Johan Theron Makelaars CC and Another v Chairperson for Office of Ombud and Others (72880/2019) [2024] ZAGPPHC 1361 (24 December 2024)

Johan Theron Makelaars CC and Another v Chairperson for Office of Ombud and Others (72880/2019) [2024] ZAGPPHC 1361 (24 December 2024)

The court found that the Ombud and Tribunal's administrative actions were materially flawed due to procedural and substantive unfairness. The Ombud failed to properly consider prescription, jurisdiction, and the adequacy of internal remedies. The Ombud's orders for reimbursement and cession were ultra vires and unenforceable, given the ongoing liquidation of Sharemax and lack of evidence of actual loss. The applicants, as representatives, were not shielded from investigation but liability required proper determination of causation and loss, which was not established. The Ombud's process did not allow for resolution of factual disputes through oral evidence or cross-examination, breaching...

Citation
[2024] ZAGPPHC 1361
Parties
Applicant: Johan Theron Makelaars CC; Applicant: Johan George Theron; Respondent: Chairperson for Office of the Ombud for Financial Services Providers; Respondent: Chairperson for the Financial Services Tribunal; Respondent: Daniel Johannes Potgieter; Respondent: Elizabeth Gertruida Potgieter; Respondent: FSP Network (Pty) Ltd t/a Unlisted Securities South Africa (In Liquidation)
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
24 December 2024
Case Number
72880/2019
Procedural Posture
Review Application / Judicial Review Under Rule 53; Final Judgment
Outcome
Application for judicial review granted in substantial part; Ombud's orders for reimbursement and cession, recommendations, determinations, and related Tribunal ruling set aside; referral to Financial Sector Conduct Authority Enforcement Department upheld; costs awarded against the Ombud on a party and party scale.
Judges
K La M Manamela
Legal Topics
Judicial Review Under Paja, Fais Act Compliance, Ombud Jurisdiction, Prescription of Claims, Procedural Fairness, Financial Services Provider Liability
Administrative Law Banking and Finance Civil Procedure Judicial Review Under Paja Fais Act Compliance Ombud Jurisdiction Prescription of Claims Procedural Fairness +1 more

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Parties

Johan Theron Makelaars CC

Applicant

Johan George Theron

Applicant

Chairperson for Office of the Ombud for Financial Services Providers

Respondent

Chairperson for the Financial Services Tribunal

Respondent

Daniel Johannes Potgieter

Respondent

Elizabeth Gertruida Potgieter

Respondent

FSP Network (Pty) Ltd t/a Unlisted Securities South Africa (In Liquidation)

Respondent

Procedural Posture

Review Application / Judicial Review Under Rule 53; Final Judgment

Legal Issues

  1. 1 Whether the Ombud and Tribunal's administrative actions were procedurally and substantively fair.
  2. 2 Whether the Ombud had jurisdiction to adjudicate the complaints given the quantum and prescription.
  3. 3 Whether the applicants, as representatives, were correctly held liable for losses suffered by the complainants.

Ratio Decidendi

The court found that the Ombud and Tribunal's administrative actions were materially flawed due to procedural and substantive unfairness. The Ombud failed to properly consider prescription, jurisdiction, and the adequacy of internal remedies. The Ombud's orders for reimbursement and cession were ultra vires and unenforceable, given the ongoing liquidation of Sharemax and lack of evidence of actual loss. The applicants, as representatives, were not shielded from investigation but liability required proper determination of causation and loss, which was not established. The Ombud's process did not allow for resolution of factual disputes through oral evidence or cross-examination, breaching...

Court Disposition

Application for judicial review granted in substantial part; Ombud's orders for reimbursement and cession, recommendations, determinations, and related Tribunal ruling set aside; referral to Financial Sector Conduct Authority Enforcement Department upheld; costs awarded against the Ombud on a party and party scale.

Orders

  • The Ombud's orders directing reimbursement of R671,000 to Mr Potgieter and R500,000 to Mrs Potgieter, together with interest, are reviewed and set aside.
  • The Ombud's order directing the applicants to take cession of the Potgieters' rights in Sharemax investments is reviewed and set aside.