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[2026] ZAEQC 1
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Lotterie and Another v Financial Sector Conduct Authority (EC14/2024) [2026] ZAEQC 1 (16 February 2026)
IN
THE EQUALITY COURT OF SOUTH AFRICA
(WESTERN CAPE
DIVISION, CAPE TOWN)
Case
number: EC14/2024
In
the matter between:
DAVID
JEFFREY
LOTTERIE
First Complainant
LOTTERIE
HOLDINGS PTY (LTD)
Second Complainant
And
FINANCIAL
SECTOR CONDUCT
AUTHORITY
Respondent
Coram:
Pangarker,
J
Hearing
date:
10 February 2026
Judgment
delivered: 16 February 2026 (electronically)
JUDGMENT
PANGARKER
J
[1]
On 18 November
2024, the complainants instituted proceedings in terms of section 20
of the Promotion of Equality and Prevention
of Unfair Discrimination
Act 4 of 2000 (PEPUDA) against the respondent seeking the following
relief:
1.1
Reinstatement of the FSP license in respect of the second complainant
(the company);
1.2
The issuing of an unconditional apology to the complainants; and
1.3
The payment of damages of R10 million for reputational defamation and
economic
hardship.
[2]
The complaint
was opposed and after various attempts by the first complainant, who
is the director of the company, to change and
expand upon the relief
as per the Form 2, all of which were dismissed prior to the hearing
of the main complaint, the complaint
was eventually heard.
[3]
The nature of
the complaint may be distilled as follows, having regard to Part E of
Form 2 completed by the first complainant:
3.1
The complainants rely on a statement made by President Cyril
Ramaphosa in Cape Town on 11 July 2021
on the progress in the
national effort to contain the COVID-19 pandemic, wherein he stated
as follows:
“
In
addition, Cabinet has decided that all business licenses and permits
that expired between March 2020 and June 2021 will
remain
valid until 31 December 2022.
New
business licenses or permits that are issued from the 1
st
of July will also be valid until 31 December 2022, and no license fee
will be payable.
This
will provide some relief to small businesses.”
3.2
According to the complainants, the President’s speech forms the
basis for their complaint of unfair
discrimination which they allege
was committed by the respondent, the FSCA.
3.3
The Chairperson of the Portfolio Committee on Small Business
Development welcomed a Cabinet decision
regarding licenses and
permits that expired during this period.
3.4
The decision was published in the Government Gazette in GN 615 of
2021.
3.5
In view of the Presidential pardon, as described above, the company
could not and did not pay its levy
related to its license as a
financial service provider (FSP) and consequently, the FSCA withdrew
such license in 2021, and this
despite the Presidential pardon.
[4]
The first
complainant alleged that the effect of the withdrawal of the
company’s FSP license was that it created economic
hardship for
both complainants. This had a knock-on effect in that, as a
micro-lender, the withdrawal of the license had a negative
effect on
the business in that service providers commenced litigation against
the company, which could not trade. Additionally,
the complainants
were defamed, and judgments and civil proceedings followed.
[5]
From
annexures attached to the complaint it was evident that the
complainants also rely on Directives issued by the Minister of
Small
Business Development published in the Government Gazette No. 44853,
Notice no. 615 of 15 July 2021 in support of their allegation
of
unfair discrimination
[1]
. The
record also indicates that the withdrawal of its FSP license was
reported to the office of the Public Protector, wherein the
first
complainant alleged that as a coloured male, he was marginalized
based on his racial classification. This averment was not
alleged in
the formal complaint with the clerk of this Court.
[6]
Having regard
to the affidavits filed, there was no dispute that the FSCA is the
regulatory and supervisory body overseeing the
conduct of financial
institutions in accordance with the laws governing the financial
sector, more specifically, the Financial
Advisory and Intermediary
Services Act 37 of 2002 (FAIS Act).
[7]
The FSCA came
into existence on 1 April 2018 and took over the functions performed
by its predecessor, the Financial Services Board
(FSB). In terms of
section 15A of the Financial Services Board Act 97 of 1990 (FSB Act),
the company, as a financial service provider,
was obliged to pay
levies to the FSCA. By 24 February 2021, the company had failed to
pay such prescribed levies.
[8]
In terms of
section 9(1)(d) of the FAIS Act, the FSCA may at any time suspend or
withdraw any license if satisfied that the licensee
has failed to pay
a levy, administration penalty or any interest in respect thereof.
There was no dispute that the company was
the licensee.
[9]
On 24 February
2021, the FSCA notified the complainants of its intention to suspend
the company’s license to act as a FSP
on grounds that the
latter failed to comply with the FAIS Act and as licensee, had failed
to pay the obligatory levy and interest.
The correspondence informed
the complainants in clear, detailed fashion, of the FSCA’s
intention and the consequences in
the event of suspension of the
license. Additionally, the first complainant was afforded time to
respond and provide reasons why
the company’s license should
not be suspended.
[10]
The
first complainant failed to respond within the allocated time frame
and so on 12 March 2021, after expiration of the period
to respond,
the complainants were informed in writing
[2]
that
the FSCA had decided to suspend the company’s license. Once
again, the details of the consequences of suspension and
that the
licensee could apply to have the FSCA’s decision reconsidered
within 30 days after being notified of the suspension
decision, were
explained in correspondence addressed to the first complainant.
[11]
The
complainants were also informed that the suspension may be lifted at
any time prior to the FSCA’s withdrawal of the license
provided
that the outstanding levies were paid. Furthermore, they were
afforded an opportunity until June 2021 to provide reasons
why the
withdrawal of the license should not be effected.
[12]
Rather than
complying with the time periods and paying the outstanding levy, the
first complainant only responded on 12 July 2021
per email, wherein
he informed the FSCA as follows:
“
Good
Morning
Last
night the President of the Republic of South Africa Cyril Ramaphosa
made an important announcement relating to Business license
and that
we should be given till December 2021. It is on this basis that I am
applying that the suspension on FSP 46010 for LOTTERIE
HOLDINGS to be
lifted as per the guideline.
Please
advise?”
[13]
In response,
the FSCA informed the first complainant that the President’s
address did not relate to FSPs but rather to businesses
whose
licenses were renewable, such as restaurants. The first complainant
proceeded to address correspondence to the Presidency
enquiring
whether the FSCA was to comply with his Directives in accordance with
his July 2021 speech. According to the record in
this matter, there
was no response forthcoming from the President’s office but
notwithstanding this and the FSCA’s
notification that the
speech/Directives did not apply to FSPs, the first complainant was
undeterred: he insisted in his further
correspondence that no
businesses were excluded in the Presidential pardon, as he referred
to it.
[14]
The FSCA’s
stance remained unchanged that the announcement on the extension of
business licenses did not apply to FSPs. In
its attempt to shed
further light on the issue, the FSCA also referred the first
complainant to the Directives issued by the Minister
of Small
Business Development on 12 July 2021, read with Schedule 1 of the
Businesses Act 71 of 1991
, which was published in Government Gazette
No. 44853, Notice no. 615 of 15 July 2021, which read as follows:
“
I,
Hon. Khumbudzo Ntshaveni, MP, the Minister of Small Business
Development, … hereby issue the Directives set out
in
the Schedule hereto in order to provide direction on the
operation of businesses whose licenses and trade permits
a
s
per the
Businesses Act. no 71 of 1991
, as amended, have lapsed and
are due for renewal; and due to the prevailing lockdown regulations
are unable to renew their licences;
extension is hereby granted to
such affected business licences and trade permits, allowing
businesses to operate despite the business
licences and/or trade
permits having expired.
…”
[15]
In
referring the first complainant 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 license or permit and is
listed in Schedule 1 of the
Businesses Act no. 71 of 1991
.”
[3]
[16]
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 license 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 license
[4]
.
[17]
Thus,
on 2 September 2021, the FSCA informed the first complainant that it
withdrew the company’s license as FSP on the basis
that it had
failed to pay its levy which was outstanding in the sum of R6153.82
at that time. He was informed that the FSCA’s
decision to
withdraw the company’s FSP license could be reconsidered by the
Financial Services Tribunal in terms of section
230 of the Financial
Sector Regulation Act 9 of 2017 (FSR Act), yet despite his oral
submission that he had done so, the record
contains no
indication/proof that the issue was referred for reconsideration by
the Tribunal.
[18]
I
was thus more inclined to accept the FSCA’s submission that the
complainants had not exhausted this internal administrative
remedy.
In any event, the first complainant’s replying affidavit simply
stated that the internal remedy was impractical and
that the Tribunal
“
lacks
jurisdiction to adjudicate”
[5]
.
No
basis was laid for such bald assertion.
[19]
According
to the Form 2 complaint, the complainants allege unfair
discrimination and rely upon the President’s July 2021 speech
that all business licenses were extended to the end of December 2022,
and that the extension or pardon included the company. However,
in
the first complainant’s replying affidavit, he alleged for the
first time that: a legitimate expectation was created by
the
President’s address; the FSCA’s refusal to comply with
the pardon constituted unreasonable administrative action
in terms of
section 6(2)(h) of the Promotion of Administrative Justice Act 3 of
2000 (PAJA); and, that the FSCA’s selective
enforcement
disproportionately harmed a small black-owned FSP like the second
complainant and that this action violated section
9(3) of the
Constitution.
[20]
None of these
averments, grounds or allegations were contained in the 2024
complaint filed with the clerk of this Court. To add,
in at least
three subsequent and irregular documents filed, the first complainant
attempted to expand on the nature and relief
of the complaint,
including the introduction of approximately twenty additional orders
or relief he wished the Court to grant in
terms of PEPUDA. As alluded
to above, after hearing submissions from the first complainant and
the FSCA’s counsel, I dismissed
all the applications and
supplementary documents and provided reasons for the decisions,
ex
tempore,
which are not repeated herein. This judgment thus relates to the
initial, main complaint of unfair discrimination.
[21]
The parties’
respective affidavits with annexures and their written and oral
submissions were considered. The high-water mark
of the complainants’
case was that the reference to “
all
business”
in the President’s speech included FSPs such as the company.
Hence, according to the first complainant, the FSP license was
extended to December 2022, and payment of levies was suspended and/or
pardoned.
[22]
The
reliance on the President’s speech was, with respect,
misguided, as the statement therein regarding the extension of
business licenses had no legal effect. This is so because following
the President’s statement, the Minister of Small Business
Development issued Directives which were published in the Government
Gazette
[6]
and
which must be read with Schedule 1 of the
Businesses Act. Thus
, it is
the Directives which had legal effect or gave effect to the
President’s statement in his speech.
[23]
The first
complainant simply ignored material aspects of the Directives, and
conveniently so in my view. To clarify, it was apparent
from the
Directives that the reference therein to “
business”
,
meant a business that was required to acquire a license or permit and
which was listed in Schedule 1 of the Business Act. Clearly,
the
Directives thus applied only to those businesses referred to in such
Schedule, to wit, businesses which:
23.1
sold or supplied meals or perishable foodstuffs;
23.2
provided certain types of health facilities or entertainment;
23.3
hawking in meals or perishable foodstuffs
These
businesses required licenses, and the Directives allowed them to
operate despite the expiration of such licenses.
[24]
Furthermore,
it was also apparent from the definitions section of the Directives
that the reference to “
license”
was a reference to a license in terms of
section 2(3)
of the
Businesses Act. Clearly
, FSPs such as Lotterie Holdings (Pty) Ltd did
not fall within the ambit of the Directives as it was/is not a
business as defined
and referred to in Schedule 1 of the
Businesses
Act. Simply
put, there was no reference to FSPs in Schedule 1 of the
aforementioned Act.
[25]
The
submission by the first complainant that “
all
businesses”
include FSPs, was misguided as it ignored the specific language of
the Minister’s Directives which clearly specified the
types of
businesses that would benefit from the extension granted in respect
of their licenses. Furthermore, the first complainant’s
reference to the Government Gazette No. 44838, Notice no. 610 of 11
July 2021, which he handed in during the latter part of the
hearing,
did not advance the complainants’ case as these were the
Directives of the Department of Co-operative Governance
issued in
terms of the
Disaster Management Act 57 of 2002
during the COVID-19
pandemic.
[26]
In
view of the above, counsel’s submissions that the Directives
did not apply to the company and other FSPs and thus,
that the
company was obliged to pay its levies in terms of the FAIS Act, had
merit. In my view, the FSCA, which went to great lengths
to inform
the first complainant of its role, statutory obligations, the proper
interpretation of the Directives and Schedule 1
(read with the
Businesses Act), the
consequences of suspension of the FSP license
and the remedies available to it, could not be faulted. It bears
emphasizing that
the FSCA was mandated by law to oversee and regulate
FSPs and clearly, on the facts evident from the affidavits and
annexures relied
upon by the parties, did not single out the
complainants as alleged. More specifically, the Notice of Withdrawal
of Authorisation,
annexure KD15, sets out a comprehensive list of
FSPs/licensees which had their licenses withdrawn by the FSCA due to
contravention
of section 15A of the FSB Act read with section 302 of
the FSR Act.
[7]
[27]
The complaint
was brought on the basis that the FSCA unfairly discriminated against
the complainants as they failed to comply with
the Directives and
went ahead and suspended the company’s FSP license
notwithstanding the President’s statement. Section
6 of PEPUDA
contains a general prohibition against unfair discrimination against
any person. This section must be read with section
1 of the Act which
defines discrimination in the following terms:
“
discrimination
means
a
ny act
or omission, including a policy, law, rule, practice,
condition
or situation which directly or indirectly-
(a)
imposes burdens, obligations or disadvantages on; or
(b)
withholds benefits, opportunities or advantages from,
any
person on one or more of the
prohibited
grounds.
”
[28]
The prohibited
grounds referred to in the definition of discrimination are:
’
prohibited
grounds’
are –
(a)
r
ace,
gender, sex, pregnancy, marital status, ethnic or social origin,
colour, sexual orientation, age, disability, religion, conscience,
belief,
culture, language, birth and HIV AIDS status; or
(b)
any other ground where discrimination based on that ground –
(i)
causes or perpetuate systemic disadvantage;
(ii)
undermines human dignity; or
(iii)
adversely affects the equal enjoyment of a person's rights and
freedoms in a serious manner that is comparable to discrimination
on the ground in paragraph (a);
[29]
In
Harksen
v Lane NO and Others
[8]
,
the Constitutional Court set out a three-stage enquiry which would
inform whether unfair discrimination occurred in any set of
circumstances. The enquiry may be summarised as follows
[9]
:
(i) does the impugned conduct differentiate between people or
categories of people and if so, does the differentiation bear a
rational connection to a legitimate government purpose? (ii) does the
differentiation amount to unfair discrimination?, and (iii)
if the
discrimination is found to be unfair, can it be justified?
[30]
In
Nedbank
Ltd and Another v Survé and Others
[10]
,
the Supreme Court of Appeal made it clear that it is “
insufficient
for an applicant to baldly aver that there has been unfair
discrimination. It must adduce evidence of facts that objectively
support the conclusion contended for
”.
Objectively considered, the complaint was devoid of evidence that
supported the view that the complainants were discriminated
against,
never mind unfairly discriminated against. In my view, the
complainants did not overcome the tests set out in
Harksen
and
Survé
and Others
.
[31]
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.
[32]
There was no
unfair discrimination, and hence, this Court’s jurisdiction was
not engaged. I need not address
section 13(1)
of PEPUDA which refers
to the burden of proof which shifts to a respondent once a
prima
facie
case
of discrimination is established, as the complainants failed to meet
the threshold as set out in the authorities referred
to herein. In
any event, in his replying affidavit, the first complainant conceded
that the Directives were limited to businesses
as referred to therein
and as read with Schedule 1 of the
Businesses Act.
>
[33]
It
must also be remembered that the FSCA did not issue the Directives,
and any unhappiness with the Directives as set out in the
reply for
the first time, should have seen a joinder of the Minister of Small
Business Development, who had a direct and substantial
interest in a
challenge by the first complainant who alleged that the Directives
were unlawful for narrowing the scope of the President’s
address
[11]
. There was no
joinder application but this aspect is in any event, academic in view
of the finding that the complainants were not
allowed to make out a
new case in reply.
[34]
In all the
objective circumstances, considered alongside the Directives referred
to in this matter, the withdrawal of the company’s
FSP license
at the time was neither unfair, discriminatory nor defamatory of
either or both complainants. The facts were that the
company did not
fall within the type of business which benefited from extension
granted by the Directives. It was required as FSP
to comply with its
obligation to pay the outstanding levies, which it failed to do,
despite numerous correspondence on the issue.
Furthermore, there was
also no evidence that the FSCA’s actions amounted to hate
speech or harassment as defined by PEPUDA.
[35]
There was
evidence that the FSCA had suspended the licenses of numerous FSPs
around the same time and on the same basis as the company’s
license, as it was authorized to do. Thus, it could hardly be said
that the company was singled out by the FSCA’s conduct.
[36]
As for costs,
given the FSCA’s written warnings to the complainants regarding
its intention to suspend the FSP license, the
import of the
Directives, the reference to Schedule 1 and the
Businesses Act, one
would have thought that the first complainant would have heeded those
warnings and complied. However, as described herein, he stubbornly
refused to see reason and hung his hat on his own interpretation of
the President’s speech yet ignored the import of the
Directives. The first complainant also seemed not to have approached
the Tribunal for a reconsideration of the FSP license suspension
but
rather dug his heels in and dragged the FSCA to this Court quite
unnecessarily, in my view. The application/complaint was doomed
to
fail from the outset.
[37]
Furthermore,
the first complainant littered the record with ill-fated applications
and supplementary documents intended to introduce
new grounds of
alleged unfair discrimination and without first seeking leave of the
Court to do so. None of these attempts were
proper and much Court
time was spent on these aspects first before hearing the actual
complaint. All these factors considered cumulatively
resulted in
wasted judicial time and costs, which prejudiced the FSCA as it was
required to engage with and address frivolous matter
unnecessarily.
[38]
Section
21(2)(o)
of PEPUDA allows this Court, after holding an enquiry, to
make an appropriate costs order. This was done and, in my view, the
complainants
do not enjoy the protection of the
Biowatch
principle as the complaint was frivolous, ill-founded, and did not
engage a matter of constitutional importance
[12]
.
Considered holistically, therefore, and in view of all the factors
set out above, I exercise my discretion and award costs in
favour of
the FSCA. Lastly, counsel for the FSCA is thanked for her very
comprehensive written and oral submissions.
[39]
In the result,
I grant the following order:
The
complainants’ complaint is dismissed with costs (scale A).
M
PANGARKER
JUDGE
OF THE HIGH COURT
Appearances
:
For
Complainants: Mr D J Lotterie, in person
For
Respondent: Adv R Matsala
Instructed
by: Robert
Charles Attorneys and Conveyancers
Cape Town
[1]
Form
3
[2]
Annexure
KD2
[3]
Schedule
to GG 44853, Notice no. 615 of 15 July 2021
[4]
In
earlier correspondence to the first complainant, the FSCA provided a
copy of the Directives and Schedule 1 to the
Businesses Act. The
Directives were attached in support of the complainants’ Form
2.
[5]
Replying
affidavit, record p104
[6]
GG
No. 44853, Notice No. 615, dated 15 July 2021
[7]
Lotterie
Holdings (Pty) Ltd also appears on the list, which was published on
7 December 2021
[8]
1998
(1) SA 300 (CC)
[9]
Harksen,
par [53]; Social Justice Coalition and Others v Minister of Police
and Others
2019 (4) SA 82
(WCC) par [38]
[10]
[2024]
1 All SA 615 (SCA)
[11]
Judicial
Service Commission and Another v Cape Bar Council and Another
2013
(1) SA 170
(SCA) par [12]
[12]
Biowatch
Trust v Registrar, Genetic Resources and Others
2009 (6) SA 232
(CC)
par [24]