Nedbank Limited and Another v Surve and Others (160_2023) [2023] ZASCA 178 (18 December 2023)

The core legal principle underlying the decision is that in cases of alleged unfair discrimination, the burden of proof lies with the complainant to establish a prima facie case of discrimination. Mere perception or inference of discrimination based on race is not sufficient to meet this burden.

Author

Ross Shepstone
March 06, 2024

The case involves an appeal from the Western Cape Division of the High Court, Cape Town, sitting as the Equality Court, between Nedbank Limited and Nedgroup Private Wealth Stockbrokers (Pty) Ltd (Nedbank) as appellants and Dr. Mohammed Iqbal Survé, Sekunjalo Investment Holdings (Pty) Ltd, African Equity Empowerment Investment Limited, and several other respondents. The dispute arose when Nedbank decided to close the accounts of Dr. Survé and entities within the Sekunjalo Group, alleging conduct amounting to unfair discrimination on the grounds of race.

The background leading to the closure of accounts stemmed from the Mpati Commission of Inquiry, which investigated allegations of impropriety concerning the Public Investment Corporation (PIC) and its relationship with companies within the Sekunjalo Group. The Commission's findings raised concerns for Nedbank, leading to a decision to review its relationship with the respondents. After extensive engagements and considerations, Nedbank decided to terminate its banking relationship with the respondents, citing reputational and association risks.

"The thrust of the respondents’ case was that there appeared to be a collective effort among the banks to ‘unbank’ the Sekunjalo Group... The key element of the respondents’ case for unfair discrimination was that Nedbank had been selective in its assessment of which customers posed reputational risks, and that this selective assessment was based on the race of the entities in question."

The respondents, feeling targeted and discriminated against based on race, approached the Equality Court seeking an interim interdict to prevent Nedbank from closing their accounts. The respondents argued that Nedbank's decision was racially motivated, pointing out that other companies not facing closure despite being implicated in fraud were predominantly white-owned, while the Sekunjalo Group entities facing closure were black-owned.

The Equality Court granted the interim interdict, ordering Nedbank to keep the accounts open pending the final determination of the case. However, the appellants appealed the decision, arguing that the respondents failed to establish a prima facie case of racial discrimination and that the order was appealable due to its serious implications on Nedbank's reputation.

The Court of Appeal found that the respondents did not provide sufficient evidence to support their claim of racial discrimination. The Court highlighted the lack of factual basis for designating certain companies as white-owned and the failure to demonstrate differential treatment based on race. The Court also noted a misdirection by the Equality Court in reversing the burden of proof. Consequently, the Court upheld the appeal, set aside the Equality Court's order, and dismissed the application with costs.

The core legal principle underlying the decision is that in cases of alleged unfair discrimination, the burden of proof lies with the complainant to establish a prima facie case of discrimination. Mere perception or inference of discrimination based on race is not sufficient to meet this burden. The court underlined the importance of presenting factual evidence that objectively supports the claim of discrimination. In this case, the respondents failed to provide adequate evidence to demonstrate that Nedbank's decision to close their accounts was based on unfair racial discrimination. As a result, the appeal was upheld, and the application was dismissed with costs.