Former Steinhoff CEO Markus Jooste. (David Harrison/M&G)
The Western Cape high court has dismissed an application by Markus Jooste’s friend, Berdine Odendaal, to compel the South African Reserve Bank to release money for legal fees, in addition to R150 000 monthly for living expenses, from an account frozen because of her link with Mayfair Speculators, which allegedly benefited from accounting fraud at Steinhoff.
The application backfired on Odendaal because the Reserve Bank had been allowing her access to cover her living expenses but baulked when she demanded more, saying she had repudiated the agreement.
Judge Derek Wille agreed, saying she had no claim against the central bank, which had frozen her funds because she may have benefited from exchange control violations in which Jooste and Mayfair Speculators were involved as she had received about R60 million from the latter.
The Reserve Bank obtained blocking orders with regard to several properties in the Val-de-Vie estate and cars she owned, as well as funds in her bank accounts.
She did not seek to challenge the blocking orders as such but through her attorneys asked the Reserve Bank to allow her access to all money in the frozen accounts to cover her fixed monthly expenses, living costs and legal costs.
“The amount that the applicant required to be released was the sum of R150 000.00 per month. Significantly, R80 000.00 of this amount was related to the upkeep of the applicant’s horses.”
The Reserve Bank countered that Odendaal’s current income appeared to be sufficient to cover her living costs. As for legal fees, it said it was amenable to release funds from the blocked accounts, if she would provide it with tax invoices.
In reply, her attorneys asked that the Reserve Bank agree to the release of a balance of R1.77 million in her primary transactional account, to allow her to cover her living costs.
The Reserve Bank agreed to transfer the sum to a new bank account and release the requested R150 000 each month, while the balance would remain subject to the blocking. In addition, the Reserve Bank released R89 067.50 which Odendaal requested to pay her legal fees in a dispute with the South African Revenue Service (Sars).
The monthly payments began in July 2021 and continued until March 2022, when the Reserve Bank said it was not obliged to release more money as Odendaal’s conduct indicated that she did not accept the terms of the agreement.
“They say any agreement reached between them has since been lawfully cancelled. Thus, the respondent argues that the applicant has not established a clear right regarding any additional agreement and has pursued no review application in this connection. They say this is because of their communications with the applicant.”
Odendaal had in the meanwhile demanded money for her insurance costs and access to interest inadvertently paid into the blocked account.
“The respondent agreed to release additional amounts to the applicant to the sum of R276 365.49 on a highly exceptional and once-off basis to allow her to defray expenses concerning her insurance and repay to her the occupational interest that a lessee paid into her blocked Nedbank account in error.”
Despite this, the Reserve Bank said, Odendaal continued to demand additional funds.
“On 4 February 2022, the applicant launched this application seeking an order directing the respondent to pay her reasonable legal fees from her blocked account in addition to the R150 000.00 per month as agreed,” Wille wrote.
“The applicant demanded this payment as of right and not as a request for further payments at the respondent’s discretion.”
Sars said it would henceforth only consider releasing funds for reasonable living expenses upon receiving proof that such had been incurred. It asked that Odendaal provide it with an updated list of her monthly income and her balance sheet.
“No such response or documentation was attached to the applicant’s replying affidavit, and the recent financial position of the applicant is absent from the papers that were presented before me at the hearing of the matter,” Wille said.
The judge said the core dispute was whether the Reserve Bank cancellation of its agreement with her was valid.
He found that it was, since it was established in law that the bona fide insistence that a party comply with an incorrect interpretation of a material term of contract or agreement could constitute repudiation.
“Objectively assessed, the applicant repudiated the agreement with the respondent even though the applicant may not subjectively have intended to repudiate the agreement. In these circumstances, the applicant provided an opening salient for the respondent to cancel the agreement, which it did.
“Thus, the contractual obligation to release an amount of R150 000.00 per month to the applicant from the funds in the blocked Nedbank account was validly terminated by the respondent.”
Wille ordered that Odendaal pay the Reserve Bank’s costs.
A German court has issued a warrant of arrest for Jooste after he failed to appear to face charges of balance sheet fraud stemming from sham transactions totalling €839 million. He has yet to be charged domestically for his role in the Steinhoff scandal.