Case Law[2022] ZACC 36South Africa
Competition Commission of South Africa v Group Five Construction Ltd (CCT 141/21) [2022] ZACC 36; 2023 (1) BCLR 1 (CC); [2023] 1 CPLR 1 (CC) (27 October 2022)
Constitutional Court of South Africa
27 October 2022
Headnotes
Summary: Competition Act 89 of 1998 — interpretation and application of section 62 — exclusive jurisdiction of Competition Tribunal —High Court jurisdiction
Judgment
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## Competition Commission of South Africa v Group Five Construction Ltd (CCT 141/21) [2022] ZACC 36; 2023 (1) BCLR 1 (CC); [2023] 1 CPLR 1 (CC) (27 October 2022)
Competition Commission of South Africa v Group Five Construction Ltd (CCT 141/21) [2022] ZACC 36; 2023 (1) BCLR 1 (CC); [2023] 1 CPLR 1 (CC) (27 October 2022)
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sino date 27 October 2022
FLYNOTES:
JURISDICTION OF COMPETITION TRIBUNAL
Competition
– Competition Tribunal — Administrative law and
legality challenges – Initiation and referral
of complaint
by Commission – Jurisdiction of Tribunal and High Court –
Competition Act 89 of 1998
,
s 62.
CONSTITUTIONAL COURT
OF SOUTH AFRICA
Case CCT 141/21
In
the matter between:
COMPETITION
COMMISSION OF SOUTH
AFRICA
Applicant
and
GROUP
FIVE CONSTRUCTION
LIMITED
Respondent
Neutral
citation:
Competition
Commission of South Africa v Group Five Construction Ltd
[2022]
ZACC 36
Coram:
Kollapen
J, Madlanga J, Majiedt J, Mathopo J, Mhlantla J, Mlambo AJ,
Theron J, Tshiqi J and Unterhalter AJ
Judgments:
Mlambo
AJ (minority): [1] to [101]
Majiedt
J (majority): [102] to [149]
Heard
on:
3
May 2022
Decided
on:
27
October 2022
Summary:
Competition
Act 89 of 1998
— interpretation and application of
section 62
— exclusive jurisdiction of Competition Tribunal —High Court
jurisdiction
ORDER
On appeal from the
Supreme Court of Appeal (hearing an appeal from the High Court
of South Africa, Gauteng Division, Pretoria):
1.
Leave to appeal is granted.
2.
The appeal is dismissed.
JUDGMENT
MLAMBO AJ:
Introduction
[1]
This
matter can be likened to a turf war. On the one side is the
applicant, the Competition Commission of South Africa
(Commission),
representing the competition authorities,
[1]
the Competition Tribunal (Tribunal), to be specific. The contested
turf is the review ambit of the Tribunal in relation to matters
arising out of the interpretation and application of chapters 2, 3
and 5 of the Competition Act
[2]
(Act), which are assigned for its exclusive jurisdiction. For want of
appropriate phrasing, I refer to these chapters as the exclusive
jurisdiction chapters. On the other side is the respondent,
Group Five Construction Limited (Group Five), a company
incorporated
under the company laws of the Republic of South Africa,
whose legal stance in the present dispute is backed by judgments of
the
High Court of South Africa, Gauteng Division, Pretoria
(High Court) and Supreme Court of Appeal. Those Courts held that
the jurisdiction of the Tribunal is ousted in matters within the
exclusive jurisdiction chapters, which have been carved out to
give
the High Court jurisdiction. Group Five asserts that this is one
such matter in which the Tribunal is red carded.
[2]
The
Commission, the regulatory body established in terms of section 19(1)
of the Act, applies for leave to appeal the judgment
and order of the
Supreme Court of Appeal.
[3]
That
Court upheld a decision of the High Court, which found that it had
jurisdiction to determine a review application brought
by Group Five
in respect of a referral to the Tribunal – of a complaint
against it – by the Commission.
[4]
The question before this Court is whether the Supreme Court of Appeal
and the High Court wrongly pronounced on the scope of
the
competition authorities’ exclusive jurisdiction, particularly
that of the Tribunal, in terms of section 62(1) of the
Act and the
Rules for the conduct of proceedings in the Competition Tribunal
[5]
(Tribunal Rules).
[3]
Section 62 of the Act provides:
“
(1)
The Competition Tribunal and Competition Appeal Court share exclusive
jurisdiction in respect of the following
matters:
(a)
Interpretation and application of Chapters 2, 3 and 5,
other than—
i.
a
question or matter referred to in subsection (2)
;
or
ii.a
review of a certificate issued by the Minister of Finance in terms of
section 18(2); and
(b)
the functions referred to in sections
21(1), 27(1) and 37,
other than a
question or matter referred to in subsection (2)
.
(2)
In addition to any other jurisdiction
granted in this Act to the Competition Appeal Court, the Court has
jurisdiction over—
(a)
the question whether an action taken or
proposed to be taken by the Competition Commission or the Competition
Tribunal is within
their respective jurisdictions in terms of this
Act;
(b)
any constitutional matter arising in terms
of this Act; and
(c)
the question whether a matter falls within
the exclusive jurisdiction granted under subsection (1).
(3)
The jurisdiction of the Competition Appeal
Court—
(a)
is final over a matter within its exclusive
jurisdiction in terms of subsection (1); and
(b)
is neither exclusive nor final in respect
of a matter within its jurisdiction in terms of subsection (2).
(4)
An appeal from a decision of the
Competition Appeal Court in respect of a matter within its
jurisdiction in terms of subsection
(2) lies to the
Constitutional Court, subject to section 63 and its respective
rules.
(5)
For greater certainty, the Competition
Tribunal and the Competition Appeal Court have no jurisdiction over
the assessment of the
amount, and awarding, of damages arising out of
a prohibited practice.” (Own emphasis.)
Background
[4]
The
underlying factual dispute in this matter relates to a complaint
initiated by the Commission into collusion between construction
companies in the process of bidding for tenders to construct stadia
for the 2010 Soccer World Cup. Group Five was alleged to have
been
one of the construction companies involved in the collusive conduct.
On 12 November 2014, the Commission, acting
in terms of
sections 49B
[6]
and 50(1)
[7]
of the Act, referred a complaint to the Tribunal against Group Five
and other construction companies for possible collusive conduct
in
contravention of section 4(1)(b)(i) and (ii) of the Act. The
allegation was that Group Five had engaged in pervasive
anti competitive
conduct in the construction industry. It was
alleged that Group Five, together with other members of an
alleged cartel, had:
(a) allocated projects for the construction of
various World Cup stadia between themselves; (b) had submitted cover
prices agreed
amongst themselves; and (c) had recovered net profits
of 17.5% per project.
[8]
[5]
Upon
receipt of the complaint, Group Five sought and was granted
information in terms of the Rules for the conduct of proceedings
in
the Competition Commission
[9]
(Commission Rules). Thereafter, instead of complying with rule
16
[10]
of the Tribunal Rules,
i.e., to file an answering affidavit within 20 days responding
to the complaint, Group Five launched
a review application in the
High Court. Group Five initiated its review application in terms
of the Promotion of Administrative
Justice Act
[11]
(PAJA) and the principle of legality, asserting that the matter fell
to be determined by the High Court in terms of section 62(2)(a)
read with section 62(3)(b) of the Act. The basis for this assertion
was that the Tribunal is not a court as defined in PAJA and
as such
has no jurisdiction to entertain the review. Group Five’s
underlying objection was that the Commission had previously
granted it immunity from prosecution through its
Corporate Leniency Policy. This policy is aimed at
encouraging those
involved in cartels to disclose prohibited
practices to the Commission in order to combat offensive conduct. In
Group Five’s
view, the about face by the Commission to
refer a complaint to the Tribunal and seek a penalty against it, was
oppressive,
vexatious and motivated by bad faith.
Litigation history
High
Court
[6]
Group Five launched the application
in the High Court, on 7 November 2017, to review the
Commission’s referral of
the complaint to the Tribunal. Group
Five sought, inter alia, orders to—
(a)
declare
that the initiation of the complaint was unlawful;
[12]
(b)
declare that the Commission granted Group
Five immunity from prosecution for contravening the Act; and
(c)
review and set aside and declare invalid
the Commission’s decision to refer the complaint and/or seek an
administrative penalty
against Group Five.
[7]
In
response to the review proceedings, the Commission lodged an
application in the High Court in terms of rule 30 of the Uniform
Rules of Court,
[13]
to declare
and set aside the proceedings on the basis that they constituted an
irregular step insofar as the High Court lacked
jurisdiction to
adjudicate the matter. The Commission contended that the Tribunal had
exclusive jurisdiction under the Act to consider
the issues raised in
the review, and that there was pending litigation before the Tribunal
on the same cause of action and in respect
of the same subject
matter.
[8]
Before
considering Group Five’s review application, the High Court had
to consider the Commission’s challenge to its
jurisdiction to
entertain Group Five’s review application.
[14]
[9]
On
this issue, the Commission based its argument on section 62(1)(a) of
the Act, read with section 169(1)(a)(ii)
[15]
of the Constitution. The Commission argued that based on section
62(1)(a), the High Court lacked jurisdiction because the
matter
fell within the provisions of chapter 2 of the Act, which it
contended fell within the exclusive jurisdiction of the
Tribunal.
[10]
The
High Court disagreed, finding that while it is common cause that the
High Court lacks jurisdiction in matters pertaining
to the
interpretation and application of chapters 2, 3 and 5 of the Act,
with respect to matters pertaining to section 62(2)(a),
the
Tribunal’s jurisdiction is ousted. In short, the High Court
reasoned that in matters concerning a challenge to the lawfulness
and
validity of a referral, the High Court, and not the Tribunal, has the
requisite jurisdiction.
[16]
Accordingly, the High Court held that there was no merit to the
Commission’s objection to the jurisdiction of the High
Court.
Supreme
Court of Appeal
[11]
The Commission subsequently appealed
the High Court’s judgment to the Supreme Court of Appeal,
having been granted leave by
the High Court. The question before the
Supreme Court of Appeal was whether the High Court was correct in
holding that it had jurisdiction
to entertain the review application.
[12]
The
Commission persisted in arguing that the issues on review fell within
the Tribunal’s exclusive jurisdiction. It contended
that the
initiation and referral of a complaint in terms of sections 49B
and 50 of the Act were matters which undoubtedly
fell within the
exclusive jurisdiction of the Commission, the Tribunal and the
Competition Appeal Court. These sections
provide for the
Commissioner to initiate a complaint against an alleged prohibited
practice
[17]
and, at any time
after initiating a complaint, for the Commission to refer the
complaint to the Tribunal for adjudication.
[18]
Group Five opposed the appeal, using the High Court’s
findings as the basis for its opposition.
[13]
The Supreme Court of Appeal reasoned
that section 62(1) excludes matters referred to in section
62(2)(a), which gives the Competition
Appeal Court additional
jurisdiction, but that such additional jurisdiction is, in terms of
section 62(3)(b), neither exclusive
nor final. Accordingly, the
Supreme Court of Appeal reasoned that the High Court’s
jurisdiction is not ousted in matters
falling under section 62(2)(a)
and that it shares concurrent jurisdiction in those matters with the
Competition Appeal Court.
[14]
The
Supreme Court of Appeal held that section 62(2)(a) and 62(3)(b)
provide that, while the Competition Appeal Court has jurisdiction
in
respect of the matters listed under section 62(2)(a), the
jurisdiction of the High Court to hear those matters is not excluded,
since in the ordinary course the High Court would have jurisdiction
over matters specified in section 62(2)(a), unless such jurisdiction
was specifically and expressly ousted in a “constitutionally
compliant manner”.
[19]
However, the Supreme Court of Appeal found that, while the
Competition Appeal Court has jurisdiction over the matters referred
to in section 62(2), the same cannot be said of the Tribunal, for two
reasons. First, the provision expressly refers to the Competition
Appeal Court as the Court with specific additional jurisdiction and,
second, unlike the High Court and the Competition Appeal Court,
which are designated as Courts with similar status to that of the
High Court,
[20]
the Tribunal
does not possess inherent powers to hear matters listed in
section 62(2)(a).
[15]
The
Supreme Court of Appeal went on to find that it is clear that the
Competition Appeal Court and the Tribunal had exclusive
jurisdiction in relation to the interpretation and application of
matters in chapters 2, 3 and 5 of the Act. The Court said these
chapters of the Act all involve matters of a specialist nature
requiring “technical expertise” which “lie at
the
complex intersection between law and economics” and, further,
that the Act is very specific about assigning these
functions to
the institutions best equipped to deal with them.
[21]
The Supreme Court of Appeal also remarked that the competition
authorities have exclusive jurisdiction in adjudicating on the
“matters dealing with the functions of the Commission, in terms
of sections 21(1), 27(1) and 37 of the Act”.
[22]
The Supreme Court of Appeal also pointed out that in terms of the
specific provisions of section 27(1)(c), the Tribunal “may
hear appeals from, or review any decision of, the Competition
Commission that may in terms of this Act be referred to it”.
[23]
[16]
The
Supreme Court of Appeal found that the issues raised by Group Five
are not within the exclusive jurisdiction of the Tribunal
and the
Competition Appeal Court because they relate to the validity and
lawfulness of the initiation and subsequent referral of
a complaint
to the Tribunal which are questions of
vires
or
legality and thus are quintessentially issues within the jurisdiction
of the Superior Courts.
[24]
The Supreme Court of Appeal further found that these are issues that
fall within the purview of section 62(2)(a), as found
in
Agri
Wire
.
[25]
The Supreme Court of Appeal referred to
Agri Wire
and its conclusions as authority regarding the ambit and
inapplicability of the section 27(1)(c) review ambit of the
Tribunal.
[26]
[17]
The
Supreme Court of Appeal held that the legality of a public body’s
conduct is a constitutional matter
[27]
and, in terms of section 62(3)(b), the competition authorities do not
have exclusive jurisdiction over such matters. The Supreme
Court of
Appeal concluded that the issues raised on review by Group Five were
not of a specialist nature which section 62(1) exclusively
reserves
for the Competition Appeal Court and the Tribunal. Instead, they
related to questions of legality concerning the
validity and
lawfulness of the initiation and the referral of the Commission’s
complaint. The Supreme Court of Appeal thus
rejected all of the
Commission’s arguments.
[18]
Finally,
the Supreme Court of Appeal found that the High Court was correct in
its finding that the Commission’s challenge
of jurisdiction had
no merit. It dismissed the appeal with costs.
[28]
In this Court
Jurisdiction
[19]
The Commission contends that the
matter engages the constitutional jurisdiction of this Court as it is
about the jurisdiction of
the competition authorities. It contends
that the matter requires this Court to interpret section 62 of
the Act. It further
contends that this Court is requested to
determine the jurisdiction of the Tribunal and Competition Appeal
Court insofar as
it refers to the power of the High Court to
review the decisions and conduct of the Commission.
[20]
Issues
relating to the conduct and powers of the Commission and Tribunal
concern the exercise of public power and are therefore
constitutional
issues. Clearly the matter engages this Court’s constitutional
jurisdiction. This Court has said as much in
Senwes
,
[29]
Yara
[30]
and
Pickfords
.
[31]
In addition, it is important, as a point of law and as a matter of
general public importance, for this Court to clarify the jurisdiction
of the competition authorities
vis
a vis
the civil courts, specifically where the issues at stake involve
intertwined competition and constitutional law issues.
Leave
to appeal
[21]
Having found that the matter engages
this Court’s jurisdiction, a further issue is whether, in terms
of section 167(3)(b)
of the Constitution, it is in the interests of
justice to grant leave to appeal. Group Five’s review
application in
the High Court was based on three issues. Those were
the initiation and referral of a complaint by the Commission, the
granting
of and withdrawal of immunity, and the alleged oppressive
prosecution initiated by the Commission against Group Five. The
Commission
squarely submitted that these are all matters falling
under chapters 2, 3 and 5 of the Act, in which the Tribunal and
Competition
Appeal Court had exclusive jurisdiction. In the
Commission’s view, these are matters that concern the
“interpretation
and application” of those chapters, which
is within the exclusive jurisdiction of the competition authorities.
It argued
that the fact that these issues were part of a High Court
review application brought in terms of PAJA and the principle of
legality does not detract from their true nature, being exclusively
competition law matters in respect of which the competition
authorities had exclusive jurisdiction.
[22]
This matter therefore raises issues
of general public importance. It provides an opportunity for this
Court to have its say regarding
the Supreme Court of Appeal’s
finding that the review competence of the Tribunal is ousted in the
issues involved in this
application.
[23]
Additionally, it is important for
this Court to clarify the jurisdictional boundaries of the
competition authorities, especially
in relation to matters that are
competition law issues but related to constitutional issues. In this
matter, the issues involve
questions of law and policy, related to
whether the High Court has jurisdiction, to the exclusion of the
Tribunal, to hear an application
to review powers exercised and
decisions taken by the Commission. The issue for this Court to
determine, therefore, is to what
extent the High Court’s
jurisdiction is ousted, if at all, in favour of the Tribunal, to
review the decisions of the
Commission. This Court has yet to express
an authoritative view on this issue. Clearly, it is in the interests
of justice to grant
leave to appeal.
Issues
[24]
The crisp issue is whether the High
Court has jurisdiction to review a decision taken by the Commission
to initiate a complaint
against Group Five. Put differently, the
issue is whether this is a matter in which the competition
authorities have exclusive
jurisdiction, such that the High Court’s
jurisdiction is ousted.
[25]
The Commission argues that the High
Court’s jurisdiction to hear the matter is ousted by virtue of
sections 27(1)(c)
and/or section 62(1) of the Act. It further
argues that the Tribunal has exclusive jurisdiction over the issues
arising out of
Group Five’s review application in terms of
section 62(1)(a). The Commission further submits that this
interpretation
is consistent with section 27(1)(c), which
specifically provides for the exclusive jurisdiction of the Tribunal
to hear “appeals
from, or review any decision of” the
Commission that “may in terms of the Act be referred to
it”. The Commission
argues that this applies to matters
relating to the interpretation and application of various chapters of
the Act, as these relate
directly to the “interpretation and
application” of those chapters.
[26]
Group Five accepts that the
competition authorities have exclusive jurisdiction in matters
relating to the functioning of various
chapters of the Act.
However, it argues that section 62(1) contains a carve out, which the
Commission ignores, and which this
review falls into. In terms of
this carve out, the competition authorities have exclusive
jurisdiction to hear matters relating
to the interpretation and
application of various chapters of the Act, “
other
than
a question or matter referred to
in subsection 2”, being: first, questions about whether an
action taken or proposed
to be taken by the Commission or the
Tribunal is within their respective jurisdictions in terms of this
Act; second, constitutional
matters arising in terms of the Act; and
third, the question whether the matter falls within the exclusive
jurisdiction granted
under section 62(1).
[27]
Group Five submits that the issues
at stake in this matter are those carved out of the exclusive
jurisdiction of the Tribunal in
terms of section 62(2)(a). It
submitted that those issues relate to the legality of the initiation
of the complaint against it
which falls to be determined under PAJA
or the principle of legality. In its view, the Tribunal has no
competence under PAJA
to determine such matters hence its resort to
the High Court whose jurisdiction is not ousted.
[28]
The
way I see things, a definitive view from this Court is required on
the meaning of section 62(1) as to the exclusive jurisdiction
of the
Tribunal and what is carved out of that exclusive jurisdiction by
section 62(2). This Court has previously stated that,
where an
objection to jurisdiction is taken at the outset, the pleadings,
properly interpreted, should determine the question of
jurisdiction.
[32]
In
Gcaba
,
this Court said:
“
In
the event of the Court’s jurisdiction being challenged at the
outset (
in
limine
),
the applicant’s pleadings are the determining factor. They
contain the legal basis of the claim under which the applicant
has
chosen to invoke the court’s competence. . . .
If, however, the pleadings, properly interpreted, establish
that the
applicant is asserting a claim under the LRA, one that is to be
determined exclusively by the Labour Court, the High Court
would
lack jurisdiction.”
[33]
[29]
This
approach was again endorsed in
Baloyi
[34]
where this Court engaged with the claim as pleaded, and concluded
that on the correct interpretation, it was a claim based in public
law and contract, rather than the Labour Relations Act.
[35]
[30]
An assessment of this Court’s
jurisdiction must thus be based on an applicant’s pleadings,
and the key question will
be to determine what claim the pleadings,
properly interpreted, reveal. Here then, the starting point is to
consider what claims
were asserted by the applicant in its pleadings.
[31]
In its rule 30 notice and founding
affidavit in the High Court, the Commission contended that
the High Court did
not have jurisdiction to adjudicate upon the
matter because Group Five’s claim related to the
interpretation and application
of chapter 2 of the Act and,
in terms of section 62(1)(a), the matter fell within the exclusive
jurisdiction of the Tribunal.
It is therefore necessary to consider,
in detail, Group Five’s review application, and determine
whether the claims
it asserted, i.e., whether the issues it required
the High Court to determine, are issues contemplated in section
62(2)(a), or
are competition law specific, or involve both
constitutional and competition law issues.
The
meaning of section 62
[32]
Before
analysing the pleadings and determining the true nature of the issues
raised by the parties in the High Court, it is necessary
to determine
the true meaning of section 62(1) of the Act, i.e., the power of
the Tribunal to adjudicate matters relating
to the interpretation and
application of the exclusive jurisdiction chapters contemplated in
the section. Section 27(1) is also
an important provision which sets
out, in general terms, the functions of the Tribunal.
[36]
I will consider the true ambit of section 27(1)(c), in
particular, which deals with the review powers of the Tribunal. It
is
useful to consider these powers within the context of the Supreme
Court of Appeal judgment, as that Court considered these sections
and
pronounced its views regarding their ambit.
[33]
The language of section 62(1)(a) is
clear. It provides that the competition authorities have exclusive
jurisdiction in respect of
the interpretation and application of the
exclusive jurisdiction chapters. Considered from the appellate nature
and role of the Tribunal
over the Commission as well as that of
the Competition Appeal Court over the Tribunal, it is clear that
the Tribunal’s
jurisdiction revolves around considering the
conduct of the Commission in carrying out its functions and
exercising its powers
in terms of the Act pursuant to its obligations
under the exclusive jurisdiction chapters.
[34]
We know that, in this matter, the
Commission initiated a complaint against Group Five in terms of
section 49B of the Act. The
basis of the complaint is Group Five’s
alleged involvement in prohibited practices, which are dealt with in
section 4.
The alleged conduct of Group Five was in
contravention of the provisions contained in chapters 2 and 5, which
fall under the exclusive
oversight jurisdiction of the Tribunal.
Section 49B grants the Commission the power to initiate and refer
complaints against errant
companies. Separately, Group Five alleges
that the Commission granted it leniency or immunity and then
withdrew it. In terms
of section 21(1)(c) and (d), the
Commission “is responsible to . . . investigate and
evaluate alleged contraventions
of chapter 2” and “grant
or refuse applications for exemption in terms of chapter 2”.
Section 21(1)(gC)
further provides that the Commission is
responsible to “grant or refuse applications for leniency in
terms of section 49E”.
Here too, what the Commission does in
terms of this section, falls under the exclusive oversight
jurisdiction of the Tribunal.
[35]
The fact that the Commission
performed these functions – initiating the complaint and
referring it for the attention of the
Tribunal – is not
controversial. It is plain that, in initiating and referring the
complaint, the Commission acted within
extant powers. It also
requires no debate that the power to grant or refuse immunity is that
of the Commission. The exercise of
these powers by the Commission
falls squarely within the exclusive jurisdiction chapters.
[36]
Where the controversy arises is the
manner
in
which the Commission performed these functions. This is an issue of
propriety, not
vires
.
I accept that, because this matter concerns the exercise of power by
the Commission as a public body, this will ultimately be
a question
of lawfulness. However, lawfulness is not to be conflated with
ultra vires.
The
question of
ultra vires
is
a subsect of lawfulness – they are not synonymous. For the
Commission’s decision to be considered
ultra
vires
, it must have acted in excess or
beyond the power conferred on it as a public body. The conduct of the
Commission here is in terms
of powers assigned to it in the Act and
therefore within its jurisdiction. More on this later.
[37]
The question whether the Commission
exercised its powers properly concerns the interpretation and
application of sections 21(1)(gC)
and 49B. The power to adjudicate
the Commission’s exercise of these powers is assigned to the
Tribunal. This means that,
in terms of section 62(1), the
determination of the meaning of these sections and their application
is exclusively that of the
Tribunal and the Competition Appeal Court.
[38]
The Tribunal was specifically
assigned exclusive jurisdiction over the Commission because it
possesses technical expertise to oversee
the Commission’s
exercise of its functions and powers. The Supreme Court of Appeal,
referring to this expertise, said:
“
It
is not difficult to discern why exclusive jurisdiction would be
granted to the [Competition Appeal Court] and the Tribunal in
relation to interpretation and application of matters in Chapters 2,
3 and 5. These are matters related to the investigation, control
and
evaluation of alleged restrictive practices, the abuse of dominant
positions and mergers. They involve matters of a specialist
nature,
which require technical expertise, and which lie at the complex
intersection between law and economics. The Act has been
very careful
in assigning these functions to the institutions best equipped to
deal with them.”
[37]
[39]
Review
is the device through which the exercise of public power is
scrutinised. The assignment of the Tribunal’s review function,
under section 27(1)(c), over the Commission’s exercise of its
powers and functions, cannot be downplayed and restricted without
clear provisions to that effect. That power was assigned in the Act
with the clear knowledge that the Commission’s conduct
and
decisions amounted to the exercise of public power, which is a
constitutional matter. However, and as the Supreme Court of
Appeal
itself noted in
Computicket
,
it is for this reason that the concept of a “constitutional
matter” in section 62(2)(b) of the Act must be given
a
narrow meaning.
[38]
That Court
said:
“
But
I do not believe that the concept of a ‘constitutional matter’
can be afforded that wide meaning in section 62(2)(b).
I say that
because in that wide sense, most, if not all disputes can ultimately
be traced back to the Constitution. It would for
example, also
include a rather mundane application to compel further particulars.
At the same time, that would render the exclusive
jurisdiction of the
[Competition Appeal Court] in certain matters – which is the
main theme of section 62 – illusory
(cf
S
v Boesak
[2000] ZACC 25
;
2001 (1) SA 912
(CC) para 15). This means that
‘constitutional matters’ in section 62(2)(b) must be
afforded a narrower meaning.”
[39]
I agree with this view.
[40]
The meaning sought to be given to
section 62(2)(b) by Group Five, which I will discuss in more detail,
cannot survive scrutiny as
it would mean that almost all decisions of
the Commission are in the section 62(2) carve out and would be
subject to the additional
jurisdiction of the Competition Appeal
Court, as a court of first instance, and by the High Court, a
non-specialist court. This
is an approach that would take the heart
out of the Tribunal’s adjudicative and review powers over the
Commission and is
one that could never have been contemplated when
sections 27(1)(c) and 62(1)(a) were crafted.
[41]
The view I take on the ambit of the
Tribunal’s exclusive oversight role over the Commission,
in terms of section 62(1),
is that it is an expansive role that
covers the conduct of the Commission in carrying out its functions
and powers arising from
the Act
pursuant
to its obligations under the exclusive jurisdiction chapters. We
know, as I have stated, that in terms of section 27,
the
Tribunal has adjudicative, appellate and review jurisdiction over
what the Commission does. Therefore, the oversight role of
the Tribunal over the Commission cannot be constrained,
unless the context and the Act justifies this. This is important
as
it buttresses the overarching purpose of the Act, which is “[t]o
provide for the establishment of a Competition Commission
responsible
for the investigation, control and evaluation of restrictive
practices, abuse of dominant position, and mergers;
and
for the establishment of a Competition Tribunal responsible to
adjudicate such matters . . .
”.
(Emphasis added.)
[42]
In
interpreting section 62(1), we have also, on several occasions, been
told by this Court that such interpretation should
involve the
statutory provision being properly contextualised when meaning is
ascribed to the words used therein.
[40]
While holding that words in a statutory provision should generally be
assigned their ordinary grammatical meaning, this Court has
consistently held that a contextual and purposive approach must be
applied to statutory interpretation.
[41]
[43]
This
Court takes a comprehensive approach to contextualising legislative
provisions having regard to both the internal and external
context of
a legislative provision when interpreting it.
[42]
Regard to the internal context of a legislative provision requires
that it be interpreted in light of the text of the legislation
as a
whole.
[43]
In this regard, in
Goedegelegen
,
this Court said “[w]e must understand the provision within the
context of the grid, if any, of related provisions and of
the statute
as a whole including its underlying values”.
[44]
A regard to the external context of a particular legislative
provision when ascribing meaning to it includes a consideration of,
amongst others, the mischief which the legislation aims to
address,
[45]
and the social
and historical background of the legislation.
[46]
[44]
The interpretation of section 62
must therefore take account of the context of the Act, which I
have sketched in the preceding
paragraphs. This context is important
in considering whether the Supreme Court of Appeal and the High Court
were correct in their
pronouncement of the scope of the competition
authorities’ exclusive jurisdiction in terms of section 62(1)
and the Tribunal
Rules. This will also inevitably involve determining
the true ambit of the carve out from the exclusive jurisdiction of
the competition
authorities.
[45]
Having
regard to the Supreme Court of Appeal’s judgment, I agree with
the finding that section 62(2) and (3)(b) of the Act
do not oust the
High Court’s jurisdiction in respect of a matter listed
under section 62(2), since, in the ordinary
course, the
High Court would have jurisdiction over those matters, unless
such jurisdiction is specifically and expressly
ousted in a
constitutionally compliant manner.
[47]
The Supreme Court of Appeal found that the issues raised in
Group Five’s review application were concerned with the
validity of the referral of the complaint to the Tribunal. It found
that this was an issue covered in the carve out in section
62(2). The
Court said:
“
A
question whether the referral by the Commission is valid or unlawful,
or whether the Commission acted beyond the scope of the
Act and
accordingly ultra vires the powers conferred on it, is a
jurisdictional question which falls within the purview of
section 62(2)(a)
as stated in
Agri
Wire
.”
[48]
[46]
The difficulty I have with this
conclusion is, as I have alluded to above, the conflation of
vires
with lawfulness. Although issues of
vires
will
always concern a question of lawfulness, not all issues of lawfulness
will concern a question of
vires
.
The finding of the Supreme Court of Appeal would be correct if the
Commission acted beyond the powers given to it as a public
authority,
which would be a question of
vires,
i.e., doing something falling outside
its jurisdiction.
[47]
The Supreme Court of Appeal’s
reasoning is merely based on the characterisation of the issues by
Group Five. This reasoning
unfortunately ignores that an
interpretation of the Act is necessary to resolve the issues arising
from the Commission’s
handling of the complaint in terms of
sections 49B and 50. This interpretive task is necessitated by the
fact that those sections
state what the Commission’s role is in
the circumstances. It necessitated that, after the interpretive
function had been
carried out, the application of those sections to
the facts would then follow. It is only after these steps have been
carried out
that a view can be formed on whether the Commission’s
actions were within its competence in terms of the Act. The Tribunal
is the entity that has exclusive jurisdiction to carry out this
adjudicative function regarding the conduct of the Commission at
issue in this matter. This view is informed by the assignment of the
powers of interpretation and application of the exclusive
jurisdiction chapters to the Tribunal.
[48]
The Supreme Court of Appeal’s
finding was also in response to an argument by the Commission that
the issues raised in Group
Five’s review application were
justiciable before the Tribunal in terms of section 27(1)(c). The
Supreme Court of Appeal’s
reasoning relied on that Court’s
decision in
Agri Wire
,
which decided the ambit of the review power of the Tribunal. In that
case, Agri Wire, one of the parties to an alleged cartel
in the wire
products industry, challenged a referral by the Commission to the
Tribunal. Agri Wire argued that the Corporate Leniency Policy,
which at that time permitted the Commission to grant immunity, was
not sanctioned by the Act. Agri Wire accordingly contended
that the evidence from one of the other parties to the cartel had
been unlawfully obtained, with the result that the referral to
the
Tribunal was irregular and should be set aside.
[49]
The
Supreme Court of Appeal, in
Agri
Wire
,
first rejected a challenge to its jurisdiction brought by the
Commission, which contended that exclusive powers of appeal and
review are vested in the Tribunal. The Commission advanced this
argument on the basis of section 27(1)(c). The Commission contended
that this section conferred on the Tribunal a general power to review
decisions of the Commission, but the Supreme Court of
Appeal
disagreed, saying that section 27(1)(c) exists for very
specified decisions of the Commission, on the basis that, in
the
absence of the section, those reviews would ordinarily go to the
High Court.
[49]
[50]
Those decisions are in section
10(2), which deals with the granting of exemptions by the Commission,
section 13(5)(b), which deals
with the approval or prohibition of
small mergers, section 14(1)(b) which deals with the approval or
prohibition of intermediate
mergers, and section 15, which deals with
the revocation of merger approvals.
[51]
The Supreme Court of Appeal thus
held that those are the only provisions that provide for the
Commission to take decisions and therefore
these are the only
provisions falling within the review ambit of the Tribunal in terms
of section 27(1)(c).
[52]
The
Supreme Court of Appeal further stated that the “it” in
section 27(1)(c) refers to the Commission, and not
the Tribunal.
The Supreme Court of Appeal said that, because section 27(1)(c) is
limited to the instances it had specified, this
means that the
section cannot be extended to a “challenge to the validity of a
referral, because that is a question whether
the referral is an
action within the jurisdiction of the Commission”.
[50]
Finally, the Supreme Court of Appeal held that whether an act by
the Commission is within the Tribunal’s jurisdiction
is a
matter that falls within section 62(2)(a) of the Act. Therefore,
it is not within the Tribunal’s exclusive jurisdiction
and
falls under the carve out.
[53]
I do not agree that section
27(1)(c), properly interpreted, limits the Tribunal’s review
powers to the four instances identified
by the Supreme Court of
Appeal in
Agri Wire
.
In that matter, the Supreme Court of Appeal based its conclusion on
the word “decision” in section 27(1)(c). The restriction
of the review ambit of the Tribunal over the Commission cannot be
justified when one considers the Commission’s role, functions
and powers in fulfilling the objects of the Act. It ignores the
overarching role of the Commission in the context of its specially
assigned functions and powers, which are in turn subject to the
oversight role of the Tribunal. Section 21, which deals with
the
functions of the Commission, sets out a substantial number of
functions. It is inconceivable that the Commission would not
take any
decisions or action arising out of any of those functions which could
be challenged under the review jurisdiction of the Tribunal.
[54]
Plainly understood, “it”
in section 27(1)(c) refers to the Tribunal. This simply means
that the Tribunal hears
appeals (from the Commission) or reviews any
decision (of the Commission) that may, in terms of the Act, be
referred to it (the
Tribunal).
[55]
If
one also considers that the review power of the Tribunal was
introduced some time after the Act came into operation, one cannot
but conclude that this review power could never have been introduced
to only deal with a very diminished area in the Act,
as found in
Agri
Wire
.
It is instructive that the review power of the Tribunal was
introduced in the same year as that of the Competition Appeal Court.
The restriction of the review power of the Tribunal to those
specified by the Supreme Court of Appeal in
Agri Wire
goes against the clear language of section 27(1)(c). In
interpreting any statute, the plain meaning of the words must be
understood within “the triad of text, context and purpose”.
[51]
As mentioned earlier, the Court in
Endumeni
clarified
that the “inevitable point of departure” is always the
language of the provision itself.
[52]
[56]
Applying the principles of
contextual statutory interpretation to section 27(1)(c), we must
understand the provision to mean
what it says, i.e., that the
Tribunal can review
any
decision
of the Commission referred to it. The Supreme Court of Appeal’s
judgment undermines the powers of the competition
authorities and
would encourage forum shopping of the kind we see in this matter. It
would also enable parties to frustrate and
delay the important work
of the competition authorities, especially the Tribunal.
[57]
Accepting that section 27(1)(c),
properly interpreted, provides for the Tribunal to review any
decision of the Commission –
this is also informed by the fact
that the Commission is perhaps the most important entity in the
scheme of the Act. It is the
entity that carries out the bulk of the
work of the Act and in this role deals with a lot more than just the
four instances specified
by the Supreme Court of Appeal in
Agri Wire
.
This must lead to a consideration of rule 42 of the Tribunal Rules,
which provides for the initiation of any proceedings before
the
Tribunal not otherwise provided for in the Rules. In terms of rule
42(3)(b), this specifically includes the appeal or review
of a
decision taken by the Commission. Clearly, the rule is to be
understood as encompassing a wide ambit of likely issues that
can be
raised by any party which seeks the Tribunal to adjudicate on any
matter.
[58]
Section 27(1)(c) must be read
together with section 21(1), as the latter sets out the decisions
that are within the Commission’s
jurisdiction to make. In other
words, the ordinary meaning of section 27(1)(c) must be that
the Tribunal can review any decision
made by the Commission
within the exercise of its functions under section 21(1). These
include the Commission’s decision
to initiate and refer a
complaint to the Tribunal, as well as a decision on whether to grant
or refuse immunity. In line with this
Court’s approach to
statutory interpretation, these provisions must then be interpreted
against the text of the Act as a
whole, by understanding it within
the grid of related provisions in the Act. It is at this point that
section 62(1) becomes
relevant, as it vests the Tribunal with
exclusive jurisdiction in respect of the matters set out therein. As
discussed, these matters
include adjudication on the interpretation
and application of the exclusive jurisdiction chapters, as well as
adjudication on the
functions of the Commission. The matters raised
by Group Five, as I discuss below, require adjudication by way
of a review
of the manner in which they have been exercised. This
adjudicatory exercise will require the interpretation and application
of
the exclusive jurisdiction chapters, and thus fall squarely within
the categories reserved for the Tribunal under section 62(1).
[59]
The
Supreme Court of Appeal sought to distinguish
Telkom
[53]
by saying that, there, the Court dealt with a scenario in which two
different regulatory agencies had concurrent jurisdiction,
and not
with the concurrent jurisdiction of the Tribunal and the High Court.
For all these reasons, the Supreme Court of Appeal
held that the
challenge to the High Court’s jurisdiction was misconceived and
should have been rejected by the High Court.
[60]
I am sensitive to the fact that
section 62(1) shares the exclusive jurisdiction in respect of the
aforementioned matters between
the Tribunal and the Competition
Appeal Court. However, sections 27 and 37 of the Act, read together,
display a clear legislative
intent that reviews regarding matters
under section 62(1) must be ventilated through the legislatively
designed hierarchy of the
competition authorities. In other words, it
is not a matter of referring a review in relation to matters under
section 62(1)
to either the Tribunal or the Competition Appeal
Court. Instead, such reviews must first be referred to the Tribunal
and thereafter,
if necessary, to the Competition Appeal Court. In
this regard, it must be noted that section 37, which sets out the
functions of
the Competition Appeal Court, limits the Competition
Appeal Court’s review power to decisions of the Tribunal. It is
not,
in terms of this section, vested with a power of review in
respect of decisions of the Commission. However, section 27, as
discussed, plainly sets out that the Tribunal is vested with a power
of review in respect of decisions made by the Commission pursuant
to
its functions under the Act.
[61]
The question becomes: which forum
does a party turn to in matters that entail a review in relation to
the matters set out under
section 62(1), if the Competition Appeal
Court has clearly been legislatively ousted from acting as an
adjudicatory body of first
instance in this regard? Based on the
ordinary meaning of the applicable legislative provisions, considered
holistically, it is
clear that the legislative design envisions a
system whereby matters of the kind described, and which include
Group Five’s
claims, must first be referred to the
Tribunal to exercise its legislatively vested review powers. If this
were not so, section
62(1) would be rendered nugatory, as neither the
Tribunal nor the Competition Appeal Court would be able to exercise
their exclusive
jurisdiction of review in relation to the matters set
out in section 62(1).
[62]
If the Act is interpreted to mean
that the Tribunal does not have the exclusive power of review in
respect of the Commission’s
exercise of its functions and
powers within the exclusive jurisdiction chapters, as an adjudicatory
body of first instance, then
it would ultimately mean that such
matters will never reach the Competition Appeal Court. As these
matters are clearly precluded
from falling within the carve out
under section 62(2) of the Act, the High Court cannot have
jurisdiction to entertain them.
Based on such interpretation, all
cases that require a review in relation to matters set out under
section 62(1) would be
left to float in a legal lacuna –
remaining forever unresolved. The narrow interpretation of the
Tribunal’s review
powers under section 27(1)(c), as set
out in
Agri Wire
,
would accordingly render the legislatively designed dispute
resolution system under the auspices of the competition authorities
entirely unworkable. The facts in this application show that
Agri
Wire
was wrongly decided, insofar as
the Supreme Court of Appeal set out a restrictive review ambit of the
Tribunal in terms of section 27(1)(c)
and its overall
interpretation of section 27(1)(c).
[63]
In line with this Court’s
internal contextual approach to statutory interpretation, these
provisions, when read together,
must be understood to mean that the
power to review the decisions made by the Commission, within the
jurisdiction of the functions
bestowed on it in terms of the Act,
vests exclusively with the Tribunal.
[64]
By launching the review in the High
Court, Group Five effectively bypassed the Tribunal and
disrupted the natural progression
of adjudication that
the Constitution envisages through the enactment of the Act,
which established the competition authorities.
In doing so, it also
robbed the appellate court in the competition law scheme, the
Competition Appeal Court, from dealing with
the complaint. If this is
to be allowed, it will erode the effectiveness of the competition
authorities and will aid parties involved
in prohibited practices to
avoid the scrutiny of the competition authorities. This is inimical
to the objectives of the Act.
[65]
The
external context of the abovementioned legislative provisions,
particularly section 21(1) of the Act, fortifies my view
that
the Legislature intended for the Tribunal to have an expansive,
as opposed to a restricted, scope of review over the
decisions made
by the Commission within the jurisdiction of the functions vested
with it under the Act. In this regard, it
is instructive that,
in terms of the Competition Amendment Act
[54]
(Amendment Act), which was passed seven years after the decision in
Agri
Wire
,
the Legislature saw it fit to amend section 21(1) of the Act by
adding section 21(1)(gC), and thereby expanding the
Commission’s
functions to include decisions on whether to grant or refuse
immunity.
[66]
The preamble to the Amendment Act
describes its purpose as being, amongst others, “to promote the
administrative efficiency
of the Competition Commission and
Competition Tribunal”. When this addition is considered
against the backdrop
of the decision in
Agri
Wire
, it is clear that the legislative
authorities recognised that the omission of the Commission’s
function to decide whether
to grant or refuse immunity resulted in
administrative inefficiency for both the Commission and the Tribunal.
At the instance of
the Commission, its ability to exercise its other
functions in terms of the Act was clearly hampered by the
omission. At the
instance of the Tribunal, its efficiency was
hampered due to the knock-on effect that the omission had by limiting
the scope
of its powers of review in respect of the Commission’s
functions (as evidenced in
Agri Wire
).
The
nature of the issues in Group Five’s review application
[67]
I now turn to consider the true
nature of the issues raised in Group Five’s review
application before the High Court.
Group Five framed its dispute as a
review under the rubric of PAJA, alternatively legality, contending
that the initiation of a
complaint against it, and all steps taken
pursuant thereto by the Commission, were unlawful and invalid. Group
Five contends that
these are fundamentally constitutional matters,
which fall squarely within section 62(2) of the Act.
[68]
The
Commission acknowledges that it is a public body exercising public
power. It further acknowledges that its decisions could “potentially
implicate the constitutional right to just administrative action”
and in turn “any challenge to the validity of the Commission’s
actions would implicate the Commission’s jurisdiction to take
such action”. However, the Commission cautions courts
not to
“allow competition issues to be dressed up as constitutional
issues”.
[55]
It submits
that the test should simply be whether the dispute in substance flows
from the Act or the Constitution. Where resolution
of the dispute
involves the interpretation and application of the Act, it should be
resolved firstly by the Tribunal and thereafter,
if necessary, by the
Competition Appeal Court. In relation to this matter, counsel
for the Commission contended during
oral argument that, at its
core, this claim is about the following:
a)
The exercise by the Commission of a power under the Act to refer the
complaint
and whether that power was properly exercised.
b)
The granting and/or withdrawal of immunity by the Commission and
whether the
Commission acted vexatiously in initiating and referring
the complaint to the Tribunal.
[69]
These issues, the Commission
submits, are all matters that fall under chapters 2, 3 and 5 of
the Act, and in terms of sections
27(1)(c) and 62(1)(a), the Tribunal
has exclusive jurisdiction to deal with them.
[70]
Having
regard to the original formulation of the claims, as set out in
Group Five’s founding affidavit in the High Court,
the
first claim was that the Commission “failed to properly
initiate a lawful investigation,
in
terms of the
Competition Act
”.
[56]
The second claim was that the Commission’s decisions “were
taken in breach of the undertaking and the grant of
immunity to
Group Five”. Finally, Group Five claimed that the
referral “is in any event oppressive, vexatious
and motivated
by bad faith”. In my assessment, the substantive basis for
these claims, viewed holistically, flows directly
from the Act and
the claims cannot be characterised as purely constitutional claims.
In what follows, I will deal with each claim
in turn and, thereafter,
with the claim viewed holistically.
The
flawed initiation claim
[71]
Group
Five contends that the complaint and subsequent investigation
launched was underpinned by a flawed initiation.
[57]
This is based on Group Five’s assertion that
the Commission conducted a research project before initiating
the
complaint. It argues that the Commission is not authorised to do
this, as it amounts to an investigation, which, according to Group
Five, can only be done after an initiation. At its core, this is an
issue which requires the interpretation and application of
the Act.
[72]
The
question is whether the Commission properly exercised its powers of
initiation and referral, in terms of the Act. This is not
a question
of
vires
,
it is a question of propriety. By definition,
ultra
vires
means
“beyond the power” – the phrase is used to describe
acts which “purport to be done in virtue of a
certain
authority, but which are really in
excess
of such authority, or of acts which are otherwise unauthorised
”.
[58]
In its review in the High Court, Group Five was in effect asking the
High Court to interpret
sections 49B
and
21
(1)(gC) of the Act.
This the High Court cannot do, as the exclusive jurisdiction to
conduct this interpretation, in terms of
section 62(1)
, vests in the
Tribunal and the Competition Appeal Court.
[73]
It is not necessary to further
belabour the point that the Act is clear on the powers conferred on
the Commission. In my view, the
real issue here is not one of
substance but one of procedure. I say so for the following reasons.
[74]
When the Commission referred the
complaint to the Tribunal, the Commission had initiated the
complaint. Even assuming that
the initiation was flawed (due to the
prior commissioning of a research project by the Commission, as
alleged by Group Five),
the Commission was still exercising a
power granted to it in terms of the Act. The enquiry has to do
with whether the commissioning
of a research project, before
initiating the complaint, constituted an improper exercise of power
by the Commission, having regard
to
sections 49B
and
50
of the Act.
Here, it is important to distinguish between an act which is beyond
or in excess of the legal powers of a public authority
(which would
properly be labelled as
ultra vires
),
and the irregular or informal exercise of power (which does not
amount to an act
ultra vires
).
This distinction was drawn in
RPM Bricks
where the Supreme Court of Appeal held:
“
It
is important at the outset to distinguish between two separate, often
interwoven, yet distinctly different ‘categories’
of
cases. The distinction ought to be clear enough conceptually. And
yet, as the present matter amply demonstrates, it is not always
truly
discerned. I am referring to the distinction between an act beyond or
in excess of the legal powers of a public authority
(the first
category), on the one hand, and the irregular or informal exercise of
power granted (the second category), on the other.”
[59]
[75]
This distinction is also consistent
with how this Court has interpreted
ultra vires
as meaning “going beyond the powers conferred”. In
Hugo
,
this Court stated that—
“
[i]f
the President acts in a manner inconsistent with the Constitution,
e.g. without reference to the Executive Deputy Presidents
or in
conflict with the obligation not to discriminate unfairly, he/she
both
exceeds
the relevant powers, bringing the ultra vires doctrine into play
,
and also triggers the nullification provision of section 4(1)”.
[60]
(Emphasis
added.)
[76]
Therefore, in instances where a
claim concerns the irregular or informal exercise of power granted,
as it does here, the challenge
is not a true
ultra vires
challenge. It is a challenge about alleged improper conduct. In this
case, it is also a challenge that can be squarely determined
within
the parameters of the Act and, in particular, section 49B of the
Act. The flaw in Group Five’s argument is that
it regards
lawfulness and
vires
as subsuming other forms of the exercise of the power. This cannot be
correct as the facts here show.
[77]
The issue is the manner in which the
Commission exercised its powers. It is not a matter involving a
determination of whether it
is, in the first instance, within the
jurisdiction of the Commission to exercise the power to initiate and
refer a complaint to
the Tribunal. The issue is whether the power has
been properly exercised by complying with the procedural requirements
set out
under the applicable exclusive jurisdiction provisions. This
does not relate to whether a public body has been vested with the
jurisdiction to exercise a power Both enquiries will ultimately
result in a determination of lawfulness. However, one depends on
considerations of
vires
,
whereas the other depends on considerations of compliance with the
procedural requirements set out under the applicable legislative
instrument. In this instance, the relevant consideration would be the
timing of the alleged pre initiation investigation.
[78]
The carve out in section 62(2)(a) is
limited to matters considering whether an action taken by the
Commission is within its jurisdiction
and therefore is a question of
vires
.
This does not extend the High Court’s concurrent
jurisdiction to matters of lawfulness regarding questions of whether
an action taken by the Commission constitutes a proper exercise of
power. The legislative framework under the Act has reserved
determinations of whether the Commission properly exercised its
powers for the competition authorities’ determination under
section 62(1)(a). This analysis illustrates that the initiation
and referral of the complaint by the Commission does
not involve
asking whether what it did was within its jurisdiction. We know that
what it did is within its jurisdiction.
The
grant of an immunity claim
[79]
Group Five’s second claim is
that the Commission’s decision to seek penalties against it in
the referral proceedings
flies in the face of the Commission’s
earlier decision to grant it immunity. Group Five contended in the
High Court that
the Commission’s decision to pursue penalties
is reviewable under PAJA, alternatively the doctrine of legality and
the rule
of law, on the basis that it is arbitrary and capricious,
irrational and/or unreasonable, and because the Commission was
functus officio
once it had decided to grant it immunity.
[80]
The power to grant immunity is found
in section 21 of the Act, which deals with the functions of the
Commission. Section 21(1)(gC)
provides that the Commission is
responsible to “grant or refuse applications for leniency in
terms of section 49E”.
The first issue to be determined
here is whether, in fact, immunity as prescribed in the Act, was
granted as alleged by Group
Five. Only the Tribunal has the power to
adjudicate and determine that. The issue is therefore about an
existing power, which arises
squarely under the Act, and whether that
power was in fact properly exercised by the Commission as alleged by
Group Five. The issue
cannot properly be characterised as a
vires
issue within the meaning of section 62(2)(a) as submitted by Group
Five. It involves the interpretation and application of chapter
5 of
the Act and, in terms of section 62(1)(a) of the Act, the
Tribunal and Competition Appeal Court share exclusive jurisdiction
to
determine it. The granting of immunity is a classical issue requiring
the technical expertise of the competition authorities,
which the
High Court lacks.
[81]
It is also worth mentioning that
Group Five’s claim in this regard alludes to an argument that
the Commission created a legitimate
expectation on the part of
Group Five that it would be protected against prosecution and
penalties. The subsequent refusal
of leniency and referral to the
Tribunal, despite such expectation, arguably constitutes an unfair
and thus improper exercise of
its powers.
[82]
Section 62(1)(b) of the Act
provides that the Tribunal and Competition Appeal Court share
exclusive jurisdiction in respect
of, amongst others, the functions
of the Commission referred to in section 21(1) of the Act. The Act
plainly vests the function
and concomitant power to grant or refuse
leniency with the Commission in terms of sections 21(gC) and
49E. Group Five’s
claim, in this regard, requires a
determination on the fairness of the manner in which the Commission
exercised the function
assigned to it in terms of section 21(1)(gC).
This leg of Group Five’s claim will further entail
adjudication on
the Commission’s function of granting or
refusing leniency as referred to in section 21(1)(gC). Here
again, the conduct
of the Commission, in granting or withdrawing
immunity, does not involve the question of whether what it did is
within its jurisdiction.
We know that it is.
The
vexatious referral claim
[83]
Group
Five’s third claim is that its good faith engagement and
cooperation with the Commission in relation to collusion
in the
construction industry led it to believe that it would be protected
against prosecution and penalties. In this context, while
Group Five
characterises the nature of this claim as an issue which arises under
PAJA, alternatively the doctrine of legality
and the rule of law, the
issue is in my view more accurately characterised as one that flows
directly from the Act. The power to
pursue a referral comes from
section 50(1) and the power to pursue an administrative penalty
against a party comes from section
59.
[61]
This matter is therefore also a competition matter concerning whether
the Commission exercised its powers properly in referring
the
complaint to the Tribunal. It involves the interpretation and
application of chapter 5 and, in terms of section 62(1)(a),
the
Tribunal and the Competition Appeal Court share exclusive
jurisdiction to determine the claim.
[84]
As with Group Five’s claim
regarding the alleged grant and withdrawal of immunity, this leg of
Group Five’s claim implicates
the Commission’s function
of referring a complaint to the Tribunal in terms of section
21(1)(g). It will accordingly entail
adjudication on the legality of
the exercise of this function by the Commission, based on an
interpretation and application of
sections 50(1) and 59. In terms of
section 62(1)(b), the Tribunal and Competition Appeal Court
share exclusive jurisdiction
to adjudicate on this function of the
Commission.
Holistic
assessment of Group Five’s claim
[85]
I accept that Group Five’s
review application, at first blush, may be viewed as raising a
constitutional matter. But as I
have shown, this is not so. I am
persuaded that the issues raised in Group Five’s application,
properly and holistically
construed, are in essence competition law
issues that involve the interpretation and application of chapters 2,
3 and 5. The
exercise, by the Commission, of functions and powers in
these chapters is specifically subject to the review power of the
Tribunal
in terms of section 27(1)(c). The issue is whether
the Commission properly exercised those powers in terms of the
Act.
As the Supreme Court of Appeal said in
Rustenburg
Platinum Mines
—
“
[i]n
a review, the question is not whether the decision is capable of
being justified . . . but whether the decision
maker
properly exercised the powers entrusted to him or her. The focus is
on the process, and on the way in which the decision
maker came to
the challenged decision.”
[62]
[86]
In
this context, and as explained in my analysis of the Supreme Court of
Appeal judgment above,
[63]
it
is inconceivable that the review power of the Tribunal over the
conduct and decisions of the Commission could be restricted
to only
the four issues mentioned in
Agri
Wire
,
with the consequence that the bulk of its conduct and decisions would
be subject to the scrutiny of the High Court, a non-specialist
Court.
No such restriction is apparent in the Act, and as I show in the
discussion of
Agri Wire
,
the approach taken there is not countenanced in the Act. It is an
approach that seeks to subjugate the competition authorities
and
stifle the proper consideration and handling of competition law
issues by the competition authorities.
[87]
The Commission also made compelling
policy-based arguments in their written submissions about the design
of the competition law
framework and how it was intended to create a
specialised hierarchy for competition regulation and adjudication. If
section 62(2)
is construed to encompass reviews like the one in
question, I am persuaded that this would undermine the intention of
the Legislature
to create a specialist competition review regime with
technically competent authorities to ensure that the Act is
efficiently and
appropriately managed and applied.
[88]
There
is merit in the view expressed in
TWK
[64]
that the source of the competition authorities’ review powers
is in sections 27(1)(c) and 37(1)(c), and not in section 62(2)
such that “the attempt to locate the source of all review of
the Commission’s actions within section 62(2) of
the Act
requires a strained interpretation of this provision”.
[65]
I agree with the expression of the correct legal position stated
there that sections 27(1)(c) and 37(1)(c), both introduced
by
way of amendment in 2000, were specifically intended to confer powers
of review on both the Tribunal and the Competition
Appeal Court
where none existed before.
[89]
The
assignment of exclusive review powers to the Competition Appeal Court
over the Tribunal in section 37(1) is the clearest indication
that
the competition authorities have exclusive jurisdiction over the
matters in the relevant chapters. This Court said in
Sidumo
[66]
that “[n]othing in section 33 of the Constitution precludes
specialised legislative regulation of administrative action.”
There, the Court was referring to the labour law arena and by parity
of reasoning, that comment finds equal application in the
competition
law arena as we find in sections 27(1)(c) and 37(1)(c) of the
Act.
[90]
In
Yara
,
a majority of this Court held that an issue concerning the power of
the Tribunal to grant or refuse an amendment in regard
to
complaints referred to it is a constitutional issue.
[67]
The first concurring judgment held that the matter concerned the
public power of the Commission and the Tribunal (a constitutional
issue), and not the substance of their expert decisions in promoting
competition.
[68]
The second
concurring judgment held that the constitutional issue relating to
the public power of the Commission is inextricably
bound to a court’s
view on the extent to which there should be deference to the
determination of economic issues by the Tribunal.
[69]
[91]
In
this matter, the constitutional issue relating to the public powers
of competition authorities is not easily separated from the
complex
competition and economic issues at play and as I suggest, should be
determined by the competition authorities. As Froneman
J noted in
Yara,
underlying
any legal determination of the powers of the Commission and the
Tribunal is some understanding of the role economics
should play in
the process.
[70]
As I see it,
this position is consistent with the overall design of section 62 of
the Act. Section 62(2) provides a process for
parties to institute
proceedings with the Competition Appeal Court as a specialist body
regarding, inter alia, the question
whether an action taken by
the Commission or Tribunal is within their jurisdiction as well as
any constitutional matter arising
in terms of the Act. This cannot be
understood to cover issues which are eminently competition law
orientated, as in this case,
and which are justiciable in terms of
the regulatory framework of the Act. Further, and in terms of
section 62(4), parties
still have the Constitutional Court at
their disposal should they disagree with the decision of the
Competition Appeal Court.
[92]
Related to this, in
Gcaba
this Court emphasised that where the
Legislature has created a specialist body or system, it is preferable
to use that system. It
held that—
“
once
a set of carefully-crafted rules and structures has been created for
the effective and speedy resolution of disputes and protection
of
rights in a particular area of law, it is preferable to use that
particular system.”
[71]
[93]
The
Supreme Court of Appeal expressed the same view in
Telkom
where
it held that “[w]here structures have been designed for the
effective and speedy resolution of particular disputes it
is
preferable to use that system”.
[72]
Bearing in mind that one of the purposes of the Act is to ensure an
expeditious resolution of disputes, various courts have now
expressed
the view that “interlocutory applications, brought on what in
the colloquial term is now called the ‘Stalingrad’
approach to jurisprudence, subverts this object of the Act”.
[73]
This view was endorsed by this Court in
Standard Bank
,
which held that a “legion of cases is not adjudicated on the
merits due to these prolonged procedural challenges”.
[74]
[94]
Consistent with this, the ability of
the competition authorities should be approached with due deference
to their expertise. As
Davis J noted in
TWK
:
“
In
addition, consideration would have to be given to the particular
expertise of the Commission in competition matters of this nature.
It
is here that the principle of deference to the expertise of the
Tribunal or the Commission would apply.”
[75]
[95]
Over
and above the importance of showing deference to the expertise of the
competition authorities, there is one final reason why
this matter
should in the first instance be heard by the Tribunal: it is because,
in terms of the principle of subsidiarity, where
legislation has been
enacted to give effect to a right, a litigant should first rely on
that legislation enacted to give effect
to the constitutional right
before directly invoking the constitutional right.
[76]
Therefore, it was appropriate in the circumstances to rely on the
processes and institutions provided in the Act, rather than PAJA
and
the principle of legality in the High Court, which does not have the
expertise to resolve competition law issues.
Conclusion
[96]
Group Five based its review
application on PAJA and the principle of legality. The labelling of
the review as a PAJA or legality
review was Group Five’s
choice. This is a choice that takes advantage of the legislative
arrangement of the Act,
section 62(2)(a) to be precise. It
is the carve out in that section that allows the High Court
entry into the competition
law arena to resolve a non-competition law
issue. As has been shown, the issues raised by Group Five are mired
in competition law
and require the attention of the competition
authorities in the interpretation and application of the Act. These
are issues that
fall outside the section 62(2) carve out.
[97]
Group Five says that the
Tribunal is not mentioned in PAJA, meaning it has no competence to
deal with the mischief it seeks
to be reviewed and set aside. But is
the issue at stake not a competition law matter? It clearly is –
it is underpinned by
a complaint regarding Group Five’s
involvement in prohibited practices, and concerns whether subsequent
conduct of the Commission
– in its initiation and referral of
the complaint – was proper.
[98]
The underlying premise of the Supreme Court of Appeal’s
reasoning regarding the ambit of
section 62(1)(a) and section
62(2)(a) was in my view incorrect. This approach also misses the
correct context of the adjudicative
and review powers of the
Tribunal.
[99]
Group Five’s review simply took the appearance of a PAJA and
legality review because Group
Five gave it that look. Is this not a
classic case of emphasising form over substance? Such labelling has
the unfortunate consequence
of side lining the competition
authorities from considering the complaint. Does this accord with the
scheme and objective
of the Act? I think not. I would understand any
justification and entitlement on Group Five’s part to seek
refuge in PAJA
and legality if there was truly no review competence
in the Tribunal. However, it is clear that in terms of
sections 27(1)(c)
and 62(1) of the Act, the Tribunal is fully
clothed with jurisdiction. Is such review power incapable to enable
the Tribunal to
consider and deal with the issues Group Five has
raised against the complaint referred to the Tribunal? It is
eminently capable.
Allowing companies implicated in complaints of
complicity in prohibited practices to avoid answering to their
conduct through a
constitutionally ordained specialist legislative
regime is inimical to the objectives of the Act.
[100]
Accordingly, and for the reasons
above, my view is that, in the present matter, the review clearly
relates to the interpretation
and application of chapters 2 and
5 and does not fall within the carve out mentioned in section 62(2).
Therefore, in
terms of section 62(1), it is a matter over which
the Tribunal and the Competition Appeal Court share
exclusive
jurisdiction.
[101]
This must lead to the conclusion
that the High Court and Supreme Court of Appeal erred in dismissing
the Commission’s jurisdictional
challenge of the High Court
and their orders must be set aside. The consequence of this
conclusion is that the Tribunal should
continue adjudicating the
complaint referred to it by the Commission. Had I commanded the
majority, I would have granted leave
to appeal and upheld the appeal.
MAJIEDT J
(Kollapen J, Madlanga J, Mathopo J, Mhlantla J, Theron J, Tshiqi J
and Unterhalter AJ concurring):
Introduction
[102]
I have had the pleasure of reading the judgment of my Brother Mlambo
AJ. I agree with his conclusions that this
matter engages this
Court’s jurisdiction for the reasons eruditely and persuasively
outlined by him, and that it is in the
interests of justice that
leave to appeal be granted. In respect of jurisdiction, I would
merely add this Court’s judgment
in
Media
24
[77]
to the case law relied upon by Mlambo AJ. Over and above the cogent
reasons advanced by my Brother as to why it is in the
interests
of justice for this Court to hear this matter, I briefly add the
following.
[103]
Group
Five contends that the legal question before us is one which has
already been considered by this Court in decisions which
reject the
idea that the Tribunal has exclusive jurisdiction over this type
of review application. For that submission, Group Five
relies on
Mondi
[78]
and
Agri
Wire.
[79]
That contention is fallacious. The type of conduct of the Commission
said to be reviewable and liable to be set aside is different
from
that in both
Mondi
and
Agri
Wire
.
The issues in
Mondi
primarily concerned the disclosure of certain information and the
applicability of rule 53 of the Uniform Rules of Court to
those
proceedings.
[80]
They are far
removed from the issues in the instant matter. The fact that
this Court in
Mondi
dismissed an application for leave to appeal directly to it is not,
as Group Five appears to suggest, dispositive of the public
interest, prospects of success and interests of justice
considerations which form part of the enquiry into leave to appeal.
That
is so, not only because
Mondi
is distinguishable, but also due to the subsequent amendment to the
Act
[81]
and the case law which
has followed
Mondi
.
[82]
[104]
In
Agri
Wire
,
the question was whether the High Court has jurisdiction to
decide whether the Act permits the Commission to refer a complaint
to
the Tribunal in respect of cartel behaviour without citing and
seeking relief against all the members of the cartel.
[83]
For reasons relating to the type of conduct complained of and the
content of the referral, the Supreme Court of Appeal held that
the
jurisdiction of the High Court is not ousted.
[84]
As I will show later,
Agri Wire
does find application in this case, but not on this particular point.
Thus, both
Mondi
and
Agri Wire
do not have the effect that the High Court has jurisdiction to
adjudicate review applications relating to the decisions of
the
Commission
generally
,
as each case is to be decided on its own merits.
[105]
In respect of the merits, I part ways with my Brother. In my
view, the grounds upon which Group Five seeks to review the decision
of the Commission plainly relate to the validity and lawfulness
of the initiation and subsequent referral to the Tribunal.
In
short, as amplified below, these are questions of
vires
or
legality, issues which quintessentially fall within the ambit of the
jurisdiction of the superior courts. I disagree that
these are
matters that fall within the exclusive jurisdiction of the Tribunal.
[106]
I gratefully adopt my Brother’s comprehensive exposition
of the factual backdrop, litigation history and the relevant
legislative
provisions. Where necessary, I expand or repeat some of
them for context or emphasis. It is important to remind ourselves of
the
central question in this case: w
hether the
High Court is clothed with jurisdiction to decide the review
that Group Five has brought under PAJA, alternatively
under the
doctrine of legality. The decisions sought to be reviewed are these:
the initiation of a complaint against Group Five
by the Commission in
which Group Five sought declaratory relief, and the referral of
the complaint by the Commission
to the Tribunal. In
essence,
Group Five’s review is a challenge to the
jurisdiction of the Commission to act in the manner that it did
and, accordingly,
the jurisdiction of the Tribunal to adjudicate
the complaint referral. As stated, these are matters concerning
powers and
legality that usually fall within the jurisdiction of
superior courts.
Merits
Pleadings
[107]
I start with the pleadings. It is important to have a proper
understanding of Group Five’s challenge on the pleadings.
It raised three broad grounds of review. First, it contended that the
initiation of the referral complaint was unlawful. Plainly,
this is a
challenge to the Commission’s jurisdiction, on the basis that
the Commission’s conduct was
ultra vires
its powers and
offended against the principle of legality. Second, Group Five
averred that it was unlawful for the Commission
to bring a
complaint referral in terms of which it sought an administrative
penalty against it after it had been granted immunity.
Third,
Group Five contended that the referral was vexatious, oppressive
and taken in bad faith.
[108]
According to Group Five, both the complaint and the referral
were liable to be set aside in terms of PAJA or, alternatively, under
the doctrine of legality, because it concerned the unlawful conduct
of the Commission in referring the complaint to the Tribunal
in
the first place. That review challenge must be distinguished from the
merits of the allegations raised in the complaint referral
against
Group Five. The merits of the matter must be heard by the competition
authorities – namely the Tribunal and the Competition
Appeal
Court – in the event that the review challenge were to fail.
Group Five concedes this.
Jurisdiction of the High
Court
[109]
The
statement in the first judgment that “
lawfulness
is not to be conflated with
ultra
vires . . .
[t]he
question of
ultra
vires
is
a subset of lawfulness – they are not synonymous”,
[85]
requires some qualification. An
enquiry
into the lawful exercise of power – a
vires
enquiry – asks whether the action is lawful (
intra
vires
)
or unlawful. The distinction, also vigorously advanced by the
Commission during oral argument, has no merit in the context of
the
issue before us. Where a power in an Act exists but is exercised
improperly or unlawfully or is exceeded, this is an
ultra
vires
challenge.
[86]
This understanding of
ultra vires
was accepted by the Supreme Court of Appeal in its judgment. The
Supreme Court of Appeal held that:
“
[The] question
whether the referral by the Commission is valid or unlawful, or
whether the Commission acted beyond the scope of
the Act and
accordingly
ultra vires
the powers conferred on it, is a jurisdictional question which falls
within the purview of section 62(2)(a) as stated in
Agri
Wire.
”
[87]
[110]
It
is important to recognise that
the
term
ultra
vires
has been historically used in two senses, one broad and one narrow.
In the latter,
ultra
vires
is a subset of lawfulness and, in the broad sense, the term is
synonymous with lawfulness.
[88]
In the present instance, the term
ultra
vires
is used in the broader sense.
[111]
In administrative law, legality challenges to a decision may
take different forms. Thus, there may be (a) a challenge that the
decision
falls outside the powers of the administrator and (b) a
challenge where the administrator acts within its power but in doing
so
has acted irrationally, unreasonably or unfairly. They are
different challenges as to legality. The question before us is
whether
the statutory language of section 62(2)(a) of the Act,
particularly the phrase “within their respective
jurisdictions”,
warrants a narrow or broad interpretation. That
is a separate question. On a narrow interpretation one would say that
jurisdiction
goes to the strict question of whether the Commission or
the Tribunal have acted within their power. A wider
interpretation
would entail simply saying that an unlawful action by
the Commission or the Tribunal is one outside their jurisdiction. My
approach
is the latter. But even on the narrower construction, the
question of lawful administrative action would fall under “any
constitutional matter” in section 62(2)(b).
[112]
In
its founding affidavit in this Court, the Commission straddles two
chairs. On the one hand, it says that, on the merits, the
question
whether the Commission has acted within its powers or exceeded
them, does not raise a constitutional issue. Elsewhere
in that same
affidavit, however, the Commission contends, in respect of this
Court’s jurisdiction to entertain this
matter, that the matter
“is plainly within the jurisdiction of this Court [and that] it
is squarely a constitutional matter”.
[89]
These are irreconcilable positions to adopt.
[113]
The central question is whether, since
initiation and referral are decisions of the Commission, a
review would lie to the Tribunal
and thereafter to the Competition
Appeal Court, as the Commission contends or whether, as
contended by Group Five, it
may challenge the Commission’s
decisions by approaching the High Court. This jurisdictional
question is to be answered,
in the first place, by an interpretation
of the relevant provisions of the Act. Some of these provisions were
before the Supreme
Court of Appeal in
Agri
Wire,
followed by that Court in this
matter. The key legislative provision is section 62 of the Act.
What bears consideration is:
to what extent does section 62
oust the High Court’s jurisdiction, in favour of the
Tribunal, to review decisions
of the Commission. The appropriate
approach, as I see it, is that the Commission’s decisions
may be reviewed by
the High Court in terms of PAJA or the
principle of legality, unless the Act expressly, or by necessary
implication, ousts
both these two pathways to review or the
High Court’s jurisdiction to hear the review.
[114]
The Commission seems to me to start the enquiry into the
ouster of jurisdiction envisaged in section 62 from the wrong
premise.
It asks to what extent the Tribunal’s exclusive
jurisdiction is ousted. The correct question to ask is: to what
extent
is the High Court’s original jurisdiction ousted by
giving the Tribunal and the Competition Appeal Court exclusive
jurisdiction?
That question must be answered with regard to the
provisions of PAJA. This is because, as will be explicated more fully
later,
the High Court has jurisdiction over all reviews arising
from the Commission’s exercise of its powers and, in
particular,
reviews brought in terms of PAJA, save for the limited
extent that section 62(1) grants the Tribunal and the Competition
Appeal
Court exclusive jurisdiction.
[115]
A
useful place to start this discussion on jurisdiction is the
constitutional provisions that establish the courts’ judicial
authority as outlined in Chapter 8. Section 166(c) of the
Constitution establishes the High Court.
[90]
Section 169 sets out the powers of the High Court.
[91]
Section 169 is couched in wide terms – it affords original
jurisdiction to the High Court to resolve any dispute that
is
capable of being resolved by resort to law, unless that jurisdiction
has been assigned to another court. It is well established
that
ouster of the High Court’s jurisdiction must be in
unambiguous terms and there is a strong presumption against
it.
[92]
Ouster must be either expressly excluded or must appear by necessary
implication from the statute’s provisions, and then
only to the
limited extent of that necessary implication. That is a high
threshold for ouster.
[93]
In
Metcash
,
in deciding whether section 36(1) and subsections (2)(a)
and (5) of section 40 of the Value Added Tax
Act
89 of 1991 ousted the jurisdiction of the High Court, this Court
stated:
“
[T]here is nothing
in section 36 to suggest that the inherent jurisdiction of a
High Court to grant appropriate other or ancillary
relief is
excluded.
The
section does not say so expressly nor is such an ouster necessarily
implicit in its terms, while it is trite that there is a
strong
presumption against such an implication.
”
[94]
(Emphasis added.)
[116]
Section 62 of the Act is at the heart of the issues in this
case. The interplay between sections 62(1) and (2) is crucial in the
determination of this matter. The jurisdiction of the Competition
Appeal Court, that is neither exclusive nor final, includes
jurisdiction over the matters set out in section 62(2)(a). Those
concern whether actions of the Commission and Tribunal are
ultra
vires.
It is true that to decide what is outside the scope of a
power, the scope of the power must first be determined, and that
determination
is not entirely separate from some of the
interpretational issues that arise under section 62(1). But this
does not mean that
questions that arise under section 62(2)(a)
are the same as those under section 62(1).
[117]
The approach to statutory interpretation is well established:
“
A fundamental
tenet of statutory interpretation is that the words in a statute must
be given their ordinary grammatical meaning,
unless to do so would
result in an absurdity. There are three important interrelated riders
to this general principle, namely:
(a)
that statutory provisions should always be interpreted purposively;
(b)
the relevant statutory provision must be properly contextualised; and
(c)
all statutes must be construed consistently with the Constitution,
that is, where reasonably possible,
legislative provisions ought to
be interpreted to preserve their constitutional validity. This
proviso to the general principle
is closely related to the purposive
approach referred to in (a).”
[95]
[118]
Properly considered in its context and purpose, the
meaning of the Act’s unequivocal wording is plain, matters
that fall
within section 62(1) fall within the
exclusive
competence of the Tribunal and the Competition Appeal Court
. But
matters that fall within the scope of section 62(2)
fall within
the jurisdiction of the Competition Appeal Court and not the
Tribunal
. Additionally, the jurisdiction of the Competition
Appeal Court in respect of matters that fall within section 62(2),
is neither
final nor exclusive – that much is clear from
section 62(3)(b). Section 62(1) simply means that
where
the Tribunal or the Competition Appeal Court has appellate
jurisdiction it is exclusive, albeit not final in the case of the
Tribunal. This recognises that an appeal from a decision of the
Commission lies exclusively to the Tribunal and, in turn,
an
appeal from a decision of the Tribunal lies exclusively to the
Competition Appeal Court. Thus understood, the Tribunal and the
Competition Appeal Court do not share jurisdiction in a literal
sense, and they enjoy appellate jurisdiction depending on the
decision made and the right of appeal (or review, limited in nature
insofar as the Tribunal is concerned). This does not afford
plenary review jurisdiction to the Tribunal – that must be
sought elsewhere in the Act.
[119]
Section 62(1)(b) of the Act makes
reference to
section 27(1) of the Act:
“
(1)
The Competition Tribunal and Competition Appeal Court share exclusive
jurisdiction in respect of the following
matters:
. . .
(b)
t
he functions referred to in sections 21(1), 27(1)
and 37,
other than a question or matter
referred to in subsection (2)
.”
(Emphasis added.)
[120]
Section
27(1)(c) recognises the power of the Tribunal to hear appeals and
reviews in respect of any decision of the Commission that
may be
referred to it in terms of the Act. Thus, the appeal and review
jurisdiction of the Tribunal is limited in terms of
the powers
conferred upon it in the Act. Those powers are to “hear appeals
from, or review any decision of, the Competition
Commission that may
in terms of this Act be referred to it”.
[96]
[121]
An
important consideration is section 169 of the Constitution read with
sections 62(2) and (3) of the Act. Section 169(1)(a)(ii)
makes
plain that the High Court does not have jurisdiction over
constitutional matters that fall within the statutorily assigned
purview of specialised forums with similar status. It is
well established that review applications, whether brought under
PAJA or the principle of legality, are constitutional matters.
[97]
Taking section 169(2)(a)(ii) into account, it would appear that
review applications that are within the realm of competition
law fall
within the jurisdictional bounds of specialised competition fora with
High Court status. In the present instance,
this is the
Competition Appeal Court. However, this is not always the case.
[122]
The word “assign” in section 169(1)(a)(ii) could
be construed as referring to exclusivity. Thus, by necessary
implication,
if a constitutional matter has not been placed in the
exclusive domain of a specialised forum, being the Competition Appeal
Court,
the High Court’s jurisdiction is not ousted. That
is where section 62(2) and (3) feature. Section 62(2)(a)
provides that the Competition Appeal Court has jurisdiction over “the
question whether an action taken or proposed to be
taken by the
Competition Commission or the Competition Tribunal is within their
respective jurisdictions in terms of this Act”,
whereas section
62(3)(b) qualifies that this jurisdiction “is neither exclusive
nor final”. Those sections cannot,
in my view, mean anything
other than that a litigant seeking to bring a review application in
competition law can do so in either
the Competition Appeal Court or
the High Court. No assignment of exclusive or final jurisdiction to
the Competition Appeal Court
can conceivably be read into these plain
and unambiguous words contained in section 62(3)(b).
[123]
It
is plain that close regard to the structure of section 62 of the Act
is required, including the interaction between section 62(1)
and (2).
Section 62(1) delineates the scope of matters that fall within
the exclusive jurisdiction of the competition authorities.
I have
pointed out the limitation of its scope. Section 62 contains a
carve-out of certain matters from the competition authorities’
exclusive jurisdiction. The section specifically and expressly does
not extend the exclusive jurisdiction to “a question
or matter
referred to in subsection (2)”. It states that the exclusive
jurisdiction is conferred “
other than
”
[98]
in respect of a question or matter referred to in subsection (2).
That aspect of non exclusivity is made repeatedly in
section 62(1)(a)(i), section 62(1)(b) and in section 62(3)(b).
If jurisdiction is not exclusive over matters falling
under
section 62(2), some other court, forum or entity must have
concurrent jurisdiction. Considering section 169 of
the
Constitution, that can only be the High Court. It bears emphasis
that the words in section 62(1)(a)(i), “
other
than—(i) a question or matter referred to in
subsection (2)
”
[99]
cannot be ignored, particularly where they appear repeatedly in the
section. And yet, that is precisely what the Commission seeks
to do
in its interpretation of the section. That is also the fatal
shortcoming in the first judgment.
[124]
The question before us is whether the Commission or Tribunal
acted outside of their powers, that is a review over which there is
concurrent jurisdiction enjoyed by the Competition Appeal Court
and the High Court. It may be that to determine such a question,
some
common ground is covered, but that does not change the jurisdictional
dividing line. Thus, the ambit of the powers conferred
in Chapter 5
of the Act may well be something that bears consideration by
the Tribunal in order to assess whether it does
have the
requisite jurisdiction in respect of a matter referred to it. Where
it does so, however, the view that it takes is not
exclusive. Its
conclusion is still subject to review by either the Competition
Appeal Court or the High Court.
[125]
The dividing line between section 62(1) and (2) is to
permit the Tribunal and the Competition Appeal Court to
carry
out their functions with exclusive competence to do so. But
where the issue raised is not decided simply by the exercise of
acknowledged
power by the Commission or Tribunal, and their
special expertise, but rather whether either body has such power at
all, then
the Competition Appeal Court’s jurisdiction is
neither exclusive nor final. Furthermore, the Competition Appeal
Court’s
non exclusive jurisdiction may extend beyond a
strict
ultra vires
challenge. This legislative design is
sensible because it is a court that must enjoy supervisory
jurisdiction over whether the
Tribunal has acted within its powers.
The Tribunal cannot itself decide that matter. In its wisdom,
Parliament decided that questions
of that kind may be decided by the
Competition Appeal Court and/or the High Court. The Tribunal
cannot be characterised
as a court, because its actions are subject
to review. The specialist nature of the Tribunal and the Competition
Appeal Court is
important for the purposes of substantive analysis
and decision making, but that is not engaged in the same way when the
question
is one of the lawful exercise of power. That is true
generally in reviews concerning
ultra vires
issues. For
example, superior courts, like the High Court, the Supreme
Court of Appeal and this Court do not require
special expertise to
decide questions of
vires
in diverse fields like
telecommunications, information technology and fishing, to mention a
few.
[126]
Even
if, as the first judgment points out,
[100]
the
concept
of a “constitutional matter” in section 62(2)(b) of
the Act is to be afforded a narrow meaning as the Supreme
Court of
Appeal held in
Computicket
,
[101]
the position remains unchanged.
Review
applications in terms of PAJA can be entertained by the High Court
as it retains its review powers by virtue of its
constitutional
status and powers. Those same review powers are enjoyed by the
Competition Appeal Court by virtue of section 62(2)
of the Act,
and confirmed by PAJA, as a court of similar status to that of the
High Court. The same is not true for the Tribunal.
[127]
That brings me to a further flaw in the interpretation of
section 62 by the first judgment, namely its failure to
recognise
that section 62(2)(a) to (c) expressly confers jurisdiction
over the questions and matters referred to in that subsection
on
the Competition Appeal Court
and
not on the
Tribunal
.
Nowhere in the Act is there any conferral on the Tribunal of
jurisdiction to deal with any of the matters in section 62(2),
and deliberately so. The Commission’s contentions to that
effect are misconceived. And I respectfully disagree with
the first
judgment’s reasoning and conclusion on this score. It is trite
that the Tribunal, created in terms of section
26 of the Act,
can exercise no powers other than those contained within the four
corners of the Act.
[128]
This
trite proposition is borne out by the decision of the Competition
Appeal Court in
Johnnic
.
[102]
The case concerned a PAJA review application of the Commission’s
decision to reject the divestiture proposal of merger
parties
(Johnnic Holdings Investment Limited and Mercanto Investments
(Proprietary) Limited) in a large merger. That
merger was approved by
the Commission subject to a divestiture condition and, when the
parties were unable to fulfil that condition,
they submitted a
divestiture proposal to the Commission for approval. The primary
grounds of the review challenge were that
the Commission’s
decision was contrary to legality, rationality and was procedurally
unfair.
[129]
The Competition Appeal Court recognised that both it and the
High Court were clothed with the requisite jurisdiction to hear
review applications in terms of PAJA:
“
Section 6 of PAJA
provides that an aggrieved party ‘may institute proceedings in
a court or a tribunal for the judicial review
of an administrative
action’. The words ‘court’ and ‘tribunal’
are both defined in PAJA.
Neither
definition includes the Competition Tribunal
.
The definition of ‘court’ includes ‘a High Court or
another court of similar status’. As stated hereinbefore,
this
Court is of similar status as a High Court.
It
therefore follows that this Court, and not the Tribunal, is cloaked
with the requisite jurisdiction.
”
[103]
(Emphasis added.)
[130]
In
Johnnic
,
the Competition Appeal Court explicated upon and distinguished its
earlier decision in
TWK
.
[104]
It pointed out that
TWK
concerned
an application for review of the Commission’s decision relating
to merger proceedings – “
a
purely competition issue
”
[105]
– whereas in
Johnnic
,
the application for review was based on constitutional grounds, and
accordingly, the Tribunal did not have jurisdiction to hear
such an
application for review.
[106]
In any event, in
Agri
Wire
,
the Supreme Court of Appeal pointed out the fallacy of the reasoning
in
TWK
.
[107]
The Commission’s reliance on
Johnnic
and
TWK
for its
contention that the Tribunal has jurisdiction to review
decisions of the Commission under PAJA or the principle of
legality
does not bear scrutiny. And the first judgment’s implicit
approval of
TWK
that “
sections
27(1)(c) and 37(1)(c), both introduced by way of amendment in 2000,
were specifically intended to confer powers of review
on
both
the Tribunal and the Competition Appeal Court
where none existed before”,
[108]
is with respect also misconceived.
[131]
A final nail in the coffin, in respect of the argument that
the Tribunal has powers to review the lawful exercise of power, is
the
definitions of “tribunal” and “court” in
PAJA. Section 6(1) of PAJA limits a party’s rights to
“institute
proceedings in a court or a tribunal for the
judicial review of an administrative action”. Section 1 of
PAJA, defines “tribunal”
as “any independent and
impartial tribunal established by national legislation for the
purpose of judicially reviewing an
administrative action in terms of
[PAJA]”. This definition plainly excludes a statutory body like
the Tribunal. Section 1
of PAJA then defines “court”
as follows:
“‘
court’
means—
(a)
the Constitutional Court acting in terms of section 167(6)(a) of
the Constitution; or
(b)
(i) a High Court or
another court of similar status;
or
(ii)
a Magistrate’s Court for any district or for any regional
division established
by the Minister for the purposes of adjudicating
civil disputes in terms of
section 2
of the
Magistrates’
Courts Act No. 32 of 1944
, either generally or in
respect of a specified class of administrative actions, designated by
the Minister by notice in the Gazette
and presided over by a
magistrate, an additional magistrate or a magistrate of a regional
division established for the purposes
of adjudicating civil disputes,
as the case may be, designated in terms of
section 9A
, within
whose area of jurisdiction the administrative action occurred or the
administrator has his or her or its principal place
of administration
or the party whose rights have been affected is domiciled or
ordinarily resident or the adverse effect of the
administrative
action was, is or will be experienced.”
[132]
For
all these reasons, the Tribunal does not have jurisdiction to
adjudicate a PAJA or legality review. Unlike the Tribunal, the
Competition Appeal Court, which has “a status similar to that
of the High Court”,
[109]
does have jurisdiction to hear PAJA and legality reviews in terms of
two provisions of the Act. First, the Competition Appeal Court
is
expressly empowered to review any decision of the Tribunal
[110]
– this power is limited to decisions of the Tribunal and does
not include decisions of the Commission. Second, in addition
to
any other jurisdiction granted in the Act, it has jurisdiction over
constitutional matters arising in terms of the Act.
[111]
That includes the power to review the exercise of the Commission’s
public powers derived from the Act. And, as stated,
in terms of
section 62(2)(a) of the Act, the Competition Appeal Court is
also clothed with additional, concurrent jurisdiction
over the “the
question whether an action taken or proposed to be taken by the
Competition Commission . . . is within [its]
. . . jurisdiction . . .
in terms of this Act”.
[133]
Next, I consider the decisions of the Supreme Court of Appeal
in
Agri Wire
and in this matter.
Agri Wire
bears
relevance to the issues in the instant matter.
Agri Wire
concerned whether the Corporate Leniency Policy (CLP) is lawful; and
whether the Act permits the Commission to refer a complaint
to
the Tribunal in respect of cartel behaviour without seeking relief
against all members of the cartel. It also concerned a comparable
issue, the lawfulness of the Commission’s initiation of a
complaint. In my view, this is a constitutional matter. This, as
in
Agri Wire
, is an issue that falls within
section 62(2)(a), and, in terms of section 62(3)(b), the
competition authorities do not
have exclusive jurisdiction over it.
[134]
In that matter, the Commission and Consolidated Wire
Industries (Pty) Ltd, the third respondent and a
“whistle-blower”
that was granted immunity in terms of
the CLP, both challenged the jurisdiction of the High Court. The
Commission relied on section 62
of the Act to argue that
appellate and review jurisdiction vests exclusively in the Tribunal.
The Supreme Court of Appeal
enumerated the decisions of
the Commission that may give rise to a review by the Tribunal:
section 10(2), under
which the Commission grants exemptions;
section 13(5)(b), the approval or prohibition of small mergers;
section 14(1)(b),
the approval or prohibition of intermediate
mergers; and section 15, the revocation of merger approval. The
list is limited
under the Act and does not include the question
as to whether the Commission has acted within its powers to initiate
or refer
a complaint. The Supreme Court of Appeal made short shrift
of the Commission’s reliance on section 62:
“
While there would
be no difficulty in recognising an exclusive jurisdiction vested in
the Tribunal and the Competition Appeal
Court if section
27(1)(c) is confined to the situations referred to in paragraph 13,
supra,
it
becomes problematic when it is extended to a challenge to the
validity of a referral, because that is a question whether the
referral is an action within the jurisdiction of the Commission.
Unlawful actions are not within its jurisdiction and an unlawful
referral would accordingly not be within its jurisdiction. But,
whether an act by the Commission is within its jurisdiction is
a
matter within section 62(2)(a) of the Act and is therefore not within
the exclusive jurisdiction conferred by section 62(1)(b)
of the
Act.
”
[112]
(Emphasis added.)
[135]
The
Commission argued in
Agri
Wire,
as
it does in this matter, that the Tribunal had exclusive
jurisdiction based on section 62(1)(a), which states that “the
Competition Tribunal and the Competition Appeal Court share exclusive
jurisdiction in respect of the . . . interpretation and application
of Chapters 2, 3 and 5”. The Supreme Court of Appeal pointed
out that Agri Wire’s objections were advanced on the basis
that
the Commission’s powers are set out in Chapter 4 of the
Act and, properly construed, those provisions do not permit
the
Commission to adopt the CLP in its present form.
[113]
Naturally, as the complaint deals with Chapter 4, and not “Chapters
2, 3 and 5”, it does not fall within section 62(1)(a)
and no
exclusive jurisdiction therefore exists.
[136]
Regarding
the Commission’s argument in this matter that the High Court
should defer to the Tribunal and allow the challenge
to be dealt with
by that body, the Supreme Court of Appeal declared that “our
courts are not entitled to decline to hear
cases properly brought
before them in the exercise of their jurisdiction”. For these
reasons, the Supreme Court of Appeal
held that “the challenge
to the High Court’s jurisdiction was misconceived and should
have been rejected”.
[114]
Next for consideration is the Supreme Court of Appeal’s
unanimous judgment in this case.
[137]
The
Supreme Court of Appeal invoked this Court’s judgment in
Baloyi
[115]
in fortification of its conclusions that—
“
t
he
issues raised on review by Group Five are not of a specialist nature
which s 62(1) exclusively reserves for the Competition Appeal
Court
and the Tribunal. They do not pertain to the interpretation of issues
in Chapters 2, 3 and 5 of the Act which are pending
before the
Tribunal. Instead, they relate to questions of legality concerning
the validity and lawfulness of the initiation and
the referral of the
complaint. . . . In the circumstances, the High Court was
correct in its finding that the challenge of
jurisdiction had no
merit.
”
[116]
[138]
The
Supreme Court of Appeal drew parallels between the labour law and
competition law frameworks, noting that in both respects,
although
specialised courts and forums have been established in terms of the
respective legislation, that does not automatically
oust the
jurisdiction of the High Court.
[117]
Its reasoning in this regard cannot be faulted. In drawing these
parallels, the Supreme Court of Appeal pointed out that, similar
to
the Labour Court and Labour Appeal Court, the Tribunal and the
Competition Appeal Court are designed to adjudicate on matters
concerning competition law and the interpretation and application of
the Act. The Supreme Court of Appeal explained that in certain
circumstances, the Tribunal and the Competition Appeal Court would be
vested with exclusive jurisdiction, as set out in section
62(1),
because matters that fall within Chapters 2, 3 and 5 of the Act
(where the Tribunal and the Competition Appeal Court enjoy
exclusive
jurisdiction) are purely competition law related matters that require
the expertise of special tribunals. The Court,
however, noted that
this is not one of those matters.
[139]
The grounds upon which Group Five seeks to review the decision
of the Commission relate to the validity and lawfulness of the
initiation
and subsequent referral, of the complaint to the Tribunal.
These are questions of
vires
or legality, issues which
typically fall within the ambit of the jurisdiction of the superior
courts. Thus, although they arise
out of a complaint referred and
initiated under the Act, the issues on review are not pure
competition law matters – that
is, matters that, according to
the Act, fall within the exclusive competence of the Tribunal
and the Competition Appeal Court.
[140]
The judgment of the Supreme Court of Appeal is unassailable.
It correctly drew parallels between the labour law and competition
law frameworks. It noted that in both frameworks, although
specialised courts and forums have been established in terms of the
respective legislation, that does not automatically oust the
jurisdiction of the High Court.
[141]
Before
us, the Commission also relies on section 27(1)(c).
[118]
The first judgment appears to be attracted by that argument. But
section 27(1)(c) does not confer a power on the Tribunal
to
review decisions of the Commission in terms of PAJA or the legality
principle. Section 27 generally sets out the functions of
the Tribunal. Section 27(1)(c) must be viewed in this
context. It does not expressly confer a right nor a remedy on a
litigant. That must clearly be found elsewhere in the Act, hence the
deliberate use of the words “may, in terms of this Act,
be
referred to it”. Notably, the section refers to “appeal”,
as well as “review”. The Commission
does not contend, nor
could it, that section 27(1)(c) confers a general
appeal
power
on the Tribunal to hear appeals against any decision of the
Commission. Thus, we must have regard to other provisions
of the Act
to determine the circumstances in which a decision of the Commission
may be referred to the Tribunal for reconsideration,
either by way of
an appeal or a review. The answer plainly does not lie within the
provisions of section 27(1)(c).
[142]
The Act delineates instances of appeal and review that lie to
the Tribunal. These are:
(a)
Appeals—
(i)
section 10(8): exemptions granted by the Commission;
[119]
(ii)
section 43B(3A)(d): a determination by the Commission of the
confidentiality of information received
relating to a market inquiry
conducted by it;
[120]
(iii)
sections 43F(1), (2) and (6): appeals against decisions of the
Commission made under that Chapter
of the Act;
[121]
and
(iv)
section 58(1)(a): orders made by the Tribunal.
[122]
(b)
Reviews— section 44(5) and (6): the Commission’s
determination of confidential information
submitted to it.
[123]
[143]
The Supreme Court of Appeal was correct in
Agri Wire
in respect of the effect of that section:
“
Its language
refers to appeals against and reviews of decisions by the
Competition Commission. In determining the scope of
this
provision it is best to start with those provisions of the Act that,
in terms, provide for the Commission to take decisions.
These are
section 10(2), under which the Commission grants exemptions;
section 13(5)(b) dealing with the approval or
prohibition of
small mergers; section 14(1)(b) dealing with the approval or
prohibition of intermediate mergers; and section 15
dealing with
the revocation of merger approval.
In
the absence of a provision such as section 27(1)(c) any
challenge to these decisions would have to be brought before the
high
court and not the Tribunal or the Competition Appeal Court. That is
an unsatisfactory situation as it departs from the hierarchy
of
decision-making under the Act and removes matters that are
appropriate for decision by those bodies from their purview.
To make
those decisions subject to appeal to, or review by, the Tribunal is
therefore consistent with the general scheme of the
Act.”
[124]
[144]
It bears emphasis that section 27(1)(c) contemplates a limited
review that does not oust the ordinary review remedies under PAJA
and
the principle of legality. Nor is there any other provision in the
Act which ousts remedies available under PAJA or the principle
of
legality. High Courts have inherent jurisdiction, and the Tribunal
does not – it is a creature of statute,
limited in
the exercise of its powers to those afforded to it within the four
corners of the Act. Absent any express powers in
the Act to do so,
the Tribunal has no authority in law to review the lawful
exercise of public power.
[145]
The
first judgement holds that section 27(1)(c) does not limit the
Tribunal’s review powers to the four instances identified
by
the Supreme Court of Appeal in
Agri Wire
,
[125]
but rather—
“
[p]lainly
understood, ‘it’ in section 27(1)(c) refers to the
Tribunal. This simply means that the Tribunal hears
appeals (from the
Commission) or reviews any decision (of the Commission) that may, in
terms of the Act, be referred to it (the
Tribunal).”
[126]
For
the reasons above, I must respectfully disagree with the first
judgement. Section 27(1)(c) plainly does so limit the Tribunal’s
review powers.
[146]
The interpretation by the Supreme
Court of Appeal in
Agri Wire
is logical and sensible; moreover, it was
correctly reaffirmed by the Supreme Court of Appeal in the
present matter.
Conclusion
[147]
In conclusion, the central issues
here are not competition law issues, but legality or
vires
issues. They fall squarely within the carve out in section 62(2)(a)
– a question whether actions are
ultra
vires
the Commission. In this
determination one must have regard to the provisions of the Act, but
that does not change the nature of
the review, which remains one of
vires
. And
once the issue is one of
vires
,
this is a matter over which the Competition Appeal Court has
concurrent jurisdiction with the High Court, to the exclusion
of
the Tribunal.
[148]
For
these reasons, leave must be granted and the appeal ought to be
dismissed. Usually, costs are not awarded against the Commission
and
there is no reason to depart from this principle in this case.
[127]
[149]
The following order is made:
1.
Leave to appeal is granted.
2.
The appeal is dismissed.
For the
Applicant:
T Ngcukaitobi SC, K
Maputla and I Kentridge instructed by
Cheadle Thompson and Haysom Incorporated
For the
Respondent: R
Bhana SC, A Gotz SC and C Avidon instructed by
Allen and Overy
[1]
The
Competition
Tribunal and the Competition Appeal Court.
[2]
89 of 1998.
[3]
The
Competition Commission of South Africa v Group Five Construction
Limited
[2021] ZASCA 37
; 2021 JDR 0613 (SCA) (Supreme Court of Appeal
judgment).
[4]
The
Competition Commission of South Africa v Group Five Construction
Limited
,
unreported judgment of the High Court of South Africa, North
Gauteng Division, Case No 74995/17 (28 October 2018) (High Court
judgment).
[5]
Rules for the conduct of proceedings in the Competition Tribunal, GN
12
GG
22025,
1 February 2001.
[6]
Section
49B of the Act provides:
“
(1)
The Commissioner may initiate a complaint against an alleged
prohibited practice.
(2)
Any person may—
(a)
submit information concerning an alleged
prohibited practice to the Competition Commission, in any manner or
form; or
(b)
submit a complaint against an alleged
prohibited practice to the Competition Commission, in the prescribed
form.
(3)
Upon initiating or receiving a complaint in terms
of this section, the Commissioner must direct an inspector to
investigate the
complaint as quickly as practicable.”
[7]
Section
50 of the Act provides:
“
(1)
At any time after initiating a complaint, the Competition Commission
may refer the complaint
to the Competition Tribunal”.
[8]
Supreme Court of Appeal judgment above n 3 at para 7.
[9]
Rules for the conduct of proceedings in the Competition Commission
GG
22025
1 February 2001.
[10]
Rule
16(1) of the Tribunal Rules provides:
“
(1)
Within 20 business days after being served with a Complaint Referral
filed by the Commission,
a respondent who wishes to oppose the
Complaint Referral must—
(a)
serve a copy of their Answer on the
Commission; and
(b)
file the Answer with proof of service.”
[11]
3 of 2000.
[12]
The complaint had been preceded by a detailed “research
project” and Group Five submits that the Supreme Court of
Appeal, in
Woodlands
Dairy (Pty) Ltd v Competition Commission
[2010]
ZASCA 104
; 2010 (6) 108 (SCA) (
Woodlands
Dairy
),
has determined that preliminary investigations prior to the
initiation of a complaint will render the complaint unlawful.
[13]
Rule
30 of the Uniform Rules of Court states:
(1)
A party to a cause in which an irregular step has been taken by any
other party
may apply to court to set it aside.
(2)
An application in terms of subrule (1) shall be on notice to all
parties specifying
particulars of the irregularity or impropriety
alleged, and may be made only if—
(a)
the applicant has not himself taken a
further step in the cause with knowledge of the irregularity;
(b)
the applicant has, within ten days of
becoming aware of the step, by written notice afforded his opponent
an opportunity of removing
the cause of complaint within ten days;
(c)
the application is delivered within 15
days after the expiry of the second period mentioned in paragraph
(b) of subrule (2).
(3)
If at the hearing of such application the court is of opinion that
the proceeding
or step is irregular or improper it may set it aside
in whole or in part, either as against all the parties or as against
some
of them, and grant leave to amend or make any such order as to
it seems meet.
(4)
Until a party has complied with any order of court made against him
in terms of
this rule, he shall not take any further step in the
cause, save to apply for an extension of time within which to comply
with
such order.”
[14]
A second issue which the High Court considered, which is not
relevant for purposes of this appeal, was whether the rule 30
procedure adopted by the Commission was appropriate for raising its
objection to Group Five’s review application. See High
Court
judgment above n 4 at para 14. On this issue, relying on
Cochrane
v City of Johannesburg
[2010] ZAGPJHC 61;
2011 (1) SA 553
(GSJ), the High Court held that
while the Commission should have raised its objections by way of a
special plea rather than in
terms of rule 30, it could nevertheless
determine the merits of the rule 30 application. The High Court
found against the Commission
on this issue.
[15]
Section
169(1)(a)(ii) of the Constitution provides that “[t]he High
Court of South Africa may decide any constitutional
matter except a
matter that is assigned by an Act of Parliament to another court of
a status similar to the High Court of South
Africa”.
[16]
High
Court judgment above n 4
at
para 22.
[17]
Section 49B(1) of the Act provides: “The Commissioner may
initiate a complaint against an alleged prohibited practice”.
[18]
Section 50(1) of the Act provides: “At any time after
initiating a complaint, the Competition Commission may refer the
complaint to the Competition Tribunal”.
[19]
Supreme Court of Appeal
judgment
above n 3
at
para 17.
[20]
Id.
[21]
Competition
Commission of South Africa v Media 24 (Pty) Limited
[2019]
ZACC 26
;
2019 (5) SA 598
(CC);
2019 (9) BCLR 1049
(CC) (
Media
24
)
at para 136.
[22]
Supreme Court of Appeal judgment above n 3 at para 16.
[23]
Id
[24]
Supreme Court of Appeal
judgment
above n 3 at para 21. See generally section 1 of
Superior Courts Act
10 of 2013
which defines “Superior Courts” as “the
Constitutional Court, the Supreme Court of Appeal, the High Court
and any court of a status similar to the High Court”.
[25]
Agri
Wire (Pty) Ltd v Commissioner, Competition Commission
[2012] ZASCA 134
;
2013 (5) SA 484
(SCA).
[26]
Supreme Court of Appeal
judgment
above n 3 at para 22.
[27]
Id
at
para 24.
[28]
Id
at
paras 27-8.
[29]
Senwes
Ltd v Competition Commission of South Africa
[2012] ZACC 6
;
2012 (7) BCLR 667
(CC).
[30]
Competition
Commission v Yara South Africa (Pty) Limited
[2012]
ZACC 14
; 2012 JDR 1118 (CC); (2012) 9 BCLR 923 (CC).
[31]
Competition
Commission of South Africa v Pickfords Removals SA (Pty) Limited
[2020]
ZACC 14; 2021 (3) SA 1 (CC); 2020 (10) BCLR 1204 (CC).
[32]
Chirwa
v Transnet Limited
[2007]
ZACC 23
;
2008 (4) SA 367
(CC);
2008 (3) BCLR 251
(CC) at paras 155
and 169.
[33]
Gcaba v
Minister for Safety and Security
[2009] ZACC 26
;
2010 (1) SA 238
(CC);
2010 (1) BCLR 35
(CC) at
para 75.
[34]
Baloyi
v Public Protector
[2020] ZACC 27
;
2022 (3) SA 321
(CC);
2021 (2) BCLR 101
(CC) at
paras 33-6 and 49 50.
[35]
66 of 1995.
[36]
Section 27(1) of the Act provides:
“
(1)
The Competition Tribunal may—
(a)
adjudicate on any conduct prohibited in terms of Chapter 2, to
determine whether prohibited conduct has occurred, and, if so, to
impose any remedy provided for in this Act;
(b)
adjudicate on any other matter that may, in terms of this Act, be
considered by it, and make any order provided for in this Act;
(c)
hear appeals from, or review any decision of, the Competition
Commission that may in terms of this Act be referred to it; and
(d)
make any ruling or order necessary or incidental to the performance
of its functions in terms of this Act.”
(e)
[37]
Supreme Court of Appeal judgment above n 3 at para 18.
[38]
Computicket
(Pty) Ltd v Competition Commission
[2014]
ZASCA 185
;
[2015] 1 CPLR 15
(SCA) at para 15.
[39]
Id.
[40]
Independent
Institute of Education
(Pty)
Limited v Kwazulu-Natal Law Society and others
[2019]
ZACC 47;
2020 (2) SA 325
(CC);
2020 (4) BCLR 495
(CC) at para
41.
[41]
Road
Traffic Management Corporation v Waymark (Pty) Limited
[2019] ZACC 12
;
2019 (5) SA 29
(CC);
2019 (6) BCLR 749
(CC) at para
29 citing
Natal
Joint Municipal Pension Fund v Endumeni Municipality
[2012] ZASCA 13
;
2012 (4) SA 593
(SCA) at para 18. See also
Cool
Ideas 1186 CC v Hubbard
[2014]
ZACC 16
;
2014 (4) SA 474
(CC);
2014 (8) BCLR 869
(CC) (
Cool
Ideas
)
at para 28.
[42]
Independent
Institute of Education
above
n 40 at para 42.
[43]
Id citing
Department
of Land Affairs v Goedgelegen Tropical Fruits (Pty) Ltd
[2007] ZACC 12
;
2007 (6) SA 199
(CC);
2007 (10) BCLR 1027
(CC) at
para 53.
[44]
Goedgelegen
id.
[45]
Id.
[46]
Id.
[47]
Supreme Court of Appeal judgment above n 3 at para 17.
[48]
Id at para 24.
[49]
Agri
Wire
above
n 25 at para 12.
[50]
Id at para 17
.
[51]
Capitec
Bank Holdings Ltd v Coral Lagoon Investments 194 (Pty) Ltd
[2021] ZASCA 99
;
2022 (1) SA 100
(SCA) at para 25.
[52]
Endumeni
above
n 41 at para 18.
[53]
Competition
Commission of South Africa v Telkom SA Ltd
[2009]
ZASCA 155
; 2009 JDR 1265 (SCA).
[54]
18
of 2018.
[55]
See also
Fraser
v ABSA Bank Limited
[2006] ZACC 24
,
2007 (3) SA 484
(CC),
2007 (3) BCLR 219
(CC) where
this Court held at para 40 that “an issue does not become a
constitutional matter merely because an applicant
calls it one”.
[56]
Emphasis
added.
[57]
The Supreme Court of Appeal, in
Woodlands
Dairy
n
12 above held that preliminary investigations prior to the
initiation of a complaint render the complaint unlawful.
[58]
Emphasis added. See Claassen RC
Classen’s
Dictionary of Legal Words and Phrases
(LexisNexis, South Africa 2022) 25.
[59]
City of
Tshwane Metropolitan Municipality v RPM Bricks (Pty) Ltd
[2007]
ZASCA 28
;
2008 (3) SA 1
(SCA) at paras 11 and 13. See also
d’Oliveira“
Administrative
Justice” in
LAWSA
3
ed (2015) vol 2.
[60]
President
of the Republic of South Africa v Hugo
[1997]
ZACC 4
;
1997 (4) SA 1
(CC);
1997 6 BCLR 708
(CC) at para 65.
[61]
Section
59 of the Act provides:
“
(1)
The Competition Tribunal may impose an administrative penalty only—
(a)
for a prohibited practice in terms of
section 4(1), 5(1) and (2), 8(1), 8(4), 9(1) or 9(1A);
. . .
(2)
When determining an appropriate penalty, the
Competition Tribunal must consider the following factors: . . .”
[62]
Rustenburg
Platinum Mines Ltd (Rustenburg Section) v CCMA
[2006]
ZASCA 175
;
2007 (1) SA 576
(SCA); at para 31.
[63]
Id at para 53.
[64]
TWK
Agriculture Limited v Competition Commission
[2007] JOL 20764
(CAC)
.
[65]
Id at para 23.
[66]
Sidumo
v Rustenburg Platinum Mines Ltd
[2007] ZACC 22
;
2008 (2) SA 24
(CC);
2008 (2) BCLR 158
(CC) at
para
91.
[67]
Yara
above n 30 at para 34.
[68]
Id
at para 72.
[69]
Id
at para 80.
[70]
Id at para 81.
[71]
Gcaba
above
n 33 at para 56.
[72]
Telkom
above
n 53 at para 36.
[73]
Senwes
Ltd v Competition Commission of South Africa
[2010]
ZAWCHC 61
;
[2010] JOL 25499
(WCC) at 6.
[74]
Competition
Commission of South Africa v Standard Bank of South Africa Limited
[2020] ZACC 2
; 2020 JDR 0685 (CC);
2020 (4) BCLR 429
(CC) (
Standard
Bank
)
at para 129.
[75]
TWK
above
n 64 at para 32.
[76]
My Vote
Counts NPC v Speaker of the National Assembly
[2015]
ZACC 31; 2016 (1) SA 132 (CC); (2015) (12) BCLR 1407.
[77]
Media
24
above
n 21 at para 35.
[78]
Competition
Commission v Mondi Limited, Hathorn and Sappi Southern Africa
Limited
CCT 213/2014.
[79]
Agri
Wire
above n 25.
[80]
See
Mondi
above
n 78 at para 11. See also See
Mondi
Limited v Competition Commission
[2014] ZAGPPHC 910 at para 11.
[81]
The Amendment Act introduced sections 21(1)(gC) and 49E into the
Act.
[82]
Standard
Bank
above
n 74.
[83]
Agri
Wire
above n 25 at para 11.
[84]
Id at paras 12–20.
[85]
First judgment at [36].
[86]
In
Hugo
above n 60 fn 82, Kriegler J stated:
“
If
the President acts in a manner inconsistent with the Constitution,
eg without reference to the Executive Deputy Presidents
or in
conflict with the obligation not to discriminate unfairly, he/she
both exceeds the relevant powers, bringing the
ultra vires
doctrine into play, and also triggers the nullification provision of
section 4(1).”
In
Fedsure Life Assurance Ltd v Greater Johannesburg Transitional
Metropolitan Council
[1998] ZACC 17
;
1999 (1) SA 374
(CC);
1998
(12) BCLR 1458
(CC) at para 54, this Court held that “where a
local government acts
ultra vires
its empowering statute it
acts unconstitutionally”.
Ultra vires
in that narrower
sense is a species of illegality. In
Pharmaceutical Manufacturers
Association of South Africa; In re: Ex parte application of
President of the Republic of South Africa
[2000] ZACC 1
;
2000
(2) SA 674
(CC);
2000 (3) BCLR 241
(CC) at para 50, this
Court held that “[w]hat would have been
ultra vires
under the common law by reason of a functionary exceeding a
statutory power is invalid under the Constitution according to the
doctrine of legality”.
[87]
Supreme Court of Appeal judgment above n 3 at para 24.
[88]
Klaaren and Penfold “Just Administrative Action” in
Woolman
et al (eds)
Constitutional
Law of South Africa
2
ed, Original Service (2013) at 63–76:
“
Both
components of the right to lawful administrative action overlap with
the principle of legality in relation to administrative
action. As
noted above, this principle has been described as ensuring that the
executive ‘may exercise no power and perform
no function
beyond that conferred upon them by law’. The right to lawful
administrative action therefore constitutionalises
the fundamental
rule of administrative law that a decision-maker must act within his
or her powers and must not act
ultra
vires
. It is clear that this right
requires that an administrator must act in terms of, and in
accordance with, the terms of an empowering
statute or other law.
This right therefore prohibits a decision-maker acting beyond the
terms of the relevant empowering legislation
and thus outlaws action
which is
ultra vires
in
the narrow sense
.
We believe, however, that the right to lawful administrative action
goes further and applies to acts that are
ultra
vires
in a broader sense of that term.
As Lawrence Baxter and other writers have pointed out, the
traditional grounds of common-law
judicial review are founded on
this
broad
ultra vires
principle. Where a decision-maker acts, for example, for an ulterior
purpose, in bad faith, takes into account irrelevant considerations
or fails to take into account relevant considerations, or makes an
error of law, he or she acts beyond his or her powers.”
(Emphasis added.)
[89]
Id at para 17.
[90]
Section 166 reads:
“
The
courts are—
.
. .
(c)
the High Court of South Africa and any high court of appeal that may
be established
by an Act of Parliament to hear appeals from any
court of a status similar to the High Court of South Africa.”
[91]
Section169 reads:
“
(1)
The High Court of South Africa may decide—
(a)
any constitutional matter except a matter that—
(i)
the Constitutional Court has agreed to hear directly in terms of
section 167(6)(a); or
(ii)
is assigned by an Act of Parliament to another court of a status
similar to the High Court of South Africa; and
(b)
any other matter not assigned to another court by an Act of
Parliament.”
[92]
Metcash
Trading Ltd v Commissioner, South African Revenue Service
[2000] ZACC 21
;
2001 (1) SA 1109
(CC);
2001 (1) BCLR 1
(CC)
(
Metcash
)
at para 43;
Standard
Bank of South Africa Ltd v Mpongo
[2021]
ZASCA 92
;
2021 (6) SA 403
(SCA) (
Mpongo
)
at paras 68–70.
[93]
Metcash
id at
para 43.
[94]
Id at para 43. See further,
Makhanya
v University of Zululand
[2009] ZASCA 69
;
2010 (1) SA 62
(SCA) at para 24;
Mpongo
above n 92 at paras 68–70.
[95]
Cool
Ideas
above
n 41 at para 28.
[96]
Section
27(1) of the Act.
[97]
Harrielall
v University of KwaZulu-Natal
[2017] ZACC 38
;
2018 (1) BCLR 12
(CC) at paras
17–8;
Justice
Alliance
of South Africa v Minister for Safety and Security
[2013]
ZACC 12;
2013
(7) BCLR 785
(CC) at para 10;
Trustees
of the Simcha Trust v Da Cruz; City of Cape Town v Da Cruz
[2019]
ZACC 8
;
2019 (3) SA 78
(CC);
2019 (5) BCLR 648
(CC) at para 19;
Buffalo
City Metropolitan
Municipality
v Asla Construction (Pty) Ltd
[2019] ZACC 15
;
2019 (4) SA 331
(CC);
2019 (6) BCLR 661
(CC) at
paras 35–6;
Law
Society of South Africa v President of the Republic of South Africa
[2018]
ZACC 51
;
2019 (3) SA 30
(CC);
2019 (3) BCLR 329
(CC);
State
Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd
[2017] ZACC 40; 2018 (2) SA 23 (CC); 2018 (2) BCLR 240 (CC).
[98]
Emphasis added.
[99]
Emphasis added.
[100]
First judgment at [39].
[101]
Computicket
above
n 38 at para 15.
[102]
Johnnic
Holdings Limited v Competition Tribunal In re: Mercanto (Pty) Ltd v
Johnnic Holdings Ltd
[2008]
ZACAC 2.
[103]
Id at para 37.2.
[104]
TWK
above
n 64
.
The
Competition Appeal Court cited Hoexter
Administrative
Law in South Africa
(Juta
& Co, Cape Town 2007) at 114 in this regard.
[105]
Emphasis added.
[106]
Johnnic
above n 102 at para 35.2.
[107]
Agri
Wire
above n 25 at para 15, wherein it was held that—
“
the
approach of the High Court, that it is permissible to look to the
rules in order to ascertain the scope of section 27(1)(c),
is not
correct. Whilst, for definition purposes, ‘the Act’ is
defined as including the rules made under the Act,
that cannot mean
that the Tribunal can, by promulgating rules, confer a jurisdiction
on itself that is not to be found in the
Act itself. . . . The
jurisdiction of the various statutory bodies set up under the Act is
defined in the Act. It is not for
them to determine their own
jurisdiction by way of the rules under which they perform their
statutory functions. That would be
entirely inconsistent with the
rule of law and the principle of legality that underpins our
Constitution.”
[108]
First judgment at [88] (emphasis added).
[109]
Section 36(1)(a) of the Act.
[110]
Section 37(1)(a) of the Act.
[111]
Section 62(2)(b) of the Act.
[112]
Agri
Wire
above n 25 at para 17.
[113]
Id at para 18.
[114]
Id at para 20.
[115]
Baloyi
above
n 34 at para 30.
[116]
Supreme Court of Appeal judgment above n 3 at para 27.
[117]
Id at paras 19-20.
[118]
Section 27 reads:
“
(1)
The Competition Tribunal may—
. . .
(c)
hear appeals from, or review any decision of, the Competition
Commission that may,
in terms of this Act, be referred to it.”
[119]
Section 10(8) states that:
“
The
firm concerned, or any other person with a substantial financial
interest affected by a decision of the Competition Commission
in
terms of subsection (2), (4A) or (5), may appeal that decision to
the Competition Tribunal, in the prescribed manner.”
[120]
Section 43B provides that:
“
(3A)
For purposes of this Chapter—
. . .
(d)
any person aggrieved by the determination of the Competition
Commission in terms
of this subsection may within 15 business days
of the determination, appeal against the determination to the
Competition Tribunal.”
[121]
Section 43F provides that:
“
(1)
The Minister, or any person referred to in section 43G(1) who is
materially and adversely
affected by the determination of the
Competition Commission in terms of section 43D, may, within the
prescribed period, appeal
against that determination to the
Competition Tribunal in accordance with the Rules of the Competition
Tribunal.
(2)
In determining an appeal in terms of subsection (1), the Competition
Tribunal may—
(a)
confirm the determination of the Competition Commission;
(b)
amend or set aside the determination, in whole or in part; or
(c)
make any determination or order that is appropriate in the
circumstances.
. . .
(6)
Any person referred to in subsection (1) who is aggrieved by a
determination or
order of the Competition Tribunal in terms of
subsection (2) may appeal against that determination or order to the
Competition
Appeal Court.”
[122]
Section 58(1)(a):
“
(1)
In addition to its other powers in terms of this Act, the
Competition Tribunal may—
(a)
make an appropriate order in relation to a prohibited practice or an
appeal referred
to in section 43F, including—
(i)
interdicting any prohibited practice;
(ii)
ordering a party to supply or distribute goods or services to
another party
on terms reasonably required to end a prohibited
practice;
(iii)
imposing an administrative penalty, in terms of section 59, with or
without the
addition of any other order in terms of this section;
(iv)
ordering divestiture, subject to section 60;
(v)
declaring conduct of a firm to be a prohibited practice in terms of
this Act, for
purposes of section 65;
(vi)
declaring the whole or any part of an agreement to be void;
(vii)
ordering access to an essential facility on terms reasonably
required.”
[123]
Section 44 provides that:
“
.
. .
(5)
A person contemplated in subsection (1) who is aggrieved by the
determination of
the Competition Commission in terms of subsection
(3) may, within the prescribed period of the Commission’s
decision, refer
the decision to the Competition Tribunal.
(6)
The Competition Tribunal may confirm or substitute the Competition
Commission’s
determination or substitute it with another
appropriate ruling.”
[124]
Agri
Wire
above n 25 at para 13.
[125]
First
judgment at [53].
[126]
First
judgment at [54].
[127]
Competition
Commission of South Africa v Pioneer Hi-Bred International Inc
[2013] ZACC 50
;
2014 (2) SA 480
(CC);
2014 (3) BCLR 251
(CC) at para
24:
“
[W]hen
the Commission is litigating in the course of fulfilling its
statutory duties, it is undesirable for it to be inhibited
in the
bona fide fulfilment of its mandate by the threat of an adverse
costs award. This flows from the need to encourage organs
of state
to make and to stand by honest and reasonable decisions, made in the
public interest, without the threat of undue financial
prejudice if
the decision is challenged successfully.”
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