Financial Sector Conduct Authority and Others v Municipal Employees' Pension Fund and Others

The Financial Sector Conduct Authority (FSCA) suspected the Municipal Employees' Pension Fund (Pension Fund) of contravening financial sector laws. Acting under the Financial Sector Regulation Act 9 of 2017, the FSCA decided to investigate the Pension Fund and applied ex parte to a judge for a search-and-seizure warrant, which was granted on 27 June 2022 and executed in July 2022. The seized material was placed in escrow pending the main application. On 25 July 2022, the Pension Fund and other respondents launched an urgent application seeking, inter alia, to set aside the ex parte warrant order and to review the FSCA's decision to investigate and apply for the warrant. In the same proceedings, the Pension Fund called upon the FSCA under Rule 53(1)(b) of the Uniform Rules of Court to produce the record of the decision and reasons. The FSCA refused, contending that the decision to investigate was not 'administrative action' under the Promotion of Administrative Justice Act 3 of 2000 (PAJA) and lacked direct, external legal effect. The Pension Fund then applied under Rule 30A(2) to compel production of the record. The High Court ordered the FSCA to furnish the record, holding that the mere filing of a review application entitled the applicant to the record 'no matter how flawed it may be'. The FSCA's subsequent application for leave to appeal was dismissed by the High Court, prompting this application to the Supreme Court of Appeal.

• Whether a regulator's decision to investigate and to apply ex parte for a search-and-seizure warrant constitutes reviewable administrative action under PAJA or the principle of legality.
• Whether a decision-maker may resist producing a record under Rule 53 on the basis that the impugned decision is not reviewable, and whether a court must determine its review jurisdiction before ordering production of the record.
• Whether an applicant seeking a record under Rule 53 must establish a factual and legal basis for the court's review jurisdiction in its founding papers.
• Whether a court should decline to exercise its review jurisdiction where an applicant simultaneously seeks a specific remedy (reconsideration of an ex parte order) and judicial review.

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.'

A court must determine that it has review jurisdiction before ordering a decision-maker to produce a record under Rule 53; the mere filing of a review application does not automatically trigger an obligation to furnish the record, and the applicant must allege facts showing that the decision constitutes administrative action or is otherwise reviewable. A financial sector regulator's decision to investigate a suspected contravention and to apply for a search-and-seizure warrant under the Financial Sector Regulation Act is investigative in nature; it does not adversely affect the rights of the subject in a manner that has a direct, external legal effect and therefore does not constitute administrative action under PAJA. Where an applicant simultaneously invokes a specific remedy (such as reconsideration of an ex parte order) and judicial review of the underlying investigative decision, and the specific remedy would render the review academic, the court should decline to exercise its review jurisdiction unless the applicant advances sufficient reasons for doing so.

The Court observed that fairness would ordinarily have required the Pension Fund to be afforded an opportunity to supplement its papers to comply with the jurisdictional requirements subsequently clarified by the Constitutional Court in Famous Idea, but concluded that such an opportunity would be futile because the Pension Fund's case was conceptually flawed on both the choice-of-remedy and the jurisdictional issues. The Court also remarked that the complexity of the issues warranted the employment of two counsel.

The judgment applies the Constitutional Court's landmark ruling in Famous Idea to confirm that an applicant seeking review under Rule 53 must establish the factual and legal basis for the court's review jurisdiction before becoming entitled to the record, ending the prior 'default position' that record production was automatic upon the filing of review proceedings. It also affirms, in the financial regulatory context, that decisions to investigate and to apply for search warrants are investigative steps that do not adversely affect rights in a direct, external manner and are therefore not reviewable administrative action. Furthermore, it reinforces that courts should decline to exercise general review jurisdiction where a tailor-made statutory or procedural remedy (such as reconsideration of an ex parte order) is available and would provide complete relief.