Cross Fire Management (Pty) Ltd v Competition Commission of South Africa (192/CACFeb21) [2022] ZACAC 1; [2022] 1 CPLR 2 (CAC) (10 February 2022)

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Cross Fire Management (Pty) Ltd v Competition Commission of South Africa (192/CACFeb21) [2022] ZACAC 1; [2022] 1 CPLR 2 (CAC) (10 February 2022)

COMPETITION
APPEAL COURT OF SOUTH AFRICA
Case
192/CACFeb21
In
the matter between:
CROSS
FIRE MANAGEMENT (PTY) LTD
Appellant
and
THE
COMPETITION COMMISSION
OF
SOUTH
AFRICA
Respondent
Coram:
Rogers JA and Fisher and Unterhalter AJJA
Heard:
10 December 2021
Delivered:
10 February 2022
ORDER
On
appeal from the Competition Tribunal:
1.
The application for condonation is dismissed.
2.
The appeal succeeds.
3.
Paragraphs 2 and 3 of the Tribunal’s order are set aside and
replaced with the following order: “The Commission’s

complaint against Cross Fire Management (Pty) Ltd is dismissed.”
4.
The respondent in the appeal must pay the appellant’s costs in
the appeal and in the condonation application, including the
costs of
two counsel.
JUDGMENT
ROGERS
JA (Fisher and Unterhalter AJJA concurring):
Introduction
[1]
The appellant, Cross Fire Management (Pty)
Ltd (Cross Fire), was a
respondent in complaint proceedings brought by the present
respondent, the Competition Commission of South
Africa (Commission),
in the Competition Tribunal (Tribunal) against seven firms in the
business of supplying and installing fire
control and protection
systems. The Commission alleged that five of them had engaged, with
others, in prohibited conduct in the
form of collusive tendering in
violation of section 4(1)(b) of the Competition Act 89 of 1998 (Act).
These five firms were Afrion
Property Services CC (Afrion), Belfa
Fire (Pty) Ltd (Belfa), Cross Fire, Fire Protection Systems (Pty) Ltd
(FPS) and Tshwane Sprinklers
CC (Tshwane Sprinklers). The Commission
had a separate and discrete complaint of market division against the
other two respondents,
Fireco (Pty) Ltd (Fireco) and KRS Fire (Pty)
Ltd (KRS, formerly Fireco Gauteng (Pty) Ltd).
[2]
Before the Tribunal hearing began, settlements
were reached between
the Commission and Afrion, FPS and KRS. Shortly after the start of
the Tribunal proceedings, Fireco reached
a settlement with the
Commission. The proceedings then continued against Belfa, Cross Fire
and Tshwane Sprinklers. Belfa was only
represented at the hearing on
the first three days, apparently because it ran out of money.
[3]
The Tribunal dismissed the complaint against
Tshwane Sprinklers but
found the case proved against Belfa and Cross Fire. Administrative
penalties of R10,100,126 and R12,894,000
were imposed on Belfa and
Cross Fire respectively. Cross Fire appeals the Tribunal’s
finding that it contravened section
4(1)(b) and the penalty.
[4]
It is not now in dispute that for some years
Cross Fire was party to
the prohibited conduct of which the Commission accused the respondent
firms. On the merits, the important
questions are whether Cross
Fire’s prohibited conduct ceased before the Commission
initiated the complaint and, if so, when
its conduct ceased. This is
relevant because section 67(1) of the Act, as it read at all times
material to this case, provided:
“A complaint in respect of a
prohibited practice may not be initiated more than three years after
the practice has ceased.”
The complaint was initiated on 13
March 2015, so the question is whether Cross Fire’s prohibited
conduct ceased before 13
March 2012. The Tribunal held not.
[5]
If this
Court finds that Cross Fire’s prohibited conduct ceased before
13 March 2012, the Commission asks us to condone its
non-compliance
with the time-limit imposed by section 67(1).
That the
Tribunal may in principle condone non-compliance
with
section 67(1) was settled by the Constitutional Court’s
judgment in
Pickfords
,
[1]
delivered on 24 June 2020.
The
Commission did not bring a condonation application in the Tribunal
but has brought such an application in this Court. If we
reach the
issue
of
condonation, the questions which arise are whether this Court –
as distinct from the Tribunal – has jurisdiction
to grant
condonation and, if so, whether it should do so; and,
if we find
that this Court lacks jurisdiction to grant condonation, whether we
can and should remit the case to the Tribunal to
deal with
condonation.
[6]
The Act came into force on 1 September 1999.
The prohibited conduct
started before that date and continued afterwards. Although Cross
Fire pleaded that the incidents of collusive
tendering occurred
ad
hoc
, it does not now contest the Tribunal’s finding that
there was an overarching understanding in terms of which the
collusive
tendering took place, even though collusive tenders made up
a relatively small part of tenders in which Cross Fire participated

(the collusive tenders specified by the Commission comprised on
average fewer than 2% per annum of the tenders in which Cross Fire

participated). The understanding was that from time to time the firms
would favourably consider requests made by one of them to
provide the
requesting firm with cover bids, i.e. bids at higher prices than
those which the requesting firm intended to submit.
The
evidence
[7]
In its complaint referral, the Commission
attached a cumulative
schedule setting out all the projects alleged to have been the
subject of collusive tendering as well as
individual schedules
listing the projects in which each respondent firm was alleged to
have engaged in prohibited conduct. Cross
Fire was alleged to have
participated in 33 collusive tenders over the period May 1996 to
August 2015. Leaving aside the six instances
predating the
commencement of the Act, Cross Fire stood accused of prohibited
conduct in 27 tenders. Cross Fire admitted collusion
in 14 of these
projects. The most recent of the admitted instances occurred in July
2009. In view of the finding of an overarching
understanding, these
14 tenders were instances where Cross Fire gave effect to the
understanding either by requesting or providing
cover bids.
[8]
The Commission adduced no direct evidence
against Cross Fire. There
were some incriminating documents. More importantly, in its answering
affidavits and witness statements,
Cross Fire admitted 14 instances
of collusion. This position was maintained by its witnesses, Ms
Catherine Stewart, Mr Anton Kriel
and Mr Hermand Rampursat. With one
possible exception, the Tribunal made no factual findings against
Cross Fire in relation to
projects where Cross Fire denied collusion.
The important question, therefore, is whether Cross Fire’s
absence from collusive
tendering after about mid-2009 until the
Commission initiated the complaint in March 2015 was because –
as Cross Fire says
– it had withdrawn from the overarching
understanding, or whether it just so happened that in this period of
just under six
years it neither requested nor gave cover bids to
firms with whom it was still in a collusive relationship.
The
early years
[9]
The only direct evidence to explain Cross
Fire’s absence from
collusive tendering after mid-2009 came from the Cross Fire
witnesses. Ms Stewart started working in
this industry at the age of
21, first for Belfa. In 1994 she moved to Fire Control Systems (Pty)
Ltd (FCS), a firm which was involved
in the collusion but which went
into liquidation in early 2015 and was not cited as a respondent. She
joined Cross Fire in 1997.
In 2000 she moved from design to sales,
and it was at this time that she was exposed to the long-standing
practice of cover pricing.
The company was headed by Messrs John
Cross and David Dalgleish. The industry was dominated by men who had
known each other for
many years. According to Ms Stewart, she was
frustrated by the collusion. Sometimes her hard work in preparing
tenders came to
nought when it emerged that Mr Cross had agreed the
outcome with a competitor.
[10]
Mr Dalglish sold out to Mr Cross in 2003. According to Ms Stewart,
Mr
Dalglish had been a leading protagonist of collusive conduct. Ms
Stewart and Mr Kriel were promoted to more senior positions,
allowing
them to exert some, though still slight, influence. In December 2004
Ms Stewart acquired a modest shareholding in the
company. In
February/March 2007 Mr Kriel became the company’s sales
director, and Ms Stewart moved to the position of projects
and
operations director. Mr Cross was still the managing director. She
and Mr Kriel had quite heated arguments with Mr Cross about
cover
pricing. Mr Cross did not share their confidence that the company
could conduct itself legitimately and still succeed.
The
One Monte project
[11]
According to Ms Stewart and Mr Kriel, the first project where their

resistance to collusive conduct came significantly to the fore was
the One Monte Project in Johannesburg in late 2008/early 2009.
One
Monte was not one of the collusive projects listed in the
Commission’s complaint referral. The fire protection tender
was
managed for the client by Trevor Williams Consulting Engineers
(TWCE). Only Cross Fire, Belfa and FCS were invited to tender.
A
collusive arrangement was reached for Belfa to win the tender, Cross
Fire being represented in this deal by Mr Cross. It turned
out,
however, that Mr Cross was out of the country when tenders were to be
submitted. According to Ms Stewart and Mr Kriel, they
took the
opportunity to extricate Cross Fire from the collusion. This they did
by not submitting a tender at all. Ms Stewart acknowledged
that
another reason for not participating in the tender was that the cover
prices Belfa was asking Cross Fire to submit were “crazy”.
[12]
Ms Stewart testified that it was most unusual for an invited firm
not
to submit a tender. If the firm did not want the work (for example,
because it was technically complicated or the firm was
too busy or
did not like the principal contractor), the firm would usually prefer
still to submit a high (non-competitive) bid
in order to stay on the
consultant’s invitation list. If a firm decided not to tender
at all, it would give an explanation.
According to Mr Kriel, he gave
such explanation – he told Mr Williams Cross Fire was too busy.
[13]
Nevertheless,
the
absence
of
a
tender
from
Cross
Fire
elicited
a
call
to Ms
Stewart from Mr John Goring, manager of the industry association,
Automatic Sprinkler Inspection Bureau (ASIB).
[2]
She told him that they did not want to be part of
the
industry collusion. She surmised that this would get back to TWCE and
to the industry, and she later concluded that her surmise
had been
right. In its tender report dated 14 February 2009, TWCE noted that
Cross Fire had not submitted a tender, citing
a large
workload as the “official reason”.
Subsequent
discussions, according to TWCE,
indicated
“that the actual reason for declining to tender appears to be
the fact that they were unwilling to participate in
the collusion
which took place between the other two parties.”
Ms
Stewart
believed
that
this
information
must
have
reached
TWCE
from Mr
Goring. TWCE
recommended
that
the
tender
not
be
awarded
and
that
serious
consideration
be given to taking action against Belfa and FCS for possible
collusion.
Nampak
Kliprivier project
[14]
According to Ms Stewart and Mr Kriel, this decision destabilised
the
cartel and gave rise to a price war which lasted for some years. Ms
Stewart testified that Cross Fire never again colluded
with Belfa;
Cross Fire consistently tried to reduce prices and outwit its
opposition, she claimed. But she also faced Mr Cross’
wrath for
having reneged on the collusive deal he had struck. The strength of
her resolve, in the immediate aftermath of the One
Monte tender, was
tested in relation to the Nampak Kliprivier project. Although in her
answering affidavit Ms Stewart denied collusion
in this project,
supplementary discovery from the Commission led her to the
conclusion, which she acknowledged in her witness statement,
that she
had collusively shared pricing information with Mr David Ford of
Independent Fire (not one of the firms cited in the Tribunal

proceedings).
[15]
In her oral evidence she testified that she still had no independent

recollection of the matter, but she inferred from an email she sent
to Mr Ford on 1 July 2009 that she must have intended Independent

Fire to provide a cover bid for Cross Fire at the prices she
furnished to him. She was not the author of the document she emailed

to Mr Ford. In her witness statement she said: “I deeply regret
my conduct and I surmise that at the time I lacked sufficient

authority to overrule the instruction to share Cross Fire’s
prices with Independent Fire.” In the event, the project
was
not awarded to Cross Fire, and Ms Stewart thought that it never went
ahead.
Ms
Stewart becomes managing director
[16]
In August 2009 Ms Stewart succeeded Mr Cross as the company’s

managing director, though the latter remained a director. This, she
said, enabled her to bring an end to collusion, though she
had been
expressing her opposition to it for some years, and by 2009 she and
Mr Kriel were taking a stand that they had “had
enough”.
It was also around this time that there was wide publicity about the
Commission’s uncovering of collusion
in the construction
industry. Fear of financial penalties and prejudicial effect on her
shareholding were added incentives to withdraw
from collusion.
The
VW Centurion project
[17]
After the Nampak Kliprivier project, the next case of collusion

alleged against Cross Fire was said by the Commission to have taken
place in August 2009, the month in which Miss Stewart became
managing
director. This was the VW Centurion Warehouse project. Mr Kriel was
the person who had knowledge of the project. He testified
that in
2008 or early 2009 he was approached by a Mr Esterhuizen of
Volkswagen about the most cost-effective way of configuring

Volkswagen’s new warehouse in Centurion. At Mr Esterhuizen’s
request, Mr Kriel gave him “budget prices”.
He and Mr
Esterhuizen worked through 15 iterations of the estimates as the
plans underwent change. “Budget prices”
in this context
did not mean very low prices, but amounts which Volkswagen should
include in its budget for the project, typically
on a worst-case
scenario.
[18]
At some stage towards the end of this planning process, Mr
Esterhuizen
asked Mr Kriel to contact other fire protection firms to
confirm that Cross Fire’s budget prices were market-related.
For
this purpose, on 20 August 2009 Mr Kriel sent Mr Ford an email
with these prices. This was still part of the “exploratory

phase” of Volkswagen’s Centurion project.
[19]
About two months later, Volkswagen decided to issue a tender.
According
to Mr Kriel, Cross Fire prepared its tender independently,
submitting aggressively low prices at a margin of less than 10%.
Cross
Fire won the tender. The record does not contain any documents
about the tender. There is no evidence that Independent Fire
submitted
a tender or, if it did, that its prices justified an
inference of cover bidding. Mr Ford, although he was a whistleblower
in relation
to collusion in the fire protection industry, does not
seem to have supplied the Commission with any hard evidence on this
project.
The Commission did not file a witness statement from Mr Ford
or from his colleagues at Independent Fire, Messrs Prinsloo and Odd.

The Commission’s investigator, Mr Monareng, testified that Mr
Ford was not a witness because he “fears the mob”
and had
stopped replying to the Commission’s emails. Ms Stewart
testified that she had heard a rumour that Mr Ford was deceased.
[20]
The last payment Cross Fire received from the client in respect
of
the successful VW Centurion project was on 19 July 2011. The
relevance of this is that if VW Centurion was a collusive tender

forming part of the overarching understanding, the effects of this
particular act of collusion arguably lasted until 19 July 2011.

Although Cross Fire submits that this was not a collusive tender, its
alternative argument is that this was the last collusive
tender. The
final payment on 19 July 2011 predated by eight months the three-year
window period for complaint initiation in terms
of section 67(1).
The
last five alleged collusive tenders
[21]
I shall return presently to the Tribunal’s findings in relation

to the VW Centurion project. What I note here is that the instances
of collusion which the Commission alleged against Cross Fire

subsequent to the VW Centurion project were the following five
projects: Two River Platinum in April 2011 (Cross Fire and FCS);

Makro Cape Gate in October 2011 (Cross Fire, Belfa and FCS); Makro
Alberton in July 2012 (Cross Fire, Belfa and FCS); Makro Bloemfontein

at an unspecified time in 2012 (Cross Fire and Belfa); and Makro
Carnival (Cross Fire, Belfa and Tshwane Sprinklers).
[22]
The Tribunal did not find any of these instances of collusion to
be
established against Cross Fire. There is nothing to gainsay Ms
Stewart’s evidence of an absence of any collusion with
Belfa
after the One Monte project. Tshwane Sprinklers, as we know, was
acquitted, and the Commission did not adduce any evidence
from
persons associated with FCS. It is also noteworthy that even on the
Commission’s case there was, in relation to Cross
Fire, an
hiatus in collusive tenders from August 2009 to April 2011.
The
anti-collusion presentations and related anecdotal evidence
[23]
Ms Stewart testified that in June 2010 she made a presentation to

Cross Fire’s board on a five-year vision for the company. The
other directors were Messrs Cross, Kriel and Netherlands. One
of the
points she wanted to address was collusion. She testified that in her
view they had already made inroads in distancing the
company from
collusive behaviour “and I wanted once and for all a decision
to be made that we weren’t going to go that
way going forward”.
In a slide dealing with “reasons we may fail (things to
avoid)”, she included in her list
(emphasis in the original),
“Getting busted for
COLLUSION
”. Her next slide was
headed “Collusion vs Squeaky Clean”. I quote the text of
the slide (emphasis in the original):
“•
Definition
of Collusion: A secret agreement between two or more parties for a
fraudulent, illegal
or
deceitful
purpose.
•
Collusion
is
criminal
– it rates up there with not paying tax.
•
Cross
Fire’s
longevity
and
reputation
is
at risk
.
•
Cross
Fire is
Squeaky clean –
put the word out that we price
things our way.”
[24]
Ms Stewart testified that at the board meeting this position on

collusion was “adopted as an official policy” and was
communicated to all relevant staff members. This was confirmed
by Mr
Kriel, who was present at the board meeting. Ms Stewart specifically
recalled sharing the slide on collusion with staff at
a meeting on 23
July 2010. She testified that Cross Fire did not formally notify
competitors of its position. However, and although
she could not
recall specifics, she said that when competitors contacted them, they
were told “we no longer collude, go away”
. If clients or
consultants wanted Cross Fire to arrange quotes from competitors,
Cross Fire would refer them to the ASIB website
which listed the
competitor firms.
[25]
Mr Kriel gave similar evidence. He said the fallout from the One

Monte project was an enduring price war. Competitors had “really
clearly got the message”. He recalled one occasion
where Mr
Ford of Independent Fire phoned him and asked for a cover price. Mr
Kriel told him, “look we don’t do that”.
It is thus
not without significance that when Mr Ford in his blackmail
correspondence (see below) listed the members of the “mob”,

he did not name Mr Kriel.
[26]
Mr Kriel also testified that subsequently, when they went to tender

openings at which competitors were present, “we made it quite
clear that we’d sort of withdrawn from that sort of behaviour”.

He remembered one particular tender opening where, before the
consultant arrived, he was giving his competitors “a bit of
a
rough time because their pricing was so ridiculously low”.
These competitors included Mr David Odd (at that time with Belfa),
Mr
Steven Ayerst (of FCS) and someone called Marco (from Accurate Fire).
Mr Ayerst retorted that Cross Fire had chosen to cause
the fight.
[27]
On another occasion, Ms Stewart and he went to a restaurant for
lunch
with a client, and happened to encounter Mr Ayerst and FCS’
managing director. Mr Kriel saw them ordering very expensive
whiskey
and commented that “we can’t afford such expensive
whiskey, we’re just drinking beers”, to which
Mr Ayerst
riposted, “Ja, well you guys chose that path, you know, you
chose to extricate yourself from this collusion and
that’s why
you can’t afford the whiskey”. Interactions of this kind
convinced Mr Kriel that the opposition was
well aware of Cross Fire’s
anti-collusion stance.
[28]
Mr Rampursat, even though in 2010 he was still part of the design

team, confirmed that he was present at a meeting when Ms Stewart made
an anti-collusion presentation. He was again reminded of
the policy
when he became the sales manager in February 2012. Mr Rampursat, who
became sales director in February 2014, testified
that all bids
submitted through his office were arrived at independently. He said,
of the position since he joined the sales team
in February 2012, “I
can say with a degree of certainty that if Cross Fire was engaged in
collusive practices at all, it
would likely have come to my
attention”.
[29]
In his sales director’s report for September 2011, Mr Kriel

discussed the competitive environment. He believed FCS was targeting
Cross Fire in the belief that Cross Fire was on the brink
of
financial failure. Belfa, in turn, was believed to be lowering
standards in order to complete projects taken on at low margins.
His
conclusion on this aspect of his report is consistent with an
anti-collusion stance:
“•
Considering
the above I believe that the pursuit of an installers association by
mostly FCS and Belfa is a thinly veiled attempt
to firstly manipulate
pricing in the market and to get some insights into where exactly
[Cross Fire] is concerning work.
•
I
would caution the pursuit of the installers association at a time
when the competition commission is investigating the construction

industry. We could ill afford to pay 10% of our annual turnover as a
fine.”
Evidence
from competitors
[30]
Mr Bruce Thomas was the only witness called by the Commission who
had
some personal knowledge of the collusive tendering. He joined FPS in
2008. Although he had been in the industry for many years,
it was
only in 2008 that he moved from design to tendering. He could not say
when collusive tendering began. It was a
modus operandi
handed
down to him by Mr Roy Kruger, who was FPS’ sole director at the
time. He confirmed that FPS had colluded with Belfa
in four of the
tenders alleged by the Commission over the period 2008-2013. He had
not found documents implicating FPS in any of
the other tenders
alleged by the Commission.
[31]
He was asked by the Commission’s representative whether FPS
had
ever engaged in collusive tendering with Cross Fire. He replied, “No,
not to my knowledge”. When a member of the
Tribunal probed
whether collusion might have been arranged with Mr Kruger without his
knowledge, Mr Thomas replied that he did
all the tendering, so Mr
Kruger could not have submitted a price without his knowledge.
[32]
He was asked whether Mr Kruger ever told him about a communication

from Cross Fire that they were now “squeaky clean” and
that this should be “put out there”. He replied
that he
had no knowledge of such a conversation, adding that he had never had
any dealings with Cross Fire personally.
[33]
The Commission did not call witnesses from any of the other firms

with whom settlement agreements were reached or from firms, such as
FCS and Independent Fire, which had not been charged. In his
opening
address in the Tribunal, the Commission’s representative said
that the Commission intended calling Mr Charles van
Deventer, a Belfa
employee, to establish collusion between Cross Fire and Tshwane
Sprinklers and, by so doing, to demonstrate that
the prohibited
conduct had not ceased more than three years before the date of the
complaint initiation. The Commission did not,
in the event, call Mr
van Deventer. It appears that the Commission reached a provisional
settlement with Belfa in October 2018,
which was retracted after it
emerged that Belfa was unable to offer the Commission additional
evidence to establish its case against
the other respondents. By that
time, the only other respondents with whom the Commission had not
settled were Cross Fire and Tshwane
Sprinklers.
[34]
Before the case was adjourned for argument, counsel for Cross Fire

said that if the Tribunal wanted to hear from Mr Cross, Cross Fire’s
legal representatives were willing to call him; and
that if the
Tribunal wanted to subpoena Mr van Deventer, Cross Fire was quite
happy for that to happen: “We are utterly confident
in the case
we have brought, and if the Tribunal wishes to hear from any party,
they are welcome to exercise their inquisitorial
powers and hear from
them.” The chairperson said that the Tribunal would discuss the
matter. The Tribunal evidently decided
not to exercise its
inquisitorial powers.
Mr
Ford’s threats
[35]
On 4 March 2014 Mr Ford sent the first in a series of emails
evidently
designed to induce the buying of his silence. He claimed to
have compiled a list of collusive projects and all supporting
documentation
regarding the cartel. He claimed that this had been on
his conscience for many years and he felt it only right to report
this to
the Commission and become a “state witness”. His
conscience was evidently somewhat contingent, because he said that

“if” he went down, he intended taking everybody down with
him. Ms Stewart replied by email, asking Mr Ford to call
her or let
her have his number so that they could chat.
[36]
Another email from Mr Ford followed on 14 March 2014. He said he
did
not know whether Mr Cross had spoken to the “main players of
the mob” to discuss Mr Ford’s intentions and
possible
solutions. All he could give Ms Stewart was two weeks to try and
resolve the issue. He listed the members of the “mob”.

There were no names from Cross Fire on the list, though Mr Cross was
mentioned in the body of the email. Ms Stewart again replied
by
email, asking what kind of solution Mr Ford was looking for.
[37]
On 21 March 2014 Mr Ford sent Ms Stewart a third email. He said
he
had the impression that the “gangsters” thought he was
bluffing. He attached random scans for her to look at. He
said he had
kept all the deals made with Independent Fire over the last 11 years.
He would be implicating all and sundry. He anticipated
fines in the
millions, loss of future revenue, possible closure of some companies,
and civil cases. He concluded: “Come up
with a decent proposal
and I’m out of your face.” On 26 March he sent her
another email simply attaching something
called “trade.pdf”.
[38]
Ms Stewart testified that there were several telephone conversations

between Mr Ford and her in March 2014. Mr Ford evidently wanted
something, but never defined exactly what it was, though she inferred

it was money. She felt harassed, because Mr Ford evidently saw her as
an intermediary between himself and the industry’s
old guard,
and it was not a position she wanted to occupy. She did not contact
any of the role players in response to Mr Ford’s
approaches.
She did, however, consult Ms Lesley Morphet, a competition lawyer at
Webber Wentzel. In a letter dated 27 March 2014,
Ms Morphet told Mr
Ford that she was instructed that his threats were without foundation
insofar as Cross Fire was concerned and
that Cross Fire was satisfied
it had nothing to fear from the competition authorities. She pointed
out that a complaint could only
be initiated in respect of conduct
taking place within the last three years, over which period Cross
Fire’s conduct had been
“exemplary”. She warned Mr
Ford that his letters amounted to attempted extortion.
[39]
Mr Ford did not make contact with Cross Fire again. Whether he made

approaches to others is unknown. Eventually, on 25 February 2015 he
supplied information to the Commission, which led to the complaint

initiation on 13 March 2015.
[40]
On 6 June 2014 Ms Veronica Cadman, a competition attorney, conducted

a comprehensive competition law compliance training programme at
Cross Fire. Ms Stewart testified that Mr Ford’s threatening

emails had given her a “wake-up call”, which is why she
organised this event. Ms Cadman’s presentation was meant
to be
a reaffirmation and to make sure that everybody, including new
employees, knew about the company’s position. In the
board
minutes of 22 July 2014 this was described as an “anti-collusion
workshop”, and it was noted that “all
were made aware
that collusion would not be tolerated in the organisation”.
Fireco’s
approach to Mr Cousins
[41]
In early 2015 Mr Zane Cousins, who worked at Cross Fire’s
Cape
Town branch, was contacted by someone from Fireco wanting to discuss
price increases. Cousins reported this to Ms Stewart
who expressed
her anger and unequivocally told him that no such conduct would be
tolerated. In his February 2015 branch report,
Cousins noted this
approach and stated that he had not responded to Fireco.
Cessation
of prohibited conduct – legal principles
Incidence of onus
[42]
In
Pickfords
,
the Constitutional Court held that section 67(1) was a time-bar
provision
and
that
in
terms
of
section
58(1)(c)
the
Tribunal
could
condone
non-
compliance
with the time limit. Before
Pickfords
,
section 67(1) was viewed as a non- condonable prescription provision.
According to the Tribunal’s pre-
Pickfords
jurisprudence,
the burden of proving that a complaint initiation was out of time
(i.e. that
the
prohibited conduct had ceased more than three years before the
initiation date) was held generally to rest on the party invoking

“prescription”.
[3]
This Court approved that approach.
[4]
According
to the Tribunal, this is not a rigid rule – considerations of
fairness
might
dictate that in a particular case the Commission should bear the
burden of proving
when
prohibited conduct ceased.
[5]
[43]
Counsel for Cross Fire submitted that all of this had changed because

of the Constitutional Court’s judgment in
Pickfords
.Since
section 67(1) was a pure time-bar provision, not a prescription
provision, the pre-
Pickfords
case law on the burden of proof
no longer applied. Instead, so it was argued, the Commission must
always prove that it complied
with the three-year limit.
[44]
In my view, this submission is unsound. Although the Constitutional

Court in
Pickfords
framed the issue as being whether section
67(1) was a time-bar provision or a prescription provision, this
appears simply to have
been a different way of posing the question
whether section 67(1) imposed a “time limit” as
contemplated in section
58(1)(c), in which case the Tribunal has the
power to condone non-compliance, or whether it was an absolute bar to
complaint initiation.
On no view of the matter could section 67(1) be
accurately described as a prescription provision. A “complaint”
is
not a “debt”, and cannot be extinguished with the
passing of time. In the case of prescription, a debt which was
previously
in existence is extinguished. A “complaint”,
by contrast, has no existence until it is initiated. Section 67(1)
simply
subjects to a time limit the Commission’s entitlement to
exercise the administrative power of initiating a complaint in terms

of section 49B.
[45]
The fact
that section 67(1) has now been held to be a condonable, rather than
a non-condonable, time limit does not in my view justify
a reversal
of the jurisprudence of the Tribunal and this Court regarding the
burden of proof. There is no general principle in
our law that the
burden of proof in respect of a time-bar provision, as distinct from
a prescription provision, rests on the claimant.
Time limits on the
institution of legal proceedings (i.e. an expiry period, or
“
vervaltermyn
”
in Afrikaans) have in other settings been held to impose a burden of
proof on the party alleging that the claim is time-barred.
[6]
[46]
A public body which is the repository of a statutory power must

satisfy itself, before exercising the power, that the jurisdictional
prerequisites for its exercise are present. It does not follow
that
if the presence of those jurisdictional prerequisites is placed in
issue, the burden of proof rests on the public body to
show that the
jurisdictional prerequisites were satisfied. If the purported
exercise of the power is challenged by way of review
proceedings, it
would be for the challenger to make out its grounds of review. There
is no reason in principle for the position
to be different where, in
the case of the initiation of a complaint by the Commission, the
challenge is raised in response to a
complaint referral.
[47]
I mentioned earlier that the Tribunal has held there to be an element

of flexibility on the question of onus, since considerations of
fairness may dictate that in certain circumstances the Commission

should bear the burden of proving when prohibited conduct ceased.
Ordinarily, the incidence of the burden of proof is a matter
of
substantive law and does not alter according to the ease or
difficulty of discharging the burden in a particular case. It is

unnecessary in this case to decide whether considerations of fairness
alter the incidence of onus or merely place an evidentiary
burden on
the Commission.
[48]
The above discussion relates to the incidence of onus on cessation

where a firm is relying on the time-bar in section 67(1). It is
conceivable that for other purposes the onus might rest on the

Commission. The egregiousness of prohibited conduct is affected by
its duration, and this is reflected in the guidance which the

Tribunal follows in the imposition of penalties. For this reason, the
Commission typically alleges the period over which the prohibited

conduct was committed. The Commission did so in this case, alleging
that the respondents engaged in the prohibited conduct from
at least
1996 until 2015. It may be that the Commission still bears the onus
of proving the duration of prohibited conduct for
purposes of
establishing its egregiousness and the appropriate penalty, but it is
unnecessary in this case to pursue the question.
Ongoing
effects
[49]
Decisions
of
this
Court
establish
that
a
prohibited
practice
in
the form
of
collusion
does not cease when the last collusive deal is struck, but continues
for as long
as the
adverse effects of the practice are, within appropriate bounds, still
being felt in the market.
[7]
Typically that will be when the last payment is received in respect
of a contract concluded with an unsuspecting customer as a
result of
the collusion
[8]
or for as
long as the
cartel members continue to apply prices fixed by them.
[9]
[50]
This
approach is applicable to a collusive tendering cartel. If the
overarching understanding comes to an end, the prohibited practice

will, generally, cease when the customer makes the final payment in
respect of the last collusive tender. It is here, however,
that the
flexibility which the Tribunal recognised in
Pickfords
[10]
may require consideration. If a firm wins the last collusive tender
in which it participated, that firm
will need
to establish when it reaped the last fruits of the tender.
But if
another member
of the
cartel won the tender, fairness may dictate that the Commission
should at least bear an evidentiary burden of showing
when
the last
fruits were reaped by that other member. The information would not be
readily available to the firm which provided a
cover bid,
whereas the Commission has the investigative powers to get the
evidence.
Withdrawing
from a cartel
[51]
The
Tribunal held that in law Cross Fire had to distance itself from the
cartel by
way of a
clear and unambiguous communication to its competitors. Without such
an act of distancing, other cartel members might continue
to conduct
themselves on the basis of coordination and not competition.
The
Tribunal referred to the decisions of this
Court in
MacNeil
[11]
and
Omnico
[12]
and to
several decisions of the Court of Justice of the
European
Communities (CJEC), later renamed the Court of Justice of the
European Union (CJEU).
In my view,
the Tribunal materially misdirected itself on the law.
[52]
MacNeil
and
Omnico
were price-fixing cases. The
passages to which the Tribunal referred dealt with the position of a
firm which attended but was passive
at collusive meetings and which
later claimed not to have been part of the prohibited conduct. This
Court’s judgments did
not use the expression “clear and
unambiguous distancing”. More importantly, though, the cases
were concerned with
the impression which passive presence could
create in the minds of other participants. If discussions at a
meeting of competitors
are plainly collusive, a firm which sits by
passively instead of declaring that it is opposed to the collusion
may be understood
to be acquiescing. As explained in
MacNeil
,
the circumstances give rise to a duty to speak. Silence may otherwise
result in the other participants implementing the collusive

arrangement on the understanding that everyone at the meeting agrees.
[53]
The
European judgments dealt with similar situations. They were concerned
with the circumstances in which a firm which attended
collusive
price-fixing meetings
could claim
not to have become part of the cartel.
The cases
cited by the Tribunal, and in argument before us,
[13]
were decided in the period 2003-2009.
The effect
of these and
other cases
was summarised more recently by the CJEU (Second Chamber) in
Toshiba
Corporation
,
[14]
hearing an appeal from the General Court (citation of authority
omitted):
“
61. In that regard
[public distancing]
, it should be borne in mind that it is
sufficient for the Commission to show that the undertaking concerned
participated in meetings
at which anticompetitive agreements were
concluded, without manifestly opposing them, to prove to the
requisite standard that the
undertaking participated in the cartel.
Where participation in such meetings has been established, it is for
that undertaking to
put forward evidence to establish that its
participation in those meetings was without any anticompetitive
intention by demonstrating
that it had indicated to its competitors
that it was participating in those meetings in a spirit that was
different from theirs
…
62.
In order to assess whether an undertaking has actually distanced
itself, it is indeed the understanding
which the other participants
in a cartel have of that undertaking’s intention which is of
critical importance when assessing
whether it sought to distance
itself from the unlawful agreement …
63.
In that
context, it should be noted that the concept of ‘public
distancing’ reflects
a factual
situation, the existence of which is found by the General Court, on a
case-by-
case basis,
taking account of a number of coincidences and indicia submitted to
it and
accordingly
an overall assessment of all the relevant evidence and indicia …”
[15]
[54]
As is apparent from the above cases, distancing is not an independent

legal requirement that exists for its own sake. It is a duty imposed
on a firm where its passivity or silence might cause other
cartel
members to implement or continue with their collusive deal on the
assumption that the passive or silent firm has acquiesced
in or is
continuing to abide by the arrangement. To take a simple price-fixing
arrangement, firms may agree at a meeting that they
will increase
their prices for the next year by 10%. This collusive agreement might
be intended to last until the firms again agree
a new increase. A
firm which passively attends a meeting where this deal is struck may
be understood by the others to have agreed
to the arrangement, and
they may proceed to implement and maintain it on that assumption.
Similarly, a firm which positively agrees
to such an arrangement and
then wishes to terminate its collusion would need to communicate this
to the others, since otherwise
they might continue to abide by the
arrangement on the assumption that the firm is still on board. Of
course, other members of
the cartel might decide to continue with the
price-fixing even though one firm has told them of its withdrawal,
but that would
then not be attributable to the conduct of the firm
which has withdrawn.
[55]
Not all price-fixing cartels are as straightforward as the above

example. The plausibility of passivity or silence by one firm having
the effect of perpetuating anti- competitive behaviour by
the other
cartel members may be affected by the particular nature and dynamics
of the cartel, but it is unnecessary to explore
this question here.
[56]
What is clear is that the requirement of “clear and unambiguous

distancing”, to the extent that its is applicable in our law,
cannot be divorced from the purpose that distancing –
when
applicable – is intended to serve, nor can it simply be
transposed to a bid-rigging cartel without regard to the differences

between a bid-rigging cartel and a straightforward price-fixing
cartel. I shall discuss some of these differences in the following

paragraphs, but before doing so I emphasise that there is no evidence
that after mid-2009 Cross Fire was present, passive or otherwise,
at
any collusive meetings.
[57]
In the case of a straightforward price-fixing cartel, the colluding

firms agree that they will, going forward, charge a particular price.
In a collusive tendering cartel, by contrast, the harmful

understanding is not an understanding that the firms will henceforth
charge a particular price. It is an understanding that they
will rig
future tenders. That understanding does not itself cause harm;
rather, it creates an enabling environment within which
actual harm
can be brought about by the rigging of particular tenders
.
Generally, the bringing about of actual harm would require
communication between the cartel members in respect of each tender,
since
the character of such a cartel is to identify one of their
number as the intended winner of the tender in question and to agree

the price above which the other members must bid to ensure that the
intended winner has the lowest bid.
[58]
Collusive tendering cartels, like price-fixing cartels, may come
in
various forms. It is notionally possible that the cartel members
could agree to rig all tenders in which they are involved or
all
tenders of a particular type. Even in such a case, one would
generally expect communication among all the cartel members on
the
occasion of each tender. However, it is arguable that if a particular
member of the cartel were not approached by the others,
and was
silent, the others would take it for granted that the member in
question would either not participate in the tender or
would set its
price unattractively high. This might result in the others colluding
on the assumption that the firm in question
will not try to be the
winner.
[59]
The bid-rigging cartel in the present case did not partake of the

character discussed in the preceding paragraph. It involved, instead,
sporadic approaches by firms to each other in terms of a
broad
understanding that made such approaches acceptable. The evidence did
not remotely show that all, most or even a significant
proportion of
tenders in the industry were the subject of collusion. If, in the
case of such a cartel, a firm (X) ceases, from
a particular time, to
participate in collusive tendering, its contribution to competitive
harm has come to an end, save for any
past collusive contracts which
still have to run their course.
[60]
If the other members of the cartel approach X in relation to a tender

and are rebuffed, any harm arising in relation to that tender from
collusion between the others cannot be said to have been brought

about by a mistaken assumption about X’s stance. If the other
members choose not to approach X, the same is true. This is
because,
in such a cartel, a particular tender is only brought within the
scope of the collusive understanding by communication
between the
cartel members. If the other members choose not to tell X that they
intend to rig this particular bid, non-communication
from X could not
plausibly cause the other members to make any assumptions about X’s
approach to the tender. To the contrary,
if they do not draw X into
the arrangement, they have no reason to believe that X will not treat
the tender as a fully competitive
one falling outside the scope of
the collusive understanding.
[61]
To this may be added that collusion on a tender is unlikely to be

effective unless every tenderer who could realistically win is part
of the collusion. The point of such collusion is for a prearranged

firm to win the tender as a result of the other tenderers providing
cover bids at higher prices. If one of the tenderers (X in
my
example) is acting independently and genuinely trying to win the
tender, the others cannot, through their conduct alone, ensure
that
one of them will win the tender, and their incentives to try to do so
are minimal.
[62]
To conclude on this aspect. A firm’s silence or inactivity
is
only relevant to the enduring nature of prohibited conduct where the
silence or inactivity has the potential to perpetuate actual

competitive harm through wrong assumptions about the firm’s
stance on an illicit understanding to which it was previously
party.
Where the firm’s stance about the illicit understanding is not
relevant to any ongoing harm that occurs, silence or
inactivity
should not in itself preclude the firm from raising the defence that
its prohibited conduct ceased when it stopped actually
performing
collusive acts. There was no evidence in this case, and the Tribunal
in its reasoning did not find, that Cross Fire’s
supposed
failure to communicate its internal decision to the other cartel
members was responsible for the perpetuation of any competitive
harm.
[63]
In any event, and as I shall explain, I consider that the other
firms
in this case must have understood, well before March 2012, that Cross
Fire was no longer willing to participate in collusive
tendering. The
fact that Cross Fire did not formally give them notice to this effect
does not bar Cross Fire from contending that
its participation in
prohibited conduct had terminated. And in this regard section 68 of
the Act should be borne in mind: save
for exceptions not here
relevant, the standard of proof in any proceedings in terms of the
Act is no higher than on a balance of
probabilities.
When
did Cross Fire’s prohibited conduct ceased?
[64]
In
assessing the factual findings made by the Tribunal on the question
of the cessation of prohibited conduct, I bear in mind the
rule that
the Tribunal, which heard and saw the witnesses, had advantages which
this Court lacks, and that the Tribunal’s
findings are thus
entitled to a measure of deference. As has been said, however, this
rule of practice must be used to assist,
and not hamper, an appellate
court to do justice in the case: an appellate court may interfere
with factual findings if the trial
court has misdirected itself on
the facts or made findings which are clearly wrong.
[16]
[65]
An
appellate court has greater liberty to interfere where the factual
finding does
not
“essentially depend on the personal impression made by a
witness’ demeanour but
predominantly
upon inferences from other facts and upon probabilities”, for
in such a case “a court of appeal with the
benefit of an
overall conspectus of the full record may
often be in
a better position to draw inferences, particularly in regard to
secondary facts”.
[17]
The Tribunal did not mention demeanour or the impression made on it
by the
witnesses.
In the
main, its findings were based on its view of the inherent
probabilities,
on
inferences
it
drew
regarding
secondary
facts
and
on
supposed
internal
contradictions.
[66]
In addition
to the well-known restrictions on appellate interference in factual
findings, this Court has held that it should, in
merger appeals, show
a “measure of deference” to the Tribunal’s
assessment of the matters set out in section
12A(1) of the Act.
This is
because the Tribunal is a specialist body consisting not only of
lawyers but
economists
with specialised financial and economic expertise. This Court will be
cautious before imposing its own conception of
the policy
considerations adopted by the Tribunal.
This
Court’s function is to examine and rigorously test the
justifications offered by the Tribunal.
[18]
This approach in merger proceedings was endorsed by the
Constitutional Court in
Mediclinic.
[19]
These cases were concerned with policy matters and policy-oriented
predictive decisions
[20]
which
typically arise in merger proceedings.
While
policy-oriented predictive decisions could perhaps also arise in
other types of proceedings, the present matter is not such
a case. We
are concerned with the legal test
for
cessation of prohibited conduct and with the sustainability of the
Tribunal’s factual
findings.
On legal matters arising under the Act, this Court is a specialist
forum. On factual findings, we are subject to the usual
appellate
constraints. This is not a case in which specialist economic
expertise or predictive policy-laden decisions require a
measure of
deference from this Court.
The
last ad hoc collusion by Cross Fire
[67]
Cross Fire’s last admitted collusive conduct was in relation
to
the Nampak Kliprivier project, the relevant date being 1 July 2009.
There is no evidence, nor any finding by the Tribunal, that
the
project went ahead, so the prohibited conduct had no enduring
effects.
[68]
The VW Centurion contract had ongoing effects until 12 July 2011,
but
was this a collusive tender? The Tribunal said that Mr Kriel’s
explanation for sending prices to Mr Ford was implausible.
If he and
Ms Stewart had refused to participate in the One Monte Project
because collusion was wrong, how could Mr Kriel see nothing
wrong in
sending Cross Fire’s confidential pricing information to
Independent Fire? The Tribunal said that Mr Kriel must
have had sight
of Independent Fire’s pricing. In any event, Mr Kriel’s
version that Volkswagen asked him to check his
prices with
competitors was not a defence to illegal conduct.
[69]
The finding of implausibility was not justified and was clearly

wrong. Mr Kriel named the person at Volkswagen with whom he was
dealing. It was open to the Commission to interview Mr Esterhuizen.

Ms Stewart testified that it was not unusual for customers or their
consultants to ask a chosen firm to get other firms to provide

quotes. She stated that after turning over a new leaf, Cross Fire
would tell customers and consultants to consult the ASIB website.
[70]
The Tribunal’s statement that Mr Kriel must have had sight
of
Independent Fire’s pricing is a material factual misdirection.
There was no oral or documentary evidence that Independent
Fire ever
provided pricing for the VW Centurion project, either to Cross Fire
or to Volkswagen. Mr Kriel’s evidence is that
Volkswagen wanted
him to check that Cross Fire’s prices were market-related. Mr
Kriel’s email of 20 August 2009 is
consistent with his having
given Cross Fire’s proposed prices to Mr Ford. There is no
evidence that a tender invitation existed
at that time, so Cross Fire
was not in competition with Independent Fire for Volkswagen’s
business.
[71]
In ascribing motives to Mr Kriel, the Tribunal failed to heed the

totality of the evidence about Cross Fire’s changing stance on
collusion, a topic I address later. However, even if one accepts
that
Mr Kriel acted wrongly (he certainly acted unwisely) in sending Cross
Fire’s pricing to Mr Ford, the Tribunal made no
factual
findings as to what came of this. The prohibited conduct which the
Commission alleged was not inappropriate sharing of
pricing
information but collusive tendering. According to Mr Kriel, there was
no tender under way as at 20 August 2020. According
to him,
Volkswagen only decided to go out to tender about two months later.
The Tribunal did not find that the tender itself was
infected by
collusion. The Tribunal did not reject Mr Kriel’s evidence that
Cross Fire prepared its bid independently and
went in at aggressively
low prices. The Tribunal did not find that Independent Fire provided
a cover bid or that it participated
in the tender at all. Information
about the tender must have been available to the Commission. Since Mr
Ford was the whistleblower,
he would presumably have supplied the
Commission with more incriminating documents if they existed.
Furthermore, the Commission
could have analysed the tenders and asked
the Tribunal to make inferences about cover bidding, assuming such
inferences were justified.
[72]
It thus cannot be found that the tender itself was collusive. At

worst for Cross Fire, there was prohibited conduct in relation to
this project in August 2009 but the prohibited conduct did not
have
enduring effects. Mr Thomas, who joined FPS in 2008 and was
responsible for FPS’ tendering from that time, was called
by
the Commission as a witness. He testified that while he was with FPS,
the company had never been involved with Cross Fire in
collusive
tendering.
Cross
Fire’s stance on collusion
[73]
The Tribunal assessment of Cross Fire’s evidence about its

withdrawal from collusion was inappropriately sceptical. The Tribunal
was not obliged to accept Cross Fire’s evidence just
because it
was uncontested. Nevertheless, the Tribunal did not pay proper regard
to the fact that there was no countervailing evidence
in
circumstances where one might have expected the Commission to be able
to adduce countervailing evidence if Cross Fire’s
testimony
were untrue. Furthermore, the Tribunal did not view the evidence
holistically or have regard to the inherent probabilities.
This
amounts to a material misdirection in its assessment of the facts. I
deal with this in the paragraphs which follow.
One
Monte project
[74]
The background to what unfolded as from early 2009 was Ms Stewart’s

gradual progression in an industry hitherto characterised by a
male-dominated “old guard”. There was no basis for the

Tribunal to call into question the genuineness of Ms Stewart’s
desire to extricate Cross Fire from collusive tendering. It
would be
unrealistic to expect her to be able to achieve this in one fell
swoop, nor did she make that claim. In early 2009 Mr
Cross, a member
of the old guard, was still the managing director. And yet it cannot
be disputed that in early 2009 Ms Stewart
and Mr Kriel caused Cross
Fire not to give effect to a collusive deal Mr Cross had struck with
Belfa and FCS in relation to the
One Monte Project.
[75]
The Tribunal found Cross Fire’s evidence on the One Monte

incident to suffer from “a few inherent contradictions”,
branding it “unpersuasive in the main”. The Tribunal

supported its view with reference to five points:
(a)
The first was that authority at the time lay with Mr Cross, not Ms
Stewart.
That is true, but misses the point. We are ultimately
concerned with whether Ms Stewart caused Cross Fire to withdraw from
collusion.
She did not have authority in February 2009, but became
the managing director in August 2009. Despite the fact that Mr Cross
was
still the managing director, her strength of feeling is shown by
the fact that she countermanded the collusive deal, taking advantage

of his absence.
(b)
The Tribunal’s second point was that Ms Stewart was not
motivated
only by a desire to refrain from collusion. She also
thought the cover bid Cross Fire was being asked to submit was so
excessive
that it would arouse suspicion. Again that is true, but the
fact that two factors were operative did not entitle the Tribunal to

reject the legitimacy of one of them.
(c)
The Tribunal’s third point was that the decision of Ms Stewart

and Mr Kriel not to submit a bid did not suggest a withdrawal from
the cartel. It might simply have suggested a decision not to
compete
in that particular tender, something which would have the effect of
abiding by the agreement Mr Cross had reached. This
reasoning is
materially flawed. The point of cover bids is to lend legitimacy to
the preferred bidder. Only three firms were invited
to bid, so the
absence of one of them materially affected the collusive arrangement,
as subsequent events showed. Belfa and FCS
could not have thought
that Cross Fire, by not submitting a bid at all, was abiding by the
deal.
(d)
Fourth, the Tribunal discounted Ms Stewart’s evidence that
communication
to Mr Goring of ASIB would get back to competitors. The
Tribunal did so because no evidence had been led on the role or
status
of ASIB and because Mr Goring was not called as a witness. For
present purposes, I am focusing on the genuineness of Cross Fire’s

endeavour to withdraw from collusion, not a communicated distancing
(assuming this to have been required). What remains uncontested
is
that Ms Stewart did tell Mr Goring that Cross Fire did not want to be
part of the collusion. Since she testified that she did
not make the
same disclosure directly to TWCE, the most probable inference is that
TWCE’s information in that regard came
from Mr Goring. At any
rate, Cross Fire’s position did not remain internal.
(e)
In the fifth place, the Tribunal said that Mr Williams of TWCE had
not
been called as a witness. His report was confined only to the One
Monte project, and did not provide evidence of Cross Fire’s

withdrawal from the overall collusive understanding. Again this is
true, but it reflects a piecemeal approach to the mosaic of
evidence
of withdrawal. Ms Stewart did not testify that she told Mr Goring
that Cross Fire was withdrawing from an overall collusive

understanding. She was explaining to him why Cross Fire had not
submitted a bid in the One Monte project. The importance is that
this
was a manifestation of the desire to avoid collusion.
[76]
In this context, the Tribunal also referred to Mr Kriel’s

anecdotal evidence about the restaurant incident. Mr Kriel did not
mention this anecdote specifically with reference to the One
Monte
project, nor was it his only anecdotal evidence. It was one of his
recollections about competitor comments indicating that
they knew
where Cross Fire stood. Be that as it may, the Tribunal said that Mr
Kriel’s evidence did not explain why this
incident should be
treated as evidence of exit from the cartel. This is again a
piecemeal approach to evidence. It is the whole
picture which
required examination. Clearly on its own this incident would not take
Cross Fire very far, but this does not make
it irrelevant.
Nampak
Kliprivier and VW Centurion
[77]
The Tribunal called Ms Stewart’s
bona fides
into
question in view of her providing prices to Mr Ford in the Nampak
Kliprivier project for cover bidding purposes. This was in
July 2009,
before she became managing director. Her evidence was that she was
acting under instruction, and that she regretted
her actions. The
question is not whether the One Monte incident marked the end of all
collusion from Cross Fire’s perspective.
The Tribunal was
required to assess Ms Stewart’s lapse in relation to Nampak
Kliprivier in the context of what went before
and came afterwards. It
is not surprising that a company which had been part of a collusive
industry for some years, and which
still had a member of the old
guard as its managing director, did not have a neat and decisive
transformation. The Tribunal criticised
Ms Stewart for putting up the
excuse that she was not the author of the document sent to Mr Ford
and that she was acting under
instruction, contrasting this with her
version in relation to the One Monte incident. However, Ms Stewart
did not claim to have
had corporate authority to override Mr Cross’
collusive One Monte deal. She faced his wrath for having reneged on
the deal.
The difference between One Monte and Nampak Kliprivier is
that Mr Cross was not, in the former case, in South Africa at the
crucial
time.
[78]
I have already dealt at some length with the VW Centurion project.

There was no evidence of a collusive tender. There is no evidence to
warrant a conclusion that Mr Kriel’s sending of prices
to Mr
Ford related to collusive tendering. And whatever criticisms there
may be of Mr Kriel in this regard, they do not extend
to Ms Stewart
who became the company’s managing director at around the same
time.
Presentations
of mid-2010
[79]
The Tribunal’s treatment of Ms Stewart’s presentation
to
the board in June 2010 is highly unsatisfactory. After recounting the
content of the presentation and some of Ms Stewart’s
oral
testimony, the Tribunal noted that on her version the board only
adopted the policy of non-collusion in mid-2010. The Tribunal
went on
to say that “even if [we] were to accept” that Cross Fire
adopted the anti-collusion policy internally, this
did not mean that
the withdrawal was communicated to competitors. If this had been
known, so the Tribunal reasoned, there would
not have been to more
recent incidents suggesting that competitors were unaware of the
withdrawal, namely Mr Ford’s communications
of March 2014 and
Fireco’s approach to Mr Cousins in early 2015.
[80]
Despite its “even if we were to accept” formulation,
the
Tribunal did not make a finding that the board presentation, and
subsequent presentation to the staff, did not take place,
nor could
such a finding properly have been made. Both Ms Stewart and Mr Kriel
gave direct evidence about the board meeting. The
board presentation
was adduced as a documentary exhibit. Mr Rampursat testified that he
was at the 2010 staff meeting when a similar
presentation was later
made.
[81]
The Tribunal was thus required to approach the matter on the basis

that Ms Stewart and Mr Kriel were opposed to collusion; that they had
taken some steps in that direction in relation to the One
Monte
project in early 2009; that there were no collusive tenders
thereafter, even if there was an attempt in July 2009 (Nampak

Kliprivier) and a possible inappropriate sharing of pricing
information in August 2009 (VW Centurion); and that by June/July 2010

their opposition to collusion had crystallised in the form of an
official board decision subsequently communicated to staff.
[82]
Before I address what the Tribunal said about Mr Ford’s emails

and Fireco’s approach to Mr Cousins, it is necessary to make a
point which might seem obvious but which the Tribunal disregarded.

The overarching collusive understanding in the present case entailed
that from time to time cartel members would approach each
other for
cover bids. But there was no evidence that after July 2009 there was
any collusive communication between Cross Fire and
any other member
of the cartel or that Cross Fire participated in any collusive
tenders. The period of nearly six years until the
Commission
initiated the complaint is too long a period for Cross Fire to have
been a slumbering member of the cartel, given that
Cross Fire was a
major player in the industry and a frequent participant in tenders.
There are only two plausible possibilities:
either the other firms
did not approach Cross Fire because they already knew where Cross
Fire stood by virtue of the One Monte
incident, or they did initially
approach Cross Fire but were rebuffed, as they surely would have
been, at least after mid-2010.
It is just not plausible, if a cartel
to which Cross Fire belonged still existed, for Cross Fire
fortuitously not to have been
asked to participate in any collusive
tenders.
The
Ford correspondence
[83]
As I have said, the Tribunal discerned, in Mr Ford’s
correspondence
and in the approach to Mr Cousins, evidence that other
firms were unaware of Cross Fire’s exit from the cartel. But Mr
Ford’s
emails to Ms Stewart contained nothing to suggest that
Cross Fire was still engaging in collusion. Ms Stewart had been the
managing
director of Cross Fire since August 2009, and Mr Ford may
well have chosen her as an intermediary because she was not one of
the
“mob”.
[84]
The Tribunal thought that Ms Stewart’s responses to Mr Ford’s

first and second emails were not what one would have expected from a
firm that had withdrawn from a cartel in 2009. She should,
the
Tribunal thought, have told Mr Ford that Cross Fire had withdrawn
from the cartel in early 2009 and that her communication
to Mr Goring
had been a message to competitors. However, it is quite wrong to read
so much into Ms Stewart’s initial guarded
responses to what was
evidently an attempt at extortion. She had not yet taken legal
advice. She would not have known what Cross
Fire’s exposure was
in relation to its historical participation in the cartel. She was
not only the company’s managing
director but had a shareholding
in the company. It is not apparent why she was required to grace a
blackmailer with any information.
An attempt to get Mr Ford to speak
more plainly would have strengthened her hand in dealing with his
veiled extortion threats.
What the Tribunal failed to note, in
relation to Mr Ford’s first two emails and his list of mob
members, was that he had
no stage suggested that Ms Stewart was
compromised.
[85]
Far more important is the response which Mr Ford received after
Ms
Stewart had sought legal advice from Webber Wentzel. Ms Stewart was
evidently told about the three-year limit in section 67(1).
She in
turn must have told Ms Morphet that Cross Fire had terminated its
involvement in collusive tendering more than three years
previously.
Ms Morphet wrote her letter in March 2014. This is consistent with Ms
Stewart’s evidence to the Tribunal, including
the evidence
about the presentations in mid-2010.
[86]
The Tribunal said that Ms Stewart must, by the time of Mr Ford’s

emails, have become aware of the Commission’s corporate
leniency policy, yet she had not explained her failure to approach

the Commission with information about the cartel. I accept that Ms
Stewart must have learnt about corporate leniency after consulting
Ms
Morphet. But she was evidently advised that Cross Fire was in the
clear because of section 67(1). However commendable it might
have
been for Ms Stewart to provide information to the Commission, she was
not obliged to do so. The fact that Cross Fire did not
seek corporate
leniency in response to Mr Ford’s threats shows that Ms Stewart
genuinely believed that Cross Fire had divorced
itself from collusion
for more than three years. If those were not the factual instructions
she gave Ms Morphet, the latter would
certainly have advised Cross
Fire to seek corporate leniency, and Cross Fire would almost
certainly have followed the advice. This
is the point the Tribunal
should have made.
Fireco’s
approach to Cousins
[87]
The Tribunal deduced from Fireco’s approach to Mr Cousins
that
as late as February 2015 competitors were still under the impression
that Cross Fire was open for collusive business. This
incident, which
was brought to the fore by Cross Fire, not the Commission, simply
cannot bear the weight placed on it by the Tribunal.
First, Fireco
was not alleged by the Commission to be part of the collusive
tendering cartel. The Commission had a discrete case
against Fireco
and KRS, one of market division. So even if Cross Fire had to
communicate its withdrawal to the other cartel members,
Fireco was
not such a member.
[88]
Second, Fireco was not in existence in 2009/2010, when Cross Fire

says it ceased being part of the cartel. Third, the fact that a
firm’s withdrawal from a cartel has become known to other

cartel members is not a guarantee against a rogue approach six years
later from an unspecified employee of a competitor. The employee

might have been a relatively newcomer to the industry, unaware of
Cross Fire’s position, or he might just have been taking
a
chance. Far more important is that Mr Cousins did not respond to the
approach and instead reported it to Ms Stewart. And fourth,
it is
apparent from the context in which Ms Stewart dealt with this
incident in her statement that she was putting it up as her
reaction
to an unusual and isolated event.
Conclusion
on cessation
[89]
In my view, the Tribunal materially misdirected itself on the law
and
on the facts, and in any event reached findings that were clearly
wrong and not reasonably open to it on the evidence. These
findings
are largely matters of inference or assessment of the inherent
probabilities. The Tribunal did not make credibility findings
based
on demeanour.
[90]
My conclusion is that Cross Fire’s last participation in
collusive conduct was in the Nampak Kliprivier project in July 2009,
though it would make no practical difference if one instead
extended
this to the VW Centurion project in August 2009 (bearing in mind that
the subsequent tender in the VW Centurion project
was not shown to
have been collusive).
[91]
Based on the correct legal test for cessation in relation to a
collusive tendering cartel of the kind in which Cross Fire was
alleged to have participated (i.e. that the firm’s withdrawal

from collusion need not necessarily have been communicated to the
other members), Cross Fire’s prohibited conduct came to
an end,
on a balance of probabilities, in July/August 2009. This means that a
complaint as against Cross Fire became time-barred,
subject to
condonation, in July/August 2012. If contrary to this view of the
legal position, one is looking for the date by which
the other
members of the cartel knew of Cross Fire’s anti-collusion
position, the probabilities are that the other members
must have
known of this by June/July 2010, since the absence of collusive
approaches to Cross Fire thereafter is not explicable
on any other
basis. On this alternative, a complaint as against Cross Fire became
time-barred, subject to condonation, in June/July
2013.
[92]
It follows that the Commission initiated the complaint against Cross

Fire 30 months (two years and six months), alternatively 19 months
(one year and seven months) after the three-year period expired.

Unless this non-compliance with section 67(1) is condoned, the
complaint initiation was barred.
The
condonation application
The Pickfords decision
[93]
In
Pickfords
the
Constitutional Court held that section 67(1) was not an absolute
“prescription”
provision but a time-bar provision condonable by the Tribunal in
terms of section 58(1)(c). In reaching
this conclusion, the
Constitutional Court said that the purpose of the Act would be
undermined if the section 67(1) time limit
were not ameliorated
either by a knowledge requirement or by the possibility of
condonation.
[21]
The
Commission abandoned its argument that a knowledge requirement should
be imported into section 67(1).
[22]
The Constitutional Court also had regard to the fact that
a finding
of prohibited conduct was the gateway for civil claims in terms of
section 65.
[23]
[94]
Prescription,
the Court said, was aimed at penalising negligent inaction, not the
inability
to act. Cartels are by their nature secretive, and it would be
inequitable to penalise the Commission, which would invariably
lack
knowledge of the cartel’s surreptitious behaviour, for its
failure to act within the three-year period. This would reward

cartels for their covert activities and not be in the interests of
justice.
[24]
Recognition
that
the
time
limit
was
subject
to
condonation
struck
the
proper
balance
between, on the one hand, the need for general certainty in
commercial affairs and the public interest in having the Commission’s

vast investigatory resources spent only on combating recent
prohibited practices and, on the other hand, the objective of the Act

to deter prohibited practices, including older practices in
appropriate circumstances. If section 67(1) were construed as an
absolute
time limit, it would encourage cartel members to remain
silent in exchange for immunity after three years, which would
completely
defeat the aims of the Act.
[25]
[95]
Section
58(1)(c) gives the Tribunal the power to condone non-compliance with
time limits in the Act “on good cause shown”.
The
Constitutional Court in
Pickfords
said
that condonation was not a mere formality.
There was a
large body of jurisprudence on the concept of “good cause”.
A power of condonation on this basis afforded
courts
a wide
discretion.
The
overriding consideration is the interests of justice, considered on
the facts of each case. Factors germane to the inquiry might
include
the extent and cause of the delay; the effect of the delay on the
administration of justice and other litigants; the reasonableness
of
the explanation for the delay; the issues raised by the matter; and
prospects of success.
[26]
Procedural
history
[96]
The Commission initiated the complaint in March 2015. In March 2017

the Commission referred the complaint to the Tribunal. Cross Fire’s
answering papers were delivered in October 2017. In those
papers
Cross Fire raised the section 67(1) defence. Witness statements were
served in September 2018, and the hearing began in
the Tribunal on 8
October 2018. The Tribunal heard argument in January 2019. The
Tribunal required the parties to file further
submissions on
penalties. Because Belfa by this time had gone into liquidation, a
collateral issue arose as to whether a new entity,
Belfa Solutions
(Pty) Ltd, could be held liable for any penalty imposed on Belfa. The
Tribunal heard argument on that issue in
May 2019.
[97]
The Tribunal only delivered its order and reasons on 15 January
2021.
This delay is not explained in the Tribunal’s reasons. Cross
Fire served a notice of appeal on 5 February 2021 from
which it was
apparent that Cross Fire persisted with its section 67(1) defence.
The appeal was set down for hearing on 1 July 2021.
Cross Fire
delivered its heads of argument on 9 June 2021. A substantial part of
its heads was devoted to the section 67(1) defence.
[98]
The Commission delivered its heads on 17 June 2021. It simultaneously

delivered its section 67(1) condonation application. No condonation
application had been brought in the Tribunal or foreshadowed
before
17 June 2021. This late development resulted in the appeal being
postponed to 22 October 2021 with a timetable for the filing
of
further papers in the condonation application. The appeal could not
proceed on 22 October 2021 due to the unavailability of
a member of
the Court, and it was eventually heard on 10 December 2021.
Does
this Court have jurisdiction in the condonation application?
[99]
Section 58(1)(c) grants a general power of condonation to the
Tribunal.
As interpreted in
Pickfords
, this power of
condonation is not limited to time limits imposed in relation to the
Tribunal’s own proceedings. Complaint
initiation, which is the
process which section 67(1) subjects to a time limit, is not a
process of the Tribunal but of the Commission.
The complaint
initiation may or may not result in a referral to the Tribunal.
[100]
This Court
is a court as contemplated in section 166(e) of the Constitution with
a status
similar to that of a High Court.
[27]
Like a High Court, this Court thus has the inherent power to regulate
its own processes.
[28]
This Court
can, therefore, condone non-
compliance
with time limits such as the period for noting a merger appeal to the
Court
in
terms of section 17(1) of the Act.
[29]
However, this Court’s inherent jurisdiction does
not extend
to condoning non-compliance with section 67(1), because the time
limit in question does not relate to a process of this
Court or even
to a process of the Tribunal. A superior court’s “‘inherent
reservoir of power to regulate its
procedures in the interests of the
proper administration of justice’ … does not extend to
the assumption of jurisdiction
not conferred upon it by statute”.
[30]
[101]
In terms of section 37(1) read with section 61(1) of the Act, the
function of this Court
is to review decisions of the Tribunal and to
consider appeals arising from the Tribunal. In such proceedings, this
Court may,
in terms of section 37(2), “give any judgment or
make any order”, including an order to confirm, amend or set
aside
a decision or order of the Tribunal or remit a matter to the
Tribunal for further hearing on any appropriate terms; and in terms

of section 61(2) the Court may make costs orders according to the
requirements of the law and fairness.
[102]
If the
Commission had brought a condonation application in the Tribunal, and
if
the
Tribunal had either dismissed or granted the application or found it
unnecessary to decide it, this Court could on appeal have
dealt with
the condonation application or remitted it to the Tribunal. However,
there was no such application in the Tribunal.
Section 37(2) cannot
be interpreted to confer on this Court a power to make orders in
respect of matters which were never before
the Tribunal. Appellate
jurisdiction is a jurisdiction to correct, not an original
jurisdiction.
[31]
On appeal,
this Court can make any order which the Tribunal could and should
have made.
The
Tribunal could not have
made an
order on the condonation application, because there was no such
application before it.
[103]
In my view, therefore, this Court cannot decide the condonation
application. And the power
of remittal in section 37(2)(b) cannot be
exercised in relation to a matter which is not properly before this
Court and was never
before the Tribunal.
[104]
Could this
Court postpone its judgment in order to allow the Commission to bring
the condonation application in the Tribunal? No.
The
Tribunal is
functus
officio
.
[32]
Its
jurisdiction in the matter could revive through a remittal in terms
of section 37(2)(b),
but absent
a proper remittal under that section the Tribunal cannot entertain a
condonation application. A power to do so could
not be sourced in the
variation power
contained
in section 66 of the Act.
[105]
This conclusion is not repugnant to the purposes of the Act. The
Constitutional Court
in
Pickfords
declared the true meaning
which the Act has always had. The lawmaker ameliorated the rigidity
of the time limit in section 67(1)
by making provision for
condonation in terms of section 58(1)(c). The lawmaker gave a
specific body, the Tribunal, the power to
condone the time limit,
despite the fact that the time limit did not relate to the Tribunal’s
own processes. If the Commission
foresees a risk of time- barring, it
has, and has always had, the right, in terms of the Act properly
interpreted, to approach
the Tribunal for condonation. The
interpretation of the statutory provisions governing the jurisdiction
of this Court should not
be distorted to accommodate what is likely
to be a temporary phenomenon brought about by a misapprehension on
the part of the Commission
and others as to the proper interpretation
of section 67(1). There is no need, in order to avoid the undesirable
results identified
in
Pickfords
, to recognise this Court as
having an original power of condonation. A timeous application to the
Tribunal is all that is needed.
The
merits of the condonation application
[106]
In case my view of this Court’s jurisdiction is wrong, I shall
explain why in any
event I would not have come to the Commission’s
aid. If this Court has jurisdiction to decide the condonation
application,
I would dismiss it. If this Court does not have
jurisdiction to decide the condonation application but does have the
power to remit
it to the Tribunal, I would not exercise my discretion
in favour of remittal.
[107]
In addition to showing good cause for failing to comply with a time
limit, a party seeking
condonation must bring the application
promptly after learning of the need for it. I deal first with good
cause.
[108]
Section 67(1) does not state that the three years starts to run when
the Commission learns
of the prohibited conduct. It would be a rare
case indeed for the Commission to learn of prohibited conduct but
only to initiate
the complaint more than three years later. Complaint
initiation marks the beginning, not the end, of an investigative
process.
The Commission does not require very much information in
order rationally to initiate a complaint. Accordingly, and while the
date
when the Commission learnt of the prohibited conduct is a
relevant consideration, it cannot be decisive, since otherwise
section
67(1) would in practice become a dead letter. At least one of
the objects of the section is for the Commission’s
investigative
powers not to be expended on stale matters.
[109]
I accept that in this case the Commission did not have knowledge of
the prohibited conduct
until shortly before it initiated the
complaint in March 2015. According to the Commission, it was alerted
to the prohibited conduct
by way of disclosures made by Mr Ford in
February 2015. There is thus a reasonable explanation for the
Commission not having initiated
the complaint within the three-year
window.
[110]
As to the prospects of success, this is easily judged with the
benefit of hindsight. At
the end of the case, after everyone had
conducted the hearing on the basis that section 67(1) was an absolute
time-bar, one can
say, based on Cross Fire’s own admissions,
that the Commission had good prospects of showing prohibited conduct
by Cross
Fire up to mid-2009. If the Commission had brought a
prospective condonation application, before Cross Fire had put all
its cards
on the table, things might have looked rather different.
Nevertheless, I shall assume in the Commission’s favour that it
had good prospects of success against Cross Fire. I also accept that
if a condonation application had been timeously brought, there
would
probably have been no litigation prejudice to Cross Fire, i.e. the
lapse of time would not have materially hampered Cross
Fire’s
ability to ascertain the facts and call witnesses.
[111]
As against these considerations, there is the fact that the extent of
the non- compliance
is very significant, 30 months on my primary
approach, 19 months on the alternative approach. Furthermore, the
conduct which took
place in mid-2009 did not result in actual
competitive harm, since in the one case (Nampak Kliprivier) no tender
ensued while in
the other case (VW Centurion) the tender was not
tainted. One would have to go back to 2008 to find the last collusive
tender in
which Cross Fire participated.
[112]
The Commission contends that the granting of condonation would better
serve the object
of deterring collusion, as it will signal to
cartelists that mere “winding down the clock” will not
guarantee exoneration.
On the facts, however, this is not a case
where it can be said that Cross Fire “kept mum” for three
years in order
to secure immunity from prosecution. There is nothing
to suggest that in the period mid-2009 to March 2014 Ms Stewart was
aware
of section 67(1). Her decision to chart a non- collusive course
for Cross Fire was based on a genuine aversion to collusion. Also

unjustified is the Commission’s insinuation that in the period
March-June 2014 Cross Fire must have received legal advice
to apply
for corporate leniency and declined to do so. The overwhelming
probabilities are that in March 2014 Cross Fire received
the advice
implicit in Ms Morphet’s letter to Mr Ford, namely that Cross
Fire was by that time “in the clear”.
[113]
Refusing condonation in this case would not mean that the cartel
could not be exposed
for purposes of deterrence. There is no
indication that any of the other firms in the cartel raised or were
able to raise the section
67(1) defence. In pursuing the complaint
against these other firms, the Commission was entitled to rely on
evidence of Cross Fire’s
collusion with other firms until
mid-2009. The interests of justice, in my view, do not dictate that
Cross Fire should be penalised
despite its
mero motu
withdrawal
from collusive conduct nearly six years before the complaint was
initiated.
[114]
What I have
said thus far does not stand alone. An applicant for condonation must
bring the application as soon as the need for
it is realised.
[33]
The Commission knew from Cross Fire’s answering papers in the
Tribunal that the company was raising
a section
67(1) defence. In fact, having regard to Cross Fire’s
admissions in its answering papers and witness statements,
section
67(1) was what the whole case was about from Cross Fire’s
perspective.
The
Commission was, of course, entitled to stake
everything
on a finding from the Tribunal that Cross Fire’s prohibited
conduct had not
ceased by
March 2012, but it then lacked a fallback position in the event of a
contrary finding, whether by the Tribunal or by this
Court. If the
Commission wanted to cover the contingency of such a finding, it
should have delivered a condonation application
in
November
2017, when replying to the answering papers, and at any rate before
the Tribunal hearing began in October 2018.
[115]
The Commission contends that it ran the case in the Tribunal on the
basis that the prohibited
conduct had not ceased more than three
years before the complaint initiation, and that because the Tribunal
agreed, “there
was no need for the Tribunal to offer the
Commission the opportunity to apply for condonation”. The
position was said to
be different in this Court, because we might
reverse the Tribunal’s decision on cessation. This argument
lacks merit. Although
the Commission ran the case in the Tribunal on
the basis that the prohibited conduct had not ceased more than three
years before
the complaint initiation, it knew that Cross Fire’s
only defence on the merits was that the conduct had ceased more than
three years before the complaint initiation. The Commission could not
assume that the Tribunal would reject Cross Fire’s defence.
The
position is no different in this Court: the Commission has continued
to contend that the conduct did not cease more than three
years
before the complaint initiation, and the Commission has rightly,
albeit belatedly, appreciated that a rejection by this Court
of Cross
Fire’s defence could not be taken for granted. If a contingent
condonation application was apposite in this Court,
the same was true
in the Tribunal. Furthermore, it was not for the Tribunal to “offer”
the Commission the opportunity
of seeking condonation, any more than
it would be the function of this Court to “offer” such an
opportunity. It was
for the Commission to take the initiative.
[116]
It is not an excuse that the Commission mistakenly believed that
section 67(1) was a non-condonable
time limit. Litigants must
generally live with the consequences of such misapprehensions. If the
Commission failed to follow a
certain procedure because it
misapprehended the law, the same is likely to be true also for Cross
Fire. Competition lawyers were
probably under the same
misapprehension as the Commission. If it had been known in 2014 that
non-compliance with section 67(1)
could be condoned, Ms Morphet would
probably have advised Cross Fire in March 2014 to apply for corporate
leniency. Ms Stewart
has stated in opposition to the condonation
application that Cross Fire would in all likelihood have sought
corporate leniency;
and that, if for any reason it had not been
granted leniency, Cross Fire would have tried to settle with the
Commission. Instead,
it operated under the misapprehension that
section 67(1) was an absolute time-bar. If Cross Fire must live with
the consequences
of its misapprehension, it does not seem unfair that
the Commission should have to do likewise.
[117]
In any event, in April 2018 the Commission, represented by counsel,
argued before the
Tribunal in
Pickfords
that section 58(1)(c)
conferred a power of condonation. It is true that the Tribunal
rejected that argument in its decision of June
2018, but the
Commission did not give up; it pursued its case in this Court and in
the Constitutional Court. If the Commission
wanted, in the present
case, to keep open the possibility of condonation, it should have
followed the same course. Because the
final outcome of such a
condonation application could have affected Cross Fire’s trial
strategy, it might have asked to have
the application, and any
appeals arising therefrom, determined before the Tribunal hearing on
the merits began. It is idle to speculate
how things would have
unfolded procedurally.
[118]
The Commission not only did not bring a condonation application in
the Tribunal. It did
not indicate to the Tribunal and Cross Fire that
it was pursuing that issue in
Pickfords
and that it wished to
reserve the right to bring such an application in the present case if
it was ultimately successful in
Pickfords
. Had the Commission
done so, it may again have affected procedural developments in the
Tribunal’s hearing, and it may have
led to the Tribunal being
asked to defer its decision until
Pickfords
was resolved.
[119]
This did not happen. Instead, the Commission and Cross Fire conducted
the litigation on
the basis that section 67(1) was an absolute
time-bar and that everything turned on when Cross Fire’s
prohibited conduct
ceased. Cross Fire prepared its witness statements
and made decisions on the calling of witnesses on the basis that it
had no cause
to be reticent about its historic involvement in
collusive conduct. The lateness in bringing the condonation
application was calculated
to cause litigation prejudice.
Furthermore, in motivating condonation, the Commission has relied
inter alia
on inferences it asks us to draw from the evidence
of Ms Stewart as to whether and if so when Cross Fire was advised by
lawyers
to seek corporate leniency. Although in the event the
inferences are not justified, it strikes me as unfair to a respondent
for
the Commission first to run a trial to completion and then to use
material derived from the trial to bolster a case for condonation.
[120]
But it does not end there. For whatever reason, the Tribunal took
more than 18 months
to hand down its decision. The Constitutional
Court delivered judgment in
Pickfords
about seven months
before the Tribunal’s decision in the present case was
delivered. The Commission thus had ample time to
notify the Tribunal
and Cross Fire that it wanted to bring a condonation application to
cover the possibility that Cross Fire’s
time-bar defence (its
only defence on the merits) succeeded. But the Commission did not do
so. Nor did it react in February 2021
when Cross Fire served its
notice of appeal. It was only in June 2021, apparently on counsel’s
advice, that the Commission
decided to bring a condonation
application. This was three and half years after the application
should have been delivered. And
this last-minute development delayed
the hearing of the appeal.
[121]
The Commission is not a hapless litigant. In its sphere of operation,
it is a well- resourced
and skilled regulator. Its excuse for only
delivering a condonation application on 17 June 2021 is, in the
circumstances, unacceptable.
It would not be in the interests of
justice for this Court at first instance to have to consider such a
late application, particularly
when the trial was run on a common
understanding at odds with the condonation application.
[122]
In all the circumstances, if this Court has jurisdiction to decide
the application, I
would dismiss it. If this Court does not have
jurisdiction to decide the application, but does have jurisdiction to
remit it to
the Tribunal for decision, I would not exercise my
discretion in favour of such a course. Finality is an important
consideration
when condonation is sought so late in the day. A
remittal would significantly delay finalisation of the matter. The
Tribunal would
need to hear argument and make a decision on
condonation. The losing party might then again appeal to this Court.
If the Tribunal
granted condonation, there would have to be a further
hearing in the Tribunal on penalties. This is so for the reason that
this
Court’s finding as to when the prohibited conduct ceased
would affect two important components of the penalty assessment,

namely (a) the duration of the prohibited conduct and (b) the
affected turnover in the last financial year in which the prohibited

conduct occurred.
[123]
A further consideration is that a remittal to the Tribunal on the
issue of condonation
would substantially reduce the significance of
the proceedings in this Court in which both parties have invested
significant resources.
Hitherto (i.e. until the condonation
application reared its head), our decision on when the prohibited
conduct ceased was critical
to the outcome of the case. If the
Tribunal were belatedly to grant condonation, however, the only
remaining significance of a
finding on the date of cessation would be
in relation to penalty. Cross Fire might not have thought it worth
the candle to appeal
on a question of that kind.
Conclusion
and order
[124]
It follows that the condonation application must be dismissed because
we lack jurisdiction
to entertain it. The appeal succeeds on the
merits. It is unnecessary in the circumstances to consider Cross
Fire’s appeal
against the penalty. There is no reason for costs
not to follow the result.
[126]
The following order is made:
1.
The application for condonation is dismissed.
2.
The appeal succeeds.
3.
Paragraphs 2 and 3 of the Tribunal’s order are set aside and
replaced with the following
order: “The Commission’s
complaint against Cross Fire Management (Pty) Ltd is dismissed.”
4.
The respondent in the appeal must pay the appellant’s costs in
the appeal and in the
condonation application, including the costs of
two counsel.
ROGERS
JA
For the
Appellant:

A Gotz SC and S Quinn instructed by Cliffe Dekker Hofmeyr Inc.
For the
Respondent:

N Maenetje SC and K Monareng instructed by the Competition Commission
of South Africa.
[1]
Competition
Commission of South Africa v Pickfords Removals SA (Pty) Limited
[2020] ZACC 14
;
2021 (3) SA 1
(CC);
2020 (10) BCLR 1204
(CC)
(
Pickfords
).
[2]
Ms Stewart testified that ASIB (Automatic Sprinkler Installation
Bureau) was a private company which carried out third-party

inspections on fire sprinkler installations. Firms could list with
ASIB on an annual basis, and ASIB would then inspect the firm's
work
to determine whether it complied with the ASIB Code. According to
her, most of the firms in the industry belonged to ASIB.
ASIB's
website states that it was established in 1970 by the country's
short-term insurers.
[3]
Competition
Commission v Pioneer Foods (Pty) Ltd
[2010] ZACT 9
;
[2010] 2 CPLR 195
(CAC) at para 86.
[4]
Paramount
Mills (Pty) Ltd v Competition Commission
[2012]
ZACAC 4
; 2012 JDR 1329 (CAC) (
Paramount
Mills
)
at paras 36-45;
Videx
Wire Products (Pty) Ltd v Competition Commission of South Africa
[2014]
ZACAC 1
; 2014 JDR 0479 (CAC) (
Videx
)
at para 78.
[5]
Pickfords
Removals SA (Pty) Ltd v Competition Commission
(CR129Sep15/PIL162Sep17)
[2018] ZACT 109
at paras 71-78.
[6]
Thorne
v Union Government
1929
TPD 156
at 159;
Mgobozi
v Administrator Transvaal
1963
(3) SA 757
(D) at 758D- 759F;
Groenewald
v Minister van Justisie
1972
(3) SA 596
(O) at 600A-D;
Administrateur
van die Provinsie, Kaap die Goeie Hoop v Burger
[1993] ZASCA 44
;
1993
(3) SA 414
(A) at 422D-E;
De
Klerk v Die Groter Kroonstad Plaaslike Oorgangsraad
[2000]
4 All SA 357
(SCA) at para 12.
[7]
Videx
(note
4 above) at para 80.
[8]
Power
Construction (West Cape) (Pty) Ltd v Competition Commission of South
Africa
(145/CAC/Sep16)
[2017] ZACAC 6
at para 45.
[9]
Paramount
Mills
(note
4 above) at para 44.
[10]
Note 5 above.
[11]
MacNeil
Agencies (Pty) Ltd v Competition Commission
(121/CACJul12)
[2013] ZACAC 3.
[12]
Omnico
(Pty) Limited v The Competition Commission
142/CAC/JUNE16.
[13]
Adriatica
di Navigazione SpA v Commission of the European Communities.
(Competition)
[2003]
EUECJ T- 61/99 at paras 135-40;
Westfalen
Gassen Nederland v Commission
[2006]
EUECJ T-303/02
at paras 86-7, 95-6, 101-3 and 122-130;
Archer
Daniels Midland v Commission
[2009]
4 CMLR 20
,
[2009] EUECJ C-510/06
at paras 119-20.
[14]
Toshiba
Corporation v Commission
[2016]
EUECJ C-373/14
, ECLI:EU:C:2016:26, EU:C:2016:26.
[15]
The expression “public distancing” in this context does
not mean that the distancing must be made publicly to the
world at
large or to the authorities. The requirement is one of external
manifestation to the other cartel members.
[16]
Bernert
v Absa Bank Ltd
[2010]
ZACC 28
;
2011 (3) SA 92
(CC);
2011 (4) BCLR 329
(CC) at para 106;
Makate
v Vodacom (Pty) Ltd
[2016]
ZACC 13
;
2016 (6) BCLR 709
(CC);
2016 (4) SA 121
(CC) at para 40;
Competition
Commission of South Africa v Mediclinic Southern Africa (Pty) Ltd
[2021]
ZACC 35
(
Mediclinic
)
at paras 45-7.
[17]
Union
Spinning Mills (Pty) Ltd v Paltex Dye House (Pty) Ltd
2002
(4) SA 408
(SCA) at para 24;
Minister
of Safety and Security v Craig
[2009]
ZASCA 97
;
2011 (1) SACR 469
(SCA);
[2010] 1 All SA 126
(SCA) at para
58.
[18]
Imerys
South Africa (Pty) Ltd v The Competition Commission
[2017]
ZACAC 1
; 2017 JDR 0531 (CAC) at para 43, quoting with approval a
passage from
Schumann
Sasol (SA) (Pty) Ltd v Price's Daelite (Pty) Ltd
[2002]
ZACAC 2; [2001-2002] CPLR 84 (CAC).
[19]
Mediclinic
(note
16 above) at para 44.
[20]
Mediclinic
(note
16 above) at paras 37, 48-52, 59 and 70.
[21]
Pickfords
(note
1 above) at para 39.
[22]
Id at para 32.
[23]
Id at para 40.
[24]
Id at para 46.
[25]
Id at para 47.
[26]
Id at para 54.
[27]
See section 36(1) of the Act.
[28]
Competition
Commission of South Africa v Standard Bank of South Africa Limited
[2020]
ZACC 2
;
2020 (4) BCLR 429
(CC) at para 117.
[29]
Astral
Foods Limited v Competition Commission
[2004]
ZACAC 3
;
[2004] 1 CPLR 1
(CAC) at para 29.
[30]
Moch v
Nedtravel (Pty) Ltd t/a American Express Travel Service
1996
(3) SA 1
(A) at 7E-F.
[31]
Cf
S v
Cassidy
1978
(1) SA 687
(A) which might be regarded as an analogous case. The
appellant had applied to the trial court for leave to appeal against
sentence,
which the trial court refused. On petition, the Appellate
Division, having doubts about the correctness of the conviction,
granted
the appellant leave to appeal against both sentence and
conviction. However, in its subsequent judgment in the appeal, the
Appellate
Division held that it did not have jurisdiction to
entertain the appeal against conviction in the absence of the
appellant having
made an application to the trial court for leave to
appeal against conviction: 690F-691B. To similar effect, see
National
Union of Metalworkers of South Africa v Jumbo Products CC
[1996] ZASCA 87
;
1996
(4) SA 735
(A) at 740B-D and
S
v Fourie
[2001]
4 All SA 365
(A) at para 13. The analogy is not, however, complete,
because in matters of the foregoing kind the trial court is not, in
relation
to leave to appeal,
functus
officio
:
it is entitled, if condonation is sought and granted, to consider a
late application for leave to appeal. This means that the
appellate
court could in principle postpone the appeal in order to allow the
appellant to seek condonation and leave from the
trial court. In the
present matter, by contrast, and as shall presently appear, the
Tribunal is
functus
officio
and
could thus not belatedly hear a section 67(1) condonation
application.
[32]
Competition
Commission v Pioneer Foods (Pty) Ltd
(91/CAC/Feb10)
[2010] ZACAC 2
at para 9.
[33]
National
Police Services Union v Minister of Safety and Security
[2000]
ZACC 15
;
2000 (4) SA 1110
;
2001 (8) BCLR 775
(CC) at para 4;
Rennie
v Kamby Farms (Pty Ltd
1989
(2) SA 124
(A) at 129G-H;
Beira
v Raphaely Weiner
[1997] ZASCA 59
;
1997
(4) SA 332
(SCA) at 337D;