The Supreme Court of Appeal in this judgment, found that sections 154, 167 and 231 of the Financial Sector Regulation Act 2017 are not unconstitutional nor invalid.

The correct interpretation of section 154 (which entitles the Financial Services Conduct Authority to make a debarment order after consultation) is that it does not exclude the Authority from receiving submissions and then considering its decision whether a person has contravened a financial sector law, such as the FAIS Act.  The Authority makes a prima facie conclusion of a contravention, awaits the submissions made by any person involved, and then considers those submissions before making a final decision.  Similarly, the determining of the appropriate administrative penalty under section 167 cannot be finally decided on until the Authority has invited submissions and considered those submissions. 

The express requirements of sections 154 and 167 cannot be interpreted to exclude submissions concerning whether a person has contravened a financial sector law.  Even if that is not expressly required (which is not the correct interpretation), section 91 of the FSR Act stipulates that the Promotion of Administrative Justice Act of 2000 (PAJA) applies to any administrative action taken by the Authority.  It is the duty of the Authority to observe procedural fairness and therefore the provisions of the FSR Act suffer no constitutional defect.  In addition, the principle known as subsidiarity requires the court to consider administrative challenges in the light of PAJA.

The FSR Act requires the Authority to provide reasons for any proposed order and the reasons must traverse the issue of the contravention.  The FRS Act also requires the FSCA to invite submissions that engage that issue. The wording in the relevant sections requires the authority to have regard to submissions “relevant to the matter”.  The court said that nothing is more relevant for the submissions than whether a person has contravened a financial sector law.  That is the very predicate upon which any imposition of an administrative penalty rests.

The Authority can make no final decision whether a contravention has taken place until it has considered the submissions of the person alleged to have contravened the relevant law.

Section 231, which provides that a decision of the Authority which is challenged before the Financial Services Tribunal is not suspended by the challenge, is not unconstitutional because the Tribunal can order suspension of the decision.

Therefore, the Act permits no want of procedural fairness in conferring powers on the Authority to determine whether there is a contravention and to impose an administrative penalty.

The applicants, who were individual and corporate financial services providers, abandoned an argument that the Authority is not an independent Tribunal or forum for the purposes of section 35 of the Constitution.