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[2013] ZAGPJHC 392
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Uniplate Group (Pty) Ltd v New Number Plate Requisites CC, In Re; New Number Plate Requisites CC v Uniplate Group (Pty) Ltd (25718/2012) [2013] ZAGPJHC 392 (23 July 2013)
REPUBLIC
OF SOUTH AFRICA
SOUTH
GAUTENG HIGH COURT, JOHANNESBURG
CASE
NO: 25718/2012
In
re the application for leave to appeal between :-
NEW
NUMBER PLATE REQUISITES
CC
...........................................................................
Applicant
and
UNIPLATE
GROUP (PTY)
LTD
..........................................................................................
Respondent
JUDGEMENT
: APPLICATION FOR LEAVE TO APPEAL
Coram
:
BESTER, AJ:
1.
The main and counter applications in this matter served before me on
15 October 2012, in the last week of my acting appointment.
2.
A written judgement signed by me on 28 October 2012, was handed down
on 5 November 2013.
3. Before I deal
with the application itself, an apology is necessary :-
3.1.
On a re-reading of my written judgment in preparation for this
hearing, it was apparent that between the settling of the first
draft
of the judgment and its retyping, a number of inconsequential
typographical and grammatical errors had escaped my attention
–
for those errors I apologise.
3.2. On 12 February
2013, I received a telephone call from Mr P Bester (no
relation), attorney for New Number Plate Requisites
CC (“NNP”),
who informed me that NNP had lodged an application for leave to
appeal my judgement was filed as far back
as 21 Nov 2012.
He enquired when the application would be heard. That telephone
call was my first notification
that an application for leave to
appeal had been lodged. At my request, attorney Bester e-mailed
to me a copy of the application.
3.3.
After that telephone call, I immediately e-mailed senior counsel who
had argued the application for NNP and Uniplate Group
(Pty) Ltd.
(“Uniplate”) and informed them that, although I was
recuperating from surgery and booked off until 9 April
2013, I would
hear the application on any date in February or March. I
requested of them to let me have about four dates
on which all
parties would be available for the hearing so as to enable me to
arrange an enrolment of the application through the
office of the
Deputy Judge President.
3.4. Senior counsel
for NNP confirmed by e-mail on 13 February 2013, that he would
discuss dates with his counterpart and would
revert with proposed
dates as soon as possible. I heard nothing further from counsel
and assumed that the application had
been withdrawn or that the
matter had settled.
3.5. My assumption
was incorrect, as on 15 May 2013, I received another call from
attorney Bester again enquiring when the application
would be heard.
I informed him that I had requested dates from counsel as far back as
February 2013, but had heard nothing
further form them and had
therefore assumed that the application had been withdrawn or settled.
Attorney Bester undertook to take
the matter up with his counsel and
revert.
3.6.
By 31 May 2013, I had again heard nothing further. Therefore,
on 31 May 2013, I telefaxed the Honourable Deputy Judge
President,
informed him of these delays and asked that the application be set
down for hearing at 9:30 AM on Monday, 10 June 2013,
and that the
parties be notified of the set-down. Receipt of the telefax was not
acknowledged.
3.7. On 7 June 2013,
I sought confirmation from the office of the Deputy Judge President
that the application had indeed been enrolled
for hearing and again
e-mailed senior counsel to notify them that I was seeking such
confirmation.
3.8. The application
was, however, not enrolled as requested.
3.9.
Thereafter, Advocate Botha for NNP arranged a date for the hearing
with all parties and succeeded in achieving an enrolment
for 23 July
2013.
3.10.
The failure to resolve the application for leave to appeal is
undoubtedly lamentable and ought to have been avoidable.
However, because acting judges do not, after completion of their
acting stints, have the benefit of direct and ongoing communication
with the court and registrars about matters heard by them, failures
such as that sketched above, occur. The procedures relating
to
the administration of applications for leave to appeal the judgements
of acting judges may therefore require a re-visitation
to ensure that
litigants receive their deserved expeditious hearing of disputes and
particularly of their applications for leave
to appeal.
3.11.
In as much as I had unwittingly contributed to the delay in the
hearing of this application by not myself immediately setting
in
motion the wheels for the enrolment and hearing of this application
in February 2013, and by assuming, erroneously, that the
matter had
resolved itself, I also apologise.
4.
To return to the application for leave to appeal, the obvious
question is whether the interim order granted by me is appealable.
First, however, some background :-
4.1. Uniplate, the
applicant in the main application and the respondent in this
application sought, in its Notice of Motion, final
or interim
interdict relief against NNP, the respondent in the main application
and the applicant in this application. The
alternative interim
relief was sought pending the finalisation of an action to be
instituted by Uniplate against NNP within 30
days of the granting of
this Order.
4.2. The relief
sought was founded in an alleged unlawful competition and more
specifically, the alleged unlawful and intentional
interference with
contractual, vertical tie-in relationships created between Uniplate
and its customers by Uniplate’s standard
customer rental
agreement.
That
agreement precluded certain trade between Uniplate’s customers
and third parties such as NNP. NNP, therefore, so the
complaint went,
sought to precipitate a breach by these customers of their agreements
so as to free them up to trade with NNP.
Uniplate therefore
sought interdict relief against NNP to restrain such conduct.
4.3. In its opposing
papers in the main application, NNP attacked the validity of the
agreements on two grounds. These grounds are
conveniently summarised
in NNP’s notice of application for leave to appeal :-
4.3.1.
The agreements are contrary to public policy. Therefore, to prevent
NNP from interfering with them would be contrary to public
policy
(referred to in the notice as "
the public policy issue
").
(Stated differently, what NNP contends in its notice is that it is
not unlawful for a
third party
to interfere with, and to
encourage the breach of contract between two other contracting
parties where that contract is alleged,
not by a contracting party,
but by that third party to be unenforceable on public policy grounds
- an extraordinary notion indeed,
but more on that below);
4.3.2. The
agreements are anti-competitive under the Competition Act, 89 of
1998, (“the Act”) in that certain exclusivity
provisions
in them are prohibited and/or liable to be declared void, having
regard to sections 5(1) and 8(1)(a), (c) and (d) of
the Act (referred
to in the notice as "
the competition law issue
").
4.4. In a counter
application, NNP therefore sought a stay of the relief sought by
Uniplate in the main application pending a referral
of the
competition law issue to the Competition Tribunal in terms of section
65(2)(b) of the Act.
4.5. At commencement
of argument on the day of the hearing of the main and counter
applications, I was informed by Uniplate’s
counsel that
Uniplate accepts that the competition issue must be referred to the
Tribunal and that it would therefore seek only
interim interdict
relief pending that referral.
4.6. On behalf of
NNP it was there contended that a crucial issue in the determination
of the application and counter-application
is the enforceability of
the agreements and, in particular, the exclusivity provisions in
them. The agreements, it was further
contended, not only
contravene the mentioned sections of the Act; they are also
contra
bonos mores
under the common law and therefore unenforceable.
4.7. During debate
at the hearing of the main and counter applications it became
apparent that counsel for the parties were in agreement
that there is
a substantial confluence between the principles underlying the
mentioned sections of the Act and those of the common
law relating to
unlawful competition. Therefore, for the purposes of the
interim interdict relief sought, much of the argument
at the hearing
of the application was focussed on the judgment of Spilg J in
Erf
179 Bedfordview (Pty) Ltd v Bedford Square Properties (Pty) Ltd
2011 JOL 27160
(GSJ) and whether, in view of section 65(2)(b) of the
Act, an enquiry into conduct allegedly prohibited under the Act is at
all
permissible and whether the interim relief sought, is available
to Uniplate in this court.
5.
In my judgement I held that, if the judgment in
Erf 179
Bedfordview
is taken to its logical conclusion, then a High Court
may, for the purposes of establishing a
prima facie
right
for
the purposes of interim relief
, consider whether or not a
provision in an agreement is
prima facie
valid or not.
But it can do no more, for then it would infringe on the exclusive
jurisdiction of the Competition Tribunal
or the Competition Appeal
Court. In my judgment I also held that, on my reading of Spilg
J’s reasoning, his judgment
is authority for the proposition
that, irrespective of section 65(2) and having found
prima facie
that a contract was valid, a High Court may grant interim relief
(pending a referral to the Competition Tribunal) in order
to
maintain a status quo. I further held that, contrary to
the position in the case heard by Spilg J where the right
was
res
iudicata
, that
prima facie
right must in this case be
shown before I could issue an interim interdict.
6.
These findings are not attacked in NNP’s application for leave
to appeal and were not criticised at the hearing of this
application;
on the contrary, counsel for NNP, in an eloquently delivered address,
submitted that they were correct.
NNP therefore, it seems
to me, is in agreement with my finding that interim interdict relief
in this court, pending the referral
and final resolution of the
competition issue, is not precluded under the Act.
7.
The immediate question is therefore whether or not the interim
interdict handed down order in paragraph (b)(i) of my order is
appealable.
8.
NNP contends in paragraphs 1.4 and 1.5 of its notice of application
for leave to appeal that I had erred by “
not referring the
matter to trial as prayed by Uniplate
” but by simply
postponing the main application for final relief
sine die
pending the final determination of the Competition issue. In
the premises, NNP contends further in that notice that I had
erred in
“
finally determining the public policy issue since the final
relief sought
(sic)
is not subject to a trial or any other
procedure relating to the public policy issue but only the
competition law issue
”. (I accept that what NNP here
meant to contend, was that “
the interim relief
handed down is not subject to the final resolution of
a
trial or any other procedure relating to the public policy issue but
only
subject to the final
resolution
of
the competition law issue
”.)
9. NNP then contends
in its notice that my order is final in effect since it :-
9.1. disposes of at
least a substantial portion of the relief claimed in the main
proceedings;
9.2. is intended to
and does have an immediate effect and is not susceptible to be
reconsidered on the same facts in the main proceedings;
9.3.
effectively usurps the role of the court granting the final order in
the application by making it dependent only on the finding
of the
Competition Tribunal.
10.
Finally, NNP contends that is in the interests of justice that it
should be granted leave to appeal against part (b) of my order
(sic,
I assume that NNP meant to refer to part (b)(i) of my order).
11.
In my judgment, I made the following order:-
“
(a) The issue
as to whether Uniplate’s standard agreement concluded with its
customers, an example of which is attached to
Uniplate’s
founding affidavit as Annexure "NPC–2", alternatively
the issue as to whether the exclusivity
provisions in that agreement
is to be prohibited or declared void in terms of the Competition Act,
1998 (“the Act”)
is referred to the Competition Tribunal
to be considered on the merits in terms of section 65 of the Act;
(b) Pending the
final determination of the issue so referred :-
(i) NNP is
interdicted and restrained from unlawfully and intentionally
interfering with Uniplate's contractual relationship with
its
customers by soliciting, inducing and persuading and by attempting to
solicit, induce or persuade any of such customers to
sever and/or in
any manner whatsoever to breach their agreements with Uniplate;
(ii)
Uniplate’s main application for final interdict relief under
case number 25718/2012 is postponed sine die;
(c) The costs of
this application will stand over for final determination when
Uniplate’s main application for final relief
is heard.”
12.
As pointed out above, the alternative interim interdict relief was
sought pending the finalisation of an action to be instituted
by
Uniplate against NNP within 30 days of the granting of this Order.
13.
However, after preparation of my judgment and when considering the
form of the order, it appeared to me that, if the referred
competition issue, after wending its laborious way through the
competition law processes to finality, succeeds, the operative or
crucial parts of the agreement relied upon by Uniplate to maintain
its control over its contracting partners would be struck down,
thus
effectively rendering moot whatever dispute Uniplate might have with
NNP about its attempts to precipitate a breach of those
agreements in
order to leave Uniplate’s contracting partners free to do
business with NNP instead. However, if I directed
Uniplate to
institute action for final relief within 30 days of my order, NNP
would no doubt again have had to plead a stay of
the action on the
same grounds raised in the main application. It would of course
also have had to plead over on the merits.
If NNP did not plead
a stay of that action pending the final resolution of the competition
issue, the action might inexorably have
progressed to the allocation
of a trial date and a hearing of the action well before the
competition issue had achieved to finality.
Despite the fact,
therefore, that Uniplate had in its Notice of Motion sought interim
relief pending the institution of an action
for final relief it would
in my view have been, if not absurd, then certainly extremely
wasteful from a costs and court resources
perspective to do so.
14.
On the flip-side of the coin, if the competition issue ultimately
fails, then the final relief sought in the main application
and NNP’s
opposition thereto would be squarely back in play -
sans
NNP’s
competition law points raised in opposition, of course.
15.
Hence, in terms of paragraph (b)(ii) of my order, I postponed
Uniplate’s main application for final interdict relief
sine
die
. If the competition issue fails, then, no doubt, the
main application may and will be reenrolled for the hearing of
Uniplate’s
application for final relief on the same facts that
served before me. When that application is heard, NNP will be
at large
to oppose the final relief on the basis of its public policy
issue grounds. Even Uniplate’s
prima facie
right could be reargued: see
Airoadexpress (Pty) Ltd v Chairman,
Local Road Transportation Board, Durban
[1986] ZASCA 6
;
1986 (2) SA 663
(A).
As quite correctly also pointed out at the hearing of this
application by counsel for Uniplate, who vigorously opposed
leave to
appeal, the parties may even seek leave of the court to supplement
their evidence or to file further affidavit evidence
in the main
application. Such further evidence could conceivably be new evidence
that became available to the parties during the
course of the
Competition Tribunal exercise. Nothing in my order precludes
them from doing so and nothing in my order precludes
another court
from discharging, varying or even extending the interim relief
pending the institution of an action for final interdict
relief.
16.
My finding that Uniplate had established a
prima facie
right
to the relief granted in paragraph (b)(i) of my order is therefore
self-evidently not a definitive finding on the existence
of that
right. Accordingly, when NNP contends in its notice of
application for leave to appeal, and contended at this
hearing, that
the public policy issue was finally decided because the interim
relief handed down was subject only to the final
resolution of the
competition law issue (in another forum), it clearly misinterprets my
judgement and order. I therefore
have great difficulty in
following NNP’s argument that my order is final in effect or
that any part of my (judgment and/or)
order dispose/s of at least a
substantial portion of the relief claimed in the main application.
17.
During the course of argument on behalf of NNP in this application,
counsel for Uniplate also referred me to
Intl Trade Administration
Commission v SCAWSA (Pty) Ltd
2012 (4) SA 618
(CC). With
reference to that case, it was submitted that the prohibition on the
granting of leave to appeal in respect of
orders which are not final
in effect had of late been adapted and that regard must now be had to
the interests of justice and,
in particular, the effect of the order
rather than simply to the form of the order. The effect of
paragraph (b)(i) of the
order made by me in this case, contended
counsel, occasioned and will occasion irreparable harm to NNP which,
contrary to what
I had found, outweighs the harm that would be
suffered by Uniplate if the order had not been granted. Whatever harm
suffered by
Uniplate, counsel contended further, would, also contrary
to what I had found, be easy to compute whereas the harm that NNP
will
suffer if the order remains in place, is virtually impossible to
quantify. Leave to appeal part (b)(i) of my order ought
therefore to be allowed in the interests of justice.
18.
At the hearing of this application my recollection of
SCAWSA
was that it was decided in a completely different factual context and
that the tenor of the judgement in respect of the appealability
of
interim interdicts was overly generalised in counsel’s
submission.
Unfortunately,
I was not before the hearing of this application alerted to the fact
that counsel would rely on that case in support
of the mentioned
submission and I therefore could not review the judgment in
preparation for the hearing. At conclusion of
all argument, I
therefore indicated to counsel that I would reserve the judgement
that I was then about to hand down in this application
in order first
to review
SCAWSA
.
19.
In
SCAWSA
an application for leave to appeal and an appeal
against an interim order handed down in the North Gauteng High Court
served before
the Constitutional Court. The court held that the
question whether the Constitutional Court should grant leave to
appeal depends
on two considerations, namely whether a constitutional
issue has arisen and if it has, whether it is in the interests of
justice
to grant leave to appeal. The mere fact that the order
in respect of which leave to appeal is sought in that court is in the
form of an interim order, the court held, is relevant and important
but not a determinative consideration in ascertaining where
the
interests of justice reside, and whether it is in the interests of
justice to grant leave to appeal, hinges on a cluster of
interactive
considerations (
SCAWSA
, paragraphs 41 and 46).
20.
However, the court further held that it would often not be in the
interests of justice to entertain appeals against interlocutory
rulings which do not have a final effect on the dispute between the
parties (
SCAWSA
, paragraph 47).
21.
In the context of interim orders of execution,
Machele and Others
v Mailula and Others
2010 (2) SA 257
(CC) at 264, citing
Minister
of Health and Others v Treatment Action Campaign and Others (No 1)
[2002] ZACC 16
;
2002 (5) SA 703
(CC), held that the "
primary consideration
"
in determining whether or not it is in the interests of justice for a
litigant to be granted leave to appeal against an interim
order of
execution is whether irreparable harm would result if leave to appeal
is not granted. It also held that a court should
have regard to the
possibility of irreparable harm and the balance of convenience.
22.
Contrary to
Machele
,
SCAWSA
, however, does not pitch
the irreparable harm requirement as high as a "
primary
consideration
”; it merely holds that irreparable harm is
“
an important, but not the sole requirement for granting
leave to appeal
”. “
The test of irreparable
harm
”, the court held, “
must take its place
alongside other important and relevant considerations that speak to
what is in the interests of justice
”. These other relevant
considerations are the prospects of success; whether the order,
although interlocutory, is final in
effect; and the kind and
importance of the constitutional issue raised. These considerations
are, however, not exhaustive; as pointed
out by the court; what is in
the interests of justice will depend on a careful evaluation of all
the relevant considerations in
a particular case.
23.
It is these "
important and relevant considerations
"
and the peculiar facts of this case that NNP overlooks entirely in
focusing on irreparable harm and balance of convenience.
I dealt
extensively with these considerations in my judgement, for example,
from paragraph 59 to paragraph 68, and I do not consider
it necessary
to repeat myself here.
24.
However, what needs specific emphasis is the fact that NNP, an
outsider, seeks to impugn agreements concluded between Uniplate
and
its customers in the face of a complete absence of any evidence
whatsoever that these customers themselves consider the agreements
to
be invalid on any basis. And NNP seeks to impugn those
agreements for no reason other than to secure the release those
customers from their contractual obligations so that it can trade
with them in direct competition with Uniplate. Moreover,
what
NNP apparently pointedly ignores, is the fact that, in terms of
paragraph (b)(i) of my order, it is interdicted and restrained,
temporarily, only from unlawfully and intentionally interfering with
Uniplate’s contractual relationships by soliciting,
inducing,
etc., those customers to sever or breach their agreements with
Uniplate. Nothing in that temporary interdict prevents
NNP from
trading lawfully - as I held in paragraph 69, all that NNP needs to
do in its competitive struggle with Uniplate for a
greater market
share is to keep its marketing activities within lawful bounds.
The latter it can do without calculatingly
precipitating breaches of
prima facie
valid contracts. (As I pointed out in my judgment,
section 65(1) of the Act preserves the validity of an agreement until
it is
declared void or prohibited by the Tribunal or Competition
Appeal Court.) The effect, therefore, of
not
granting
the interim interdict would have been to clothe NNP’s
calculated endeavours with judicial endorsement and to afford
it a
virtual free licence to induce the breach of
prima facie
valid
agreements, the unlawfulness of which conduct was
prima facie
established on the papers before me. That, I was not prepared to
do.
25.
In this context NNP’s contention at paragraph 15.2.1 of its
notice of application for leave to appeal, namely that I had
erred in
failing to find that Uniplate “
could mitigate its damage by
seeking to enforce its agreements directly with its own customers
”
is an odd contention and rather cheeky proposition. Why should
Uniplate be put to the considerable aggravation, trouble
and expense
to litigate with its own customers to force specific performance of
its agreements in order to mitigate the effect
of NNP’s
prima
facie
unlawful attempts to precipitate those breaches? It is in
my view in the interests of justice that
prima facie valid
agreements be safeguarded against such
prima facie
unlawful
conduct by interim interdict relief.
26.
Such interim relief does indeed have an immediate effect but, if the
referred competition issue is decided against NNP, it is
susceptible
to reconsideration, discharge, extension or finalisation on the same
facts in the postponed main application.
27.
In the above premises, I am of the view that another court would not
have come to a different conclusion.
28.
Whereas in my judgement I reserved the costs of the main and counter
applications for final determination when the main application
for
final relief the relief is heard, I see no reason to do so in the
case of this application.
I
accordingly make the following order
:-
“
The
application for leave to appeal is dismissed with costs”
_____________________________
A
J BESTER
ACTING
JUDGE OF THE SOUTH GAUTENG HIGH COURT,
JOHANNESBURG
COUNSEL
FOR THE PLAINTIFF :
ADV
A C BOTHA
INSTRUCTED
BY:
BLAKE
BESTER ATTORNEYS
COUNSEL
FOR THE DEFENDANT:
ADV
F SAINT
INSTRUCTED
BY:
MAHMOOD
MIA ATTORNEYS
DATE
OF HEARING:
23
JULY 2013
DATE
OF JUDGMENT:
26
JULY 2013