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[2006] ZACAC 7
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Mybico v Lewis NO and Others (59CACFeb06) [2006] ZACAC 7; [2006] 2 CPLR 459 (CAC) (20 June 2006)
IN THE COMPETITION
APPEAL COURT OF SOUTH AFRICA
CASE
NO
:
59/CAC-200606-02
DATE
:
20 JUNE 2006
In the matter between:
MYBICO
…......................................................................................
Applicant
And
DAVID
LEWIS
N.O.
(in his capacity as
the presiding member of
the
Competition
Tribunal)
….....................................................................
1
st
RESPONDENT
THE
COMPETITION TRIBUNAL
….................................................
2
ND
RESPONDENT
VODAFONE
GROUP PLC
…............................................................
3
rd
RESPONDENT
VENFIN
(PTY) LIMITED
…................................................................
4
th
RESPONDENT
JUDGMENT
DAVIS, JP:
On
the 11
th
of
January 2006 the second respondent issued merger clearance
certificates approving the merger between third and fourth
respondents
as well as Business Venture Investments No 951 LTD and
fourth respondent.
Although the
transactions were filed separately, they were considered by second
respondent to be inter-dependent. Argument relating
to these
transactions was heard by the second respondent simultaneously. In
reasons which were provided later by the Tribunal,
the transactions
were approved.
On 24 February 2006
applicant sought relief by way of a notice of motion, the relief
being set out as follows: the decision taken
by the first and second
respondents to approve the merger between third and fourth
respondents in terms of Section 16 (2) (a)
of the Competition Act 98
of 1998 ('the Act') and the decision to issue a merger clearance
certificate in terms of the Competition
Tribunal Rule 35 (5) (a) be
reviewed and set aside.
The matter was initially
enrolled by this court and, given certain defects, it was then
withdrawn. This Court sought to accommodate
applicant, particularly
because applicant had raised considerations relating to black
economic empowerment and participation
in the economy by
historically disadvantaged communities, being key objectives of the
Act.
Accordingly, the Court
set the matter down for this morning. In terms of the Rules of this
Court, a directive was issued in terms
of which heads of argument
were required to be filed by applicant fifteen court days prior to
the hearing and in the case of
the respondent, ten court days. When
it became apparent that these heads of argument were not going to be
filed timeously, as
a Judge President of this Court, I instructed
the Registrar to make contact with the attorney who represented the
applicant.
The Registrar informed me that the attorney had
withdrawn, in that the applicant was not able to provide sufficient
funds for
the costs of representation.
Pursuant to this
information I instructed the Registrar to make contact with
applicant, which proved to be extremely difficult.
Faxes were sent,
telephone contact was attempted but with no success. Indeed, as at
yesterday (that is one day before the matter
is to be heard) this
Court had no idea as to whether the matter was to proceed and, if
so, in what format. In a spirit of ensuring
that parties should feel
comfortable in approaching this Court, the Registrar even went to
the lengths of contacting respondents'
attorney in order to obtain
some assistance from that office as to how this Court might contact
applicant. All of these attempts
proved to be futile.
This morning I was
informed at 8.03 by the Registrar of the Court that a fax would be
received by my office entitled 'request
for postponement'. Mr
Cockrell, who appears on behalf of the respondents, informed this
Court that his client had received this
fax at approximately 16:30,
the day before the hearing. The request for postponement which is
unaccompanied by any affidavit
or substantiation of the points
made reads thus,
"the organisation
MYBICO requests the Presiding Officer "Judge President" of
the Competition Appeal Court to postpone
the hearing of 20 June 2006
for the following reasons.
1. Although we filed an
appeal our attorneys of record has withdrawn due to lack of funds to
pay them.
2. We have not been able
to draft heads of argument as we do not have an attorney.
3. We have approached
the Legal Aid Board who cannot assist us.
4. We are currently
trying to obtain the services of one of the legal aid clinics at the
universities.
5. We are also setting
up a trust fund to fundraise for the funds required.
6. We request the Court
to postpone the hearing for ten weeks."
Mr Mothopeng, who
appeared for the applicant this morning informed this Court that
applicant was involved in negotiations with
various firms of
attorneys in order to procure legal representation; accordingly he
felt confident that within ten weeks, applicant
would be able to
provide heads of argument to substantiate its case. Hence he
requested a postponement.
As
Mr Cockrell correctly submitted, postponements are not merely for
the taking. They have to be properly motivated and substantiated.
As
the Court said in
Madnitsky
v Rosenberg
,
1949 (2) SA 392
(A) at
399,
"No doubt a Court
should be slow to refuse to grant postponement where the true
reasons for a party's non-preparedness has
been fully explained,
where his unreadiness to proceed is not due to delaying tactics and
where justice demands that he should
have further time for the
purpose of presenting his case".
These are weighty
considerations. In this case, the pattern of applicant's conduct has
been to generate delay after delay without
any substantiation as to
why such delays were created. The first respondent, in his answering
affidavit sets out the background
to much of this dispute as
follows:
"20.1 At no stage
did the applicant make any submissions to the Competition Commission
during its investigation of the merger;
20.2. The applicant
never applied to intervene in the second respondent's proceedings;
20.3. The applicant
never in any other way made itself a party to the merger
proceedings;
20.4 The applicant was
not present at the hearing as it is evidenced by the attendance
register ..." Third respondent then
continues,
"The
applicant submitted the documents referred herein on the 11
th
of
January 2006 at 10:12. The documents were provided to the merging
parties at the commencement of the hearing which considered
same and
made a joint submission to the effect that the objection therein
should not be entertained."
The narrative can then
be picked up in the reasons provided by second respondent in which
the following is stated:
"The Tribunal
received a last minute objection to the merger in the form of a
joint written statement from the two groupings
called MYBICO and HBR
Foundation. The objection arrived after the proceedings were due to
begin. However fortuitously it was
received by the panel minutes
before the hearing actually began. The objection was nevertheless
put to the merging parties who
argued that it should not be
admissible. We are of the view that the written submission
containing the objection should be considered
despite the
un-procedural manner in which it was brought. The authors of the
objection did not attend the hearings and therefore
did not speak to
their submissions." (para 13)
Thereafter second
respondent sets out the basis by which it rejected these
submissions. In particular it states;
"In terms of the
Competition Act the
Tribunal does not have the power to tell parties
whom they should sell to. At most the Tribunal is empowered to
prohibit a merger
on the grounds listed in the Act." (para 14)
It appears to be that
applicant's real complaint is that part of the shareholding should
have been sold to "a true BBBEE
with the same or even
subsidised share value of R47,25".
The Tribunal them
concluded: "It would take an enormously ambitious reading of
this provision to contend that it empowers
us to require parties to
sell the interest, which is the subject of the merger, not to their
chosen acquirer but to a person,
or class of persons, of our
making." (para 17)
On this basis, the
Tribunal considered and dismissed the objection. So much therefore
for the background to both the substance
of the dispute and the
conduct of applicant in prosecuting its case.
As
I have noted earlier in
Madnitsky
case,
supra, the Court should grant a postponement where the true reasons
have been fully explained, where there have been no
delaying
tactics, and where justice so demands. Manifestly, we have not been
provided, with an adequate explanation for applicant's
dilitory
conduct throughout these proceedings. There is at least an inference
that can be drawn that there have been some delaying
tactics,
particularly in that this Court has bent over backwards to
accommodate applicant on at least two separate occasions.
Insofar as
this particular application is concerned, I have already set out, in
my view, the extraordinary steps to which this
Court went in order
to facilitate this application being heard properly.
As to the question of
justice, two issues should be considered. One concern as Mr Cockrell
submits, is the significant prejudice
to the respondents in this
case, particularly third and fourth respondents. Clearly if a merger
has been approved by the Tribunal
some six months ago there must be
prejudice if a cloud of litigation hangs over the merger for an
indefinite period.
Secondly
it seems to me that the Court needs to consider, to some extent, the
substance of the application. Applicants have suggested
three
separate grounds by which their relief should be granted; Firstly,
non-compliance by the second respondent with the principle
of
audi
alteram partem,
secondly,
bias on the part of the second respondent and thirdly, failure to
apply its mind.
Insofar
as the second and the third grounds are concerned, that is bias and
failure to apply its mind, there is no evidence provided
in the
founding affidavit of applicant to substantiate this particular set
of objections. Insofar as the first objection is concerned,
that is
a breach
audi
alteram partem,
as
Mr Cockrell submitted in his written heads of argument, it is
difficult to understand how applicant can seriously advance this
complaint in the circumstances where it did not attend the hearing.
If applicant had been present at the hearing, it might have
sought
leave to address the second respondent. The fact is that applicant
did not seek to do so. Indeed the affidavits which
have been put
before this Court make it clear that applicant's representative
arrived at the offices of second respondent at
11.15, that is
significantly after the hearing had ended.
Notwithstanding this, as
Mr Cockrell said, it is somewhat surprising to read the averment of
Mr Mothopeng that;
"he
together with other members of the applicant attended at the hearing
on the 11
th
of
January
2006"
As Mr Cockrell
submitted, since applicant failed to attend the hearing there can be
no basis for its complaint that it was not
afforded an opportunity
to make oral representations to second respondent. In my view, after
a careful consideration of the papers
which have been provided in
this Court, there is no justification for any other conclusion than
that there is no meaningful substance
in the case which has been
brought by applicant.
I want to make one final
point. Mr Mothopeng very eloquently told this Court that the youth
of this country should participate
in the economy. There can be no
question that he is absolutely correct. There can be no doubt that
the future of this country's
democracy depends upon the most
widespread participation in the economy by all South Africans,
particularly those millions who
were precluded from adequate and
fair participation in the economy due to 300 years of racist rule.
This judgment should not
be construed in any way to contradict or
not to support this line of argument. However a Court must follow
the rules which are
laid down, the procedures which are contained in
the Act and the jurisprudence which has been set out over a long
period of time.
There is no merit in
granting a postponement when a Court does not consider there to be
any substance in the application. The
fact that there is no
substance in the application does not however mean that Mr
Mothopeng's client should not seek to negotiate
with respondents to
ensure the implementation of his commendable vision. Indeed, this
Court offered the parties an opportunity
to do that, and it was only
upon their refusal to continue along these lines, that this Court
was compelled to come to this conclusion.
In the result, the
procedural defects in the application, are condoned given that the
applicant is not legally represented. The
application for
postponement and the main application are dismissed, together with
costs.
DAVIS, JP
Mailula and Patel AJJA's
concurred.