Tribunal: ‘true test’ for debarment is balance of probability

The case for debarring a representative must be established on a balance of probability, not prima facie findings, the Financial Services Tribunal (FST) said when it upheld a representative’s application for his debarment to be set aside.

Assupol Life debarred Neo Makhutja for allegedly forging a client’s signature on a policy.

It refunded the complainant her premiums.

Makhutja applied to the FST for reconsideration on the grounds that the case against him had not been established beyond reasonable doubt.

The tribunal’s deputy chairperson, Judge Louis Harms, said Makhutja was under a misapprehension.

“Debarment does not depend on a finding beyond reasonable doubt that the particular FSR is no longer a fit and proper person as required by the FAIS Act. The true test is on a balance of probability.”

Judge Harms said the chairman of the debarment committee had likewise failed to understand that the case against Makhutja must be established on a balance of probability. Instead, he reached a conclusion based on prima facie findings.

Judge Harms said the committee’s report appeared to be a “cut and paste job”.

The “big giveaway” was that the report stated that Makhutja was given an opportunity to explain the circumstances around the complainant’s signature, but he apparently could not be reached on his cellphone. Makhutja “not only appeared at the two hearings but filed a lengthy report, which the chairman elsewhere quoted but failed to consider”.

The tribunal said certain facts had been ignored:

  • The application form, which contained correct information about the complainant, and which could only have been obtained from her, was signed on 23 January 2019.
  • An SMS was sent to her number confirming the issuing of the policy.
  • The debit order was honoured for more than two years.
  • The complaint was only laid in April 2021. The complainant said she could not remember signing the policy application.
  • She later sought to withdraw the complaint (not because the applicant influenced her), but then changed her mind again.

Handwriting experts can err

The FST said the chairman of the debarment committee had obtained reports from a handwriting expert, stating that the signatures on the application form differed from the complainant’s usual signature.

“The first report did not satisfy the chairman, and he postponed the hearing for a ‘better’ report. The second report assured the chairman that the expert’s findings ‘are accurate’ and are evidence based. It is apparent that the chairman’s conclusion was based on this adamant report.”

Judge Harms said handwriting experts “may be very wrong”, and their opinions must always be tested against all the other facts of a case.

He said it was “not good enough” that the chairman had made only prima facie findings of fact and held that Makhutja’s conduct “appeared” to be in conflict with the FAIS Act.

The FST concluded that the case against Makhutja had not been established on a balance of probabilities, and his debarment was set aside.

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