IN THE HIGH COURT OF ESWATINI In the matter between: CASE NO, 618/24 CHOON YOON KIAW KWOK CHOON Applicant And FIRST NATIONAL BANK OF ESWATINI LIMITED Respondent Neutral Citation: Choon Yoon Kiaw Kwok Choon v First national bank of Eswatini Limited (618/24) [2024] SZHC 90 (30'* April 2024) CORAM: NM MASEKO J FOR APPLICANT: ATTORNEY MR L MANYATSI FOR RESPONDENT: ATTORNEY MR KN SIMELANE HEARD: 23.04.2024 DELIVERED: 30.04.2024 Preamble; — Civil law ~ Civil Procedure — Law of contract - Review Proceedings as against implementation of a contractual relationship right based on a written contact - Whether review proceedings are competent to set aside a decision based on contractual right — legal authorities referred to which deals with the contractual right of a bank to terminate a contract with a client, where the bank perceives such contractual relationship exposes the bank to reputational and/or business risks. 1JUDGMENT MASEKO J U1] On the 15th March 2024, the applicant launched motion proceedings for an order in the following terms:- 1) Dispensing with the Rules of Court in relation to manner of service, time limits and hearing this matter as one of urgency. 2) Condoning the Applicant's non-compliance with the Rules of this Honorable Court. 3) Directing the Respondent to show cause why its dectsion to terminate the banking relationship between the parties herein as contained in the Respondent's letter to Applicant dated the 20th February 2024 should not be reviewed, corrected and set aside. 4) That the Respondent is called upon to dispatch within a period to be set by the above Honorable Court, to the Registrar of this Honorable Court record of proceedings if any wherein the Respondent's decision to terminate the parties’ relationship was taken and the full reasons thereof. 5) That pending finalization of this matter, a rule nisi do hereby issued operating with immediate effect, staying execution of the Respondent's letter to Applicant dated the 20th February 2024. 6) Directing and ordering the Respondent to pay costs of suit of this application at rate of attorney and own client scale. 7) Granting further and or alternative relief.(2) [4] (5] [6] ‘The Founding and Replying Affidavits of Applicant are used in support of this application and the Answering Affidavit of Respondent is deposed to by Mnceczi Ngomane in his capacity as the Head of Executive Banking of the Respondent. ‘The matter came before court on urgency on the 20th March 2024 and was postponed to the 25th March 2024 for arguments, and thereafter postponed to the 12th April 2024 to deal with prayer 5 (stay) only. Indeed on the 12th April 2024, arguments were made in respect of prayer 5 and 1 reserved my ruling, and owing to the urgency of the matter, the court allocated the 23rd April 2024 for arguments on the merits, and this judgment shall be of the main matter. 1 am grateful to both counsel for the Bundle of Authorities filed by each counsel in support of their arguments. FOR D) IN The major issue for determination is whether this matter fall within the law of contract as between private parties or falls within the realm of administrative law whereby the decision of the respondent to terminate the contract may be reviewable. LI c The applicant states that she is a widow and businesswoman of Mauritian origin, and that she has continually lived in Eswatini for the past thirty-nine (39) years, and reside in Manzini area in the Manzini District. The applicant states that she maintains a banking relationship with the respondent wherein she operates two (2) banking accounts namely: 37 (8) (9] Smart Gold Account No: 62775213110 and a Flexi Fixed Account No: 76204267978. Both of these accounts are holden at the Manzini Branch of the respondent, and dates back to the year 2006 She states further thai the Pleai Account is an investment account where substantial amount of money is invested with the respondent from which she yeinvested with. derives interest on a monthly basis and the interes the respondent on the same account. The applicant states further that on the 29th February 2024 she received a telephone call from Mbali Dlamini who introduced herself as an employee of the respondent wherein the said Mbali informed her that she should check her email which has been sent to her by the respondent. Indeed she checked her email and found a letter marked “A” and signed by Mncedzi Ngomane, the Head of Retail Banking. The letter was dated 20th February 2024 but she received it on the 29th February 2024, ‘The applicant states that she was shocked by the contents of the letter wherein the respondent was advising her that it will close all her account within thirty (30) days because the applicant was facing criminal charges preferred against her by the Crown, wherein she was arrested, charged and detained for contravening the Money Laundering and Financing of Terrorism (Prevention) Act of 201 1as well as contravention of the Game Act of 1953. The applicant has annexed the Charge Sheet marked Annexure “B” and currently she is out on bail pending her trial. ‘The applicant states that the decision to terminate her banking relationship with the respondent was taken unilaterally and she was never afforded an opportunity to present her side of the story. She argues that even these charges themselves have not been proven against her hence she remains presumed innocent until proven guilty in a court of{10} 0 law, The applicant states further that there is no co-relation between the unproven charges levelled against her and the bank accounts held by the respondent, She argues that her bank accounts are never and were never used as a conduit to commil the alleged offences, and further that even money involved in the alleged offences was never withdrawn from these operated with the respondent. The applicant states further that the decision making process that was employed by the respondent in arriving at its impugned decision was seriously flawed. The decision was arrived at unilaterally without affording her, her right to be heard. She states that she was never consulted or invited by the respondent to make representations on why her accounts should not be closed. She states further that paragraph 3 of Annexure “A” clearly indicates that only the interests of respondent were catered for but not her interests because she was never afforded an opportunity to present her side of the story. The applicant states that the respondent acted ultra vires or misconceived the nature of its powers in terms of the enabling statute (the Financial Institutions Act), wherein the respondent only has the powers to report a suspicious transaction on her bank accounts to the Central Bank of Eswatini and not take a unilateral decision to fore-close her accounts. She states that there are no suspicious transactions ever transacted on her bank accounts held with the respondent. She states further that even the Money Laundering and Financing of Terrorism (Prevention} Act of 2011 does not empower the respondent to close her account. She states that it is only the Eswatini Financial Investigation Unit (EFIU) that apply penal measures against a party who has been proved to have contravened the Financial Institutions Act. The applicant states that the unilateral decision of the respondent stands to be reviewable because it is unreasonable and is as a result of an unwarranted adherence to the unqualified bank-customer agreements or 5{12} (13) banking standards policies which may provide the respondent with the right (o unilaterally cancel her bank account. Applicant states that the unilateral decision to cancel the accounts is fraught with irregularities which wanant the intervention of this couit to review and sct aside as null and void. She states that the unilateral decision to close her accounts willy-nilly is not investor or customer friendly. and that she stands {o suffer immense financial prejudice if the decision is not reviewed and overturned. She states that she stands to lose her investments and also lose the benefits of instant international money transfers. She states further that on the other hand, the respondent stands to suffer no prejudice if the unilateral decision by respondent to cancel her account is overturned. She states that if the respondent is certain of any wrongdoing on her part they ought to report such to the relevant authorities and not to resort to the unilateral cancellation of her account. She states further that the matter is urgent hence this court should enroll it as such. THE RESPONDENT'S CASE (SUMMARY) In its opposition the respondent states that the matter in question relates mainly to rights, duties and obligations of the parties based on the written agreement herein annexed as Annexures “FNB 1", “FNB 2" respectively. Mr. Ngomane states further that in respect of the respondent, it relates to further compliance with national and international obligations, policies, local legislation, guidelines, notices and directives, amongst other issues. Mr, Ngomane states further that the cancellation of the contract in question relates to an exercise of contractual rights, as opposed to same being an administrative decision or a tribunal’s decision or a decision taken in exercise of the judicial or quasi judicial powers and therefore such decision is not reviewable. Mr. Ngomane states that the filing of these proceedings is an abuse of the process of this Court and that the 6(14) [15] {16} respondent will demonstrate that the applicant has failed to satisfy the requirements of an interdict. Mr. Ngomane states that the respondent as a financial institution is a corporate citizen and its banking operations are guided by legislation together with guidelines, notices and directives. He states further that the respondent has a duty to protect its business and reputational risk that may result from any actual or perceived unlawful acts, crimes, illicit conducts or transactions, money laundering, breach of national laws by its account holders. Mr. Ngomane states that the applicant's failure to disclose the existence of the signed contract between the parties renders these proceedings fatally defective. He states that the wrilten contract regulates the relationship between the parties. He states further that the applicant has deliberately not disclosed the contract despite the fact that she is in possession of same. Mr. Ngomane states that amongst the rights and duties contained in the contract between the parties is that the respondent has a right to terminate the contractual agreement on thirty (30) days’ notice in terms of Clause 9 of Annexure “FNB 2". These are the terms and conditions of the contract between the parties. {17] Mr. Ngomane states that in terms of Clause 9 of Annexure “FB 2" it isan express agreement between the parties that the respondent can terminate the contract between the parties based on any information relating to or ity or conduct, actual or any suspicions of any fraud or criminal act perceived.[18] {19] [20] Mr. Ngomane states that in casu the applicant is facing serious criminal charges, the nature of which triggers or triggered the exercise of the respondent's right to terminate the contract, and therefore the basis for the applicant's application that the charges preferred against the applicant have not been proved and or the issue of ber presumpuon of her innocence has no basis to vindicate her from the cancellation of her account, Mr. Ngomane states further that the notice (Annexure “A") issued to the applicant was an exercise of a contractual right vested in the respondent and well known to the applicant, and that such exercise of the right is not based on judicial or quasi-judicial decision, which would ordinarily attract review proceedings. Mr. Ngomane states that the applicant's contention that the respondent's decision making process is flawed, or unnatural, was made without consulting the applicant and that the respondent failed to apply its mind, or acted ultra vires or that the respondent misconceived its powers, and that the decision is unreasonable, are all misconceived because the respondent did not exercise administrative, judicial and / or quasi-judicial powers but simply exercised its rights as contained in the contract Annexures “FNB 1” and “FNB 2” respectively. Mr. Ngomane states further that in casu, the respondent has a right to exercise its contractual right to terminate the contract in the manner the -respondent has done because the contract does not specify any process to be followed other than giving notice and further that even if the written contract had not specified/provided expressly the right to terminate the aforesaid contract, it will still be an implied terms of this indefinite contract to terminate same on reasonable grounds in terms of the common law, and that the common law does not provide for the 8(21) (22) process or grounds of review forming the basis of the applicant's application to review the respondent's decision to terminate their contractual relationship in respect of the applicant's accounts held with the respondent Mr. Ngomane states further that the respondent has complied with the thirty (30) days’ notice expressly agreed upon by the parties and further that the applicant has failed to establish a cause of action in terms of Rule 53 of the Rules of this Court read together with the Constitution. ANALYSIS OF THE EVIDENCE AND THE LAW APPLICABLE: ‘The evidence presented by the parties in casu is premised or predicated on a contract which was entered into between the parties on the terms and conditions as set out in Annexure FNB 1. | must state clearly at this stage that the terms and conditions of the contract ("FNB 1") are contained in Annexure “FNB 2". This court does not accept the applicant's contention that Annexure "FNB 1” is a stand-alone document and does not incorporate Annexure “FNB 2". It cannot be like that because FNB1 clearly provided for the “declarations” which were made by the applicant when it entered into the contract with the respondent on the 30" July 2018, as can be seen from bullets number 6 & 7 found at page 38 of the Book of Pleadings (The Book). ‘The declarations made by the applicant is as follows: “L hereby confirm that I have read and understood the General Terms and Conditions. I also confirm that the information provided by me to FNB Swaziland and FSR is true, correct and current; including information about my residency and citizenship for tax purposes, and that I will inform FNB Swaziland if it changes.” Bullet 7 provides as follows: “I understand that terms and conditions apply to the products, services and my relationship with the bank, 1 agree to these terms and conditions. I have received a copy 9[23] [24] [2 5] ] of these ferms and conditions. (copies can also be obtained _from fnbswaziland.co.sz or from any FNB Branch)” ‘The terms and conditions herein referred to in FNB 1 are contained in FNB 2 found at pages 39 - 46 of the Book, When the applicant signed FNB 1 she declared that she had read and understood the terms and conditions, and these are the ones stipulated [rom pages 39 - 46 of (ie Book, No matter how the applicant has tried to separate FNB 1 from FNB 2, it is my view not only disingenuous of the applicant to do so but also totally unsubstantiated. Possibly it is for that reason why the applicant has (ied to launch review proceedings in an otherwise clearly defined contractual relationship between the parties and best suited to be dealt with under the law of contract and not through review proceedings which then encroaches onto administrative law. These proceedings in casu do not fall to be determined through review proceedings. Further the respondent has been emphatic that the applicant has deliberately not disclosed this contract “FNB 1” and “FNB 2” before this court as the source of their relationship. This court agrees in toto with the respondent because it was or rather is crucial for the applicant to outline which terms and conditions have been or are being violated by the respondent in its notice to terminate the contract on the 30" April 2024. It is the view of this court that it is trite that a decision by a contracting party to cancel a contract concluded between two private parties cannot form the subject of review by the court. This is because the power of the courts to review the lawfulness, reasonableness and procedural fairness of decisions or actions applies only to decisions or actions taken by public bodies. The cancellation of agreements on the facts of the case in casu between two private contracting parties has nothing to do with the control of administrative power or even the method of that control. 10[26] It is the view of this court that the decision by the respondent to cancel the contract between the parties, even if deemed unilateral by the applicant, it is not an exercise of public power, nor is it within the realm of the exercise of review proceedings, The position in casu is that the applicant is seeking lo review and set aside a decision taken by the respondent (o terminate the contract which prescribes certain rights, and obligations between the parties. The contract in casu FNB 1 and FNB 2 provides for options to the respondent to elect to cancel the contract when it deems that certain obligations have not been complied with by the applicant. This court is therefore of the view that there is a contractual dispute between the parties arising from the election by the respondent to exercise its contractual right to terminate the agreement after it had given the applicant the thirty (30) days’ notice in terms of “KNB 2” headed SANCTIONS AND FINANCIAL CRIME found at page 44 of the Book. For ease of reference it is crafted as follows: “FNB must comply (and in some cases make policies, standards / or guidelines (o foster voluntary compliance) with laws, requirements, standards, recommendations, guidelines and directives relating to terrorism, corruption, bribery, money laundering, financial crimes, know your customer requirements and sanctions, obligations, locally and internationally (as i may be applicable) issued by various bodies in a number of jurisdictions and FNB's own policies as aligned (0 FNB's compliance framework and requirements in this regard ( referred (0 as the Requirements) in relations to you, any entity, any security provider, any person related to them, or acting on behalf of, or involved with you including their mandated persons, directing executives, signatories, shareholders, holding companies, trustees, beneficiaries, partners, managers, controllers, associates, subsidiaries, beneficial owners, ultimate beneficial owners and related entities (you and all of the aforesaid persons and eniilies are referred to as “Impacted Persons"). In order to comply with the requirements, or > Any fraud or criminal activity (actual or perceived) is suspected; or 1ao (i) (id) The conduct (actual and perceived) of any Impacted Person is in FNB's view undesirable; or Performing under any agreement instruction or transaction places FNB in breach of any local or international aww, regulation or Requirement: or Performing any obligations under any agreement or continuing the banking relationship with any Impacted Person would adversely affect or otherwise reduce or remove FNB's ability to Raise local or international funding; and / or Contract with, or maintain its relationships with, iniernational financial institutions; and / or ‘Transact in or process payment or otherwise deal in other currencies. FNB may, at the siart of the business relationship and / or at any time thereafter, in relation fo any Impacted Persons, do any or all of the following: Verify (check and confirm) their identity Refuse to do business with any Impacted Person that it considers undesirable or that is involved in undesirable conduct; On 30 days’ notice for less if warranted) terminate any account, business relationship, deal, facility, instruction or transaction with any Impacted Person or refuse to honour any instrument or carry out any transaction. Refuse to do business with any person or Impacted Person that falls outside FNB's risk appetite or that appears on any sanction list as prescribed by legislation or used by it in the management of its risk or that is linked to any person that appears on such sanction list, or linked to any restricted countries or the government agencies of such restricted countries as determined from time to time; Terminate the Bank's relationship with any Impacted Person if FNB ts compelled {0 do so by law or if FNB has reason to believe that a continued relationship will expose FNB fo reputational or business risk. 2(27) [28] FNB will not be liable for any direct, indirect or consequential loss, damage, costs or expenses whatsoever that may be suffered or incurred by anyone as a resuill of, arising from, or relating fo any such prohibition. limitation, detay, decline or termination due to the implementation of this clause, provide that the Impacted Person will remain liable to FIVE for all amounts owing to FNB (actual or contingend). FNB will nol liable Jor any toss whatsoever, should any foreign bank (1) refuse to execute any instruction, (2) delay payment or withhold Junds due to any requirement. This court has taken time to reproduce contents of Clause 9 which relates to Sanctions and Financial Crime to appraise the reader of the contractual terms and obligations of the parties in casu. The contract FNB 1 and FNB 2 contain specific clauses about when a contract will be terminated, so it is clear that the respondent has grounds for termination, and in casu the respondent has clearly articulated the reason being the Game and Money Laundering and Financing of Terrorism criminal charges which the applicant is facing and that these criminal charges pose reputational and business risk to the aforesaid respondent. In the case of Bredenkamp v Standard Bank (599/09) [2010] ZASCA 75 (27 May 2010) Harms DP stated as follows at para 64: This leaves for consideration the questions whether the Bank had (in terms of the relief presently soughi) good cause to close the accounts. The Bank had a contract which is valid, that gave it the right to cancel. It perceived that the listing created reputational and business risks. It assessed those risks at a senior level. It came fo a conclusion. It exercised its right of termination in a bona fide manner. It gave the appellants a reasonable time to take their business elsewhere. The termination did not offend any identifiable constitutional value and was not otherwise contrary to any other policy consideration. The Bank did not publicise the closure or the reasons for tts decision. It was the appellants who made these facts public by launching the proceedings and requiring the Bank to disclose the reasons.” B[29] [30] It is the view of this court that the contracl in casu FNB 1 together with FNB 2 do not create a tribunal or mechanism to decide matters atlecting the parties. This therefore renders meritless the applicant's argument that she was not given an opportunity to present her case during the process when respondent's management considered her case. Sie bredenkamp case (supra) referred to by Mr. KN Simelane is the ultimate authority and precedent that contractual relationships between the bank and its customers are regulated by the contract currently in existence hetween the parties, and that where the bank feels that its reputation and / or business is at risk owing to the conduct / misconduct of the client, it has a right to invoke the provisions of the contract leading to cancellation or termination of the contract, €.g. giving reasonable notice to the client of the intention to cancel or terminate the account. This is the position in casu, and in my view on the basis of Bredenkamp’s principles the respondent acted within its contractual right to issue a notice to terminate the contract on “perception” of a wrongdoing to protect its reputation and business locally and internationally. The applicant is very much aware of the contract despite an attempt to deny knowledge of the terms and conditions contained in FNB 2. In the case of Annex Distribution (Pty) Ltd end Others v Bank of Baroda (52890/2017) [2017] ZAGPPHC] 608 2018 (1) SA 56 2 (GP) (21% September 2017) Fabricus J. dealt at length with the bank's contractual right to terminate its banking services with a client upon perception of conduct likely to cause reputational and business risk to its banking services. This is what Fabricus J stated at para 22: “In Bredenkamp v Standard Bank supra, the following principles were laid down for the termination of the banker- client relatic 144) 2} 3) 4) 5) a A bank has @ right to terminate @ contract with its clients on notice periods specified in their particular contract. In the absence of an express termination clause. a bank is entitied to terminate on reasonable notice. See also: Putco Lid v 1V und Radio Guaranice Company (Fiy) Lid and Other Related Cases 1985 (4) SA 809 (A) and Amalgamated Beverage Industries Ltd » Rond Vista Wholesalers 2004 (1) SA 538 (SCA} A bank has no obligation to give reasons for terminating this relationship. Its motives for terminating such are generally irrelevant (there may be an exception where there is found to be an abuse of rights); There are no self-standing right to reasonableness, fairness or goodwill in the law of contract. Buen if there were however, it would be fair for a bani to exercise its contractual right to ferminate its relationship with its clients on proper notice. In this regard the Supreme Court of Appeal said the following: *{57).......the fact that the appellants as business entilies are entitled to banking facilities may be a. commercial consideration, but it is difficult to see how someone can insist on opening a bank account with a particular bank and, if there is an account, to insist that relationship should endure against the will. bona fide formed of the bank.” A bank is also entitled to terminate the relationship with a client on a basis of @ reputational and business risks and courts should be reluctant fo second- guess that decision: “{65] The appellants (claimed) that objectively speaking. the bank's fears about its reputation and business risks were unjustified. Ido ot believe iL is fora court lo assess risks whether or not bona fide business sion, which is on the fe it reasonable and_rational_was objectively “wrong” where _in_the circumstances _no_public_policy considerations _are involved, Fairness has_two sides. The Appellants approach the matter from their point only, That, in my view. is wrong." Irrespective of whether negative publicity about the client is true, a bani is fully entitled to terminate the relationship with a client that has a bad reputation. I may repeat that in this case, as in the Bredenkamp decision, the bank did not seek to rely on the factual accuracy of the relevant reports, but merely on the particular reputation of its clients. 1s7) ~~ The fact that the client may have difficulty finding another bank does not impose any obligation on the bank to retain the client: “60] Lfinel il difficull lo pereeive the fui uess of inposiig Uc (he obligation lo retain a client simply because other bares are Hot like! epl that eniily as a client, The Appellants were unable to find a constitutional niche or other public policy consideration justifying their demand.” [31] The signature of the applicant in FNB 1 acknowledging the terms and conditions laid down in FNB 2 deserve mention because it then attracts the caveat subscriptor principle. In the case of Burger v Central South African Railways 1903 TS 571 the court held that: “It is a sound principle of law that a man when he signs a contract, is taken to be bound by the ordinary meaning and effect of the words which appear over his signature.” 132] RH Christie, in the book titled: The Law of Contract in South Africa, 5 Edition, LexisNexis, and Butterworths states as follows at pages 174 - 175 “It is a matter of common knowledge that a person who signs a contractual document thereby signifies his assent to the contents of the document, and if these subsequently turn out not to be liking he has no one to blame but himself” {33] It is my considered view as formulated from the merits in casu, that the review proceedings have no merit, because the relationship between the parties is strictly contractual flowing from Annexure FNB 1 AND FNB 2 respectively. [34] In the circumstances, | hand down the following judgment: 1. The entire application dated the 15!" March 2024 is hereby dismissed with costs ( such costs to be on the ordinary scale} 16So Ordered “fe > AI JUDGE