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[2015] ZACAC 2
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Allens Meshco (Pty) Ltd and Others v Competition Commission and Others, Inre: Mondi Ltd and Another v Allens Meshco (Pty) Ltd and Others (135/CAC/Jan15) [2015] ZACAC 2; [2015] 1 CPLR 27 (CAC) (26 March 2015)
THE COMPETITION APPEAL
COURT OF SOUTH AFRICA
(SITTING
IN CAPE TOWN)
135/CAC/Jan15
DATE:
26 MARCH 2015
In
the matter between
ALLENS
MESHCO (PTY)
LTD
..........................................................................
FIRST
APPELLANT
HENDOK
(PTY)
LTD
......................................................................................
SECOND
APPELLANT
WIRE
FORCE (PTY)
LTD
.................................................................................
THIRD
APPELLANT
AGRI
WIRES (PTY)
LTD
...............................................................................
FOURTH
APPELLANT
AGRI
WIRE NORTH (PTY)
LTD
......................................................................
FIFTH
APPELLANT
AGRI
WIRE UPINGTON (PTY)
LTD
...............................................................
SIXTH
APPELLANT
CAPE
WIRE (PTY)
LTD
..............................................................................
SEVENTH
APPELLANT
FOREST
WIRE (PTY)
LTD
............................................................................
EIGHTH
APPELLANT
INDEPENDENT
GALVANISING (PTY)
LTD
.................................................
NINTH
APPELLANT
ASSOCIATE
WIRE INDUSTRIES (PTY)
LTD
..............................................
TENTH
APPELLANT
T/A
MESHRITE
And
COMPETITION
COMMISSION
....................................................................
FIRST
RESPONDENT
CAPE
GATE (PTY)
LTD
.............................................................................
SECOND
RESPONDENT
CONSOLIDATED
WIRE
INDUSTRIES
.......................................................
THIRD
RESPONDENT
And
in the intervention applications between
MONDI
LTD
.......................................................................................................
FIRST
INTERVENER
SAPPI
SOUTHERN AFRICA
LTD
..............................................................
SECOND
INTERVENER
And
ALLENS
MESHCO (PTY)
LTD
......................................................................
FIRST
RESPONDENT
HENDOK
(PTY)
LTD
..................................................................................
SECOND
RESPONDENT
WIRE
FORCE (PTY)
LTD
..............................................................................
THIRD
RESPONDENT
AGRI
WIRES (PTY)
LTD
...........................................................................
FOURTH
RESPONDENT
AGRI
WIRE NORTH (PTY)
LTD
...................................................................
FIFTH
RESPONDENT
AGRI
WIRE UPINGTON (PTY)
LTD
...........................................................
SIXTH
RESPONDENT
CAPE
WIRE (PTY)
LTD
...........................................................................
SEVENTH
RESPONDENT
FOREST
WIRE (PTY)
LTD
.........................................................................
EIGHTH
RESPONDENT
INDEPENDENT
GALVANISING (PTY)
LTD
..............................................
NINTH
RESPONDENT
ASSOCIATE
WIRE INDUSTRIES (PTY)
LTD
...........................................
TENTH
RESPONDENT
T/A
MESHRITE
COMPETITION
COMMISSION
..........................................................
ELEVENTH
RESPONDENT
CAPE
GATE (PTY)
LTD
..........................................................................
TWELFTH
RESPONDENT
CONSOLIDATED
WIRE INDUSTRIES
.........................................
THIRTEENTH
RESPONDENT
Coram
:
DAVIS JP, VICTOR AJA & ROGERS AJA
Heard:
23 MARCH 2015
Delivered:
26 MARCH 2015
JUDGMENT
ROGERS
AJA (DAVIS JP & VICTOR AJA concurring):
[1]
The appellants (to whom
I shall refer collectively as ‘AMG’) appeal against a
decision by the Tribunal on 22 January
2015 refusing to stay the
hearing of complaint proceedings pending the delivery of judgement in
review proceedings instituted by
AMG in the North Gauteng High Court
(‘NGHC’). The first respondent in the appeal (‘the
Commission’) is
the party which referred the complaint to the
Tribunal. The second respondent in the appeal (‘Cape Gate’)
is one of
the respondents in the referral proceedings. The AMG
entities are the other respondents in those proceedings.
[2]
In reaction to
supplementary heads of argument filed by the Commission, Mondi Ltd
(‘Mondi’) and Sappi Southern Africa
Ltd (‘Sappi’)
filed intervention applications to be allowed to participate in the
appeal. These companies are not involved
in the complaint proceedings
giving rise to the appeal.
[3]
The Commission
initiated the complaint on 14 July 2009 and referred it to the
Tribunal on 7 September 2009. The Commission alleges
that AMG and
Cape Gate, as firms engaged in the manufacture and distribution of
wire and wire-related products, participated in
price-fixing, market
division and collusive tendering over the period 2001 to 2008 in
violation of s 4(1)(b) of the Competition
Act 89 of 1998 (‘the
Act’). It is a matter of concern that, more than five and a
half years after the referral, the
hearing on the merits has not
begun in the Tribunal. Cartel cases are difficult enough without
adding failing memory to the challenges.
[4]
The procedural
background is briefly the following. On 28 August 2008 the
Commission, in accordance with its Corporate Leniency
Policy (‘CLP’),
granted Consolidated Wire Industries (Pty) Ltd (‘CWI’)
conditional immunity in relation
to the matters subsequently referred
to the Tribunal. Prior to this date AMG had applied for leniency but
was informed that another
firm was ‘first through the door’.
On 19 September 2008 the Commission notified AMG that its leniency
application was
second in line and would be reconsidered if the first
leniency applicant (CWI, though its identity was not disclosed at
that stage)
failed to comply with the conditions of immunity. As
mentioned, on 7 September 2009 the Commission referred the complaint
to the
Tribunal.
[5]
On 8 May 2010 two of
the AMG entities (to whom I shall refer collectively as ‘Agri
Wire’) launched review proceedings
in the NGHC in which they
sought the setting aside of the Commission’s grant of immunity
to CWI and declaring unlawful and
inadmissible the evidence obtained
by the Commission from CWI in exchange for immunity (‘the first
review’). Agri Wire’s
case was that the CLP was unlawful.
The Commission opposed the first review.
[6]
During July 2010 AMG
and Cape Gate filed answering affidavits in the complaint
proceedings. It is not clear why ten months for this
exercise were
taken or allowed. AMG thereafter applied to the Tribunal to stay the
referral proceedings pending a determination
of the first review. The
Tribunal granted the stay on 28 March 2011.
[7]
On 5 July 2011 the NGHC
dismissed the first review.
[1]
The Supreme Court of Appeal dismissed an appeal on 27 September
2012.
[2]
On 1 November 2012 the Constitutional Court dismissed an application
for leave to pursue a further appeal by way of an order recording
that there were no reasonable prospects of success.
[8]
On 15 May 2013, by
which time nothing further seems to have happened in the referral,
AMG launched another review application in
the NGHC, this time
seeking to set aside the Commission’s refusal to grant AMG
leniency (‘the second review’).
AMG’s case on this
occasion was that the Commission had refused leniency on the
incorrect basis that the CLP precluded it
from granting leniency to a
firm which was ‘second through the door’. The Commission
opposed the second review.
[9]
In the meanwhile the
Tribunal held a pre-hearing conference on 16 July 2013. The pending
review was apparently not mentioned. On
17 February 2014 AMG’s
attorneys wrote to the Commission suggesting that the parties meet to
discuss the implications of
the second review, given that the review
might not be determined before the referral hearing began. The
Commission’s response
was that the review and referral
proceedings were distinct and could run independently of each other.
The Commission’s view
was that, if the second review succeeded
and if thereafter the Commission were to grant AMG leniency, the
Tribunal was nevertheless
entitled to determine whether or not AMG
had contravened s4(1)(b) though a fine could not be imposed.
[10]
On 23 April 2014 the
Commission wrote to the attorneys for the respondent firms, including
AMG, recording the agreement that the
referral hearing would run from
22 January 2015 to 4 February 2015.
[11]
The second review was
argued before Rabie J on 15 September 2014. He reserved judgement.
His judgement has not yet been delivered.
[12]
The Tribunal held a
further pre-hearing conference on 19 November 2014. There was still
consensus among the parties that the hearing
would start on 22
January 2015.
[13]
On 13 January 2015
AMG’s attorneys wrote to the Commission and Cape Gate’s
attorneys, proposing that the referral hearing
be stayed because
Rabie J had not yet delivered judgement. The Commission disagreed. On
the following day AMG delivered a stay
application for hearing by the
Tribunal on Monday 19 January 2015. The Commission filed its opposing
affidavit on the Monday. The
Tribunal directed that the parties argue
the stay at the start of the referral hearing on Thursday 22 January
2015. After hearing
argument on that day, the Tribunal adjourned for
a short while. On resumption the Chairperson announced that the panel
had discussed
the matter and that its decision was to dismiss the
application for a stay.
[14]
What one might then
have expected was for the hearing to begin forthwith or at least on
the following day (Friday 23 January 2015).
Instead, agreement was
reached to resume on Monday 26 January 2015 with opening statements
and the first witness. On 23 January
2015 AMG filed a notice of
appeal against the refusal of the stay. On the Monday there was
further discussion, on and off the record,
the upshot of which was
that by agreement the referral hearing was postponed pending the
determination of an expedited appeal by
AMG to this Court.
[15]
Subsequently the
President of this Court gave directions for the hearing of the appeal
on 23 March 2015. By 5 February 2015 AMG
(represented by Mr Geach
SC), the Commission (represented by Mr Maenetje SC leading Ms
Lekokotla)
and Cape Gate (represented by Mr
Campbell SC leading Mr Makola) had filed their heads of argument. As
one would expect, they made
submissions directed to the particular
facts and circumstances of the case (though, as will appear, they
failed to deal with one
important threshold issue)
[16]
On 27 January 2015 the
Commission filed supplementary heads of argument, this time
represented by Mr Marcus SC leading Ms Steinberg
and Ms Goodman. In
the supplementary heads the Commission, through counsel, expressed
its frustration at constant challenges to
its decisions by way of
review proceedings, challenges which, in the Commission view, were
often an abuse with no purpose other
than delay. After a wide-ranging
survey of authorities on abuse of process and the principles
applicable to reviews, including
reviews in medias res, the
Commission’s counsel submitted that it would be appropriate for
this Court to ‘lay down
the following guidelines’,
namely:
[3]
‘
1.
Where the decision [
viz
of the Commission
]
in question is one which does not affect rights, or is of a
preliminary nature, it will not fall within the definition of PAJA
[4]
and will thus not be reviewable under PAJA.
2. Where the decision in
question does constitute administrative action, it will, in general,
not be reviewable, unless the applicant,
who bears the onus, is able
to establish:
(a) prejudice;
(b) exceptional circumstances
justifying review;
(c) that it has exhausted all
internal remedies.
3. A decision which does not
affect rights or is of a preliminary nature, will be reviewable under
the principle of legality but
generally the applicant in such a case
is required to discharge the onus of showing –
(a) exceptional circumstances
such as ill-faith, oppression or vexation;
(b) why the matter cannot be
resolved in the ordinary course by the Tribunal;
(c) that it has exhausted all
alternative remedies.
4.In general, preliminary
litigation relating to competition matters such as the validity of an
initiation or a referral –
the list is not exhaustive –
must be instituted in the Tribunal and subject to the rules referred
to above.’
[17]
It was the Commission’s
request for the laying down of these guidelines that prompted Mondi
and Sappi to launch their intervention
applications on 11 and 18
March 2015 respectively. Their alleged interest arises from the fact
that they are parties to pending
review proceedings which may be
affected by the requested guidelines.
[18]
I turn now to the
appeal.
[19]
AMG invokes this
Court’s appellate jurisdiction, not its review jurisdiction.
Section 61(1) of the Act provides that a person
affected by a
decision of the Tribunal may appeal to this Court in terms of the
Court’s rules ‘if, in terms of section
37, the Court has
jurisdiction to consider that appeal…’. In terms of
s37(1)(b) this Court may
‘
(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
(ii) any of its interim or
interlocutory decisions that may, in terms of this Act, be taken on
appeal.’
[20]
Counsel for AMG and
Cape Gate did not mention the question of appealability in their
heads of argument. The Commission’s counsel
said in para 21 of
their heads that in the interests of reaching finality expeditiously
they did not take issue with the appealability
of the Tribunal’s
decision and abided this Court’s decision in that regard.
[21]
The question of
appealability goes to our jurisdiction. Even if the parties were
agreed that we should hear the appeal, they could
not by agreement
confer jurisdiction on us.
[22]
Section 37(1)(b) draws
a distinction between ‘final’ decisions and ‘interim
or interlocutory’ decisions.
In civil practice this distinction
is one which has been recognised as a matter of interpretation of the
phrase ‘judgement
or order’ in s 20(1) of the
recently repealed Supreme Court Act 59 of 1959. Given the language of
s 37(1)(b)
of the
Competition Act, there
is every reason to have
regard to the civil jurisprudence on this topic and this Court has
indeed done so in earlier decisions
(
Telkom
SA Ltd v Orion Cellular Pty Ltd & Others
[2005]
1 CPLR 113
(CAC) at 119c-i;
Loungefoam
(Pty) Ltd & Others v Competition Commission of South Africa &
Others
[2011] 1
CPLR 19
(CAC) para 20).
[23]
In
Zweni
v Minister of Law and Order
1993
(1) SA 523
(A) Harms AJA (as he then was) pointed out that s 20(1)
of the Supreme Court Act, unlike its predecessors, did not draw a
distinction between ‘judgments or orders’ on the one hand
and ‘interlocutory orders’ on the other. The distinction
was now between ‘judgments or orders’ (appealable with
leave) and decisions which are not ‘judgments or orders’
(not appealable at all). After reviewing the authorities, he said
that a ‘judgment or order’ is a decision which, as
a
general principle, has three attributes: (i) the decision must
be final in effect and not susceptible of alteration by the
court of
first instance; (ii) the decision must be definitive of the
rights of the parties; (iii) the decision must have
the effect
of disposing of at least a substantial portion of the relief claimed
in the main proceedings. 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. The learned judge of appeal gave, as an
example, the exclusion of evidence which
hampered a party in proving
his case. Depending on the trial court’s ultimate decision on
the merits, an erroneous ruling
on admissibility might be a basis for
setting aside the decision on the merits and remitting it to the
trial court (532F-533F).
[24]
In accordance with the
principles laid down in
Zweni
,
this Court in
Telkom
held that a
decision by the Tribunal that a party to s 49C proceedings
produce allegedly confidential documents in terms of
s 45(1) was
interim or interlocutory in nature as it dealt
with
a question of procedure which was inextricably limited to the manner
in which the primary dispute between the parties would
be litigated.
The Court held, further,
that
there was no provision in the Act which made such an interim order
appealable. In
Loungefoam
it was said that
ordinarily a decision by the Tribunal to grant or refuse an amendment
would be procedural in nature but that in
some circumstances the
effect of the decision would be to dispose of the substantive rights
of the parties. In the latter event
the decision will be ‘final’
within the meaning of s 37(1)(b)(i). In
Loungefoam
the Tribunal’s
decision allowing the Commission to ‘amend’ its referral
affidavit was found to be an appealable
decision because the
Tribunal, by allowing the amendment, had finally determined that it
had jurisdiction to consider the additional
matters which the
Commission sought to introduce, in circumstances where the respondent
firms contended that the Tribunal had no
such jurisdiction in view of
the more limited terms of the complaint as initiated by the
Commission.
[25]
An order refusing a
postponement or temporary stay of proceedings does not have any of
the attributes of a ‘judgment or order’
in accordance
with our civil jurisprudence. A judge who refuses a postponement
might upon further consideration grant it, ie the
decision is
susceptible of alteration by the same court (that this is unlikely in
practice is beside the point). The refusal of
the postponement or
stay is not definitive of the rights of the parties. The party who
has been refused the postponement might
nevertheless succeed on the
merits. And the refusal of the postponement or stay does not dispose
of any portion, let alone a substantial
portion, of the relief
claimed in the main proceedings.
[26]
Thus it was that
Conradie J (as he then was) held in
Priday
t/a Pride Paving v Rubin
1992
(3) SA 542
(C) that the refusal of a postponement was not appealable.
Even if on appeal the refusal of the postponement were changed to a
grant of the postponement, this ‘would not serve to advance the
resolution of the main dispute between the parties’
(at 549B).
Where a postponement is refused, the party who sought it might, in
the language of
Zweni
,
be placed at a disadvantage which nothing but an appeal can remedy
but that does not make the decision a ‘judgment or order’
with the attributes of finality to qualify as such.
[27]
This does not mean that
the party will never be able to question the refusal of the
postponement. If the case on its merits goes
against the party who
was refused a postponement, that party may, in an appeal against the
decision on the merits, raise as a ground
of appeal that the trial
court wrongly refused the postponement and that this materially
prejudiced the appellant in the conduct
of his case. This was
precisely the nature of the appeal in one of the leading cases on the
principles applicable to postponements,
Myburgh
Transport v Botha t/a Is a Truck Bodies
1991
(3) SA 310
(NmSC). There, following an unsuccessful application by
the defendant for a postponement, the defendant’s counsel
withdrew,
whereupon judgment was granted in favour of the plaintiff
after the hearing of unchallenged evidence. An appeal against the
judgment
on the merits succeeded on the ground that the trial judge
had erred in his approach to the application for a postponement.
[28]
In my opinion, the
express language of
s 37(1)(b)
of the
Competition Act makes
this
an a fortiori conclusion in the present case. The Tribunal could at
any time have re-visited the question of a stay. The refusal
of the
stay was not definitive of the rights of the parties (in the present
case, the merits of the alleged cartel behaviour).
The refusal of the
stay did not dispose of any part of the relief claimed in the main
proceedings (an order declaring the implicated
firms to have
contravened
s 4(1)(b)
in the manner set forth in the referral
affidavit, an order directing them to refrain from such conduct
henceforth and the imposition
of an administrative fine equal to 10%
of their annual turnover for the 2008 financial year). If AMG were to
make good the allegations
contained in its answering affidavit in the
referral proceedings, the Commission’s claim for relief against
it would be dismissed.
The refusal of the stay did not prevent or
even inconvenience AMG in advancing its defence.
[29]
From this it follows
that the Tribunal’s refusal of a stay is not a ‘final
decision’ as contemplated in
s37(1)(b)(i).
It is an ‘interim
or interlocutory’ decision as that phrase is used in
s 37(b)(ii)
but there is no provision in the Act to the effect
that this particular kind of interim or interlocutory decision –
the refusal
of a postponement or stay – may be taken on appeal.
This Court thus does not have jurisdiction to entertain the appeal.
[30]
While the parties may
be anxious for us to express an opinion on the merits of the
Tribunal’s decision to refuse the stay,
it would be
inappropriate to do so. Our remarks would inevitably be obiter.
Furthermore we do not have the Tribunal’s reasons
for refusing
the stay. It is a remarkable feature of this case that we have been
asked to entertain an appeal when we do not know
the grounds of the
Tribunal’s decision (though they might perhaps be inferred from
the transcript of the argument addressed
to the Tribunal). I hasten
to add that I do not say this as a criticism of the Tribunal. It
might have been better for the Tribunal
to give brief ex tempore
reasons. But the Tribunal may have been influenced by the need for a
prompt decision and a belief that
its reasons would not be of
immediate importance. The Tribunal could if necessary, give its
reasons for refusing the stay as part
of its reasons on the main
case. There is no indication that any of the parties requested the
Tribunal to give reasons so that
they could be included in the appeal
record.
[31]
Where I do think both
the Commission and the Tribunal went astray is in allowing the
referral hearing to be postponed pending an
urgent appeal to this
Court. Quite apart from the fact that the refusal of the stay was not
appealable, the Commission’s
contention in the stay proceedings
was that AMG had not made out a case for a stay and that the hearing
should commence and run
in accordance with timetable previously
agreed between the parties. The Tribunal, in refusing the stay, must
have agreed with this
view. It was self-defeating, in the
circumstances, for the Commission to abandon the agreed hearing dates
just because AMG filed
a notice of appeal. Once the stay was refused
on 22 January 2015, the hearing should have started on that day or by
the latest
the next day. The Commission should not have agreed to a
postponement of the hearing pending an urgent appeal and the Tribunal
should in any event not have allowed the parties to do so.
[32]
The proper course is to
strike the appeal from the roll since we do not have jurisdiction. As
to costs, none of the parties resisted
the appeal on the basis of an
absence of jurisdiction, instead addressing the merits. As far as we
can tell, they bear equal responsibility
for having agreed to hold
the Tribunal’s proceedings in abeyance pending the conduct of
an urgent appeal. They reached their
agreement in that regard without
appreciating that the Tribunal’s decision refusing the stay was
not appealable. I thus consider
that the parties should bear their
own costs.
[33]
The Commission’s
request for guidelines in its supplementary heads of argument is in
my view entirely misconceived. Even if
the Tribunal’s refusal
of a stay were appealable, the appeal would not have been concerned
with the circumstances in which
and procedure by which decisions of
the Commission may be taken on review. It is an historical fact that
AMG has twice brought
review proceedings in the NGHC. The first
review has been finally determined. The second review has been
argued, the parties have
raised whatever points they wished to
advance in that forum, and judgment from Rabie J is awaited. Nothing
we now do or say can
affect the outcome of that review.
[34]
It is not the function
of a court of law to issue decrees binding on persons at large
(
Kayamandi
Town Committee v Mkhwaso and Others
1991
(2) SA 630
(C) at 634B-635E
)
.
The judicial function, in contrast with the legislative function, is
to determine live disputes between the parties properly before
the
court. Centuries of experience have also taught that this is the best
way to determine and develop the law. Nobody apart from
the parties
to the present appeal would be bound by anything we say on the
matters raised in the supplementary heads (ie our judgment
would not
be res judicata except as between the parties to this appeal). And of
the parties in the present appeal, only the Commission
seems to have
any interest in asking for guidelines.
[35]
The applications by
Mondi and Sappi for intervention are likewise misconceived. That they
felt moved to seek intervention reflects
the inappropriateness of the
Commission’s request that we lay down guidelines for reviews of
the Commission’s decisions.
But misconceived arguments by a
party to litigation does not justify intervention by outsiders. If
for any reason it had been necessary
and appropriate for us in the
present case to decide any of the matters raised in the Commission’s
supplementary heads, the
mere fact that our findings of law might
affect other parties in other litigation would not justify their
intervention. If it were
otherwise, hundreds of litigants could
potentially seek intervention in an appeal because it raised a point
of law which was relevant
to cases in which they were or expected to
become involved.
[36]
The following order is
made:
(a) The applications by Mondi Limited and Sappi Southern
Africa Ltd to intervene in the appeal are dismissed.
(b) The appeal is struck from the roll.
(c) The parties to the appeal and the intervening
parties are to bear their own costs.
APPEARANCES
For Appellants Mr BP
Geach SC
Instructed by: Roestoff
& Krause Attorneys
Hazelwood
Pretoria
For First Respondent Mr
NH Maenetje SC & Ms BD Lekototla
And also Mr G Marcus SC
and Ms C Steinberg and Ms I Goodman
Instructed by: The
Competition Commission
The dti Campus Building
C, Mulayo
77 Meintjies Street
Pretoria
For Second Respondent
Messrs J Campbell SC & BL Makola
Instructed by: Bowman
Gilfillan
165 West Street
Sandton
For First Intervener
(Mondi Ltd)
Mr D Unterhalter SC, Mr
S Budlender SC and
Ms S Pudifin-Jones
Instructed by: Nortons
Inc
135 Daisy Street
Sandton
For Second Intervener
(Sappi Ms K McLean Southern Africa Ltd):
Instructed by Bowman
Gilfillan
165 West Street
Sandton
[1]
[2011] ZAGPPHC 117.
[2]
[2012] 4 All SA 365 (SCA); 2013 (5) SA 484 (SCA).
[3]
I have renumbered the proposed guidelines set out
in paras 4.1.1 to 4.1.4 of the Commission's supplementary heads.
[4]
The
Promotion of Administrative Justice Act 3 of
2000
.