FAIS Ombud turns down two applications for leave to appeal
The FAIS Ombud has turned down two applications for leave to appeal brought by aggrieved parties against determinations issued by him.
In the first case, that of Elizabeth Penzhorn against Seppo Ranta of Point Broker Services, Charles Pillai (pictured right), the Ombud for Financial Services Providers, had on 4 February 2008 ordered the broker to refund to M/s Penzhorn the sum of R22 344 in respect of commissions that were not disclosed to her.
In his finding the Ombud found that Mr Ranta had not disclosed those commissions. He found that when Ms Penzhorn had pertinently asked the broker about costs, he had advised her that those costs would be “nominal”.
The Ombud held that the broker had not challenged the client’s allegation regarding the use of the word “nominal”.
Based on the fact that the broker had not pertinently disclosed costs and that he had advised the client that any costs charged would be “nominal”, the Ombud then ordered that the broker refund a substantial portion of those costs.
In his application for leave to appeal against the order granted by the Ombud, the broker claimed that “the determination is flawed from a legal and factual point of view in that the word ‘nominal’ is used throughout and ultimately used in passing judgment by way of a penalty”.
The broker further claims that he “never used the word ‘nominal’”. Instead, in his application for leave to appeal, he claims that he used the word “normal” in describing what fees he would charge.
The Ombud dismissed this claim on the basis that it “was never the respondent’s case”, in the first place, and that “the respondent had never pertinently dealt with it in any of his replies” to the Ombud.
The Ombud emphasised that the issue was whether the broker had disclosed costs as required and found that the point raised by the broker that he advised the client that costs would be “normal” did not amount to a disclosure of those costs.
In his application for leave to appeal the broker again confirmed that he had asked the complainant to sign partially-completed application forms.
In response to this, the Ombud warned that the “respondent appears not to appreciate the serious nature of its conduct in requiring complainant to sign partially completed forms”. In the determination the Ombud had found that the portion of the application form that reflected costs as a percentage was neither initialled nor signed by the client.
In the second refusal of leave to appeal, this time from an aggrieved complainant, the Ombud found on various grounds that another tribunal will not come to a different conclusion.
In the matter of Khayroon Osman against Noord-Wes Makelaars BK, the Ombud had found on 7 February 2008 that an instruction given by complainant’s son, Mohamed Osman to the broker to remove a BMW which was insured and replace it with an Audi was a valid instruction.
The Ombud further found that after the BMW was involved in an accident, the complainant then herself attempted to have the BMW insured and maintained that her son had no instructions to have removed the BMW from insurance in the first place.
The Ombud found on the basis of the available evidence that complainant had only revoked her son’s mandate to act on her behalf, after the BMW was involved in an accident.
The Ombud further found that the complainant’s request to have the BMW placed on cover, after the accident, “was an inept attempt to ensure that there was insurance cover before filing a claim”.
In her application for leave to appeal, complainant essentially raised two grounds of appeal, namely that:
(a) that the broker did not get instructions from her son to cancel the insurance cover on the BMW; and
(b) that her son, in any event, had no authority to act for her in cancelling the insurance cover on the BMW.
In dealing with each of the grounds, the Ombud found that complainant was represented by her son throughout and that it was the son who had signed the broker’s appointment note on her behalf.
In fact, the Ombud held that although he had not stated it in his determination, the signature on the complaint form addressed to the Ombud is similar to that on the broker’s appointment note.
The Ombud also found that in her application for leave to appeal, the complainant had for the first time furnished a case number from the police and that this information was not provided to the broker or the broker’s attorneys although they specifically asked for it, and neither was it provided to the Ombud in the first place when she lodged her complaint with the Ombud.
The Ombud further held that there was no denial from complainant’s son that he did not give instructions to respondent to cancel the insurance cover on the BMW.
Click here to read the full document - Elizabeth Penzorn / Point Broker Services cc (PDF file 15 kb) and Click here to read Khayroon Osman / Noord-Wes Makelaars (PDF file 119kb)
