Harmony Gold Mining Company Limited v Gold Fields Limited and Others (43/CAC/Nov04) [2005] ZACAC 4; [2005] 1 CPLR 97 (CAC) (10 May 2005)

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[2005] ZACAC 4
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Harmony Gold Mining Company Limited v Gold Fields Limited and Others (43/CAC/Nov04) [2005] ZACAC 4; [2005] 1 CPLR 97 (CAC) (10 May 2005)

IN THE
COMPETITION APPEAL COURT
43/CAC/Nov04
In the matter between
HARMONY GOLD MINING
COMPANY LIMITED Applicant
And
GOLD FIELDS LIMITED

1
st
Respondent
THE COMPETITION
COMMISSION 2
nd
Respondent
THE MINISTER OF
TRADE AND INDUSTRY 3
rd
Respondent
THE COMPETITION
TRIBUNAL 4
th
Respondent
JUDGMENT: 10 MAY 2005
DAVIS JP
[1] This is an application for leave to appeal to the Supreme Court
of Appeal against the whole of the order of this Court dated
26
November 2004.
[2] The facts of the dispute between applicant and first respondent
are described comprehensively in the principal judgment in which
this
Court set out its justification for the order granted on 26 November
2004. Accordingly, there is no necessity to traverse the
factual
dispute again.
[3] The Court’s order
was couched in the following terms:
‘Pending the final approval of the acquisition by Harmony of all of
the shares in the share capital of Gold Fields or some of the
shares
in Gold Fields pursuant to the early settlement offer (with or
without conditions) by the Competition Tribunal or the Competition
Appeal Court in terms of the Act:
[Harmony] shall be and is hereby interdicted and restrained from
voting, or otherwise exercising any rights attached to, any
shares
in the share capital of [Gold Fields] which is may have acquired
pursuant to the early settlement offer or otherwise.’
[4] Before the matter was heard on 24 March 2005, the Court
communicated with the parties and requested them to consider whether
the dispute was not moot. The reason for this request can be
summarized thus: In the reasons given for the order, the Court found
that the early settlement offer and the subsequent offer in substance
formed part of a single transaction to acquire all the shares
in
first respondent. Subsequent to the order having been granted, the
date of the early settlement order passed and the vote on
the
so-called IAM Gold transaction was concluded. The proposed merger,
which was notified by applicant’s attorney in terms of
Rule 28 of
the Commission’s Rules of 19 October, 2004 has been set down for
hearing before the Tribunal in May 2005. In terms
of the principal
judgment, this Court adopted the approach that at all material times
there was but one merger transaction between
the parties. It is
clear in terms of section 13 A (3), of the Competition Act 89 of
1998 (‘the Act’) that applicant may not
implement this merger as
notified until it has been approved, with or without conditions by
the Competition Commission in terms of
section 14(1)(d) of the (‘the
Act’), Competition Tribunal in terms of section 16(2) of the Act
or the Competition Appeal Court
in terms of section 17 of the Act.
[5] In short, the question of mootness concerns the issue as to
whether the dispute is not now academic in that, subsequent to the
order having been granted, section 13 A(3) of the Act is now of
application to the proposed merger, notwithstanding disputes about
the legal implications of the early settlement offer.
[6] In heads of argument, Mr Unterhalter, who appeared together
with Mr Wilson on behalf of the applicants, submitted that the
matter
was not moot. Relying upon the decision of the Supreme Court of
Appeal in
Radio Pretoria v Chairman, Independent Communications
Authorities of South Africa
2005(1) SA 47(SCA) at 55, he
contended that a case is moot and therefore not justiciable if it no
longer presents an existing controversy
which is required if the
Court is to avoid giving advisory opinions on abstract propositions
of law.
[7] Mr Unterhalter submitted that, upon an application of this test,
the present case was not academic. Although the vote on the
so-called IAM Gold resolutions had taken place, applicant remained
unable to exercise any of the rights attached to its shares in
first
respondent, including the right to vote on any matters that may have
been put to first respondent’s shareholders for approval.
It was
denied the right to minority shareholder protection and possibly even
the right to receive dividends and to sell its shares.
Mr
Unterhalter submitted that, even when the merger proceedings were
finally determined, the interdict would only fall away if
the merger
was approved and not if it was prohibited. It followed that, in the
event that the merger was prohibited, the interdict
would endure
indefinitely even after the merger proceedings were finally
determined. The order would thus constitute a permanent
deprivation
of Harmony’s rights as a shareholder. In my view, Mr Unterhalter is
correct; the scope of the order extends beyond
that which was
intended by this court as is evident from the reasons provided
[8] It was common cause between the parties that this Court has the
power to alter the order granted on 26 November 2004. Section
66(1)
of the Act provides that this Court,
acting on its own accord
or
an application of a person affected by a decision order, may vary or
rescind its decision or order
(a) erroneously sought or granted in the absence of a party affected
by it
(b) in which there is ambiguity, or an obvious error or omission but
only to the extent of correcting that ambiguity, error or omission,
(c) made or granted as
a result of a mistake, to all of the parties to the proceeding. (my
emphasis)
[9] Pursuant to this
section, the Court invited the parties, particularly in the light of
Mr Unterhalter’s submissions, to consider
whether a variation to
the order should not be granted in terms of section 66.
[10] Mr Gauntlett, who appeared together with Mr van der Nest and Mr
Cockrell on behalf of respondents, immediately took up the invitation
of this Court and proposed certain amendments that could be made to
the order. For reasons best known to themselves, applicants’
counsel stoutly resisted this invitation during the hearing. However
on 31 March 2005 they submitted supplementary heads regarding
this
issue.
[11] The wording of section 66(b) of the Act follows the common law
principle. The interpretation of this provision can thus be guided
by
the manner in which courts have dealt with the general common law
principle of correcting, altering or supplementing an order.
In
Firestone South Africa (Pty) Ltd v Genticuro
AG
1977 (4) SA
298
(A) at 307
Trollip JA
said ‘The Court may correct
clerical, arithmetical, or other errors in its judgment or order so
as to give effect to its true intention…This
exception is confined
to the mere correction of an error in expressing the judgment or
order; it does not extend to altering its
intended sense or
substance’.
[12] The order of 26 November 2004 was granted in great haste and
under enormous pressure. The Tribunal had dismissed first
respondent’s
application that the early settlement offer did not
involve an acquisition of control over respondent. Within six days
thereof, this
Court heard an application based upon a voluminous
record together with extensive and complex heads of argument. The
Court was
placed under considerable pressure to dispose of the matter
before 26 November 2004, the cut-off date for the early settlement
offer
It duly issued its order. It was in no position to provide
reasons for the order given, the complex and important arguments that
had been raised by counsel and which required careful analysis
Reasons were provided later. An appellate court should not be
placed
under this kind of pressure. Understandably therefore, the
order granted did not completely or accurately reflect the true
intention
of the Court as evidenced in the written reasons which
were subsequently provided.
[13] There are
accordingly clear grounds for correcting the order to reflect the
proper intention of this Court. The intention of
this Court, as is
clear from the written reasons is that, until such time as the
Competition Authorities had decided upon the notifiable
merger,
applicant should not be entitled to perform any act which could
constitute the implementation of the merger as envisaged
in section
13 A(3) of the Act. The order of 26 November 2004 must therefore be
corrected to give proper reflection to the intention
of the Court.
[14] Once these corrections are made the matter, in my view, becomes
moot. Mr Unterhalter’s eloquence concerning the possibility
of
some ‘other merger’ (other than the one before the Tribunal)
notwithstanding, there is no other merger before the Tribunal
or
which is being proposed by applicants. Mr Gauntlett noted that first
respondent announced its intention to acquire 100% of the
share
capital of first respondent. It was intent on acquiring all the
shares of first respondent. It made its intention clear in
the SENS
announcement and was potentially capable of realizing this intention.
Whatever might be the merits of an argument based
on the early
settlement offer it is this very merger as set out in a SENS
announcement and described in the letter of applicant’s
attorneys
of 19 October 2004 which is now before the Tribunal. This merger
falls within the scope of section 13 A(3). First respondent
is
prohibited from voting its shares or otherwise acting in a manner
which would implement the merger in violation of section13 A(3)
until
such time as the Tribunal and possibly this Court finally determined
the issue. To the extent that the order of 26 November
2004 is
amended so as to replicate this position, the dispute between the
parties which gave rise to the order has become moot.
On this basis,
there are in my view, no reasonable prospects, that another Court
would come to a different conclusion.
For these reasons, the
following order is made:
The order of 26 November 2004 will be corrected thus:
Pending the final determination of the acquisition by Harmony of all
the shares and the share capital of Goldfields or some of the
shares
in Goldfields pursuant to the early settlement offer (with or without
conditions), by the Competition Tribunal or the Competition
Appeal
Court in terms of the Act:
1.1 First respondent shall be and is hereby interdicted and
restrained from voting its shares in the share capital of the
applicant
which it may have acquired in the early settlement offer or
otherwise, which would constitute an attempt to implement the merger
as set out in the SENS announcement of 15 October 2004 prior to the
final determination of that merger by the Competition Tribunal
in
terms of section 16(2) or the Competition Appeal Court in terms of
section 17 of the Act.
2. First respondent is
ordered to pay the costs of the appeal which includes the cost of two
counsel.
3. The application for
leave to appeal is dismissed with costs, including the costs of two
counsel.
________________
DAVIS JP
Jali and Hussain J JA concurred.