COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case Number: 41/CR/Jul01
In the matter between:
SAD Holdings Limited First Applicant
SAD Vine Fruit (Pty) Ltd Second Applicant
and
The Competition Commission Respondent
In the referral:
The Competition Commission Applicant
and
SAD Holdings Limited First respondent
SAD Vine Fruit (Pty) Ltd Second respondent
Reasons and Order
Introduction
This is an application brought by SAD Holdings Ltd and SAD Vine Fruit (Pty) Ltd
(“SAD”) to dismiss the complaint referred to us by the Competition Commission
(“Commission”) on 17 July 2001 on the basis that the Commission does not have
jurisdiction to refer the complaint to us as it did not do so within the requisite one
year period.
The Commission, in the complaint referral, allege that SAD has contravened the
provisions of sections 5(1) and 8(d)(i) of the Competition Second Amendment
1
Act, No. 39 of 2000. We have not yet commenced hearing the complaint referral.
However we decided to hear this application first as if it is successful it would
dispose of the complaint referral.
Background
On 13 October 1999 the complainants, South African Raisins (Pty) Ltd (“South
African Raisins”) and Mr Slabber, filed a complaint of restrictive practice with the
Competition Commission against SAD. The complaint was lodged in terms of
section 44 of The Competition Act, No. 89 of 1998 (“the old Act”) 1.
The Commission accepted the complaint filed by the complainants on 13 January
2000 in terms of Competition Commission Rules 2 17(1) and (2). Rule 17, which
prescribe the procedure to be followed when filing a complaint with the
Commission, states as follows:
1) A person other than the Commissioner, by filing a completed Form CC1,
may submit a matter to the Commissioner, if
(a) the matter concerns a practice that meets both of the tests set out
in Rule 16(a) and (b);
(b) the submission is not frivolous; and
(c) the Commissioner has not initiated or accepted a complaint in
respect of that practice.
2) Upon receiving a submission in terms of subrule (1), the Commission
must either –
(a) accept the submission as a complaint in terms of section 44; or
(b) notify the person who made the submission that the Commission
has rejected the submission as a complaint, and provide a brief
written explanation for that decision.
On the same day that the complainants filed their complaint with the Competition
Commission they also launched an application for interim relief in terms of
section 59 of the old Act with the Competition Tribunal. The Competition Tribunal
granted interim relief to South African Raisins and Mr Slabber on 24 November
1999.3
1 The Competition Second Amendment Act, No. 39 of 2000 came into affect on 1 February 2001.
1 The Competition Second Amendment Act, No. 39 of 2000 came into affect on 1 February 2001.
2 We will be referring to the rules and Act as they were prior to the amendment of the Act unless
we state otherwise. See footnote 1 supra.
3 See Tribunal Case No.: 04/IR/Oct99
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Thereafter the respondents in the Interim Relief case, SAD, brought an
application to the High Court of South Africa in the Transvaal Local Division, inter
alia, questioning the jurisdiction of the Competition Tribunal over the dispute
between the applicants and the respondents. Ngoepe, JP delivered his
judgement on 15 March 2000 and declared the orders made by the Tribunal as
null and void and of no force and effect. 4 Ngoepe JP based his decision on the
fact that the respondents conduct was excluded from the application of the
Competition Act as the Act, did not apply to “acts authorised or subject to public
regulation” and since the raisin industry was subject to regulation in terms of he
Marketing of Agricultural Products Act it was thus within the ambit of the
exclusion and hence the Tribunal had no jurisdiction to make the orders it did. As
a result of this judgement the Competition Commission decided to suspend its
investigation into the main complaint on 15 March 2000. The Commission argued
that since the judgment found that the Competition Act was of no application to
the raisin industry and hence the Tribunal had no jurisdiction over the respondent
to ajudicate an interim relief case, they for the same reason, had no jurisdiction to
investigate the complaint under the Act. Thus the Commission interpreted the
judgment as having stayed their jurisdiction. 5
The complainants appealed the judgement of Ngoepe JP and on 29 September
2000 Melunsky, AJA of the Supreme Court of Appeal found that the Judge
President erred in holding that the Tribunal had no jurisdiction to make the orders
of 29 September 1999. 6
The Competition Commission considered that the judgment of Melunsky AJA had
“reinstated its jurisdiction” 7 and so it recommenced its investigation on 29
September 2000, i.e. 6 months and fourteen days after it suspended the
investigation. According to the Commission’s calculations it referred the
complaint to the Tribunal well within the one year period prescribed in
Competition Commission Rule 19(2). They allege they did so, if one excludes the
period in which their jurisdiction was ‘suspended’, exactly 11 months and 19 days
after acceptance and hence their referral is timeous.
Jurisdictional point
Rule 19 of the Competition Commision’s rules states as follows:
4 Case No: 1930/00 of 15 March 2000.
5 See supplementary affidavit of Ibrahim Bah paragraph 2.7
6 Case No.176/2000 of 29 September 2000.
7 See supplementary affidavit of Ibrahim Bah paragraph 2.7
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(1) The Commission must notify the registrar of the Competition Tribunal
that a complaint has been initiated or accepted by the Commission on the
earliest of the following dates, as applicable in a particular case:
a) The date on which the Commissioner initiates the complaint.
b) The date on which the Commission accepts a submission in
terms of Rule 17(2)(a).
c) The date on which the Tribunal determines in terms of Rule
1794) that a submission satisfies Rule 17(1).
d) The date on which the Commission publishes a notice in terms
of Rule 18(1)(b).
(2). Subject to subrule (3), the Commission must either refer a complaint
to the Tribunal in Form CT 1(1), or issue a Notice of Nonreferral in Form
CC 8, no more than one year after the date on which the complaint was
initiated or accepted, as the case may be, as reported to the Tribunal in
terms of subrule (1).
(3) In a particular case –
a) the Commission, and all claimants recognised at the time, may
agree to extend the period allowed in subrule (2);
b) on application by the Commission, the Tribunal may extend the
period allowed in subrule (2).
(4) If the Commission has not referred a complaint to the Tribunal, or
issued a Notice of Nonreferral, within the time allowed by subrule (2), or
subrule (3) if different, the Commission will be deemed to have issued a
Norice of Nonreferral on the expiry of the relevant time period.
(5) Upon issuing a Notice of Nonreferral in terms of subrule (2), the
Commission must deliver a copy of the notice to each claimant recognised
at the time.
It is common cause between the parties that the Commission had to refer the
complaint in casu to the Tribunal on or before the 12 thJanuary 2001, unless that
period had been validly interrupted. It is also common cause that if the period
between 15 March 2000 when Ngoepe JP delivered his order and 29 September
between 15 March 2000 when Ngoepe JP delivered his order and 29 September
2000 when Melunsky AJA reversed that order constitutes a valid suspension of
the one year period then the Commission would still be in time with its referral.
The issue that we have to decide is whether this sixmonth period constitutes a
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valid suspension of running of the oneyear period contemplated in Rule 19. If it
does not, since the Commission does not seek to rely on any of the other
grounds contained in Rule 19(2) for the extension of the oneyear period, it will
be deemed by virtue of the operation of Rule 19(4) to have issued a notice of
nonreferral to the complainants.
The respondents’ argument is straightforward. The Commission’s powers to
investigate were not removed by the order of Ngoepe JP. In the first place the
Commission was not a party to that litigation which was between the respondents
and the complainants 8. Secondly, notwithstanding the reasoning of the Court, the
relief was limited to nullifying two orders made by the Tribunal in interim relief
proceedings and had no bearing on the powers of the Commission. Thirdly the
noting of the appeal by the complainants, the date is not given, in any event led
by operation of law to the suspension of Ngoepe JP’s order as in terms of High
Court Rule 49(11). It states as follows:
49(11) Where an appeal has been noted or an application for leave to
appeal against or to rescind, correct, review or vary an order of a court
has been made, the operation and execution of the order in question shall
be suspended, pending the decision of such appeal or application, unless
the court which gave such order, on application of a party, otherwise
directs.
Thus the respondents argue the Commission was never under any legal
obligation to suspend its investigation and absent such compulsion its duty was
to continue, notwithstanding that in his reasons Ngoepe JP had come to the
conclusion that the Competition Act did not apply to the respondents.
Nor, they argue, could the decision be regarded as res judicata in respect of the
Commission and the respondent. A judgment is only regarded as res judicata 9 if
it meets the following requirements:
a) it is with respect to the same subject matter
b) based on the same ground
a) it is with respect to the same subject matter
b) based on the same ground
c) between the same parties. 10
In this case the dispute is not between the same parties, as the Commission was
not a party to the litigation between the respondent and the complainant, nor was
8 In the matter before Ngoepe JP the Tribunal was cited as a third respondent but the Tribunal
did not oppose the application and agreed to abide by the decision of the court.
9 A matter is regarded as res judicata if an end has been put to a dispute by a decision of a
judge.
10 See Lawsa Volume 9 paragraph 421 footnote 5 and the cases cited there.
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the subject matter or the relief the same.
Thus the Commission they argue was not precluded by the litigation from
investigating the complaint and hence the time period was never suspended.
The Commission argue that since the central finding of the High Court was that
the Act did not apply to the raisin industry the effect was that the Commission
would, based on the courts reasoning, have no jurisdiction to investigate the
complaint as such an investigation was premised on the application of the Act.
Thus it was immaterial that they were not a party to the dispute and not
prohibited from continuing by an express order of court. There was little point in
investigating a matter to be brought before a tribunal, which the court had found
had no jurisdiction. The suspension of the judgment by virtue of the appeal they
said was irrelevant as this was not a case of an appeal concerning the payment
of money or for relief. The Commission therefore acted properly in suspending its
investigation until the SCA order of reversal.
One has a great deal of sympathy with the Commission’s argument and it is hard
to criticize its decision to suspend its investigation pending the outcome of the
appeal. Were we vested with the discretion to condone the time period in Rule
19(2) we have no doubt that we would have done so.
The rule it is clear does not allow that discretion post facto and we could only
extend the period during the oneyear period if we were asked to do so on
application in terms of Rule 19(3)(b) 11.
The Commission however relies for the existence of our discretion on section
58(1) (c) of the amended Act 12, which states:
58 (1). In addition to its powers in terms of this Act, the Competition
Tribunal may –
(c) subject to sections 13(6) and 14(2), condone, on good cause
shown, any noncompliance of –
i) the Competition Commission or Competition Tribunal
rules; or
i) the Competition Commission or Competition Tribunal
rules; or
11 That application would have to be made before the expiry of the oneyear period. Whilst the
subrule does not expressly require this, the logic of the section given the deemed referral in
19(4) dictates this conclusion.
12 A similar provision is to be found in Rule 54(3) of the previous Tribunal Rules and Rule 55(3)
of the current rule but whichever applies our conclusion remains the same.
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(ii) a time limit set out in this Act.
This section however cannot be utilised to defeat noncompliance with threshold
jurisdictional issues, which relate to whether the Tribunal or Commission have
jurisdiction to determine a matter. The section applies to matters over which we
already have jurisdiction and not those where jurisdiction may have lapsed. Nor
does the express language of Rule 19(3), which as we have seen above
provides for a specific time extension remedy, suggest that any other is
appropriate in those circumstances.
At best for the Commission is a concession by the respondents that the time
period could be regarded as suspended if the Commission were expressly
precluded by operation of a court order that subsisted for the relevant period and
in such a case we could read in to Rule 19 (2) a time period of one year in which
the Commission could validly exercise its powers. Since as they have argued the
Commission was not so subject, we are not required to make such a reading in.
Order
We come to the conclusion that the Commission was not precluded by operation
of law from continuing its investigation and that in the absence of any discretion
on our part to condone their noncompliance within the time period contained in
Rule 19(2) their referral was not made in time.
We therefore find that:
1. The Commission has no jurisdiction to refer the complaint to the Tribunal;
2. They are deemed to have issued a notice of nonreferral to the
complainants.
South African Raisins and Mr Slabber, the complainants, however are not without
a remedy. They are entitled, because of the deemed nonreferral, to refer the
complaint directly to the Tribunal should they so wish. Since the complainants,
until this decision, were not in a position to exercise their rights to refer this
dispute to the Tribunal, we rule that for the purpose of Rule 14(1)(b) of the
Tribunal Rules 13 the Commission will be deemed to have issued a notice of non
referral with effect from the date of this decision. The Commission is required to
bring this fact to the attention of South African Raisins and Mr Slabber.
13 We refer here to the current Rules of the Tribunal.
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There is no order as to costs.
23 October 2001
N. Manoim Date
Concurring: D. Lewis and C. Qunta.
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