Kenilworth Gold Circle

The judgment

The court's own file

125/CAC/NOV13 JUDGMENT /RG /... 1 IN THE COMPETITION APPEAL COURT OF SOUTH AFRICA (WESTERN CAPE HIGH COURT, CAPE TOWN) CASE NUMBER: 125/CAC/NOV13 DATE: 6 DECEMBER 2013 5 In the matter between: PHINDIWE ABEGAIL KEMA First Applicant AFRICA RACE GROUP (PTY) LTD Second Applicant and KENILWORTH RACING (PTY) LTD First Respondent 10 GOLD CIRCLE (PTY) LTD Second Respondent THE THOROUGHBRED Third Respondent HORSERACING TRUST THE SOUTH AFRICAN GROOMS Fourth Respondent ASSOCIATION 15 J U D G M E N T DAVIS, J P: 20 This is an application for leave to appeal to the Constitutional Court against the judgment of this court on 13 September 2013 in which this court found that the second applicant (the fourth respondent in the previous proceedings) did not have the necessary locus standi to appeal a decision of the Competition 25 125/CAC/NOV13 JUDGMENT /RG /... 2 Tribunal(‘Tribunal’) in respect of an intermediate merger. I should commence by making by making the point that in a case such as the present the practice has developed by way of a previous decision of the Constitutional Court’s that this court 5 should be asked to voice its vi ew as to whether an appeal should proceed to the Constituti onal Court. It is within this context that the hearing this mo rning has taken place. See Competition Commission v Yara So uth Africa (Pty) Ltd [2013] ICPLR 320 (CAC) at 322. 10 There are two further points that need to be made by way of introduction. The only issue which was determined by this court on 13 September 2013 concerned locus standi. There is 15 an affidavit which has been deposed to by the first applicant in this proceedings, Ms Kema, which sets out the reasons why the applicants seek to appeal the substantive decision to allow the merger to proceed. 20 This court did not deal with the substance of these arguments, not out of disrespect for t he applicants but because it determined that the issue of locus standi had to be decided prior to any legal analysis and enquiry into the merits of the Tribunal’s decision. Further, the case dealing with locus 25 125/CAC/NOV13 JUDGMENT /RG /... 3 standi, involves the interpretation of various sections of the Competition Act 84/98 (“the Act”) rather than a challenge to the constitutionality of provisions of the Act. Were the latter to have been the case, it is clear that the relevant Minister would have had to be joined to the proceedings and an entirely 5 different hearing would then have taken place. This case, which has been brought by the applicants, turns on an argument that section 61 (1) of the Act, grants the applicants a right to appeal the decision of the tribunal insofar 10 as the merger is concerned. Section 61(1) provides that a person affected by a decision of the Competition Tribunal may appeal against a Tribunal de cision or approach the Competition Appeal Court to review the decision in accordance with the Rules of the Competition Appeal Court. 15 Mr Chitando, who appears on behal f of the applicant, has based his argument, as indeed was the case when the matter was initially heard before this court, on the submission that his clients are persons affected by a decision of the Competition 20 Tribunal and accordingly this court should have accepted that they have locus standi to appeal the decision of the Tribunal. The problem, which this court then faced, and which still confronts it, is that a decision was taken by this court in The 25 125/CAC/NOV13 JUDGMENT /RG /... 4 Competition Commission v Distill ers Corporation (SA) Limited and Another, (case number 31/CA C/SEP03) in which the contrary interpretation then that urged upon us by Mr Chitando was adopted. In that case, co nfronted with exactly the same argument ,raised on that o ccasion by the Competition 5 Commission, Malan, AJA (as he t hen was) referred to section 17 of the Act and noted at paras 6-7: “By contrast, the two categories of persons expressly identified as having a right of appeal 10 against Tribunal merger decisions, namely the merger parties themselves and trade unions and employees of the merger parties are clearly ‘proximately affected’ by the decision in question and are accordingly persons ‘affected by’ such 15 decision for the purposes of section 61(1) of the Act. It follows and is apparent from the structure of the Act that section 61(1) must be read subject to section 17(1). In fact a consideration of the two 20 sections illustrate the rule of statutory interpretation that generalia specialibus non derogent, which applies to both earlier and subsequent enactments as we ll as to specific and general provisions in the same legislation. 25 125/CAC/NOV13 JUDGMENT /RG /... 5 In the context of the Act it is clear that sections 61(1) and 37 are general provisions governing the kind of Tribunal decisions generally that may be appealed to, and reviewed, by the Competition Appeal Court and also which categories of person 5 may appeal and review su ch decisions. Section 17(1) is a specific provision governing the categories of person who may appeal Tribunal decisions specifically in terms of section 16 of the Act”. 10 It is against this finding that applicants have submitted that there is a reasonable prospect that the Constitutional Court might come to a different interpretation. The difficulty with this submission is critically the following: to what extent is it 15 reasonable to conclude that the specificity of section 17 is trumped by section 61 so that section 61 expands the category of “affected persons” who may be entitled to appeal in merger proceedings? 20 The conduct ofmerger proceedi ngs as set out in the Act (Chapter 3 thereof) is clear. There are particular parties who are entitled to be heard by the Tribunal in these proceedings. They include the parties to the merger and any person who in terms of section 13A(2) is required to be given notice of the 25 125/CAC/NOV13 JUDGMENT /RG /... 6 merger. This latter group is described in section 13A(2): any trade union that represents a substantial number of its employees or the employees concerned or repr esentatives of the employees 5 concerned if there are no such registered trade unions. Merger proceedings are thus very different from proceedings in terms of the balance of the Ac t which deals with prohibited practices. One might envisage a different line of argument (I do not make any definitive findi ng thereon) insofar as locus 10 standi in respect of prohibited practices is concerned; however,by contrast a merger is effectively an administrative decision taken by the Tribunal and, if necessary, the Competition Appeal Court, to determine whether the merger should proceed pursuant to the provisions of Chapter 3. 15 Accordingly, and given the mani fest need for expedition in the determination of a merger, the Act made it clear as to which parties were entitled to be heard or to put it in the terminology of the Act, which parties we re “affected” by merger 20 proceedings. Were section 61 to be given the interpretation urged upon us by applicants, it wo uld, in effect, mean that section 17 is rendered somewhat nugatory, read together with section 13A(2) for there would now be a larger category of persons who would (1) be requir ed to be notified and (2) who 25 125/CAC/NOV13 JUDGMENT /RG /... 7 would then be entitled to participate in merger proceedings. This was clearly not the scheme of the Act as set out in the provisions. There is in addition a further problem. Section 16(1)(b) refers to intermediate mergers of which the present 5 merger stands to be classified. It provides that , if the Competition Commission approves an intermediate merger or approves such merger subject any conditions, a person in terms of section 13A(2) who is required to be given notice of the merger by way of a written notice in the prescribed form, 10 may request the Tribunal to consider the approval or conditional approval, provided the person has been a participant in the proceedings in the Competition Commission. No other party is given this right. The section is clear and 15 unambiguous. On the basis of the arguments raised by applicants, notwithstanding that a party would not have been entitled to participate at stage one, that is at the stage before the Tribunal, suddenly rights would have been created or their position would have been trans mogrified pursuant to section 20 61(1) and at stage two of the proceedings they would be able to participate. This surely is a situation which not only could never have been contemplated by the Act but which is at war with the wording of 25 125/CAC/NOV13 JUDGMENT /RG /... 8 the Act. In other words, pursuant to section 16(1)(b) a party such as the applicant could never have had the matter brought before the Tribunal in the first place. It is this particular provision which makes it abundan tly clear that section 61(1) cannot be read to provide for the anomalous situation which 5 would arise were the interpretation contended for by the applicants to be accepted. On this basis and given that the only issue before this court was whether the interpretation which was laid out in Distillers, 10 supra, was incorrect, and thus whether there is some form of ambiguity in the wording in the relevant sections which would allow a different reading of the Act to take place, it is my view that there is no reasonable pr ospect that the Constitutional Court would arrive at an interpretation different to that which 15 was set out in the Distillers case and applied in the judgment of this court of 13 September 2013. FOR THESE REASONS THEREFOR E I WOULD DISMISS THE APPLICATION LEAVE TO APPEAL WITH COSTS. 20 ________________ DAVIS, JP 25 125/CAC/NOV13 JUDGMENT /RG /... 9 I concur. ___________________ MOLEMELA, AJA 5 I agree and just wish to make one further point since Mr Citando referred to section 34 of the Constitution and the right of access to the court. That was one of the constitutional provisions he urged on us as affecting or supporting his 10 proposed interpretation in terms of which section 61 would give his client a right of appeal even though she did not fall within the ambit of section 17. I think it is important to bear in mind that the merger control 15 provisions of the Act constitute administrative machinery which was created by the Act to regul ate mergers in an expeditious fashion. The applicant and other persons did not prior to the enactment of these provisions have any particular right to interfere with or challenge merger proceedings. 20 It was perfectly permissible for the law maker to create this machinery to allow for persons fairly to participate in the proceedings of the Commission and the Tribunal but then to give a limited range of rights of persons to take it further. No 25 125/CAC/NOV13 JUDGMENT /RG /... 10 right was taken away and this reason also, I think, supports what the Judge President has said. 5 _________________ ROGERS, AJA