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[2015] ZACT 123
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Competition Commission v H Pistorious & Co (Pty) Ltd; In re: Competition Commission v H Pistorious & Co (Pty) Ltd and H Pistorious & Co (Pty) Ltd v Competition Commission (CR150Oct13/ASP165Dec14/Exc200Feb15) [2015] ZACT 123; [2015] 2 CPLR 729 (CT) (14 July 2015)
COMPETITION
TRIBUNAL OF SOUTH AFRICA
Case
No:
CR1500ct13/ASP165Dec14/EXC200Feb15
In
the matter between:
The
Competition
Commission
APPLICANT
and
H
Pistorius & Co (Pty) Ltd
RESPONDENT
In
re:
The
substitution application between:
The
Competition Commission
APPLICANT
and
H
Pistorius
&
Co (Pty)
Ltd
RESPONDENT
and
The
exception application between:
H
Pistorius & Co (Pty)
Ltd
APPLICANT
and
The
Competition
Commission
RESPONDENT
Panel
: Yasmin Carrim (Presiding Member)
: Andreas Wessels
(Tribunal Member)
: Medi Mokuena (Tribunal
Member)
Heard
on
: 28 May 2015
Reasons
Issued on
: 14 July 2015
Reasons
for
Decision
Background
[1]
On 20 August 2008 a complaint was filed against
H.
Pistorius
& Co (Pty) Ltd, alternatively
H.
Pistorius en Kie ("H Pistorius & Co") by Mr. Du Preez
of Enviro Lime to the Competition Commission (the "Commission").
The Commission, after completing its investigation, referred a
complaint to the Competition Tribunal ("Tribunal") in
which
it alleged that
H
Pistorius & Co (Ply) Ltd (the "Company"
or the "Respondent"), engaged in minimum resale price
maintenance
("RPM") of calcitic agricultural lime ("CAL")
between 2004 and 2010.
[2]
In its answering affidavit, the Company raised as one of its points
in
limine
that the complaint was brought
against the wrong entity and not against the trading entity, namely
the Hendrik Pistorius Trust No
IT 114/63 (the "Trust"). The
respondent explained that there were a number of entities in the H
Pistorius stable but
the trading entity at the time of the alleged
contravention was the Trust and not the company.
[3]
The Commission then brought an application to compel further and
better discovery filed on
21
August
2014
in which
it
sought
documents/information
relating
to
the
Trust,
H Pistorius
and Co, Pistorious
Beleggings,
and
H
Pistorius
(Ply) Ltd. This application was
opposed by
the Respondent on the basis that it sought to compel discovery from
entities that were
not cited
as respondents to the proceedings.
The
Commission subsequently did not pursue that application
[1]
and brought
this
application for substitution.
[4]
In this
application
for
substitution
the
Commission
sought
to
substitute
the
Trust
for
H
Pistorius
& Co
(Pty) Ltd as the
respondent
in the
matter.
Curiously,
in response
to the
Commission's
application
to
substitute,
H Pistorius
& Co (Ply) Ltd brought an exception application. The application
for substitution and the exception were heard together
on 28 May
2015.
[2]
Non-compliance
with Tribunal Rule 45(3)
[5]
The substitution application was brought in terms of Tribunal Rule
45. In the course of the proceedings the Tribunal was informed
that
the application had not been served on the Trust or the individual
Trustees, which the Commission now sought to cite as respondents,
and
that the Trust was not represented at the hearing.
[6]
Mr. Coetzee on behalf of H Pistorius & Co (Ply) Ltd submitted
that on this basis alone the Commission's application for
substitution must fail for non-compliance with the rules of the
Tribunal.
[7]
Since this is an application for substitution rather than joinder,
Rule 45(1) has no relevance. Furthermore it was common cause
between
the parties that this application was not a species of the kind
contemplated in Rule 45(2) which relates to the correction
of a
misnomer and requires the mere correction of a technical
irregularity. Instead this application requires the substitution
of
one legal entity for another. Accordingly Rule 45(2) is also
inapplicable. The relevant rule is therefore Rule 45(3).
[8]
The relevant portion of Rule 45(3) requires that
"[i]f
in
any
proceedings it
becomes
necessary to substitute
a
person
for an existing party, any party to those proceedings, on application
and on
notice to everv other part
y
(our emphasis)
, may apply to the Tribunal
..
.for
an order substituting that party for an existing party
..."
[9]
On an ordinary reading of the rule, it clearly contemplates that
"notice" of such intention to substitute a person
must be
given to every other party to the proceeding. While the rule does not
expressly state that "every other party"
includes the
person that is sought to be substituted, to argue the contrary would
lead to a bizarre outcome, namely that the rule
would require notice
to be given to every other party to the proceeding except the person
or party to be substituted!
[10]
The Commission
argued that
the latter part of that paragraph, namely
"on
application
and
on
notice
to
every
other
party
...for
an
order
substituting
that
party
for
an
existing
party"
did not
require service of the application to substitute on the Trust or the
Trustees. Mr. Ngcongo on behalf of the Commission argued
that the
Tribunal was entitled to grant the
substitution
application
without
such
application
being
served
on
the
Trust
or
the
individual
trustees
first, provided
there
was no
prejudice
to
the
party
sought
to be
substituted
that
could
not be
cured
by
an order
of
costs.
He
relied on the judgment
of Flemming
DJP in
O'Sullivan
[3]
in
support of
this stance.
[11]
However, none of the cases relied upon by the Commission supported
the contention that Tribunal Rule 45(3) should be interpreted
in this
manner. In all of these cases the issue to be decided was not whether
or not service of the summons (or application) –
in other words
notice to the person intended to be brought to court - could be
dispensed with.
O'Sullivan
was concerned simply with
the rectification of the respondent's name from Heads Models Agency
to Heads Models Agency CC. In that
case the respondent was present at
the proceedings and understood that the summons which had been served
on it was intended for
it. The case of
Janet
discussed
therein by Flemming J - and which ostensibly was also relied upon by
the Commission - was also not concerned with whether
or not notice or
service of the summons on the person sought to be substituted could
be dispensed with.
[12]
A cornerstone of our legal system
is that a
person is entitled to notice that
proceedings
are being instituted against
him or her.
In general,
legal
proceedings cannot commence unless
the
party
against
whom relief
is
sought
is
notified
of
the
initiating
process
by means of
service.
[4]
This
principle
is captured
in Rule 4(1
)(a)(ix) of
the
Uniform
Rules of
Court which
requires service on each Trustee.
[5]
[13]
The
fundamental
principle
echoed in
this
practice is
the notion
of
fairness or
fair
administrative
justice
as
contemplated
in
the
Constitution of
the
Republic
of
South
Africa.
[6]
The
interpretation sought by the Commission is not only a conflation
between the
standard
for
granting
a
substitution
application
(substantive
review)
with
a
procedural
requirement
(to
notify)
but would
also
be
inconsistent
with
section
52(2)
of
the
Competition
Act that requires this Tribunal to conduct its proceedings in
accordance with the principles
of natural
justice.
[7]
It would
also be a
violation
of the
Constitution. When proceedings
have
begun
without
any
notice
the
subsequent
proceedings
are
null
and void
and may be disregarded or set aside.
[8]
[14]
Hence we conclude that Rule 45(3) read in context, and in accordance
with the fundamental principle of fairness, requires a
party wishing
to join or substitute a party or a person to serve notice on that
person or party. In this instance, the Commission
was required to
serve notice of the substitution application on individual Trustees
so as to afford them an opportunity to be heard
on the merits of the
substitution application. Indeed even if the rules were silent on the
issue of substitution or joinder, fairness
would require that the
application to substitute be served on the Trustees. As it stands the
Commission's failure to comply with
Rule 45(3) has resulted in this
undesirable situation where the entity sought to be cited as
respondent was not present or represented
at the hearing while the
entity being sought to be substituted out, the current respondent,
was opposing the very application which
it stood to benefit from.
[15]
The
Tribunal
Rules
for
the Conduct
of Proceedings do
not
specifically
provide
for
a
procedure
for service
on
a
Trust.
However,
we
are
guided by
Rule
4(1)(a)(ix)
of
the
Uniform
Rules of Court
[9]
and
require the
Commission,
should it
still persist to substitute
or
join
the Trust,
to serve the
application
on the individual Trustees
of the
Trust.
Conclusion
[16]
In light of the above, we conclude that the application to substitute
is defective due to the fact that the Commission failed
to serve the
application on the Trustees of the Trust and is accordingly dismissed
for non-compliance with Rule 45(3). In the event
that the Commission
still seeks to substitute or join the Trust to the proceedings it
must serve such application on the individual
Trustees and afford
them a reasonable opportunity to answer such application as provided
in the Tribunal Rules. Given that the
Trust and the individual
Trustees were not afforded such opportunity and were not represented
at the hearing we find that the application
to substitute and
consequently the application for exception are not ripe for hearing.
14
July 2015
DATE
_________________
Yasmin
Carrim
Andreas
Wessels and Medi Mokuena concurring
Tribunal
Researcher:
Aneesa Ravat
For
the Applicants:
Adv. P Ngcongo instructed by The Competition Commission
For
the Respondents:
Adv. A Coetzee instructed
by Louw Attorneys
[1]
See Transcript of hearing in the Discovery Application between
the
Commission and H Pistorius & Co (Pty) Ltd & Three Others;
Case No. 0
1
9604
on
1
0
October 20
1
4.
[2]
As agreed in a prehearing held on 22 April 2015.
[3]
O' Sullivan v Heads
Model
Agency
CC
1
995
(4) SA 253
(W).
[4]
Rules Regulating the Conduct of the Proceedings of the Several
Provincial and Local Divisions of the high court of South Africa
See Harms at 8-11[Issue 52].
[5]
See Harms
at 8-18
[Issue 51].
[6]
See Bill of Rights and section 33.
[7]
The law
permits of
ex
parte
applications
in very few exceptional circumstances but this is not such a
situation.
Nor did the Commission
provide an
explanation as to why service on the Trustees
had not
been effected.
[8]
See Harms at 8-11[Issue 52] and the cases cited
Dada v
Dada
1
971
(2) SA 287
(T); SA Instrumentation (Pty) Ltd v Smitchem (Pty) Ltd
1
977
(3) SA 703
(D); Mutebwa v Mutebwa 2001
(2) SA
1
93
(TK).
[9]
As contemplated in Tribunal Rule 55(l)(b).