Ombud for Financial Services Providers v CS Brokers CC and Others

Mr JB Wallace invested R730 000 (mostly belonging to his pensioner mother) in Sharemax property syndications in 2009 through interactions involving a financial adviser and CS Brokers CC, an authorised financial services provider under the Financial Advisory and Intermediary Services Act 37 of 2002 (FAIS). The investment failed to generate income and the capital was not repaid. Wallace lodged a complaint with the Ombud for Financial Services Providers. There were material factual disputes, including whether CS Brokers or its representative advised Wallace to invest. CS Brokers applied under s 27(3) of FAIS for the Ombud to hold oral hearings or decline jurisdiction in favour of a court due to these disputes. The Ombud refused, stating that her office did not hold hearings, and later determined the complaint on the papers, ordering CS Brokers to pay R730 000 plus interest. Subsequent appeals within the FAIS framework failed. CS Brokers successfully reviewed these decisions in the High Court, leading to the Ombud’s appeal to the Supreme Court of Appeal.

The appeal was dismissed with costs, including the costs of two counsel. The High Court’s order reviewing and setting aside the decisions of the Ombud and the Appeal Board stood.

The case affirms that the Ombud for Financial Services Providers exercises quasi-judicial powers and must properly apply and exercise statutory discretions. A rigid policy or blanket refusal to consider procedural options such as oral evidence constitutes a reviewable failure to exercise discretion. The decision reinforces principles of procedural fairness and administrative justice within statutory dispute-resolution schemes.