Advertising Regulatory Board NPC and Others v Bliss Brands (Pty) Ltd

• Jurisdiction: South Africa

Advertising Regulatory Board NPC and Others v Bliss Brands (Pty) Ltd
2022 (4) SA 57 (SCA)

2022 (4) SA p57

Citation	2022 (4) SA 57 (SCA)
Case No	786/21; [2021] ZASCA 51
Court	Supreme Court of Appeal
Judge	Petse DP, Schippers JA, Plasket JA, Hughes JA and Matojane AJA
Heard	April 12, 2022
Judgment	April 12, 2022
Counsel	S Budlender SC (with N Ferreira, K Harding and K Mvumu) for the first appellant.; G Marcus SC (with C McConnachie) for the second and third appellants.; CDA Loxton SC (with F Southwood SC) for the respondent.

Flynote : Sleutelwoorde

Media — Advertising — Advertising Regulatory Board (ARB) — Complaints relating to advertising by non-members of ARB — Lawful for ARB to consider — ARB not unconsitutionally usurping judicial authority or denying access to court — ARB's members entitled to refuse to publish advertising as part of their right to freedom of expression — Constitution, s 16.

Practice — Judgments and orders — Courts should decide issues defined by parties — Court raising constitutionality of Advertsising Regulatory Board powers mero motu — Inappropriate.

Headnote : Kopnota

The first appellant, the Advertising Regulatory Board NPC (the ARB), carries on business as an independent, self-regulatory body in the advertising industry. Its members are required to adhere to the Code of Advertising Practice (the Code). Section 55 of the Electronic Communications Act 36 of 2005 (ECA) provides that every electronic broadcaster must adhere to the Code as determined and administered by the ARB. Where an offending advertiser has ignored a reasonable request for co-operation, the ARB may issue an ad alert to its members, who may not carry the offending advertisement.

2022 (4) SA p58

The second and third appellants, Colgate-Palmolive (Pty) Ltd and Colgate-Palmolive Company (Colgate), and the respondent, Bliss Brands (Pty) Ltd (Bliss Brands), were competitors in the toiletries business. In December 2019 Colgate lodged a complaint with the ARB that Bliss Brands, in the packaging of its Securex soap, had breached the Code by exploiting the advertising goodwill and imitating the packaging architecture of Colgate's Protex soap. Although Bliss Brands was not a member of the ARB, it raised no objection to the ARB's jurisdiction and participated fully in its hearings, taking the matter all the way to the ARB's final appeal committee (the FAC), which found in favour of Colgate. (See [4].)

After the FAC dismissed its appeal, Bliss Brands successfully applied to the Gauteng Division of the High Court, Johannesburg (the High Court) to review and set aside the FAC's decision. The High Court had mero motu questioned the constitutionality of the ARB's powers and issued a directive that the parties submit argument on the constitutionality of those parts of the Code and the memorandum of incorporation (the MOI) which authorised the ARB to determine whether the packaging of a product constituted passing-off or breach of copyright. It then declared clause 3.3 of the ARB's MOI unconstitutional, void and unenforceable, because it permitted the ARB to decide complaints concerning advertisements of non-members. In this regard the High Court held inter alia that the ARB's processes infringed the right of non-members of access to court under s 34 of the Constitution and usurped judicial functions in various respects; and that the powers the ARB exercised in relation to the regulation of advertising by non-members was not sourced in law and thus unconstitutional.

The High Court also inter alia declared that the ARB had no jurisdiction over non-members in any circumstances and may not issue any rulings in relation to non-members or their advertising. And it made statements of principle, such as that the ARB was not empowered to determine breaches of the Code under the ECA. It also held that Bliss Brands' submission to the ARB's jurisdiction could not be said to constitute actual consent. (See [6], [8] and [14].)

The whole of clause 3.3 of the ARB's MOI was taken almost verbatim from the order in Advertising Standards Authority v Herbex (Pty) Ltd 2017 (6) SA 354 (SCA) (Herbex), which confirmed a settlement agreement that the ARB's predecessor, the Advertising Standards Authority (the ASA), had no jurisdiction over any person or entity who was not a member and may not — in the absence of a submission to its jurisdiction — require non-members to participate in its processes, issue any instruction, order or ruling against the non-member or sanction it. The Herbex order however also confirmed that the ASA may consider and issue a ruling to its members (which was not binding on non-members) regarding any advertisement, regardless of by whom it is published, to determine, on behalf of its members, whether its members should accept any advertisement before it was published or should withdraw any advertisement if it had been published. The High Court considered that, except for the part of the order that 'the respondent [the ASA] has no jurisdiction over any person or entity who is not a member of the respondent', the rest of the Herbex order was ad personam in nature. (See [28] – [29].)

This case, the ARB's appeal to the Supreme Court Appeal, concerned the correctness of the High Court's order and statements of principle.

Held

The ARB's powers were sourced in law. The Promotion of Administrative Justice Act 3 of 2000 (PAJA) expressly contemplated that a juristic entity other than an organ of state may take decisions constituting administrative action in

2022 (4) SA p59

terms of an 'empowering provision'. The ARB's MOI and Code constituted empowering provisions. The mere absence of a statutory source for these powers was therefore no barrier to the ARB validly exercising public functions. (See 16] – [17].)

A failure to raise any objection to jurisdiction and subsequent participation in proceedings was sufficient to demonstrate submission to jurisdiction. Bliss Brands unquestionably submitted to the jurisdiction of the ARB. Although the appeal could be disposed of solely on this basis, legal certainty required addressing the High Court's pronouncements on the constitutionality of clause 3.3 of the MOI, its declaration that the ARB may not issue rulings in relation to non-members or their advertising, and its statements of principle. (See [13] – [14].)

It was clear from s 55 of the ECA that all broadcast service licensees (whether members or non-members of the ARB) were obliged to comply with the Code as administered by the ARB. The order of the High Court prevented the ARB from performing this statutory duty in terms of s 55 of the ECA, by prohibiting the ARB from determining any complaint in respect of non-member advertising, even where that advertisement was broadcast by a broadcasting-service licensee. (See [20] – [23].)

The declaratory relief which this court granted in Herbex — the whole order — was plainly one in rem: it pronounced upon the limits and powers of the ASA in relation to every non-member advertiser, not only Herbex. The High Court's declaration that clause 3.3 of the MOI was unconstitutional, was contrary to the order made and precedent established in Herbex. The order in Herbex ought to have disposed of Bliss Brands' constitutional challenge. (See [32] and [34].)

The ARB's members were entitled to refuse to publish advertising as part of their right to freedom of expression in s 16 of the Constitution. Its power to consider complaints relating to advertisements by non-members for the benefit of its own members, advanced the right to freedom of association. The Constitutional Court has held that the right of association, 'enable[d] individuals to organise around particular issues of concern' and 'permit[ted] a group to collectively contest and ameliorate the structure of social power within its midst'''. This was precisely what the members of the ARB did. They organised around the shared goal of promoting ethical standards in advertising, as reflected in the Code. The right to self-regulation included the right of associations to adopt rules and standards to regulate their conduct in their dealings with the outside world. And the right of freedom of association included the right to dissociate. Bliss Brands' right to dissociate did not give it an unfettered right to dictate to the ARB and its members how they should exercise their rights of association. (See [35] and [41] – [43], [46] and [48].)

The existence of an adjudicative administrative tribunal such as the ARB did not limit the right of access to courts — its decisions were subject to judicial control. There was no principle of law requiring an adjudicative administrative tribunal to adopt the same rules of evidence that apply in courts. The High Court overlooked the flexible requirements of procedural fairness under PAJA. The ARB and the courts were different fora with distinct powers. The ARB operated consensually and may only determine whether its Code has been breached. It did not exercise a judicial function when doing so. (See [50], [55] – [56] and [58] – [59].) In the result the appeal would be upheld.

2022 (4) SA p60

Cases cited

Southern Africa

AAA Investments (Pty) Ltd v Micro Finance Regulatory Council and Another 2007 (1) SA 343 (CC) (2006 (11) BCLR 1255; [2006] ZACC 9): referred to

Advertising Standards Authority v Herbex (Pty) Ltd 2017 (6) SA 354 (SCA): applied

Airports Company South Africa v Big Five Duty Free (Pty) Ltd and Others 2019 (5) SA 1 (CC) (2019 (2) BCLR 16; [2018] ZACC 33): dictum in para [1] applied

AmaBhungane Centre for Investigative Journalism NPC and Another v Minister of Justice and Correctional Services and Others 2021 (3) SA 246 (CC) (2021 (4) BCLR 349; [2021] ZACC 3): dictum in para [58] applied

Calibre Clinical Consultants (Pty) Ltd and Another v National Bargaining Council for the Road Freight...