accounts was that it
reasonably believed that the first applicant was a politically
exposed person because it understands that there is a connection
between the applicants the arms deal commission and therefore
the
reason for closing the accounts was not made bona fide.
[24] Counsel argued that contrary to the
applicant's counsel submission, the
Bredenkamp and Others v Standard Bank
of South Africa Ltd
[12]
was not authority for the
proposition that bona tides was a requirement for a decision to close
a client's account. Counsel further
argued that since the applicants
were well aware of the relief they are seeking, they have not set out
in their papers
why
the information given to them and that given to the Ombud which is in
their possession was not sufficient and how it would assist
them in
exercising and protecting their rights. That the applicants have only
laid out a legal conclusion and not facts as to why
they are in need
of the documents sought.
[25] Furthermore, as regards to information the
first respondent received from the Commission
it
was argued that that information could
not be released without the permission of the Commission,
particularly as it had not been
joined. It is the contention of the
respondents that the accounts were closed because when the Commission
started and the first
applicant's name was bandied in the media, this
raised the first applicant's profile. In terms of the respondents'
obligations
in terms of FICA, the first respondent is required, in
respect of people who are classified as 'Politically Exposed People'
("PEP")
to put in place certain measures as it is taken
that such persons are vulnerable to money laundering schemes. In view
of the additional
resources the first respondent would have to expend
on monitoring the first applicant and his associated entities versus
the benefit
that would accrue to the first respondent through the
applicants, a business decision was made that it would be prudent to
terminate
the relationship it had with the applicants.
[26] It was finally submitted that the
application should be dismissed as the applicants have failed to show
why the documents sought
are reasonably required.
[27] It is common cause that the applicant
complied with the procedural requirements for a request to access
information under the
Act.
[28] The first issue to be determined is
whether the information needed by the applicants is for the exercise
or protection of their
rights. According to the applicants, they need
the information in order for their legal representatives to determine
whether any
of their rights were affected and also consider
instituting legal action if necessary
.
Nowhere in the founding affidavit or the
replying affidavit do the applicants allude to which rights they seek
to exercise or protect.
It could not be expected of the first
respondent to provide the applicants with information in a situation
where the applicants
have failed to explain which rights they wished
to protect or exercise and the relevancy of the information required
for that purpose.
[29] In terms of the contractual relationship
between the first respondent and the applicants, the first respondent
was entitled
to terminate the relationship on proper notice
.
The first respondent had given the
applicants ample notice of their intention to close their accounts
.
[30] Furthermore, it is apparent that the first
respondent made the decision to close the applicants' account after
it became apparent
that the first applicant had become a PEP, there
was not only a commercial but also a reputational risk to the first
respondent
in keeping the first applicant and his related entities as
clients
.
The
first respondent had no obligation to retain a client whose
monitoring in terms of money laundering measures put in place would
be more onerous when compared with the benefit, in terms of fees
,
it would receive from the applicants. I
am of the view that the first respondent's bona tides in deciding
to close the applicants' accounts cannot
be questioned
[13]
.
In the Bredenkamp matter (supra) where the court was faced with facts
similar to the facts in this case, the court held that:
"[65] The appellants' response was that,
objectively speaking, the Bank's fears about its reputation and
business risks were
unjustified. I do not believe it is for a court
to assess whether or not a bona fide business decision, which is on
the face of
it reasonable and rational, was objectively 'wrong' where
in the circumstances no public policy considerations are involved"
.
[31] Even though the first applicant's
connection to the Commission might have been a factor in the first
respondent's decision
to close the accounts of the applicants, I am
satisfied that the overriding reason for the decision was business
related and concerns
about the risks involved.
[32] Further, I am of the view that giving the
applicants the information they seek, the first respondent would have
been in contravention
of the prohibition against disclosure of what
the Commission was investigating. Furthermore, this would have led to
the exposure
of the first respondent's processes which are in place
with regard to investigating and monitoring money laundering
activities
of their clients and could have exposed confidential
information relating to investigations it had undertaken in this
regard. I
am therefore satisfied that the decision by the first
respondent to refuse to give the applicants access to the information
they
required was rational and lawful. Furthermore, in view of the
fact that the applicants had not formulated the rights they wished
to
exercise or protect it is not clear how accessing the information
they seek would have gained them substantial advantage in
any
potential litigation.
[33] The fact that the applicants have not
categorically shown what rights they wished to exercise or protect is
indicative of the
fact that the applicants might have been on a
fishing expedition to find out circuitously what information the
Commission had on
them. Nothing stopped the applicants from going
directly to the Commission to seek for the information they required.
[34] With regard to the applicants' alternative
prayer that this court should have a look at the information required
and then decide
whether it should be made available to the
applicants, in view of the fact that the applicants already knew that
they were being
investigated by the Commission, it is not necessary
for this court to determine whether the information held by the first
respondent
should be made available to them or not.
[35] In the result the following order is made:
'The application is dismissed with costs.'
____________________
NP MNGQIBISA-THUSI
Judge of the High Court
Appearances:
For the Applicants: Adv JP Vorster SC
Instructed by: Stockenstrom Fouche
For the
Second Respondent: Adv BE Leech SC
Instructed
by: Webber Wentzel
[1]
Act 2 of 2000
[2]
Section 78(2)(d)(i) reads as follows: "A requester-(d)aggrieved
by a decision of the head of a private body- (i) to refuse
a request
for access; may, by way of application , within 30 days apply to
court for appropriate relief in terms of section 82.
[3]
Section 82 provides that: "The court hearing an application may
grant any order that is just and equitable, including orders-
(a)
confirming , amending or setting aside the decision which is the
subject of the application concerned; (b) requiring from
the
information officer or ... the head of a private body to take such
action or to refrain from taking such action as the court
considers
necessary within a period mentioned in the order; (c) granting an
interdict, interim or specific relief, a declaratory
order or
compensation ; or (d) as to costs".
[4]
Section 50 (1) (a) of the Act provides that: "A requester must
be given access to any record of a private body if-that record
is
required for the exercise or protection of any rights.
[5]
2001 (3) SA 1013
(SCA) at [28].
[6]
2005 (3) SA 486 (SCA).
[7]
[2006] ZASCA 34
;
2006 (4) SA 436
(SCA). In dealing with the meaning of 'required' in
section 50 (1) (a) of the Act, the court held that: "[6] ....
Generally
speaking the question whether a particular record is
'required' in the context of s50 (1) (a) for the exercise of
protection
of a particular right is inextricably bound up with the
facts of that matter."
[8]
Act 38 of 2001.
[9]
[1984] ZASCA 51
;
1984 (3) SA 623
(A) at 643E-635C.
[10]
Claase v Information Officer, South African Airways (Pty) Ltd
2007
(5) SA 469
(SCA) at [8].
[11]
In NDPP v Zuma
2009 (2) SA 207
at [47] the court stated that: "...It
is not proper for a court in motion proceedings to base its judgment
on passages in
documents which have been annexed to the papers when
the conclusions sought to be drawn from such passages have not been
canvassed
in the affidavits. The reason is manifest - the other
party may well be prejudiced because evidence may have been
available to
it to refute the new case on the facts. A party cannot
be expected to trawl through annexures to the opponent's affidavit
and
to speculate on the possible relevance of facts therein
contained. The position is no different from the case where a
witness
in a trail is not called upon to deal with a fact and the
court then draws an adverse conclusion against that witness".
[12]
2010 (4) SA 468 (SCA).
[13]
Putco Ltd v TV & Radio Guarantee Co (Pty) Ltd
1985 (4) SA
809
at 832H-I.