Premier Foods (Pty) Ltd v Manoim NO and Others

• Jurisdiction: South Africa
• Judge: Maya ADP, Shongwe JA, Petse JA, Gorven AJA and Baartman AJA
• Judgment Date: 04 November 2015
• Docket Number: 20147/2014 [2015] ZASCA 159
• Hearing Date: 29 September 2015
• Counsel: D Unterhalter SC (with M du Plessis and L Kelly) for the appellant. GJ Marcus SC (with C Steinberg) for the third respondent. MM le Roux for the fourth to twelfth respondents.
• Court: Supreme Court of Appeal

Premier Foods (Pty) Ltd v Manoim NO and Others
2016 (1) SA 445 (SCA)

2016 (1) SA p445

Citation	2016 (1) SA 445 (SCA)
Case No	20147/2014; [2015] ZASCA 159
Court	Supreme Court of Appeal
Judge	Maya ADP, Shongwe JA, Petse JA, Gorven AJA and Baartman AJA
Heard	September 29, 2015
Judgment	November 4, 2015
Counsel	D Unterhalter SC (with M du Plessis and L Kelly) for the appellant.; GJ Marcus SC (with C Steinberg) for the third respondent.; MM le Roux for the fourth to twelfth respondents.

Flynote : Sleutelwoorde B

Competition — Unlawful competition — Cartel conduct — Competition Commission's corporate-leniency policy — Leniency — Where leniency applicant granted conditional immunity for participation in cartel activity but excluded C from complaints referral — Finding by Tribunal that conduct amounting to prohibited practice not competent — Issue of notice certifying such finding, necessary for institution of claim for damages, accordingly not lawful in circumstances — Competition Act 89 of 1998, s 58(1)(a)(v) read with s 65(6)(b).

Headnote : Kopnota

The Competition Commission granted the appellant, Premier Foods (Pty) Ltd D (Premier), conditional immunity for its involvement in a bread cartel under its corporate leniency policy (the policy). This policy provides immunity against the imposition of administrative penalties but places no limits on the rights of parties injured by the cartel activity to pursue their civil remedies.

Premier was subsequently excluded by the Commission from the complaints E referred to the Tribunal. No relief was sought against it, neither was it cited as a respondent. Despite this, the Tribunal granted an order declaring the cartel activity of Premier, in addition to that of the cited respondents, a prohibited practice in terms of s 58(1)(a)(v) of the Competition Act 89 of 1998 (the Act). Such a declaration was necessary for the issue of a notice in F terms of s 65(6)(b) of the Act, certifying that such a finding had been made, failing which a claim for damages could not be prosecuted.

Seeking to institute a claim against all cartel members, respondents 4 – 12 sought such a notice from the Tribunal in respect of Premier (notices had already been obtained in respect of the cited respondents).

Before the matter was resolved, Premier approached the High Court for an order G declaring that such a notice could not lawfully be issued in the circumstances. The application was dismissed but leave to appeal granted by the Supreme Court of Appeal.

Held

The Tribunal was a creature of statute and had only those powers given to it by H the Act. In the present context these only arose on the referral of a complaint by the Commission. Whether the Tribunal was empowered to make the order depended on the ambit of the referral. This was a fact-based enquiry. The Commission also had a right to exclude a cartel member from a referral. If so, the Tribunal's power was limited to those particulars so referred. I

On the facts, the Tribunal had no power to grant any order against Premier. The declaration was accordingly a nullity which in turn meant there was no finding to certify, and no notice in terms of s 65(6)(b) could lawfully be issued. The order sought by Premier should accordingly have been granted by the court a quo. Appeal upheld. (Paragraphs [18] – [19], [21] and [47] at 454A – 455A.) J

2016 (1) SA p446

Cases Considered

Annotations A

Case law

Agri Wire (Pty) Ltd and Another v Commissioner, Competition Commission and Others 2013 (5) SA 484 (SCA) ([2012] 4 All SA 365; [2012] ZASCA 134): dicta in paras [22] and [24] applied

Bhyat v Commissioner for Immigration B 1932 AD 125: referred to

Children's Resource Centre Trust and Others v Pioneer Food (Pty) Ltd and Others 2013 (2) SA 213 (SCA) ([2012] ZASCA 182): referred to

Competition Commission of South Africa v Senwes Ltd 2012 (7) BCLR 667 (CC) ([2012] ZACC 6): dictum in para [36] applied

Cool Ideas 1186 CC v Hubbard and Another C 2014 (4) SA 474 (CC) (2014 (8) BCLR 869; [2014] ZACC 16): dictum in para [28] applied

Lewis & Marks v Middel 1904 TS 291: compared

MEC for Health, Eastern Cape and Another v Kirland Investments (Pty) Ltd t/a Eye & Lazer Institute 2014 (3) SA 481 (CC) (2014 (5) BCLR 547; [2014] ZACC 6): dictum at 512 applied

Mukaddam v Pioneer Foods (Pty) Ltd and Others D 2013 (2) SA 254 (SCA) ([2012] ZASCA 183): referred to

Mukaddam v Pioneer Foods (Pty) Ltd and Others 2013 (5) SA 89 (CC) (2013 (10) BCLR 1135; [2013] ZACC 23): referred to

National Union of Metalworkers of South Africa v Intervalve (Pty) Ltd and Others 2015 (2) BCLR 182 (CC) ((2015) 36 ILJ 363; [2014] ZACC 35): discussed and compared

Oudekraal Estates (Pty) Ltd v City of Cape Town and Others E 2004 (6) SA 222 (SCA) ([2004] 3 All SA 1; [2004] ZASCA 48): referred to

Poswa v Member of the Executive Council for Economic Affairs, Environment and Tourism, Eastern Cape 2001 (3) SA 582 (SCA) (2001 (6) BCLR 545): referred to

Premier Foods (Pty) Ltd v Manoim NO and Others F [2013] 2 CPLR 367 (GNP) ([2013] ZAGPPHC 236): reversed on appeal

Senwes Ltd v Competition Commission of South Africa [2011] ZASCA 99: discussed

The Master of the High Court (North Gauteng High Court, Pretoria) v Motala NO and Others 2012 (3) SA 325 (SCA) ([2011] ZASCA 238): dictum in G para [12] applied

Trustees for the Time Being of the Children's Resource Centre Trust and Others v Pioneer Foods (Pty) Ltd and Others; Mukaddam and Others v Pioneer Foods (Pty) Ltd and Others [2011] ZAWCHC 102: referred to

Woodlands Dairy (Pty) Ltd and Another v Competition Commission 2010 (6) SA 108 (SCA) ([2010] ZASCA 104): dictum in para [12] discussed and H applied.

Statutes Considered

Statutes

The Competition Act 89 of 1998, ss 58(1)(a)(v) and 65(6)(b): see Juta's Statutes of South Africa 2014/15 vol 2 at 2-477 and 2-479.

Case Information

D Unterhalter SC I (with M du Plessis and L Kelly) for the appellant.

GJ Marcus SC (with C Steinberg) for the third respondent.

MM le Roux for the fourth to twelfth respondents.

An appeal from the Gauteng Division, Pretoria (Kollapen J sitting as J court of first instance).

2016 (1) SA p447

Order A

1.

The appeal is upheld with costs, including those consequent on the employment of two counsel.

2.

The order of the court a quo dismissing the application with costs is set aside and the following order substituted:

'1.

Declaring that neither the first nor the second respondent B can lawfully issue a notice in terms of s 65(6)(b) of the Competition Act 89 of 1998, certifying that the applicant's conduct has been found to be a prohibited practice under the Act in Competition Tribunal of South Africa case Nos 15/CR/Feb07 and 50/CR/May08.

2.

The second and third respondents are directed to pay the C costs of the applicant.'

Judgment

Gorven AJA (Maya ADP, Shongwe JA, Petse JA and Baartman AJA concurring):

[1] Cartel activity is a form of practice prohibited by s 4(1)(b) of the D Competition Act. [1] Self-interest dictates that the cartel members close ranks. For this reason the third respondent, the Competition Commission (the Commission), has adopted a corporate-leniency policy (CLP). [2] This offers a —

'self-confessing cartel member, who is first to approach the Commission, E immunity for its participation in cartel activity upon the cartel member fulfilling specific requirements and conditions set out under the CLP'. [3]

It is hoped by this to encourage cartel members to disclose cartel activity and thus to contribute toward achieving the objects of the Act. [4]

[2] The appellant, Premier Foods (Pty) Ltd (Premier), had been granted F conditional immunity under the CLP. It gave evidence of the cartel

2016 (1) SA p448

Gorven AJA (Maya ADP, Shongwe JA, Petse JA and Baartman AJA concurring)

A activity in complaints referred by the Commission to the second respondent, the Competition Tribunal (the Tribunal). This appeal concerns an order granted by the Tribunal in those proceedings declaring the conduct of Premier to be a prohibited practice in respect of its involvement in cartel activity (the declaration). [5] Premier says that the B Tribunal was not empowered to make the declaration because the conduct of Premier was not included in the complaints referred to the Tribunal. Premier submits that the declaration is therefore a nullity. As a result, the argument goes, neither the Tribunal nor the first respondent, the Chairperson of the Tribunal (the Chairperson), can lawfully C certify the declaration in terms of s 65(6)(b)(i) of the Act.

[3] The declaration came to be granted as follows. In December 2006 the Commission received information of an alleged bread cartel operating in the Western Cape (the first complaint). [6] It initiated a complaint against Premier, Tiger Food Brands (Pty) Ltd (Tiger) and Pioneer Foods (Pty) Ltd D (Pioneer). Premier applied for leniency under the CLP, disclosing that it and the other two parties had been operating a cartel in the Western Cape by fixing selling prices and other trading conditions. [7] Premier went further and disclosed that it, Pioneer and Foodcorp (Pty) Ltd (Foodcorp) had operated a bread cartel in other parts of the country. This involved agreements to allocate territories. [8] As a result of this E information the Commission initiated a second complaint (the second complaint). [9] The Commission referred the two complaints to the Tribunal. Only Tiger and Pioneer were cited as respondents in the first complaint, and only Pioneer and Foodcorp were cited as respondents in the second complaint. Relief was sought only against the cited respondents. F

[4] The two complaints were dealt with together by the Tribunal. The founding affidavit to the referral arising from the first complaint explains why Premier was not...