COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: 04/CR/Jan02
In the matter between:
Anglo American Corporation Medical Scheme Applicant
and
The Competition Commission of South Africa First Respondent
Engen Medical Fund Second Respondent
United South African Pharmacies Third Respondent
Members of United South African Pharmacies Fourth Respondent
In re:
The Competition Commission Of South Africa Applicant
AngloAmerican Corporation Medical Scheme First Complainant
Engen Medical Fund Second Complainant
And
United South African Pharmacies First Respondent
Members Of United South African Pharmacies Second Respondent
APPLICATION FOR INTERVENTION
The applicant in this matter seeks leave to intervene in complaint referral
proceedings, which the Competition Commission (“Commission “) has instituted
against the third and fourth respondents. The third respondent 1 (“USAP”) opposes
the application. I have to decide–
1 When I refer to the respondents I refer to them as cited in the intervention application not the
complaint referral. To avoid confusion I have hereafter referred to the third respondent as USAP.
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i) whether the applicant has demonstrated an interest that is not
adequately represented by the Commission; and if so
ii) what the form of the applicant’s intervention should take in order for its
interest to be adequately represented.
Background
The applicant, a registered medical scheme, submitted a complaint against USAP
and its members to the Competition Commission on 21 December 2000. On 9 May
2001 the second respondent Engen Medical Fund submitted a complaint to the
Commission against USAP .
These two complaints formed the basis of a complaint referral, that the Commission
has brought against USAP and its members, and which was filed with the Tribunal
on 17 January 2002.
The Commission alleges that USAP and its members have been engaged in
prohibited practices in contravention of sections 4(1)(a) and 4(1)(b) of the Act in that
they are alleged to have been involved in a “group boycott” of the complainants in
order to coerce them to concede to a standard discount scheme that USAP’s
members offer. The Commission seeks relief against the third and fourth
respondents in the form of a declaratory order and the imposition of an
administrative fine.
The third respondent has brought an exception to the Complaint referral, which has
not yet been set down for determination. Neither the third respondent nor any of the
firms falling within the class of the fourth respondent have filed answering affidavits. 2
The applicant now seeks leave to intervene in these proceedings. The basis for its
application is that it seeks relief not contemplated in the Complaint referral and that
in order to found this relief it needs to make a number of allegations that are not
contained in the referral. 3 USAP has opposed the application on the grounds that
the applicant has not shown ‘ a distinctive interest ‘ in the matter that would justify
the applicant intervening.
The applicant alleges that if allowed to intervene it would seek an interdict and an
The applicant alleges that if allowed to intervene it would seek an interdict and an
order that the respondents supply or distribute goods and services on terms
2 The fourth respondent, the second respondent in the complaint referral, is described as all the retail
pharmacies that are members of USAP.
3 The applicant points out that its complaint was responsible for the referral and that its members are
the “ the direct and primary victims of the respondents’ ongoing anticompetitive conduct.” (See
applicant’s heads of argument paragraph 2.1.6.)
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reasonably required to end the prohibited practices.
Analysis
The legal regime that governs intervenor’s rights is contained in section 53 of the Act
and Rule 46 of the Tribunal rules.
In terms of section 53(1)(a)(ii)(bb)
53. The following persons may participate in a hearing in person or through a
representative, and may put questions to witnesses and inspect any books,
documents or items presented at the hearing:
a) if the hearing is in terms of Part C …
(i)….
(ii) the complainant if – …
(aa)…
(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;”
Rule 46 provides:
“Intervenors
(a) At any time after an initiating document is filed with the Tribunal,
any person who has a material interest in the relevant matter may
apply to intervene in the Tribunal proceedings by filing a Notice of
Motion in Form CT 6, which must –
(i) include a concise statement of the nature of the
person's interest in the proceedings, and the
matters in respect of which the person will make
representations; and
(b) be served on every other participant in the proceedings.
2) No more than 10 business days after receiving a motion to intervene, a
member of the Tribunal assigned by the Chairperson must either –
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i.make an order allowing the applicant to intervene,
subject to any limitations –
1. necessary to ensure that the
proceedings will be orderly and
expeditious; or
2. on the matters with respect to which
the person may participate, or the
form of their participation; or
(b) deny the application, if the member concludes that the interests
of the person are not within the scope of the Act, or are already
represented by another participant in the proceeding.
(b) Upon making an order in terms of subrule (2), the assigned
member may make an appropriate order as to costs.
(4) If an application to intervene is granted –
(i) the registrar must send to the intervenor a list of
all documents filed in the proceedings prior to
the day on which the request for leave to
intervene was granted; and
(b) access by an intervenor to a document filed or received in evidence is
subject to any outstanding order of the Tribunal restricting access to
the document.”
Counsel for the applicant points out correctly that section 53(1)(a)(ii)(bb) does not
require the complainant to make a showing of its interest in the matter and in this
respect Rule 46 should not be read to encroach upon a right granted by the statute. I
agree with that proposition. Rule 46 is a general rule that applies to intervention in all
forms of Tribunal proceedings and is not limited to complaint procedures. 4 In order
for a complainant to intervene in a complaint referral, it would satisfy the requirement
of interest in Rule 46 by alleging that it was the complainant whose complaint had
formed the basis or part of the basis for the complaint referral. This interpretation
harmonises the section and the rule.
The applicant has made these allegations and accordingly I find that it has shown
4 Rule 46 applies to proceedings in which an ‘initiating document” has been filed. An ‘initiating
document’ is defined in the Rules to include complaint referrals, applications, appeals and merger
proceedings.
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that it has an interest in the matter. 5
The next question is whether the applicant has demonstrated that its interest is not
adequately represented by another participant. It is quite clear that the applicant
seeks remedies that are not sought by the Commission, the only other ‘participant’ in
the present complaint referral. If the Commission does not seek this relief, the
complainant has no other remedy open to it. Even the applicant’s subsequent right
to claim damages, in the event that the Tribunal were to find that there has been a
restrictive practice, will not assist it in this respect. The relief that the applicant seeks
is competent for us to grant and is prima facie related to addressing the effects of
the prohibited practice should it be proven. The applicant in my view has therefore
demonstrated an interest that is “not adequately represented by another participant”.
The final question is, to what extent does the applicant need to participate, in order
for its interest to be adequately represented?
In this respect I should indicate that USAP during the course of argument offered
two solutions. They argued that at best the applicant had made out a case for
arguing for a ‘distinctive remedy’ as its case on the merits was in real terms, no
different from that of the Commission. The fact that it might quibble over what
allegations should form part of the Commission’s papers did not mean that it had
established that its interest was not ‘adequately represented’
That being so, USAP argued that the merits and the remedy could be separated and
that given an adverse finding on the merits, the applicant could then be permitted to
intervene on remedies.
As an alternative, USAP also offered, by way of a tender, that if the Tribunal found
against them and granted declaratory relief it would undertake to be bound by such
a declarator as if it were interdicted from doing so.
a declarator as if it were interdicted from doing so.
The applicant criticised the adequacy of both these remedies. The former remedy
might lead to practical problems if the applicant only became involved in the second
round. By way of example, it might lead to the need to recall witnesses who had
testified on the merits but whose evidence might also be relevant to remedies. This
second round would create inevitable disputes if the witnesses appeared to be
returning to the merits.
The latter remedy was also criticised. It was unheard of for a respondent to tender a
remedy not sought and left the applicant with a feeling of discomfort.
5 As counsel for USAP did not seriously dispute this approach at the hearing I need
not discuss it further.
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It is difficult for an adjudicator to determine what procedural rights can be granted to
an intervenor on an a priori basis without the risk of error. It would be dangerous for
the Tribunal to form a view of what form of participation is adequate to found a case
for the relief sought, at the commencement of proceedings, when the Tribunal lacks
a full appreciation of the extent of the case. There is no obligation on the
Commission, which is dominus litis in this matter, to traverse the type of evidence
which might be relevant to the intervenor’s relief but not that sought by the
Commission.6
The applicant for this reason sought only an order that it be allowed to intervene. 7
Applicant’s counsel argued that the content of this right could then be determined at
each procedural stage of the matter and the Tribunal could then at the appropriate
moment decide whether the issue related to its interest and if so then it could be
heard. This type of approach is in my view unsatisfactory. It leaves the ambit of the
intervention uncertain throughout the course of proceedings. The Tribunal would
then be required to spend much time adjudicating demarcation disputes at every
procedural stage of the case. Such dissipation of time and energy to tangential
issues is unwarranted. 8
It is also important from a point of fairness that the third and fourth respondents
know on what basis the intervenor founds its relief in order for them to meet that
case. If the intervenor’s case only unravels in the course of proceedings without
being ascertainable from the outset, then the respondents are worse off than would
be the case if the intervenor had been a coplaintiff, as they would lose the benefit of
having a complaint referral setting out the case. It might be that the intervenor’s case
once pleaded is less distinct from that of the Commission once it has been stated,
once pleaded is less distinct from that of the Commission once it has been stated,
but it would be better to err on the side of granting them that latitude than the
alternative.9 The risk of denying an intervenor adequate representation could mean
that it might be unable to establish its case for relief, not because it is unable to
prove it, but because of some preestablished stricture limiting its rights. The risk to
the respondents, on the other hand is more one of expense and inconvenience. The
6 The intervenor went to great length in its papers to illustrate the type of allegations that the
Commission ought to have made in the referral. I need not comment on this aspect except to illustrate
the danger in once recognising a right to seek relief, to confine an intervenor to arguing its case off
the other parties papers where the lis between the latter does not contemplate the interest of the
intervenor.
7 Prayer 1 in the Notice of Motion. In argument this was expanded on to include intervention in
respect of all those matters referred to in section 53.
8 During the course of argument I debated with counsel a via media between full right of participation
and one that could allow the intervenor to adequately represent its interest. It seemed that on the
facts of this case, such a solution was not possible without leading again to demarcation disputes.
9 In The Competition Commission and Others v American Natural Soda Ash Corporation and Others
No: 49/CRApr00 and 87/CR/Sep00; 30 November 2001 the Tribunal held that the legislature’s policy
was to encourage as much participation in deliberations as possible as “this is considered to be
healthy for arriving at optimal decisions”
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cost issue can be obviated by a costs order the inconvenience is an unfortunate
consequence of litigation. There is also a practical benefit of having an intervenor
with its own set of pleadings as it means that demarcation disputes are less likely as
one knows a priori what the intervenor’s case is.
The Commission neither opposed nor supported the application. Although invited to
make submissions the Commission’s representative declined to do so. In the
absence of any opposition from the Commission there seems to be no policy reason
for limiting the applicant’s right to intervene.
For this reason I am allowing the applicant full rights of intervention provided that it is
limited to seeking the relief it has made out in its papers.
I make the following order –
1. The applicant is granted leave to intervene in this matter in terms of Rule 46(2)
subject to the following conditions:
1.1. The applicant must file a statement of intervenor's particulars within 10
business days of this order. The intervenor's particulars must comply with the
requirements for a complaint referral in terms of rule 15 subject to the
necessary changes required by context. The respondents will be entitled to
file an answer to the intervenor’s particulars and the applicant’s to file a reply.
The time periods and format set out in Rules 1617, will apply subject to the
necessary changes required by context
.
1.2. The applicant’s relief will be confined to seeking an order contemplated by
subsections 58(1)(a)(i) and 58(1)(a) (ii) of the Act.
1.3. The intervening particulars do not constitute a separate cause of action and
are contingent on the continuance of and the validity of the Complaint
referral. Accordingly the intervenor has an interest in the validity of the
complaint referral and will be entitled to participate in any proceeding
concerning objections to the Complaint referral.
concerning objections to the Complaint referral.
1.4. The intervenor will be liable for the costs of the respondent if the intervention
is unsuccessful.
2. The applicant’s right to intervene subject to paragraph one above, includes:
2.1. adducing evidence and argument in support of the relief it seeks; and
2.2. taking all said steps as are reasonably necessary to advance the case to be
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made in favour of the relief sought by it including:
2.2.1 the crossexamination of witnesses;
2.2.2 the production of documents;
2.2.3 the attendance of prehearing conferences;
2.2.4 the participation in any interlocutory applications which affect the relief
sought by the First Complainant.
3. Costs of this application are awarded to the intervenor including the costs of an
additional legal representative.
Norman Manoim
Presiding Member
Date 4 June 2002.
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