19 January 2022 14:00 by Merilyn Kader
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In Mwale v Financial Services and Another  4 All SA 167 (GP), the applicant applied to the Financial Services Tribunal for a reconsideration of the decision of the Authority on the grounds of being unreasonable, irrational; and bias.
By Merilyn Rowena Kader LLB (Unisa), Legal Editor at LexisNexis South Africa.
Financial Services Regulation - Nature and requirements of reconsideration application: The second respondent, the Prudential Authority issued a direction in terms of s 83 of the Banks Act 94 of 1990 against the applicant and a close corporation in which he was sole member. It was common cause that during 2010, the applicant joined an illegal pyramid scheme.
In Mwale v Financial Services and Another  4 All SA 167 (GP), the applicant applied to the Financial Services Tribunal for a reconsideration of the decision of the Authority. The Tribunal’s dismissal of his application led to the present application for review of that decision. The grounds of review were that the Tribunal’s decision was influenced by a material error of law; that the decision was unreasonable and irrational; and that the Tribunal (and specifically the chairman) was biased.
A reconsideration application must be made in accordance with the Tribunal Rules, must contain full particulars of the grounds on which the application is based and must be drafted to conform as far as possible to a standard form. A reconsideration application constitutes an internal remedy as contemplated in s 7(2) of the Promotion of Administrative Justice Act 3 of 2000. The court had regard to the Authority’s reasons to determine whether the Tribunal correctly dismissed the reconsideration application. The Authority had found that the pyramid scheme in which the applicant had participated had conducted the business of a bank in contravention of the Banks Act, and the Tribunal could not fault that finding. Arguing that the Tribunal had materially erred in its interpretation of ‘the business of a bank’, the applicant alleged that his involvement in the pyramid scheme was not a regular feature of his business practice. The Tribunal held that the acceptance of money from members of the public by the applicants, was a regular feature of the scheme, and was satisfied on the facts that the applicants conducted the business of a bank. The court agreed with the Tribunal’s evaluation of the facts and the conclusion reached.
For the applicant to establish bias by the Tribunal, he had to show that he (as the person who apprehended bias) and the apprehension itself were reasonable. He failed to discharge the onus on him in that regard. The application was dismissed with costs.
Merilyn Rowena Kader
Legal Editor at LexisNexis