THE COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No: 018655
In the matter between:
NATIONAL UNION OF METALWORKERS OF
SOUTH AFRICA
and
Applicant
MARLEY PIPE SYSTEMS (PTY) LIMITED First Respondent
COMPETITION COMMISSION Second Respondent
Panel
Heard on
• Order issued on
Reasons issued on :
Introduction
Yasmin Carrim (Presiding Member)
Andiswa Ndoni (Tribunal Member)
Mondo Mazwai (Tribunal Member) .
23 April 2014
03 June 2014
03 June 2014
Decision and Order
[1] This is an application for costs in terms of Section 57(1) of the
Competition Act 89 of 1998 ("the Act") read with Rule 50(3)(b) of the
Tribunal Rules.
[2] The Applicant is the National Union of Metalworkers of South Africa
. ("NUMSA"), a trade union recognised as such in terms of the Labour
Relations Act 66 of 1995 ("the LRA") and in terms of section 1 of the
Act. The Applicant approached the Tribunal to hear the cost application
1
without any written submissions as the first Respondent withdrew its
review application at short notice, as discussed below. The
Respondents did not object to the non-filing of written submissions.
[3] The First Respondent is Marley Pipes Systems (Pty) Limited ("Marley"),
a manufacturer and distributor of plastic pipes and fittings for reticulation
systems and subsidiary of the Al.iaxis Group (a global plastic solutions
company).
[4J The Second Respondent is the Competition Commission
("Commission"), which is simply cited as a Respondent for purposes of
its interest in the matter .. The Applicant did not seek wasted costs
against the Commission.1
Background
[5] On 29 November 2011, this Tribunal approved an intermediate merger
between Marley and Petzetakis Africa {Pty) Ltd subject to an
employment condition .that Marley should within a period of 6 (six)
months after the acquisition date employ 311 (three hundred and
eleven) employees who were in Petzetakis's employ at the date upon
which Petzetakis ceased trading.
[6J The merger was approved subject to a further condition that the
Commission may on good cause shown bY. the merging parties, lift,
revise or amend these conditions.
[7] In accordance with the condition in paragraph 5 above, on 14 June
2013 Marley approached the Commission to reduce the number of
former Petzetakis employees that Marley would be obliged to re-employ
1 See Transcript of Hearing at page 2.
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from 311 ( three hundred and eleven ) to 230 ( two hundred and thirty)
employees.
[8] After re-assessment of Marley's request, the Commission concluded
that the revision or amendment of the relevant merger condition did not
meet the threshold of good . cause shown .. as prescribed. in the
conditions. As a result Marley's request was not granted.
. . . .
[91 Following the Commission's refusal to amend the condition, Marley filed
an urgent review application to the Tribunal, which is the subject matter
of this cost application.
Marley's Review Application
[1 0] On 26 March 2014, Marley filed an application to the Tribunal for the
review of the Commission's refusal to revise the employment condition
referred to in paragraph 4 above. In this application, the Commission
and NUMSA were cited as first and second respondent respectively.
[11] In its application, Marley requested the Tribunal to direct the
Commission to pay its wasted costs, and for NUMSA to pay costs only
in the event of it opposing the review application.
[12]The review application was set down for hearing on 23 April 2014, and
was withdrawn one day before the hearing (due to public holidays),
hence the cost application was heard without written submissions. The
notice of withdrawal was filed on 17 April 2014:
[13]At the time of the withdrawal of the application NUMSA had filed an
answering affidavit and a supplementary answering affidavit dealing
extensively with the .facts as well as issues of law raised by Marley in its
application.
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[14]The reason for the withdrawal of the application we were told was as a
result of a decision by the Commission to review the employment
condition.
Current Cost Application
[15] The Applicant in the cost application is seeking an order for its wasted
costs against Marley. The Applicant submits that it is trite that.a party
that is responsible for aborted proceedings is responsible for the costs
of the opposing parties.
[16] The Applicant further submitted that it wenf to great lengths to assist
the Tribunal with its opposing papers and should be entitled to its costs
for the withdrawal of the review application by Marley. 2
[17]The- argument put up by Marley was two-fold. In the first instance it
was argued that section 57(2) limited the Tribunal's powers to award
costs only in a hearing of _ a complaint between a complainant and a
respondent that have been referred to it in terms of section 51(1).3
Marley relied upon the recent judgement of the Constitutional Court in
Competition Commission v Pioneer Hi-Brecf in support of this
contention. Second, and if the Tribunal held that it was empowered to
grant costs as a matter of law, it ought not to exercise its discretion in
the circumstances of this case to award costs against Marley.
[181 Marley had not acted ma/a fide in withdrawing the application. Rather
the review_ application was rendered moot by the settlement agreement
that it had reached with the Commission. It had withdrawn the
application in order to not waste the Tribunal's and the parties' time for
relief that had been rendered unnecessary by the settlement agreement
2 See page 10 of the Transcript of the hearing. .
3 Such a referral can be made by a complainant whose complaint has been non-referred by the
Commission. • •
4 Competition Commission a~d Pioneer Hi-Bred International Inc & Others, Case no: CCT 58/13
[2013] ZACC 50.
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reached with the Commission. Marley submitted that in the exercise of
its discretion, the Tribunal should order that each party. pays its own
costs.
[19] However given our decision to not.award costs against Marley on the
basis of the facts of this case, we find it unnecessary to deal with
jurisdictional points raised by Mr Wilson on behalf of Marley.
[20]Asa general rule the Act encourages participation in our proceedings.5
Registered trade unions are afforded special rights of participation
because they are legally entitled to receive notification of a merger
under section 13(A)(2)(a) of the Act. The Tribunal welcomes such
participation and would not seek to discourage unions from acting on
behalf of their members' interests in our proceedings. At the same time
this case does present unique facts.
[21]The reason for Marley's withdrawal stems from the fact that the
Commission at the last minute agreed to review the conditions that had
been imposed on the Marley/Petzetakis transaction. The application to .
review the condition launched by Marley with the Tribunal was rendered
moot because it had obtained the relief it had sought through the
Commission's offer. Correspondence between Marley's legal
representatives and the Commission· confirms that exploratory
discussions about a settlement took place 10 (ten) days before the
scheduled hearing.
[22) Unfortunately as between the legal representatives for Marley and the
Commission the responsibility to include NUMSA in these discussions
was left to the Commission. The Commission wrote to NUMSA's legal
representatives advising of the possibility of a settlement on 11 April
2014(which was 10 (ten) days before the hearing). NUMSA's legal
5 See section 53 of the Competition Act.
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representatives were aware that the Commission and Marley were in
settlement discussions, and that the review application could possibly
be withdrawn. NUMSA persisted in filing its supplementary answering
affidavit on17 April 2014 without first enquiring if a settlement had.been
reached.
[23] In our view it would . have been preferable had Marley's legal
representatives taken responsibility for contacting NUMSA's lawyers
directly and had done so speedily and not relied on the Commission to
do so. NUMSA had after all been joined as a respondent by Marley and
not by the Commission. At the same time we give due regard to the
fact that the withdrawal by Marley was bona fide.
[24] In Serwada v Minister of Home Affairs 6 the court held that:
24.1 "Ordinarily a party who withdraws his · or her application is
considered as having conceded the merits and thus is obliged to make
tender of the costs. In this . case what triggered a withdrawal of the
application was a response by the respondent which satisfied the relief
sought in a way that exonerated the court from making a dete,mination
whether or not the passport and temporally residence certificate should
be returned to the applicant. Yet it was argued strenuously on behalf of
the respondent that the applicant must not only bear its own costs but
that he must pay the costs of the respondent as well. It seems to me
that the Court is not confronted with an ordinary situation of a
concession on the merits made through the withdrawal of the
application. That the withdrawing party should bear the costs cannot be
regarded as a hard and fast rule in the circumstances of this case. "7
6 Serwada v Minster of Home Affairs [201 I] JOL 27643 (ECM)
7 Ibid
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[25] Furthermore, NUMSA's legal representatives had been notified of the
settlement and made aware of the possibility of a withdrawal at least 10
(ten) days before the hearing. However, given that the settlement
discussions themselves had commenced at a very .late stage the timing
of the notification does not seem unreasonable to us.
Conclusion .
[26] We agree with Marley's submissions that the withdrawal of the review
application is nota concession on the merits.
[27] The review application has been rendered moot by the settlement
• agreement reached with the Commission, and as such it would be
neither fair nor logical for Marley to continue with an application which
has become futile by reason of the settlement agreement.
[281 In exercising our djscretion to award costs, we ·have to exercise our
discretion judiciously with due regard to all relevant considerations.
[29] While we acknowledge arid appreciate the role played by NUMSA in
assisting the Tribunal with its submissions in the review application, for
the reasons stated above, justice and fairness dictates that each party
should pay its own costs. We therefore dismiss the cost application
filed by NUMSA.
ORDER
1. The application _for costs filed by the Applicant under case riumber
018655 is hereby dismissed.
• 03 June 2014
DATE
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Ms Yasmin Carrim and Ms Mondo Mazwai concurring
Tribunal Researcher:
For the Applicant:
For the First Respondent:
Caroline Sserufusa
Adv Michelle Le Roux instructed by Hogan
Lovells
Adv Jerome Wilson instructed by Webber
Wentzel
For the Second Respondent: Bongani Ngcobo
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