AAA Investments (Proprietary) Limited v Micro Finance Regulatory Council and Another

AAA Investments, a registered micro-lender, challenged the validity of extensive rules made by the Micro Finance Regulatory Council, a regulatory body approved by the Minister of Trade and Industry under section 15A of the Usury Act 73 of 1968. The rules regulated registration, lending practices, disclosure, finance charges, disciplinary procedures and reporting obligations of micro-lenders. The applicant contended that in making these rules, the Council unlawfully exercised public legislative power without proper authority and that certain rules infringed the constitutional right to privacy. The High Court held the rules unconstitutional as an unlawful exercise of public power, while the Supreme Court of Appeal reversed that decision, holding that the rules operated in the private sphere through contractual consent. AAA Investments sought leave to appeal to the Constitutional Court.

Leave to appeal was granted, but the appeal was dismissed. The order of the Supreme Court of Appeal was upheld, and the rules made by the Micro Finance Regulatory Council were declared valid.

The case is a leading authority on the application of the Constitution and the principle of legality to private bodies exercising public regulatory functions. It clarified that private entities can exercise public power subject to constitutional scrutiny, without necessarily exercising legislative power. The judgment is foundational in South African administrative and constitutional law concerning public-private regulation.