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[2022] ZACAC 7
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Goodyear South Africa (Pty) Ltd v Competition Commission and Others (198/CAC/Jan22) [2022] ZACAC 7; [2022] 2 CPLR 24 (CAC) (19 July 2022)
REPUBLIC
OF SOUTH AFRICA
IN
THE COMPETITION APPEAL COURT OF SOUTH AFRICA
CAC
CASE NO: 198/CAC/Jan22
CT
CASE NO: CR053Aug10
(1) REPORTABLE: YES
(2) OF INTEREST TO
OTHER JUDGES: YES
(3) REVISED. NO
SIGNATURE DATE: 19
JULY 2022
In
the matter between:
GOODYEAR
SOUTH AFRICA (PTY)
LTD Appellant
and
COMPETITION
COMMISSION 1st
Respondent
APOLLO
TYRES SOUTH AFRICA (PTY) LTD 2nd
Respondent
CONTINENTAL
TYRES (PTY) LTD 3rd
Respondent
BRIDGESTONE
SOUTH AFRICA (PTY) LTD 4th
Respondent
SOUTH
AFRICAN TYRE MANUFACTURERS
CONFERENCE
(PTY)
LTD 5th
Respondent
JUDGMENT
MANOIM
JA (Potterill AJA and Kubushi AJA concurring)
Introduction
[1]
This
is an appeal against a directive given by the presiding member at a
pre- hearing conference of the Competition Tribunal (Tribunal)
relating to the admission of an expert witness statement.
[1]
[2]
The
appellant, Goodyear South African (Pty) Ltd (Goodyear), is one
amongst five respondents in an ongoing case in which several
tyre
manufacturers are alleged to have contravened section 4(1)(b)(i) of
the Competition Act, no 89 of 1998 (the Act). The appellant
is
appealing the directive because the member of the Tribunal had ruled
that it could not have its expert witness statement admitted.
The
case had been referred to the Tribunal by the Competition Commission
(Commission).
[2]
The Commission
is the first respondent in the appeal which it opposes. The other
respondents have not opposed the appeal.
[3]
Section 4(1)(b)(i) makes an agreement between competitors to
fix prices a contravention of the Act.
[4]
The essence of the case is that the respondent firms were
competitors, who from 1999 to 2007, were involved in a cartel to
increase
the list prices of tyres sold to tyre dealers in South
Africa, as well as to time when increases would be implemented.
Goodyear
denies the allegations and contends that the price increases
that occurred were made by it unilaterally and in response to
increases
in raw material prices.
[5]
What is immediately apparent from the time period in which the
contravention is alleged to have taken
place is that this complaint
has taken years to get to trial. In October 2006 the Commission first
took up the case when it received
a complaint from a customer called
Parsons Transport which owns a fleet of trucks. Since then, the
Commission has added to the
complaint and acquired further evidence
through raids on some of the respondents’ premises. During this
period there have
been
several
interlocutory skirmishes which have taken the matter to this court
and even to the Constitutional Court. The fortunes of
either side
have fluctuated in this litigation, and each blames the other for the
length of time it has taken to get the complaint
to trial. It is not
necessary for me to apportion blame. The only relevance of the
effluxion of time at the present moment is Goodyear’s
explanation for why it needs to call an expert witness to supplement
the testimony of its factual witnesses and the Commission’s
concern about further delay.
The
pre-hearing
[6]
This background in the matter leads me to describe what
happened at the pre- hearing. The practice of the Competition
Tribunal is
to regulate its forthcoming hearings in what are termed
pre-hearing conferences, presided over by a single member of the
panel
who will hear the matter subsequently. The purpose of these
conferences is to attend to the necessary procedural housekeeping to
ensure that the trial before the full panel comprising three members,
can run smoothly.
[7]
On
the 14 December 2021 the presiding member held a pre-hearing to make
final preparations for the hearing of this matter. Present
were the
legal representatives of the Competition Commission and three of the
respondents who were still opposing the matter.
[3]
[8]
Goodyear’s counsel informed the presiding member that it
intended to call an economist as one of its witnesses. The
pre-hearing
took place on a Tuesday. On the previous Friday
afternoon, Goodyear’s attorneys had filed its economist’s
report and
indicated that it intended to call the economist because,
as was put by its counsel Mr Gotz at the pre-hearing, it would be
difficult
for its factual witnesses to deal with matters they had not
thought about for fifteen years. The expert he explained, was briefed
to deal with the extent of the difference between the net price and
the list price. Also, to deal with trends in raw material price
increases.
[9]
The Commission objected to the calling of the witness. Its reasons
were both procedural and substantive.
The hearing was due to commence
on 1 February 2022 and the Commission was concerned that this might
delay the case. Moreover, the
Commission had to consider whether it
needed to brief its own expert in
response
- leading to further delay. The Commission was highly critical of the
manner in which Goodyear had gone about bringing
the application.
[10]
According
to the Commission, “
Goodyear
had not asked the Tribunal for
provision
to be made in the timetable for the filing of an expert witness
statement, neither during the previous pre-hearings when
the filing
of witness statements was discussed (as early as December 2016 and
again in May 2017), nor when the timetable was agreed
for the filing
of supplementary witness statements and the holding of the hearing
(in March 2021)
.”
[4]
[11]
The Commission also queried if this was evidence that was
properly the domain of an expert, given that it appeared from its
first
reading of the report, to be factual, not opinion evidence.
[12]
As is evident from the transcript of the pre-hearing, there
was much back and forth argument between the respective legal
representatives
about this issue.
[13]
At the end of the hearing, as is Tribunal practice, a
directive was sent to all the parties indicating what rulings had
been made
by the member at the pre-hearing. The directive stated the
following on the Goodyear application:
[14]
“
The
economic report that was filed by Goodyear on 10 December 2021 will
not be admitted as an expert witness statement for the purpose
of
these proceedings.”
[5]
[15]
The appeal is against this part of the directive. Goodyear
goes on to argue that the direction is incorrect because:
a.
It is not competent for a single member (as opposed to the full
panel)
to give such a ruling; and
b.
Even if it is, the ruling infringes on Goodyear’s fair hearing
rights
because it denies it the ability to defend itself in the
proceedings.
Issues
to be decided
[16]
The key issue in the appeal is whether the directive is of a
final nature.
[17]
The language of this ruling suggests it was made as a final
ruling. However, in the course of the pre-hearing the presiding
member
appeared to suggest that she had not taken a final view of the
matter and any direction was of an interim nature.
[18]
For
instance, after initially stating that the witness statement would
not be permitted, she went on to say that “.
..
if the Tribunal feels at a later stage we cannot proceed without the
assistance of an expert, well then we will at least come
back to this
point. But for now, we are no- I am not allowing it.”
[6]
[19]
Later
she suggested that the matter would be left to the Commission and the
legal team
for the other respondent to look at and come back to her if “…
they
wanted to re-open the debate
”.
[7]
[20]
The Commission relies on these passages in the transcript to
argue that the directive was not final in nature. If it is not final
in nature it argues, it is not appealable as it is not a final
decision of the Tribunal. Only final orders are appealable to this
Court in terms of section 37 of the Act, as I will go on to discuss.
Second, even it is appealable, it was competent for a single
member
to have made such a decision and it was correctly made.
[21]
But Goodyear argues that we must only have regard to the
written directive and that from its language it is made clear that
the
direction is final in nature.
What
has transpired since the pre-hearing
[22]
Before analysing the respective arguments, some background is
necessary to explain the context in which the decision was made.
[23]
The
pre-hearing was held on 14 December 2022 and the notice of appeal was
filed on 12 January 2022.
[8]
The
hearings however commenced on 1 February and the matter is now part
heard and will recommence in September 2022. In the meantime,
since
the appeal was filed, the Tribunal panel has heard evidence from all
the Commission’s witnesses and some of the respondents,
witnesses including one factual witness who testified on behalf of
Goodyear.
[24]
This means there is still an opportunity for Goodyear’s
expert to testify if this is permitted but it may also mean that
Goodyear’s
assumptions on why it needed to lead this evidence
may have changed.
The
directive
[25]
No reasons are given after pre-hearings to explain why
directions have been made. Some explanation may be given by the
member during
the course of the pre-hearing, but this is not a
prerequisite
[26]
Since
the nature of a pre-hearing is informal there is always a certain
amount of give and take between both parties and the presiding
member
about issues. For this reason, I do not consider that the remarks
made in the course of discussion by the member are anything
other
than attempts to resolve or clarify issues. What matters ultimately
is how the direction was formulated when it was issued
to the
parties. As in this case, the
directive
is typically made in writing after the pre- hearing, and no doubt
also after reflection by the member over what had been
argued.
[9]
[27]
This means that in deciding whether the direction was of a
final or interim nature, I must have regard to the written direction
and not what may have been suggested by the member in the course of
the pre-hearing.
[28]
I repeat again for convenience the terms of the direction.
[29]
“
The economic report that was filed by Goodyear
on 10 December 2021 will not be admitted as an expert witness
statement for the purpose
of these proceedings.”
[30]
It is clear from this language that the decision on the
expert report was final in its effect. This has a bearing on two
issues
that are germane to this appeal. (i) Whether the direction is
appealable in terms of section 37 of the Act. (ii) Whether it is a
decision that can be made by a single member.
[31]
Since the answer to both these questions is determined by
the same exercise in classification they can be considered together.
The
legislative framework
[32]
This court’s appellate jurisdiction derives from
section 37(1) of the Act.
[33]
That section states:
37 (1) The Competition
Appeal Court may-
(a)
review any decision of the Competition Tribunal; or
(b)
consider an appeal arising from the Competition Tribunal in
respect of-
(i)
any
of its final decisions
other than a consent order made in
terms of section 63; or any of its interim or interlocutory decisions
that may, in terms of
this Act, be taken on appeal.
(My
emphasis).
[34]
The Commission argues that the directive is not a “
final
decision
” of the Tribunal and hence is not appealable in
terms of 37(1)(b)(i) nor is it a decision contemplated in
37(1)(b)(ii) because
there is nothing in the Act that permits a
directive arising from a pre-hearing to be taken on appeal.
[35]
In contrast to the approach of the Commission, Goodyear
argues that the decision is a final one. This has two consequences it
argues.
First, the decision is therefore appealable and secondly, it
is not a decision that could have been made by a single member at a
pre-hearing. I turn now to this latter argument.
[36]
Ordinarily
decisions of the Tribunal are made by a panel comprising three
members.
[10]
However, the Act
also permits certain decisions to be made by a single member. It is
not in dispute that a pre-hearing conference
is a hearing that can
competently serve before a single member. Indeed, this is the manner
in which the Tribunal typically functions,
and its Rules explicitly
provide for this.
[11]
The
question rather is whether a decision of this nature is one that
could be made by a single member if it had a final effect.
[37]
The relevant provision in the Act which govern what
matters can be determined by a single member is section 31(5).
31(5) The Chairperson
of the Competition Tribunal, or another member of the Tribunal
assigned by the Chairperson, sitting alone,
may make an order of an
interlocutory nature
that, in the opinion of the Chairperson,
does not warrant being heard by a panel comprised of three members,
including
-
(a)
extending or reducing a prescribed period in terms of this
Act;
(b)
condoning late performance of an act that is subject to a
prescribed period in terms of this Act;
(c)
granting access to information contemplated in sections 44 to
45A and any conditions that must be attached to the access order; and
(d)
compelling discovery of documents.
(My emphasis).
[38]
Goodyear
argues that a direction to exclude certain evidence is not one of the
decisions
expressly
listed
in
subsection
(5).
This
observation
is
correct
but
following an amendment to the Act in 2018 which came into effect in
2019, the list of matters that can be decided by a single
member was
expanded by the additions of sub-paragraphs (b) and (c) and a
rephrasing of the introductory text that precedes the
list. In terms
of the amendment the word “
including
”
was inserted just prior to the list of enumerated decisions, making
it clear that this is not a closed list.
[12]
However the
limiting phrase of an “
interlocutory
nature”
was
also inserted in the text at the same time. The fact that an issue is
not specifically listed does not preclude the Chairperson
from
directing a single member to hear it, if it does not warrant being
heard by a panel. However, despite the fact that the list
of orders
that might be given by a single member is now unlimited it has been
qualitatively limited. The order must be of an interlocutory
nature.
[39]
In oral argument Goodyear conceded the point that the list
is not exhaustive but argued that there was no direction given by the
Chairperson that the decision did not warrant being heard by a panel
of three members. To this the Commission argued in response
that when
the Chairperson appointed the member to preside at the pre-hearing
this sufficed.
[40]
I do not consider we need to go into whether the
Chairperson needed to have given a specific direction beyond
appointing the member
to preside at the pre- hearing – the
appointment is not a fact not in dispute.
[41]
Section 31(5) makes it clear that a single member may make
an order provided it is of an “
interlocutory nature
”.
If the direction has a final effect, then it is not an interlocutory
order and could not be made by a single member.
When
is an order a final order?
[42]
Courts are
reluctant to allow piecemeal appeals. One need look no further than
the long litigious history of this matter as testimony
to this
concern. Hence orders not deemed final were not considered
appealable. It is not always clear when an order is final. For
a
number of years, the leading authority on this point was
Zweni
v Minister of Law and Order
[13]
in
which the then Appellate Division laid down the following criteria
for determining the issue. (i) the decision must be final
in effect
and not open to alteration by the court of first instance;(ii) it
must be definitive of
the
rights of the parties; and lastly, (iii) it must have the effect of
disposing of at least a substantial portion of the relief
claimed in
the main proceedings.
[43]
In
Allens
Meshco
[14]
this court
followed the approach in
Zweni
and
added its own observation that:
“
The fact that a
decision may cause a party inconvenience or place him at a
disadvantage in the litigation which nothing but an appeal
can
correct is not taken into account in determining appealability.
…”.
[15]
[44]
But
Zweni
is
no longer the final authority on this issue. More recently in
Metlika
Trading Ltd and Others v Commissioner, South African Revenue
Service
[16]
the court
held that where an interim order is intended to have an immediate
effect and will not be reconsidered on the same facts
in the main
proceedings, it will generally be final in effect.
[45]
The
approach
in
Metlika
was
later
cited
with
approval
by
the
Constitutional
Court in
International
Trade Administration Commission v SCAW South Africa (Pty) Ltd
[17]
where the
Court held, after considering several decisions of the Supreme Court
of Appeal and prior decisions of the Court that the:
“
Zweni
requirements on when a decision may be appealed against were never
without qualification. For instance, it has been correctly
held that
in determining whether an interim order may be appealed against
regard must be had to the effect of the order rather
than its mere
appellation or form.”
[18]
[46]
What courts now decide as definitive of appealability is not
just finality but what is in the interests of justice. As the Court
in
Scaw
explained:
“
The test of
irreparable harm must take its place alongside other important and
relevant considerations that speak to what is in
the interests of
justice, such as the kind and importance of the constitutional issue
raised; whether there are prospects of success;
whether the decision,
although interlocutory, has a final effect; and whether irreparable
harm will result if leave to appeal is
not granted. It bears
repetition that what is in the interests of justice will depend on a
careful evaluation of all the relevant
considerations in a particular
case.”
[19]
In the
present matter the directive is stated in final terms.
Contrary to
what the presiding member had said at some stages during the
pre-hearing, there is no indication that the directive
would be
reconsidered at a later stage of the proceedings if the application
to lead the evidence was renewed.
[47]
If the contentions of Goodyear are correct, then exclusion
of the evidence might lead to irreparable harm if Goodyear cannot
defend
itself adequately without this evidence on the unusual facts
of this case. (I pause to state I take no view on the correctness of
this contention by Goodyear as this court has not only not had sight
of the expert report, but we also have not had access to any
of the
testimony in the case thus far. Both are relevant considerations
which we cannot pronounce upon.)
[48]
Since there is no indication that the order would be
reconsidered later in the proceedings it is in the ‘
Metlika
sense’ final. The decision is therefore appealable in terms
of section 37(1)(b)(i) of the Act. It is also for the same reason
because it is final in effect, not an interlocutory decision and thus
could not be made by a single member sitting alone in terms
of
section 31(5) of the Act.
Nature
of relief
[49]
In
the Notice of Appeal, the order sought is that paragraph 6 of the
directive be set aside. In argument Mr Gotz for Goodyear suggested
that we could follow the approach taken by the SCA in
Ansac
and
give an order to replace that of the member. I do not consider that
is necessary. Our approach to the section has been explained
in these
reasons and it does not require us to go any further to provide a
corrected order.
[20]
Costs
[50]
Although Goodyear has succeeded in its appeal the Commission
was entitled to oppose the appeal as it raised important issues for
the interpretation of sections of the Act. Moreover, had Goodyear
acted with greater urgency in bringing a timeous application
before
the Tribunal to lead the evidence this issue may have been fully
ventilated and not necessitated an appeal at this stage.
For this
reason, it is only fair that each party is liable for its own costs.
ORDER
1.
Paragraph 6 of the directive issued on 15 December 2021 is set aside.
2.
Each party is liable for its own costs.
Date
of hearing: 6 May 2022
Date
of reasons: 19 July 2022
N.
Manoim JA
S.
Potterill AJA
M.
Kubushi AJA
APPEARANCES
For
the Appellant:
Adv
Anthony Gotz SC, Adv Nicole Lewis and
Adv Luyanda Nyangiwe
Instructed
by:
Judin
Combrinck Incorporated
For
the First Respondent:
Adv
Daniel Berger SC and Adv Anisa Kessery
Instructed
by:
Competition
Commission
[1]
The Tribunal is constituted in terms of
section 26
of the
Competition Act, 89 of 1998
.
[2]
The Commission is established in terms of section 19 of the Act.
[3]
The fourth respondent Bridgestone has applied for and was granted
conditional immunity. Paragraph 23 of the Complaint referral,
record
page 88.
[4]
See Commission heads of argument paragraph 6
[5]
Record page 2 paragraph 6.
[6]
Transcript of pre-hearing , record page 51.
[7]
Ibid page, 53.
[8]
It is dated 12 January 2021, but this must be an error.
[9]
The direction is dated on 15 December which means it was made one
day after the pre-hearing.
[10]
Section 31(1).
[11]
See Tribunal rules 21 and 22.
[12]
It had been a closed list previously prior to the amendment.
[13]
1993 (1) SA 523
(A) at 532I – 533A.
[14]
Allens Meshco (Pty) Ltd and others v Competition Commission and
others [2015] 1 CPLR 27 (CAC).
[15]
Ibid paragraph 23.
[16]
[2004] 4 All SA 410)
in para 24.
[17]
2012 (4) SA 618
(CC)
[18]
Paragraph 53.
[19]
Ibid paragraph 55.
[20]
American Natural Soda Ash Corporation and Another v Competition
Commission of South Africa and others 2005(3) SA 1 (SCA) see
paragraph 62 and the formulation of the order at paragraph 3.