Telkom SA Limited v Orion Cellular (Pty) Ltd and Others (38/CAC/Jan04) [2004] ZACAC 4; [2005] 1 CPLR 113 (CAC) (17 December 2004)

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[2004] ZACAC 4
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Telkom SA Limited v Orion Cellular (Pty) Ltd and Others (38/CAC/Jan04) [2004] ZACAC 4; [2005] 1 CPLR 113 (CAC) (17 December 2004)

IN
THE COMPETITION APPEAL COURT
CAC CASE
NO. 38/CAC/JAN04
TRIBUNAL CASE NO.
19/IR/APRIL03
In the matter between:
Telkom SA Limited

Appellant
And
Orion Cellular (Pty)
Ltd
First Respondent
Standard Bank of
South Africa Ltd
Second Respondent
Edgars Consolidated
Stores Ltd
Third Respondent
JUDGMENT:
DAVIS JP
Introduction.
This is an appeal against an order and decision of the Competition
Tribunal (‘the Tribunal’) dated 23 December 2003 and a further
order dated 24 February 2004 in which two interlocutory applications
brought by first respondent against appellant were granted.
In its first
application of 17 September 2003, first respondent sought the
disclosure of all signed and/or unsigned documents concluded
or
exchanged between appellant, second and third respondents. This
application has been referred to in these proceedings as the
‘production
application’. In a second application of 14 November
2003, first respondent sought access to the same documents in terms
of section
45 of the Competition Act 89 of 1998 (‘the Act’).
This application has been referred to in these proceedings as the
‘section
45 application’.
The factual background.
During April 2003 first respondent submitted a complaint regarding
anti-competitive conduct by appellant to the Competition Commission
(‘the Competition’) in terms of section 49 B of the Act.
Simultaneously it launched an application for interim relief against
appellant in terms of section 49 C of the Act. First respondent
contended in its complaint and its interim relief application that
appellant had exploited its position as the sole provider of land
line telecommunication services in South Africa to induce the
customers
of first respondent to terminate their agreements with
first respondent for the connection of calls from fixed phones to
cell phones
and to contract with appellant instead for these and
various other bundled telecommunication services. Central to both
first respondent’s
complaint and its interim relief application
were agreements that appellant concluded with customers of first
respondent, including
second and third respondents. According to
first respondent, these agreements were evidence of anti competitive
conduct.
In its answering
affidavit in the interim relief proceedings, appellant contended that
its contract with second respondent was of
a confidential nature and
accordingly could not be disclosed to first respondent. It was only
prepared to make a copy of this agreement
available to first
respondent’s attorneys and then subject to a confidentiality
undertaking. As regards its agreement with third
respondent,
appellant stated that this agreement was only in draft form and was
still subject to finalization.
Upon signing a
confidentiality undertaking, first respondent’s attorneys examined
the agreement with second respondent and determined,
in their view,
that its contents were not confidential and in any event were
pivotal to, and determinative of, first respondent’s
complaint
against appellant. Accordingly, they contended that these documents
constituted material evidence which should be placed
before the
Tribunal for the purposes of its determination of the complaint and
interim relief application.
Upon a refusal by
appellant to disclose this agreement, first respondent brought the
production application. In its answering affidavit
in the production
application, appellant stated that in order to assist the Tribunal in
assessing the allegation, it was attaching
copies of the agreements
to its answering affidavit under a Form CC 7 claim of
confidentiality. In terms of the Form CC7, appellant
claimed
confidentiality in respect of the entire contents of both second and
third respondent agreements and also the annexures
thereto.
The attachment of these
agreements to appellant’s answering affidavit in the production
application gave rise to a further application
by first respondent
for access to these documents; this time in terms of section 45 of
the Act. Specifically, first respondent requested
the Tribunal to
order, in terms of section 45 of the Act, that information referred
to in appellant’s Form CC7 was not confidential
and thus should be
made available to first respondent. This relief was also resisted by
first respondent, essentially on the same
grounds as it had opposed
the production application.
Both applications were
heard by the Tribunal on 15 December 2003. The Tribunal found for
first respondent and ordered that information
contained in the two
agreements was not confidential, save that the allegedly confidential
information was (on an interim basis)
to be treated as confidential.
It further ordered that appellant be directed to provide copies of
both agreements to first respondent’s
attorneys subject to certain
conditions, being:
These agreements could be disclosed to first respondents directors,
officials, counsel, experts in consultants only and to no
other
persons;
Such disclosure was for the purpose of pursuing the interim relief
application and any related interlocutory litigation, but
for no
other purpose; and
all the recipients were required to sign written confidentiality
undertakings.
Appellant has appealed the decision of the Tribunal, specifically on
the basis that the Tribunal erred in ordering that the information
of
the agreements could be disclosed to directors and other officials of
first respondent as well as first respondent’s consultants.

Appellant avers that the Tribunal ought to have ordered that the
confidential information should only be disclosed to respondent’s
legal representatives and independent experts identified by first
respondent. Furthermore appellant contends that the Tribunal
erred
in ordering that the two agreements attached to appellant’s
answering affidavit in the section 45 application and identified
in
the order as confidential could be disclosed to directors and other
officials of first respondent as well as the first respondent’s
consultants. Similarly, it contends that the Tribunal should have
ordered that this information be disclosed only to first
respondent’s
legal representatives and independent experts
identified by first respondent.
The Right of Appeal to this Court.
When this matter first came before this Court on June 14 2004, the
question arose as to whether the decision of the Tribunal was
appealable to this Court. The matter was then postponed until 29 July
2004 at which hearing, this particular issue became the central
point
of argument. Before any consideration can be given to the merits of
the appeal the question of the appealability of the Tribunal’s
decision must be decided.
This question requires
an analysis of the Act’s treatment of confidential information.
Confidential
information is defined in section 1 of the Act, as meaning ‘trade,
business or industrial information that belongs
to a firm, has a
particular economic value and is not generally available to or known
by others’.
Confidential
information is dealt with in part A of Chapter 5 of the Act. For
the purposes of this dispute, sections 44 and 45
are of particular
relevance.
Section 44 provides as follows:
‘(1)(a) A person,
when submitting information to the Competition Commission or the
Competition Tribunal, may identify information
that the person claims
to be
confidential information.
.
(b) Any claim
contemplated in paragraph (a) must be supported by a written
statement in the prescribed form, explaining why the
information is
confidential.
(2) The Competition
Commission is bound by a claim contemplated in sub-section (1), but
may at any time during its proceedings refer
the claim to the
Competition Tribunal to determine whether or not the information is
confidential information.
.
(3) The Competition
Tribunal may
(a) determine whether
or not the information is confidential; and
(b) if it finds that
the information is confidential, make any appropriate order
concerning access to that information.’
Section 45 provides as follows:
‘(1) A person who seeks access to information that is subject to a
claim that it is
confidential information
may apply to the
Competition Tribunal in the
prescribed
manner and form, and
the Competition Tribunal may –
determine whether or not the information is
confidential
information
; and
if it finds that the information is confidential, make any
appropriate order concerning access to that
confidential
information
.
Within 10 business days after an order of the Competition Tribunal
is made in terms of section 44(3), a party concerned
may
appeal against that decision to the Competition Appeal Court,
subject to its rules
From the time information comes into the possession of the
Competition Commission or Competition Tribunal until a final
determination
has been made concerning it, the Commission and
Tribunal must treat as confidential, any information that –
the Competition Tribunal has determined is
confidential
information
; or
is the subject of a claim in terms of this section.
Once a final determination has been made concerning any information,
it is
confidential only to that extent that it has been accepted to be
confidential information
by the Competition Tribunal or the
Competition Appeal Court.’
The structure of this
part of the Act can be summarized thus:
Any person submitting
information to the Commission or to the Tribunal may identify some or
all of that information to be classified
as confidential. Once this
claim of confidentiality has been made, the Commission can itself
dispute the claim in terms of section
44(2) of the Act or the
Tribunal may itself make a determination regarding the claim and
accordingly make an appropriate order in
terms of section 44(3)(b).
Section 45 gives the
right to ‘a person who seeks access to information that is subject
to a claim that is confidential information’
to apply in a
prescribed manner to the Tribunal for disclosure of such information.
The Tribunal has the power to decide whether
the information is
confidential and, if so, it may then decide how disclosure should be
managed.
There is no express
right of appeal from a decision in respect of an application brought
in terms of section 45(1). To the extent
that there is reference to
a right of appeal, section 45(2) provides for an appeal only in
cases where a decision has been made
in terms of section 44(3) and
then, it would appear, in cases in which the Commission has referred
the claim of confidentiality to
the Tribunal in terms of section
44(2).
The present case.
In the present case, the Tribunal’s decision was not made in
response to a referral of the claim for confidentiality in terms of
section 44(2). The first application, being the production
application, concerned the discovery in the application for interim
relief of agreements which had been concluded between appellant and
second and third respondents. The second application, referred
to as
the section 45 application, was launched by first respondent
expressly in terms of section 45(1) of the Act.
On a reading of the
express wording of section 45(2), it is clear that no right of appeal
is given to appellant in respect of either
of the two applications.
Mr Unterhalter who appeared together with Mr Wesley on behalf of
appellants, submitted however that section
45(2) of the Act refers to
a right of appeal in respect of decisions made by the Tribunal in
terms of s 44(3). He submitted that
this confirms that a right of
appeal exists in respect of decisions on confidentiality made in
terms of s 44(3). In his view, the
purpose of the section is not to
confer a right but simply to regulate the time period within such an
appeal must be brought. On
this basis, the purpose of s 45(2) is no
more than an expression of legislative concern that appeals against
decisions made during
the Commission’s investigations are brought
expeditiously in order to facilitate the investigations of the
Commission.
Mr Unterhalter
contended that a finding that there is a right of appeal from
decisions made in terms of s 44(3) but not in terms of
s 45(1) would
render the Act arbitrary in its operation. In his view, subsections
44(2) and 44(3) provide a special regime for the
determination of
whether information is confidential during the course of
investigations by the Commission. This is the meaning
of the phrase
‘
at any time during its proceedings’.
In those cases
where the Commission has referred a complaint to the Tribunal the
proceedings become those of the Tribunal, not of
the Commission.
The general regime for
the determination of the confidentiality of information in litigation
before the Tribunal is contained in s
45. Mr Unterhalter submitted
that it could not have been the intention of the legislature to
confer a right of appeal in respect
of the specific regime created in
s 44, at the preparatory stage, and not the general regime set out in
s 45(1), during the subsequent
hearing itself. He contended that
the arbitrariness of such a regime is highlighted by the fact that a
right of appeal has been
expressly conferred in respect of decisions
made by the Tribunal in terms of s 45 A(2), that is an appeal against
a decision of the
Tribunal which reveals confidential information in
its decision.
The effect of Mr
Unterhalter’s submission would be to read into section 45(2) the
words ‘or section 45(1)’ after the words section
44(3). To read
in these words would, in effect, give rise to an appeal both in
respect of a decision taken by the Tribunal in terms
of section 44
and section 45(1). This would ignore the difference between the two
situations contemplated. Section 44 is concerned
with the
communication to a third party by the Commission or Tribunal of
information that they have acquired from an informant. Section
45 is
concerned with a third party’s right to acquire information already
held by the Commission or Tribunal; the first deals
with a claim of
confidentiality; the second with the access by a third party of
information already subject to a claim of confidentiality.
Section 45(2) is
connected to the first procedure and effectively the process of a
claim to confidentiality as set out in section
44. Section 45(2)
gives a party the right to challenge a decision of the Tribunal to
whether information is confidential and if
so, how such information
could be accessed. In my view, there is a clear difference between a
procedure in which information is classified
as confidential and a
mechanism whereby a third party can lay claim to information of
another which has already been so classified.
Mr Unterhalter thus
submitted that, were a construction of section 45 to be adopted
whereby appeals were confined to decisions taken
in terms of section
44(3), the legislative procedure would be arbitrary in its operation.
Mr Brassey, who appeared together with
Mr Wilson, on behalf of
respondents, contended that an order made under section 44(3) is
made by one organ in the hierarchy of anti
competition regulators,
being the Tribunal in respect of a decision of another regulator,
being the Commission. Concerns of public
perception and consideration
of regularity made it important that the two bodies remain
independent and that their adjudicative dealings
be clearly
transparent. The provision of a mechanism for scrutiny by a Court of
their interactions
per se
ensures that this imperative of
policy is safeguarded. For these reasons, Mr Brassey contended, the
grant of a right of appeal only
in respect of decisions taken in
terms of section 44(3) was based on sound policy grounds..
Whatever the policy
considerations for providing a specific appeal in respect of a
section 44 claim as opposed to section 45 claim,
it is extremely
dangerous to speculate on the intention of the legislature when this
Court is asked to depart so markedly from the
express wording of a
section. See
Summit Industrial Corporation v Claimants against the
Fund comprising the Proceeds of the Sale of M V Jay Transporter
1987
(2) SA 583
(A) at 596 J-597 B.
Appellants argument
amounts to a claim of a
casus omissus.
However
an
interpretation based on an appeal in respect of one procedure and the
absence thereof in respect of an entirely different procedure
does
not give rise to so glaring an error, so unfortunate a consequence,
that if it can be confidently concluded that Parliament
had
overlooked a right of appeal in respect of the one procedure, being
the claim by a third party to confidential information.
A General Right of Appeal.
Section 37(1) of the
Act provides that the Competition Appeal Court may –
review any decision of the Competition Tribunal; or
consider an appeal arising from the Competition Tribunal in respect
of –
any of its final decisions, other than a consent order made in
terms of section 63; or
any of its interim or interlocutory decisions that may, in terms of
that be taken on appeal.
In the alternative appellant relied on a residual right of appeal in
terms of s 37(1). This argument appears to accept the inapplicability
of the express provisions, namely section 44 and 45 of the Act in
conferring a right of appeal against orders pertaining to a claim
for
confidential information by a third party.
Mr Unterhalter
submitted that a decision on confidentiality in terms of section
45(1) of the Act is ‘a final decision’ in terms
of section
37(b)(i) of the Act and that the Tribunal’s decision was
appealable, notwithstanding that section 45 might not specifically
confer such a right.
Mr Unterhalter
submitted that the decision of the Tribunal in the present case
effectively amounted to a final decision. The inroads
made on
appellant’s right of confidentiality by an order compelling
disclosure of such information were substantial and irreversible.
In
his view, confidentiality once lost, cannot be restored. As was held
in
Southern African Motor Industry Employers Association v South
African Bank of Athens Ltd
1980 (3) SA 91
(A) at 96 H, in
determining whether an order is final it is important to bear in mind
that ‘not merely the form of the order must
be considered but also
predominantly its effect’. Recently, in
Metlika Trading Limited
and 4 Others
v
CSARS (
unreported decision of the Supreme
Court of Appeal case No. 427/03) an order was granted by the High
Court that the respondent take
all necessary steps to procure the
return of an aircraft to South Africa. The order was stated to be an
interim order pending the
finalization of an action by the respondent
against some of the appellants. The question arose as to whether
such an order was appealable
on appeal.
Streicher JA
said ‘The
order that steps be taken to procure the return of the aircraft to
South Africa, as well as the other orders relating
to the aircraft,
were intended to have immediate effect, they will not be reconsidered
at the trial and will not be reconsidered
on the same facts by the
court
a quo
. For these reasons they are in effect final
orders’. (at para 24).
This approach sought to
follow the well known test laid down in
Zweni v Minister of Law
and Order
1993(1) SA 523 (A) at 536 B where the Appellate
Division held that a decision is only appealable if it complies with
three attributes,
being that the order is final, that it has
definitive of the right to the parties and has the effect of
disposing of at least a
substantial portion of the relief claimed in
the main proceedings.
The decisions in
Metlika, supra
which dealt with an appeal against an order to
return an aircraft to South Africa and
Macosand v Macassar Land
Claims Committee and Others
(unreported decision of Supreme Court
of Appeal case No. 594/03) which dealt with an appeal against an
interim interdict preventing
the undertaking of further mining
operations, effectively for a lengthy period, are clearly
distinguishable from the facts of this
case. The present dispute
deals with a question of procedure which is inextricably limited to
the manner in which the primary dispute
between the parties will be
litigated. Compare in this connection the judgment of
Cloete JA
in
Mantruck & Bus (SA) v Dorbyl Ltd
2004 (5) SA 226
(SCA) at para 21. In short, the present dispute does not comply with
the
Zweni
test and is thus not a judgment or order which is
appealable.
Even if a decision is an interim or interlocutory it ‘may, be taken
on appeal’ but only if the Act so provides (section 37(1)(b)(ii).
Certain interim or interlocutory decisions can be taken on appeal,
where the Act so specifies such as, for example, in section 49
C(7).
However, for the reasons already given, the Act does not grant any
specific right of appeal to an aggrieved party where the
Tribunal
has provided access to confidential information under section 45(1).
For
these reasons, the appeal is dismissed with costs including the costs
of two counsel.
_______________
DAVIS JP
I agree

______________
SELIKOWITZ JA
I agree

_______________
MAILULA AJA