Nedbank Limited vs. Houtbosplaas (Pty) Ltd and Another

South Africa

19.05.2022

Banking

A party who had been deprived of the use of his or her capital for a period of time has suffered a loss and did not need to establish special proof of his or her damages

The appeal was about two companies, namely Houtbosplaas (Pty) Ltd (Houtbosplaas) and TBS Alpha Beleggings (Pty) Ltd (TBS Alpha) suing their erstwhile Bank, Nedbank Limited (Nedbank), for damages (ie mora interest) for failing to give immediate effect to their instructions. The gravamen of the complaint by Houtbosplaas and TBS Alpha was that Nedbank had refused to close their bank accounts pursuant to their written instructions of 20 January 2017 to Nedbank to do so upon termination of the parties' customer and banker contractual relationship. The appeal concerned, primarily, the right of a customer of a bank to summarily terminate its customer and banker contractual relationship and close the customer's account.

Whether Houtbosplaas and TBS Alpha had a right of recourse against Nedbank for mora interest as a consequence of Nedbank's failure to pay over the funds held in their account to a nominated Bank within a reasonable time of having been requested to do so.

Preference shareholders were precluded from exercising their voting rights only in relation to matters concerning the assets or profits of the companies that would benefit them either financially or materially. Other than that, their voting rights were untrammelled. Concerning Section 21(2) of Financial Intelligence Centre Act, 2001 (FICA) before its amendment, the SCA held that it applied to Bank customers who already had existing accounts with a Bank when FICA took effect on 1 February 2002 and thus did not avail Nedbank. A party who had been deprived of the use of his or her capital for a period of time has suffered a loss and did not need to establish special proof of his or her damages.

Both Houtbosplaas and TBS Alpha were rightfully entitled to judgment in the amounts claimed representing mora interest calculated from 20 January 2017 (ie the date of demand), to 10 July 2017 (ie the date on which effect was given to their instruction to close the accounts and pay over the various funds held in those accounts to ABSA Bank). There was no basis for concluding that Nedbank was justified in refusing to give effect to its erstwhile clients' instructions to close the relevant bank accounts. In so doing Nedbank acted in breach of its obligations. Appeal dismissed.

Tags : Payment Funds Interest

Share :