1
IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD AT PRETORIA)
Case No: 59/CR/May12
In the matter between:
AUTOBID (PTY) LTD Applicant
And
TRANSUNION AUTO INFORMATION SOLUTIONS (PTY) LTD Respondent
Panel : Lawrence Reyburn (Presiding Member),
Medi Mokuena (Tribunal Member) and
Takalani Madima (Tribunal Member)
Heard on : 01 November 2012
Order issued on : 05 November 2012
Reasons issued on : 11 February 2013
DECISION AND ORDER
Introduction
[1] An order in this matter was issued by the Compe tition Tribunal (“the Tribunal”)
on 05 November 2012. For convenience the order is repeated at the end of
this decision.
2
[2] This is an application by Autobid (Proprietary) Limited (“Autobid”) for
condonation of the late filing of a complaint referral under Section 51(1) of the
Competition Act, 1989, as amended (‘the Act”) in wh ich it is alleged that the
respondent, Transunion Auto Information Solutions ( Pty) Ltd (“Transunion”)
has contravened sections 8(a),(b),(c) and (d) and s ection 9 of the Act by
engaging in conduct which amounts to abuse of domin ance and illegal price
discrimination.
Background
[3] Transunion has for many decades compiled data o n the identity of the types
of motor vehicles sold on the South African market. Every model and every
variant of every manufacturer’s vehicle is identifi ed in this system by its own
eight-digit code number. This code system will for convenience be referred to
below as “the identity code system.” Apparently th e identity code system, in
conjunction with information on the year of manufac ture of the vehicle, is
accepted throughout the motor trade as the relevant means of identifying a
type of motor vehicle.
[4] Transunion also keeps records of the prices at which used motor vehicles are
sold in South Africa and has built up a database in which all sales of used
motor vehicles about which Transunion has informati on are recorded. These
data are made available for payment to dealers in u sed vehicles as a guide
for negotiations when next a vehicle of the relevant type is presented for sale.
These data are linked in Transunion’s records to th e identity code system so
that the resulting database provides a comprehensiv e and easily accessible
guide to the value of all used vehicles traded in S outh Africa. This combined
compilation of data will be referred to below as “the value code system.”
[5] Transunion provides its data to the trade in th e form of periodically published
booklets of prices which are sent to dealers, and a lso electronically in various
formats. Transunion is based in Gauteng.
formats. Transunion is based in Gauteng.
[6] Autobid is a motor dealer based in Kwa-Zulu Nat al which has historically been
a customer of Transunion for access to the value co de system. In more
recent times it has engaged in the provision to som e of its motor dealer
3
customers of data it has compiled on the values of used motor vehicles. It
provides this data service electronically. Apparently the recipients can link this
data with information they receive from Transunion as subscribers to its data
service, and they then have a comparative basis on which to decide on the
pricing of any particular vehicle. A transaction between the seller and a buyer
for the vehicle can then take place quickly and efficiently.
[7] The summary set out above is in simple and sket chy terms. Behind it is an
edifice of information technology, intellectual pro perty and contractual rights
of some complexity.
[8] Disagreements which had been simmering between Autobid and Transunion
for some time came to the boil in 2011 when Transun ion sought to increase
by a considerable margin its charges to Autobid for the provision of
Transunion’s data service concerning its value code system and to impose
what Autobid regarded as harsh and unacceptable con ditions for the
continuation of this service. Autobid declined thi s proposal and on 12 April
2011 Transunion terminated its provision to Autobid of its data service.
Autobid proceeded to lodge a complaint of contravention of various provisions
of the Act with the Competition Commission (“the Commission”) under section
49B(2) of the Act. The complaint was filed on 14 A pril 2011 under case no.
2011Apr5733.
[9] On the same day Autobid filed an application fo r urgent interim relief at the
Tribunal under section 49C of the Act, requesting a n order from the Tribunal
requiring Transunion to provide access by Autobid t o Transunion’s data
services embodying the value code system pending th e outcome of the
complaint. The case number for this application was 32/IR/Apr11.
[10] Autobid’s legal representative responsible for lodging the complaint and the
application for interim relief was attorney George Michaelides, of Gauteng,
who practised under the style of Michaelides Attorn eys and Conveyancers.
who practised under the style of Michaelides Attorn eys and Conveyancers.
The complaint was considered by the Commission and on 19 September
2011 the Commission issued a notice of non-referral of the complaint. In its
accompanying letter to Autobid the Commission state d that it considered that
Transunion’s value code system was not an essential facility for Autobid’s
4
business operations, and refuted other assertions b y Autobid concerning the
legality of the conduct of Transunion complained of by Autobid.
[11] Autobid’s interim relief application had been opposed by Transunion and an
answering affidavit was filed by Transunion. The time period for the filing of a
replying affidavit expired without such a replying affidavit having been filed.
Following the issuance of the Commission’s notice o f non-referral, Autobid
had an opportunity to file a self-referred complain t with the Tribunal in terms
of section 51 of the Act. Under rule 14(1)(b) of t he Tribunal’s rules this
complaint was to have been filed within 20 business days following the date
of the Commission’s notice of non-referral, i.e. by 17 October 2011.
[12] In fact Autobid’s self-referred complaint was filed only on 25 May 2012,
namely more than seven months following the due dat e of 17 October 2011.
Condonation is now sought by Autobid for this late filing under the
condonation provisions of rule 54(1) of the Tribunal’s rules, which states that:
“A party to any matter may apply to the Tribunal to condone late filing
of a document, or to request an extension or reduct ion of the time for
filing a document, by filing a request in Form CT6.”
[13] Autobid has filed an affidavit by one of its d irectors, Ms Leanne Gillian Martin,
supporting both the condonation application under r ule 54(1) and the self-
referred complaint under section 51(1). Before deal ing with the condonation
application and the justification for it raised by Autobid it is necessary to
outline some other relevant events.
High court litigation
[14] After Autobid had filed its complaint with the Commission under section
49B(2) and its interim relief application on 14 Apr il 2011, Transunion,
considering that Autobid was illegally continuing t o use data from
Transunion’s value code system in Autobid’s data se rvice to its customers,
Transunion’s value code system in Autobid’s data se rvice to its customers,
filed an application with the Durban division of th e High Court of Kwa-Zulu
Natal seeking an interdict restraining Autobid from such use. The basis of the
complaint was an allegation that Autobid was infrin ging Transunion’s
copyright in the identity code and the value code s ystems. This High court
5
application was filed on 9 June 2011 under case no. 6494/2011. It was
opposed by Autobid and answering and replying affidavits were filed.
[15] After hearings had taken place on 13 September 2011 and 24 October 2011
the presiding judge, Mr Acting Justice Kissoon Singh, prepared a decision but
before it could be handed down he received a communication from the parties
regarding new evidence, which led to an application for the admission of this
new evidence. The application to admit the new evi dence was heard on 30
January 2012 and was granted. Supplementary docume nts containing this
evidence were then filed. The parties to the matte r agreed that no final
hearing was necessary in the light of the further e vidence and the judge
proceeded to write and hand down his decision. It is dated 14 March 2012. A
copy of the decision was handed in at the Tribunal’s hearing on 01 November
2012.
[16] In that decision the High Court ruled that cop yright subsisted in the identity
code and value code systems and that this copyright was owned by
Transunion. Autobid was found to have infringed th e copyright and was
interdicted from reproducing those codes, as incorp orated in various
Transunion publications, unless licensed by Transun ion to do so. The order
expressly provides that a licence might arise from a ruling or directive which
might be issued by the Tribunal, or could arise otherwise.
[17] It is clear from the decision that the reserva tion regarding a ruling or directive
of the Tribunal was inserted by the judge as a prec aution in view of the
provisions of section 65(2) of the Act, which reads:
“If, in any action in a civil court, a party raises an issue concerning
conduct that is prohibited in terms of this Act, th at court must not
consider the issue on its merits, and –
(a) If the issue raised in one in respect of which the Competition
Tribunal or Competition Appeal Court has made an or der, the
court must apply the determination of the Tribunal or the
court must apply the determination of the Tribunal or the
Competition Appeal Court to the issue; or
(b) otherwise, the court must refer that issue to the Tribunal to be
considered on its merits, if the court is satisfied that –
6
(i) the issue has not been raised in a frivolous or vexatious
manner; and
(ii) the resolution of that issue is required to de termine the final
outcome of the action.”
[18] The judge was aware of the filing by Autobid o f its complaint with the
Commission under section 49B(2) of the Act and of t he existence of the
interim relief application by Autobid made under se ction 49(C). In his
decision he states that, before he became aware of the additional evidence
referred to above, he had prepared his decision on the basis that he would
refrain from granting interdictory relief to Transu nion and would refer to the
Tribunal the question of possible contravention by Transunion of the Act by
way of the prohibited practices alleged by Autobid. This would have been his
response to noting that the complaint was pending b efore the Commission
and that the interim relief application was being pursued by Autobid.
[19] However, what the judge learned from the addit ional evidence was that
attorney Michaelides had absconded from his practic e and disappeared, that
Michaelides had withheld from Autobid and its couns el the fact that that the
Commission had issued a notice of non-referral in r espect of Autobid’s
complaint to it, that no self-referred complaint by Autobid had been lodged
with the Tribunal following the issuance of the Com mission’s notice of non-
referral, and that Michaelides had lied to his client’s counsel during the course
of the court proceedings by saying that a replying affidavit by Autobid was on
the point of being filed in the interim relief appl ication brought by Autobid. In
fact no such affidavit had been prepared and it see ms that Michaelides had
not even told his client that there was a need to prepare and file this affidavit.
[20] In view of the emergence of these facts in th e additional evidence the judge
found, relying on the decision in the case of Plati num Holdings (Pty) Ltd and
found, relying on the decision in the case of Plati num Holdings (Pty) Ltd and
others v Victoria and Alfred Waterfront (Pty) Ltd , SCA case no. 428/2003
(judgment dated 28 May 2004) , that Autobid was conducting a hopeless case
in its defence of the High Court proceedings as it no longer had a complaint
pending against Transunion before the Commission, a nd was consequently
acting frivolously in those proceedings. The requi rements of section
65(2)(b)(i) were therefore not met and the court co nsidered it was at liberty to
7
grant Transunion the interdictory relief it had sou ght without referring
Autobid’s allegations of restrictive practices to the Tribunal.
[21] The reservation regarding a licence obtained b y a ruling of the Tribunal as
expressed in the order made by the judge is therefo re of a precautionary
nature since the possibility of the late filing of a self-referred complaint and
condonation of its lateness by the Tribunal was in existence at the time of his
decision and is referred to in it.
Factors relevant to condonation
[22] Autobid’s tribulations in having its complaint aired in the Tribunal did not end
with the omissions and deceptions of its absconded attorney. From Ms
Martin’s affidavit of 23 May 2012, filed in support both of the condonation
application and of the self-referred complaint, it emerges that after the fact of
attorney Michaelides’ disappearance came to light i n the last weekend of
October 2011, Autobid in the ensuing week appointed a fresh legal
representative in the form of John Isabelle Attorne ys. It was only when
attorney Isabelle began to delve into the matter th at various deceptions and
suppressions of information by Michaelides emerged and their implications
were unravelled. Ms Martin states that Autobid was unaware that the
Commission had decided not to refer Autobid’s complaint to the Tribunal, and
was unaware that a replying affidavit in the interi m application had been
needed. Autobid had relied on Michaelides to keep track of the proceedings
and notify it of requirements as they arose, so tha t Autobid had been heavily
reliant on Michaelides’ diligence and honesty. As it turned out, it was attorney
Isabelle who first informed Autobid, on or about 3 November 2011, of the
Commission’s non-referral decision of 19 September 2011.
[23] A consultation was held on 11 November 2011 by one of Autobid’s directors,
Mr Peter Azzie, and Mr Isabelle with a senior advoc ate to take advice on the
Mr Peter Azzie, and Mr Isabelle with a senior advoc ate to take advice on the
steps needed to prepare and lodge Autobid’s self-re ferred complaint to the
Tribunal. Autobid was advised at this consultation that it should expand upon
the documents which had been sent to the Commission with the originally
lodged complaint, and should further supplement the expanded documents
with a report by an economist having specialist knowledge of the motor trade.
Steps were promptly taken to put this advice into effect.
8
[24] Witnesses were approached for further evidence and Mr Tony Twine, a
consultant economist with extensive experience of t he motor industry,
practising in the firm Econometrix, was briefed dur ing November 2011 on the
report that was required from him. He was only abl e to provide a complete
draft of his report in the week ending 8 February 2012. The draft was send to
Autobid for its comments. Mr Twine was informed th at the draft was in order
except for some very minor matters and he was asked to finalise and sign it.
Before he could do so he died. His death occurred on 12 March 2012.
[25] Autobid took further advice from an advocate w ith extensive competition law
experience and as a result obtained a report from a nother economist, and
this, together with an unsigned copy of Mr Twine’s report, has been attached
to the self-referred complaint lodged with the Trib unal. Ms Martin’s affidavit
contains a detailed account of steps taken by Autob id to protect its interests
and those of its customers and to advance its compl aints regarding
Transunion’s alleged contraventions of the Act in t he period following
Michaelides’ disappearance, which occurred after th e initial hearings in the
High Court litigation.
[26] The action taken by Autobid included consultat ions with various lawyers,
communications with Transunion’s attorneys, and imp lementation of the legal
advice received by Autobid to bolster its complaint with customers’ reports
and an expert economics report. It is clear that t he year-end holiday period
intervened, when legal advisers are generally away from their offices.
Has ‘good cause’ been shown?
[27] The Tribunal, in dealing with condonation appl ications, is required by section
58(1)(c) of the Act to determine whether the applic ant has shown ‘good
cause’ for the condonation. This means that the cir cumstances of each case
are considered individually and that there is no universal formula or closed list
are considered individually and that there is no universal formula or closed list
of factors to apply. In assessing the merits of a c ase the Tribunal may be
9
guided by the principles which prevail in the High Court regarding
condonation for non-compliance with time limits and rules of court. 1
[28] In United Plant Hire (Pty) Ltd v Hills and oth ers , 1976(1) SA 717(A) at p 720 it
was stressed that a court in dealing with a condona tion application should be
fair to both sides. Relevant considerations might be the degree of non-
compliance with the rules for which condonation was sought, the explanation
given for non-compliance, the prospects of success of the applicant in the
contemplated litigation, the importance of the case , the respondent’s interest
in the finality of the judgment, the convenience of the court, and the
avoidance of delay in the administration of justice . This list of factors was
said to be non-exhaustive.`
[29] Condonation would be pointless if there were n o prospect at all of success in
the contemplated litigation, but the Tribunal took the view in the Makhathini
case (cited above) that this was an issue which it should not attempt to
assess in circumstances where there has not been a hearing on the merits of
the matter in respect of which condonation is sough t. Accordingly, we
express no opinion on Autobid’s chances of success in its self-referred
complaint apart from expressing our view that it ca nnot be said that the
complaint has no prospect whatsoever of success. I t is conceivable – and it
need be stated no higher -- that a full ventilation of the merits of the matter in
a hearing before the Tribunal will reveal that the view taken of Autobid’s case
by the Commission in its letter of 19 September 201 1 setting out its reasons
for the non-referral decision was incorrect. That question will be considered
in the hearing to follow.
[30] If the unusual circumstances related in Ms Mar tin’s affidavit are taken into
account, essentially the double blow of the defecti on and deceptions of
attorney Michaelides and the death of Mr Twine, it seems to us that Autobid
attorney Michaelides and the death of Mr Twine, it seems to us that Autobid
was the victim of considerable misfortune which was not of its making.
Transunion’s counsel, Mr Wilson, was quick to refer us to cases in which it
was held that bad luck on its own is not a basis fo r condonation, and that
condonation should be withheld if the applicant, on becoming aware of the
1 See M. Makhathini and others v GlaxoSmithKline SA (Pty) Ltd and another , 34/CR/Apr04, at pars 16 et
seq, and cases cited in that decision.
10
relevant lapse, has failed to act in good faith, di ligently and promptly, in
remedying the failings which have led to non-compli ance with a time limit or
other formal requirement.
[31] Where an attorney has failed in his duty and the result has been the non-
compliance in question, the attorney’s client is ex pected to act promptly,
vigorously, and effectively in righting the wrong d one by the attorney. Not
everything can be blamed on the defaulting attorney . This is clear from the
cases cited by Mr Wilson, exemplified by Saloojee N NO v Minister of
Community Development, 1965(2) SA 135 (A), Blumenthal v Thompson NO,
1994 (2) SA 118 (A), and the Tribunal’s own finding s in Independent Estate
Agents Committee v KwaZulu-Natal Property Services Ltd (case no
25/CR/Apr02).
[32] We accept all these precepts but consider that on the papers before us there
is nothing to controvert Ms Martin’s assertions tha t once she became aware
of Michaelides’ disappearance Autobid acted speedil y and effectively in
getting the self-referred complaint properly drafte d and supported by useful
guidance to the Tribunal from an economist with spe cialist knowledge of the
motor trade, utilising the services of lawyers fami liar with the competition law
system. Ms Martin and Mr Azzie are clearly not exp erienced in competition
law and Ms Martin, who has been responsible within Autobid for advancing
the complaint, had to be guided by specialists in d etermining what was
required of Autobid and ensuring that the complaint was comprehensively
documented. Several consultations with lawyers too k place, all of which
appear to have contributed usefully to her goal.
[33] Although the delay of upwards of seven months in the filing of a document will
in most circumstances represent an exceptionally le ngthy period, we are
satisfied that because of the specialised and compl ex nature of the complaint
and its supporting documents, and the inevitable di fficulties of a lay client in
and its supporting documents, and the inevitable di fficulties of a lay client in
obtaining expert advice on the important step for i t to take in the competition
arena which the filing of the complaint represents, it would be unfair to
Autobid to withhold condonation because of this delay.
[34] We consider that no prejudice has been suffere d by Transunion by the delay.
Transunion has enjoyed the benefit of the interdict granted by the High Court
11
so that its commercial activities are undisturbed a nd for the present Autobid
has been excluded from using data subject to its co pyright. This exclusion
could conceivably be terminated if the complaint is heard and decided in
Autobid’s favour, but the delay in the lodging of t he complaint has if anything
operated to favour, not disfavour, Transunion in this respect.
[35] There is no unfairness to Transunion in granti ng the condonation sought by
Autobid.
[36] On the basis of this reasoning we accordingly find that good cause as
required for the condonation has been shown by Autobid.
[37] There was initially a possibility that the Tri bunal would be called upon to deal
with a striking-out application which Transunion co ntemplated bringing,
relating to certain passages in Ms Martin’s affidav it, but at the hearing we
were informed that this was not being pursued.
[38] The order we have made establishes a notional date from which, if
Transunion chooses to supplement the answer to Autobid’s complaint which it
has already placed on record, the period prescribed by the Tribunal’s rule
16(2) for the filing of the answer will be deemed t o commence. The existing
answer is contained in Mr Michael von Hoene’s answering affidavit of 25 June
2012, and is already extensive, but the order allows Transunion as a matter of
procedural fairness an opportunity to add further a nswering material if it
wishes to do so.
[39] The Tribunal’s order as issued on 05 November 2012 is as follows:
1) The late filing on 25 May 2012 by Autobid (Pty) Ltd of its complaint against
Transunion Auto Information Solutions (Pty) in term s of Section 51(1) of the
Competition Act, 1998, is condoned.
2) For the purposes of establishing filing dates an d the taking of other action
pursuant to that complaint referral, the date of fi ling of the complaint referral
with the Tribunal will be deemed to be the date of this order.
12
3) An order as to costs in the condonation applicat ion is reserved pending the
outcome of the complaint referral.
________________ 11 F ebruary 2013
Lawrence Reyburn Date
Medi Mokuena and Takalani Madima concurring.
Tribunal Researcher : Ipeleng Selaledi
For Autobid : Adv. A. Annandale SC instructed by Jo hn Isabelle
Attorneys
For Transunion : Adv. J. Wilson instructed by Bowma n Gilfillan
Attorneys