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Are Midstream Reviews of Proceedings at an Investigative Stage Permissible? Insights from a Full Bench Appeal

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Published Date: February 19, 2024

An appeal serving before a full bench in the High Court of South Africa, Gauteng Division, Pretoria has recently shed light on whether a midstream review of proceedings conducted at an investigative stage is permissible.

The appeal stemmed from a ruling by a single judge in the same division that an investigation conducted at the investigative stage had to be set aside on the basis that it was procedurally unfair.

The investigation, initiated by the financial conduct watchdog, the FSCA, focused on financial misstatements made by an executive of a large sugar-producing company. The executive was aggrieved by how the investigation was conducted, arguing that he was forced to respond to questions without being afforded prior access to the documents on which the investigators relied. Additionally, he argued that the Financial Sector Regulation Act bestowed extensive powers on the investigators, including the imposition of criminal penalties for non-compliance with questioning, which constituted public power that was able to be reviewed in terms of the Promotion of Administrative Justice Act (PAJA) and/or the principles of legality.

These perceived irregularities prompted the executive to launch a review of the investigation to the court a quo, arguing that substantial injustice would arise if the court did not intervene at the investigative stage.

In considering the court a quo’s decision, the full bench found, amongst others, that it erred in finding that the provisions of PAJA were applicable and in not appreciating that a review would only be permissible if the executive demonstrated “grave injustice”.

Highlighting the reasons why PAJA does not apply, the full bench cited the Constitutional Court case of Viking Pony, wherein it was found that PAJA’s provisions are activated only when there is an explicit finding and announcement of guilt, which is not typically present in the context of an investigation.

Concerning the issue of grave injustice, the full bench noted that the principles of legality require that public power be exercised lawfully, rather than arbitrarily or unlawfully. To meet this requirement, the exercise of public power must be rationally related to the purpose for which the power was given. In considering whether this was the case, the full bench observed that the executive was represented by his lawyers throughout the investigative process; he received fair notice of his interview; the investigators provided him in advance with a detailed list of issues they intended to cover; and they expressed their willingness to adjourn or postpone the interview at his request. Taking all these facts into consideration, the full bench concluded that the conditions of the investigation did not amount to grave injustice.

In conclusion, the full bench’s ruling affirms that a midstream review of proceedings at an investigative stage is permissible, albeit under specific circumstances.

Article by:
Jean-Paul Rudd
Partner, Adams and Adams
16/02/2024

Jean-Paul Rudd
Partner | Attorney

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