American Natural Soda Ash Corporation and Another v Botswana Ash (Pty) Ltd and Others (CAC64/8/2006) [2007] ZACAC 2 (11 June 2007)

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[2007] ZACAC 2
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American Natural Soda Ash Corporation and Another v Botswana Ash (Pty) Ltd and Others (CAC64/8/2006) [2007] ZACAC 2 (11 June 2007)

15
IN THE COMPETITION APPEAL COURT OF
SOUTH AFRICA
CASE NO
:
CAC64/8/2006
DATE
: 11 JUNE 2007
In the matter between:
AMERICAN NATURAL SODA ASH
First Applicant
CORPORATION
CHC GLOBAL (PTY) LTD
Second Applicant
And
BOTSWANA ASH (PTY) LTD
First Respondent
CHEMSERVE TECHNICAL PRODUCTS
(PTY) LTD
Second
Respondent
WEBBER WENTZEL BOWENS
Third Respondent
THE COMPETITION COMMISSION
OF SOUTH AFRICA
Fourth Respondent
J U D G M E N T
(Application for Leave to Appeal)
DAVIS, JP
:
[1] This is an application for leave
to appeal against the judgment of this Court of 5 January 2007 in
which the Court dismissed
an appeal against the decision of the
Competition Tribunal (‘Tribunal’). The Tribunal had refused an
application for the
disqualification of first respondent from
continuing to participate as an intervenor
in
complaint proceedings which had been brought by fourth respondent
before the Tribunal, together with its legal team, being the
third
respondent, from continuing to represent first respondent in those
proceedings.
[2] Before dealing with the merits of
the application for leave to appeal, it is necessary to set out the
test which must be applied
by this Court before it grants leave to
appeal to the Supreme Court of Appeal.
[3] In
American Natural Soda Ash
Corporation & Another v The Competition Commissioner &
Others
2005(6) SA 158 (SCA) at 21-22, the Supreme Court of
Appeal set out the test thus:
“
As we observed in Numsa..., the
procedures for applying for leave to appeal and the factors relevant
to obtaining special leave
are well established. The criterion for
the grant of special leave to appeal is not merely that there is a
reasonable prospect
that the decision of the CAC will be reversed,
but that the applicants can establish some ‘additional factor or
criterion’.
One is whether the matter, though depending mainly on
factual issues, is also of very great importance to the parties or
of great
public importance.
In applying this criterion, this
Court must be satisfied, notwithstanding that there has already been
an appeal to a specialist
tribunal and that the public interest
demands that disputes about competition issues be resolved speedily,
that the matter is objectively
of such importance to the parties or
the public, that special leave should be granted.
We emphasise once more that the fact
that applicants have already had a full appeal before the CAC will
normally weigh heavily against
the grant of leave. And the demands
for expedition add further weight to that.”
In this connection see also the test
for special leave as set out by
Corbett, JA
(as he then was)
in
Westinghouse Brake & Equipment v Bulger Engineering
1986(2) SA 555 (A) at 564-565.
[4] In summary, it is clear that
leave from this Court can only be granted in special circumstances
in terms of the test as has
been set out. This stringent approach
to leave is clearly congruent with the objects of the Competition
Act 84 of 1998 (‘the
Act’). One of the purposes of the Act is to
ensure that, save for constitutional matters, this Court should be
the final forum
for all litigants. That the drafters appeared to
overlook a provision in the Constitution has produced a situation
where there
is a further possible hearing to the Supreme Court of
Appeal (“the SCA”). The SCA has recognised that the
constitutional demand
that it is the final court for appeal in
relation to non-constitutional matters must be weighed with the
purposes of this Act so
that special leave becomes the appropriate
test. See
American Natural Soda Ash Corporation
, supra.
[5] I make one further comment about
special leave. Almost any case that comes before a Court dealing
with leave to appeal is of
importance to the parties concerned.
Litigation, by its very nature, is a process about which the warring
parties feel strongly.
That is why they have been unable to resolve
their disputes and come before a court. If the test for special
leave is to be applied,
it cannot simply be that leave is granted
because the matter is of importance to the parties. The dispute
must be of such importance
to make it distinct from considerations
which would normally apply in matters of leave to appeal.
[6] Mr
Brassey
, who appeared
together with Mr
McNally
for the appellants (applicants in
this application), sought to persuade this Court that leave should
be granted essentially on
two bases namely, that this Court had
erred in its rejection of the so-called “side-switching argument”
and secondly, that
there was clear evidence of a breach of
confidence sufficient to justify the relief which applicants sought
initially from the
Tribunal and then from this Court.
[7] Mr Brassey now refined his
argument about side-switching. He contended that in the present
case there had clearly been a switch
by Mr Dingley from the fourth
respondent to third respondent. On the basis of that switch, fourth
respondent had a justifiable
cause for complaint. Even if fourth
respondent refused to so proceed, the applicants would have
locus
standi
to ‘slipstream’ fourth respondent and bring a case on
the basis of side-switching. In other words, once a side-switch had

been established, a third party in the position of applicant could
also bring such an application. Mr
Brassey
conceded, as he
had to, that none of the authorities presented to this Court, fell
within this factual matrix. In all of the cases
that had been
presented to this Court, the side-switching involved a movement from
one party to an adversarial party.
[8] In the present case, Mr Dingley
had been employed by fourth respondent which, as Mr
Gotz
, who
appeared on behalf of the first respondent noted correctly, had a
duty to prosecute a complaint which had been brought by
first
respondent, both in the interests of the public and in the interests
of first respondent (‘the complainant’). The side-switching
jurisprudence
did not extend to the case of a person moving
from one party to another who was also in an adversarial position to
the applicant.
[9] Viewed accordingly, it is
difficult to see what possible merit there could be in this nuanced
approach adopted by Mr
Brassey
to the issue of
side-switching. Mr
Trengove
, who appeared on behalf of
third respondent classified it as a new argument. It is not
necessary for this Court to determine
whether it was a new approach
or merely a subtle shift of an argument which had previously been
presented to this Court.
[10] That leads to the issue of the
breach of confidence. Mr
Brassey’s
central point,
which he made most forcibly in his reply, can be summarised thus:
Applicants had entered into confidential discussions
to settle a
dispute with fourth respondent. Pursuant to that initiative, they
sought an undertaking of confidentiality. Accordingly,
it could not
be contended that the test in a matter such as the present dispute
should result in the position that, once the discussions
had been
sought to be undertaken in a confidential manner, applicant would
have to show precisely what was confidential in order
to obtain
relief.
[11] Expressed differently, the
discussion took place pursuant to a confidential undertaking. A
person who was present at those
confidential discussions owed a duty
to the parties to those discussions to uphold the undertaking of
confidentiality. Once Mr
Dingley had moved from fourth respondent
to the third respondent, he had no right to breach that undertaking,
nor did the applicants
have to do more than show that a person
present at these confidential discussions had moved to an
adversarial party in order to
obtain the relief sought in this case.
[12] In amplification of this
argument, Mr
Brassey
submitted that the proper test to be
applied was the following: could there be an exploitation of the
information given to Dingley
which could lead to a position which
could be detrimental or disadvantageous to applicants?
[13] Mr
Trengove
correctly
pointed out that the potential exploitation of information given to
Dingley could only justify the relief sought by applicants
if that
information had been confidential, was still confidential and
remained relevant to the dispute in point. On the facts,
as this
Court has already found, Dingley denied the set of allegations
raised by applicants. If the two affidavits to which Mr
Dingley
deposed in this case, are examined, these documents reveal that he
was at great pains to deny that any information of which
he was
possessed was of a confidential nature.
[14] Mr
Brassey
made much of
the fact that there was a shift in the approach given by Mr Dingley
in the two affidavits to which he deposed, namely,
that in the first
affidavit he had no recollection of the discussions, while in the
second affidavit he “suddenly” began to
recollect details
thereof.
A more careful reading of the second
affidavit supports a different set of conclusions. In the second
affidavit Mr Dingley discusses
the fact that in October 2005 he
entered the employ of third respondent and that he had no
involvement in the present saga of litigation
until late April 2006,
approximately four years after his last involvement with the case.
He then describes how he spoke with
members of third respondent
regarding what had occurred while he was in the employ of fourth
respondent. The narrative continues
at paragraph 36 of this
affidavit:
”
It was concluded that there was
nothing barring me from involvement in the matter and it was
understood that I remained subject
to the confidentiality provisions
of the Act. This conclusion was reached after taking into account
the following:
36.1. First, the settlement agreement
had been discovered and made available to third respondent (its
contents were thus known)
and had been placed before this Tribunal
for formalisation as an order…
36.2. Second, having carefully
studied the pleadings filed of record, I determined that my
recollection of the meetings and the
discussions to which I have
been made party, had been pleaded and were contained in the written
arguments before the Appeal Court.
In particular, the record
reflects that the First Applicant had pleaded and argued that it
should be properly construed as a pro
competitive legitimate joint
venture.
36.3. Third, I believed (and still
do) that at the relevant time, I had no knowledge of any
confidential information of the applicants
at all, let alone any
such information which is germane to the first respondent’s
interests in the Ansac matter...
36.4. Fourth, a significant period of
almost four years has elapsed since my previous limited involvement
and the case appeared
to have developed considerably based on my
analysis of the pleadings and recollection of events”.
These passages clearly show that, if
the two affidavits differed, it was due to additional information to
which Dingley had had
recourse, prior to the second affidavit.
[15] On these facts, which call to be
examined in terms of the approach adopted in
Plascon-Evans Paints
Ltd v Van Riebeeck Paints (Pty) Ltd
1984(3) SA 623 (A), the
question arises as to how another Court could come to a conclusion
different to this Court. In other words,
is there any information
which another Court could glean from the affidavits presented by
applicants and the detailed denial by
respondents which would
justify it to conclude that the radical relief sought in this case
can be granted on a broad and relatively
bald assertion of
confidentiality? I think not.
[16] There is no argument which has
been presented to this Court which suggests that the
Plascon-Evans
rule should not apply in this case. Accordingly, on its
application, it appears that there can be no reasonable prospect of
success
to the extent that this consideration remains part of the
test which must be taken into account in considering special leave.

As Mr
Trengove
further asked rhetorically, if the necessary
information is not placed before the Court, where lies the cause of
action to sustain
the drastic form of relief sought by applicants?
[17] There is a further consideration
which justifies the approach of this Court. In determining whether
applicants meet the test
of special leave, as I have already noted
the matter must be of very great importance to the parties or of
great public importance.
What that means is that this dispute must
clearly be of such import as to be critical to the ultimate case,
being the complaint
brought by first respondent to fourth
respondent.
[18] Mr
Gotz
referred us to a
decision of the Second Circuit of the United States Court of Appeals
in
Armstrong v McAlpin
625F.2d433, a case which has been
confirmed by the US Supreme Court in
Firestone Tyre & Another
v Risjord
[1981] USSC 6
;
449 US 368
(1981). In
Armstrong,
the issue
before the Court,
inter alia
, was that of a so-called
‘midstream’ appeal similar to that confronting this Court,
namely the question of a disqualification
of a firm representing a
party in a dispute. The Second Circuit said the following:
“
In recent opinions many members of
this court have noted that the availability of an immediate appeal
seemingly contributed to the
proliferation of disqualification
motions and the use of such motions for purely tactical reasons,
such as delaying a trial”.
The judgment then goes on:
“
[W]e do not think the harm caused
by the erroneous denial of disqualification motion differs in any
significant way from the harm
resulting from other interlocutory
orders that may be erroneous, such as orders requiring discovery
over a work product objection
or orders denying motions for recusal
of the trial judge.
In those situations we have held that
no immediate appeal is available as a matter of right...Moreover,
the harm caused by an erroneous
denial of a disqualification motion
is usually not irreparable since this court retains its traditional
power to grant a new trial
if the district court’s ruling
ultimately turns out to be incorrect”.
[19] These
dicta
do not
justify a denial of an appeal
per se
, but rather support the
conclusion that this particular appeal is not of such “very great
importance to the parties” to justify
special leave. In other
words, in this matter, applicants had an opportunity to put their
case before the Tribunal and, furthermore,
appealed to this Court.
On the reasoning adopted in
McAlpin’s
case, it would appear
that it can never be said that this dispute, at this stage of the
overall proceedings is of such great importance
as to justify
special leave.
[20] In my view, to adopt a contrary
position, would be to so weaken the notion of special leave as to
hollow it of content so that
almost all cases prosecuted in the
Tribunal, appealed to this Court will be heard in the Supreme Court
of Appeal and possibly,
with some imagination from one or other
counsel, in the Constitutional Court. That can never be in the
interests of competition
jurisprudence
in this country or the
economy which is dependent on speedy and expeditious resolution.
[21] In my view, this case raises no
profound new question of law because the case is resolved on the
facts. It is not of such
great importance to the parties for the
reasons I have outlined. For these reasons the application for
leave to appeal is dismissed,
with costs, including costs of two
counsel.
DAVIS, JP
MAILULA, AJA and PATEL, AJA
:
Concurred.