COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No.: 63/CR/Sep09
In the application for a Tribunal Directive:
Allens Meshco (Pty) Ltd First Applicant
Hendok (Pty) Ltd Second Applicant
Wire Force (Pty) Ltd Third Applicant
Agri Wire (Pty) Ltd Fourth Applicant
Agri Wire North (Pty) Ltd Fifth Applicant
Agri Wire Upington (Pty) Ltd Sixth Applicant
Cape Wire (Pty) Ltd Seventh Applicant
Forest Wire (Pty) Ltd Eighth Applicant
Independent Galvanising (Pty) Ltd Ninth Applicant
Associated Wire Industries (Pty) Ltd
t/a Meshrite Tenth Applicant
AND
Competition Commission First Respondent
Cape Gate (Pty) Ltd Second Respondent
Consolidated Wire Industries Limited Third Respondent
In the application brought by Cape Gate (Pty) Ltd
Cape Gate (Pty) Ltd Applicant
AND
The Competition Commission First Respondent
Allens Meshco (Pty) Ltd Second Respondent
Hendok (Pty) Ltd Third Respondent
Wire Force (Pty) Ltd Fourth Respondent
Agri Wire (Pty) Ltd Fifth Respondent
Agri Wire North (Pty) Ltd Sixth Applicant
Agri Wire Upington (Pty) Ltd Seventh Applicant
Cape Wire (Pty) Ltd Eighth Applicant
Forest Wire (Pty) Ltd Ninth Applicant
Independent Galvanising (Pty) Ltd Tenth Applicant
Associated Wire Industries (Pty) Ltd
t/a Meshrite Eleventh Respondent
Consolidated Wire Industries (Pty) Ltd Twelth Respondent
______________________________________________________________
Panel : Norman Manoim (Presiding Member), Yasmin Carrim
(Tribunal Member) and Medi Mokuena (Tribunal Member)
Heard on : 23 April 2010
Order Issued : 28 May 2010
Reasons for Decision and Order
[1] This is an application for discovery of certain documents from the
Competition Commission (“the Commission”) brought by the first to tenth
applicants against the Commission .The ten applicants are amongst twelve
respondent firms in a case brought by the Commission, alleging collusion in
the market for wire and wire related products. To avoid confusion between
parties to this interlocutory application, and the complaint referral to which it
relates, we will refer to the applicants in casu as the applicants, but when we
refer to ‘respondents,’ we refer to not to respondents in this case, but the
respondent firms in the complaint referral proceedings.
[2] By the time we got to hear this application some of the documents originally
sought by the applicants had either been furnished by the Commission or
were no longer sought. 1 We thus confine ourselves in this decision to those
that remain in dispute.2
Legal Principles to be applied
[3] We begin by considering the legal principles involved in this type of
application and then we proceed to apply those principles to the documents
1 Items 1and 3, as listed in the Notice of Motion, were provided, whilst items 13 and 14 were
no longer sought by the applicants. 2 An application for discovery brought by Cape Gate Pty Ltd, which confined itself to the
documents subsequently produced by the Commission, was for this reason not proceeded
with.
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sought. This is a discovery application brought to discover documents that
are allegedly referred to in the Commission’s complaint referral. Discovery is
sought to enable the applicants to file answering affidavits. Note that this is
not a discovery application for the purpose of trial.
[4] We have been asked to apply rule 35(12) of the High Court rules to this
application.3 In terms of Rule 55(1)(b) of the Rules for the conduct of
proceedings of the Competition Tribunal ( “Tribunal rules”) we may in the
case of a lacuna in our rules apply the High Court rules. Initially on the
papers there was an arcane debate between the parties as to whether a
procedural lacuna truly existed and hence, if it did not, could the High Court
rules be invoked. During oral argument this debate was not persisted with.
[5] We are frequently confronted with the question as to whether rule 35(12)
applies to our proceeding. Whilst in the past we have not though that a formal
answer was required the procedural debates that bedevilled this case
indicates that perhaps a more considered answer would give welcome
guidance to litigants.
Rule 55(1) states :
55. Conduct of hearings
1. If, in the course of proceedings, a person is uncertain as to the
practice and procedure to be followed, the member of the Tribunal
presiding over a matter –
a. may give directions on how to proceed; and
3 High Court Rule 35(12) states “Any party to any proceeding may at any time before the
hearing thereof deliver a notice as near as may be in accordance with Form 15 in the First
Schedule to any other party in whose pleadings or affidavits reference is made to any
document or tape recording to produce such document or tape recording for his inspection
and to permit him to make a copy or transcription thereof. Any party failing to comply with
such notice shall not, save with the leave of the court, use such document or tape recording
such notice shall not, save with the leave of the court, use such document or tape recording
in such proceeding provided that any other party may use such document or tape recording.”
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b. for that purpose, if a question arises as to the practice or
procedure to be followed in cases not provided for by these
Rules, the member may have regard to the High Court Rules.
[6] The first thing to note about the rule is that it confers a discretion to apply the
High Court rules. When we find that a procedure is not made certain from
our rules we are not obliged to apply the High Court rules but may decide to
do so. Secondly, the discretion is to have “regard to” the High Court rules -
this is something less exacting than importing the entire rule once one has
identified a lacuna. There is good reason for this. The Tribunal has often
stated in the past that its proceedings are sui generis. 4 Uncritical borrowing
of a High Court rule in toto may lead to impracticality. We are also required as
an administrative tribunal to proceed informally but to do so fairly. We see no
reason to formally adopt rule 35 to applications to compel discovery of
documents to refer to pleadings. Basing that discretion on administrative
fairness to respondents is a sufficient basis for finding our powers to order
discovery when appropriate.5 We do not need to find rule 35 through the door
of tribunal rule 55 to do so. Granted in most cases the outcomes would be
identical regardless of which approach we adopted. But there may be subtle
distinctions in some cases – although not in this one- where outcomes may
differ. The choice also has procedural implications. We would not require the
service of a notice as does rule 35. In our proceedings an application to
discover that met the requirements of Tribunal rule 42 would suffice, although
it would be advisable for an applicant to request documents by way of
correspondence first from the opposing party to obviate the need for litigation.
4 See The Competition Commission and American Natural Soda Ash CHG Global (Pty) Ltd
Case No.: 49/CR/Apr00 at page 14-15; National Association of Pharmaceutical Wholesalers
Case No.: 49/CR/Apr00 at page 14-15; National Association of Pharmaceutical Wholesalers
Others and Glaxo Wellcome Others Case No.: 45/CR./Jul01 per par 55 " Our Complaint
Referral proceedings as we have observed previously in Botash (1) are sui generis and
cannot be classified as either action or application proceedings as they have aspects of each.
Like trial proceedings the pleadings may be supplemented by evidence, but unlike trial
proceedings the pleadings are in affidavit form and contain some if not all the evidence that
may be led in the proceedings. It may well be that in some cases the matter can be resolved
entirely on the papers and in this respect they resemble High Court application procedures,
but unlike those proceedings (except where there is a referral to oral evidence in exceptional
cases) hearings are not necessarily confined to the pleadings and additional documentary
and oral evidence is typically adduced".
5 See Norvatis SA (Pty) Ltd and others v The Competition Commission and others (CT
22/CR/B/Jun 01, 2.7.2001) per par 41 “The demands of fairness will depend on the context of
the decision viewed within the procedural context in which it arises ”; Simelane NO and others
v Seven-Eleven Corporation SA (Pty) Ltd and another [2001–2002] CPLR 13 (SCA) par 16.
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[7] Having now dealt with the basis of our discretion, we now consider what
principles we would apply to cases to compel discovery of documents
referred to in pleadings.
[8] The first principle we apply is that where a document is relied on to support a
relevant allegation in the pleading, it should be provided, usually by way of
attachment as an annexure to the pleading, although for practical reasons
this may not always be possible. Typically if one quotes from a document it
should be provided. However a document may also be relied on without
being expressly quoted, and in these circumstances it should be provided as
well. For instance the pleader may rely instead of making use of direct
quotation, on a summary of what is contained in the document.
[9] The second principle we apply is that the inference of the existence of a
document is not sufficient to create an obligation to disclose such a
document. This is an approach consistent with one taken by the High Court in
a rule 35(12) case.6
Application of the principles
[10] The first principle has largely been adhered to by the Commission in its
approach to the present referral, but it has not applied it consistently. For this
reason documents which are all partially quoted in the complaint referral, but
not attached, must be produced to the applicants. We itemise them below in
accordance with the numbers in the applicants’ notice of motion followed by
the paragraph in the complaint referral to which they relate.
Item 8. AD PARAGRAPH 28.4
Item 8.1 - The email from De Kock of Hendok dated 30 August 2007 to the
third respondent;
6 See Penta Communication Services (Pty) Ltd v King and Another 2007 (3) SA 471 (c) paras
15-18
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Item 8.2 - The email from Van der Bank in terms of which he forwarded the
email of de Kock to Van der Bank of Cape Gate.
Item 9. AD PARAGRAPH 28.6
Sms of Van der Bank dated 6 August 2008 to Bushy Botha of the twelfth
respondent.7
Item 10. AD PARAGRAPH 29.1.1
The email dated 24 October 2006 from Gert Jacobs to Bushy Botha and
Ronnie Kallan.
Item 11. AD PARAGRAPH 32
The distribution agreement prepared by Edward Nathan for the twelfth
respondent and concluded with Agri Wire on 9 May 2006.
[11] The remaining documents sought are not expressly referred to in the referral
nor is their content relied upon to make averments in the referral to which
fairness might require a respondent to consider in order to plead. For this
reason we have refused the application to produce these documents. We
explain briefly below what the requests were and why we do not consider the
applicants require production of them to file their answer.
Item 2
In paragraph 20 of the referral the Commission summarises the basis of the
complaint. It alleges that over a period of time the respondents fixed prices,
divided markets and tendered collusively. It alleges that they did so “...in
various meetings and by way of exchange of correspondence and short
7 We were advised that the short message service (“sms”) referred to, item 9, is available to
the Commission in documentary form and so this has been included in the list.
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message services (SMS’s).....” In response to this the applicants make the
following request:
“AD PARAGRAPH 20 of the referral -item 2 of the Notice of Motion
The correspondence and short message service exchanged between
the respondents to allegedly fix prices of wire products, divide
markets by allocating customers and to tender collusively in relation
to supply of cable and armouring wire.”
It is clear from paragraph 20 that it is a summary of the case – indeed the
paragraph is headed “Basis of the complaint” - and that the Commission does
not rely on the contents of the documents for the purpose of this allegation. It
simply refers to them in a generic fashion as the various means in which the
alleged contraventions of section 4 of the Act found their form. The applicants
do not require what would amount to pre-trial discovery in order to answer this
allegation.
Item 4
In paragraph 24 of the complaint the Commission alleges that a firm known as
CWI had applied for corporate leniency and that it had granted it corporate
leniency on 28 August.
The Applicants seek the “conditional corporate leniency granted to the 12th
respondent ( CWI) ..” We understand from submissions made during
argument that what is sought here is the document in which the Commission
sets out its conditions of leniency. Although the referral does not make it clear
that this exists in documentary form, counsel for the Commission advised us
that it did. Nevertheless this paragraph, as is perfectly clear, does not rely on
the contents of the document. It simply records that leniency was granted. It is
the act of granting leniency that is alleged. Indeed there is no reference to a
document at all.8
The applicants do not need access to the document in terms of which
leniency was granted in order to answer.
8 Applying the principle in Penta
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Item 5
In paragraph 26.1.1 of the referral the Commission alleges that the
respondents agreed on a national price lists for their products and the
Commission attaches this price list (annexure NN2) to the referral. In
annexure NN2 (as opposed to in the referral affidavit) there is a small note
which says “These prices must be read in conjunction with CWI (Pty)(Ltd)’s
conditions of sale.” The applicants seek these conditions of sale. The
reference in one document, which has been annexed, to another, does not
constitute a reference to the secondary document in the referral. The
Commission makes nothing of the conditions of sale in its referral and the
allegation concerns the prices in the lists which are attached. The applicants
do not require the conditions of sale to answer.
Item 7
In paragraph 28.3.3 read with paragraph 28.3.2 the Commission alleges that
meetings were held on various dates specified at which the respondents
wanted to reinforce adherence to allegedly collusive agreements. It is alleged
that after these meetings national price lists would be circulated on the
express understanding that the participants in the meetings would use the
price lists as the basis for their own pricing of the relevant products. The
Commission then attaches two price lists dated respectively 2007, and 2008
which it alleges evidence the price similarities. The applicants seek all the
national price lists that were alleged to have been circulated at the specified
meetings. Although price lists are referred to the Commission does not rely on
their content in this paragraph – indeed it is not clear that the Commission
even has them in its possession. The allegation relates merely to the act of
circulating price lists. The applicants do not need to have regard to their
content – assuming they are still in existence – in order to plead.
Item 6
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In paragraph 28.3.1 of the referral there is again mention of a national price
list, except this time it is mentioned in the singular. The context is that at a
meeting in October 2001 of the respondents agreed to return to using “ the
national price list less agreed discounts” The applicants seek this price list.
Once again there is no reliance on this document and hence the applicants do
not require it in order to plead. However there is some ambiguity as to
whether the Commission is alleging reliance on a single national price list – in
which case the applicants are entitled to know whose it is – or if the
Commission means that each is to return to using its own national price list –
which we understand is being alleged to be the case for later period.(See
paragraph 28.3.3. of the referral which we referred to earlier) For this reason
we believe that any unfairness to the applicants about this ambiguity may be
cured by further particulars on this aspect and we have formulated relief to
this effect accordingly.
Item 12
The Commission alleges in paragraph 33.1 of the referral that the
respondents were engaged in collusive tendering and itemises three tenders
where this took place. The applicants seek copies of the tenders submitted by
the respective respondents in respect of each of the three tenders. There is
no reliance here on tender documents nor indeed is any document even
referred to. The principle discussed above in relation to the Penta case would
apply equally here. The applicants do not require the tenders to plead.
Order
After having heard the parties the Competition Tribunal orders that in respect of the
application of inspection and transcription of documents–
[1] The applicants be provided with the following documents being items 8, 9, 10
and 11 of the Notice of motion;
[2] That in respect of paragraph 28.3.1 and the reference therein to “..the
[2] That in respect of paragraph 28.3.1 and the reference therein to “..the
national price list” the Competition Commission must provide further
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particulars with regard to what is meant by the “national price list”. If the
Commission is referring to a single firm it should state this and the name of
the firm concerned; if more than one, which firms national price lists are being
referred to;.
[3] The application in respect of items 2, 4, 5, 6, 7 and 12 is dismissed.
[4] Within 20 business days after being served with the particulars referred to in
paragraph 2 above the applicants must file their answering affidavits.
[5] There is no order as to costs
_______________
Norman Manoim
Presiding Member
Concurring: Yasmin Carrim and Medi Mokuena
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