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[2018] ZACAC 3
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Standard Bank of South Africa v Competition Commission of South Africa (165/CACMar 18) [2018] ZACAC 3; [2018] 1 CPLR 121 (CAC) (22 June 2018)
THE
COMPETITION APPEAL COURT OF SOUTH AFRICA
Case
No: 165/CAC/Mar 18
In
the matter between:
THE
STANDARD BANK OF SOUTH AFRICA LIMITED
Applicant
and
THE
COMPETITION COMMISSION OF SOUTH AFRICA
Respondent
Heard
:
14 June 2018
Delivered:
22
June 2018
JUDGMENT
BOQWANA
JA
[1]
On
20 March 2018 the applicant (‘Standard Bank’) lodged an
application to review and set aside the decision of the respondent
(‘the Commission’) to refer it to the Competition
Tribunal (‘the Tribunal’), wherein the Commission alleged
that Standard Bank, together with other banks, engaged in cartel
conduct prohibited by section 4 (1) (b) (i) and (ii) of the
Competition
Act 89 of 1998 (‘the Act’). Standard
Bank contends that that decision is invalid and unlawful in terms of
section
62 (2) (b) of the Act. The Notice of Motion called for
the Commission to file a complete record of the decision to refer
Standard Bank to the Tribunal (‘the Record’) within 15
days of receipt of the Notice of Motion.
[2]
The
Commission refused to file the Record. It lodged a
counter-application, contending that the Competition Appeal Court
(‘CAC’) does not have jurisdiction to hear the review
application; alternatively that the review application be stayed
pending the outcome of the appeal, to be heard by the CAC, in
relation to the Commission’s obligation to produce the record
of its decision in response to a request for access to the record,
made in terms of Rule 15 (1) of the Commission Rules, and the
determination by the Tribunal of an exception filed by Standard Bank
in the pending complaint referral proceedings.
[3]
On
20 April 2018 Standard Bank wrote to the Judge President, requesting
directions in terms of Rule 34 (2) (a) of the
Rules
for the Conduct of Proceedings in the Competition Appeal Court
(‘the
CAC Rules’), to direct the Commission to produce the Record in
order to enable the review to proceed, to specify
the date by which
the Record must be produced, and to make such directions as it may
deem fit.
[4]
Rule
34 (1) and (2) (a) provides that:
“
(1) The Judge
President may give any directions that are considered just and
expedient in matters of practice and procedure.
(2) If, in the
course of proceedings, a person is uncertain as to the practice and
procedure to be followed, the presiding judge
–
(a)
may give directions on how to proceed;...”
[5]
The
Judge President designated me to hear the matter as a single judge.
The matter was set down on 29 May 2018. It was
postponed
at the instance of the Commission and argued on 14 June 2018.
Parties filed written submissions to assist the Court
in
determining this matter.
[6]
Section
38 (2A) of the Act lists a number of instances where the Judge
President, or a judge of the CAC, designated by the Judge
President,
may sit alone, as follows:
“
(a) appeal
against a decision of an interlocutory nature, as prescribed by the
rules of the Competition Appeal Court;
(b) application
concerning the determination or use of confidential information;
(c) application for
leave to appeal, as prescribed by the rules of the Competition Appeal
Court;
(d) application to
suspend the operation and execution of an order that is the subject
of a review or appeal; or
(e)
application
for procedural directions
.”
(Own
emphasis)
[7]
The
Commission contends that a single judge has no power to direct the
Commission to produce the Record, because section 38 (2A)
restricts
his or her powers to matters of “
practise
and procedure
”
to
be followed, and only “
procedural
directions
”
may
be issued in terms of that section. The current matter is not a
procedural issue.
[8]
According
to it, the issue of the Record is disputed on substantive grounds.
Directions, as contemplated in section 38 (2A)
(e), may only be
competently granted if the CAC has the jurisdiction to hear the
matter in the first place. It accordingly
argues that that
jurisdictional point must be determined first before the issue of
whether the Record should be dispatched can
arise. This, it
contends, can only be done by a full court.
[9]
In
Standard Bank’s view section 38 (2A) (e) perfectly allows a
single judge to direct the Commission to file the Record, as
this is
a procedural matter prescribed in Rule 53 of the Uniform Rules of
Court (“High Court Rules”). Rule 53
(1) (b) calls
for the despatching “
within
fifteen days after receipt of the notice of motion, to the registrar
the record of such proceedings sought to be corrected
or set aside
…”
[10]
It
is not disputed that Rule 53 finds application, because of the
provision in Rule 34 (2) (b) of the CAC Rules which states that:
“…
if
a question arises as to the practice or procedure to be followed in
cases not provided for by these Rules or by a direction of
the Judge
President in terms of subrule (1), the judge may have regard to the
High Court Rules or Rules of the Supreme Court of
Appeal
.”
[11]
The
first question to be answered is whether the dispatching of the
Record is a procedural issue, with regard to which I would be
empowered to give directions. It has been held to be so by the
courts, for example, in the seminal decision of
Jockey
Club of South Africa v Forbes
[1992] ZASCA 237
;
1993
(1) SA 649
(A) at 660 D-E, where the Court held, amongst others,
“[
m
]
anifestly
the procedure created by the Rule
[53]
is
to his
[private
citizen’s]
advantage
in that it obviates the delay and expense of an application to amend
and provides him with access to the record.”
In
Safcor
Forwarding (Johannesburg) (Pty) Ltd v National Transport Commission
1982
(3) SA 654
at 669B, the Court said: “
With
the coming into operation of Rule 53 of the Uniform Rules of Court a
standard procedure
for
all types of review, save where any law otherwise provided, was laid
down
.”
Lastly, in
Afrisun
Mpumalanga (Pty) Ltd v Kunene NO and Others
1999
(2) SA 599
(T), at 629 A, referring to the furnishing of the record
in review proceedings in terms of Rule 53, the Court stated that
“[
t
]
he
applicant should not be deprived of the benefit of this procedural
right unless there is clear justification therefor..
.”.
These findings were repeated in numerous judgments, including in
Helen
Suzman Foundation v Judicial Service Commission
2015
(2) SA 498
(WCC) (‘
Helen
Suzman WCC’
),
at para 14. See also
Erasmus
,
Superior Court Practise
,
D1-707.
[12]
The
Court in
General
Council of the Bar of South Africa v Jiba and Others
2017
(2) SA 122
(GP), at paras 111 to 112, enhanced the point further by
expressing the purpose of the Rule requiring the record in some
length,
as follows:
“[111] …The objective of rule 53 is obvious. The
time frames are to ensure that review proceedings are not
unnecessarily delayed. Secondly, despatching to the registrar
the record of the proceedings sought to be corrected or set
aside,
together with such reasons as the decision-maker is by law required
to give, and notifying the applicant that this has been
done and
making such record available to the applicant, is to ensure that a
party aggrieved by the decision is properly informed
as to the route
to follow.
The rule serves as a tool to ensure that any
challenge to the proceedings sought to be reviewed is well considered
and properly
pleaded
. For this purpose, the applicant or
aggrieved party is under subrule (4) given an opportunity, by
delivery of a notice and
accompanying affidavit, to amend, add to or
vary the terms of his notice of motion and supplement the supporting
affidavit if need
be. Similarly, the decision-maker is in terms
of subrule (5) (b) given the opportunity to deliver any affidavit he
or she
may desire in answer to allegations made therein and any
further reasons as contemplated in subrule (1) (b).
[112]
Therefore compliance with rule 53 regarding time frames and
providing a complete record is not just a procedural process, but is
a substantive requirement which serves to ensure that the substance
of the decision is properly put to the fore at an early stage.
Any attempt to frustrate this should be met with displeasure by
our courts.”
(Own
emphasis)
[13]
The
matters above recognised compliance with Rule 53 as being a
procedural process. The substantive requirement mentioned
in
Jiba
supra,
at para 112, is simply pointed to the importance of placing the
content of the record to the fore at an early stage of the
proceedings. It is a step imposed by the Rules, with
timeframes, and is important for the party
aggrieved
by the decision of the decision maker, so as to ensure that such a
party “
is
properly informed as to the route to follow
”
.
The
Court also referred to this Rule “
as
a tool to ensure that any challenge to the proceedings sought to be
reviewed is well considered and properly pleaded
.”
In
Turnbull-Jackson
v Hibiscus Coast Municipalit
y
and
Others
2014
(6) SA 592
(CC), at para 37, the Rule 53 record was referred to as
undeniably “
an
invaluable tool in the review process
”
.
[14]
Many
other decisions, before and after those mentioned above, emphasised
the duty of the decision maker in filing the record in
review
proceedings, the most recent being the sequel decision of
Helen
Suzman Foundation v Judicial Service Commission
(CCT289/16)
[2018] ZACC 8
(24 April 2018) (‘
Helen
Suzman CC’
),
where the Constitutional Court re-iterated t
he
already established purpose of Rule
53
as to “
facilitate
and regulate applications for review
.
The
requirement in rule 53 (1) (b) that the decision-maker file the
record of decision is primarily intended to operate in favour
of an
applicant in review proceedings. It helps ensure that review
proceedings are not launched in the dark. The record
enables
the applicant and the court fully and properly to assess the
lawfulness of the decision-making process. It allows
an
applicant to interrogate the decision and, if necessary, to amend its
notice of motion and supplement its grounds for review
.”
(Footnotes omitted)
[15]
As
was held in another oft quoted case,
Democratic
Alliance and Others v Acting National Director of Public Prosecutions
and Others
2012
(3) SA 486
(SCA), at para 37:
“…
Without
the record a court cannot perform its constitutionally entrenched
review function, with the result that a litigant’s
right in
terms of s 34 of the Constitution to have a justiciable dispute
decided in a fair public hearing before a court with all
the issues
being ventilated, would be infringed…”
[16]
These
judgments clearly point out that the filing of the Record is a
procedural step which is there to facilitate the review, and
to
ensure that relevant parties are informed of the substance informing
the decision, early on in the process, so as to decide
on the course
to take. With that entire backdrop, I have no reason but to
find that the dispatching of the Record is an issue
within the
contemplation of section 38 (2A) (e) of the Act.
[17]
The
Courts in
Afrisun
and Helen Suzman
WCC
supra posited that an applicant can only be deprived of the benefit
of this
procedural
right
if
there is clear justification therefor. The question is whether
such justification exists in this case.
[18]
Referring
to the process whereby Standard Bank had requested the Commission’s
record of investigation, in terms of Rule 15
(1) of the Commission
Rules (‘the Rule 15 (1) process’), the Commission submits
that directions cannot be granted in
favour of Standard Bank because
it has a right to insist on a respondent to plead before it is
entitled to a record. This
point it also asserted in the matter
of
Standard
Bank of South Africa Limited v The Competition Commission
(CASE
no: 160/CAC/Nov 2017), i.e. the Rule 15 (1) appeal that went to the
CAC. In that matter, however, it invited the CAC
to introduce a
qualification into Rule 15, by incorporating section 7 of the
Promotion of Access to Information Act 2 of 2000 (‘PAIA’)
in Commission Rule 14 (1) (e), by holding that proceedings before the
Tribunal were equivalent to civil proceedings as contemplated
by
section 7 of PAIA, and therefore that that section qualified the
record as “restricted information”. The Court
rejected this approach. In its judgment delivered on 01 June
2018, it found, at para 35, that the earlier precedent set by
it in
Group
Five Ltd v Competition Commission
(139/CAC/Feb16)
[2016] ZACAC 1
(23 June 2016) applied in that matter, unabatedly. It
found that: “
as
a matter of law the Commission was obliged to have availed the record
of its investigation to the appellant, to have done so
within a
reasonable time, and to have disregarded the appellant’s status
as litigant in determining the extent of a reasonable
time
.”
The Court then directed the Commission to make available its
record of investigation to Standard Bank in terms of
the Notice of
Motion (I was informed by Counsel for Standard Bank that the
provision was within five days).
[19]
Counsel
for the Commission advised that the Commission intends appealing the
decision of the CAC in that matter to the Constitutional
Court,
although no papers have yet been filed to petition. I am not
certain how the Commission would be able to cross over
the hurdle
that it was refused leave to appeal by the Constitutional Court in
Group
Five,
having
regard to the fact that the issues are essentially the same, as was
found by the Court in
Standard
Bank
supra,
notwithstanding the Commission introducing a PAIA argument.
[20]
In
any event, in relation to these proceedings, the Constitutional Court
in
Helen
Suzman CC
supra,
at para 44, held that PAIA and Rule 53 serve different purposes.
“
Rule
53 helps a review applicant in the exercise of his or her right of
access to court under section 34 of the Constitution. On
the
other hand, in one instance PAIA affords any person the right of
access to any information held by the state
.”
(Footnote omitted) It again said, at para 46, that the
difference in the nature of, and purposes served, by
these
provisions, “
underscore
the reality that it is inapt simply to transpose PAIA proscriptions
on access to information to the rule 53 scenario.
There is a
principled basis for drawing a distinction.
”
See
also
Nova
Property Group Holdings Ltd and others v Cobbett and another (MandG
Centre for Investigative Journalism NPC as amicus curiae)
[2016]
3 All SA 32
(SCA) at para 32 where a clear distinction is drawn
between a right to information in terms of
section 26
of the
Companies Act 71 of 2008
and PAIA.
[21]
The
Commission also contends that it has the right to conduct an
investigation without being constrained by interlocutory applications
and to get the complaint heard and finalised by the Tribunal.
According to the Commission, these rights take this matter
outside the realm of procedural matters envisaged in
section 38
(2A).
[22]
I
disagree with the Commission; the review is a separate process to the
process at the Tribunal, brought in terms of different provisions
which attract different obligations. The process before the
Tribunal and the intended appeal of the CAC decision to the
Constitutional Court do not suspend the continuation of the review
process as of normal course. The issue of the stay and
of
whether Standard Bank’s approach is cynical, or calculated to
by-pass a process already in place, or that it smacks of
abuse of
process, is, insofar as it is sought in the counter-application, a
matter for the review court to decide.
[23]
As
to the jurisdictional point, the Commission contends that section 62
(2) (b) of the Act only allows for purely constitutional
questions.
In its view, the matter Standard Bank has brought on review is
entirely a competition issue, which this Court
cannot hear as a Court
of first instance. It relies on section 37 of the Act, amongst
others, which identifies the functions
of the CAC, including its
ability to review any decision of the Tribunal, as well as the dictum
of this Court in
TWK
Agriculture Limited and Competition Commission & Others
(67/CAC/Jan07)
[2007] ZACAC 3
(7 August 2007),
at
para 23, where the Court seemed to accept the possibility of the
review of the decision of the Commission by the Tribunal in
terms of
section 27 (1) of the Act, and at para 24 where the Court postulated
the
structure of the Act to be “
designed
to ensure that this Court is, as its name suggests, an appeal court.
Were Mr Brassey to be correct, this court would
be a court of
first instance insofar as the review of decisions of the Commission
were concerned. It would not have the benefit
of the considered
decision of a specialist body, being the Tribunal. In this way,
applicant’s interpretation would
undermine the careful
construction of the competition institutions as provided for by the
Act
.”
[24]
In
Johnnic
Holdings Limited and Another v Competition Tribunal and Others in re:
Mercanto (Pty) Ltd v Johnnic Holdings Ltd
[2008]
ZACAC 2
(23 September 2008), however, the Court, while distinguishing
TKW
on
the facts, seemed to accept that an applicant wishing to bring the
review of the decision of the Commission to this Court, could
do so
relying on section 62 (2) (b) of the Act. It held as follows at
para 35.2:
“
I
agree with the submission by Counsel for the applicants that the
facts in
TWK
supra
are distinguishable from the present matter. In that case the
applicants sought the review of the Commission’s
decision
relating to merger proceedings, a purely competition issue. The
applicants relied on section 62 (2) alternatively
section 62 (1) of
the Act. The Court held that it did not have jurisdiction to
hear the matter as a court of first instance.
In
casu, the applicants rely on the provisions of section 62 (2) (b).
The review sought by the applicants relating to the
decision of
the Commission is based on constitutional grounds. Section 1
(c) of the Constitution entrenches the supremacy
of the Constitution
and the rule of law, and the right to just administrative action in
Section 33 thereof. PAJA is constitutionally
mandated
legislation contemplated in Section 33(3) of the Constitution.
Section 6 of PAJA provides for circumstances under
which an
administrative action may be subject to review. The present
application is not a competition but a constitutional
matter
.”
(Own
emphasis)
[25]
The
Commission’s concern, that parties’ reliance on s 62 (2)
to approach this Court directly may allow for the by-passing
of the
Tribunal and undermine the processes of the Act, or render provisions
such as sections 27 (1) and 37 (1) nugatory, is not
unimportant. I
agree that this issue, coupled with the findings of the Court in
Johnnic
and
TKW,
may
require some teasing out by the full court. The question,
however, is whether, in the meantime, Standard Bank should be
deprived of the Record, and until such time that the full Court has
determined and settled the issue of jurisdiction.
[26]
Counsel
for the Commission seemed to suggest that as a matter of law, the
issues raised by the Commission should be determined first
and
thereafter the issue of the Record would become relevant. He
referred to the decision of
Makhanya
v University of Zululand
2010
(1) SA 62
(SCA) at para 29, to support this proposition. Apart
from the fact that
Makhanya
dealt
with a usual situation in action proceedings, that of special pleas
and exceptions having to be disposed of first before merits
were
determined,
Makhanya
did
not lay down the law that every time a jurisdictional point
in
limine
is
raised, and particularly in motion proceedings, the court must hear
and dispose of the point first, separate from and in advance
of the
merits. That, in my view, would be usurping the power of the
Court to determine its own process. It is upon
the court
hearing the review to decide what it seeks to do, either by itself or
having considered the grounds tendered for separation
of issues by a
party seeking it.
[27]
The
Supreme Court of Appeal in
Competition
Commission v Computicket (Pty) Ltd
(853/2013)
[2014] ZASCA 185
(26 November 2014), at para 20, was clear that the
filing of the Record automatically follows from the launching of the
review.
It held as follows:
“…
Nonetheless,
the Commission offered not only one, but two answers. Its first
answer was that in order to demand the record,
Computicket had to
make out a
prima
facie
case
for review. The only basis relied upon for this contention was
that Computicket bears the onus of establishing its review
grounds.
But as I see it, the basis relied upon amounts to a
non
sequitur
.
I agree with the CAC’s finding that this argument
effectively places the cart before the horse. Not infrequently
the ability of an applicant for review to discharge the onus resting
on it to make out a case, will depend on considerations appearing
–
or not appearing – from the record of the material upon which
the challenged decision had been made. Moreover,
upholding the
Commission’s argument would give rise to a two stage enquiry on
the merits of the case: first, without the
record to determine
whether the applicant had made out a prima facie case. If the
applicant clears that hurdle, the second
stage enquiry then follows
to finally determine the merits, this time with the benefit of the
record which had now been made available.
The proposed
scenario, for which there appears to be no justification in logic, is
clearly unsustainable. Finally,
the argument under
consideration is not supported by Rule 53.
In
terms of this rule, the obligation to produce the record
automatically follows upon the launch of the application, however
ill-founded
that application may later turn out to be.”
(Own
emphasis)
[28]
Counsel
for the Commission argued that
Computicket
did
not deal with jurisdiction, but with a different question of whether
Computicket
had
to make out a
prima
facie
case
for the review. I do not agree with this distinction; whilst the
jurisdictional point may not have been in issue there,
Computicket
raised
a principle that an applicant does not need to clear a hurdle of
showing a competent case, before it can be entitled to a
record. The
launching of the review entitles it; whether it would succeed with
its case at the end or not, or whether its case
would be found to
have been ill-conceived, is a different issue.
[29]
The
Record may be necessary to assess the jurisdictional point too. It
cannot be assumed that the Record will play no role
in that exercise.
Also, from a practical point of view the Commission’s
approach may result in a three stage enquiry.
First, the Court,
without the benefit of the Record, would decide whether the matter is
one falling under section 62 (2)
(b); if it finds that it has
jurisdiction to hear the matter, the Record would then be made
available or may still be contested
on other grounds, the applicants’
papers may be amended once the Record has come to the fore,
thereafter the Court would
hear the merits. To the extent that
this path becomes unavoidable due to the nature of the case, that
would be an issue that
the Court would have to deal with at that
stage. For the moment, though, this approach may result in the
delays that the
Court in
Jiba
supra
decried.
[30]
Having
taken into consideration all the submissions made before me, I find
no legally cognisable reason as to why Standard Bank
should be
deprived of the Record so the review can continue.
Helen
Suzman CC
supra
puts the obligation to produce a record beyond question. The fact
that the matter was argued extensively in that case did
not change
the fact that the filing of the Record is a procedural issue.
Substantial questions there had to do with ‘content
of
the record’ (i.e. inclusion of the deliberations of the JSC as
part of the record) rather than whether, as a matter of
procedure,
the applicant was not entitled to a record.
[31]
I
might add that my reading of the law on this issue is, in my view,
congruent with the spirit, purport and objects of the Constitution.
Laudable as the work of the Commission is, it is also subject to the
rubrics as well as the principles of accountability and transparency,
and I say this conscious of the Commission’s work and its
efforts in ensuring that transgressors of the Act are held to
account.
[32]
In
the circumstances, I find no basis for permitting the Commission to
withhold the Record from Standard Bank.
[33]
I
therefore make the following order:
1.
The
Respondent is directed to, within 15 days from the date of this
Order, file with the Registrar of this Court, the complete record
of
its decision to refer the Applicant to the Competition Tribunal under
case number CR212Feb17.
2.
The
Respondent is ordered to pay the costs of the Applicant including the
costs of two counsel to the extent employed.
______________________
NP
BOQWANA
Judge
of Appeal
APPEARANCES
For
Applicants:
Adv.
J J Gauntlett SC; QC (written submissions only) and Adv. L C Kelly
Instructed
by: Herbert Smith Freehills South Africa Attorneys Inc, Rosebank,
Johannesburg
For
Respondent:
Adv.
T Ngcukaitobi, Adv. I Kentridge,
Adv.
F Hobden and Adv. L Zikalala (written submissions only)
Instructed
by: Ndzabandzaba Attorneys Inc.,
Bryanston,
Johannesburg