THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 1344/2023
In the matter between:
FINANCIAL SECTOR CONDUCT AUTHORITY FIRST APPLICANT
UNATHI KAMLANA N O SECOND APPLICANT
BRANDON TOPHAM N O THIRD APPLICANT
GERRIT JACQUES BRUWER N O FOURTH APPLICANT
and
MUNICIPAL EMPLOYEES’ PENSION FUND FIRST RESPONDENT
AKANI RETIREMENT FUND
ADMINISTRATORS (PTY) LIMITED SECOND RESPONDENT
AKANI PROPERTIES (PTY) LIMITED THIRD RESPONDENT
MUNGHANA LEISURE AND
TOURISM (PTY) LIMITED FOURTH RESPONDENT
MARGARET MAGDALENA LE GRANGE FIFTH RESPONDENT
ZAMANI ERNEST EHPRAIM LETJANE SIXTH RESPONDENT
NTHABELENG REFILWE MOTSOHI SEVENTH RESPONDENT
JACK BRUCE MALEBANE EIGHTH RESPONDENT
2
Neutral Citation: Financial Sector Conduct Authority and Others v Municipal
Employees’ Pension Fund and Others (1344/2023) [2026]
ZASCA 66 (8 May 2026)
Coram: MAKGOKA, NICHOLLS and SMITH JJA and DAWOOD and
MOLITSOANE AJJA
Heard: 16 May 2025
Delivered: 8 May 2026
Summary: Civil Procedure – Rule 53 of the Uniform Rules of Court – Financial
Sector Conduct Authority – review of the decision of a regulatory body to
investigate – whether a regulatory body is obliged to disclose the record of its
decision to investigate when that decision is challenged on review under rule 53
simultaneously with the relief to set aside the ex parte order obtained following
the investigation.
3
________________________________________________________________
ORDER
________________________________________________________________
On appeal from: Gauteng Division of the High Court, Pretoria (Kooverjie J
sitting as court of first instance):
1 The applicants are granted leave to appeal.
2 The appeal is upheld with costs, including costs of two counsel.
3 The order of the Gauteng Division of the High Court, Pretoria, is set aside and
replaced with the following:
‘The application is dismissed with costs.’
________________________________________________________________
JUDGMENT
________________________________________________________________
Makgoka JA (Nicholls, Smith JJA and Dawood and Molitsoane AJJA
concurring):
[1] This is an application for leave to appeal against an order of the Gauteng
Division of the High Court, Pretoria (the High Court). That court, in terms of
rule 53 of the Uniform Rules of Court, ordered the first applicant to provide the
record of its two-pronged decision to investigate the first respondent, and to apply
to a judge for a search -and-seizure order against the first respondent. The High
Court subsequently dismissed the applicants’ application for leave to appeal.
Upon further application to this Court, the application was referred for oral
argument in terms of s 17(2) (d) of the Superior Courts Act 10 of 2013 (the SC
Act).1 The parties were directed to be prepared to argue the merits of the appeal,
should they be called upon to do so.
1 Section 17(2)(d) of the SC Act reads:
‘The judges considering an application referred to in paragraph (b) may dispose of the application without the
hearing of oral argument, but may, if they are of the opinion that the circumstances so require, order that it be
argued before them at a time an d place appointed, and may, whether or not they have so ordered, grant or refuse
the application or refer it to the court for consideration.’
4
[2] The delivery of this judgment has been delayed by several factors,
including having to await the Constitutional Court’s judgment in Famous Idea
Trading v Government Employees Medical Scheme (Famous Idea).2 That case
was heard after this appeal. It had a direct bearing on the central issue in dispute
in the appeal, namely, whether a court considering an application to compel the
production of a record is entitled to determine whether the impugned decision is
reviewable. As the Constitutional Court reserved judgment, it was prudent for
this Court to await the Constitutional Court’s judgment in that matter, which was
delivered on 11 February 2026. In light of that judgment, the parties were invited
to file supplementary heads of argument , if so advised . The parties obliged,
respectively, on 24 February 2026 and 4 March 2026.
Factual background
[3] The first applicant, the Financial Sector Conduct Authority (the Financial
Authority), is a financial sector regulator under the Financial Sector Regulation
Act 9 of 2017 (the Financial Sector Regulation Act). In terms of s 135(1)(a), it is
empowered to conduct an investigation if it reasonably believes there is, or may
be, a contravention of a financial sector law. The Financial Authority, through its
instructed investigator, may, under s 138, apply to a judge for a search warrant.
The second, third and fourth applicants are officials of the Financial Authority. I
refer to all the applicants collectively as ‘the Financial Authority.’
[4] The Financial Authority suspected that the first respondent, the Municipal
Employees’ Pension Fund (the Pension Fund), was contravening financial sector
laws. It launched an investigation into the Pension Fund’s conduct under s 135 of
the Financial Sector Regulation Act. It subsequently applied ex parte for a
warrant to search the Pension Fund’s premises. Ledwaba DJP granted the
2 Famous Idea Trading 4 (Pty) Ltd v Government Employees Medical Scheme and Others [2026] ZACC 5; 2026
(4) BCLR 291 (CC).
5
application and issued the search warrant on 27 June 2022. The warrant
authorised the Financial Authority to search the Pension Fund’s premises and to
seize the documents and inf ormation listed therein. The warrant was executed
against the respondents between 5 and 14 July 2022. The parties signed an Escrow
Agreement under which all seized information is held by a third party pending
the determination of the main application.
[5] On 25 July 2022, the Pension Fund and the other respondents filed an
urgent application seeking, among other things, an order setting aside the ex parte
order. It is unclear from the papers what the relationship between the Pension
Fund and the other respondents is, or what the other respondents’ interest in the
matter is. Be that as it may, I refer to the respondents collectively as ‘the Pension
Fund.’
[6] In addition to an order setting asi de the ex parte order, the Pension Fund
also sought to review ‘[t]he decision of one or more of the [applicants] to institute
the ex parte application . . .’. The Pension Fund further called on the Financial
Authority, under rule 53(1)(b) of the Uniform Rules of Court, to dispatch to the
Registrar of the High Court the record of the proceedings relating to the Financial
Authority’s decision to investigate the affairs of the Pension Fund, ‘together with
such reasons as the [Financial Authority is] by law required to give or desire to
make’. The Financial Authority had fifteen days to comply, but failed to do so.
Instead, on 16 August 2022, it delivered its notice of intention to oppose the
envisaged application.
[7] On 15 September 2022, the Pension Fund filed a notice in terms of rule
30A, complaining that the Financial Authority had failed to dispatch the record
and reasons by the 16 August 2022 deadline set out in their review application.
The notice afforded the Financial Authority 10 days to deliver the record, together
6
with the reasons, ‘ failing which [the Pension Fund] will apply to court. . . to
compel compliance with the Rules, and to seek other relief.’
[8] On 30 September 2022, the Financial Authority, through its attorneys,
replied to the Pension Fund’s rule 30A notice and asserted that: (a) the Financial
Authority’s decision does not constitute administrative action within the meaning
of s 1 of the Promotion of Administrative Justice Act 3 of 2000 (the PAJA); and
(b) the Financial Authority’s decision to investigate the Pension Fund did not
have a direct and external legal effect within the meaning of s 1 of the PAJA.
Accordingly, the Financial Authority co ntended that the Pension Fund was not
entitled to any record under rule 53(1)(b).
In the High Court
[9] As a result, on 25 October 2022 the Pension Fund lodged an application in
the High Court in terms of rule 30A(2) of the Uniform Rules, seeking a
declaratory order that the Financial Authority had failed to comply with
rule 53(1)(b) and with their notice in terms of Rule 30A dated 15 September 2022,
and an order compelling the Financial Authority to furnish the record. The
Pension Fund’s application was premised on its entitlement to the record as a
matter of course , having filed a rule 53 review application. The Pension Fund
further asserted that the review application was brought under the PAJA.
[10] The Pension Fund stated that the Financial Authority had relied on
impermissible grounds for refusing to comply with rule 53(1)(b), insofar as those
grounds amounted to defences on the merits and were thus irrelevant at that stage
of the proceedings. The Pension Fund emphasised that the application to compel
was not the correct forum to debate the merits of their contentions, which will be
addressed before the High Court in due course in the review application. In any
event, the respondents asserted that the Financi al Authority’s contentions were
7
ill-founded for a variety of reasons, including that they were focused on the PAJA
challenge, which ignored the fact that all exercises of public power are reviewable
under the principle of legality and must comply with the rule of law.
[11] Furthermore, the Pension Fund asserted that the Financial Authority’s
decision had a very real and direct effect on their rights, including infringements
of their rights to privacy and human dignity. It also resulted in the Pension Fund
incurring substantial costs to address the effects of the Financial Authority’s
decision, including the search-and-seizure process, legal challenges, and market
consequences, such as the loss of goodwill. The Pension Fund, it argued, has been
seriously prejudiced by the Financial Authority’s decision.
[12] The Pension Fund asserted that courts always retain the right to control and
review unconstitutional exercises of power at intermediate stages of a multi-stage
decision-making process. This may arise from the nature of the decision, the
manner in which it was made (eg, in bad faith), or the basis on which it was made
(eg, without adequate supporting documentation). These aspects will only be
fully known once the record is delivered, enabling the court to assess them. It is
not for the Financial Authority to pre-empt this process by way of an interlocutory
objection, when the Court , hearing the merits , has not yet fulfilled its review
function with the full benefit of the record. For these rea sons, the Pension Fund
sought an order requiring the Financial Authority to provide the record and the
reasons for its decision.
[13] The Financial Authority opposed the application and advanced two main
reasons why it should not be ordered to provide the record. First, the ex parte
application sought a search -and-seizure warrant to support a full investigation ,
and did not determine the Pension Fund ’s culpability. Culpability would be
and did not determine the Pension Fund ’s culpability. Culpability would be
determined after considering the information obtained during the investigation.
8
A decision to investigate, and the process of that investigation, including a
decision to institute proceedings to obtain a warrant to further such investigation,
provided that such investigation does not include a determination of culpability,
cannot be seen to affect the rights of any person in a manner that has a direct and
external legal effect. Thus, averred the Financial Authority, its decision to
institute the ex parte application, as well as the Judge’s order to grant the warrant,
do not constitute administrative action, and therefore the PAJA does not apply.
[14] Second, the Financial Authority contended that the principle of legality
does not apply because the Pension Fund failed to establish that: (a) the Financial
Authority acted outside the law and in a manner inconsistent with the
Constitution; and (b) the decision to institut e the ex parte application was
irrational and unrelated to the purpose for which the powers in the Financial
Sector Regulation Act were conferred on the Financial Authority.
[15] For these reasons, the Financial Authority contended that there was no
causa for a review under rule 53, and consequently no legal basis for the relief
sought, ‘as there is no valid review before the court’. Accordingly, a request for
a record under those rules cannot be made. The Financial Authority, therefore,
sought the dismissal of the Pension Fund’s application.
[16] Before I turn to the High Court’s judgment, it is necessary to set out how
our courts understood the default legal position regarding a deci sion-maker’s
obligation to furnish the record of its decision. The default position was
understood as follows: in an application for review, the decision-maker is obliged
to furnish the applicant with the record of the decision under review, irrespective
of the merits of the applicant’s review application. This was on the authority of
9
this Court’s decisions, such as Competition Commission v Computicket 3 and
SARS v Richards Bay Coal Terminal.4
[17] The only exception was understood to be when the decision -maker
challenged the court’s review jurisdiction, as held by the Constitutional Court in
Competition Commission of South Africa v Standard Bank (Standard Bank).5 In
that event, a ruling on jurisdiction must precede all other orders, including an y
order on whether the record should be produced. This is because a court must be
competent to make any orders it issues. If the court lacks jurisdiction in the matter,
the obligation to furnish the record does not arise. 6 A defence that the decision
was n ot reviewable was considered irrelevant to the question of whether the
decision-maker had to furnish the record. As long as the applicant filed an
application to review the decision, the obligation arose without more.
The judgment of the High Court
[18] The H igh Court approached the application on the basis of the default
position set out above. Having found no challenge to its jurisdiction, it held that
the mere institution of a review application by the Pension Fund, without more,
entitled it to the record, ‘no matter how flawed it may be’. The High Court
reasoned that the reviewability of the impugned decision would ultimately be
determined by the court hearing the review application, and thus was irrelevant
to the question of whether the record should be produced. Accordingly, the High
Court ordered the Financial Authority to furnish the Pension Fund with the
record. It subsequently dismissed the Financial Authority’s application for leave
to appeal.
3 Competition Commission v Computicket (Pty) Ltd [2014] ZASCA 185; 2014 JDR 2507 (SCA); [2015] 1 CPLR
15 (SCA).
4 Commissioner for the South African Revenue Service and Another v Richards Bay Coal Terminal (Pty) Ltd
[2023] ZASCA 39; 2023 JDR 0956 (SCA); 86 SATC 145 para 28.
[2023] ZASCA 39; 2023 JDR 0956 (SCA); 86 SATC 145 para 28.
5 Competition Commission of South Africa v Standard Bank of South Africa Limited; Competition Commission of
South Africa v Standard Bank of South Africa Limited; Competition Commission of South Africa v Waco Africa
(Pty) Limited and Others [2020] ZACC 2; 2020 JDR 0685 (CC); 2020 (4) BCLR 429 (CC) (Standard Bank).
6 Standard Bank paras 201-203, see also paras 118 and 119.
10
An overview of the authorities subsequent to the High Court’s judgment
[19] In a judgment of this Court in Murray v Ntombela (Murray),7 the majority
affirmed the default position explained above. There, the respondents instituted
review proceedings in terms of rule 53 against the decision-makers, who refused
to produce the record of their decision. The respondents then launched an
application to compel the decision -makers to furnish the record. The decision -
makers filed a rule 6(5) (d)(iii) notice asserting that their decision was not
reviewable because they had neither exercised a public power nor performed a
public function when they made it.
[20] The majority held t hat determining whether the impugned decision was
reviewable would require the court to assess the substantive merits of the review
before the procedural requirements of rule 53 were satisfied, which was
untenable. Accordingly, that issue fell to be determ ined with the merits of the
main review application. The majority dismissed the decision-makers’ appeal and
upheld the High Court’s order requiring the decision-makers to furnish the record.
[21] The minority in Murray disagreed, holding that the exception carved out in
Standard Bank was not the only one. It recognised an analogous exception under
which the decision -maker can resist furnishing the record on the basis that the
impugned decision is not reviewable.
[22] Subsequent to Murray, the Constitutional Court delivered its decision in
Commissioner for the South African Revenue Service v Richards Bay (Richards
Bay),8 which is relevant to the question of whether, assuming it had review
jurisdiction, the High Court should have exercised that jurisdiction before
7 Murray and Others NNO v Ntombela and Others [2024] ZASCA 24; [2024] 2 All SA 342 (SCA); 2024 (4) SA
95 (SCA).
8 Commissioner for the South African Revenue Service v Richards Bay Coal Terminal (Pty) Ltd [2025] ZACC 3;
2025 (6) BCLR 639 (CC); 2025 (5) SA 617 (CC); 88 SATC 162.
11
deciding whether to order the Financial Authority to furnish the record. In
Famous Idea, the Constitutional Court overturned this Court’s majority judgment
in Murray and endorsed the minority judgment. I address the Constitutional
Court’s reasoning in both these matters later.
In this Court
Leave to appeal
[23] The threshold question is whether the Financial Authority has satisfied the
requirements for leave to appeal. These are set out in s 17(1) of the SC Act ,
namely: (a) the presence of reasonable prospects of success, 9 or (b) another
compelling reason why the appeal should be heard. 10 I consider these
requirements in light of the facts of the case and the developments in
jurisprudence since the High Court’s judgment. Key among these are the
Constitutional Court’s decisions in Famous Idea, which overruled the Murray
majority judgment, and in Richards Bay. I conclude that the Financial Authority
should be granted leave to appeal. Although it needs to satisfy only one of the
two requirements, I am satisfied that both are met.
The effect of Famous Idea
[24] The Constitutional Court stated that the majority of this Court in Murray
had misunderstood its judgment in Standard Bank. The Court explained that the
Standard Bank exception required a reviewing court to determine its jurisdiction
by reference to the founding papers. The Court further explained that an applicant
seeking production of the record must establish that all grounds, upon which it
was asserted that the court had review jurisdiction , are supported by relevant
factual material. In other words, an applicant must identify both the facts upon
which they base their cause of action and the legal basis of that cause of action.
9 Section 17(1)(a)(i).
10 Section 17(1)(a)(ii).
12
Where the review is based on the PAJA, an applicant must allege that the decision
constitutes administrative action and explain w hy. Unless an applicant lays a
factual basis for the review ground, it will have failed to engage the court’s review
jurisdiction and is not entitled to the record.11
[25] Importantly, the Constitutional Court confirmed that when a decision -
maker asserts that its decision is not reviewable, this concerns the court’s review
jurisdiction, rather than its constitutional jurisdiction to entertain and determine
review applications generally. The Constitutional Court unanimously held that
the majority judgment in Murray was incorrect to the extent that it held that such
a defence constitutes a challenge to the merits of the review, rather than to the
court’s review jurisdiction. It accordingly overruled the Murray majority and
endorsed the minority.12
[26] In the present case, the Financial Authority resisted the rule 30A application
on the ground that its decision is not reviewable because it: (a) does not include
a determination of culpability; (b) cannot be seen to affect the rights of any person
in a manner that has a direct and external legal effect. Thus, it neither constitutes
‘administrative action’ under the PAJA nor under the principle of legality. The
Constitutional Court in Famous Idea endorsed this defence as a challenge to the
court’s review jurisdiction, which must be determined before an order can be
made requiring a decision-maker to furnish the record.
[27] In the present case, the thrust of the Pension Fund’s case was that, having
instituted a review application under rule 53, it was entitled to the record as a
matter of law . In its affidavit, t he Pension Fund stated that the Financial
Authority’s grounds for refusing to furnish the record (as gleaned from previous
correspondence between the parties) were irrelevant, as they amounted to
11 Famous Idea paras 60-64.
12 Ibid para 65.
13
defences on the merits. The Pension Fund then traversed those grounds to show
that they were ill-founded.
[28] However, what is glaringly absent from the Pension Fund ’s founding
affidavit is any factual basis upon which the court’s review jurisdiction could be
founded. This is understandable, given that the weight of authority at that stage
required only the filing of what appeared to be a review application, after which
the production of the record would have to follow. We now know that this is
insufficient and that a factual basis for the court’s review jurisdiction must be
established, as subsequently clarified by the Constitutional Court in Famous Idea.
Thus, on the papers as they stan d, the Pension Fund is not entitled to the
production of the record. Because the High Court’s judgment was delivered
before the clarification by the Constitutional Court, fairness would ordinarily
require that the Pension Fund be afforded an opportunity to supplement its papers
to comply with the essence of Famous Idea.
[29] Having carefully considered that option, I conclude this would be a futile
exercise. This is for two reasons, each of which presents insurmountable obstacles
to the Pension Fund obtaining the record. The first concerns whether the Pension
Fund was entitled to seek, simultaneously, an order setting aside the ex parte
order and a judicial review of the Financial Authority’s decis ion to investigate
and to apply for the ex parte order. I refer to this as the choice -of-remedy issue.
The second is that, in addition to asserting the court’s review jurisdiction, the
Pension Fund had to demonstrate that the Financial Regulator’s decision to
investigate and to apply for a warrant affected its rights in a manner that had a
direct and external legal effect.
14
Choice of remedy
[30] As noted, in its notice of motion, the Pension Fund sought, in the main, an
order setting aside the ex parte order. It also sought judicial review of the
Financial Authority’s decision to seek a warrant. Accordingly, the Pension Fund
invoked two distinct remedies, both within the High Court’s jurisdiction.
[31] In Richards Bay, the taxpayer sought relief under s 47(9)(e) of the Customs
and Excise Act 91 of 1964 (the CEA), which provides for a wide appeal against
a tariff determination made under the CEA. The taxpayer also sought judicial
review of SARS’s tariff assessment. Consequently, the taxpayer requested a
record of the decision, among other things, under rule 53. SARS refused to
produce the record, contending that judicial review did not apply to the dispute,
which had to be resolved by the wide appeal. The Court explained how this issue
should be approached:
‘What emerges is that not every reviewable irregularity would necessitate a resort to review
relief, especially when there is a tailor-made remedy that can address the complaint of a wrong
decision which may negate the need to persist with a challenge to an irregular process. . . If the
determination is found to be incorrect, a wide appeal court will substitute it with the correct
determination which will, subject to possible further appeals, bring finality to the dispute. In
that event there may be nothing left to re view, as the Court observed in BP Southern Africa,
where it asked, in the context of a review and a wide appeal brought simultaneously against
the same decision, “[o]nce that appeal has been determined, the question was what, if anything,
was left of the review?”’13 (Footnotes omitted.).
[32] Under these circumstances, the Constitutional Court held that, in respect of
review relief, once a court has review jurisdiction, it must also decide whether to
exercise it. Thus, the Court drew a distinction between the conferment of
exercise it. Thus, the Court drew a distinction between the conferment of
jurisdiction by law and the court’s exercise of that jurisdiction. Accordingly, the
mere fact that a court is clothed with jurisdiction does not necessarily oblige it to
13 Richards Bay paras 115 and 116.
15
exercise it. It may decline to do so in certain circumstances, such as in the present
case, where a party invokes two distinct remedies.
[33] In the present case, if the court, on reconsideration, finds that the ex parte
order was erroneously sought or granted, it would set it aside and grant the
ancillary orders sought by the Pension Fund, including the return of documents
seized pursuant to the warrant. In that event, I ask the same question: what, if
anything, would be left to review? Nothing, I surmise. This is because, as
mentioned, the Pension Fund’s pleaded case is silent as to the basis on which the
High Co urt was to assume review jurisdiction. Its invocation of the judicial
review remedy was designed solely to access the record. I find apposite the
Constitutional Court’s characterisation of the taxpayer’s demand for the record in
Richards Bay:
‘There may also be instances where a taxpayer may purport to advance a ground of review, but
in substance be seeking to obtain a correct decision, and simply be clothing its challenge in
PAJA language in order to obtain access to the record. It is in these instances w here a court
must refuse to exercise its review jurisdiction and require a party instead to pursue the section
47(9)(e) appeal as the remedy properly suited for the challenge. The manner in which a party
pleads their case is important, just as the availability of the two remedies is in assisting a court
to determine whether the exercise of its review jurisdiction is warranted.’14 (Emphasis added.)
[34] What is clear is that a court cannot grant both remedies in respect of the
same decision. It must select one. As to which, the Constitutional Court in
Richards Bay held that where a statute provides for certain relief, a party should
rely on that relief rather than judicial review, unless the court is satisfied that the
applicant has advanced sufficient reasons to be entitled to proceed by way of
applicant has advanced sufficient reasons to be entitled to proceed by way of
review. I see no reason in principle to adopt a different approach here.
14 Ibid para 109.
16
[35] A reconsideration application to set aside an order obtained ex parte is the
default remedy, not a judicial review. The Pension Fund has not advanced any
reasons for proceeding by way of judicial review. Thus, the High Court would
have had no basis to decide whether to exercise its review jurisdiction. In any
event, any such decision must be preceded by a determination that the court has
review jurisdiction. I have demonstrated that the Pension Fund’s case does not
get out of the starting stalls in that regard. It would thus be futile to remit the
matter in circumstances where the court would not be in a position to decide
whether to exercise its review jurisdiction. On this basis, too, the Pension Fund’s
case flounders.
Whether the Financial Authority’s decision constitutes ‘administrative action’
[36] A court will have review jurisdiction under the PAJA and the competence
to order the furnishing of the record only if the impugned decision constitutes
‘administrative action’. In Minister of Defence v Motau and Others ,15 the
Constitutional Court described the concept of ‘administrative action ’ as the
threshold requirement for administrative law review.16 It explained:
‘The rather unwieldy definition can be distilled into seven elements: there must be (a) a
decision of an administrative nature; (b) by an organ of state or a natural or juristic person; (c)
exercising a public power or performing a public function; (d) in terms of any legislation or an
empowering provision; (e) that adversely affects rights; (f) that has a direct, external legal
effect; and (g) that does not fall under any of the listed exclusions.”17 (Footnote omitted.)
[37] The disputed requirement in the present application is whether the
Financial Regulator’s decision adversely affected the Pension Fund’s rights. This
Court has considered this issue in relation to regulatory bodies, including the
Competition Commission, the Registrar of Banks, and the Companies and
Competition Commission, the Registrar of Banks, and the Companies and
15Minister of Defence and Military Veterans v Motau and Others [2014] ZACC 18; 2014 (8) BCLR 930 (CC);
2014 (5) SA 69 (CC).
16 Ibid para 33.
17 Ibid.
17
Intellectual Property Commission.
[38] Under s 49B(2) (b) of the Competition Act 89 of 1998, any person may
lodge a complaint with the Competition Commission against any entity. The
complaint is investigated under s 49B(3), after which the investigating team
submits its final report to the Commission. The Commission may refer the
complaint to the Competition Tribunal under s 50(2)(a) of the Competition Act.
In the cases before this Court, the issue was whether the Competition
Commission’s decision to investigate and to refer the matter to the Competition
Tribunal was reviewable.
[39] In Simelane v Seven -Eleven (Simelane)18 this Court endorsed the
Competition Tribunal’s conclusion in Novartis v Competition Commission19 that
the Commission’s functions are investigative, not determinative. Accordingly,
this Court concluded that the ultimate decision to refer a matter to the Tribunal
and the referral itself are of an investigative, not an administrative, nature, and
therefore, not subject to review, ‘save in cases of ill -faith, oppression, vexation
or the like.’ 20 Simelane was followed in Competition Commission v
Telkom21 (Telkom); and Competition Commission v Yara (Yara).22 In Telkom, this
Court elucidated the requirement that the decision must have the capacity to affect
legal rights, as follows:
‘[A]lthough the complaint referral indeed affects Telkom in the sense that it may be obliged to
give evidence under oath, be subject to a hearing before the Tribunal, and be required to submit
its business affairs and documentation to public scrutiny it cannot be said that its rights have
18 Simelane and Others NNO v Seven -Eleven Corporation (Pty) Ltd and Another 2003 (3) SA 64 (SCA) ;
[2003] 1 All SA 82 (SCA).
19 Novartis SA (Pty) Ltd v Competition Commission (CT22/CR/B Jun 01 paras 35-61).
20 Simelane para 17.
21 Competition Commission of South Africa v Telkom SA Ltd and Others [2009] ZASCA 155; 2009 JDR 1265
(SCA); [2010] 2 All SA 433 (SCA).
(SCA); [2010] 2 All SA 433 (SCA).
22 Competition Commission v Yara (South Africa) (Pty) Ltd and Others [2013] 4 All SA 302 (SCA); 2013 (6) SA
404 (SCA); [2013] 2 CPLR 351 (SCA).
18
been affected or that the action complained of had that capacity.’23 (Footnote omitted.)
[40] In Yara, it was emphasised that the purpose of the Commission initiating a
complaint and the subsequent investigation is not to afford the suspect firm an
opportunity to put its case. This Court explained further:
‘The Commission is not even required to give notice of the complaint and of its investigation
to the suspect. Least of all is the Commission required to engage with the suspect on the
question whether its suspicions are justified. The principles of administrative justice are
observed in the referral and th e hearing before the Tribunal. That is when the suspect firm
becomes entitled to put its side of the case.’24
[41] As regards the Registrar of Banks (the Registrar), its regulatory powers
derive from the Banks Act 94 of 1990 (the Banks Act). The Registrar is
empowered to investigate a matter and, if there is reason to suspect a
contravention of s 11(1) of the Banks Act, to apply to the High Court for the relief
set out in s 81 of the Banks Act. In Corpclo v Registrar of Banks,25 the Registrar
obtained relief in the High Court as envisaged above.
[42] On appeal, the appellants invoked the PAJA, contending that the decisions
to investigate and to institute proceedings against them were administrative
decisions that required them to be given adequate notice of their nature and
purpose, and a reasonable op portunity to make representations, among other
things. With reference to Telkom and other authorities , this Court summarily
dismissed this contention, holding that a decision to institute proceedings in the
High Court for an interdict does not affect the a ppellants' rights or have that
capacity. It is the court that decides that the Banks Act is being contravened and
23 Ibid para 10.
24 Yara para 24.
25 Corpclo 2290 CC v The Registrar of Banks [2012] ZASCA 156; 2012 JDR 2100 (SCA); [2013] 1 All SA 127
(SCA).
19
grants the interdict.26
[43] Similarly, in Singh v Companies and Intellectual Property Commission ,27
this Court concluded that the investigation of a complaint lodged with the
Companies and Intellectual Property Commission does not constitute
administrative action. It concluded that the definition of administrative action in
s 1 of the PAJA does not extend to a referral to a statutory body for investigative
purposes.
[44] The same approach was adopted by the High Court in Wingate-Pearce v
South African Revenue Service.28 It held that the South African Revenue Service’s
receipt of information about the applicant from the Police’s Organised Crime Unit
could not, in itself, adversely affect the applicant’s rights. Nor could its decision
to investigate his tax affairs, the investigation process, or the decision to apply
for the warrant. These processes did not constitute administrative action.29
[45] The essence of these cases is reinforced by the Constitutional Court’s
observation in Viking v Hidro-Tech (Viking)30 that it is unlikely that a decision to
investigate and the process of investigation, without determining culpability,
could itself adversely affect the rights of any person in a manner that has a direct
and external legal effect.
[46] I consider these authorities apposite to the present case. As I see it, the
Financial Authority shares certain features with the Competition Commission and
26 Ibid para 26.
27 Singh v Companies and Intellectual Property Commission [2019] ZASCA 69; 2019 (5) SA 432 (SCA).
28 Wingate-Pearse v Commissioner, South African Revenue Service and Others 2019 (6) SA 196 (GSJ); [2019] 4
All SA 601; 82 SATC 21.
29 Ibid para 41.
30 Viking Pony Africa Pumps (Pty) Ltd t/a Tricom Africa v Hidro -Tech Systems (Pty) Ltd and Another [2010]
ZACC 21; 2011 (1) SA 327 (CC); 2011 (2) BCLR 207 (CC) paras 38 -39.
20
the Registrar of Banks in relation to their investigation and referral procedures.
All these regulatory bodies have investigative and referral powers conferred by
their respective legislative instruments. Under the Competition Act, the
Commission refers complaints to the Competition Tribunal after investigation.
Under the Banks Act, the Registrar of Banks may, after an investigation, apply to
the High Court for specified relief.
[47] Under the Financial Sector Regulation Act, the Financial Authority may,
upon investigation, apply to a magistrate or judge for a warrant under s 138. That
section must be read with ss 135, 136, 137 and 138. Section 135 provides that a
financial sector regulator may instruct an investigator appointed by it to conduct
an investigation in respect of any person if it reasonably: (a) suspects a
contravention of a financial sector law for which the financial sector regulator is
the responsible authorit y; or (b) believes that an investigation is necessary to
achieve the objects referred to in section 251(3) (e). Section 136 sets out
investigators’ powers to question and to require the production of documents or
other items. Section 137 empowers investigators to enter and search premises.
[48] Section 138(1), which provides for the obtaining of warrants, reads:
‘(1)(a) A judge or magistrate who has jurisdiction may issue a warrant for the purposes of this
Part on application by an investigator.
(b) The judge or magistrate may issue a warrant in terms of this section –
(i) on written application by the investigator setting out under oath or affirmation why it is
necessary to enter and investigate the premises; and
(ii) if it appears to the magistrate or judge from the information under oath or affirmation that
–
(aa) in the case of an investigation under section 135(1)(a), that –
(AA) there are reasonable grounds for suspecting that a contravention of a financial sector law
has occurred, may be occurring or may be about to occur;
has occurred, may be occurring or may be about to occur;
(BB) entry and investigation of the premises are likely to yield information pertaining to the
contravention; and
21
(CC) entry and investigation of those premises is reasonably necessary for the purposes of the
investigation;
(bb) in the case of an investigation under section 135(1) (b), that there are reasonable grounds
to believe that the investigation necessary to comply with a request referred to in that section.’
[49] It is plain from s 138 that the overarching jurisdictional fact fo r the
Financial Authority to apply for a warrant is reasonable suspicion of a
contravention of a financial sector law. Once a basis is laid for this under oath, it
is the magistrate or the judge who exercises a discretion whether to grant the
warrant. In other words, the Financial Authority’s role is limited to the
investigation.
[50] To sum up, the upshot of Simelane and the cases that followed it is that a
regulatory body’s decision to investigate and to refer complaints to an
adjudicative body is not an administrative action and therefore not reviewable. In
my view, this applies with equal force to the Financial Authority’s decision to
investigate and to seek a warrant. That decision does not, in itself, adversely affect
the Pension Fund’s rights, nor does a decision to seek a search warrant from a
judge. It is the ex parte order that does so, not the Financial Authority’s decision
to investigate and to apply for the warrant. As the order is a judicial decision, it
is not reviewable under the PAJA.
[51] Because the order was obtained ex parte, the Pension Fund’s remedy is
reconsideration. This preserves administrative fairness. For these reasons, the
Financial Authority’s decision to investigate and to seek a warrant is not
reviewable. Accordingly, I agree with the Financial Authority’s argument that the
Pension Fund’s application was conceptually flawed and that they it is not entitled
to the record.
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Conclusion
[52] For all the reasons stated above, I conclude that the Financial Authority
should be granted leave to appeal and that the appeal should be allowed. Costs
should follow the result. It brooks no debate that the issues involved warranted
the employment of two counsel.
Order
[53] In the result, the following order is granted:
1 The applicants are granted leave to appeal.
2 The appeal is upheld with costs, including costs of two counsel.
3 The order of the Gauteng Division of the High Court, Pretoria, is set aside and
replaced with the following:
‘The application is dismissed with costs.’
___________________________
T MAKGOKA
JUDGE OF APPEAL
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Appearances:
For applicants: W Trengove SC (with him L Peter)
Instructed by: Norton Rose Fulbright SA Inc., Johannesburg
Macintosh Cross & Farquharson, Pretoria
Phatshoane Henney Attorneys, Bloemfontein
For respondents: AE Franklin SC (with him J P V McNally SC
and T Mafukidze)
Instructed by: Webber Wentzel, Johannesburg
Honey Attorneys, Bloemfontein.