A.C. Whitcher (Pty) Ltd v Competition Commission of South Africa and Others (84/CAC/Jan09) [2009] ZACAC 2; [2009] 2 CPLR 291 (CAC) (3 August 2009)

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A.C. Whitcher (Pty) Ltd v Competition Commission of South Africa and Others (84/CAC/Jan09) [2009] ZACAC 2; [2009] 2 CPLR 291 (CAC) (3 August 2009)

IN
THE COMPETITION APPEAL COURT OF SOUTH AFRICA
Case No.: 84/CAC/Jan09
In
the matter between:
A. C. WHITCHER (PTY)
LIMITED Appellant
and
THE
COMPETITION COMMISSION OF
SOUTH
AFRICA First Respondent
MTO
FORESTRY (PTY) LIMITED Second Respondent
BOSKOR
SAAGMEULE (PTY) LIMITED Third Respondent
BOSKOR
RIPPLANT (PTY) LIMITED Fourth Respondent
JUDGMENT:
DAVIS JP:
Introduction
[1] On 14 December 2006, the second to
fourth respondents submitted an application for consideration of an
intermediate merger to
the Competition Commission. The second
respondent was the primary acquiring firm. The third and fourth
respondents were the
primary target firms. The second respondent
proposed to acquire the assets and the business of the third and
fourth respondents
in terms of a sale of business agreement.
[2] The Competition Commission (“the
Commission”) investigated the proposed merger at some length. On
13 March 2007, the Commission
decided to approve the merger without
conditions.
[3] The reasons for the decision were
set out in the Commission’s report dated 12 March 2007 (“the
final report”).
[4] In July 2007, the appellant
launched an application before the Competition Tribunal (“the
Tribunal”) to review and set aside
the decision (“the review
application”). It was the first such review of its kind before
the Tribunal, brought on the basis
of the decision of this Court in
TWK Agriculture Ltd v the
Competition Commission
(67/CAC/Jan07).
[5] The Tribunal dismissed the review
application. It found that the Commission had not misdirected
itself in approving the merger.
In addition, the Tribunal held that
the appellant had delayed unreasonable before launching the review
application. The appellant
now appeals to this Court against the
Tribunal’s decision
The
framework of the dispute.
[6] The dispute, as it was argued on
appeal, turned on three separate questions:
1. Whether the appellant delayed
unreasonably before the launching of the review application;
2. If this court did not consider the
delay to be unreasonable, then, on the basis of the merits of the
decision, were there justifiable
review grounds for setting aside the
decision of the Tribunal.
3. If this court decided that the
impugned decision was vitiated by a material irregularity, should it
then exercise its discretion
and refuse to grant relief to appellant.
Unreasonable
delay
[7] Mr Gauntlett, who appeared
together with Mr Cockrell onn behalf of second, third and fourth
respondents, joined cause with Mr
Sibeko, who together with Ms
Kjoroeadira appeared on behalf of first respondent to emphasise as
their primary ground of attack
against that the appeal the delay in
launching the application was fatal to the application.
[8] The chronology can be summarized
thus. The impugned decision was taken by the Commission on 13 March
2007. The review application
was launched on 5 July 2007, some
three and half months thereafter. It was common cause that
appellant learnt of the impugned
decision within days after it was
taken. On 19 March 2007, appellant’s attorney wrote to the
managing director of third and
fourth respondents to advise him that
the appellant would ‘in all probability be taking [the impugned
decision] on an urgent
review to the Competition Tribunal’.
However the proclaimed understanding of the inherent urgency of the
application notwithstanding
the review was only launched on 5 July
2007.
[9] In his answering affidavit on
behalf of the second, third and fourth respondents, Mr David Reeves
took up the question of delay
on the part of applicant. After
averring that there had been an unreasonable delay by applicant
before it launched its application
for review, Mr Reeves pointed out
that a number of steps had been taken subsequent to the authorisation
of the merger to implement
the transaction, including the following:
1. The Boskor mill was transferred
to MTO on 5 June 2007
2. The purchase price was paid 7
days thereafter to Swartland
(Pty) Ltd, the parent company of third
and fourth Respondents;
MTO implemented an organisational
restructure, and
appointed additional regional
management to manage its Tsitsikamma region in May 2007. In
particular, MTO’s business was restructured
into three regions,
Boland, Outeniqua and Tsitsikamma;
MTO and Boskor have thoroughly
integrated their
employees into the various
regions. In particular:
all employees at the Boskor mill
were transferred to MTO;
all employees of the Boskor mill
were transferred to the MTO pension fund; and
all Boskor employees were included
in the MTO incentive bonus scheme, which will enhance their
earnings.
[10] In applicant’s replying
affidavit, Mr Westcott raised three justifications for appellant’s
delay in the eventual launching
of its review application:
1. Its managing director Mr Raymond
Ritchie had been out of the country (in Northern Mozambique) for
three weeks after the decision
by the Commission had been taken.
Appellant considered it unwise to launch the review application
without careful consideration
of the issues by Mr Ritchie. In
particular “upper most in our minds, was the fact that the fact MTO
was the appellant’s only
supplier. There was a concern that
launching the review could have serious implications and that it was
not a decision taken
lightly” by appellant.
2. According to Mr Westcott, to the
best of applicant’s knowledge, the merger was only ‘officially
consummated’ in June 2007.
According to Mr Westcott, a number of
rumours have been circulating in April and May 2007 that there were
still serious obstacles
to the merger. Accordingly, the application
was launched only when appellant became aware that the merger was
going ahead in
June 2007.
3. When appellant took the decision to
proceed with the application, there was great uncertainty as to
whether the review had to
be brought before the Tribunal or this
Court. That uncertainty was only to be resolved after this court
handed down its decision
in
TWK
Agriculture Limited v The Competition Commission
(Case No 67/CAC/Jan07). Accordingly, Mr Westcott averred that
appellant had been advised by its legal representatives that it
might
wish to wait until the matter of
TWK
Agriculture
had been
disposed of before filing its application for review. In
justification he noted that some of the appellants legal
representatives
had been present during the hearing of the
TWK
Agriculture
case and once
it ‘became apparent in the course of argument the CAC would not
readily accept that the Tribunal lacked jurisdiction
to review a
merger decision taken by the Commission;’ the appellant proceeded
to launch its review application in the present
dispute.
The Tribunal’s decision
[11] The Tribunal considered these
particular arguments and concluded thus:
“
the [appellant’s] delay of
some 75 business days in bringing the review application was
unreasonable in the circumstances of this
case, and does not warrant
this Tribunal overlooking it. Indeed the [appellant’s] lackluster
conduct in seeking interim relief,
its inclination to adopt a wait
and see attitude and its rather limp suggestion that the merging
parties would not rush ahead with
the merger, suggests that the delay
may in fact have been willful and that this application is nothing
more than a ploy to extract
some form of commercial advantage rather
than the pursuit of the public interest
”.
[12] Mr Unterhalter, who appeared
together with Mr Gotz on behalf of the appellant, submitted that the
Tribunal had erred with regard
to this finding; in particular that
the review had been brought in terms of the Promotion of
Administrative Justice Act 3 of 2000
(PAJA) and that the appellant
could not rely on the outside limit of 180 days as provided for in
PAJA.
[13] Mr Unterhalter submitted that a
decision of the Commission to approve an intermediate merger such as
the present merger was
administrative action as defined in section 1
of PAJA. For this reason, the review proceedings stood to be
analysed in terms
of section 7 (1) read together with section 6 (1)
PAJA. In short, the review had to be instituted without
unreasonable delay
and ‘not later than 180 days after the date on
which the person concerned was informed of the administrative action,
became aware
of the action and reasons for it or might reasonably
have been expected to have become aware of the actions and reasons’.
[14] As the present review proceedings
have been initiated within the 180 days period contemplated in
section 7 (1) PAJA, the application
could not be time barred.
[15] By contrast, Mr Gauntlett
submitted that the wording of section 7 (1) made it clear that the
application for review may be
time barred, even if brought within the
180 day period, the decisive question being whether the appellant
delayed unreasonably
before launching the application. In this
connection he referred to the judgment of Brand JA in
Associated
Institutions Pension Fund and others v Van Zyl and others
2005 (2) SA 382
(SCA) at para 46 in which the learned judge of appeal
emphasised that the failure to bring a review within a reasonable
time may
cause prejudice to the respondent, that there was a public
interest element in the finality of administrative decisions and the

exercise of administrative functions and that the determination of a
reasonableness of delay was entirely dependant on the facts
and
circumstances of a particular case. Only after a court had
determined that the delay was unreasonable, could it proceed to

exercise a discretion as to whether the delay should be condoned.
[16] Mr Unterhalter submitted that in
this case the explanation provided by the appellant justified a
conclusion that the delay
was not unreasonable. In my view, the
reason offered by the appellant concerning the uncertainty as to the
appropriate forum
for review which was finally settled in the
TWK
Agriculture
case is of
considerable weight. It is understandable for the appellant not to
rush to one other forum to bring its review application,
until a case
which was about to be heard in this court, had been finally
determined so that appellant’s legal representatives
could make an
informed decision as to the advice to be given to their clients about
the appropriate forum. In summary, the fact
that the case was only
argued on 12 June 2007, therefore justified a delay until such time
as an informed decision could be made
as to the appropriate forum for
review in the light of the prevailing uncertainty as to the law.
[17] There is a further reason why
the delay should not constitute an insurmountable obstacle to an
evaluation of the merits.
As Brand JA said in the
Associated
Institutions Pension Fund and others
,
supra
at para 46, there is a public interest element in the finality of
administrative decisions. There is a public interest element
in
insuring, within the competition law context, that, when a merger
transaction is sanctioned, it is justified within terms of
the
provisions of the Act. If a competition authority acts in
manifestly unreasonable regard for the applicable provisions of
the
Act in sanctioning such a transaction, the prejudice to a range of
stakeholders including competitors and consumers is potentially

significant. Thus, even Mr Gauntlett was constrained to concede
that, were there to be an ‘egregiously reviewable decision’

this consideration would have to be weighed in so far as the
evaluation of an unreasonable delay was concerned.
[18] For these reasons therefore, it
is necessary to turn to the merits of the Commissions decision.
The
merits review
[19] In its answering affidavit first
respondent states, ‘in its founding affidavit and supplementary
affidavit the Applicant
places extreme focus on facts used by the 1
st
Respondent in coming to its conclusion. Knowing that a review
application its not merit based it appears as if the Applicant
is
bringing the application in the guise of an appeal’.
[20] On the basis of this approach two
arguments were raised by respondents;
(i) The significance of the
distinction between an appeal and the present proceedings, being a
review; and
The standard to be adopted, in so
far as review proceedings
of this kind, was concerned.
This distinction between an appeal and
review is not one without difficulty. Particularly under PAJA, the
merits of a decision
will, to some extent, form part of the scrutiny
to be exercised by the reviewing court. Cora Hoexter
Administrative
Law in South Africa
at 106.
As Navsa AJ said in
Sidumo
and another v Rustenberg Platinum Mines LTD and others
2008
(2) SA 24
(CC) at para 108. ‘This court recognised that scrutiny
of a decision based on reasonableness introduced a substantive
ingredient
into review proceedings. In judging a decision for
reasonableness, it is often impossible to separate the merits from
scrutiny’.
[21] For this reason, appellant was
correct to contend that the Tribunal was required to scrutinise the
reasoning of the Commission
in order to establish whether the
latter’s decision constituted reasonable administrative action.
The tribunal was thus tasked
not merely to describe the approach
adopted by the Commission, and then accept its approach at face
value, but rather carefully
to examine the Commission’s process of
reasoning as reflected in its final report and to determine whether
that reasoning displayed
an appropriate understanding of the law and
a reasonable application of the law to the facts as set out.
[22] The Tribunal emphasised the
importance of deference to the Commission. It reasoned thus:
“
Given the complex nature of the
decision and the fact that the Commission exercises its discretion
through direct engagement with
issues of fact, law and economics,
this Tribunal
would
be inclined to show a high degree of respect for the decision of the
Commission and would only be inclined to set aside decisions
of the
Commission in circumstances of a grave or palpable error.
Such an approach would be in accordance with the guidelines
developed by our courts and similar to that adopted in jurisdictions

such as the European Union (“EU”) where the Court of First
Instance (“CFI”)
has
granted the European Commission (“EC”) a margin of appreciation
and would not set aside a decision unless there was some
grave or
manifest error or procedural illegality.
”
[23] There are at least two grave
errors contained in this passage. Firstly, the concept of deference
needs to be treated carefully.
It is not simply jurisprudential war
cry. In any event, it has been decidedly overworked in our law.
For a general discussion
see Hoexter, supra at 138 - 147. In the
first place, a distinction must be drawn between deference when it
applies within the
context of the doctrine of the separation of
powers and a case such as the present dispute. The doctrine of
separation of powers
designates specific areas of competence which
are associated with each of these three branches of government. As
Prof Jeffrey
Jowell has noted:
“
it is not the province of
courts, when judging the administration, to make their own evaluation
of the public good, or to substitute
their personal assessment of the
social and economic advantage of a decision. We should not expect
judges therefore to decide
whether the country should join a common
currency, or to set a level of taxation. These are matters of
policy and the preserve
of other branches of government and courts
are not constitutionally competent to engage in them.
”
Cited by Hoexter, supra at 139
[24] However in this case, the
question for determination does not concern the application of the
doctrine of separation of powers.
It involves the supervisory role
of the Tribunal over the Commission in the case of an intermediate
merger, in which the latter,
is both the investigator and the
adjudicator. Manifestly, these rules call for a heightened level of
scrutiny. Furthermore,
as David Mullan
2006
Acta
Juridica
42
at 50 has
noted, an important criterion in assessing the level of deference
owed in a review application is the expertise of the
reviewing court
relative to that of the administrative body. In this case, the
Tribunal has significant economic expertise and
knowledge of
competition matters. It was set up for the purpose of constituting
a specialist body. It is in an entirely different
position from a
general court, whose members are not appointed, as is the case with
those of the Tribunal, because of their specific
expertise in the
field upon which they are called to review. A second, significant
mistake committed by the Tribunal is its unfortunate
invocation of
the law of the European Union. The Tribunal seems to have completely
omitted from its consideration the important
decision in
P,
the Commission v Tetra Laval (‘Tetra Laval
II’
)
[2005] ECR
I
– 987. The
European Court of Justice said, inter alia, in its
Tetra
Laval
decision:
“
The community courts [must],
inter alia establish whether the evidence relied on is factually
accurate reliable and consistent but
also whether that evidence
contains all the information which must be taken into account in
order to assess the complex situation
and whether it is capable of
substantiating the conclusions drawn from it”.
para 39
Thus, the power of review extends to
‘whether the factual information on which such assessments are
based is accurate and whether
the conclusion drawn as to fact are
correct; whether the Commission undertook a thorough and painstaking
investigation, and in
particular whether it carefully inquired into
and took sufficiently into consideration all the relevant factors;
and whether the
various passages in the reasoning developed by the
Commission in order to arrive at its conclusions in respect of the
compatibility
or otherwise of a concentration with the common market
satisfy requirements of logic, coherence and appropriateness.’
Cited
by
Bay and Calzado
2005 (28) World Competition 433.
[25] In short, a careful process of
investigation of the reasoning adopted by the Commission is required.
That does not mean that,
where the Commission arrives at a
plausible and justifiable conclusion, that it is permissible that
this should be substituted
for an alternative by the Tribunal. Its
task is to ask whether the process of reasoning as contained in the
Commission’s report
can justify the conclusion at which the latter
arrived.
The
Commission’s reasoning
[26] Mr Unterhalter, in his oral
argument before the court, concentrated on two central findings of
the Commission namely, the question
of foreclosure and the definition
of the market.
[27] The concern of a number of
enterprises like appellant, which conduct the business of a sawmills,
was that, if the proposed
merger took place, the increased
concentration in the downstream sawmilling market would make the
merged entity dominant in the
market for sawn timber. This was made
clear to the Commission in representations generated by appellant’s
attorney on 29 January
2007. The following was stated with regard
to vertical foreclosure:
“
1.
CSG
would secure a sustainable and long term supply of saw logs for the
sawmills under its control, the commercial imperative of
which is
self evident if one has regard to the fact that up to 40% of the
total plantation area in the WSC could be phased out,
Boskor is
operating well below capacity and significant capital investments
have been made at the Longmore saw mill.
2. CSG would be able to ensure that
its sawmills get a better log mix, leaving competing sawmills to
compete over a low-grade log
mix. Even where ACW is provided with
the contract volume, the merged entity could easily manipulate the
quality log supply.
ACW can be given all the hard species, small
logs, logs with knots, crooked, burnt, worm eaten, as well as
inaccessible mountainous
area timber (which have a higher cost of
harvesting and is of poorer quality), etc. This would significantly
raise ACW’s costs
due to the lower production rates and higher
wastage associated with the sawing of poorer quality logs, ACW has on
a number of
occasions experienced the manipulation of the quality of
its log supply
.”
In the founding affidavit, deposed to
on behalf of appellant, Mr Westcott noted that this representation
‘proved to be prophetic
because ACW was already experiencing an
increase in the manipulation of the quality of its log supply since
the merger was approved’.
[28] In summary, appellant’s
complaint was that, while it may not be immediately foreclosed in the
sense of being denied total
access to saw logs, its dependence on the
merged entity meant that it was no longer an effective competitor
with the emerged entity.
The best that appellant could hope for was
compliance by the merged entity with its contractual obligations to
supply appellant
with 28 500 cbms saw logs per year. But it would
not be able to access more logs nor could it be sure of the quality
thereof.
[29] Read accordingly, the complaint
concerned foreclosure not only of volume but of quality of product.
The Commission completely
ignored the question of the quality of logs
which might have been provided to appellant: thereby not considering
at all the question
of quality foreclosure.
[30] Turning to volume foreclosure,
the Commission made much of the estimated 100 000 cbms of logs which
would not be available
after March 2008 as a result of fires in the
Tsitsikamma / Longmore region. This observation then supported the
following critical
conclusion on vertical concerns:
“
MTO’s output of saw logs is
going to decline by 100 000 cbms of saw logs, or approximately 15 per
cent of its total volume.
Due to the location of the fires, all of
this volume is going to be reduced in the Tsitsikamma / Longmore
region, where all the
interveners (except Steinhoff) are located.
Existing log output in the Tsitsikamma region is 267 , 500 cbms, of
which 137,500
would continue to be sold to Boskor without the merger,
28, 500 cbms would be sold to ACW and 101,500 cbms were sold on the
open
market. The entire volume sold on the open market is
eliminated as a result of the fires. This effectively amounts to
the volumes
sold to ACW and the smaller millers, and their reduction
in volume is not merger specific
.”
[31] This conclusion is manifestly
unreasoned. In terms of section 12 A of the Act, the Commission
must initially determine whether
or not the merger is likely to
substantially prevent or lessen the competition. Thus, the key
question is to determine the effect
of the merger; in this case; in a
market in which supplies had already declined because of the fire.
The fire can therefore not
be taken out of the equation to justify a
rather cavalier conclusion that the consequent reduction in volume
was not merger specific.
[32] A rational enquiry would examine
how the distribution of the logs took place before the merger and
then compared this position
to what would be likely after the merger.
Before the merger, a supplier of logs would rationally decide how to
distribute its
product between appellant and, for example Boskor, on
the basis of financial considerations. Clearly once the merger had
taken
place, there was an incentive to self supply downstream. The
fire exacerbated the problem because, after the merger, there was
now
greater scarcity than would have been the case had there not been a
fire. This in itself would presumably mean that there
was less
largesse for appellant to distribute to mills other than its own.
But none of these issues appear to have taken up any
of the
consideration of the Commission.
[33] An argument which was raised and
canvassed by the Commission concerned whether Boskor prior to the
merger, had countervailing
power which would have constrained second
respondent prior to the merger. The Commission concluded that,
although this theory
was credible, it did not have any evidence of
constraining power in practice. However, a few pages later in its
own report it
summarises the evidence of the Steinhoff group to
conclude ‘that they believe that the merger results in fundamental
and irreversible
structural change in the saw milling market in the
region. The reason for this claim is Steinhoff’s evidence that
there would
be less constraining power as a result of the merger with
Boskor than previously was the case.
[34] Turning to the market, the
Commission found that:
“
Even though price differentials
and transport costs at first glance would suggest a separate Eastern,
Western and Southern Cape
market this would appear to be a temporary
phenomenon. In the future we expect a lot more product to come from
KZN and the Northern
Provinces and even possibly from imports,
discussed below”.
In coming to this conclusion, the
Commission relied on a report produced on behalf of appellant by Mr
Crickmay to the effect that
approximately 75 000 cbms of product
came into the Eastern and Western Cape from KZN and Mpumalanga. But
Mr Crickmay’s own
report indicates that only a small quantity of
timber could be expected to ‘make their way to the W, S, N Cape
from (the) mills
in the Northern Provinces’. In a report which
would pass a standard of reasonableness as outlined in this
judgment, it was
to have been expected that the Commission engaged
properly with Crickmay report to the effect that there was simply not
enough
supply to meet the demand in the provinces of KZN or
Mpumalanga and further the costs of transporting sawn timber from
those provinces
over the distance would add so significantly to the
costs to make sourcing of sawn timber from those provinces either
unfeasible
is the provinces concerned or at the very least, to give
second respondent a significant degree of market power to increase
prices
by the addition of the transport costs.
[35] Within this context, consider the
following key passage in the Commission’s report in which it
summarises its geographic
market definition:
“
Even though price differentials
and transport costs at first glance would suggest a separate Eastern,
Western and Southern Cape
market this would appear to be a temporary
phenomenon. In the future, we expect a lot more product to come from
KZN and the Northern
Provinces and even possibly from imports
”.
This expectation of the Commission is
never justified in its report nor does the evidence appear to support
its enthusiastic embrace
of the extended market.
[36] A reasoned conclusion about the
market is particularly important to consider the Commission’s own
finding with regard to
the Herfindahl – Hirschman index (HHI) which
is employed to measure the level of market concentration. If the
narrower geographic
market definition (the Cape’s) was employed,
the HHI would increase from 1058 to 1508, an addition of some 450
points. This
is a figure which may have triggered a greater level of
scrutiny on the part of the Commission.
Conclusion
[37] The Commission committed a number
of errors, of both commission and omission, with regard to its
calculations on critical areas
of foreclosure and market definition.
The conclusions which it reached, in particular, its ability to
undertake the predictive
evaluation contemplated in section 12 A (1)
of the Act was vitiated by these significant errors which no
reasonable decision maker
in the position of the Commission would
have so taken or omitted to consider.
[38] Section 2 of the Act contains as
one of the purposes of the Act, that small and medium sized
enterprises have an equitable
opportunity to participate in the
economy. Appellant falls into this catergory enterprise and the
purpose of the Act would be
subverted if the evaluation of the merger
between second and third respondent took place in circumstances where
significant errors
had been constituted so as to justify a conclusion
that an unreasonable decision had been made to the detriment of small
and medium
enterprises.
[39] Without dealing with these
critical question, which were thus not properly determined in its
report, doubt must exist as to
whether the concerns articulated, for
example by Steinhoff, have been resolved: that is that the merger
would result in a fundamental
and irreversible structural change in
the saw milling market in the region. To return to the argument
about unreasonable delay;
the errors committed by the Commission and
the importance of the merger for so significant a part of the economy
in the region
supports the dismissal of the delay argument.
Is
the merger irreversible?
[40] Mr Gauntlett emphasized the
decision in
Chairperson:
Standing Tender Committee and others v JFE Sapela Electronics (Pty)
Ltd and others
[2005] 4 All
SA 487
(SCA) at paras 20 – 29, namely that the court may exercise
its discretion not to grant a review because any relief granted would

be incapable of practical implementation, given the lapse of time
between the launch of the proceedings and the granting judgment.
In
other words, the transactions set out by Mr Reeves, as described
earlier in this judgment, meant that huge prejudice would
be suffered
were appellant to obtain relief.
[41] Given the nature of merger
proceedings, were this argument to succeed, it would be extremely
difficult for any successful party
to gain substantive relief in a
merger review. Mergers require expedition; litigation of a complex
kind demands careful deliberation.
A balance has to be struck
between these considerations as opposed to an abandonment of the
deliberative requirements of adjudication.
In any event, the effect
of a decision to refer the matter back to the Commission would not
practically undo the various transactions
described by Mr Reeves.
On the strength of
Oudekraal
Estates (Pty) Ltd v City of Cape Town
2004 (6) SA 222
(SCA), a decision to merge would have taken place,
pursuant to what was then a duly authorised decision on the part of
the Commission.
In terms of the findings of this court, that
decision by the Commission must be set aside. But the order which
is to be made
in this case does not effect the legal consequences of
any decision or act taken pursuant to the merger as approved by the
Commission.
What flowed legally from the Commission’s decision to
permit the merger, cannot be set aside in these proceedings nor can
any
of the contractual obligations entered into by the merged parties
automatically be declared to be of no force and effect in law,
until
a court, upon hearing the merits of a duly formulated application so
decides. Hence, any setting aside of acts taken pursuant
to the
authorisation of the merger by the Commission would have to flow from
such a duly launched application which would need
to be successfully
upheld by another court.
[42] Any such application would, of
course, have to be brought during the period in which the Commission
would be required to reconsider
its decision, itself an indication
that a stay of any such proceedings would, in the ordinary course, be
far more appropriate than
the granting of irreversible relief; that
is setting aside of transactions already undertaken at the very time
that the Commission
is reconsidering whether to permit the merger.
[43] Thus, it does not appear that
this argument concerning prejudice which has been raised by the
respondents should be fatal to
the relief due to appellant.
[44] For these reasons therefore, the
following order is made:
1. The appeal is upheld with costs,
including the costs of two counsel.
2. The decision of the Competition
Commission of 12 March 2007 to approve the merger between MTO
Forestry (Pty) Limited and Boskor
Saagmeule (Pty) Limited and Boskor
Ripplant (Pty) Ltd is set aside.
3. The transaction is referred back to
the Commission for further consideration as to whether the merger
should be approved and
if so whether appropriate conditions should be
attached to such approval pursuant to the decision of the Commission
to approve
the merger.
______________
DAVIS J P
TSHIQI and ZONDI AJJA concurred