A dispute that began with a debarment in 2022 and moved through the Financial Services Tribunal and the High Court has ended with a reconsideration decision that turned on when referral arrangements and commission flows cross the line into a failure of honesty and integrity.
In a decision dated 7 April, the Tribunal dismissed an application by Beverley Dabrowa to reconsider her debarment by Paulina Binfa & Associates t/a PBA Financial Services (PBA). The Tribunal concluded that, on the evidence before it, her conduct did not meet the fit and proper requirements, particularly in relation to honesty and integrity.
The decision follows an earlier Tribunal ruling in her favour, which was subsequently reviewed and set aside by the High Court.
From debarment to remittal
PBA debarred Dabrowa in July 2022 after concluding that she had engaged in conduct it regarded as dishonest. This included her involvement in referral arrangements with a broker at another financial services provider, the receipt of commission outside the business, and a failure to disclose those arrangements.
When the matter first came before the Tribunal in 2023, it took a different view. It focused on the fact that PBA had not identified a specific statutory prohibition in the FAIS Act preventing the referrals and commission, concluded that the issues raised were largely contractual in nature, and held that dismissal for breach of contract did not automatically justify debarment. It set the debarment aside.
PBA then approached the High Court in Johannesburg. It argued that the Tribunal had misdirected itself by narrowing the enquiry and failing properly to assess whether Dabrowa met the fit and proper requirements, particularly in relation to honesty and integrity.
The High Court agreed, finding that the Tribunal had failed to apply the correct test and had not properly engaged with the substance of the conduct. It set aside the 2023 decision and remitted the matter for reconsideration before a differently constituted panel.
Read: Tribunal misapplied legal test in debarment reconsideration, High Court rules
The April 2026 decision was the result of that reconsideration.
Referral arrangement
The Tribunal recorded that the arrangement arose from an alleged referral commission agreement between Dabrowa’s husband and a friend, who was a broker at another FSP.
On the evidence before it:
- Dabrowa’s husband had previously exited the insurance industry;
- attempted to return but was not registered as an FSP or representative and was not creditworthy; and
- concluded a referral arrangement under which clients would be referred to the friend, who would service the business and share commission.
This phase was brief. The Tribunal recorded that:
- only two clients were referred; and
- shortly thereafter the husband took up employment outside the industry and was “no longer entitled to receive any referral commission”.
In her own affidavit, Dabrowa stated that because her husband was no longer entitled to receive commission, the broker agreed to pay the commission into her bank account, and she was able to receive it because she was a registered representative.
The Tribunal treated this as significant. It found Dabrowa was aware that the arrangement had been structured to “circumvent” her husband’s inability to transact, and she allowed and facilitated the use of her account for that purpose.
Dabrowa’s case was that:
- the commission originated from her husband’s arrangement;
- she was not herself competing with PBA; and
- her involvement was limited, including administrative assistance in relation to payments.
The Tribunal approached this explanation by testing it in the alternative.
It held that:
- if the commission was in substance her husband’s, then she had facilitated the payment of funds he was not entitled to receive;
- if it was her commission, then she had earned commission from a competitor without disclosure to her employer.
On either version, the Tribunal found that the conduct raised concerns of dishonesty. As it put it, the applicant “cannot have it both ways”.
Testing the explanation against the emails
The Tribunal turned to the contemporaneous email evidence, which it treated as central to the factual enquiry.
The Tribunal found that:
- the emails reflected a direct working relationship between Dabrowa and the broker, and
- they indicated ongoing referral activity and were inconsistent with the suggestion that her role was limited to administering payments on behalf of her husband.
The Tribunal found that the arrangement was not confined to the two clients originally referred by her husband. The email evidence showed that:
- Dabrowa was actively involved in referring or facilitating further business; and
- the arrangement had, on the probabilities, become ongoing and independent of her husband’s original referrals.
The contractual defence
Dabrowa also argued that she was not obliged to disclose the arrangement, relying on a clause in her employment agreement that required disclosure of outside interests only “on request”. She also maintained that she had not sold short-term insurance while employed by PBA, even though she was licensed to do so.
The Tribunal rejected this argument. It held that the “on request” formulation could not reasonably be interpreted to exclude undisclosed dealings with a competitor, that she remained subject to a broader duty to act in the interests of her employer, and that her position was internally inconsistent.
Fit and proper: integrity in context
The Tribunal emphasised that the fit and proper requirement demands the highest standards of honesty, integrity, and reputation. It stated:
“To have earned a referral commission that goes into the bank account of the applicant from a competitor of the applicant’s employer, without the knowledge of the employer, is a serious matter that warrants a severe sanction.”
It further held: “The allegation of referral of clients to another authorised financial services provider, once proven, amounts to dishonesty and lack of integrity, materially impacting on the fit and proper requirement.”
The Tribunal found that the structure of the arrangement, the routing of commission through Dabrowa’s account, her involvement in ongoing referrals, and the lack of disclosure collectively demonstrated, in its view, conduct inconsistent with those standards.
The fact that Dabrowa had worked in the industry for more than 33 years and was “an expert in risk assessment did not minimise the impact of dishonesty that seriously and negatively offended the fit and proper requirement”. The Tribunal found that she ought to have known better.
The Tribunal concluded that PBA had not erred in debarring Dabrowa and dismissed the application for reconsideration.
