The Financial Services Tribunal (FST) has ruled that a dissatisfied consumer cannot use the Financial Sector Conduct Authority’s enforcement machinery as a backdoor route to private compensation.
In a decision that turned on jurisdiction rather than the merits of the underlying insurance dispute, the Tribunal dismissed a reconsideration application by Dr Peter-John Karle Kane after finding that he had no legal interest in whether the FSCA took enforcement action against AON SA (Pty) Ltd.
According to the Tribunal, AON placed Kane on a Pinion/Santam homeowners’ policy with effect from 26 October 2018. The policy schedule recorded “Limited Subsidence and Landslip: Yes” and “Extended Subsidence and Landslip: Not Taken/ R0.00.”
Kane’s property later sustained structural damage “consistent with soil movement”. He submitted claims to Santam in 2021 and again in 2024, but both claims were rejected because of the policy’s limited subsidence notation and related exclusions. Kane pursued his dispute with Santam through its internal arbitrator without success.
The dispute then shifted from the insurer’s rejection of the claims to the conduct of the intermediary. Kane alleged he had never been properly informed of the material limitation in cover and had not knowingly elected limited subsidence cover. On that basis, he contended that AON had breached the General Code of Conduct for Authorised FSPs and Representatives under the Financial Advisory and Intermediary Services Act.
The Tribunal noted that complaints about non-compliant advice are dealt with by the Ombud for Financial Services Providers, but said that Kane, “for reasons of his own, pursued other routes, and did not lay a complaint with the FAIS Ombud”. The Tribunal also observed that he did not institute legal proceedings.
The complaint to the FSCA and the regulator’s response
In May 2025, Kane lodged a complaint with the FSCA against AON. He sought a finding of liability based on an alleged breach of AON’s statutory obligations under FAIS and the Code of Conduct in connection with the insurance placement because, he said, AON had failed to conduct a proper informed consent and disclosure process. The complaint was framed on the footing that this alleged failure had resulted in his holding limited subsidence cover without his knowledge or meaningful consent.
The FSCA’s response was contained in a letter dated 19 February 2026. The Tribunal said the FSCA dealt with the allegations and AON’s answer, considered the applicable legislative framework, and informed Kane it was “satisfied that no regulatory breach warranting any ‘enforcement action’ had been established”. Its file was accordingly closed.
Kane applied to the Tribunal for reconsideration of that outcome. The Tribunal said, in substance, he was seeking an order that AON pay compensation equivalent to the amounts that would have been payable by Santam if the policy limitations had not been present. It said this would be based on a finding or declaratory order that AON had breached its obligations under the Code of Conduct.
The decision also records that the Tribunal did not analyse the alternative relief sought because, if the key issues were decided in Kane’s favour, the matter would have had to be remitted to the FSCA; the Tribunal said it “does not issue directions”.
A separated jurisdiction point
Rather than proceeding immediately to the merits, the chairperson of the Tribunal directed that the jurisdiction issue raised by the FSCA be dealt with as a separated matter.
The decision referred to the Constitutional Court’s judgment in Gcaba v Minister for Safety and Security and Others (2009) and reiterated the principle that jurisdiction is determined with reference to the allegations in the pleadings, not by the substantive merits of the case. In an in limine challenge, the Tribunal said, the complaint is the determining factor because it contains the legal basis on which the complainant has chosen to invoke the Tribunal’s competence.
That meant the Tribunal did not resolve whether AON in fact failed to disclose the limitation in cover or whether Kane knowingly elected limited subsidence protection. The Tribunal instead dealt with the prior question whether Kane was legally entitled to challenge the FSCA’s non-enforcement decision.
What the FSCA can do – and what it cannot do
The Tribunal said that if the FSCA receives a complaint from a member of the public about an entity subject to its jurisdiction, it investigates the complaint administratively. If it concludes there is merit, it may proceed to enforcement action and may debar a natural person who has materially contravened a financial sector law under section 153 of the Financial Sector Regulation Act, impose an administrative penalty under section 167, or withdraw or suspend the licence or authorisation of the financial services provider under section 9 of the FAIS Act.
The Tribunal then drew the distinction that became central to the jurisdiction point: “What it cannot do is to order the FSP to pay the complainant loss or damages or anything else. It is not an ombud or a court of law.”
The decision records that when this was explained during argument, Kane “changed tack” and insisted, as the Tribunal understood him, that AON’s licence should be withdrawn and/or that an administrative penalty should be imposed. But the Tribunal said the decisive question was “whether the applicant will be any richer or poorer depending on what the FSCA does” and answered that he would be neither.
‘Person aggrieved’ and legal interest
That reasoning led to the Tribunal’s conclusion that Kane lacked the legal interest required for reconsideration. Because he would not obtain compensation or any direct financial benefit from enforcement action against AON, the Tribunal held he had “no legal interest in whatever administrative action the FSCA takes or does not take”. On that footing, he was not a person aggrieved by the Authority’s decision not to take any action against AON.
The Tribunal said the meaning of “person aggrieved” as a jurisdictional requirement has been dealt with “ad nauseam” in its jurisprudence. It added that Kane had offered no argument to show that those decisions, which applied superior courts’ judgments, were wrong.
The Tribunal concluded that the reconsideration application stood to be dismissed in limine for lack of jurisdiction.
