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[2011] ZACT 13
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Competition Commission South Africa v Liberty Group Ltd (83/CR/Dec10) [2011] ZACT 13; [2011] 1 CPLR 111 (CT) (4 March 2011)
COMPETITION
TRIBUNAL REPUBLIC OF SOUTH AFRICA
Case
No: 83/CR/Dec10
In
the matter between:
The
Competition Commission South Africa
…..................................................
Applicant
and
Liberty
Group Limited
….........................................................................
Respondent
Panel:
N Manoim (Presiding Member), Y Carrim (Tribunal Member) and A Wessels
(Tribunal Member)
Heard
on
12
January 2011
Decided
on
04
March 2011
ORDER
The
Tribunal hereby confirms the consent agreement annexed hereto,
marked.annexure A and the addendum to the consent agreement,
marked
as annexure B.
N
Manoim
Concurring:
Y Carrim and A Wessels
Competition
Tribunal
South
Africa
Notice
of Motion
Date:
22-Dec-2010
File
cc case no: 2009jul4569/jul
To:
The
registrar of the Competition Tribunal
Concerning
the matter between:
The
Competition Commission
(Applicant)
and
Liberty
Group Limited
(Respondent)
Take
notice that the
The
Competition Commission
intends
to apply to the Tribunal for the following order:
The
Consent Agreement..between the Competition Commission and Liberty
Group in terms of section 49D be confirmed as an order of
the
Competition Tribunal in terms of section 58(1 )(b) of the Competition
Act, no 89 of 1998 ( as amended)
Name
and Title of person authorised to sign:
Bongani
Ngcobo -Acting Chief Legal Counsel
Authorised
Signature: Date: 22/12/10
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(Held
In Pretoria)
CT
Case No.
CC
Case No. 20G9Jul4569/2009Jul4571
In
the matter between:
THE
COMPETITION COMMISSION
…....................................................................................
Applicant
And
LIBERTY
GROUP
LIMITED
.................................................................................................
Respondent
In
re:
THE
COMPETITION COMMISSION
….....................................................................................
Applicant
BEDFORD
SQUARE PROPERTIES (PROPRIETARY)
LIMITED
…..................................................................................................................
First
Respondent
LIBERTY
GROUP LIMITED
…................................................................................
Second
Respondent
ERF
179 BEDFORDVIEW (PROPRIETARY) LIMITED
…..........................................
Third
Respondent
WIN
TWICE PROPERTIES (PROPRIETARY) LIMITED
Fourth
Respondent
CONSENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND LIBERTY GROUP
LIMITED IN TERMS OF SECTION 49D READ WITH SECTION 58(1)
(b) OF THE
COMPETITION ACT, NO. 89 OF 1998 (AS AMENDED)
The
Competition Commission of South Africa and Liberty Group Limited
hereby agree that application be made to the Competition
Tribunal
for confirmation of this Consent Agreement as an order of the
Competition Tribunal in terms of section 49D read with
section 58(1)
(b) of the Competition Act, No. 89 of 1998 (as amended,) on the
terms set out below.
1
.
Definitions
1.1.
For the purposes of this Consent Agreement the following definitions
shall apply:
1.1.1.
"the Bedford" means the Bedford development, being a
mixed-used development featuring a retail component, and
which is a
combination of Bedford Square and Bedford Centre (which centres have
been (inked via an subterranean passage);
1.1.2.
"Bedford Centre" means the erstwhile Bedford Centre
shopping centre, the retail component of which was classified
as a
community shopping centre at the time that the Bedford Centre
Restraint was concluded and which is situate in the suburb
of
Bedfordview in Johannesburg;
1.1.3.
"Bedford Centre Restraint" means clause 2.3 of the Bedford
Centre Settlement Agreement and the entirety of the
notarial deed of
restraint concluded between Win Twice, Liberty Group and Erf 179 on
14 June 2004 under notarial deed number
000002659 / 2004, in terms
of which the Bedford Centre was precluded for a period from letting
space to Woolworths;
1.1.4.
"Bedford Centre Settlement Agreement" means the agreement
concluded between Win Twice, Liberty Group, Erf 179,
BOE Bank and
Nedbank Limited on or about 4 November 2003;
1
.1
.5.
"Bedford Square" means the erstwhile Bedford Square
shopping centre, the retail component of which was classified
as a
community shopping centre at the time that the Bedford Square
Restraint was concluded and which is situate in the suburb
of
Bedfordview in Johannesburg;
1.1.6.
"Bedford Square Properties" means Bedford Square
Properties (Proprietary) Limited, a company duly incorporated
and
registered in accordance with the laws of the Republic of South
Africa with its principal place of business being at 9 Gordon
Hill
Road, Parktown Johannesburg. Bedford Square Properties is the
ultimate owner of the Bedford;
1.1.7.
"Bedford Square Restraint" means clause 3.1 of the Bedford
Square Settlement Agreement and the entirety of the
notarial deed of
restraint concluded between Bedford Square Properties, Liberty Group
and Erf 179 on 21 June 2004 under notarial
deed number 000002655 /
2004, in terms of which Bedford Square was precluded for a period
from letting space to Woolworths or
Mica;
1.1.8.
"Bedford Square Settlement Agreement" means the agreement
concluded between Cavaleros, Liberty Group and Bedford
Square
Properties on or about 4 November 2003
1.1.9.
"BOE Bank" means BOE Bank Limited, being the financiers of
Bedford Centre;
1.1.10.
"Cavaleros" means the Cavaieros Group, being the
controllers of Erf 179;
1.1.11.
"
Competition Act" means
the Competition Act, No. 89 of
1998 (as amended);
1.1.12.
"Commission" means the Competition Commission of South
Africa, a statutory body established in terms of
section 19
of the
Competition Act, with
its principal place of business at 1st Floor,
Muiayo Building (Block C), the DTI Campus, 77 Meintjies Street,
Sunnyside, Pretoria;
1.1.13.
"Commissioner" means the Commissioner of the Commission,
appointed in terms of
section 22
of the
Competition Act;
1.1.14.
>
"Consent
Agreement" means this agreement duly signed and
concluded
between the Parties;
1.1.15.
"DTI" means the Department of Trade and Industry;
1.1.16.
"Eastgate" means the Eastgate shopping centre, a super
regional shopping centre situate in the suburb of Bedfordview
in
Johannesburg. Liberty Group owns Eastgate;
1.1.17.
"Erf 179" means Erf 179 Bedfordview (Proprietary) Limited,
a company duly incorporated and registered in terms
of the company
laws of the Republic of South Africa, with its registered place of
business at 7D Geldenhuis Road, Malvern East,
Germiston. Erf 179
owns Village View;
1.1.18.
"LCGG" means the Local Council of Greater Germiston;
1.1.19.
"Liberty Group" means Liberty Group Limited, a company
duly incorporated and registered in terms of the company
laws of the
Repubtic of South Africa, with its principal place of business at 1
Ameshoff Street, Johannesburg. Liberty Group
owns Eastgate;
1.1.20.
"Liberty Properties" means Liberty Group Properties
(Proprietary) Limited, a company duly incorporated and registered
in
terms of the company laws of the Republic of South Africa, with its
principal piace of business at 25 Ameshoff Street, Johannesburg.
Liberty Properties is a wholly owned subsidiary of Liberty Group and
focuses on property development, property management and
property
related investments of Liberty Group's property portfolio;
1.1.21.
"Parties" means the Commission and Liberty Group;
1.1.22.
"Mica" refers to Supergroup Limited t/a Mica Hardware, a
company duly incorporated and registered in terms of
the company
laws of the Republic of South Africa, with its principal place of
business at 27 Impala Road Chiselhurston, Sandton.
Mica is a chain
of hardware stores;
1.1.23.
"Respondents" means Bedford Square Properties, Liberty
Group, Win Twice and Erf 179;
1.1.24.
"Restraints" means the Bedford Square Restraint and the
Bedford Centre Restraint collectively;
1.1.25.
"Settlement Agreements" means the Bedford Square
Settlement Agreement and the Bedford Centre Settlement Agreement
collectively;
1.1.26.
"Summons" means the summons issued by the Commission on 1
October 2009 and served on Liberty Group;
1.1.27.
"Tribunal" means the Competition Tribunal of South Africa,
a statutory body established in terms of
section 26
of the
Competition Act, with
its principal piace of business at 3rd Floor,
Mulayo building (Block C), the DTI Campus, 77 Meintjies Street,
Sunnyside, Pretoria;
1.1.28.
"Village View" means the Village View neighbourhood
shopping centre situate in Bedfordview Johannesburg and
which is
owned by Erf 179;
1.1.29.
"Win Twice" means Win Twice Properties (Proprietary)
Limited, a company duly incorporated and registered in
terms of the
company laws of the Republic of South Africa, with its principal
place of business at the Smit Road, Bedford Shopping
Centre. At the
time that the Bedford Centre Restraint was concluded, Win Twice was
the owner of Bedford Centre;
1.1.30.
"Woolworths" means Woolworths Limited, a company duly
incorporated and registered in terms of the company laws
of the
Republic of South Africa, with its principal piace of business at 93
Longmarket Street Cape Town. Woolworths is the owner
/ franchisor of
various retail supermarkets throughout South Africa.
The
Complaint and the Commission's Investigation
2.1.
During July 2009,the Commission initiated two complaints against the
Respondents concerning allegations of a contravention
of
section
4{1)(b)(ii)
of the
Competition Act in
relation to certain notarial
deeds of restraint and a settlement agreement entered into between
the Respondents pursuant to various
objections lodged in relation to
town planning issues, and which are more fully described below :
2.1.1.
The Bedford Square Settlement Agreement, comprising a settlement
agreement dated 4 November 2003 containing various terms
of
settlement, including that the Bedford Square Restraint is
registered;
2.1.2.
The Bedford Square Restraint, comprising a notarial deed of
restraint registered on 12 July 2004 over the title deed of
Erf 39
Bedford Gardens owned by Bedford Square Properties (i.e. Bedford
Square) in favour of Liberty Group and Erf 179, which
restricts
Bedford Square Properties or its successors in title from leasing
retail space to Woolworths and Mica for a period
of 11 years; and
2.1.3.
The Bedford Centre Restraint, comprising a notarial deed of
restraint registered on 12 July 2004 over the title deeds of
properties described as Erf 50, 51, 54 and 64 of Bedford Gardens
Township (i.e. the Bedford Centre) owned by Win Twice in favour
of
Liberty Group and Erf 179, which restricts Win Twice from leasing
retail space to Woolworths for a period of 15 years.
2.2.
These complaints were initiated after the Commission had
investigated and non-referred a complaint lodged by Bedford Square
Properties against Liberty Group in respect of alleged
contraventions of
section 8(d)(i)
of the
Competition Act, The
Commission consolidated the two complaints for purposes of its
investigation in accordance with Rule 17(2) of the Commission
Rules.
I//
The
Commission's findings
3.1.
The Commission's investigations established that the Bedford Square
Restraint was concluded between Liberty Group, Erf 179
and Bedford
Square Properties, in settlement of an objection lodged by the
former two parties with the Townships Board against
the LCGG's
decision to approve a rezoning application brought by Bedford Square
Properties to develop a mixed offering shopping
centre ultimately
comprising Bedford Square.
3.2.
Further, the Commission found that the Bedford Centre Restraint was
concluded to settle -disputes concerning; an application
by Win
Twice for the rezoning of the Bedford Centre so as to extend the
Bedford Centre's bulk (square meterage) in a node in
which, at the
time, Liberty Group felt there to be an oversupply of retail space.
Before such rezoning application was heard
by the appropriate town
planning authority, Liberty, Erf 179, BOE Bank and Win Twice entered
into the Bedford Centre Settlement
Agreement giving rise to the
Bedford Centre Restraint
3.3.
The Commission however found that although the Settlement Agreements
were entered into by the Respondents in settlement of
objections and
negotiations regulated by town-planning legislation, a consequence
of the Restraints was that they exceeded the
scope of such
legislation in that Liberty, Erf 179, Bedford Square Properties and
Win Twice, in agreeing the terms set out in
the Restraints,
contravened
section 4(1)(b)(ii)
of the
Competition Act as
follows:
3.3.1.
Liberty Group as owner of Eastgate, Erf 179 as owner of Village View
and Bedford Square Properties as owner of Bedford
Square divided
markets by agreeing that Bedford Square Properties be restrained
from leasing retail space to Woolworths and Mica
in Bedford Square
for a period of 11 years; and
3.3.2.
Liberty Group as owner of Eastgate, Erf 179 as owner of Village View
and Win Twice as owner of Bedford Centre divided markets
by agreeing
than Win Twice be restrained from leasing retail space to Woolworths
in Bedford Centre for a period of 15 years.
4.
Admission
of Liability
Liberty
Group admits that the Restraints contravened
section 4(1)(b)(ii)
of
the
Competition Act.
5.
Future
Conduct
5.1.
Liberty Group confirms that the conduct under investigation has
already ceased and it undertakes -
5.1.1.
not to divide markets by allocating customers in contravention of
section 4(1)(b)(ii)
of the
Competition Act;
5.1.2.
not
to enforce the Restraints nor to require any of either Bedford
Square Properties or Win Twice (or their successors in title) to
abide by the Restraints;
5.1.3.
to develop and implement a compliance programme, with corporate
governance, designed to ensure that ail its relevant employees
are
aware of the provisions of the
Competition Act and
do not contravene
them; and to submit a copy of the aforementioned compliance
programme outlined above to the Commission within
90 business days
of the date of confirmation of this Consent Agreement as an order of
the Tribunal.
6.
Administrative
Penalty
6.1.
In terms of
section 58(1)
(a) (iii), and
59
(2) and (3) of the
Competition Act, Liberty
Group is liable to pay an administrative
penalty.
6.2.
The parties have agreed that Liberty Group should pay an
administrative penalty of
2.5%
of
Liberty Group's retail property portfolio's total turnover for the
financial year ended 2008, being an amount of R18 811 708.55
within
thirty days of the confirmation of this Consent Agreement as an
order of the Tribunal.
6.3.
Liberty Group shall pay the administrative penalty into the
following bank account of the Commission:
Name
of Account:
THE
COMPETITION COMMISSION
Bank
name:
ABSA
BANK PRETORIA
Account
No:
4050778576
Branch
Code:
323345
6.4.
The
Commission will pay the administrative penalty into the National
Revenue Fund in terms
of
Section 59(4)
of the
Competition Act.
>
Full
and
Final
Settlement
This
agreement,
upon confirmation
as
a consent
order
by
the
Tribunal, is entered
Into
in
full and
fma\
secernent
and
concludes all proceedings between the Commission and Liberty Group
relating to the alleged contravention of
section 4(1
)(b) by Liberty
Group and/or its subsidiaries of the
Competition Act that
are the
subject of the Commission's investigations under case numbers
2009Ju\4569
and 20Q9Jul4571.
Dated
and Signed at ______________ on the 10
th
day
od December 2010
Donald
Samuel Ogbu
Chief
Executive Officer -
Liberty
Group Properties (Proprietary) Limited, duly authorised
representative
of Liberty
Group
Limited
Dated
and signed at Pretoria on the
21
day
of
December
2010
Shan
Ramburuth
Commissioner:
Competition Commission
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(Held
In Pretoria)
CT
Case No. 83/CR/DEC10
CC
Case No. 2009Jul4569/2009Jul4571
In
the matter between:
THE
COMPETITION COMMISSION
Applicant
And
LIBERTY
GROUP LIMITED Respondent
In
re:
THE
COMPETITION COMMISSION
Applicant
BEDFORD
SQUARE PROPERTIES (PROPRIETARY)
First
Respondent
LIMITED
LIBERTY
GROUP LIMITED
Second
Respondent
ERF
179 BEDFORD VIEW (PROPRIETARY) LIMITED
Third
Respondent
WIN
TWICE PROPERTIES (PROPRIETARY) LIMITED
Fourth
Respondent
ADDENDUM
TO CONSENT ORDER AGREEMENT ENTERED INTO BETWEEN THE COMPETITION
COMMISSION OF SOUTH AFRICA ("THE COMMISSION")
AND LIBERTY
GROUP LIMITED ("LIBERTY") ON 20-DECEMBER 2010 AT PRETORIA
IN TERMS OF SECTION 49D READ WITH SECTION 58(1)
(b) OF THE
COMPETITION ACT, NO. 89 OF 1998 (AS AMENDED)
WHEREBY
IT IS AGREED AS FOLLOWS:
1.
In
this addendum -
1.1.
save as defined herein or where the context clearly indicates to the
contrary, terms defined in the designated agreement
shall bear the
meaning ascribed to them therein when used in this addendum;
1.2.
"designated agreement" means the consent order agreement
entered into between the parties hereto on 20 December
2010 at
Pretoria.
2.
With
effect from the date of last signature of this addendum, the parties
agree to amend the
designated agreement as follows, namely :
2.1.
By inserting a new clause 5.1.2 A after the existing clause 5.1.2
and before clause 5.1.3 -
"
5.1.2 A to engage in ail such conduct necessary, as is within its
power, to partially cancel the notarial deeds of Restraint
as
between it, Win Twice and Bedford Square Properties. For the
avoidance of doubt, Liberty hereby waives all and any right
conferred upon it in terms of the notarial deeds of Restraint."
3.
The
designated agreement shall be amended only to the extent expressly
contemplated herein and
save as specifically contemplated in this
agreement, the designated agreement shall continue to be
of force
and effect on the basis of its original terms and conditions.
4,
This addendum constitutes the whole agreement between the parties
relating to subject matter hereof.
5,
No
amendment or consensual cancellation of this addendum and no
extension of time, waiver or
relaxation or suspension of or
agreement not to enforce or to suspend or postpone the
enforcement
of any of the provisions or terms of this addendum
shall be binding unless recorded in a written
document signed by
the parties.
No
extension of time or waiver or relaxation of any of the provisions
or terms of this addendum shall
operate so as to preclude any
party thereafter from exercising its rights strictly in accordance
with
this addendum.
Dated
and signed at BRAAMFONTEIN on the 8
th
day
of February 2011
Melville
Urdang
Director
- Liberty Group Properties (Proprietary) Limited, duly authorised
representative of Liberty Group Limited
Dated
and signed at Pretoria on the 28
th
day
of February 2011
Shan
Ramburuth
Commissioner:
Competition Commission