Equality Court blow for businessman in R10 million claim

THE Equality Court has turned down a  Cape Town businessman’s application against the Financial Sector Conduct Authority (FSCA), describing David Lotterie’s complaint  as frivolous, ill-founded, and did not engage a matter of constitutional importance. 

The director of a financial services provider (FSP) company Lotterie Holdings Pty Ltd, had hauled the FSCA before the courts for an order to have it paying R10 million, reinstatement of his company’s licence, as well as an unconditional apology. 

He had instituted proceedings against the Financial Sector Conduct Authority (FSCA) in terms of Section 20 of the Promotion of Equality and Prevention of Unfair Discrimination Act 4 of 2000 (PEPUDA).

The damages claim was for reputational defamation and economic hardship he suffered after his company’s licence was suspended in February 2021, when he failed to pay levies owed in terms of Section 15A of the Financial Services Board Act 97 of 1990 (FSB Act). 

The business licence was suspended and eventually withdrawn prior to the presidential pardon, which was issued for small businesses as they were the hardest hit during the deadly Covid-19 pandemic.

The pardon, announced in July 2021, was issued for business licences and permits that expired between March 2020 and June 2021, and extended their validity to December 2022; no licence fees were payable for these extensions. 

The pardon applied to businesses which were listed in Schedule 1 of the Business Act and applied only to businesses which sold or supplied meals or perishable foodstuffs, provided certain types of health facilities or entertainment, and hawked meals or perishable foodstuffs.

The court noted that in another complaint to the Public Protector, Lotterie alleged that as a coloured male, he was marginalised based on his racial classification. This allegation was, however, not part of his formal complaint to the Equality Court. 

According to his submissions, Lotterie alleged that the effect of the withdrawal of the company’s FSP licence, which had an outstanding levy of R6,153.82, was that it created economic hardship and this had a knock-on effect on his business as a micro-lender.

In response to this, the FSCA informed Lotterie that the pardon did not relate to FSPs but rather to businesses whose licences were renewable, such as restaurants. 

The FSCA’s stance remained unchanged that the announcement on the extension of business licences did not apply to FSPs.

Presiding Judge Mas-Udah Pangarker said that Lotterie’s reliance on the President’s speech was “misguided” as he “simply ignored material aspects of the directives, and conveniently so in my view”. 

“In referring Lotterie to the directives and legislation, the FSCA pointed out that FSPs do not fall in the category of ‘business’, as defined in the Minister’s directives as the attached Schedule defined ‘business’ as ‘any business that is required to acquire a licence or permit…

“Needless to say, the first complainant was unconvinced. According to him, the President’s speech referred to all businesses which included FSPs and thus, the company’s licence was extended to December 2022. The FSCA noted the disagreement and, quite patiently and respectfully in my view, reminded the first complainant of its objectives and functions in terms of the FAIS legislation and indicated that it would, in the circumstances, proceed with its necessary regulatory functioning in respect of the company’s FSP licence.”

The court noted that Lotterie “littered the record with ill-fated applications and supplementary documents intended to introduce new grounds of alleged unfair discrimination.

“To baldly allege unfair discrimination on the premise that the FSCA refused to pardon the company from paying its FSP levies when it should have done so in terms of the President’s statement, was fundamentally flawed.

“As demonstrated above, the complainants’ blind reliance on the President’s speech and their incorrect interpretation of the directives (as read with Schedule 1 of the Businesses Act), do not get the complainants out of the starting blocks for relief in terms of PEPUDA,” said Judge Pangarker.

Cape Times