This Supreme Court of Appeal judgment in The Ombud for Financial Services Providers and C S Brokers CC and Others  ZASCA 117 is a reminder that section 20 of FAIS created the office of the Ombud as a mechanism for the speedy resolution of disputes which would otherwise be dealt with in court.
A complainant has an election to either utilise the Ombud or approach a court. Financial Services Providers have no such election. They must meet the claimant in whichever forum is selected by the claimant.
The powers of the Ombud are similar to those of a court. A determination of the Ombud or a final decision of the Board of Appeal is regarded as a civil judgment of a court had the matter been heard by a court.
The Ombud is granted extensive substantive powers, including when investigating or determining an officially received complaint, to implement any procedure including mediation which the Ombud deems appropriate.
Those powers are quasi-judicial powers rather than purely administrative powers. The powers include the discretion to decline to entertain the complaint on the basis that a court or similar dispute resolution forum is the more appropriate forum to decide the complaint. And its procedural discretion allows the Ombud to receive oral evidence, among other options.
In the particular case, the legal representatives for the financial services provider against whom the complaint was laid, requested the Ombud to hold a hearing or defer to the court in respect of the complaint. The Ombud declined the hearing of oral evidence and gave as a reason that the Ombud ‘does not hold hearings’.
The court held that the response clearly indicated that no discretion at all was exercised on the application. Rather a pre-determined policy was applied without reference to the specific issues in the matter before the Ombud. The court agreed with the finding of the Appeal Board that that decision does not constitute an improper exercise of her discretion but an approach which “disregards her statutory obligation to exercise her discretion”.
In argument the Ombud had adopted a contradictory approach in arguing that the office does not have a policy that prohibits the holding of hearings and that where appropriate a hearing will be held but in the particular case there were no material disputes of fact that required a hearing. The court said that it was difficult to say which factors weighed and occupied the Ombud’s mind when she gave the decision and that her assertion that there was no material dispute of fact “… simply beggars belief”.
The court said that it was not necessary to address the manner in which the discretion of the Ombud should be exercised and the test for interference with it on review because no discretion was exercised at all.