Enough is Enough: Court Ends 20-Year Litigation Against Standard Bank

Enough is enough, the Gauteng High Court, Pretoria found in barring a company and its director from instituting any further litigation against Standard Bank, following a 20-year long legal spate over an electronic pin-pad innovation for internet banking security in scrambled form.

Fed-up with the continuous litigation which has also turned to the Supreme Court of Appeal and the Constitutional Court against it, Standard Bank now asked Judge Anthony Millar to declare Advertising Digital Services (ADS), represented by its sole director Johan Reynders, as vexatious litigants.

The complaint was that they repeatedly brought the same subject matter to court over the years, under different legal guises.

It all started in 2003 when Standard Bank developed an electronic pin-pad for internet banking security in scrambled form (that is where the sequence of numbers appeared in a random order to enhance protection against hacking). This technology was initially introduced to customers in an unscrambled format to avoid confusion for first-time users.

In August of 2003, ADS, represented by Reynders, approached the bank with its “@ key-system” - a virtual scrambled keypad designed for similar security purposes. The bank was, at the time, evaluating multiple external proposals but did not disclose its own development for security reasons.

Following a meeting during which a non-disclosure agreement (NDA) was signed between the bank and ADS, Standard Bank concluded that ADS's proposal offered no value, as it already possessed more advanced technology.

ADS later alleged that this meeting prompted the bank to implement its scrambled pin-pad, constituting a breach of the NDA and resulting in damages to ADS. By October 2003, Standard Bank had implemented the scrambled version of the pin-pad to customers. It relied on a straightforward 13-line Java algorithm drawn from scrambling techniques documented in 1980s numerical textbooks.

In July 2004, ADS instituted its first action against the bank, alleging breach of confidential information and misappropriation of the “@ key-system” and seeking damages on a contractual basis. The trial was delayed for five years due to various reasons, including that several of ADS's attorneys withdrew.

In April 2010, ADS's claim was dismissed. It was ruled that there was no breach of confidentiality, and that the information had been publicly available online since 1998. ADS tried to appeal the order which resulted in numerous unsuccessful interlocutory applications. When ADS tried to appeal for a fourth time, the trial judge declined to hear it, having already dismissed a prior similar application.

This was far from the end of the litigation as Reynders, mostly representing himself, soldiered on over the years and even unsuccessfully complained at a stage to the SCA that one of the trial judges was unfair.

When ADS and Reynders again launched further litigation based on “new facts discovered” against the bank, the latter had enough and asked the court to declare them as vexatious litigants. 

Reynders filed complaints alleging misconduct against various judicial officers. It is the stance of ADS and Reynders that the way he has conducted himself in the legal proceedings over the years is neither abusive nor vexatious, but rather an entitlement to vindicate the rights of ADS.

But Judge Millar said over 20 years the courts made it clear Standard Bank has no case to answer to and that Reynders’s relentless pursuit is abusive and vexatious. He ordered that they may not institute further proceedings against Standard Bank, without getting the greenlight from a judge.

zelda.venter@inl.co.za