Competition Commission of South Africa v Pioneer Hi-Bred International Inc and Others

• Jurisdiction: South Africa
• Judgment Date: 18 December 2014
• Citation: 2014 (2) SA 480 (CC)

Competition Commission of South Africa v Pioneer Hi-Bred International Inc and Others
2014 (2) SA 480 (CC)

2014 (2) SA p480

Citation	2014 (2) SA 480 (CC)
Case No	58/13; [2013] ZACC 50
Court	Constitutional Court
Judge	Moseneke ACJ, Skweyiya ADCJ, Cameron J, Froneman J, Jafta J, Nkabinde J, Van der Westhuizen J, Zondo J, Madlanga J, Mhlantla AJ and Dambuza AJ
Heard	November 4, 2014
Judgment	December 18, 2014
Counsel	W Trengove SC (with J Wilson and K Serafino-Dooley) for the applicant.; K McLean (with B Malan) for the amicus curiae.

Flynote : Sleutelwoorde B

C Competition — Competition Tribunal — Costs — Power to award — Tribunal does not have power to award costs against Competition Commission.

Competition — Competition Appeal Court — Costs — Power to award — Competition Appeal Court does not have power to award costs against Competition Commission in relation to proceedings in Competition Tribunal.

D Competition — Competition Appeal Court — Costs — Power to award — Competition Appeal Court may order costs against Competition Commission on appeal if this accords with requirements of law and fairness.

Headnote : Kopnota

This case raises the following issues:

Whether the Competition Tribunal has the power to award costs against the E Competition Commission. It holds that it does not. (Paragraphs [11], [30] – [31] and [40] at 483A – B, 489C – 490A and 491H – I.)

Whether the Competition Appeal Court has the power to award costs against the Competition Commission in relation to Competition Tribunal proceedings. It holds that the Competition Appeal Court lacks such a power: its costs power restricted to proceedings in the Competition Appeal Court. F (Paragraphs [11] and [42] at 483A – B and 492C – E.)

Whether the Competition Appeal Court has the power to award costs against the Competition Commission on appeal. It holds that the Competition Appeal Court has this power — it may order costs if this is in accordance with the requirements of the law and fairness. (Paragraphs [11], [19] and [21] at 483A – B, 486D – E and 486H – 487A.)

Cases Considered

Annotations G

Case law

Biowatch Trust v Registrar, Genetic Resources, and Others 2009 (6) SA 232 (CC) (2009 (10) BCLR 1014; [2009] ZACC 14): referred to

Chevron Engineering (Pty) Ltd v Nkambule and Others 2004 (3) SA 495 (SCA) ([2004] 1 All SA 137); [2004] 3 BLLR 214): referred to H

Coetzeestroom Estate and GM Co v Registrar of Deeds 1902 TS 216: referred to

Competition Commission of South Africa v Senwes Ltd 2012 (7) BCLR 667 (CC) ([2012] ZACC 6): referred to

Competition Commission v Loungefoam (Pty) Ltd and Others 2012 (9) BCLR 907 (CC) ([2012] ZACC 15): dictum in para [16] applied I

Competition Commission v Pioneer Hi-Bred International Inc and Others [2013] ZACAC 1: referred to

Competition Commission v Yara South Africa (Pty) Ltd and Others 2012 (9) BCLR 923 (CC) ([2012] ZACC 14): distinguished

Deneysville Estates Ltd v Surveyor-General 1951 (2) SA 68 (C): referred to J

2014 (2) SA p481

Fleming v Fleming en 'n Ander 1989 (2) SA 253 (A): referred to A

Nortje and Another v Attorney-General, Cape, and Another 1995 (2) SA 460 (C) (1995 (1) SACR 446; 1995 (2) BCLR 236): dictum at 485F applied

Omnia Fertilizer Ltd v The Competition Commission, In re: The Competition Commission of South Africa v Sasol Chemical Industries (Pty) Ltd and Others [2009] ZACAC 5: referred to

Pioneer Hi-Bred International Inc and Another v Competition Commission and B Another [2012] ZACAC 3: reversed on appeal

Pioneer Hi-Bred International Inc, Pannar Seed (Pty) Ltd v The Competition Commission (CT case No 81/AM/9 December 2010): referred to

Tsosane and Others v Minister of Prisons and Others 1982 (3) SA 1075 (C): dictum at 1076E – 1077B applied.

Case Information

W Trengove SC (with J Wilson and K Serafino-Dooley) for the applicant. C

K McLean (with B Malan) for the amicus curiae.

An application for leave to appeal against a costs order granted by the Competition Appeal Court. The order is in para [49].

Judgment

Skweyiya ADCJ (Moseneke ACJ, Cameron J, Froneman J, Jafta J, D Nkabinde J, Van der Westhuizen J, Zondo J, Madlanga J, Mhlantla AJ and Dambuza AJ concurring):

Introduction

[1] This is an application for leave to appeal against a costs order granted E by the Competition Appeal Court (CAC) against the Competition Commission (Commission). The application raises the scope of the CAC's powers to award costs against the Commission when it litigates in the course of its duties in terms of the Competition Act [1] (Act).

Background F

[2] Pioneer Hi-Bred International Inc (Pioneer) and Pannar Seed (Pty) Ltd (Pannar) are companies involved in the hybrid maize seed breeding market. Pioneer and Pannar informed the Commission of their intention to undertake an 'intermediate merger' [2] in terms of the Act. In terms of G ss 12A and 14 of the Act, the Commission investigated the proposed merger and prohibited it on the grounds that it was likely to give rise to a substantial prevention or lessening of competition in the South African hybrid maize seed market.

[3] Pioneer and Pannar (merging parties) filed a request with the H Tribunal in terms of s 16(1)(b) of the Act to reconsider the Commission's decision. The merging parties joined the Commission as a respondent and the Commission defended its decision before the Tribunal. No costs were sought by any of the parties.

2014 (2) SA p482

Skweyiya ADCJ (Moseneke ACJ, Cameron J, Froneman J, Jafta J, Nkabinde J, Van der Westhuizen J, Zondo J, Madlanga J, Mhlantla AJ and Dambuza AJ concurring)

A [4] The Tribunal also prohibited the merger on the same grounds as the Commission had done. [3] It made no order as to costs.

[5] The merging parties appealed the Tribunal's decision to the CAC. In their notice of appeal, the merging parties prayed only for the costs of the appeal to be paid by the Commission. However, in their heads of B argument, the merging parties asked that the Commission be ordered to pay their costs in the appeal and in the Tribunal proceedings. The Commission was once more joined as a party to the proceedings and it again defended its decision and that of the Tribunal.

[6] The CAC upheld the merging parties' appeal (judgment on the merits) C and approved the merger subject to conditions. [4] The CAC further ordered the Commission to pay the costs of the merging parties (1) in the CAC proceedings; and (2) in the Tribunal proceedings. It gave no reasons for its costs order.

[7] The Commission sought leave to appeal to the Supreme Court of D Appeal against the entire judgment and order. The application was dismissed. It then sought leave to appeal in the CAC to the Constitutional Court against the costs order only. The merging parties filed a notice of intention to abide. The CAC granted the Commission leave to appeal to this court. [5]

E [8] Before this court, the Commission does not challenge the CAC's approval of the merger but only its costs order, which it argues was wrongly awarded. The Commission submits that (1) while the CAC may have the power to award costs against the Commission in its own proceedings, that discretion was wrongly exercised in this case; and (2) the CAC has no power to award costs against the Commission in relation F to Tribunal proceedings.

[9] None of the respondents opposed the Commission's application to this court. The court thus invited representatives of the Johannesburg Bar Council to make submissions as a friend of the court (amicus curiae). G On behalf of the amicus, Ms Kirsty McLean and Ms Berna Malan filed written submissions and Ms McLean made oral submissions. The court is grateful to them for their helpful submissions.

[10] The amicus chose to confine its submissions to the abstract point of the scope of the Tribunal and CAC's respective powers to award costs against the Commission, declining to make submissions on the particular H grant of costs in this case.

Issues

[11] The issues before this court are as follows:

2014 (2) SA p483

Skweyiya ADCJ (Moseneke ACJ, Cameron J, Froneman J, Jafta J, Nkabinde J, Van der Westhuizen J, Zondo J, Madlanga J, Mhlantla AJ and Dambuza AJ concurring)

(a)

Should this court grant leave to appeal? A

(b)

Does the CAC have the power to award costs against the Commission on appeal?

(c)

Does the CAC have the power to award costs against the Commission in relation to Tribunal proceedings?

(d)

Accordingly, did the CAC exercise its discretion to award costs against the Commission in the present matter judicially? B

Leave to appeal

[12] Leave to appeal should be granted. Whether the CAC has the power to award costs against the Commission in relation to Tribunal proceedings and the extent of its power in relation to its own proceedings are C questions that concern the scope and proper exercise of statutory powers raising a constitutional issue in the principle of legality. [6] This is an issue of importance because it concerns the independence and operation of state institutions charged with functions under the Act that are important to the economy and the general public. [7] D

[13] While it is not generally in the interests of justice to grant leave to appeal on questions of costs only, [8] the issues in this case fall within established exceptions. The issues are matters of principle requiring legal interpretation that are neither trivial nor insubstantial [9] — the legal determination of which may impact on the fulfilment of the purposes of the Act. The Commission has reasonable prospects of success. The interests E of justice thus favour the grant of leave to appeal.

The nature of the Commission

[14] It is important to consider the nature of the Commission under the F Act, and its capacities, functions and powers in...