Nedbank Limited v Houtbosplaas (Pty) Ltd and Another

Houtbosplaas (Pty) Ltd and TBS Alpha Beleggings (Pty) Ltd were long‑standing clients of Nedbank. During 2016 Nedbank demanded copies of trust deeds relating to four family trusts that held shares in the companies, purportedly to comply with FICA. The trusts themselves were not Nedbank clients. A dispute arose over whether each trust held 25% or more of the voting rights, which would trigger disclosure obligations under FICA. When the companies refused to provide one outstanding trust deed, Nedbank restricted their accounts. On 20 January 2017 the companies summarily terminated the banker‑client relationship and instructed Nedbank to close the accounts and transfer the funds to ABSA Bank. Nedbank refused, citing FICA compliance, and only released the funds in July 2017 after the documentation was eventually supplied. The companies sued for mora interest for the period during which their funds were withheld.

The appeal was dismissed with costs. The High Court order awarding payment of mora interest to Houtbosplaas and TBS Alpha was confirmed.

The case clarifies the limits of banks’ powers under FICA, confirming that compliance obligations do not override a client’s contractual right to terminate the banker‑client relationship and demand immediate payment of credit balances. It affirms that FICA cannot be used to justify the freezing of accounts where statutory thresholds are not met and the requested information concerns non‑clients.