Jaihai v Financial Services Tribunal and Another (3416/2022) [2023] ZAGPPHC 697; [2023] 4 All SA 404 (GP) (17 August 2023)

FLYNOTES: ADMINISTRATIVE – Review – Failure to provide reasons – Dismissal of reconsideration application –Prudential refused to provide reasons for dismissal – Secrecy clause did not absolve Prudential Authority of its statutory duty – Failure to comply with procedures in not properly constituting a panel or issuing directions prior to dismissing reconsideration application – Decision was irrational, unreasonable and unlawful – Non-compliance with FST rules – Decision reviewed and set aside – Protected Disclosures Act 26 of 2000, s 8.

IN THE HIGH COURT OF SOUTH AFRICA

(GAUTENG DIVISON, PRETORIA)

Case No.: 3419/2022

REPORTABLE: YES/NO

OF INTEREST TO OTHER JUDGES: YES/NO

REVISED

Date: 17/08/2023

In the matter between:

AHJEETH DHRUPLAL JAIHAI

Applicant

and

THE FINANCIAL SERVICES TRIBUNAL

First Respondent

PRUDENTIAL AUTHORITY

Second Respondent

JUDGMENT

SARDIWALLA J:

[1] The Applicant seeks to review and set aside the decision of the first respondent under case number (PA3/2021) and declaring the decision of the first respondent unconstitutional, unlawful and invalid.

Background Facts

[2] The Following are the material facts of this matter:

2.1 The applicant was employed by Investec Bank Limited ("Investec") from 2005 to 2014.

2.2 He resigned from his position with Investec in 2014.

2.3 Three years later, in 2017, he referred grievances pertaining to what he viewed as the unfair, undignified, and discriminatory way he was treated during his period of employment to two sub-committees of Investec’s Board.

2.4 In 2018 a mediation process was embarked on which proved unsuccessful.

2.5 The applicant’s referral was subsequently dismissed.

2.6 Aggrieved by the dismissal of his referral the applicant made a protected disclosure in terms of section 8 (1)(c) of the Protected Disclosures Act 26 of 2000 (“PDA”) to the second respondent on 10 December 2019.

2.7 The second respondent acknowledged receipt of the complaint on 10 February 2020.

2.8 After numerous exchanges of correspondences between the applicant and the second respondent from the period of 10 February 2020, on 10 March 2021 the second respondent replied to the applicant as follows:

The PA’s primary mandate is to promote and enhance the safety and soundness of financial institutions. The PA’s approach to supervision is risk- based, and as such, it focuses resources in areas which pose the greatest risk to the achievement of the PA’s objectives as well as to the safety and soundness of the financial system in its entirety. Furthermore, ongoing supervision includes monitoring licenced financial institutions’ adherence to the financial sector laws and related prudential requirements. In this instance the requirements contained in the Banks Act 94 of 1990 (the Banks Act) and the Regulations relating to the banks (the regulations) are exclusively relevant.

The PA has duly considered the content of your disclosure under reference and, cognisant of the ambit of the above-mentioned mandate and supervisory approach, thoroughly assessed all allegations raised in the disclosure documentation that fall within the PA’s ambit of responsibilities as prudential supervisor. In this regard the PA did not identify any matters of concern nor any reason to believe that Investec Bank Limited (Investec) contravened or transgressed the provisions of the Banks Act and the Regulations. Accordingly, the PA could not be of any further assistance to you, and from the PA’s perspective, the matter is regarded as finalised.”

2.9 On 14 March 2021, the applicant requested a statement of reasons and material facts from the second respondent.

2.10 On 20 April 2021, the second respondent replied to the applicant refusing the request for reasons on the preservation of secrecy clause detailed in section 33 of the South African Reserve Bank Act 90 of 1989 ("SARB Act").

2.11 On10 May 2021 , aggrieved by the second respondent’s response the applicant applied to the first respondent for reconsideration of the second respondent’s decision.

2.12 On 10 June 2021, the second respondent’s attorneys addressed a letter to the first respondent advising that no decision had been taken as contemplated in section 218 of the FSR Act and as a result the first respondent did not have jurisdiction to adjudicate the matter.

2.13 The applicant replied to the letter of 10 June 2021 on 15 June 2021 essentially disputing that the second respondent had made a decision.

2.14 On 28 June 2021 the second respondent replied reaffirming their position on jurisdiction and addressed matters related to conflict of interest and again requested directions from the first respondent.

2.15 On 6 July 2021 the Deputy Chairperson of the first respondent summarily dismissed the applications application for reconsideration under section 234(4) of the FSR Act stating the following:

“The application for reconsideration is summarily dismissed under section 234(4) of the FSR Act 9 of 2017 because the applicant has no interest in the outcome of the decision or lack of the decision. He is in the position of an informer and is not a person aggrieved. Apart for this, the application is otherwise also vexatious and scurrilous.”

[3] The applicant brought the present application seeking the following relief in terms of section 6(2)(a)(i) and 6(2)(b) of the Promotion of Administrative Justice Act 3 of 2000 (“PAJA”) alternatively on the principle of legality:

1. “1. Reviewing and setting aside, and declaring unconstitutional, unlawful, and invalid, the decision of the First Respondent in Ahjeeth JaiJai v Prudential Authority (PA3/2021).

2. 2. Directing that the application for reconsideration is remitted to the First Respondent for reconsideration.

3. Directing the First Respondent, in reconsidering the application for the reconsideration. To act in accordance with its statutory mandate and its tiles which may include issuing directions on:

3.1 the filing of a statement of reasons, further reasons, and a properly collated, indexed, and paginated bundle of relevant underlying documents by the Second Respondent; and

3.2 The filing of amended and/ or augmented grounds by the Applicant.

4. As far as it may be necessary, condoning the delay in filing this application, and extending any applicable time period to the date of its launch.

5. Ordering that any respondents opposing this application pay the costs of the application, on a joint and several basis.

6. Further and/or alternative relief.”

[4] It is the first respondent’s summary dismissal which the applicant in these proceedings seeks to have reviewed and set aside.

[5] The first respondent has filed a notice to abide by this Court’s decision and the second respondent has opposed the application.

Grounds of Review

[6] The Applicant’s grounds of review are that:

6.1 The Deputy Chairperson on his own of the FST was not authorised by an empowering provision to make the summary dismissal decision. Alternatively, a mandatory and material procedure prescribed by an empowering provision was not complied with.

6.2 The summary dismissal decision was procedurally unfair.

6.3 The summary dismissal decision was irrational, unreasonable and arbitrary.

6.4 In reaching the summary dismissal decision, the FST failed to consider relevant considerations and took into consideration irrelevant considerations.

6.5 The Summary dismissal decision was materially influenced by an error of law, particularly in relation to the application of the FSR Act and the Protected Disclosures Act.

[58] The FST Rules are clear that reasons must be submitted in order for the reconsideration application to be considered and if not done so the decision maker must do so within 30 days. It seems plain to me from the papers that the first respondent does not deny the applications contentions and for that reason has chosen to abide by this Court’s Ruling. It my view the second respondent’s opposition does not take the matter any further and there is no need to delve into the merits of the second respondent’s averments. The first respondent although clearly entitled to determine procedures relating to it at its own discretion, it is also prudent in a fact-finding investigation to inform and interact with a person whose rights may be adversely affected. In the present matter the first respondent did not at any stage of its investigation find it necessary to engage with the applicant is clearly adversely affected by the decision. This goes against the principles of natural justice and fair procedure. At this stage I am satisfied that this failure to do so renders the conduct to be reviewed and set aside. It cannot be denied that the decision adversely affected the applicant and at the very least he should have been given reasons for the decision by both the first and second respondents. I am in agreement with the applicant that without the reasons from the second respondent being provided to the first respondent it did not have the necessary information before it which in terms of the FST Rules it was required to have for a reconsideration application, that the first respondent did could not have properly applied its mind to the matter in order to summarily dismiss the application. In absence of the first respondent’s

reasoning I cannot find any procedural rational for the first respondent’s decision.

[58] This Court is empowered in terms of section 8(2) of PAJA to make an order directing the parties at this Court finds necessary to do justice between the parties. Therefore the contention by the second respondent that this Court cannot in terms of section 232 attempt to usurp the discretionary powers of the Tribunal and this would be a violation of this provision, is misguided.

[59] I see no reason why the costs should not follow the result. I grant the following order:

1. That the decision of the first respondent in Ahjeeth JaiJai v Prudential Authority (PA3/2021) is hereby reviewed and set aside.

2. The application for reconsideration is remitted to the first respondent for reconsideration.

3. The first respondent is directed, in reconsidering the application for the reconsideration, to include issuing directions on:

3.1 the filing of a statement of reasons, further reasons, and a properly collated, indexed, and paginated bundle of relevant underlying documents by the Second Respondent; and

3.2 The filing of amended and/ or augmented grounds by the applicant.

4. The first and second respondents are ordered to pay the costs of this application, on a joint and several basis.

Sardiwalla J

Judge of the High Court

Appearances:

For the Applicant: Kameel Premhid Suhail Mohammed

Instructed by: Power Singh Incorporated

For the Second Respondent: M Majozi

Instructed by: Werksmans

Attorneys