Nedbank Limited and Another v Survé and Others

The respondents comprised Dr Mohammed Iqbal Survé and 44 entities within the Sekunjalo Group of Companies, of which Dr Survé was the founder. Nedbank Limited and Nedgroup Private Wealth Stockbrokers (the appellants) were among several banks that terminated banking relationships with the respondents. In November 2021, Nedbank dispatched termination letters giving 120 days' notice of account closures, citing reputational and association risks. These risks arose from findings in the Mpati Commission of Inquiry report (released March 2020) which investigated allegations of impropriety concerning the Public Investment Corporation (PIC) and its relationship with certain Sekunjalo Group companies, notably Ayo Technology Solutions. The Commission found that Ayo shares were grossly over-valued at listing, plummeted 87% in value shortly thereafter, and demonstrated 'malfeasance of the Sekunjalo Group'. The report generated significant adverse media attention. After extensive engagement between the parties, Nedbank proceeded with account closures. The respondents first approached the High Court for an urgent interdict but were directed to the Equality Court which had exclusive jurisdiction. On 21 February 2022, they instituted an application in the Equality Court for an interim interdict under section 21(5) of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (the Equality Act), seeking to prohibit account closures and to re-open already closed accounts, pending final determination of their equality complaint alleging unfair racial discrimination.

• Whether an interim interdict granted by the Equality Court is appealable
• Whether the respondents established a prima facie case of unfair racial discrimination on the basis of race
• Whether the Equality Court correctly applied the onus of proof in an application for interim relief
• What facts are necessary to establish a prima facie case of racial discrimination in the context of an interim interdict application
• Whether the interests of justice render an interim order appealable despite it not meeting the traditional Zweni test for appealability

The appeal was upheld with costs, including costs of two counsel where so employed. The order of the Equality Court was set aside and replaced with an order dismissing the application with costs, including costs of two counsel where so employed.

The binding legal principles established are: (1) An interim interdict granted by the Equality Court may be appealable if the interests of justice so dictate, even if it does not meet the traditional Zweni test for appealability, particularly where the order ought never to have been granted in the first place or where serious reputational consequences flow from findings of racial discrimination. (2) To establish a prima facie case of unfair racial discrimination in an interim interdict application, applicants must adduce objective factual evidence demonstrating: (a) the racial designation of both the alleged victim and the comparator entities, based on factors such as racial composition of senior management, board of directors and beneficial shareholders; (b) that these entities are similarly situated in all material respects apart from race; and (c) that the reason for differential treatment was race. (3) Mere allegation, perception, speculation, conjecture or supposition is insufficient to establish a prima facie case of discrimination; factual allegations must objectively support the conclusion contended for. (4) Where a case is based on inference, the inference of discrimination must be shown to be more plausible than alternative inferences. (5) In applications for interim relief under the Equality Act, the applicant bears the onus of establishing a prima facie case of discrimination before the respondent attracts any onus under section 13 of the Equality Act. (6) The Equality Court may not reverse the onus of proof before a prima facie case has been established.

The Court made several non-binding observations. First, it noted that banks are contractually entitled to terminate banking relationships on reasonable notice and are under no obligation to provide reasons for such decisions, citing Bredenkamp v Standard Bank. Second, it observed that the specific issue of whether the Equality Court order was interim or final in effect did not ultimately need to be determined, as even an interim order can be appealable on interests of justice grounds. Third, the Court commented on the serious and enduring scourge of racism in South Africa, noting it has 'infected the fabric of our national life for well over three hundred years' and that the Equality Act was specifically devised to address and eliminate this scourge. Fourth, the Court noted the serious reputational repercussions of findings of racial discrimination, particularly for a major bank like Nedbank. Fifth, while not deciding the issue definitively, the Court indicated that it interpreted the Equality Court's order as potentially prohibiting Nedbank from closing accounts for any reason, even non-discrimination related breaches of contract, which would exceed the Equality Court's limited jurisdiction. The Court also observed that recent Supreme Court of Appeal judgments could be said to differ in approach regarding the role of interests of justice in determining appealability, but noted it was unnecessary to rehearse these as the Constitutional Court had dealt expressly with the issue in the context of interim interdicts.

This judgment is significant for South African equality and procedural law in several respects. First, it clarifies the appealability of interim interdicts granted by the Equality Court, confirming that such orders may be appealable where the interests of justice so require, particularly where the order ought never to have been granted or where serious reputational consequences flow from findings of racial discrimination. Second, it establishes important principles regarding the evidentiary threshold for establishing prima facie cases of racial discrimination in interim proceedings. Applicants must adduce objective factual evidence, not mere perception, assumption or speculation. Third, it confirms that racial designation of corporate entities requires factual inquiry into matters such as racial composition of senior management, board of directors and beneficial shareholders, not bare assumption. Fourth, it emphasizes that comparative analysis for discrimination claims requires establishing that comparators are similarly situated in all material respects apart from the prohibited ground. Fifth, it reinforces that the onus remains on applicants to establish prima facie discrimination before respondents attract any burden under section 13 of the Equality Act, even in the context of that Act's provisions. The judgment is also significant in the banking law context, confirming that banks retain contractual rights to terminate banking relationships on reasonable notice for reputational risk reasons, subject to non-discrimination principles.