The Chairperson of the Financial Services Tribunal refused a firm of brokers and an individual broker permission to appeal a decision of the FAIS Ombud by which they were obliged to pay one client R330 000 and another R550 000 plus interest for investing their money in an inappropriate high-risk investment contrary to the mandate to invest in a low-risk investment.
It was held that the refusal of permission to allow the appeal by the Chairperson of the Tribunal amounted to the exercise of a statutory function under the Financial Sector Regulation Act of an investigative nature and not an administrative act for the purposes of the Promotion of Administrative Justice Act, 2000 (PAJA).
Anyone dissatisfied with the decision to refuse an appeal is entitled to challenge the decision under the principles of legality. A legality judicial review concerns itself with two issues, namely lawfulness and rationality. The issues under a PAJA review are different.
In this matter the brokers only pursued a PAJA review and their application to set aside the decision to refuse their appeal was dismissed.
Dissatisfied parties to Ombud proceedings are not without a remedy but the remedy and the rights must be carefully considered.
[Koch and Kruger Brokers CC v The Financial Sector Conduct Authority, the Ombud for Financial Services Providers and the Financial Services Tribunal, High Court of South Africa Gauteng Division case no 48799/19 dated 30 May 2024]