American Natural Soda Corporation and Another v Competition Commission of South Africa and Others (577/2002) [2003] ZASCA 70; [2003] 3 All SA 487 (SCA) ; [2003] 1 CPLR 1 (SCA) (2 June 2003)

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[2003] ZASCA 70
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American Natural Soda Corporation and Another v Competition Commission of South Africa and Others (577/2002) [2003] ZASCA 70; [2003] 3 All SA 487 (SCA) ; [2003] 1 CPLR 1 (SCA); 2003 (5) SA 655 (SCA) (2 June 2003)

REPUBLIC OF SOUTH
AFRICA
IN THE SUPREME COURT OF
APPEAL
OF SOUTH AFRICA
Case number: 577/2002
Reportable
In the matter between:
AMERICAN NATURAL SODA CORPORATION
First Applicant
CHC GLOBAL (PTY) LIMITED
Second Applicant
and
THE COMPETITION COMMISSION OF SOUTH
AFRICA
First Respondent
BOTSWANA ASH (PTY) LTD S
econd Respondent
CHEMSERVE TECHNICAL PRODUCTS
(PTY) LIMITED
Third Respondent
CORAM
: VIVIER ADP, ZULMAN, FARLAM, LEWIS JJA et
MLAMBO AJA
HEARD
: 7 MAY 2003
DELIVERED
: 2 JUNE 2003
SUMMARY:
Competition Act
89 of 1998
─ appealability of decisions of Competition Appeal Court
to Supreme Court of Appeal ─ necessity for leave to appeal.
__________________________________________________________________
JUDGMENT
__________________________________________________________________
FARLAM JA
INTRODUCTION
[1]
In this matter the applicants, a corporation
exporting soda ash from the United States of America and its local
distributor, seek
an order declaring that they are entitled to note
an appeal against a judgment of the Competition Appeal Court directly
to this Court,
alternatively to apply to this Court for leave to
appeal against the judgment and, if leave is granted, to note an
appeal against
the judgment to this Court. In the further
alternative they seek directions in regard to the prosecution and
conduct of their appeal
against the judgment.
[2]
The judgment of the Competition Appeal Court
which the applicants wish to take on appeal to this Court was
delivered on 24 October
2002 by Malan AJA, with whom Davis JP and
Jali JA concurred. In it Malan AJA dismissed the applicants’ appeal
against a decision
of the Competition Tribunal delivered on 30
November 2001 in which it was held (1) that jurisdiction under s 3(1)
of the Competition
Act 89 of 1998 (to which I shall hereinafter refer
as ‘the Act’) can be based on any effect, within the meaning of
the Act, within
South Africa, whether non-competitive or
pro-competitive; (2) that any agreement among firms having a
provision setting prices is
a restrictive horizontal practice within
the contemplation of s 4(1)(b) of the Act and
per se
unlawful;
and (3) that the second and third respondents, an exporter of soda
ash to this country, Botswana Ash (Pty) Ltd,
and its local
distributor, Chemserve Technical Products (Pty) Ltd,
had the
required
locus standi
to seek an order from the Competition
Tribunal interdicting the first applicant from engaging in the
alleged restrictive horizontal
practice, despite the absence of an
allegation that they were adversely affected by the first applicant’s
conduct. In its decision
on the
locus standi
ground the
Competition Appeal Court relied on ss 49B, 49C and 53 for its
conclusion that the second and third respondents had
locus standi.
[3]
In the notice filed on behalf of the two
applicants in this Court the applicants purported to appeal against
the Competition Appeal
Court’s judgment in respect of all three
grounds. (In what follows I shall call these grounds ‘the section 3
ground’, ‘the
section 4(1)(b) ground’ and ‘the
locus
standi
ground’.) At no stage have they approached the
Competition Appeal Court for leave to appeal against its judgment on
any of the grounds.
RELEVANT STATUTORY PROVISIONS
[4]
Before the contentions of the parties are
dealt with it is appropriate to set out certain provisions of the Act
as it has been amended,
inter alia,
by Act 39 of 2000. The
relevant provisions are the definition of ‘complainant’ in s
1(1), ss 3(1) (which is to be found in chapter
1 of the Act), 4(1)
(which is to be found in chapter 2 of the Act), 49B, 49C, 53, 62 and
63 (which are to be found in chapter 5 of
the Act) as well as ss
165(1), 166 and 168(3) of the Constitution, Act 108 of 1986.
The definition of ‘complainant’ in s 1(1) reads:
‘(1) In this Act ─
. . .
“complainant” means a person who has submitted a complaint in
terms of section 49B(2)(b)’.
Section 3(1) of the Act 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 66 of 1995);
(b) a collective agreement, as defined in
section 213
of the
Labour
Relations Act, 1995
; and
(c) and (d) ... [which were deleted by
s 2(a)
of Act 39 of 2000].’
Section 4(1), which deals with restrictive horizontal
practices, reads [as amended by s 3(b) of Act 39 of 2000]:
‘(1) An agreement between, or concerted practice by, firms, or a
decision by an association of firms, is prohibited if it is between
parties in a horizontal relationship and if ─
(a) it has the effect of substantially preventing, or lessening,
competition in a market, unless a party to the agreement, concerted
practice, or decision can prove that any technological, efficiency or
other pro-competitive gain resulting from it outweighs that
effect;
or
(b) it involves any of the following restrictive horizontal
practices:
(i) directly or indirectly fixing a purchase or selling price or any
other trading condition;
(ii) dividing markets by allocating customers, suppliers,
territories, or specific types of goods or services;
or
(iii) collusive tendering.’
Sections 49B and 49C are part of Part C of chapter 5.
Section 49B [which was inserted in the Act by s 15 of
Act 39 of 2000], as far as is material, reads:
‘(1) The Commissioner may initiate a complaint against an alleged
prohibited practice.
(2) Any person may ─
(a) submit information concerning an alleged prohibited practice to
the Competition Commission, in any manner or form; or
(b) submit a complaint against an alleged prohibited practice to the
Competition Commission, in the prescribed form.’
Section 49C [which was also inserted in the Act by s 15
of Act 39 of 2000],
as far as is material, reads:
‘(1) At any time, whether or not a hearing has commenced into an
alleged prohibited practice, the complainant may apply to the
Competition Tribunal for an interim order in respect of the alleged
practice.
(2) The Competition Tribunal ─
(a) must give the respondent a reasonable opportunity to be heard,
having regard to the urgency of the proceedings; and
(b) may grant an interim order if it is reasonable and just to do so,
having regard to the following factors:
(i) The evidence relating to the alleged prohibited practice;
(ii) the need to prevent serious or irreparable damage to the
applicant; and
(iii) the balance of convenience.’
Section 53 [which was substituted by s 15 of Act 39 of
2000] deals with the
right to participate in a hearing. As far as is material
it reads:
‘The following persons may participate in a hearing, in person or
through a representative, ...
(a) If the hearing is in terms of Part C ─
(i) the Commissioner, or any person appointed by the Commissioner;
(ii) the complainant, if ─
(aa) the complainant referred the complaint to the Competition
Tribunal;
or
(bb) in the opinion of the presiding member of the Competition
Tribunal, the complainant’s interest is not adequately represented
by another participant, and then only to the extent required for the
complainant’s interest to be adequately represented;
. . .
(iii) the respondent; and
(iv) any other person who has a material interest ....’
Section 62, as substituted by section 15 of Act 39 of
2000, reads:
‘(1) The Competition Tribunal and Competition Appeal Court share
exclusive jurisdiction in respect of the following matters:
(a) Interpretation and application of Chapters 2, 3 and 5, other than
─
(i) a question or matter referred to in subsection (2); or
(ii) a review of a certificate issued by the Minister of Finance in
terms of section 18(2); and
(b) the functions referred to in sections 21(1), 27(1) and 37, other
than a question or matter referred to in subsection (2).
(2) In addition to any other jurisdiction granted in this Act to the
Competition Appeal Court, the Court has jurisdiction over ─
(a) the question whether an action taken or proposed to be taken by
the Competition Commission or the Competition Tribunal is within
their respective jurisdictions in terms of this Act;
(b) any constitutional matter arising in terms of this Act; and
(c) the question whether a matter falls within the exclusive
jurisdiction granted under subsection (1).
(3) The jurisdiction of the Competition Appeal Court ─
(a) is final over a matter within its exclusive jurisdiction in terms
of subsection (1); and
(b) is neither exclusive nor final in respect of a matter within its
jurisdiction in terms of subsection (2).
(4) An appeal from a decision of the Competition Appeal Court in
respect of a matter
within its jurisdiction in terms of subsection (2) lies to the
Supreme Court of Appeal or
Constitutional Court, subject to section 63 and their respective
rules.
(5) For greater certainty, the Competition Tribunal and the
Competition Appeal Court
have no jurisdiction over the assessment of the amount, and awarding,
of damages arising out of
a prohibited practice.’
Section 63, as substituted by s 15 of Act 39 of 2000,
reads, as far as is
material:
‘(1) The right to an appeal in terms of section 62(4) ─
(a) is subject to any law that ─
(i) specifically limits the right of appeal set out in that
section; or
(ii) specifically grants, limits or excludes any right of appeal;
(b) is not limited by monetary value of the matter in dispute; and
(c) exists even if the matter in dispute is incapable of being valued
in money.
(2) An appeal in terms of section 62(4) may be brought to the
Supreme Court of
Appeal or, if it concerns a constitutional matter, to the
Constitutional Court, only ─
(a) with leave of the Competition Appeal Court; or
(b) if the Competition Appeal Court refuses leave, with leave of the
Supreme Court of Appeal or the Constitutional Court, as the
case may
be.
(3) A court granting leave to appeal in terms of this section may
attach any
appropriate conditions, including a condition that the applicant
provide security for the costs of
the appeal.
(4) If the Competition Appeal Court, when refusing leave to appeal,
made an order of
costs against the applicant, the Supreme Court of Appeal or the
Constitutional Court may vary
that order on granting leave to appeal.
(5) An application to the Competition Appeal Court for leave to
appeal must be made
in the manner and form required by the Competition Appeal Court
Rules.
(6) An application to the Constitutional Court for leave to appeal
must be made in the
manner and form required by its Rules.
(7) Section 21(1A) to (3)(e) of the Supreme Court Act, 1959 (Act 59
of 1959), read
with the changes required by the context, applies to an application
to the Supreme Court of
Appeal for leave to appeal in terms of this Act.
(8) A person applying to the Supreme Court of Appeal for leave to
appeal under this
Act must give notice of the application to the registrar of the
Competition Appeal Court.’
Section 165(1) of the Constitution provides:
‘(1) The judicial authority of the Republic is vested in the
courts.’
Section 166 of the Constitution reads:
‘The courts are ─
(a) the Constitutional Court;
(b) the Supreme Court of Appeal;
(c) the High Courts, including any high court of appeal that may be
established by an Act of Parliament to hear appeals from High
Courts;
(d) the Magistrates’ Courts; and
(e) any other court established or recognised in terms of an Act of
Parliament, including any court of a status similar to either
the
High Courts or the Magistrates’ Courts.’
Section 168(3) of the Constitution reads:
‘(3) The Supreme Court of Appeal may decide appeals in any matter.
It is the highest court of appeal except in constitutional matters,
and may decide only ─
(a) appeals;
(b) issues connected with appeals; and
(c) any other matter that may be referred to it in circumstances
defined by an Act of Parliament.’
THE ORDER REFERRING THE APPLICATION FOR HEARING
BEFORE THE COURT
[5]
On 25 February 2003 the applicants’
application was referred for the hearing of argument before this
Court. Paragraph 2 of the order
reads as follows:
‘Without limitation of the issues on which the parties will be
entitled to address arguments to the Court the parties are requested
to address submissions on the following issues:
(a) whether the applicants are entitled to appeal to this Court
against those portions of the judgment of the Competition Appeal
Court in which it was held
(1) that the second and third respondents had
locus standi
to
seek an interim interdict against the first applicant and
(2) that the first applicant is not entitled to raise an efficiency
defence in respect of the allegations that it had contravened
section
4(1)(b)
of the
Competition Act 89 of 1998
;
(b) whether
section 62(3)(a)
of the
Competition Act is
constitutional;
(c) whether it is competent for the applicants to note an appeal to
or to seek leave to appeal from this Court against those portions
of
the judgment of the Competition Appeal Court referred to in paragraph
(a) above without first seeking the leave of the Competition
Appeal
Court; and
(d) whether it is appropriate for this Court to consider the matter
separately from such appeal as the applicants may wish to bring
in
terms of
section 62(4)
, read with
section 63(2)
, of the
Competition
Act in
respect of that portion of the judgment of the Competition
Appeal Court in which it rejected the applicants’ contentions
regarding
the correct interpretation of
section 3(1)
of the
Competition Act.’
APPLICANTS’ SUBMISSIONS
[6]
The applicants submitted that all portions of
the judgment of the Competition Appeal Court in respect of which they
sought leave to
appeal implicated directly or indirectly the
interpretation and application of Chapters 2, 3 and 5 of the Act and
were accordingly
matters in respect of which s 62(3)(a) purported to
confer final jurisdiction upon the Competition Appeal Court and that
s 62(3)(a)
purported to oust the jurisdiction of this Court to
entertain an appeal against the judgment of the Competition Appeal
Court in this
matter on any ground. They submitted further that s
62(3)(a) violated s 168(3) of the Constitution because that section
conferred
jurisdiction to determine appeals in
any
matter on
this Court and therefore any attempt to deprive this Court of such
jurisdiction is unconstitutional. They submitted that
s 63(3)(a) of
the Act should therefore be declared invalid.
[7]
They proceeded to submit that no procedure
for noting an appeal from a judgment of the Competition Appeal Court
in circumstances such
as the present is provided for in s 62(4), read
with s 63 of the Act or at all, and accordingly it is both competent
and appropriate
for the applicants to seek to note an appeal directly
to this Court without seeking leave from the Competition Appeal
Court.
FIRST RESPONDENT’S SUBMISSIONS
[8]
Counsel for the first respondent, the
Competition Commission, submitted that the applicants were not
entitled to appeal to this Court
in respect of the
locus standi
and section 4 issues as both such issues were within the
exclusive jurisdiction of the Competition Appeal Court in respect of
which
its decision was final in terms of s 62(3)(a) of the Act. This
section, so it was submitted, is constitutionally valid and not in
conflict with s 168(3) of the Constitution on a proper construction
thereof.
[9]
Counsel for the first respondent submitted
further that the applicants should first have sought leave to appeal
from the Competition
Appeal Court in respect of all three issues
which they wish to bring on appeal. As far as the
locus standi
and
section 4 issues were concerned they could and should, so it was
contended, have raised the constitutionality of s 62(3)(a) before
the
Competition Appeal Court, which would have had the power to deal with
the point under s 62(2)(b), and its decision on the point,
if
unfavourable to the applicants, could have been brought before this
Court either by way of an appeal in terms of s 62(4), if the
Competition Appeal Court gave leave, or by way of an application for
leave under s 63(2)(b) if it did not.
[10]
Counsel for the first respondent also argued
that the application was procedurally defective and irregular because
the applicants
had failed to seek leave to appeal from the
Competition Appeal Court in respect of the section 3 issue. This was
because the section
3 and section 4 issues were inextricably linked
and could not be adjudicated separately, with the result that it
would not be appropriate
or convenient for this Court to consider
these two issues on a piece-meal basis.
SECOND AND THIRD RESPONDENTS’ CONTENTIONS
[11]
Counsel for the second and third respondents
contended that all three issues in respect of which the applicants
seek to attack the
Competition Appeal Court judgment fall outside the
exclusive and final jurisdiction of the Competition Appeal Court and
can be attacked
on appeal before this Court only with the leave of
the Competition Appeal Court in terms of s 63(2)(a) or, if such leave
is refused
(and only after it has been sought), with the leave of
this Court.
They contended accordingly that the application should
be dismissed because of the applicants’ failure first to seek leave
to appeal
from the Competition Appeal Court.
[12]
Counsel for the second and third respondents
also submitted that the applicants were seeking to ventilate issues
on appeal before
this Court which are not appealable. They submitted
that the applicants were in effect endeavouring to appeal against a
decision
dismissing exceptions (such a decision being not appealable:
see
Minister of Safety and Security and Another v Hamilton
2001(3)
SA 50 (SCA) and
Maize Board v Tiger Oats Ltd
2002(5) SA
365(SCA)) and that in any event a decision dismissing a
locus
standi
objection ‘would not give rise to the granting of leave
to appeal’: in support of this submission they relied on a
dictum
of Harms JA in
Smith v Kwanonqubela Town Council
1999 (4)
SA 947
(SCA) at 954J – 955A.
DISCUSSION
[13]
It is appropriate to deal first with the
contention advanced by counsel for the second and third respondents
that the decisions the
applicants seek to bring on appeal are not
appealable. There is in my view no substance in this contention.
[14]
Though the issues in question may have been
presented in form as grounds of exception there can be no doubt but
that the decisions
on such issues will have a final and definitive
effect on the main case before the Tribunal. The Competition Appeal
Court specifically
so held – and rightly so in my view – in
relation to the s 4(1)(b) issue (see paragraph [22] of its
judgment) and the position
is no different in regard to the
locus
standi
point. Indeed in the
Kwanonqubela
case, on which
counsel for the second and third respondents sought to rely, Harms JA
said in terms (at 950E) that a decision on a
locus standi
point
is appealable. (The
dictum
at 954I to 955A related to a
different question, whether in the circumstances of that case leave
to appeal on the
locus standi
point should have been granted
before the proceedings had been terminated.)
[15]
In my view the objection raised by all three
respondents, namely that the present application must be dismissed
because the applicants
did not first ask the Competition Appeal Court
for leave to appeal, was well taken. My reasons for so holding are as
follows.
[16]
The foundation of the applicants’ argument
in this Court is their submission that the ouster of this Court’s
jurisdiction contained
in s 62(1) and (3)(a), read with s 62(4), is
unconstitutional. But even if one assumes that this contention is
correct, this will
lead only to the excision from those sub-sections
of the provisions giving effect to the ouster. The further provisions
in s 62(4)
and s 63(2) providing for the necessity for seeking leave
to appeal, either from the Competition Appeal Court, or, if it
refuses,
this Court, cannot be held to be unconstitutional (see
Besserglik v Minister of Trade, Industry and Tourism (Minister of
Justice Intervening)
[1996] ZACC 8
;
1996 (4) SA 331
(CC)). The result is that
even if the applicants’ attack on the constitutionality of the
attempted jurisdictional ouster succeeds
the need for leave to appeal
will remain and will extend, on the excision of the wording
complained of, to all appeals from the Competition
Appeal Court.
[17]
The wording of the statute under
consideration here differs from that of item 22 of Schedule 7 of the
Labour Relations Act 66 of 1995
, which was considered in
Chevron
Engineering (Pty) Ltd v Nkambule and Others,
argued together with
the present matter. In that case leave to appeal to this Court (from
a decision of the Labour Appeal Court) was
not required as a
pre-requisite to coming to this Court by the Constitution, the
Labour
Relations Act or
the Supreme Court Act 59 of 1959. In the present
case it was clearly the intention of Parliament that leave to appeal
should be a
pre-requisite from an appeal from the Competition Appeal
Court to this court and a decision that the jurisdictional ouster was
unconstitutional
would not alter the position.
[18]
It follows that the application for the two
declarations sought must fail. The application for directions must
suffer the same fate
because it cannot be ‘just and expedient’
for directions to be given regarding the prosecution and conduct of
an appeal which
is not validly before the Court.
ORDER
[19]
The following order is made:
The application is dismissed with costs, such costs to
include, in the case of the second and third respondents, those
occasioned
by the employment of two counsel.
.........................
IG FARLAM
JUDGE OF APPEAL
CONCURRING
VIVIER ADP
ZULMAN JA
LEWIS JA
MLAMBO AJA