Mukaddam v Pioneer Foods (Pty) Ltd and Others

• Jurisdiction: South Africa
• Citation: 2013 (5) SA 89 (CC)

Mukaddam v Pioneer Foods (Pty) Ltd and Others
2013 (5) SA 89 (CC)

2013 (5) SA p89

Citation	2013 (5) SA 89 (CC)
Case No	CCT 131/12; [2013] ZACC 23
Court	Constitutional Court
Judge	Moseneke DCJ, Bosielo AJ, Froneman J, Jafta J, Khampepe J, Mhlantla AJ, Nkabinde J, Skweyiya J and Zondo J
Heard	May 7, 2013
Judgment	June 27, 2013
Counsel	RP Hoffman SC (with W de Vos and CD Shone) for the applicant.; SF Burger SC (with JPV McNally SC and JA Cassette) for the first respondent.; J Dickerson SC (with M O'Sullivan) for the second respondent.; D Unterhalter SC (with M du Plessis and L Kelly) for the third respondent.; T Ngcukaitobi (with M Bishop) for the amicus curiae.

Flynote : Sleutelwoorde F

Practice — Class action — Certification — Court to certify class action if in G interests of justice to do so — Guidelines to apply to determine where interests of justice lie are: whether class has identifiable members; whether cause of action raising triable issue; whether common issues of fact or law; and whether suitable class representative — Guidelines non-exhaustive and not conditions precedent or jurisdictional facts. H

Practice — Class action — Discretion to certify — Inteference with by appeal court — Appeal court may interfere with lower court's exercise of discretion to certify where lower court did not act judicially, or where it based exercise of its discretion on wrong principle of law or on misdirection of fact.

Practice — Class action — Section 38 class action — Quaere: whether certification I required — Constitution, s 38.

Headnote : Kopnota

In this case a bread distributor applied to a high court for it to certify a class action against bread producers. The high court refused the application and the Supreme Court of Appeal dismissed the distributor's appeal. The distributor then appealed to the Constitutional Court. J

2013 (5) SA p90

A In issue was what standard a court ought to use in adjudicating an application for certification. The court held that a class action ought to be certified if it were in the interests of justice to do so. Factors to be used in determining where the interests of justice lay were whether the class had identifiable members; whether there was a cause of action raising a triable issue; whether there were common issues of fact or law; and whether there was a B suitable class representative. These factors were not conditions precedent or jurisdictional facts and nor were they exhaustive. (Paragraphs [15] – [18], [34] – [35] and [47] at 94E – 95A, 99C – E and 103E – G.)

A second issue was when a court of appeal could interfere with a lower court's exercise of the discretion to certify or not certify a class action. The Constitutional Court held that an appeal court could interfere where the C lower court had not acted judicially in exercising its discretion, or where it had based the exercise of its discretion on a wrong principle of law, or on a misdirection of fact. (Paragraphs [47] – [48] at 103E – H.)

A third issue — left open by the court — was whether certification was required in class actions brought under s 38 of the Constitution, rather than under the common law, as here. (Paragraphs [40] – [41] at 100C – 101G.)

D Writing separately, Mhlantla AJ held that the certification requirement ought indeed to apply to actions brought under s 38, and Froneman J criticised the Supreme Court of Appeal's application of the law. (Paragraphs [59], [63], [70] and [79] at 106G – H, 109G – 110A and 111I.)

Cases Considered

Annotations

Case law E

Agri Wire (Pty) Ltd and Another v Commissioner of the Competition Commission and Others [2012] 4 All SA 365 (SCA): referred to

Chief Lesapo v North West Agricultural Bank and Another 2000 (1) SA 409 (CC) (1999 (12) BCLR 1420; [1999] ZACC 16): referred to

F Children's Resource Centre Trust and Others v Pioneer Food (Pty) Ltd and Others 2013 (2) SA 213 (SCA): applied

Ferreira v Levin NO and Others; Vryenhoek and Others v Powell NO and Others 1996 (2) SA 621 (CC) (1996 (4) BCLR 441; [1996] ZACC 27): referred to

G Fose v Minister of Safety and Security 1997 (3) SA 786 (CC) (1997 (7) BCLR 851; [1997] ZACC 6): referred to

Gory v Kolver NO and Others (Starke and Others Intervening) 2007 (4) SA 97 (CC) (2007 (3) BCLR 249; [2006] ZACC 20): referred to

K v Minister of Safety and Security 2005 (6) SA 419 (CC) (2005 (9) BCLR 835; [2005] 8 BLLR 749; [2005] ZACC 8): referred to

H Media Workers Association of South Africa and Others v Press Corporation of South Africa Ltd ('Perskor') 1992 (4) SA 791 (A): applied

Minister of Finance and Others v Gore NO 2007 (1) SA 111 (SCA) ([2007] 1 All SA 309): referred to

Minister van Polisie v Ewels 1975 (3) SA 590 (A): referred to

Mukaddam and Others v Pioneer Food (Pty) Ltd and Others 2013 (2) SA 254 (SCA): I reversed on appeal

Ngxuza and Others v Permanent Secretary, Department of Welfare, Eastern Cape, and Another 2001 (2) SA 609 (E) (2000 (12) BCLR 1322): referred to

Permanent Secretary, Department of Welfare, Eastern Cape, and Another v Ngxuza and Others 2001 (4) SA 1184 (SCA) (2001 (10) BCLR 1039): J referred to

2013 (5) SA p91

PFE International and Others v Industrial Development Corporation of South Africa Ltd A 2013 (1) SA 1 (CC) (2013 (1) BCLR 55; [2012] ZACC 21): referred to

S v Basson 2007 (3) SA 582 (CC) (2007 (1) SACR 566; 2005 (12) BCLR 1192; [2005] ZACC 10): referred to

South African Broadcasting Corp Ltd v National Director of Public Prosecutions and Others 2007 (1) SA 523 (CC) (2007 (1) SACR 408; B 2007 (2) BCLR 167; [2006] ZACC 15): dicta in paras [39] and [41] applied

Trustees, Two Oceans Aquarium Trust v Kantey & Templer (Pty) Ltd 2006 (3) SA 138 (SCA) ([2007] 1 All SA 240): referred to.

Statutes Considered

Statutes

The Constitution of the Republic of South Africa, 1996, s 38: see C Juta's Statutes of South Africa 2012/13 vol 5 at 1-31.

Case Information

RP Hoffman SC (with W de Vos and CD Shone) for the applicant.

SF Burger SC (with JPV McNally SC and JA Cassette) for the first respondent.

J Dickerson SC (with M O'Sullivan) for the second respondent. D

D Unterhalter SC (with M du Plessis and L Kelly) for the third respondent.

T Ngcukaitobi (with M Bishop) for the amicus curiae.

An appeal against a decision of the Supreme Court of Appeal. The order is in para [56]. E

Judgment

Jafta J (Moseneke DCJ, Bosielo AJ, Khampepe J, Nkabinde J and Zondo J concurring):

Introduction

[1] In our constitutional dispensation everyone is guaranteed access to a F competent court to have their dispute resolved by the application of law and decided in a fair manner. [1] But this guarantee does not include the right to choose the method of approaching and placing a dispute before a particular court. The determination of the process to be followed when litigants approach courts is left in the hands of the courts.

[2] Section 173 of the Constitution recognises and preserves the courts' G power to determine how disputes are to be placed before them. [2] Our superior courts enjoyed this power even before the adoption of the Constitution. [3] This case concerns the exercise of this power by the Western Cape High Court, Cape Town (high court), in circumstances where the applicant sought permission to institute a class action against H the respondents. The claims to be pursued are for the payment of damages allegedly suffered by members of a particular class as a result of certain conduct by the respondents.

2013 (5) SA p92

Jafta J (Moseneke DCJ, Bosielo AJ, Khampepe J, Nkabinde J and Zondo J concurring)

The facts and litigation history A

[3] The applicant in this application for leave to appeal is Mr Imraahn Ismail Mukaddam. At the relevant period, he carried on the business of distributing bread in the Western Cape. He purchased bread from some of the respondents who are major bread producers, and sold it to B informal traders from whom consumers bought their bread. The record shows that there were approximately 100 distributors like the applicant in the Western Cape.

[4] The respondents are Pioneer Foods (Pty) Ltd (Pioneer Foods), Tiger Consumer Brands Limited (Tiger Brands) and Premier Foods C Limited (Premier Foods). All are producers of bread from whom the applicant and other distributors sourced their supplies. However, the respondents' businesses are not confined to the Western Cape Province. They trade throughout the country.

[5] In 2006 the Competition Commission launched an investigation D against the respondents, following complaints that they were involved in anti-competitive behaviour in dealing with bread distributors in the Western Cape. The applicant was one of the individuals who submitted complaints to the Commission. The investigation was undertaken in terms of the Competition Act. [4] Premier Foods sought leniency from the E Commission and came forward with the disclosure of how it had engaged in anti-competitive conduct with the other respondents in violation of the Competition Act. The Commission has a corporate-leniency policy in terms of which business entities who cooperate in its investigations are rewarded with the imposition of lenient fines. [5]

F [6] The disclosure by Premier Foods led to the expansion of the Commission's investigation to other parts of the country. Tiger Brands was among the entities implicated in the disclosure. It negotiated and concluded a settlement agreement with the Commission in relation to unlawful conduct in the Western Cape and other parts of the country. A penalty of nearly R99 million was imposed on Tiger Brands.

G [7] The complaints against Pioneer Foods were referred to the Competition Tribunal for adjudication. A lengthy hearing ensued which culminated in Pioneer Foods being found guilty of anti-competitive conduct in breach of the Competition Act...