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[2013] ZASCA 84
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Competition Commission of South Africa v Arcerlormittal South Africa Ltd and Others (680/12) [2013] ZASCA 84; [2013] 3 All SA 234 (SCA); 2013 (5) SA 538 (SCA); [2013] 1 CPLR 1 (SCA) (31 May 2013)
Links to summary
THE
SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Case No: 680/12
Reportable
In the matter between:
COMPETITION COMMISSION OF SOUTH
AFRICA
.................................
APPELLANT
and
ARCERLORMITTAL SOUTH AFRICA LIMITED
.........................
FIRST RESPONDENT
CAPE GATE (PTY) LTD
..........................................................
SECOND
RESPONDENT
SCAW SOUTH AFRICA (PTY) LTD
............................................
THIRD
RESPONDENT
SOUTH AFRICAN IRON AND STEEL
INSTITUTE
.................
FOURTH
RESPONDENT
Neutral citation:
Competition
Commission of SA v Arcerlormittal SA Ltd
(680/12)
[2013] ZASCA 84
(31 May 2013)
Coram
: Brand, Nugent, Cachalia,
Pillay JJA and Mbha AJA
Heard: 21 May 2013
Delivered: 31 May 2013
Summary: Litigation privilege –
requirements – purpose of document claimed to be privileged not
to be ascertained by
reference to its author, but by reference to the
person under whose authority it was procured – waiver of
privilege –
party disclosing privileged document in pleading –
implied waiver – litigant’s access to Competition
Commission
record under Commission rule 15 – confidential
information – disclosure.
___________________________________________________________________
ORDER
___________________________________________________________________
On appeal from:
Competition
Appeal Court (Davis JP, Mailula and Dambuza JJA concurring sitting as
court of appeal):
‘
1. The
appeal by the Commission is dismissed and the cross-appeals by AMSA
and Cape Gate are upheld. In each case the Commission
is to pay the
costs of AMSA and Cape Gate, including the costs of two counsel.
2. No order is made regarding the
costs incurred by Scaw on appeal.
3. The order of the Competition Appeal
Court is replaced with the following order:
(i) The appeal by AMSA and Cape Gate
is upheld and the order of the tribunal is set aside;
(ii) The Commission is ordered to
provide to AMSA the documents listed as items 3–42 in para 14
of the judgment of the Competition
Appeal Court;
(iii) The Commission is ordered to
provide the leniency application and marker application to AMSA, and
to provide the leniency
application to Cape Gate, subject to the
finding by the tribunal on Scaw’s claim to confidentiality in
form CC7 dated 9 July
2008. That claim to confidentiality is remitted
to the tribunal for determination and the making of an appropriate
order regarding
access to the information;
(iv) The Commission is ordered to
provide to AMSA its record of information collected during its
investigation, subject to any claims
to privilege made by the
Commission in relation to any of the information, and to any claims
that it is restricted information,
including confidential
information. Should any such claims be made they are to be submitted
to and determined by the tribunal;
(v) The Commission is to pay AMSA’s
and Cape Gate’s costs in the appeal and its costs in the
proceedings before the
tribunal, including the costs of two counsel
where employed;
(vi) No order is made regarding the
costs of Scaw.’
___________________________________________________________________
JUDGMENT
___________________________________________________________________
CACHALIA JA (BRAND, NUGENT, PILLAY
JJA AND MBHA AJA CONCURRING):
[1] This is an appeal by the
Competition Commission (the Commission) and two cross-appeals by the
first and second respondents,
ArcelorMittal South Africa Limited and
Cape Gate (Pty) Limited, that arise from proceedings before the
Competition Appeal Court
(CAC). It is convenient to refer to these
respondents as AMSA and Cape Gate. And where, in the judgment,
reference is made to the
‘respondents’ this refers to
AMSA and Cape Gate collectively.
[2] The nature and status of the
appeals needs some explanation and to do that requires an account of
how the dispute that is before
us arose.
[3] There is a dispute between the
Commission and the respondents over the latters’ entitlement to
the production of documents
from the Commission. They require the
documents, they say, to properly consider their written responses to
a complaint that the
Commission has lodged against them with the
Competition Tribunal (the tribunal). The Commission alleges they have
engaged in prohibited
practices as part of a steel cartel in
contravention of the Competition Act 89 of 1998 (the Act). It refuses
to hand over the documents,
saying they are privileged and also
contain ‘restricted information’ under the Commission’s
rules.
1
[4] Scaw South Africa (Pty) Ltd
(Scaw), the third respondent, which admits to being part of the
alleged cartel, gave the documents
to the Commission. It did so to
avoid prosecution by taking advantage of the Commission’s
Corporate Leniency Policy (‘the
CLP’).
2
The rationale of the policy was
recently explained in
Agri
Wire (Pty) Ltd & another v Commissioner of the Competition
Commission & others
3
as follows:
‘
[T]he
CLP has been developed to encourage participants to break ranks and
disclose information that enables the Commission to tackle
cartel
behaviour. This information is furnished “in return for
immunity from prosecution”, the latter being the term
used in
the policy for a reference to the Tribunal and adjudication on a
complaint of cartel activity, in which an administrative
penalty is
sought. Clause 3.1 says that the CLP outlines the process through
which “the Commission will grant a self-confessing
cartel
member . . . immunity for its participation in cartel activity”.
That immunity is granted in return for full disclosure
and full
co-operation in pursuing the other cartel members before the
Tribunal.’
[5] Unable to obtain the documents
from the Commission, AMSA and Cape Gate separately applied to the
tribunal for an order directing
the Commission to produce them. The
Commission opposed the applications, alleging both that the documents
were privileged and that
they constituted restricted information.
Scaw was a party to the proceedings, alleging that it had a claim to
have the documents
kept confidential. Save for ordering limited
disclosure of certain documents, the tribunal dismissed both
applications.
[6] Both respondents then appealed to
the CAC against the order of the tribunal. The Commission opposed the
respondents’ appeals.
Scaw was again a party to the appeals.
The CAC made no order on the appeals by the respondents, considering
it unnecessary to decide
the issues upon which the tribunal had
pronounced. Instead it upheld Scaw’s contention that the
documents were protected
from disclosure by a claim it had made to
confidentiality in terms of s 44(1)
(a)
of the Act. The position,
so it reasoned, was thus governed by the provisions of the Act
4
concerning access to information over
which confidentiality had been claimed – a matter for the
tribunal, rather than the
CAC. In view of its decision to refuse
access on other grounds, the tribunal had had no reason to consider
that contention by Scaw.
The CAC therefore remitted the matter to the
tribunal to determine Scaw’s confidentiality claim.
[7] The order of the CAC – or
rather, its failure to rule upon the order made by the tribunal,
which is what was before it
on appeal – has created a dilemma
for all the parties. Had the appeal against the order of the tribunal
been dismissed then
the documents would have been protected from
disclosure, and the question whether they were subject to a
confidentiality claim
by Scaw would have had no practical effect
(which is what the tribunal concluded, hence it did not deal with
that claim). It was
only if the CAC had upheld the appeal against the
order of the tribunal that it would have been necessary for the
matter to be
remitted to the tribunal to rule on Scaw’s
confidentiality claim.
[8] As it is, by failing to either
confirm or set aside the tribunal’s order, the parties are back
to square one. When the
tribunal is called upon to consider the
confidentiality issue, which has been referred back for its ruling,
the Commission will
again be entitled to invoke the same defences to
disclosure, which have already been upheld by the tribunal. It is in
an effort
to avoid that occurring that the matter is now before us.
Strictly, an appeal lies against an order of a court. Absent an order
of the CAC on the appeal that was before it there was nothing to
appeal against. What has brought the matter before us is that
the
parties need a decision on the issues that were before the tribunal,
without which they have reached a stalemate. I think it
is clear that
they cannot be left in that position, and we ought to accede to their
unanimous request to resolve these issues,
notwithstanding that
strictly there was nothing to appeal.
[9] The dispute has its genesis in an
investigation by the Commission against alleged prohibited practices
in the steel industry
that began more than five years ago.
5
The Commission commenced the
investigation by initiating two complaints in terms of s 49B of the
Act: one on 21 April 2008 and the
other on 5 June 2008. AMSA, Cape
Gate, Scaw and the South African and Iron and Steel Institute were
among the companies being investigated.
The Institute is cited as the
fourth respondent but it plays no part in these proceedings.
[10] On 19 June 2008 the Commission
conducted searches at the premises of various companies as part of
the investigation. Following
the search, and after learning that no
other company had applied for leniency under the CLP, Scaw took the
opportunity to do so.
[11] In applying for leniency Scaw
first applied for what is known as a ‘marker’, which
allows the applicant to claim
priority ahead of other cartel members
who may also apply for leniency. The Commission’s policy allows
leniency only to the
first successful applicant. On 2 July 2008,
after the marker application was submitted, the Commission requested
further specific
information from Scaw. A week later, on 9 July,
Scaw submitted its leniency application, and on 17 July the
Commission granted
Scaw conditional immunity from prosecution.
Thereafter, Scaw handed over numerous further documents to the
Commission, at the Commission’s
behest, and attended several
consultations with the Commission concerning the complaints.
[12] In consequence of the information
received from Scaw, including the information in the leniency
application, and from its own
investigations, the Commission
determined that the respondents had engaged in prohibited practices
in contravention of ss 4(1)
(b)
(i)
and 4(1)
(b)
(ii)
of the Act.
[13] On 1 September 2009 the
Commission referred a complaint regarding the alleged prohibited
practices to the tribunal for adjudication.
6
It alleged that the respondents were
party to ‘agreements’, as defined in the Act, to fix
prices, trading conditions
and to divide markets between themselves.
In addition to seeking declaratory and interdictory relief against
the respondents, excluding
Scaw, which had been granted conditional
immunity, the Commission sought the imposition of an administrative
penalty of 10 per
cent of each respondent’s annual turnover in
South Africa, including their exports, for the preceding year.
[14] Shortly after the Commission
delivered its founding affidavit (‘the referral affidavit’)
Cape Gate and AMSA sought
the production of documents from the
Commission. The Commission provided some documents to AMSA, but
refused to hand over the rest.
[15] In December 2009 the respondents
applied to the tribunal for access to the documents. Cape Gate sought
access only to Scaw’s
leniency application document, the
annexures and all supporting documents that were submitted in support
of the application (‘the
leniency application’). For this
purpose it relied on rule 35(12) of the Uniform Rules of Court,
which the tribunal
applies. The rule permits any party, after
delivering a notice to any other party in whose pleadings or
affidavit there is reference
to a document, to inspect and copy the
document.
[16] AMSA sought access to a much
broader set of documents than Cape Gate did. First, it wanted all the
documents the Commission
generated during its investigation of the
complaint. Put simply it sought the ‘Commission record’
pertaining to the
complaint. It contends that Commission rule 15(1),
which gives a right to ‘any person’ – not only to a
person
being investigated for a prohibited practice – to
inspect or copy any Commission record, permits this. Second, AMSA
also
relied on rule 35(12) for discovery of an extensive set of
documents described in a table attached to the Notice of Motion.
7
This included the leniency
application, the marker application and other documents to which
reference was made in the referral affidavit.
The other documents
include letters, faxes, e-mails and all other forms of
correspondence, notes, tape recordings, photographs,
electronic data,
website and other publications, as well as minutes of meetings.
[17] The tribunal granted AMSA
‘limited discovery’ of three documents, which were
referred to in the referral affidavit,
but for the rest dismissed
both applications. The Commission was ordered to provide copies of
only those documents that were specifically
referred to: an e-mail
dated 25 September 2003 and the minutes of export monitoring
subcommittee meetings held on 5 April 2005
and 15 November 2005.
[18] Before the CAC, AMSA no longer
persevered with its application for the full list of documents in
respect of which it sought
discovery, but it persisted for access to
a truncated list set out in a table in para 14 in the CAC’s
judgment. These documents,
other than the leniency application, are
no longer in issue, the Commission having accepted before us that
they are disclosable
under rule 35(12). In summary, therefore, AMSA
and Cape Gate seek access to the leniency application and AMSA also
seeks access
to the Commission record.
[19] The Commission’s stance has
remained consistent throughout proceedings before the tribunal and
the CAC, and has not altered
before this court; it claims that it is
entitled to withhold the documents from the respondents. In respect
of the leniency application,
it claims this entitlement for two
reasons: first, because the leniency application is protected by
litigation privilege and, secondly,
because it is claimed as
restricted information in terms of Commission rule 14(1)(e),
8
which gives it a discretion to
withhold it under s 37(1)
(b)
of the Promotion of Access to
Information Act 2 of 2000 (PAIA). Concerning AMSA’s claim to
disclosure of the Commission record,
the Commission’s
submission in this court was that rule 15 finds no application once
litigation commenced. I turn to consider
the Commission’s claim
that the leniency application is protected from disclosure by
litigation privilege.
Litigation Privilege
[20] Litigation privilege is one of
two components of legal professional privilege, the other being the
privilege that attaches
to communications between a client and his
attorney for the purpose of obtaining and giving legal advice.
Litigation privilege,
with which we are concerned in this case,
protects communications between a litigant or his legal advisor and
third parties, if
such communications are made for the purpose of
pending or contemplated litigation. It applies typically to witness
statements
prepared at a litigant’s instance for this purpose.
The privilege belongs to the litigant, not the witness, and may be
waived
only by the litigant.
[21] Litigation privilege has two
established requirements: The first is that the document must have
been obtained or brought into
existence for the purpose of a
litigant’s submission to a legal advisor for legal advice; and
second that litigation was
pending or contemplated as likely at the
time.
9
[22] There is some uncertainty as to
whether documents prepared for litigation must have submission to
legal advisers as it sole
purpose, substantial purpose, definite
purpose or dominant purpose. A suggestion that the document must have
been prepared substantially
for that purpose was rejected as having
been based on a misreading of earlier authority.
10
In
Sweiden
and King v Zim Israel Navigation
11
Booysen J said it suffices if it is a
definite purpose, whether there are other purposes or not. He
considered that the weighty
authority of the House of Lords in the
seminal case of
Waugh v
British Railways Board
,
12
which adopted the dominant purpose
test, did not accord with our practice.
13
The dominant purpose test has since
been applied in Canadian
14
and Australian courts.
15
And the parties appear to adopt it in
their submissions.
[23] It is, however, not always
apparent what the definite or dominant purpose is. In
Waugh
,
where the two purposes of a document
carried equal weight, the court found that no dominant purpose
attached to the document and
it was therefore not protected by
litigation privilege.
16
But the courts have also looked at
these separate or dual purposes as part of a single overarching
purpose related to litigation.
So where, in
Re
Highgrade Traders Ltd
,
17
insurers had commissioned reports to
establish the cause of a fire that had destroyed an insured’s
business the Court of Appeal
was not prepared to find separate
purposes. Instead it said the following:
‘
What
then is the purpose of these reports? The learned judge [a quo] found
duality of purpose because, he said, the Insurers wanted
not only to
obtain the advice of solicitors, but also wanted to ascertain the
cause of the fire. Now, for my part, I find these
two quite
inseparable.’
18
[24] Here the parties differ over the
purpose for which the leniency application was brought into
existence, let alone its definite
or dominant purpose. It is
therefore not necessary in this case for us to consider whether
Sweiden
was
correctly decided, and if so, whether our common law should be
developed to accord with developments in other jurisdictions.
I shall
leave the question open.
[25] The Commission contends that
consistent with the purpose of the CLP, it obtained the application
for the purpose of prosecuting
the steel cartelists and seeking
advice from its legal advisors on the contemplated litigation. AMSA’s
submission is that
the document was
created
not for that purpose, but for Scaw to
be given immunity against prosecution in exchange for the
information. And the fact that the
Commission may have considered it
useful in litigation after having received it cannot alter the fact
that it was not created for
this purpose. The Commission therefore
could not claim the privilege. In short, AMSA submits that it is the
purpose of the creator
of the document, at the moment of its
creation, that is material to the test for the document’s
purpose.
[26] Cape Gate adds a gloss to this
submission. It contends that the document was prepared at Scaw’s
instance, and not that
of the Commission’s or its legal
advisors’. On Cape Gate’s argument, in order to fall
within the protection of
the rule, the leniency application had to
have originated in answer to inquiries made by the Commission or its
lawyers; in other
words, the Commission can only claim privilege over
information it actively sought with a view to its litigation, not
information
that comes into its hands for any other purpose. The
facts, say Cape Gate, do not support the claim for privilege on this
basis.
[27] In my view the flaw in the
respondents’ approach is that they incorrectly focus on Scaw’s
motive in composing the
leniency application to determine the purpose
– whether definite or dominant – instead of focusing on
the Commission’s
reason for obtaining or procuring it. The
purpose of the document is not to be ascertained by reference to its
author, either at
the time at which the document was prepared or at
the time it is handed over to the litigant or the litigant’s
legal representative.
Instead, the purpose of the document is to be
determined by reference to ‘the person or authority under whose
direction,
whether particular or general, it was produced or brought
into existence’.
19
In that case it is the intention of
the person who procured the document, and not the author’s
intention, that is relevant
for ascertaining the document’s
purpose.
20
The author need not even have known of
possible litigation when the document was prepared.
21
[28] The inquiry into whether
litigation privilege attaches to the leniency application is
fact-bound. In this case that inquiry
must focus on the facts set out
in the Commission’s answering affidavits in response to the
respondents’ discovery
applications. The Commission says that
the CLP is founded upon an expectation of litigation. The
commencement of discussions with
a leniency applicant is always with
a view to instituting prosecutions against cartelists. And the grant
of immunity flows from
the process. Put simply the grant of immunity,
to secure the cooperation of a cartelist, is inseparable from the
litigation process
itself. This much is clear from the tribunal’s
characterization of the purpose of the CLP in the
Pioneer
Foods
case:
22
‘
[38]
The very purpose of the CLP . . . is for firms who have been part of
a cartel to come forward with the carrot of immunity offered
in
return for information and co-operation. But that is not an end in
itself. The information obtained from immunity applicants
under the
CLP is intended for the purpose of litigation against the remaining
firms alleged to be part of the cartel. The informants
furnish the
Commission with the information which forms the basis of its decision
to refer a complaint. The extract from the CLP
that we cited above
clearly obliges applicants to cooperate with the Commission “until
the Commission’s investigations
are finalized and the
subsequent proceedings in the Tribunal are completed”.
[39]
That in the process an ancillary outcome, the award of indemnity is
afforded, does not detract from the fact that the Commission’s
central object is to use the information to conduct litigation in the
Tribunal against such members of the alleged cartel as contest
proceedings. Thus the inescapable conclusion is that inherent in this
process is the contemplation of litigation.’
[29] It emerges from the Commission’s
affidavits that it contemplated litigation as a result of its
investigation into the
steel industry. Scaw became aware of the
investigation and applied to the Commission for a marker, which was
granted. The Commission
then requested Scaw to file a leniency
application, which contained certain specific information. Scaw did
so on 9 July 2008. Of
importance in this regard is that the
Commission pertinently says that the leniency application was
prepared for its use, even
though it would be of a benefit to Scaw.
And it was made clear to Scaw from the outset of its engagement with
the Commission that
the information contained in the leniency
application was required so that a complaint could be initiated
against the respondents.
Moreover, the Commission’s in-house
and external legal advisors were involved throughout this process,
including providing
advice on the leniency application.
[30] There is no reason to doubt that
explanation. Moreover, our courts have held that, subject to certain
limited exceptions, ‘the
statements in the affidavits of
documents are conclusive with regard to the documents that are . . .
in the possession . . . of
a party giving the discovery . . . as to
the grounds stated in support of a claim of privilege from production
for inspection’.
23
A court will therefore not lightly go
behind averments in an affidavit to the effect that the likelihood of
litigation was contemplated
when the document was procured.
24
[31] I therefore consider that the
circumstances under which Scaw created the document and the
Commission obtained it are inseparable.
The document came into
existence at the instance of the Commission for the purpose of
prosecuting firms alleged to be part of a
cartel. And the fact that
there was, in the process, to borrow from the tribunal’s
phraseology in the
Pioneer
Food’s
case, ‘an
ancillary outcome of indemnity’ does not detract from this
purpose. Furthermore, the accepted facts support
the Commission’s
averment that litigation was likely when the document was procured,
that its lawyers were involved in the
process – including
advising on the leniency application, and that the purpose for the
preparation of the leniency application
was to support the envisaged
litigation. The leniency application was, in substance, Scaw’s
witness statement in the contemplated
litigation. The document was
therefore privileged in the hands of the Commission.
[32] In the light of this finding the
question that arises is whether the Commission waived its privilege
by referring to the leniency
application in the referral affidavit,
as the respondents’ contend it did. Under rule 35(12) a
document becomes disclosable
if reference is made to it in a
pleading. The tribunal dismissed this contention somewhat cursorily:
waiver, it said, is not lightly
inferred and the ‘oblique
references’ to the leniency application in the referral
affidavit are not sufficient to constitute
a waiver. The CAC did not
consider the point.
[33] Waiver may be express, implied or
imputed. It is implied if the person who claims the privilege
discloses the contents of a
document, or relies upon it in its
pleadings or during court proceedings. It would be implied too if
only part of the document
is disclosed or relied upon. For a waiver
to be implied the test is objective, meaning that it must be judged
by its outward manifestations;
in other words from the perspective of
how a reasonable person would view it.
25
It follows that privilege may be lost,
as the English courts have held, even if the disclosure was
inadvertent or made in error.
26
Imputed waiver occurs when fairness
requires the court to conclude that privilege was abandoned.
27
The respondents contend that in this
case the loss of privilege is implied or to be imputed to the
Commission. The Commission submits
that the bare references to the
leniency application in the referral affidavit did not amount to a
waiver of privilege.
[34] I appreciate that a bare
reference to a document in a pleading, without more, may be
insufficient to constitute a waiver, whereas
the disclosure of its
full contents may constitute a waiver. Where the line is drawn
between these extremes is a question of degree,
which calls for a
value judgment by the court. When that line is crossed the privilege
attached to the whole document, and not
just the part of the document
that was referred to, is waived. The reason is that courts are loath
to order disclosure of only
part of a document because its meaning
may be distorted. But it must also be so that it does not inevitably
follow that because
part of document is disclosed, privilege is lost
in respect of the whole document. This would be so where a document
consists of
severable parts and is capable of severance.
28
I turn to the facts here.
[35] The Commission referred to the
leniency application in its referral affidavit in these terms:
‘
8.7
. . . Scaw applied for leniency in terms of the Commission’s
CLP for price fixing and market allocation in relation to
rebar, wire
rod, sections (including rounds, squares angles and profiles).
8.8
Scaw confirmed in the application for leniency that there has been a
long standing culture of cooperation amongst the steel
mills
regarding the prices to be charged, and discounts to be offered, for
their steel products such as rebar, wire rod, sections
(including
rounds and squares, angels and profiles). The cooperation extended to
arrangements on market division.
8.9
In addition to information submitted by Scaw in its leniency
application, the Commission conducted its own investigations which
largely confirmed the allegations made by Scaw and provided further
evidence of anticompetitive practices in contravention of section
4(1)(b) of the Act – involving both price fixing and market
division.
8.10
It is as a consequence of information contained in the Scaw
application for leniency and that obtained from the Commission’s
investigations that this referral is made.’
[36] These paragraphs, in my view,
amount to much more than a bare or oblique reference to the leniency
application. The allegation
in para 8.8 that a long standing culture
of cooperation was ‘confirmed in the application for leniency’
makes it clear
that the application contained a full recital of facts
that supported that conclusion. Whether the application indeed
contained
those facts is a matter that the respondents will be called
upon to respond to in their answering affidavits. It is precisely to
enable it to do so that rule 35(12) requires documents referred to in
pleadings to be disclosed.
29
[37] The Commission must be taken to
be aware of the rule and the circumstances under which the privilege
that attaches to a document
may be lost or waived. It must be borne
in mind that a complaint referral requires no more than a concise
statement of the grounds
of the complaint and the material facts or
point of law relied on.
30
The referral is in the form of an
affidavit and it may contain evidence that is intended to be led in
the proceedings. The tribunal
may adopt a more flexible approach to
pleadings than is the practice in the high court.
31
This means that the Commission is
under no obligation to refer to any documents and was under no
obligation to refer to the leniency
application; it needed to set out
only the material facts that supported the allegation of collusive
conduct against the respondents.
Objectively viewed, therefore, the
Commission’s reference to the leniency application in the
referral affidavit is consistent
with an implied waiver of the
privilege, and I so hold.
[38] Once it is accepted that the
Commission waived its privilege to the leniency application, it
follows that any entitlement of
the Commission to claim the
information as restricted information under rule 14(1)(e) was
similarly waived.
[39] What remains is Scaw’s
claim of confidentiality concerning the information that was part of
the leniency application.
Cape Gate contests the claim. As I
understand its submission, Cape Gate contends that once Scaw and the
Commission agreed that
the information provided was discoverable for
use in proceedings before the tribunal in terms of s 11.1.3.3,
32
Scaw no longer had any reasonable
expectation that the information provided would be treated as
confidential in litigation proceedings.
And so, it submits, Scaw
cannot claim any of the documents provided to the Commission as
confidential information.
[40] Before I consider this
submission, it bears mentioning that the Act carefully regulates
‘confidential information’
to protect the confidential
commercial interests of complainants and informants.
33
It has an important underlying public
purpose: Absent guarantees that their confidential information will
be protected from disclosure
to third parties, firms submitting
information to the Commission as informants may be reluctant to do
so. Were this to be the case,
the Commission would be severely
hampered in its ability to investigate breaches of the Act.
[41] In my view Cape Gate’s
submission conflates the two senses in which the term confidentiality
is dealt with in the CLP:
The first concerns the confidentiality of
the CLP process, and the second relates to the confidentiality of an
informant’s
information. The process is undertaken under a
confidentiality agreement
as
envisaged in the CLP.
34
Under the agreement, the leniency
applicant agrees to submit information in exchange for immunity. The
Commission, for its part,
agrees to undertake the process on a
confidential basis and to treat all the information submitted by the
leniency applicant as
confidential,
35
whether or not the information is in
fact ‘confidential information’ in terms of the Act. If
the applicant applies for
leniency, the parties will enter into a
written agreement in terms of which the applicant is granted
conditional immunity.
36
And once the Commission decides to use
the information at the tribunal, clause 11.1.3.3 says this shall not
constitute a ‘breach
of confidentiality’. Properly
construed, therefore,
all
information submitted by
the applicant must be treated in confidence by the Commission until
it decides to use the information before
the tribunal, in which case
only information specifically claimed to be ‘confidential
information’ must be dealt with
in terms of the Act.
[42] The relevant sections are s
44(1)
(a)
,
which provides for the right of informants to claim confidentiality
for information submitted to the Commission, and s 45, for
the manner
and form under which a person seeking access to such information may
apply to the tribunal for disclosure. Once an informant
submits
information claimed to be confidential in the prescribed manner,
explaining why the information is confidential, the Commission
is
bound by the claim until the tribunal rules to the contrary.
37
This means that ‘confidential
information’
so described
must fall within the ambit of the Act,
which defines it to mean ‘trade, business or industrial
information that belongs to
a firm, has a particular economic value,
and is not generally available or known by others’.
38
It is therefore necessary for an
informant who submits information, which he claims to be
confidential, to the Commission to describe
the nature of the
information with sufficient precision in order to support any
subsequent claim that it should not be published
or disclosed to
anyone else.
39
[43] The CAC, I think, correctly held
that until the respondents apply through the legislatively prescribed
procedure under s 45(1)
for access to the information, and the
tribunal determines whether or not the information is confidential,
the documents remain
confidential. I do, however, have doubts as to
whether Scaw’s claim to confidentiality falls within the terms
of the section.
In its written statement in the prescribed form
40
explaining why the information is
confidential, and under a column requiring an applicant to describe
the ‘nature of the economic
value of the information’,
Scaw made no attempt to bring any of the information within the ambit
of the definition. It merely
stated, formulaically, and in respective
of each of four categories of information claimed to be confidential,
that it is ‘[i]nformation
belonging to a private entity which
is strictly private and confidential and made in pursuance of
corporate leniency and which
is clearly not in the public domain and
which could cause irreparable harm if it becomes available to
competitors or other third
parties’. What Scaw describes here
are the
consequences
of
the information being disclosed, not the
nature
and economic value of the information.
Scaw’s mere assertion, in the prescribed form, that the
information is confidential,
does not make it so.
[44] But it was submitted on behalf of
Scaw, and I accept the submission, that the tribunal is the proper
forum in which a claim
to confidentiality under the section, both in
its form and its substance, is to be tested. The CAC therefore
correctly remitted
this question to the tribunal, and Cape Gate’s
submission to the contrary falls to be dismissed.
AMSA’s Rule 15 application
[45] As mentioned earlier, AMSA also
seeks access to the Commission record (apart from the leniency
application) under Commission
rule 15(1) read with rule 14. Rule
15(1) allows ‘any person’ to have access to ‘any
Commission record’,
provided it is not ‘restricted
information’ contemplated in rule 14(1). The Commission opposes
this.
[46] The Commission suggested in
argument that AMSA is not entitled to invoke rule 15 to obtain access
to the record as the rule
is aimed at providing access to information
to the public, and not to a litigant. If it is correct that a member
of the public
may gain access to the Commission record under rule 15,
subject to any restrictions under rule 14, and this must be so on a
plain
reading of the rule, it would be absurd to prevent a litigant
from being given access. This would mean, for example, that access
could be denied to the Chief Executive Officer of AMSA, but not to
her relatives or friends, who are members of the public. It
follows
that AMSA is entitled to the Commission record subject to any claims
of privilege or any restriction under rule 14.
[47] The tribunal accepted that when
analysing the right exercised by AMSA in terms of rule 15(1) it must
do so from the vantage
of this being a general right available to
all, and not a litigant’s right. On this basis it found that
the documents sought
by AMSA constituted restricted information in
terms of rule 14(1)(e) read with s 37(1)
(b)
of PAIA. (Section 37(1)
(b)
allows a public body such as the
Commission to restrict access to its record in the public interest if
the disclosure of the information
could reasonably be expected to
prejudice the future supply of similar information, or information
from the same source.)
41
The tribunal thus dismissed AMSA’s
application for the documents to be disclosed in terms of rule 15(1).
[48] Rule 14(1) provides for five
categories of restricted information: confidential information;
42
information concerning the identity of
a complainant;
43
information concerning the conduct
attached to a complaint until a referral or notice of non-referral is
issued;
44
the Commission’s work product;
45
and finally any document to which the
Commission is ‘required or entitled to restrict access in terms
the Promotion of Access
to Information Act, 2000 (Act No. 2 of 2000)’
(PAIA),
46
which is in issue here.
[49] There is no dispute that once the
complaint had been referred to the tribunal for adjudication, any
restriction under rule
14(1)(c)
47
fell away because access to the record
could no longer be restricted on this ground. The tribunal, however,
held that the Commission
was entitled to withhold access to the
record because disclosure would reasonably compromise the future
supply of similar information
or information from the same source.
The tribunal thus held that the information could be withheld from
AMSA at the Commission’s
discretion because of its ‘inherent
nature’.
48
As I have already held that the
information forming part of the leniency application must be
disclosed, the question whether information
from the same source –
ie the leniency applicant – may be withheld falls away. The
Commission may therefore not withhold
this part of the record on this
ground.
[50] I accept though that the record
may also contain similar information pertaining to the investigation
that may emanate from
sources other than the leniency applicant,
which the Commission may well be entitled to restrict; indeed it may
be obliged to restrict
this information in the public interest if it
reasonably believes that disclosure would prejudice the future supply
of such information.
But it does not follow that all information in
the record may be withheld even if it does not fall into this
category, or any other
category, contemplated in rule 14. If the
Commission seeks to prevent AMSA from gaining access to the record,
it cannot do so generally
but is required to identify specific
documents or categories of documents to which it may wish to restrict
access. In this regard
AMSA has made it clear that it does not seek
access to documents that may legitimately be claimed to be part of
the Commission’s
work product as contemplated by rule 14(1)(d).
Consequently AMSA’s claim to the record succeeds, subject to
any claim that
specific documents are privileged, restricted or
confidential.
[51] To conclude, I hold that the
leniency application was privileged, but that the Commission waived
its privilege by referring
to it in the referral affidavit, as it did
to the claim that the application was restricted under rule 14(1)(e).
The leniency application
must therefore be disclosed to the
respondents subject to the tribunal determining Scaw’s claim of
confidentiality in terms
of s 45(1) of the Act. In respect of AMSA’s
application for disclosure of the Commission record, this too is
upheld, subject
to any claim that the record or any part of it may be
restricted under rule 14, or on the grounds of privilege, or any
other ground
that provides a recognised defence to the disclosure of
information. Those claims are to be adjudicated by the tribunal, if
any
such claims arise.
[52] The following order is made:
‘
1. The
appeal by the Commission is dismissed and the cross-appeals by AMSA
and Cape Gate are upheld. In each case the Commission
is to pay the
costs of AMSA and Cape Gate, including the costs of two counsel.
2. No order is made regarding the
costs incurred by Scaw on appeal.
3. The order of the Competition Appeal
Court is replaced with the following order:
(i) The appeal by AMSA and Cape Gate
is upheld and the order of the tribunal is set aside;
(ii) The Commission is ordered to
provide to AMSA the documents listed as items 3–42 in para 14
of the judgment of the Competition
Appeal Court;
(iii) The Commission is ordered to
provide the leniency application and marker application to AMSA, and
to provide the leniency
application to Cape Gate, subject to the
finding by the tribunal on Scaw’s claim to confidentiality in
form CC7 dated 9 July
2008. That claim to confidentiality is remitted
to the tribunal for determination and the making of an appropriate
order regarding
access to the information;
(iv) The Commission is ordered to
provide to AMSA its record of information collected during its
investigation, subject to any claims
to privilege made by the
Commission in relation to any of the information, and to any claims
that it is restricted information,
including confidential
information. Should any such claims be made they are to be submitted
to and determined by the tribunal;
(v) The Commission is to pay AMSA’s
and Cape Gate’s costs in the appeal and its costs in the
proceedings before the
tribunal, including the costs of two counsel
where employed;
(vi) No order is made regarding the
costs of Scaw.’
_________________
A CACHALIA
JUDGE OF APPEAL
APPEARANCES
For Appellant: N H Maenetje SC (with
him N Jele)
Instructed by:
DTI Campus, Block C, Sunnyside
N W Phalatsi & Partners,
Bloemfontein
For First Respondent: M van der Nest
SC (with him D Turner)
Instructed by:
Bell Dewar Inc, Sandton
Honey & Partners, Bloemfontein
For Second Respondent: J Campbell SC
(with him A Gotz)
Instructed by:
Bowman Gilfillan Inc, Sandton
Matsepe’s Inc, Bloemfontein
For Third Respondent: D Unterhaulter
SC (with him K Hofmeyr)
Instructed by:
Nortons Inc, Sandton
McIntyre & Van der Post,
Bloemfontein
1
Rule
14 of the Rules for the Conduct of Proceedings in the Competition
Commission, Proclamation No. 12,
GG
22025, 1 February 2001.
2
Corporate
Leniency Policy, GN 628,
GG
31064, 23 May 2008.
3
Agri
Wire (Pty) Ltd & another v Commissioner of the Competition
Commission & others
[2012] 4 All SA 365
(SCA) para 6.
4
Under
s 45 of the Act.
5
This
Court has drawn the following dates from the judgment of the
tribunal, noting that there are some immaterial discrepancies
between those listed by the CAC and the dates submitted to the court
in the affidavits.
6
Pursuant
to the provisions of s 50(1) read with s 51(2) of the Act and the
Competition Tribunal rule 15(2), published in Proclamation
No. 12
,
GG
22025, 1 February 2001.
7
It
relied also on Uniform rule 35(14), but this was misplaced as the
rule applies only to actions.
8
See
para 47 below.
9
D
T Zeffertt and A P Paizes
The South African Law of Evidence
2
ed (2009) at 674, 688. The formulation in Zeffertt and Paizes drawn
from the cases there cited does not include the phrase ‘brought
into existence’ in the first requirement for litigation
privilege. The phrase is used in
United Tobacco Companies (South)
Ltd v International Tobacco Co of SA Ltd
1953 (1) SA 66
(T) at
70A. This phrase is also used in: C Tapper
Cross & Tapper on
Evidence
12 ed (2010) at 454. Tapper also points out that
English courts require a definite prospect of litigation in
contemplation by
the client, and not a mere vague anticipation of
it. But that it was not necessary for the likelihood to exceed 50
per cent.
(at 453-454). In
General Accident Fire and Life
Assurance Corporation Ltd. v Goldberg
1912 TPD 494
at 594 Mason
J used the phrase ‘likely or probable’. As the words
‘likely’ and ‘probable’
are synonymous I
consider that their use together is redundant.
10
Zeffert
and Paizes (above) at 680.
11
Sweiden
and King v Zim Israel Navigation
1986 (1) SA 515
(D) at 519.
12
Waugh
v British Railways Board
[1979] 2 All ER 1169.
13
D
T Zeffertt and A P Paizes
The South African Law of Evidence
2
ed at 680.
14
Blank
v Canada (Minister of Justice)
2006 SCC 39
;
[2006] 2 SCR 319
(SCC) para 60.
15
Mitsubishi
Electric Australia (Pty) Ltd v Victorian Work Cover Authority
[2002] VSCA 59
;
(2002)
4 VR 332.
16
Waugh
(above) at 1173C and 1174B-C
.
; See also
Axa Seguros S
A de C V v Allianz Insurance plc
[2011] EWHC 268 (England and
Wales High Court (Commercial Court))
para 13..
17
Re
Highgrade Traders Ltd
[1984] BCLC 151
(CA).
18
At
25E.
19
This
formulation was first expounded by Barwick CJ in
Grant v Downs
[1976] HCA 63
;
(1976) 135 CLR 674
at 677, and approved in
Waugh V British
Railways Board
[1979] 2 All ER 1169
at 1174, 1178, 1183
[1979] UKHL 2
; ,
[1980]
AC 521
at 533, 537, 543-544.
20
Guinness
Peat Properties Ltd & others v Fitzroy Robinson Partnership (a
firm)
[1987] 2 All ER 716
at 723.
21
C
Tapper
Cross & Tapper on Evidence
12 ed at 454.
22
Pioneer
Foods (Pty) Ltd v Competition Commission in re: Competition
Commission v Tiger Brands Ltd t/a Albany & another
;
Competition Commission v Pioneer Foods (Pty) Ltd t/a Sasko &
another
[2009] 1 CPLR 239
(CT).
23
United
Tobacco Companies (South) Ltd v International Tobacco Co of SA Ltd
1953 (1) SA 66
(T) at 70H, quoting from
Halsbury
,
the
Hailsham
edition, Vol. 10,
para 445.
24
Ibid
72.
25
Road
Accident Fund v Mothupi
2000 (4) SA 38
(SCA) para 16.
26
Guinness
Peat Properties Ltd & others v Fitzroy Robinson Partnership (a
firm)
[1987] 2 All ER 716
at 729.
27
S
v Tandwa
2008 (1) SACR 613
(SCA) paras 18-19.
28
A
Keane
The Modern Law of Evidence
3 ed (1994) at 486.
29
Unilever
v Polagric (Pty) Ltd
2001 (2) SA 329
(C) at 336G-J.
30
Tribunal
rule 15(2).
31
M
Brassey, J Cambell, R Legh, C Simkins, D Unterhalter & J Wilson
Competition Law
1 ed (2002) at 308-309.
32
Clause
11.1.3.3 of the CLP says: ‘The Commission shall maintain
confidentiality on all information, evidence and documents
given to
it throughout the process. Use of documents and information obtained
from the applicant at the Tribunal in terms of
the Act shall not
amount to the breach of confidentiality.’
33
See
the definition of ‘confidential information’ in s 1 of
the Act. See also M Brassey, J Cambell, R Legh, C Simkins,
D
Unterhalter & J Wilson
Competition Law
1 ed at 303.
34
Section
11.1.3.3 of the CLP. See also Currie & Klaaren
The
Promotion
of Access to Information Act Commentary
at 8.63.
35
See
clause 8.2, which says: ‘A firm that chooses to disclose its
identity or any relevant information at this stage does
so at its
own risk because it would not be protected by the CLP at this stage.
However, the Commission will protect information
submitted by
applicants and treat it with utmost confidentiality.’
36
Clause
11.1.3.2.
37
Sections
44(1)
(b)
and
44
(2).
38
Section
1 of the Act.
39
Cf
R Whish
Competition Law
6 ed (2008) at 391.
40
Form
C 77.
41
Section
37(1)
(b)
(i) and (ii) of PAIA.
42
Rule
14(1)(a).
43
Rule
14(1)(b).
44
Rule
14(1)(c).
45
Rule
14(1)(d).
46
Rule
14(1)(e).
47
See
n 45 above.
48
At
para 18.