Louis Case Reports

BANKING – FICA AND CLIENT INSTRUCTION TO CLOSE ACCOUNT
Nedbank v Houtbosplaas (Pty) Ltd [2022] ZASCA 69

Houtbosplaas and TBS Alpha are both limited liability private companies which held several banking accounts with Nedbank for decades. Retired Judge van Dijkhorst is the company representative for both and has been the sole director of the companies since their incorporation. He holds one preference share in each of the companies and four trusts named after his four daughters each hold one preference and ordinary shares in the two companies. Ostensibly pursuant to Financial Intelligence Centre Act (FICA) requirements, Nedbank requested copies of the trust deeds, but the representative had objections, asserting that Nedbank’s request constituted an unjustifiable intrusion into the trusts’ right to privacy. After an impasse, he gave written notice to Nedbank to close the accounts and transfer the funds to certain accounts at Absa. Nedbank advised the companies that it would not comply with the request to close the accounts and transfer the funds because the companies had failed to comply with Nedbank’s request and the accounts were restricted in accordance with the prescripts of FICA. This caused a delay in the transfer and the companies successfully sued Nedbank in the High Court. Nedbank then appealed to the Supreme Court of Appeal.

Petse DP discusses the purpose and relevant provisions of FICA and its regulations; that for the provisions of reg 7(f)(ii) to be triggered, the trust involved must hold 25 % or more of the voting rights at a general meeting of the company concerned; and the High Court’s findings that Nedbank was not justified in law to require a copy of the particular trust deed, because none of the trusts exercised 25 % voting rights at the companies’ general meetings. Further, the High Court held that nowhere does FICA require existing bank clients to provide verification documents to a bank when requested to do so and enforce that demand for submission of identity documents for verification, by restricting access to their accounts. The court also discusses the companies’ claim for mora interest and whether there was any lawful justification for Nedbank to restrict the accounts for the reasons upon which Nedbank relied.
The appeal is dismissed with costs.

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TRUSTEES AND CURATORS BONIS
Master of the High Court In re Van Rooyen NO v RAF [2022] 35182-2016 (GP)

The Master approached the court with a report seeking guidance on the Master’s supervisory powers over trustees and curators bonis in matters where damages have been awarded by courts. The Master also identified five RAF cases where specific guidance was sought. The Master described the practical difficulties in implementing court orders that are ambiguous in that, while they are aimed at establishing trusts in personal injury matters, they appear to confuse the powers extended to the Master under the Estates Act and those under the Trust Act. The Master also raised concerns on the developing practice among legal professionals to circumvent the checks and balances afforded the Master under the Estates Act by establishing trusts for the protection of damages awarded to vulnerable plaintiffs rather than proceeding via the curator bonis route. These plaintiffs, in RAF and medical negligence claims, were minors or those with brain damages and were better protected by the appointment of a curator bonis, over whom the Master has more extensive supervisory powers.

Keightley J, Millar J and Vallaro AJ discuss the legal position in respect of curators bonis and trusts under the Estates Act and the Trust Act; whether the interests of vulnerable plaintiffs be properly protected via the mechanism of a trust, or is the appointment of a curator bonis necessary; the remuneration of trustees and curators and eradicating ambiguities in court orders; the powers of the Master in terms of the Administration of Estates Act and the Trust Property Control Act and precedents of prior consent and approval of the Master; the function of the Guardian’s Fund; a summary of Findings on the Judge President’s Directive; Guidelines for a consolidated Practice Directive; and the appropriate order in each of the test cases.

The court notes at [35] that the Master has no special duty to protect public funds; at [56] that if this court were to agree to the Master’s submission, the effect would be to place an even greater bureaucratic burden on the Master’s office and in all probability cause greater inefficiencies and prejudice to the persons who most require efficient administration of their affairs by others; at [109] that that it is not the function of the Master to micro-manage the exercise of powers by either curators or trustees; and at [111] there is no warrant for the Master to insist that the exercise of all the curator’s powers should be subject to her prior approval in every case.

It is desirable that a practice note be developed in this Division specifically dealing with the procedure to be followed by parties who approach the court for an order aimed at protecting damages awarded to plaintiffs in RAF and medical negligence matters. Guidelines for the development of the proposed practice directive are given at para [161]. The specific matters are dealt with from para [162].

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PAIA – NON-PROFIT ORGANIZATION
Goosen-Joubert v Women4Women NPC [2022] ZAWCHC 82

The applicant, Ms Goosen-Joubert, entered the Mrs SA beauty pageant as a contestant and competed through each round of the elimination process and made it to the final event of the beauty pageant. The contestants were required to conclude written agreements with Mrs SA and certain of the clauses required the selling of tickets for fund raising. Applicant did not win the Mrs South Africa 2021 title, but was awarded instead the title of Mrs Charity. She was uncomfortable with the terms of the contract for Mrs Charity and did not accept the title or sign the contract. After she posted on Instagram, proceedings were brought against her by the director of Mrs SA, where it was alleged that her statements were defamatory. The registrar issued and authorised the disclosure of the bank statements of Women4Women NPC (an affiliate of Mrs SA) in terms of a subpoena duces tecum. Upon perusal of these bank statements, the applicant noticed that there had been numerous personal payments made. The applicant now seeks in terms of s 50 of PAIA records including the annual reports and financial statements of Women4Women as well as its Constitution.

Mantame J discusses the applicant’s contention that since she contributed to Women4Women, she is entitled to the information and because it is a non-profit organisation that is concerned with the upliftment of women, she is entitled to know how its funds are disbursed; the respondent’s points that the applicant had failed to exhaust the complaints procedure set out in s 77A of PAIA; that the requested information is not necessary for the exercise of the applicant’s rights; the meaning of “required”; and the respondent’s belief that the applicant has an ulterior motive in launching and persisting with this application.

The decision by the respondent not to provide the applicant with the information requested is set aside and the respondent is directed to provide the applicant access to the information in terms of s 78(2) of PAIA, as detailed in the order at para [73].

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ABOUT THE EDITOR

Louis Podbielski spent ten years at Juta working on various law reports and has read many thousands of judgments for case selection. He has considerable experience in writing flynotes and headnotes, compiling case annotations, and in refining subject indexes.​ During his four years at LexisNexis he was involved with legal data, analytics and in developing various legal tech solutions. He now runs his own case law service Louis Case Law

You can read his full CV and more about Louis on his LinkedIn profile where he shares interesting and recent cases.

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