The Supreme Court of Appeal (SCA) has delivered a judgment on the limits of judicial review during regulatory investigations, ruling that the Financial Sector Conduct Authority was not obliged to hand over the record of its decision to investigate the Municipal Employees’ Pension Fund (MEPF) and apply for a search-and-seizure warrant against it.
In a unanimous judgment handed down on 8 May, the SCA overturned a High Court ruling that had compelled the FSCA to produce the record under Rule 53 of the Uniform Rules of Court.
The judgment clarifies that litigants seeking access to a regulator’s investigative record must first establish a factual basis for review jurisdiction. It also reinforces the principle that investigative decisions by regulators generally do not constitute “administrative action” reviewable under the Promotion of Administrative Justice Act (PAJA).
Search warrant and record dispute
The dispute arose after the FSCA, acting under the Financial Sector Regulation Act (FSRA), launched an investigation into suspected contraventions of financial sector laws by the MEPF. The Authority subsequently obtained an ex parte warrant authorising searches of the fund’s premises and the seizure of documents and information. The warrant was granted in June 2022 and executed in July 2022.
The parties later entered an escrow agreement under which the seized information would be held by a third party pending the outcome of the main proceedings.
The MEPF then approached the High Court in Pretoria on an urgent basis seeking, among other relief, to set aside (on reconsideration) the ex parte order and to review the FSCA’s decision to investigate the fund and apply for the warrant. At the same time, it invoked Rule 53 and demanded that the FSCA provide the record of the proceedings relating to those decisions.
When the FSCA refused, the fund brought a Rule 30A application to compel compliance with Rule 53.
The FSCA argued that its decisions to investigate and seek the warrant were not reviewable under PAJA because they did not determine culpability and did not adversely affect rights in a manner that had a “direct and external legal effect”.
The High Court rejected that argument. It held that once a review application had been instituted, the applicant was entitled to the record no matter how flawed it may be, and questions about whether the impugned decision was ultimately reviewable should be determined later by the court hearing the review itself.
Accordingly, the High Court ordered the FSCA to furnish the MEPF with the record.
On appeal, the FSCA argued that the High Court should not have compelled it to furnish the Rule 53 record because the MEPF had not established review jurisdiction; the proper remedy for the ex parte warrant was reconsideration; and the FSCA’s decision to investigate and seek a warrant was not reviewable administrative action.
Constitutional Court shifts the legal position
By the time the matter reached the SCA the legal position had shifted significantly following the Constitutional Court’s February 2026 judgment in Famous Idea Trading 4 (Pty) Ltd v Government Employees Medical Scheme.
In Famous Idea, the Constitutional Court held that a litigant seeking access to a Rule 53 record must first establish a factual basis showing that the court has review jurisdiction. Merely labelling proceedings as a review application is insufficient.
Judge Tati Makgoka, writing on behalf of the SCA, said the MEPF’s papers fell short of that standard.
“What is glaringly absent from the pension fund’s founding affidavit,” he said, “is any factual basis upon which the Court’s review jurisdiction could be founded.”
The SCA acknowledged that this omission was understandable because, at the time the litigation was launched, prevailing authority suggested that filing what appeared to be a review application entitled an applicant to the record. The Constitutional Court only later clarified the position in Famous Idea.
Ordinarily, the SCA said, fairness might have justified allowing the MEPF to supplement its papers. But the Court concluded that doing so would be futile because the fund faced “insurmountable obstacles” in any event.
The first concerned the remedies pursued by the fund.
The SCA held that reconsideration of an ex parte order is ordinarily the default remedy where a warrant has been granted without notice. A litigant cannot, without special justification, simultaneously pursue judicial review as an alternative route to substantially the same practical relief.
“A reconsideration application to set aside an order obtained ex parte is the default remedy, not a judicial review,” said Judge Makgoka.
The MEPF had not advanced reasons why review proceedings were necessary in addition to reconsideration proceedings. According to the Court, the review route appeared directed mainly at obtaining access to the record.
Judge Makgoka quoted with approval the Constitutional Court’s warning in Commissioner for SARS v Richards Bay Coal Terminal that litigants may sometimes “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”.
Why the SCA found the review flawed
The second obstacle was the nature of the FSCA’s investigative powers themselves.
The SCA held that the FSCA’s decisions to investigate and to seek a warrant did not constitute “administrative action” under PAJA, because they did not themselves adversely affect rights. The Court drew a distinction between the regulator’s investigative conduct and the judicial warrant ultimately granted.
“It is the ex parte order that [affects rights], not the financial authority’s decision to investigate and to apply for the warrant,” Judge Makgoka said. “As the order is a judicial decision, it is not reviewable under the PAJA.”
The judgment explained that, under the FSRA, the FSCA may investigate suspected contraventions and apply to a judge or magistrate for a warrant, but it is ultimately the judicial officer who decides whether the statutory requirements for the warrant have been met.
In reaching its conclusion, the SCA aligned the FSCA with other regulators whose investigative functions have previously been held not to constitute administrative action. The judgment discussed earlier decisions involving the Competition Commission, the Registrar of Banks, and the Companies and Intellectual Property Commission, all of which emphasised the distinction between investigative functions and decisions that finally determine rights or culpability.
The SCA also referred to the Constitutional Court’s observation in Viking Pony Africa Pumps v Hidro-Tech Systems 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”.
The SCA accordingly granted the FSCA leave to appeal, upheld the appeal with costs, including the costs of two counsel, and set aside the High Court’s order compelling production of the record. It replaced it with an order dismissing the application to compel the record, with costs.
The judgment does not mean that regulatory investigations can never be challenged successfully. But it confirms that investigative steps of this kind will generally not constitute PAJA administrative action, and applicants seeking Rule 53 records must first establish a factual basis for review jurisdiction.
Click here to download the judgment.
