Cape Town - As South Africa braces itself for an epic court battle by the black-owned Sekunjalo Group – amid their allegations of collusion, suppression of transformation and media freedom – with the country’s banks, the Equality Court’s ruling is set to be a game-changer in terms of transformation in the country.
The widely reported move by the country’s banks to systematically close the accounts of Sekunjalo Investment Holdings (SIH) and related entities (the Sekunjalo Group), that affect about 8 500 employees, and indirectly over 40 000 livelihoods, has been described by financial academics, industry commentators, among others, as an attack on transformation.
Other media, meanwhile, falsely reported that Sekunjalo had lost its application for an interdict at the Western Cape High Court, after Judge Matthew Francis dismissed the application on jurisdictional grounds, referring to the need for the merits of the case to be heard at the Equality Court.
This move by the Sekunjalo Group – comprising 43 applicants – to challenge the country’s banking cartel’s discriminatory tactics and dominance in the South African banking sector in the Equality Court, is a first for South Africa.
But what is the Equality Court?
Judiciary watchdog, Judges Matter, and researcher Mbekezeli Benjamin said: “Equality Courts are specialised courts that deal with cases of hate speech, unfair discrimination, and harassment. They are established in terms of the Equality Act and sit in both the magistrates’ courts and the high courts in every province in South Africa. They serve an important role in combating harmful discrimination.”
Benjamin said in terms of section 20 of the Equality Act, anyone who had been discriminated against unfairly or was a victim of hate speech and harassment may file a case at the Equality Court.
Benjamin said the Equality Court deals with cases of unfair discrimination based on specific grounds contained in the Equality Act, and section 9 of the Constitution, including race, gender, disability, sexual orientation, social origin culture, religion, and economic status.
Giving an example of a recent Equality Court matter, Benjamin cited the case involving the allocation of police resources to Khayelitsha versus those allocated to the wealthier suburbs of Cape Town, such as Rondebosch.
“The Equality Court ruled that the under-allocation of police resources to Khayelitsha amounts to unfair discrimination based on race and socio-economic status.”
The appeal in the case was heard by the Constitutional Court on February 3, 2022, and the judgment is not yet out.
In their application to the Equality Court, the Sekunjalo Group seeks, among others, an order directing each of the banks and, where applicable, regulatory authorities cited, to take specific steps to stop their unfair discrimination and harassment against the complainants and associated entities, including reinstating the complainants’ and entities’ banking services and facilities until such time as they have provided rational and lawful reasons acceptable to this Court for the termination of those banking services and facilities.
The Group’s Equality Court case is attracting support from across the country, including a request to be certified as a class action against the banks, by Gardee Godrich Attorneys representing some 6000 South Africans.
In his ruling in the High Court, Judge Francis said his reading of the provisions of the Promotion of Equality and Prevention of Unfair Discrimination Act (PEPUDA), and the Competition Act, was that the Equality Court and the Tribunal had exclusive jurisdiction to determine the matters referred to them by the applicants, to the exclusion of the High Court.
“These matters do indeed raise important issues of law and are of great practical importance for all the parties concerned. The applicants have categorised this case as being one about Transformative Constitutionalism - a case where the private law of contract and common law on the one hand, collides head-on with constitutional values on the other.
“In this regard, it appears to me that it is fundamentally unfair and contrary to public policy for a bank to unilaterally decide to close an account, place the proceeds of any monies standing to the credit of the account holder in that bank’s suspense account, and the bank then retains the interest earned on those monies,” reads Judge Francis’s ruling.
“I must add that although it is not evident on the facts before me that the contract between Nedbank and the respondents contain a clause which permits Nedbank to unilaterally appropriate any interest earned on monies in a suspense account, if such a clause does exist, it and/or the enforcement thereof could arguably be unfair and contrary to public policy.”
Respondents in the Sekunjalo Group’s Equality Court case include ABSA Bank, First National Bank, Nedbank, Investec Bank, Sasfin Bank, and Mercantile Bank among others.