This judgment reviewed a decision by the Financial Services Tribunal which had set aside the debarment of a former financial services representative of the financial services provider (FSP). Despite finding that the Tribunal failed to take relevant facts into consideration, and did not properly consider the fit and proper requirements for purposes of debarment, the court declined to substitute its decision for the Tribunal’s decision and remitted the matter back to the Tribunal for reconsideration because the court did not have the full record and all relevant facts before it.

The representative was employed by the FSP as a registered representative and key individual in 2017 and was authorised to sell life insurance, health insurance, pension benefit investments, and non-life insurance. The representative was dismissed in 2022 on various counts of misconduct and was also debarred under the FAIS Act. The FSP found that her actions had been knowingly dishonest and in contravention of her employment contract and industry standards relating to honesty and integrity by not disclosing to her employer that she was referring clients to another FSP for referral commission.

The representative applied for reconsideration of the debarment by the Tribunal The debarment was set aside on the basis that her conduct amounted primarily to a breach of her employment contract, not a regulatory contravention justifying debarment. The FSP could not demonstrate before the Tribunal any contravention of the FAIS Act and relied only on the provisions of the representative’s employment contract.

The FSP sought judicial review, arguing that the Tribunal committed a material error of law, failed to consider relevant factors, considered irrelevant ones, and misapplied the fit and proper test required under the FAIS Act.

The court upheld the review. It found that the Tribunal impermissibly narrowed the enquiry, focused incorrectly on contractual issues, and failed to assess the representative’s conduct against the established fit and proper requirements, including honesty and integrity. This constituted a material error of law and a failure to consider relevant considerations under PAJA.

The matter was remitted to the Tribunal for reconsideration by a different panel with oral evidence if necessary to resolve factual disputes in the papers. It remains to be seen on the evidence whether the representative knowingly placed themselves in a conflict of interest for purposes of the FAIS General Code of Conduct, and whether the representative’s conduct contravened the fit and proper requirements for purposes of debarment.  

Paulina Binfa and Associates t/a PBA Financial Services CC v Dabrowa and Others