Standard Bank Investment Corporation v Competition Commission and Others, Liberty Life Association of Africa Ltd v Competition Commission and Others (44/2000, 50/2000) [2000] ZASCA 20; 2000 (2) SA 797 (SCA) ; [2000] 2 All SA 245 (A) (31 March 2000)

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[2000] ZASCA 20
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Standard Bank Investment Corporation v Competition Commission and Others, Liberty Life Association of Africa Ltd v Competition Commission and Others (44/2000, 50/2000) [2000] ZASCA 20; 2000 (2) SA 797 (SCA) ; [2000] 2 All SA 245 (A) (31 March 2000)

IN THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
CASE NO. 44/2000
In the matter between
Standard Bank Investment Corporation First Appellant
and
The Competition Commission First Respondent
The Competition Tribunal Second respondent
The Minister of Finance Third Respondent
The Registrar of Banks Fourth Respondent
The Minister of Trade and Industry Fifth Respondent
Nedcor Limited Sixth Respondent
Old Mutual PLC Seventh Respondent
The Executive Officer of the
Financial Services Board Eighth Respondent
Liberty Life Association of Africa Limited Ninth
Respondent
South African Society of Banking
Officials Tenth Respondent
The Securities Regulation Panel Eleventh Respondent
________________________________________________________________
CASE NO 50/2000
In the matter between
Liberty Life Association of Africa Limited Second
Appellant
and
The Competition Commission First Respondent
The Competition Tribunal Second Respondent
The Minister of Finance Third Respondent
The Registrar of Banks Fourth Respondent
The Minister of Trade and Industry Fifth Respondent
Nedcor Limited Sixth Respondent
Old Mutual PLC Seventh Respondent
The Registrar of Long-Term Insurance Eighth Respondent
Standard Bank Investment Corporation Limited Ninth
Respondent
South African Society of Banking Officials Tenth
Respondent
The Securities Regulation Panel Eleventh Respondent
BEFORE: HEFER, NIENABER, HARMS, MARAIS and
SCHUTZ JJA
HEARD: 23 MARCH 2000
DELIVERED: 31 MARCH 2000
Bank merger - insurance merger - regulatory authorities
- whether Minister of Finance and Registrar of Long-Term Insurance -
or
whether competition authorities as well - interpretation of
statutes - literal and purposive construction.
________________________________________________________________
J U D G M E N T
________________________________________________________________
SCHUTZ JA:
[1] The issue in this appeal is whether the Competition
Commission established under the Competition Act 89 of 1998 (“the
Competition
Act”) is one of the regulatory authorities whose
approval of a bank merger and an insurance merger is required.
[2] Nedcor Limited (“Nedcor”) has announced its
intention of bringing about the merger of itself and Standard Bank
Investment
Corporation Ltd (“Standard Bank”), the controller of
Standard Bank of South Africa Ltd. Standard Bank is the appellant
in
one of two appeals which have been heard as one, together with a
third purported appeal. Standard Bank is, through its subsidiary,

the largest commercial bank in South Africa. Nedcor rates third or
fourth. The board of Standard Bank opposes the merger, the
largest
ever attempted in our country. The shareholders of Standard Bank
are yet to speak. If the merger does take place it
will also
profoundly affect the second appellant, Liberty Life Association of
Africa Limited (“Liberty”). Control of Standard
Bank will give
Nedcor and, through it, its own controller - Old Mutual PLC (“Old
Mutual”) - control over Liberty. Old Mutual
and Liberty are
competitors in the long-term insurance market. Liberty sides with
Standard Bank in opposing the proposed merger,
as does the South
African Society of Banking Officials, one of the respondents.
There are eleven respondents in the Standard
Bank appeal and eleven
in the Liberty appeal (but not quite the same eleven). It would
serve no point to list them all and I shall
identify them to the
extent necessary as they appear. It should be added, though, that
the Minister of Finance, the Registrar
of Banks and Old Mutual (all
respondents) side with Nedcor’s contentions. The Competition
Commission has also purported to appeal
and was represented before
us by two counsel. However, it appeared that it was not asking for
any order, but was merely concerned
at some of the reasoning of the
court
a quo
. It is therefore not an appellant, but that does
not mean that it may not attract an adverse order for costs because
of its participation
in the hearing.
[3] Much has been said in the papers about the merits
and demerits of Nedcor’s proposal. This is not a subject on
which this
court should express any view. The decision is one that
rests, in the first place, with the appropriate regulatory
authorities
and ultimately, if permission be given, with the
shareholders of Standard Bank. In fact the issue in the appeals
concerns the
identitification of the regulators. Nedcor contends
that, as its proposal involves the acquisition of more than 49% of
the
shares in a company controlling a bank, the decision required is
that of the Minister of Finance in terms of s 37 (2) (a) (iii)
of
the Banks Act 94 of 1990 (“the Banks Act”) (albeit after
consultation with the Competition Commission under s 37 (2) (b))
and, as its proposal also involves the acquisition of control over
one life insurer by another, Nedbank accepts at this stage that
the
further decision of the Registrar of Long-Term Insurance in terms of
s 26 of the Long-Term Insurance Act 52 of 1998 (“the
Long-Term
Insurance Act”) is also required. Standard Bank and Liberty, on
the other hand, contend that approval in terms of
the
Competition
Act is
an additional requirement. As the merger is a “large
merger”as defined in
s 11
(3) (b), the Competition Commission
would have to refer it to the Competition Tribunal (one of the
other respondents) and the
Minister of Trade and Industry (another
respondent) with its recommendation, as required by
s 14
(3). The
Tribunal would then reach a decision in terms of
sections 15
and
16
.
An appeal against the decision of the Tribunal lies to the
Competition Appeal Court in terms of
sections 17
and
37
. What I
have said about the procedures under the
Competition Act is
premised
on the procedures and decisions under that Act having application to
bank and insurance mergers. The dispute in the
appeal is whether
they do apply. The court
a quo,
per Coetzee AJ,
held in favour of Nedcor that the separate permission of the
competition authorities was not needed, but granted leave to appeal
to this court.
[4] Subsections 37 (1) and (2) (a) of the Banks Act,
although of some length and complication, are simple in their
application to
the facts of this case. As the acquisition of more
than 49% of the shares in a “controlling company” of a bank is
involved,
the Minister of Finance’s permission must be obtained in
terms of s 37 (2) (a) (iii). The section proceeds in s 37 (2) (b):
“
Permission in terms of paragraph (a) shall only be
granted on application on the prescribed form and after consultation
with the
Competition Board established by section 3 of the
Maintenance and Promotion of Competition Act, 1979 (Act No 96 of
1979).”
The Act last mentioned was repealed in 1998 by the
current Competition Act. However, in terms of s 83 (1) and schedule
3 par 4
(d) of that Act any reference in any other statute to the
Competition Board under the 1979 Act is to be regarded as a
reference
to the Competition Commission under the 1998 Act.
[5] Certain criteria which the Minister of Finance must
take into account in granting or withholding consent to the
acquisition
of control over a bank are set out in s 37 (4):
“
Permission in terms of subsection (2) for the
acquisition of shares in a bank . . . shall not be granted unless .
. . the Minister
. . . is satisfied that the proposed acquisition of
shares -
(a) will not be contrary to the public interest; and
(b) will not be contrary to the interests of the bank
concerned or its depositors . . .”
[6] Subsections 26 (1) - (3) of the Long-Term
Insurance Act provide in part:
“
(1) Subject to this section, no person shall,
without the approval of the
Registrar, acquire or hold shares or any other
interest in a long-term insurer which result in that person,
directly or indirectly,
alone or with an associate, exercising
control over that long-term insurer.
(2) No person shall acquire shares in a long-term
insurer if the aggregate
nominal value of those shares, by itself or together
with the aggregate nominal value of the shares already owned by that
person
or by that person and his, her or its associates, will amount
to 25 per cent or more of the total nominal value of all of the
issued
shares of the long-term insurer concerned, without first
having obtained the approval of the Registrar.
(3) The approval referred to in subsection (2) -
(a) . . .
(b) shall not be given if it would be contrary to -
(i) the public interest: or
(ii) the interest of the policyholders, or of persons
who may become policy-holders, of the long-term insurer; and . .
.”
[7] Turning to the Competition Act, s 3 is headed
“Application of Act” and
subsection (1) reads:
“
(1) This Act applies to all economic activity
within, or having an effect within, the Republic, except -
(a) collective bargaining within the meaning of section
23 of the
Constitution
, and the Labour Relations Act, 1995
(Act No 66 of 1995);
(b) a collective agreement, as defined in section 213
of the Labour Relations Act, 1995;
(c) the rules of a professional association to the
extent that they are exempted in terms of Schedule 1;
(d) acts subject to or authorised by
public
regulation
; or
(e) concerted conduct designed to achieve a
non-commercial socio-economic objective or similar purpose.”
“
Public regulation” is defined in s 1 to mean:
“
Any national, provincial or local government
legislation or subordinate legislation, or any license, tariff,
directive or similar
authorisation issued by a
regulatory
authority
or pursuant to any statutory authority.”
“
Regulatory authority” is defined in the same
section to mean:
“
An entity established in terms of national,
provincial legislation or local government legislation or
subordinate legislation responsible
for regulating an industry, or
sector of an industry.”
[8] Nedcor and those who associate themselves with its
arguments (to whom I shall refer collectively as “Nedcor”,
unless there
is a need to highlight the exact provenance of an
argument) contend that s 37 of the Banks Act provides for an entire
regulatory
system as far as the acquisition of control by one bank
over another through the purchase of shares is concerned. In the
course
of exercising his discretion the Minister of Finance will
take into account competition considerations, after consultation
with
the Competition Commission, but will not necessarily give them
predominant or decisive weight. He will take into account other
considerations and particularly the importance of maintaining the
integrity and security of banks - cf
Nuwe Suid-Afrikaanse
Prinsipale Beleggings (Edms) Bpk and Another v Saambou Holdings Ltd
and Others
1992 (4) SA 696
(W) at 706 I - J. Similarly, Nedcor
contends that, as far the acquisition of control over one life
insurer by another is concerned,
s 26 and associated provisions of
the Long-Term Insurance Act provide an entire regulatory regime.
Standard Bank and those who
side with its arguments (to whom I shall
refer similarly as “Standard Bank”), on the other hand, contend
that s 3 (1) (d) of
the Competition Act does not except bank or
insurance mergers from the operation of the Competition Act, so that
there are three,
not two, regulatory authorities, the Minister of
Finance, the Registrar of Long-Term Insurance and the Competition
Commission.
Nedcor, needless to say, holds s 3 (1) (d) to exempt
bank and long-term insurance mergers from regulation by the
competition authorities,
save as is provided in s 37 (2) (b) of the
Banks Act.
[9] The resolution of the dispute depends upon the
meaning of the exception contained in s 3 (1) (d) of the Competition
Act. The
opening words of s 3 (1) apply the Act to “all economic
activity.” These words of great generality extend its operation
to
the countless forms of activity which people undertake in order
to earn a living. But the extension is not unlimited, as the
existence
of the five exceptions (a) to (e) proclaims. Because the
area of demarcation of the Act can be derived only from the general
enactment
and the exceptions, there is no reason to give the
exceptions less weight than the general words. In the case before
us there
is no doubt that the proposed bank merger is an “economic
activity.” The question is whether it will be an “act”
(Afrikaans
“handeling”) “subject to or authorised by
public
regulation
.” Read in the context of the Act the “acts”
envisaged form part of a confined class. That is so because the
subject matter
of the Act is what may broadly be described as
actually or potentially monopolistic or anti-competitive agreements,
practices
or acts, which are grouped under the headings restrictive
horizontal practices, restrictive vertical practices, abuse of
dominant
position and mergers. Entering into an agreement or
abusing dominance may in themselves be “acts” or “handelinge.”
Because
of the frequency with which I will have to refer to the
confined construction that I have placed on the word “act”, and
its
importance, I shall refer to the word so construed as a
“monopolistic act.” I do not use this expression pejoratively,
nor
in order to define, but in order to coin a brief label. This
construction does not involve reading words into the subsection.
It
is a necessary construction, given the context and given the purpose
of the Act. Failure to construe the word correctly is
the reason,
it seems to me, for much of the confusion and the concern about the
operation of the Act, manifested both in this
appeal and more
widely.
[10] The act of merging two banks by the acquisition by
one of the majority of the shares in the other is clearly an “act.”

Because the Minister of Finance must grant his “permission”,
the act of acquisition has to be “authorised by” him. As
this
is so it is unnecessary to consider the exact import of the phrase
“subject to.” The next enquiry is whether authorisation
by the
Minister is authorisation “ by public regulation.” This
enquiry takes one to the definition of “public regulation.”

This definition falls into at least two parts, but the one presently
relevant is “any license, . . . or similar authorisation
issued
by a
regulatory authority
. . .” If the Minister is a
“regulatory authority”, then this part of the definition is
satisfied. That part of the definition
of “regulatory authority”
which reads “an entity established in terms of national . . .
legislation . . . responsible for
regulating an industry, or sector
of an industry” is satisfied, provided that the Minister is an
“entity”. As to whether
the Minister is an “entity”, he
clearly is. According to the Shorter OED an entity is a “being.”
The nature of the being
is indefinite. It may be a person, the
holder of an office, a board, an institution. It may also be a
Minister of Finance. The
relevant part of the definition is
satisfied because the Minister’s post is established under s 91,
read with section 85 (2)
of the Constitution of the Republic of
South Africa, 1996; and because under the Banks Act he has wide
powers of regulation over
the banking industry (s 90) and
particularly over bank mergers (see sections 37 and 54).
[11] My conclusion is that on a plain reading of s 3
(1) (d) it excepts acts performed under s 37 of the Banks Act (i e
bank mergers
by the acquisition of a majority shareholding) from the
operation of the Competition Act in express terms. The general
tenor of
the numerous arguments as to why a literal reading of the
subsection should not be adopted tends to confirm that the literal
interpretation
contended for by Nedcor is correct, as a literal
interpretation.
[12] The same result follows in the case of s 26 (1) of
the Long-Term Insurance Act. Because the “approval” of the
Registrar
is required before control over a long-term insurer may be
acquired, the act of acquiring control is on a literal reading also

excepted from the Competition Act by s 3 (1) (d) of that Act.
[13] The conclusions set out above have been reached
without any reference to s 37 (2) (b) of the Banks Act, which has no
counterpart
in the Long-Term Insurance Act. Much argument was
addressed to us on this subsection, with which it is unnecessary to
deal, as
a decision can be reached without reference to it. I say
no more than that the requirement of prior consultation with the
Competition
Commission seems on the face of it to be an indication
that the latter is not intended to be an independent regulatory
authority
with parallel jurisdiction in the case of a bank merger.
[14] I now turn to the various arguments that have been
raised as to why s 3 (1) (d) should not be read as it reads.
[15] Running through many of these arguments is the
contention that the Competition Act should be given a purposive
reading, or,
to put the matter slightly differently, that we should
have regard to the spirit of that Act. This is so particularly, so
the argument
runs, because of the preamble to the Act, and its
sections 1 (2), 2 and 3 (1). I set these provisions out, not
because I think
they solve the problem before us, but because they
were pressed upon us as lying at the root of its solution. The
preamble reads:
“
THE PEOPLE of South Africa recognise:
That apartheid and other discriminatory laws and
practices of the past resulted in excessive concentrations of
ownership and control
within the national economy, weak enforcement
of anti-competitive trade practices, and unjust restrictions on full
and free participation
in the economy by all South Africans.
That the economy must be open to greater ownership by a
greater number of South Africans.
That credible competition law, and effective structures
to administer that law are necessary for an efficient functioning
economy.
That an efficient, competitive economic environment,
balancing the interests of workers, owners and consumers and
focussed on development,
will benefit all South Africans.
IN ORDER TO -
provide all South Africans equal opportunity to
participate fairly in the national economy;
achieve a more effective and efficient economy in South
Africa;
provide for markets in which consumers have access to,
and can freely select, the quality and variety of goods and services
they
desire;
create greater capability and an environment for South
Africans to compete effectively in international markets;
restrain particular trade practices which undermine a
competitive economy;
regulate the transfer of economic ownership in keeping
with the public interest;
establish independent institutions to monitor economic
competition; and give effect to the international law obligations of
the
Republic.”
Section 1 (2) reads in part:
“
This Act must be interpreted -
(a) in a manner that is consistent with the
Constitution
and gives effect to the purposes set out in
section 2.”
Section 2 reads:
“
Purpose of Act. - The purpose of
this
Act
is to promote and maintain competition in the Republic in order -
(a) to promote the efficiency, adaptability and
development of the economy;
(b) to provide consumers with competitive prices and
product choices;
(c) to promote employment and advance the social and
economic welfare of South Africans;
(d) to expand opportunities for South African
participation in world markets and recognise the role of foreign
competition in the
Republic;
(e) to ensure that small and medium-sized enterprises
have an equitable opportunity to participate in the economy; and
(f) to promote a greater spread of ownership, in
particular to increase the ownership stakes of historically
disadvantaged persons.”
In the case of s 3 (1) stress is also placed upon the
extended scope of the phrase “
all
economic activity.”
This stress begs the question as to the extent of the succeeding
exceptions.
[16] Our courts have, over many years, striven to give
effect to the policy or object or purpose of legislation. This is
reflected
in a passage from the judgment of Innes CJ in
Dadoo Ltd
and Others v Krugersdorp Municipal Council
1920 AD 530
at 543.
But the passage also reflects that it is not the function of a court
to do violence to the language of a statute and impose
its view of
what the policy or object of a measure should be. The passage
reads:
“
Speaking generally, every statute embodies some
policy or is designed to carry out some object. When the language
employed admits
of doubt, it falls to be interpreted by the Court
according to recognized rules of construction, paying regard, in the
first place,
to the ordinary meaning of the words used, but
departing from such meaning under certain circumstances, if
satisfied that such
departure would give effect to the policy and
object contemplated. I do not pause to discuss the question of the
extent to which
a departure from the ordinary meaning of the
language is justified, because the construction of the statutory
clauses before us
is not in controversy. They are plain and
unambiguous. But there must, of course, be a limit to such
departure. A Judge has
authority to interpret, but not to
legislate, and he cannot do violence to the language of the lawgiver
by placing upon it a meaning
of which it is not reasonably capable,
in order to give effect to what he may think to be the policy or
object of the particular
measure”.
[17] Another oft-quoted passage is that in the judgment
of Schreiner JA in
Jaga v Dönges NO and Another
1950 (4)
SA 653
(A) at 664 E - H. It warns against the Sirenic perils of
words, whilst repeating that there are bounds to legitimate
interpretation.
It reads:
“
Seldom indeed is language so clear that the
possibility of differences of meaning is wholly excluded, but some
language is much
clearer than other language; the clearer the
language the more it dominates over the context, and
vice versa
,
the less clear it is the greater the part that is likely to be
played by the context.
Ultimately, when the meaning of the language in the
context is ascertained, it must be applied regardless of the
consequences and
even despite the interpreter’s firm belief, not
supportable by factors within the limits of interpretation, that
the legislator
had some other intention. . . . But the legitimate
field of interpretation should not be restricted as the result of
excessive peering at the language
to be interpreted
without
sufficient attention to the contextual scene
.”
(Own emphasis.)
[18] Also the Constitution, which expresses many values
and rights in general terms, must have its language respected. As
Kentridge
AJ said in
S v Zuma and Others
[1995] ZACC 1
;
1995 (2) SA 642
(CC)
at 652 I - 653 B:
“
While we must always be conscious of the values
underlying
the Constitution, it is nonetheless our task to
interpret a written instrument. I am well aware of the fallacy of
supposing that
general language must have a single ‘objective’
meaning. Nor is it easy to avoid the influence of one’s personal
intellectual
and moral preconceptions. But it cannot be too
strongly stressed that the Constitution does not mean whatever we
might wish it
to mean.
We must heed Lord Wilberforce’s reminder that even a
constitution is a legal instrument, the language of
which must be respected. If the language used by the lawgiver is
ignored in
favour of a general resort to ‘values’ the result is
not interpretation but divination. If I may again quote
S v
Moagi
(
supra
at 184), I would say that a constitution
‘
embodying fundamental rights should
as far its
language permits
be given a broad construction’.”
(My emphasis.)
[19] The ultimate logical dilemma which confronts such
a one as would subvert the words chosen by Parliament in favour of
the spirit
of the law, is stated by Innes CJ, in the form of a
question, in
Dadoo’s
case (above) at 543-4:
“
What, then, is meant by saying, as some of the
authorities do, that an act [the concrete transaction with which
the court is concerned]
may not contravene the language of the law,
and yet may infringe its spirit and be on that account invalid?
Does it mean that
the intent or spirit of the law operates beyond
the limits of its language, - in which case there would be in effect
two enactments,
one expressed, and the other unexpressed, but
equally operative?”
[20] In terms of s 43 of the Constitution, the
legislative authority of the national sphere of government is vested
in Parliament.
Parliament exercises its authority mainly by
enacting Acts. Acts are expressed in words. There is therefore
elementary merit
in what was said by Harms JA in
Abrahamse v East
London Municipality and Another: East London Municipality v
Abrahamse
1997 (4) SA 613
(SCA) at 632 G - H:
“
Interpretation concerns the meaning of the words
used by the Legislature and it is therefore useful to approach the
task by referring
to the words used, and to leave extraneous
considerations for later.”
[21] Having regard to the authority and persuasiveness
of what has gone before, I think that the submission in Standard
Bank’s
heads of argument that the “semantic or literalist
approach enjoys ever less support in modern legal theory” is cast
rather
high. However, as I have endeavoured to show, our law is an
enthusiastic supporter of “purposive construction” in the sense
stated by Smalberger JA in
Public Carriers Association and Others
v Toll Toad Concessionaries (Pty) Ltd and Others
1990 (1) SA 925
(A) at 943 G - H:
“
Mindful of the fact that the primary aim of
statutory interpretation is to arrive at the intention of the
Legislature, the purpose
of a statutory provision can provide a
reliable pointer to such intention where there is ambiguity.”
(In so far as the decision in
Stopforth v Minister
of Justice and Others; Veenendaal v Minister of Justice and Others
2000 (1) SA 113
(SCA) at 121 F - G is concerned, it is necessary to
point out that the insertion of the quotation ascribed to Ogilvie
Thompson
JA is an error, as no such passage is to be found in
Secretary for Inland Revenue v Sturrock Sugar Farm (Pty) Ltd
1965 (1) SA 897
(A).)
[22] Finally on the subject: the importance of
purpose, the dangers of literalism and yet the weight of the words
used in arriving
at the purpose, is perhaps nowhere better expressed
than by Judge Learned Hand in 1944 in
Borella et al v Borden Co
145 Fed Rep 2d Series 63 at 64 - 65:
“
We can best reach the meaning here, as always, by
recourse to the underlying purpose, and, with that as a guide, by
trying to project
upon the specific occasion how we think persons,
actuated by such a purpose, would have dealt with it, if it had been
presented
to them at the time. To say that that is a hazardous
process is indeed a truism, but we cannot escape it, once we abandon
literal
interpretation - a method far more unreliable. . . .
We do not indeed mean that here, or in any other
interpretation of language, the words used are not far and away the
most reliable
source for learning the purpose of a document; the
notion that the ‘policy of a statute’ does not inhere as much in
its limitations
as in its affirmations, is untenable.”
[23] The drift of the arguments on the Standard Bank
side, as they were developed, was that to give effect to the near
all-embracing
attack on anti-competitive acts which it is the
purpose of the Competition Act to sustain, the impact of s 3 (1) (d)
is to be lessened,
that is, exceptions to the generality should be
reduced. There was no uniformity as to how this was to be done, not
surprisingly,
as there were 15 counsel in court (only six of whom
addressed us) and six sets of heads of argument and one supplement.
Originally
Standard Bank, Liberty and the Commission all proposed
that words of limitation be read into s 3 (1) (d). The trouble was
that
the words were not the same.
Quot homines tot sententiae
,
you might say. But it is this very uncertainty which is created by
different opinions as to how a statute should read that is
often a
bar to implying words: see Corbett JA in
Rennie NO v Gordon and
Another
1988 (1) SA (A) 1 at 22 E - H and Corbett AJ in
S v
Burger
1963 (4) SA 304
(C) at 308 C - F.
[24] Mr
Wallis
, who had not drawn the original
heads for Liberty, understandably distanced himself from an attempt
to read words in. Instead
he argued for a contextual or purposive
approach. Whether the problem was indeed shaken off so readily
needs to be explored.
[25] The argument that was developed by
Mr Wallis
,
as also
Mr Slomowitz,
for Standard Bank, was not always easy
to follow. It was to the effect that s 3 (1) (d) applies only to
such statutes as regulate
particular fields and at the same time
regulate competition within those fields, to a greater or lesser
extent. The example par
excellence, if there is such an example, is
a statute that deals with competition as comprehensively as does the
Competition Act.
No candidate was proposed. If there is none such,
the exception becomes a portentous nullity, unless a means of
calibration is
found. How much special regulation must there be
before a statute qualifies for exclusion by s 3 (1) (d)? Save for
the firm affirmation
that the two Acts with which we are concerned
are beyond the pale of exception, we obtained no clear answer to
this question.
I do not think there is one.
Mr Smith,
who
appeared for the Commission,
particularly criticized the
unreported decision of Ngoepe JP in the High Court, Transvaal
Provincial Division, in the case of
SAD Holdings Ltd, SAD Vine
Fruit Pty Ltd v SA Raisins Pty Ltd, Slabber and the Competition
Tribunal
delivered on 15 March 2000. This decision may be open
to the criticism that, contrary to what I have said above about the
need
for a “monopolistic act” to be present, the case may have
decided that s 3 (1) (d) operates merely because a regulatory body
operates in a general sense in a particular field. But I fail to
see how any errors that the judgment may contain advance
Mr
Smith’s
argument. The argument as to how much regulation was
required, whatever quite it was, was intended to advance the
supposed broad,
near universal, purpose of the Competition Act.
[26] This purpose was also the engine driving
Mr
Wallis’s
next argument, that serious anomalies would arise if
s 3 (1) (d) were not appropriately contained or restrained. He
referred to
a long list of statutes containing competition
provisions. Other counsel assured us that there are many more.
Examples mentioned
were those governing air travel, medical aid
schemes, broadcasters, telecommunications, the liquor industry and
electricity supply.
A literal interpretation of s 3 (1) (d) would
lead to what was called a startlingly wide field of exclusion from
the application
of the Competition Act. When one bears in mind that
one is concerned only with the exclusion of a “monopolistic act”
I do
not find such exclusions as there may be to be startling. I do
not intend pronouncing upon individual statutes, but it may be that
deliberate policy decisions, or mere inertia in reworking or
integrating old statutes, offer an explanation for scattered
outcrops
of monopoly laws.
[27]
Mr Slomowitz
took the anomaly argument
considerably further. He contended that a literal interpretation
would have the effect of exempting
all share purchases on the
Johannesburg Stock Exchange, thus practically nullifying the
Competition Act. This is an impressive
looking argument, but I do
not think that it has substance, essentially because the instances
relied upon are not “acts” of
the kind which the Competition
Act is intended to frustrate or regulate, ie they are not of
themselves “monopolistic acts.”
The argument is that a purchase
of shares would be “subject to” the Companies Act, the Stock
Exchanges Control Act, 1985,
as well as the rules and regulations
thereunder. In truth, however, anyone may buy or sell shares.
The market on which shares
are bought may be subject to some
regulation, but the act of buying a share is not; any more than the
act of buying a sack of
lettuces on a fresh produce market is.
[28] So much for the anomalies. I do not claim to have
conducted a definitive or binding investigation of them, but I do
think
that I have shown that they are not as alarming as they are
claimed to be. I can now come back to the argument that the
operation
or non-operation of s 3 (1) (d) depends upon degrees of
regulation exercised by other statutes or organs created under them
over
competition matters. The principial difficulty with the
argument is that there are no degrees about an “act” (in the
sense
of a “monopolistic act”) being “subject to” or
“authorised by” a statutory regulator. It either is or it is
not.
This leaves no room for an enquiry into the extent or degree
of regulation, which is the unlikely starting point of the argument
under consideration. There is no room for calibration. So that the
attempts to inject life back into a moribund Competition
Act by an
infusion of its spirit, are unnecessary. Properly interpreted the
Act has a wide, if not universal application. The
Act is alive and
well. This should be some solace to
Mr Smith’s
client.
[29] The next argument was that the history of the
legislation on banks, insurers and monopolies compels us to depart
from a literal
reading of s 3 (1) (d), so as to allow regulation by
the Commission parallel with that of the Minister of Finance and the
Registrar
of Long-Term Insurance. I do not intend going through
this legislation at length, because in the end what emerges is that
there
have been marked policy shifts in the past (not surprising, as
there are strong arguments both ways) and a fundamental change in
the structure of the competition authorities, so that there is no
consistent, even less, reliable pointer in the history, which
dictates a non-literal reading of the 1998 competition statute. It
is true that between 1979 and 1985 there was dual regulation
of bank
mergers by the Minister of Finance and the (then) Minister of
Economic Affairs. It is also true that between 1991 and
1998 there
was dual control. But the 1998 Competition Act is so fundamentally
different from its 1979 predecessor that there
is simply no
inference that can be drawn that dual regulation was intended after
1998, and particularly not so in the face of
s 3 (1) (d).
[30] Finally it was argued that we should
harken to the message contained in s 1 (3) of the Competition Act,
which lays
down that any person interpreting the Act “may consider
appropriate foreign law.” Our courts have, of course, considered
foreign
law, where appropriate, over the years. Indeed the
Roman-Dutch system of law is itself a product of just such a
process, as is
the on-going South African system which succeeded it.
Reference to foreign law is sometimes helpful, particularly when
one’s
own system is silent or uncertain on a point, or may be
thought to be deficient, or simply for purposes of comparison and
enlargement
of view. But the ransacking of the legal libraries of
the world may, where it is not appropriate, lead to no more than
more paper,
more costs, more delay and even more confusion, without
any commensurate benefit. There is also sometimes a positive danger
in
resorting to foreign law - that it should be only half
understood, because the person going to it does not sufficiently
understand
the foreign system. A significant part of the papers in
this case was taken up with foreign material, Canadian and American,
to
aid us in our task. The difficulty I have found in making any
use of it is that it is, again, inconclusive. Some systems choose
dual control, others single, yet others dual control with one
regulator predominant. If the conclusion is once reached that our
own policy in those regards may be gathered clearly from our own
legislation, I see no point in burdening readers of this judgment
further by referring to voluminous foreign material, which does not
advance the argument.
[31] On appeal there was a faint attempt to pursue a
prayer praying a direction to the Minister of Finance and the
Registrar of
Banks to provide Standard Bank with a copy of Nedcor’s
application under s 37 (2) with its supporting documentation and all
other
written representations and information obtained from other
parties. The Minister of Finance has submitted that in the light of
his undertaking to furnish interested parties with such information
as they may be entitled to there is at present no dispute.
It is
not the function of this court to act as adviser:
Shoba v Officer
Commanding, Temporary Police Camp, Wagendrift Dam, and Another
etc
1995 (4) SA 1
(A) at 14 G,
J T Publishing (Pty) Ltd and Another v
Minister of Safety and Security and Others
[1996] ZACC 23
;
1997 (3) SA 514
(CC)
at 524
I - 525 C. And insofar as Standard Bank bases its
case upon the Constitution, it is a salutary rule that a question of
constitutional
law should not be anticipated in advance of the
necessity of deciding it:
Zantsi v Council of State, Ciskei, and
Others
1995 (4) SA (CC) at 617 H - 618 C. Standard Bank should
await the decision of the Minister, and if it be dissatisfied with
it
and believes that it has a valid complaint as to the process by
which he reached his decision, that will be the time to take action.
[32] The two appeals are dismissed. The costs are to be
paid jointly and severally
by the two appellants and the Competition Commission.
Costs are to include the
costs of two counsel where two or more were employed.
W P SCHUTZ
JUDGE OF APPEAL
CONCUR
HEFER JA
NIENABER JA
HARMS JA