A man has lost his legal bid against First Rand Bank Limited (First National Bank/FNB) and the South African Reserve Bank (Sarb) concerning millions he forfeited to the State under the Currency Exchange Act 9 of 1933 and its regulations, amid fraud allegations.
His application was struck off the roll with costs in the Western Cape High Court on Monday for a lack of jurisdiction and urgency.
The matter dates back to 2018 when his bank account with FNB was blocked and the funds therein forfeited to the State.
According to court documents, on August 28, 2018, FNB received a directive from Sarb to block the man’s account and prohibit any withdrawals under Exchange Control Regulations. The bank then transferred R6 447 708.71 from his cheque account to an exchange control suspense account on October 1, 2018.
Subsequently, these funds were moved to an internal suspense account.
On October 11, 2018, Sarb instructed a partial refund of R2 645 355.71 to his cheque account, with R3 802 353.00 remaining in the suspense account.
The account was put on hold again in October 2018 due to fraud allegations against the man by a company.
A court order on December 6, 2018, extended the hold pending the company’s claims.
“On March 28, 2019, the applicant was placed into provisional sequestration by order of this court and on January 6, 2020, his estate was finally sequestrated. A payment of R2 639 143.45 was on April 23, 2020, made from the applicant’s cheque account to the account of the applicant’s insolvent estate, as directed by the administrators of the estate. On August 30, 2021, a Notice and Order of Forfeiture was published by the Reserve Bank, instructing that the funds held in the blocked account (account number 6[...]) be forfeited to the State,” court papers read.
The man said in court papers that he became a father on June 14, which he argued necessitated urgent proceedings to try and get the money back.
He also sought a declaratory order that the conduct of FNB and the Sarb violated his constitutional rights, rendering their actions unconstitutional and invalid.
He further sought R60 million in general damages from FNB, arguing that the withholding of his funds and the failure to provide due process had caused “significant financial and emotional harm, justifying the substantial damages he is claiming”, court papers read.
He also sought R35m in damages from the Reserve Bank.
First Rand Bank Limited, its executives and administrators, and the Sarb, opposed the application on several grounds, including the court’s lack of jurisdiction, that the matter lacked urgency and was an abuse of court process and that the relief was incompetent.
Ultimately Acting Judge Adrian Montzinger found: “After careful consideration of the facts and legal principles involved, I am not convinced of this division’s jurisdiction to entertain the matter, given that the events in question occurred in Gauteng, where the respondents are also based. Even if jurisdiction could be established, the lack of urgency still warrants striking the application from the roll.
“In light of the above and since the respondents were compelled to come to court to oppose an application that had a real jurisdictional impediment and failed to address the urgency requirements, the applicant should be compelled to pay them their full costs.”
Cape Times