Deighton v Financial Sector Conduct Authority and Others (15703/2021) [2022] ZAGPPHC 520 (8 July 2022)

Deighton v Financial Sector Conduct Authority and Others (15703/2021) [2022] ZAGPPHC 520 (8 July 2022)

The court found that the FSCA investigation panel's refusal to provide the applicant with documents prior to questioning was procedurally unfair and violated principles of natural justice. The statutory scheme imposed strict obligations on the applicant to answer questions fully and truthfully, making prior access to documents essential for compliance. The panel's conduct exposed the applicant to the risk of making incomplete or misleading statements, with potentially severe consequences, including unlimited administrative penalties. The court held that the investigation and its composition were unlawful and unjust, and that the applicant was entitled to review relief before the...

Citation
[2022] ZAGPPHC 520
Parties
Applicant: Michael Edward Deighton; Respondent: Financial Sector Conduct Authority; Respondent: The Financial Sector Regulator; Respondent: Alexander Pascoe; Respondent: Prinisha Pillay; Respondent: David Loxton
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
8 July 2022
Case Number
15703/2021
Procedural Posture
Review Application / Judgment on Review of FSCA Investigation Procedure
Outcome
Application granted. The investigation and its composition are reviewed and set aside as procedurally unfair.
Judges
Millar
Legal Topics
Procedural Fairness, Natural Justice, Financial Sector Regulation Act, Promotion of Administrative Justice Act, Unlawful Investigation, Access to Documents
Administrative Law Banking and Finance Procedural Fairness Natural Justice Financial Sector Regulation Act Promotion of Administrative Justice Act Unlawful Investigation Access to Documents

Case Brief

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Parties

Michael Edward Deighton

Applicant

Financial Sector Conduct Authority

Respondent

The Financial Sector Regulator

Respondent

Alexander Pascoe

Respondent

Prinisha Pillay

Respondent

David Loxton

Respondent

Procedural Posture

Review Application / Judgment on Review of FSCA Investigation Procedure

Legal Issues

  1. 1 Whether the FSCA investigation panel's refusal to provide the applicant with documents prior to questioning constituted procedural unfairness.
  2. 2 Whether the composition and conduct of the investigation panel violated principles of natural justice.
  3. 3 Whether the applicant was entitled to review relief before the conclusion of the investigation.

Ratio Decidendi

The court found that the FSCA investigation panel's refusal to provide the applicant with documents prior to questioning was procedurally unfair and violated principles of natural justice. The statutory scheme imposed strict obligations on the applicant to answer questions fully and truthfully, making prior access to documents essential for compliance. The panel's conduct exposed the applicant to the risk of making incomplete or misleading statements, with potentially severe consequences, including unlimited administrative penalties. The court held that the investigation and its composition were unlawful and unjust, and that the applicant was entitled to review relief before the...

Court Disposition

Application granted. The investigation and its composition are reviewed and set aside as procedurally unfair.

Orders

  • It is declared that the investigation and/or action undertaken against the applicant pursuant to the Respondents' Investigation Instruction dated 26 October 2020 is unlawful on the basis that it is procedurally unfair.
  • The investigation instituted and pursued by the Respondents against the Applicant in terms of the Financial Services Regulation Act, 9 of 2017, is reviewed and set aside on the basis that it violates the requirements of procedural fairness.