COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: 18/CR/Mar01
In the matter concerning the application for amendment in the complaint referral
by :
The Competition Commission (Commission)
against
South African Airways (Pty) Ltd (SAA)
DECISION
This is an application by the Commission to the Tribunal in terms of Competition Rule
18. The Commission applied to amend its founding papers filed in respect of its
Complaint Referral against SAA. After a hearing held on 12 November 2001 the Tribunal
has decided to grant the application for the reasons set out below:
BACKGROUND
The substantive complaint referral to which this interlocutory application
relates is one filed by the applicant, the Competition Commission (the
“Commission”), against South African Airways (“SAA”) (the
“Respondent”), in terms of which the Commission alleges that SAA, a
dominant firm, is offering incentive commissions to travel agents as well as
incentives to travel agent consultants in the form of travel bonuses. The
Commission alleges that these practices are in contravention of sections 8(d)
(i) alternatively 8(c) of the Competition Act. A prehearing conference
scheduled for 16 August 2001 was aborted when it emerged that the
Commission would be filing amendments to its founding papers. The pre
hearing was accordingly postponed sine die . On the 17 August 2001 the
Tribunal made the following order:
1. The prehearing conference is postponed sine die.
2. The matter is adjourned to allow the Competition Commission to file, by
Notice of Motion in terms of Rule 42, an application to amend and
supplement their Complaint referral (“the application”).
3. If the Respondent opposes the application it must file an answering affidavit
within the time period contemplated in Rule 43 and the provisions of that sub
rule apply to any reply that the Commission may file. Thereafter the
application will be set down for hearing on a date to be arranged by the
Registrar.
4. If the Respondent does not oppose the application, it
i. Must indicate that intention by notice to the Commission and
Tribunal, within 10 business days after being served with the
application: and
ii.will be entitled to file a supplementary answering affidavit to the
Commission’s amended Complaint referral within 20 business
days of notifying their intention not to oppose.
5. Costs of the prehearing, if competent, have been reserved.
On 23 August 2001, the Competition Commission filed its Notice of Motion
and a Supporting Affidavit, giving notice of its intention to amend its
founding affidavit in the complaint referral. This amendment was brought in
terms of Competition Tribunal rule 18 read with section 50 (3) (iii) of the
Act1. Note that the Commission’s supporting affidavit simply detailed the
amendments to its founding papers – it did not provide reasons for amending
the papers.
On the 6 September SAA filed an objection to the Commission’s application to amend its
founding papers. The objection was made on the following four grounds:
1. the amended papers show a new cause of action;
2. the Respondent shall suffer irremediable prejudice;
3. the designated application does not disclose any grounds or reasons for
such amendment;
1 This section states that “When the Competition Commission refers a complaint to the Competition
Tribunal in terms of subsection 2(a) , it may –….
(iii) add particulars to the complaint as submitted by the complainant…”
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4. the Applicant is not bona fide in bringing such application.
Note that SAA did not provide further explanation or elaboration of its objection – it
simply made the bald assertions reproduced above.
A hearing was accordingly convened to ventilate the Commission’s position
with regard to the amendment and SAA’s objection thereto. The
Commission filed heads outlining its case on 24 October 2001, in which it
stated that its arguments would be more fully amplified in replying heads of
argument once it had had sight of the respondent’s heads, arguing that
SAA’s bald, unsubstantiated assertion did not provide the basis for a
considered response. SAA objected to the Commission’s stated intention to
file heads in reply to SAA’s heads, stating that the Commission, as
applicant, was obliged to file substantive heads in support of its application
to which the respondents would respond. They asserted that the Commission
had no right of reply to their heads. The respondents were initially due to file
their heads on the 7 th November. In the lengthy exchange of correspondence
that ensued, the respondents indicated that they would not file their heads
unless and until the Commission withdrew its heads and replaced them with
more substantive heads. The Commission declined to do so, stating that the
respondents would be entitled to air their grievances at the hearing.
AMENDMENT
We should make clear from the outset our disquiet at the controversy – not to mention the
costs – generated by the Commission’s desire to make certain amendment to its founding
papers. This should normally be an uncontentious issue. In the practice of the High
Court an amendment takes the form of a mere notice of intention to amend – to which the
opposing party is entitled to object rather than an application to which opposition is
opposing party is entitled to object rather than an application to which opposition is
expected. In other words, the party wishing to make the amendment would simply
inform the court and the opposing party of its decision to amend its papers. This notice
would usually be accompanied by a tender to cover additional costs, if any, incurred by
the opposing party in responding to the amendments. Only under extreme circumstances
would such an amendment be opposed, much less rejected by the adjudicator. The latter
is naturally concerned to hear the best, the most complete, case that the respective parties
are able to bring before it. Provided the amendment does not prejudice the opponent of
the amending party the amended papers will simply be filed and the matter would, in due
course, proceed to be heard on the basis of the amended papers.
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Regrettably, however, the Commission’s attempt to amend its paper in this matter has not
proceeded in the routine manner outlined above. On the contrary its attempt to amend its
founding papers has spilled over into a heated prehearing conference and an irascible
exchange of correspondence between the parties, and, now, is the subject of an opposed
proceeding that has itself generated significantly more heat than light, and more cost than
both.
We are in little doubt that in this particular matter original sin resides with the
Commission:
• The first intimation that either the respondent or the Tribunal had of the
Commission’s intention to amend its papers came as the parties and their legal
counsel and members of the Tribunal gathered at a prehearing conference
convened by the Tribunal to resolve certain matters pretrial. The papers filed by
the parties constituted the basic ingredient for a meaningful prehearing
conference that was then aborted in consequence of the Commission’s sudden
notice of its intention to amend its papers.
• On belatedly revealing its intention to amend its papers the Commission did not
see fit to tender an apology much less the costs incurred by the respondent in
attending the aborted prehearing conference and in responding to the amended
papers.
• Having been specifically ordered by the Tribunal to make application for an
amendment to its founding papers in terms of the provision of Rule 42, the
Commission inexplicably submitted its application in terms of Rule 18 read with
Section 50(3)(iii).
• Despite having informally revealed to the prehearing conference the rationale
underlying its desire to amend its papers, the Commission then obdurately refused
to motivate its formal notice to amend its proposal.
Neither has the respondent covered itself in glory:
Neither has the respondent covered itself in glory:
• In response to the Commission’s filing of its amended pleadings the respondent
contented itself with a terse, peremptory listing of the broad basis of its objections
to the amendment and constantly resisted pleas by the Commission to elaborate its
bald assertions so as to enable the Commission to respond meaningfully.
• And then, at the commencement of the present hearings, the respondent suddenly
submitted lengthy heads of argument elaborating the legal and factual basis of its
objection.
The Tribunal was then obliged to preside over lengthy legal argument in a matter that, in
the ordinary course of events, should not have detained the members of the Tribunal, nor
the opposing legal counsel, nor, of course, their long suffering clients. In summary:
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Mr. Pretorius for the Commission argues that the Tribunal should, in this matter, follow
High Court convention and view amendments to pleadings as a matter of course, akin to a
right enjoyed by any party appearing before it and which only require to be motivated in
argument in the event that the other party to the proceedings challenges the amendment
and provides reason for this challenge. Given that, in this matter, the respondent has
contented itself with a number of broad assertions rather than an elaborated statement of
the reasons underlying its objection, Mr. Pretorius thus contends that there is not a proper
objection before us. In particular, insists Mr. Pretorius, the respondent has not been able
to show that it has suffered prejudice in consequence of the Commission’s desire to
amend its papers.
Mr. Bhana for the respondent contends that a proper application to amend
has not been placed before us. He takes a different view of High Court
convention and, in any event, points out that the rule in terms of which the
Tribunal ordered the Commission to submit its amendment specifically
contemplates an application rather than a mere notice and that application
presupposes that the grounds on which the application be made are
elaborated and that the respondent be afforded an opportunity to respond to
that fully elaborated application. Moreover he insists that the respondent has
suffered prejudice, to wit the additional cost incurred in consequence of the
amendment, including the cost of the prehearing conference that was
aborted by the amendment. 2 However, he argues that the Tribunal is not
even required to consider the question of prejudice, because the
Commission, by filing a defective application to amend, has not even
reached the hurdle beyond which the question of prejudice is appropriately
considered.
reached the hurdle beyond which the question of prejudice is appropriately
considered.
We are not going to provide a lengthy, elaborately reasoned response to a
matter which has already occasioned considerably more agitation and
cogitation than is warranted. Suffice to point out that the approach taken by
the respondent to the status of pleadings before the Tribunal – and therefore
to the amendment of these pleadings – ignores the fact that proceedings
before this Tribunal are never simply civil disputes between two warring
private parties. The Tribunal is a creature of a particular statute that has as its
principal objective the protection of the public from anticompetitive
conduct. This reality accounts for certain of the powers given us by the
2 Note that in the elaborate heads of argument submitted at the hearing the respondent argued that
additional prejudice arose insofar as the Commission has sought to amend its papers after sight of and in
response to its opponent’s counter argument outlined in its answer to the founding papers. Our reading of
the record is that this claim was later abandoned – it is, in any event, without merit in this case leaving
cost as the only instance of prejudice.
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legislature including our inquisitorial power and it animates our approach to
a range of simple and complex matters including the status of pleadings
before us. In short it ensures that we adopt, if anything, a more flexible
approach to the pleadings before us than would the High Court in a civil
matter. We are not refereeing a conflict between two private rivals; we are
securing the objectives of the Competition Act. 3
Our concern is then simply that the substantive complaint be fully ventilated.
We cannot allow our disquiet at the cavalier approach adopted by the parties
to these proceedings to undermine our duty to the public, including its right
to have complaints that are referred to us fully ventilated. This consideration,
more than any of the technical arguments made by the Commission or the
respondent, dictates that the Commission be allowed to file its amendments
and that the respondent be accorded the opportunity to respond to these
amendments. This is, in our view, what a proper application of the Act
requires. In Whittaker v Roos & Another; Morant v Roos & Another
Wessels J laid out the position of the court, in the process expressing
concerns not evidenced by the posture of either of the parties in the matter
before us:
‘This Court has the greatest latitude in granting amendments, and it is very
necessary that it should have. The object of the Court is to do justice between the
parties. It is not a game we are playing, in which, if some mistake is made, the
forfeit is claimed. We are here for the purpose of seeing that we have a true
account of what actually took place, and we are not going to give a decision upon
3 Had either party seen fit to consult earlier decisions of the Tribunal they would have
recognized that this issue has been previously decided. Cf the Tribunal’s decision in
recognized that this issue has been previously decided. Cf the Tribunal’s decision in
Case Number: 49/CR/Apr00 American Natural Soda Ash Corp/CHC Global (Pty) Ltd and and The
Competition Commission/Botswana Ash (Pty) Ltd/Chemserve Technical Products (Pty) Ltd : ‘ This leads us
on immediately to the second consideration, for if the Tribunal is entitled to enter the fray in this way,
unlike its civil court counterpart, it suggests that the function of pleadings to determine the parameters of a
dispute, as we understand them in civil actions is diminished. The policy rationale behind this is that
prohibited practices do not just have private effects but also affect the broader public. The Tribunal as the
guardian of the purposes of the Act cannot be constrained by the ambit of pleadings to the extent would a
civil court in adversarial proceedings. The legislature did not intend to make the Tribunal a prisoner
confined by the walls of opposing lawyers’ pleadings. We must bear in mind that the primary purpose of
pleadings is to define the issues between the parties so that each knows what case it must be prepared to
meet and secondly so that the court is in a position to identify the issues on which it must make its decision.
In the Tribunal’s proceedings pleadings serve this function as well, but their status is less elevated given the
inquisitorial nature of the Tribunal and the public character of complaint procedures we alluded to above.
Consequently our approach to pleadings will be more flexible than a civil court’s. Furthermore in our
proceedings the defining of issues is not the sole preserve of the pleadings and this function can be
supplemented by a prehearing conference.’
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what we know to be wrong facts. It is presumed that when a defendant pleads to
a declaration he knows what he is doing, and that, when there is a certain
allegation in the declaration, he knows that he ought to deny it, and that, if he
does not do so, he is taken to admit it. But we all know, at the same time, that
mistakes are made in pleadings, and it would be a very grave injustice, if for a
slip of the pen, or error of judgment, or the misreading of a paragraph in
pleadings by counsel, litigants were to be mulcted in heavy costs. That would be
a gross scandal. Therefore, the Court will not look to technicalities, but will see
what the real position is between the parties.’
We accordingly authorise the amendment but will allow the respondent to
file a supplementary answering affidavit and for the Commission to reply
thereto.
COSTS
While we must ensure that our decision as to the substantive admissibility of the
Commission’s amended papers is neither influenced by the Commission’s role in causing
this wasteful litigation in the first place, nor by the respondents role in extending it, these
considerations would normally play a central role in the determination of a costs award.
In our previous order we reserved the determination of the costs of participating in the
aborted prehearing conference. We confirm that here and, in addition, reserve the
determination of costs occasioned by the amendment and the costs associated with the
opposed proceeding in this matter.
Our previous order reserved costs ‘if competent’. That rider was inserted specifically in
deference to the possibility that the Tribunal may not be able to award costs for or against
the Commission. That matter remains to be resolved. However, while the legal questions
are unanswered, from a public policy standpoint it is clear that the prevalent notion that
we are barred from awarding costs in a matter involving the Commission is responsible
we are barred from awarding costs in a matter involving the Commission is responsible
for a perverse set of incentives – in short it enables the Commission to adopt what Mr.
Bhana in this matter aptly characterized as a ‘slapdash’ approach to its role in litigation.
On the other hand it enables defendants to oppose matters, even matters already decided
in the Tribunal and the High Court, for no apparent reason other than pique and the desire
to prevent opponents from having their day in court. This matter is ripe for determination
and after the final resolution of the substantive issues in this matter it will be decided.
Since the award of costs for or against the Commission has serious implications for it, we
did not want to decide our competence to do so without giving both parties the
opportunity to fully argue the matter and hence our decision to reserve.
ORDER
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The Tribunal accordingly makes the following order:
1. We authorize the Commission’s amendment and supplementation of the
Founding Affidavit of Izak Wouter De Villiers Meyer, attached to its
Compaint Referral, in the manner contained in the affidavit accompanying its
Notice of Motion filed by the Commission on 23 August 2001;
2. The respondent must file its supplementary answering affidavit, if
any, to the amended complaint referral within 20 business days of
the date of this order;
3. The Commission must thereafter file its reply, if any, to the
respondent’s supplementary answering affidavit, within 10
business days of being served therewith;
4. The following issues of costs are reserved to be resolved at the hearing
i. participation in the prehearing conference on 16 August 2001;
ii. the wasted costs occasioned by the amendments; and
iii. the costs occasioned by the opposition to the amendments.
____________________ 16 November 2001
D.H. Lewis
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