PPC And Temblor Trading

The judgment

The court's own file

THE COMPETION APPEAL COURT OF SOUTH AFRICA JUDGMENT Reportable Case no: 267/CAC/Jan25 268/CAC/Feb25 In the review between: PPC LIMITED Applicant and THE COMPETITION TRIBUNAL First Respondent MONDO MAZWAI N O Second Respondent IMRAAN VALODIA N O Third Respondent GEOFFREY BUDLENDER N O Fourth Respondent TEMBLOR TRADING (PTY) LTD t/a Fifth Respondent EST BUIDLING & HARDWARE THE COMPETITION COMMISSION Sixth Respondent And in the appeal between: PPC LIMITED Appellant and TEMBLOR TRADING (PTY) LTD t/a First Respondent EST BUIDLING & HARDWARE THE COMPETITION COMMISSION Second Respondent 2 Coram: Potteril, Masipa et Dippenaar AJJA Heard: 16 April 2025 Delivered: 28 May 2025 Summary: Competition law – Review and appeal of decision of the Competition Tribunal granting interim relief under s 49C of the Competition Act, 89 of 1998 – material misjoinder of parties with direct and substantial interest – sequence of determination of review and appeal fact specific - Court to determine misjoinder issue although non-joinder not expressly raised before Competition Tribunal – procedural irregularity – parties with a direct and substantial interest not joined to proceeding - decision reviewed and set aside – review dispositive of the matter – unnecessary to determine appeal on the merits. ORDER On appeal from: The Competition Tribunal: 1 The late filing of the applicant’s review application is condoned; 2 The decision of the Competition Tribunal of 31 December 2024 under case number IR133DEC 24 is reviewed and set aside. 3 The fifth respondent in the review application is ordered to pay the applicant’s costs on scale C which shall include the costs of two counsel, where employed. JUDGMENT Dippenaar AJA (Potteril and Masipa AJJA concurring) Introduction

[1]Two matters serve before us, both launched by PPC Limited (‘PPC’) as applicant and appellant. The first, a review application; the second, an appeal. They relate to the granting of an urgent interim relief order under s 49C(2) of the Competition Act 89 of 1998 (the Act) by the first respondent, the Competition Tribunal (the Tribunal) on 31 December 2024 in proceedings launched at the instance of the fifth respondent, Temblor Trading (Pty) Ltd t/a EST Building & Hardware (EST). 1 The Tribunal published its reasons on 22 February 2025.

[2]In terms of the interim order, PPC was interdicted and restrained from refusing to deal with EST, refusing to supply cement to EST’s members and supplying cement to EST members on terms which differ from those agreed to between PPC and EST, which applied prior to 15 November 2024, for a period of six months or the conclusion of a hearing into the prohibited practices alleged, whichever is the earlier.

[3]The Tribunal, the second to fourth respondents, the members of the Tribunal that adjudicated the application and the sixth respondent, the Competition Commission, 2 did not deliver any papers and did not participate in the proceedings. The fifth respondent, EST, opposed both the review and the appeal proceedings. Factual background

[4]The background facts are not contentious. PPC is a manufacturer and supplier of cement. It sells cement to a wide variety of customers in South Africa. Its customers 1 The first respondent in the appeal. 2 The second respondent in the appeal. 2 include hardware retailers. EST styles itself as a co-operative buying group for hardware products including cement. It does not itself purchase cement from PPC, either for its own account or on behalf of its members. It has some 756 members, 197 of which purchase cement from PPC. EST’s members who purchase cement from PPC comprise of mainly small and medium sized enterprises or firms owned by historically disadvantaged persons.

[5]For the past twelve years, PPC and EST have annually concluded a supply agreement or trading terms agreement regulating rebates payable by PPC based on the total volumes of cement collectively purchased by EST’s members from PPC. EST retains a portion of the rebate payments made by PPC. The balance is paid by EST to the members. In reply, EST stated that it retained nearly 20% (1-1.2% of the 5.5%) rebate paid by PPC.

[6]The terms on which PPC supplies cement to the EST members have at all relevant times been agreed upon directly and individually with EST’s members, save for the volume rebate payable on purchases of cement. It was undisputed that PPC bears the risk in relation to these purchases.

[7]On EST’s version, its role is to pool, from an accounting perspective, its members’ volumes of cement purchases to earn rebates at the highest level. It receives payment of such rebates on an annual basis and pays it to its members, after deduction of a portion of the rebate paid by PPC for the service provided. The exact proportion of the rebates retained by EST were not disclosed, despite a request from PPC to do so.

[8]The rebate terms that applied between PPC and EST prior to 15 November 2024 are set out in a written agreement concluded between them on 14 December 2023. The agreement was in force for a period of 12 months, commencing on 1 January 2024 (‘the 2024 rebate agreement’). 3

[9]On 15 November 2024, PPC advised EST and the affected EST members that it would not be concluding a rebate agreement with EST for the 2025 calendar year and that its relationship with EST would be coming to an end on 31 December 2024 as part of its ‘strategic review and future planning in respect of buyer groups that do not have a central trading account and that do not provide financial risk protection to PPC on behalf of its members’. Instead, PPC would be agreeing to rebates directly with the individual EST members and would be paying the rebates directly to the members. This solicited various communications between PPC and EST relating to the issue. No consensus could be reached between them.

[10]On 28 November 2024, PPC informed EST of its final decision not to renew or extend the trading terms agreement. On 6 December 2024, PPC addressed a letter to EST’s members proposing that they sign new trading term agreements directly with PPC. The letter updated the EST members on PPC’s rebate structure and advised members, inter alia, that ‘small retail stores that previously received a rebate of 0.8% will now enjoy rebates exceeding 3.5%’.

[11]According to PPC, rebate schemes are intended to incentivise customers to buy more of a firm’s products. The scheme becomes entirely unworkable if there is a middleman that retains an undisclosed and discretionary amount of the rebate because the firm offering the rebate has no idea, and no control over, how much of the rebate is actually paid to the members.

[12]Dissatisfied with PPC’s stance, on 8 December 2024 EST approached the Tribunal for interim relief on an urgent basis. Before the Tribunal, EST submitted that the unilateral and arbitrary decision by a dominant market player, PPC, disregarded the constitutional right of EST’s members to freely associate their business with a recognised buyer group. Once the protection of a buyer group was eradicated, this would in all probability result in EST’s members being systematically exposed to higher prices as they were unable to unlock higher rebates or any rebates at all if they were unable to achieve the targets set by PPC. 4

[13]After the hearing on 20 December 2024, the Tribunal exercised its interrogative powers and via an email sent to the parties, directed them to provide a comprehensive analysis of how PPC’s proposed 2025 rebates would affect each EST member’s rebate and to present calculations on what rebate each member would have received.

[14]In response various spreadsheets and other information was provided by both PPC and EST on 23 and 24 December 2024. None of the evidence was adduced under oath. No data or primary evidence underpinned the spreadsheets, prepared by the respective parties pursuant to the Tribunal’s email. There are numerous factual disputes between the parties pertaining to such information and whether the financial period of 2023 or 2024 should be utilised, given that the 2024 figures were based on estimates and assumptions in various respects. On EST’s calculations, almost all EST members would be worse off under the new PPC rebate structure. PPC’s calculations revealed the opposite, namely that EST members would earn more by way of rebate in 2025 than they did in 2023. The Tribunal’s findings

[15]The Tribunal found that the requirements of s 49C(2)(b) were established. In granting its order the Tribunal relied principally on the provisions of s 8(1)(d)(ii) and s 8(1)(c) of the Act. Section 8(1)(d)(ii) prohibits a dominant firm from refusing to supply scarce goods and services to a customer or competitor. Section 8(1)(c) prohibits a dominant firm from engaging in an exclusionary act, other than an act listed in s 8(1)(d), if the anti-competitive effect of that act outweighs its technological, efficiency or other pro- competitive gain.

[16]The Tribunal held that EST prima facie established prohibitive conduct on the part of PPC under s 8(1)(d)(ii). It further found that prohibitive conduct under s 8(1)(c) was prima facie established and that PPC’s new structure was exclusionary and had anti- competitive effects. It further held that EST had established prima facie that, absent the granting of interim relief, the EST members (and in turn consumers) would suffer serious 5 or irreparable harm and that the balance of convenience favoured the granting of interim relief.

[17]In coming to its conclusions, the Tribunal took account of the effect on members of EST and the consumers they supply, who are in low-income and rural areas. 3 In summary it found that PPC’s unilateral refusal to deal with EST, coupled with its conduct of inducing and/or forcing EST’s members to conclude new trading term agreements directly with it, to the exclusion of EST, meant that PPC would be in a position to charge higher prices for cement, to the detriment of EST’s members and ultimately to the detriment of consumers. 4

[18]The Tribunal found that the harm would be to EST’s members’ competitive position and that EST had shown prima facie that its members would be worse off absent pre- existing agreements with PPC in that the members would no longer be guaranteed a rebate, would earn less rebates on higher target volumes, would lose the benefit of pooling volumes and would no longer earn a profit share. No supporting affidavits from any EST members were attached to its founding papers.

[19]In PPC’s answering papers, it pointed out the absence of evidence from the EST members and challenged EST’s locus standi, a point rejected by the Tribunal. It held: 5 ‘In our view, PPC is correct that the Members are not before us qua members. However, considering that the agreement is between EST and PPC for the benefit of the Members, we are satisfied that both EST and PPC possess the relevant knowledge to assist us in determining whether the Members’ competitive position will prima facie be better or worse under the 2025 trade conditions.’ 3 Reasons paras 84-85. 4 EST Heads of argument para 14. 5 Reasons para 64. 6

[20]The Tribunal in its reasons, relied heavily on the contested evidence submitted after the hearing. PPC submitted that the Tribunal erred in accepting EST’s submissions without proper interrogation of the data upon which it relied. The Tribunal concluded: ‘…[T]he empirical data suggests that the current rebate structure is more beneficial to the Members than PPC’s 2025 rebate structure. Further, that under PPC’s 2025 rebate structure, the Members may be exposed to higher prices (through earning lower rebates).’ 6 Grounds of review and appeal and EST’s basis of opposition

[21]The basis for PPC’s review was that the EST members to which the Tribunal’s order refers, and whose legal interests are affected by the Tribunal’s order, were not joined as parties in the Tribunal proceedings and were not given the opportunity to be heard, thus falling foul of the audi alteram partem principle. It submitted that the interim order should be set aside as being procedurally unfair as envisaged by s 6(2)(c) of The Promotion of Access to Justice Act 3 of 2000 (PAJA).

[22]After the timeous delivery of the review application was placed in dispute by EST, PPC sought condonation for its failure to comply with the time periods provided for in rules 23-27 of the Competition Appeal Court Rules. EST did not deliver any opposing papers in response but persisted with its opposition in argument.

[23]In relation to the review, EST contended that condonation for the late delivery of the condonation application should be refused as PPC’s delay was not properly explained. In sum, EST’s grounds of opposition to the review were that: (i) PAJA was not applicable and did not constitute a cause of action; (ii) EST’s failure to join the EST members did not violate the right to audi alteram partem; and (iii) that the EST members do not have a direct and substantial interest in the relief. EST further relied on the fact that the issue of a material non-joinder was not raised before the Tribunal. Lastly, EST submitted that this Court could and should exercise a discretion against the granting of relief. 6 Reasons para 78. 7

[24]PPC’s appeal was based on various grounds, challenging each of the aspects of the Tribunal’s findings in relation to dominance, exclusion and anti-competitive effects under s 8(1)(c) and s 8(1)(d)(ii) of the Act, as well its findings regarding irreparable harm and the balance of convenience under s 49C(2)(b). The findings of the Tribunal were defended by EST. A dispute also arose between the parties as to whether the interim order was appealable, with EST contending that it was not appealable and PPC submitting the opposite.

[25]Centrally, PPC contended that it enjoys the right of freedom of contract, and thus the right to choose not to conclude contracts with firms that it no longer wishes to deal with and to terminate contractual arrangements that have outlived their usefulness. It challenged the ambit of the order granted in paragraphs 1.1 and 1.3 pursuant to s 8(1)(d)(ii) in relation to the ‘refusal to deal’, as EST is not a competitor or customer of PPC and the Tribunal made no finding that cement is a scarce good or that PPC had refused to supply cement to the individual members. It contended that in paragraph 1.2 the Tribunal implicitly recognised that EST is not a customer of PPC in respect of goods and services, prohibiting PPC from supplying cement to EST’s members. Regarding s 8(1)(c), the Tribunal stated that its s 8(1)(d)(ii) analysis applied equally to s 8(1)(c). PPC’s challenge was that it was on the strength of its incorrect findings that PPC’s conduct fell within s 8(1)(d)(ii), that it found PPC had contravened s 8(1)(c) and that the Tribunal’s reasoning failed if PPC’s conduct was found not to contravene s 8(1)(d)(ii).

[26]PPC further contended that if a dominant firm’s conduct falls outside the scope of the exclusionary acts defined in s 8(1)(d) as in the present case, it was incumbent on the Tribunal to at least explain why that conduct nonetheless remained exclusionary under s 8(1)(c). It complained that the Tribunal did not do so as EST did not even identify or define the market in which it and its members compete, and no evidence was led, even via EST members, that individual members were being prevented from participating in or expanding in the retail markets in which they compete. 8

[27]PPC further challenged EST’s case on the question of anti-competitive effects. It contended that EST’s case and the Tribunal’s findings on the question of irreparable harm focussed exclusively on the potential harm to the individual members. It was argued that under s 49C, the Tribunal may grant an interim interdict only where it is necessary to prevent harm to the applicant. On this basis PPC submitted that the Tribunal was not authorised to grant relief in the exercise of its discretion to prevent irreparable harm to any firm other than EST.

[28]Lastly, PPC submitted that there was no prima facie case based on the unsubstantiated analysis prepared by EST for purposes of the litigation after the hearing was concluded, which was never confirmed under oath and the veracity of which was highly doubtful. It was contended that there was no evidence that EST would suffer irreparable harm and that EST effectively conceded that an interim order was not necessary to protect it. On these grounds, PPC sought an order upholding the appeal and replacing the Tribunal’s order with one dismissing EST’s application for interim relief.

[29]EST’s stance in relation to the appeal was that the interim order was not appealable as it was not final and did not have an irreversible effect. It defended the Tribunal’s factual and legal findings and contended that the requirements of s 49C(2) had been met and the interim relief had been correctly granted. It further challenged the point taken in PPC’s heads of argument that the Tribunal had erred in accepting EST’s post- hearing submissions without proper interrogation of the data upon which it relied, on the basis that this was impermissible and was not raised as a ground for appeal in the notice of appeal or supplementary notice of appeal. EST did not persist with its reliance on s 8(1(d)(i) of the Act, which was rejected by the Tribunal. Sequence of determination

[30]During argument, the parties were in agreement that the appeal should be determined first. PPC contended that if the appeal succeeded, the review would become moot. During argument, reliance was placed on Mercantile Bank, A Division of Capitec 9 Bank Ltd and Others v Surve and Others (Mercantile Bank) 7 and Competition Commission v Bank of America Merril Lynch International Limited (Bank of America), 8 in which both appeal and review proceedings were launched and determined at the same time. The grounds of appeal and grounds of review advanced in those cases were the same or similar. In both those cases, this Court dealt with the appeals first, which in both instances were also dispositive of the review proceedings. PPC argued that this was the appropriate sequence to follow in the present instance as a determination of the appeal in its favour would end the litigation between the parties.

[31]A similar stance was adopted by EST in its heads of argument. During argument, the respondent indicated that it would apply for an extension of the interim order in due course, if necessary. In argument, EST conceded that if there was merit in the review, it should be determined first. EST contended that if the review was successful, the matter should be remitted to the Tribunal for the joinder of the EST members to enable them to participate in the proceedings.

[32]In my view, Mercantile Bank and Bank of America are distinguishable on the facts, given that the ground of review of non-joinder raised in the present instance is separate and distinct from the grounds of appeal raised by PPC, already referred to. I accept that the sequence of determination is fact specific to each case, as argued by PPC. The facts in Mercantile Bank and Bank of America rendered it appropriate for the appeals to be determined first.

[33]In the present instance, that approach would not dispose of the review ground if the appeal was to be determined first. Moreover, it does not appear procedurally correct for the appeal to be determined first. The review raises an important antecedent question 7 Mercantile Bank, A Division of Capitec Bank Ltd and Others v Surve and Others [2023] ZASCA 2; [2023] 3 CPLR 33 (CAC). 8 Competition Commission v Bank of America Merril Lynch International Limited and Others 2020 (4) SA 105 (CAC); [2020] 1 CPLR 26 (CAC). 10 to the merits of the appeal, being a material non-joinder of parties with a direct and substantial interest in the proceedings. That flows from the established principle that a court will refrain from dealing with any issue which may impact on the interests of parties who should have been joined. 9 It is significant in this context that the arguments advanced by both PPC and EST in relation to the appeal in various respects involve the position and interests of the EST members. The views of the EST members, if the review is to succeed, may have a material impact on the matter and may change the landscape against which the appeal is to be considered.

[34]Given the facts of this case, it is apposite to consider the review first. It centres around the issue whether the Tribunal could lawfully grant the order that it did without first having afforded the affected EST members an opportunity to be heard. The review

[35]Prior to dealing with the merits of the review, it is convenient to first deal with various other issues raised by EST. As stated, EST’s contention that the review fell to be dismissed because it was filed out of time was met by an application for condonation by PPC. EST did not deliver any opposing papers to the condonation application but made submissions in its heads of argument on the issue. It was submitted that PPC’s review did not depend on the Tribunal’s reasons and that it did not avail itself of the remedy provided for in the rules. It was common cause that PPC failed to adhere to the time frames prescribed in rule 23(1) and rule 23(2)(b) of the Competition Appeal Court Rules. The application was brought 10 business days late.

[36]EST further submitted that PPC chose to rely on its replying affidavit in support of condonation, rather than to file an application supported by a self-standing founding affidavit and, in so doing, deprived EST of the opportunity to answer the condonation application. The latter submission is in my view overly technical and elevates form over 9 City of Johannesburg v South African Local Authorities Pension Fund and Others [2015] ZASCA 4; (2015) 36 ILJ 1439 (SCA) para 3. 11 substance. Had EST elected to deliver an affidavit opposing the condonation application, it is unlikely that it would not have been admitted into evidence. It chose not to deliver any affidavit in opposition and placed no facts before the Court on the issue.

[37]It is trite that condonation is not there for the mere asking but that an applicant must make out a case for the indulgence. In terms of rule 23(2)(b), any review of a decision of the Tribunal must be brought within 15 business days. 10 The relevant principles pertaining to the interests of justice are well known and were summarised by the Constitutional Court in Steenkamp and others v Edcon Limited (Steenkamp). 11 It is not necessary to repeat them.

[38]Considering the facts and all the relevant factors and principles enunciated in Steenkamp holistically, I am persuaded that it is in the interests of justice for condonation to be granted. 12 PPC has given a reasonable explanation for its delay and the cause thereof. It explained that it awaited the reasons of the Tribunal as it may have revealed additional grounds for the review application. Albeit that PPC had a remedy under rule 23, that should not exclude PPC from a remedy in circumstances where there was a delay on the part of the Tribunal in delivering its reasons. Viewed holistically, the stance adopted by PPC in the circumstances was not unreasonable and the delay was not extensive. It cannot be concluded, as EST submits, that PPC wilfully disregarded the rules. PPC has further illustrated reasonable prospects of success. It cannot be concluded that EST has suffered any prejudice. It did not claim any. In the result, the late filing of the review application should be condoned, and such order will be granted. 10 Tsutsumani Business Enterprises CC v Competition Tribunal and Others [2023] ZACAC 6; [2023] 3 CPLR 34 (CAC) para 12. 11 Steenkamp and Others v Edcon Limited [2019] ZACC 17; 2019 (7) BCLR 826 (CC); [2019] 11 BLLR 1189 (CC) para 36. 12 Ibid paras 36-37; Grootboom v National Prosecuting Authority and Another [2013] ZACC 37; 2014 (2) SA 68 (CC); 2014 (1) BCLR 65 (CC) paras 22-23 and 51. 12

[39]Turning to the merits, in contending that a failure to join does not violate the right to audi alteram partem, EST placed reliance on the decision of the Tribunal in Cancun Trading No 24 CC and Others and Seven-Eleven Corp SA (Pty) Ltd (Cancun Trading), where the Tribunal held: 13 ‘The respondent…has argued that the Tribunal is entitled to have regard to the common law principles followed by the High Courts because it is bound by its statute to conduct its hearings in accordance with the principles of natural justice. In this regard the respondent is entirely correct but it requires a logical leap of faith to infer a common law rule on joinder from the principles of natural justice and the respondent has not given us any authority on this point. Natural justice is about fairness to the joined. The High Court doctrine is about who should be joined.’

[40]I am not persuaded that EST’s reliance on Cancun Trading avails it. The facts in Cancun Trading are distinguishable. There, the argument was raised in context of the non-joinder of co-franchisees of the respondent. The argument that the entire franchise would collapse was further undermined by the claimant’s undisputed averments. The Tribunal found that on the facts, no case for joinder was made out. 14 Importantly, the issue whether the Tribunal was entitled to have regard to the common law principles followed by the High Courts was left open and was not determined. 15

[41]Moreover, one of the most important principles of natural justice is audi alteram partem. 16 It is trite that an interested party must be afforded an opportunity to be heard if such a party has a substantial and direct interest in a matter. 17 EST’s submission that PPC had not referred to a single authority supporting its argument that not joining EST’s members amounted to an infringement of the right to audi alteram partem, lacks merit. 13 Cancun Trading No 24 CC and Others and Seven-Eleven Corp SA (Pty) Ltd (18/IR/Dec99) [2000] ZACT 10 (7 April 2000) para 19. 14 Ibid paras 21-22. 15 Ibid paras 19-20. 16 Hlongwane v Minister of Justice 1993 (2) SA 269D. 17 Ex parte Body Corporate of Caroline Court [2002] 1 All SA 49 (A); 2001 (4) SA 1230 (SCA) paras 9-14, with reference to Amalgamated Engineering Union v Minister of Labour 1949 (3) SA 637 (A). 13

[42]EST further contended that the review should be dismissed as PPC did not raise non-joinder before the Tribunal. Before the Tribunal, PPC had complained that EST had no standing to bring the application and had not attached any affidavits from the EST members to its founding papers. EST submitted that the Tribunal had in fact applied its mind to the complaint raised by PPC. The Tribunal concluded: 18 ‘In our view, PPC is correct that the Members are not before us qua members. However, considering that the agreement is between EST and PPC for the benefit of the Members, we are satisfied that both EST and PPC possess the relevant knowledge to assist us in determining whether the Members’ competitive position will prima facie be better or worse under the 2025 trade conditions. This approach is in line with the CAC’s requirement that we not employ too rigid an approach in interim relief proceedings considering that an effective interim order will “ …have effects within a market or across markets, and may affect different market participants: customers, competitors and suppliers.”’

[43]The affidavits by the two EST members expressing their preference to contract with PPC directly was placed before the Tribunal as well as a bundle of unconfirmed letters presented by EST. It should reasonably have been clear to the Tribunal that the views of all the EST members were not placed before it and that the members hold opposing views. What the Tribunal did not apply its mind to, even in the face of the affidavits from the two EST members, was the effect the order would have on the affected EST members. The Tribunal was aware that a number of EST members had already concluded agreements with PPC directly and offers had been made to the other EST members which have dealings with PPC.

[44]Under s 55 of the Act and Competition Tribunal Rule 55, the Tribunal has a wide discretion in managing and conducting its proceedings. Moreover, the Tribunal enjoys a discretionary power of joinder under Competition Tribunal Rule 45(1). It provides: ‘The Tribunal, or the assigned member, as the case may be, may combine any number of persons, whether jointly, jointly and severally, separately, or in the alternative, as parties in the 18 Tribunal Reasons, para 64. 14 same proceedings, if their respective rights to relief depend on the determination of substantially the same question of law or facts’.

[45]It was thus open to the Tribunal to have ordered the joinder of the EST members mero motu, so that they may be heard in the proceedings. Significantly, the common law position on obligatory joinder remains unchanged in that anyone with a direct and substantial interests in a matter must be joined. 19 In my view, it was incumbent on the Tribunal to consider whether all parties who had a direct and substantial interest in the relief sought, was before it when it made its decision.

[46]Moreover, it is well established that a court may raise the issue of non-joinder mero motu. EST’s stance disregards what the Constitutional Court stated in Morudi and Others v NC Housing Services and Development Co Ltd: 20 ‘On the authority of Amalgamated Engineering and Cape Bar Council, the High Court could not validly grant an order in the main application without the applicants having been joined or ensuring that they would not be prejudiced. It was incumbent upon that Court mero motu to insist on their joinder’. …The failure to do so constituted a procedural irregularity and denied the parties their access to court.’ 21

[47]It is apposite to further refer to what was stated in Amalgamated Engineering: 22 ‘Indeed it seems clear to me that the court has consistently refrained from dealing with issues in which a third party may have a direct and substantial interest without either having that party joined in the suit or, if the circumstances of the case admit of such a course, taking other adequate steps to ensure that its judgment will not prejudicially affect that party’s interests’. 23 19 Afrocentric Health Limited and Discovery Health Medical Scheme and Others [2016] 2 CPLR 888 (CT) para 25. 20 Morudi and Others v NC Housing Services and Development Co Ltd and Others [2018] ZACC 32; 2019 (2) BCLR 261 (CC) para 31. 21 Ibid paras 33-34. 22 Fn 18 above at 659. 23 Quoted in Morudi fn 21 above para 30. 15

[48]EST’s contention that as the issue of non-joinder was not raised before the Tribunal, it could not be raised, thus lacks merit.

[49]I turn to whether PPC may rely on PAJA and whether it constitutes a cause of action in the review. EST submitted that it did not, given that it was a statutory review under s 49C(6) of the Act therefore, PPC could not invoke s 6(2) of PAJA as a ground of review.

[50]In Competition Commission of South Africa v Group Five Construction Ltd (Group Five), 24 the Constitutional Court confirmed that this Court, which has ‘a status similar to that of the High Court’, has jurisdiction to hear PAJA and legality reviews in terms of the two relevant provisions of the Competition Act, one of which is s 37(1)(a), which expressly empowers this Court to review any decision of the Competition Tribunal.

[51]It was argued by EST that Group Five is distinguishable. I do not agree. The fact that it is a statutory review does not mean that it is not open to the applicant to invoke grounds under PAJA, given that it deals with constitutional issues. 25 As held expressly in Group Five: ‘It bears emphasis that section 27(1)(c) contemplates a limited review that does not oust the ordinary review remedies under PAJA and the principle of legality. Nor is there any other provision in the Act which ousts remedies available under PAJA or the principle of legality.’ 26

[52]In terms of s 37(1)(a) of the Act, this Court has the power to ‘review any decision of the Competition Tribunal’. It is cast in wide terms. The same applies to s 49C(6). A review on statutory grounds does not necessarily exclude a review under PAJA. Where the offending conduct qualifies under PAJA, as in the present instance, a party may 24 Competition Commission of South Africa v Group Five Construction Limited [2022] ZACC 36; 2023 (1) BCLR 1 (CC); [2023] 1 CPLR 1 (CC) para 132. 25 State Information Technology Agency SOC Ltd v Gijima Holdings (Pty) Ltd 2018 (2) SA 23 (CC). 26 Fn 25 above para 144. 16 choose between the remedies offered by PAJA and the special statutory review regime. 27 The provisions of s 37 of the Act must be read in conjunction with PAJA, which sets out the grounds on which administrative action may be reviewed. 28 Accordingly, EST’s submission that PAJA is not applicable and does not provide a cause of action, is without merit.

[53]I turn next to the merits of the review application. It was undisputed that in the period between 15 November 2024 and 31 December 2024, PPC made offers to contract directly with EST’s members. The offers included the terms of the rebate that would be payable to the EST members in 2025, subject to them achieving prescribed volume targets. It was disclosed at the hearing that some 34 EST members had accepted PPC’s offers, and binding contracts were concluded with them.

[54]PPC’s case is that the Tribunal’s order has the effect that PPC and the relevant members cannot perform under the various agreements concluded between them prior to 31 December 2024 (incorporating PPC’s 2025 terms and conditions) insofar as they differ from the terms referred to in the Tribunal’s order (‘the first category’). In addition, the members of EST to which PPC has offered to supply cement under PPC’s 2025 terms and conditions, but with whom agreements had not yet been concluded, are prohibited from accepting and implementing such offers insofar as they differ from the terms referred to in the Tribunal’s order (‘the second category’).

[55]PPC submitted that the EST members were affected and clearly had a legal interest in the relief granted by the Tribunal. The first category had concluded legally binding agreements under which they enjoyed various rights which are not unenforceable. The second category of members have been deprived of their right to conclude and 27 Hoexter and Penfold, Administrative Law in South Africa, 3 rd ed 155-157. 28 Fuel Retailers Association of Southern Africa v Director-General Environmental Management, Department of Agriculture, Conservation and Environment, Mpumalanga Province and Others 2007 (6) SA 4 (CC); 2007 (10 BCLR 1058 (CC) para 37. 17 benefit from similar agreements with PPC should they wish to do so. It was argued that the EST members thus have a direct and substantial interest in the subject matter of the action and are prejudiced by the Tribunal’s order because they no longer enjoy the right to contract with PPC on terms of their own choosing. As previously stated, two EST members filed affidavits to this effect. It was argued that the failure to join the EST members constituted a material non-joinder.

[56]PPC argued that the proceedings before the Tribunal were procedurally unfair and its order falls to be set aside under s 6(2)(c) of PAJA and remitted to the Tribunal so as to obtain the views of all EST members on the relief sought by EST in its application.

[57]In response, EST contended that the EST members only had a financial interest, rather than a legal interest in the relief granted by the Tribunal. It submitted that the order only applied to those firms who chose to remain members of EST and that there was nothing preventing a member from resigning from the buying group ‘either entirely or in respect of PPC’s cement’. No evidence had however been presented that any ‘partial resignation’ from EST was possible. The evidence illustrated that EST members enjoyed a benefit over various of the products sold by the respective members. EST’s conclusions regarding resignation were not supported by any primary facts and appear to be self- serving.

[58]EST introduced a bundle of some 40 letters from its members offering support for EST in some form or the other. Generally, these letters are cast in broad and generic terms. None of the letters were confirmed under oath. The letters further do not expressly address the vital question whether the respective members would prefer to contract directly with PPC in 2025 for rebates, or whether they prefer to contract via EST. The letters are by and large pro forma letters, and in my view take the matter no further. They do not provide a response to the central issue. The views of the remaining affected EST members remain unclear. What remains clear is that the EST members were not afforded the opportunity to be heard in the proceedings. 18

[59]EST averred that PPC’s decision may preclude the EST members from effectively participating in downstream markets. No evidence in substantiation thereof was presented, nor were the EST members offered any opportunity so state their position.

[60]The information provided to the members by EST’s Mr Greeff appears to be incomplete and in certain respects, slanted. It would be in the interests of those members to have the opportunity to state their views. Notably, at least two members provided PPC with affidavits, which supported them directly contracting with PPC. What the views of the other affected EST members are, remains unclear.

[61]The test for material non-joinder is well established and does not require elaboration. 29 The joinder of a party is only required as a matter of necessity, as opposed to a matter of convenience, if that party has a direct and substantial interest which may be affected prejudicially by the judgment of the court in the proceedings concerned.

[62]As held in City of Johannesburg v South African Local Authorities Pension Fund: ‘A “direct and substantial interest” is more than a financial interest in the outcome of the litigation. A test often employed to determine whether a particular interest of a third party is the one or the other, is to examine whether a situation could arise in which, because the third party had not been joined, any order the court might make would not be res judicata against that party, entitling him or her to approach the court again concerning the same subject matter and possibly obtain an order irreconcilable with the order made in the first place….’ 30 The present facts satisfy this test.

[63]In Rosebank Mall (Pty) Ltd and Another v Cradock Heights (Pty) Ltd (Rosebank Mall), 31 a distinction was drawn between necessary joinder and a joinder of convenience. In cases of joinder by necessity, a court may, even on appeal, mero motu raise the question of joinder to safeguard the interests of third parties and decline to hear the matter 29 Absa Bank Ltd v Naude NO 2016 (6) SA 540 (SCA) para 10; Judicial Service Commission and Another v Cape Bar Council and Another 2013 (1) SA 170 (SCA) para 12. 30 Fn 10 above para 9. 31 Rosebank Mall (Pty) Ltd and Another v Cradock Heights (Pty) Ltd 2004 (2) SA 353 (W) para 11&12. 19 until such joinder has been effected or the court is satisfied that third parties have consented to be bound by the judgment or have waived their right to be joined. It was further held that informal notice to a party not cited in judicial proceedings, coupled with mere non-intervention or even an intimation of non-intervention, does not amount to a representation that such third party will submit to and be bound by any judgment or order given.

[64]In Rosebank Mall, a distinction was further drawn between the case of a party whose rights purely derived from a right which was the subject-matter of litigation and in which he had no legal interest, on the one hand and on the other, a case where a third party has a right acquired aliunde the right which is the subject-matter of litigation and which would be prejudicially affected if a judgment or order made in litigation to which it was not a party were carried into effect. 32

[65]On the facts, the position of the EST members falls into the latter category. The order granted by the Tribunal, and specifically in paragraph 1.3 thereof, impairs the rights of the EST members who have concluded agreements regarding 2025 with PPC and those EST members who wish to do so on the terms offered by PPC and would probably have a detrimental effect on the rights and interests of at least some of the EST members who elect to contract directly with PPC.

[66]EST argued that, given the Tribunal’s finding that EST’s members would be prejudicially worse off in the absence of the interim relief sought by EST, their interests were not prejudicially affected by the Tribunal’s decision and thus, PPC had not established that EST’s members had a material interest in the outcome of the Tribunal’s proceedings, requiring their joinder. It was further contended that there could be no concern that there would be any prejudice to EST members if the Tribunal order was allowed to stand. Those arguments are circular and predicated upon the correctness of the findings of the Tribunal. However, those findings have been challenged and are part 32 Fn 32 above para 37. 20 of the subject-matter of the appeal. Moreover, those findings of the Tribunal were based on evidence produced after the hearing, which were not confirmed on oath.

[67]As to appropriate relief, EST submitted that this Court should, irrespective of the merits of PPC’s non-joinder point, exercise its discretion and refuse to grant the setting aside order sought in the review application as it would prejudice the second category of affected EST members, being those that have not yet signed new agreements with PPC. It was contended that if the order was set aside, they would have no agreement in place with PPC entitling them to any rebate for 2025, constituting significant financial prejudice to those members. That argument is however not sustainable on the facts.

[68]Considering the facts and the terms of the relief granted by the Tribunal, I am persuaded that the EST members have a direct and substantial interest and that their interests are affected by the order granted. No facts were presented that the EST members acquiesced to the granting of an order without their participation. Thus, a joinder was necessary. The information placed before the Tribunal illustrated that members held different views and that not all of the EST members were aligned to the stance adopted by EST, fortifying the need for them to be afforded an opportunity to be heard on the issue.

[69]Lastly, EST submitted that this Court should not set aside the Tribunal’s order but that both the appeal and the review should be postponed to permit EST’s members to be joined to the proceedings. Reliance was placed on the remedy granted in Pretorius v Slabbert (Pretorius). 33 In Pretorius, an appeal was postponed sine die to permit an interested party to be joined.

[70]Given the present factual matrix, the mere postponement of the matter would not be a suitable remedy and would give rise to numerous additional complexities. As already 33 Pretorius v Slabbert 2000 (4) SA 935 (SCA), relying on Selborne Furniture Store (Pty) Ltd v Steyn NO 1970 (3) SA 774 (A). 21 stated, the landscape may significantly change once all the EST members have been afforded an opportunity to be heard. It would also not address the potential prejudice of the EST members were the interim order to stand. Conclusion

[71]I conclude that PPC has established that the proceedings before the Tribunal were procedurally unfair as envisaged by s 6(2)(c) of PAJA and that the review must succeed. The interim order must be set aside.

[72]Both parties argued for a remittal in the event that the review was successful. The interim order has endured for a period close to its six months’ duration. Remittal would be wholly impractical given the limited period left in which the order will still be in effect. Nor is it clear that there is sufficient time to ensure the papers are ripe for hearing after the joinder of the EST members or that a panel to hear the matter could even be constituted to hear it in this period, let alone make a decision. Remittal would simply create more problems for all involved. EST’s indication that it intended to apply for an extension of the order does not resolve the issues.

[73]The outcome in the review application renders it unnecessary for this Court to consider the merits of the appeal. It is also unnecessary to consider whether the interim order is appealable. Costs

[74]There are circumstances in which a party may appeal on the merits of a decision and still bring a review where grounds for doing so also exist. As held in Mercantile Bank, a court which enjoys both appeal and full review jurisdiction, as this Court does, should not adopt a highly technical approach as it may result in failing to provide access to justice. 34 34 Mercantile Bank fn 8 above para 85, referring to Liberty Life Association of Africa v Kachelhoffer NO 2001 (3) SA 1094 (C). 22

[75]As observed by Manoim JP: 35 ‘A court should also recognise the dilemma that faces a party who genuinely wishes to challenge both the regularity of the proceedings and the merits of the case. If it is driven by ulterior motives, then that will be readily discernible to a court and suitable orders of costs can be made to discourage similar abuse.’

[76]On the facts, it cannot be concluded, as submitted by EST, that the review application constitutes an abuse. To the contrary, I have concluded that it must succeed. There is thus no reason to deviate from the normal principle that costs follow the result. Counsel agreed that costs should be granted on scale C and that the employment of two counsel was warranted. Considering the issues and complexities involved, such an order is warranted. Order

[77]In the result the following order is granted: 1 The late filing of the applicant’s review application is condoned; 2 The decision of the Competition Tribunal of 12 November 2024 under case number IR133DEC24 is reviewed and set aside; 3 The fifth respondent in the review application is ordered to pay the applicant’s costs on scale C, which shall include the costs of two counsel, where employed. ________________________ EF Dippenaar AJA Competition Appeal Court 35 Mercantile Bank fn 35 above para 86. 23 Appearances For the applicant/appellant: J Wilson SC and G Marriot Instructed by: Nortons Inc For the fifth respondent: A Gotz SC and A Kessery Instructed by: ST Attorneys.