The Constitutional Court this morning handed down judgement in
both the Competition Commission v Yara South Africa and Others
(Yara case) and Competition Commission v Loungefoam and Others
(Loungefoam case) and dismissed with costs the Competition
Commission's (Commission) applications for leave to appeal
earlier decisions of the Competition Appeal Court (CAC).
In both of these cases the Commission sought determination on
whether it could amend its complaint referral to the Competition
Tribunal to include facts that may have arisen as a result of an
investigation and thus were not listed in the initial complaint,
and where in both of these cases the Competition Appeal Court (CAC)
had ruled against the Commission. In light of the CAC ruling in the
Yara case, the Commission sought leave to appeal directly to the
Constitutional Court as well as concurrently lodging a request for
leave to appeal to the Supreme Court of Appeal (SCA) before the
CAC, which remains pending. In the Loungefoam case the Commission
failed to seek leave to appeal from the CAC before lodging its
request with the Constitutional Court.
The majority judgment of the Constitutional Court in the Yara case
held that the Commission's delay in lodging this application
was excessive and that the Commission failed to adequately explain
the reasons for the delay. The Constitutional Court held that the
Commission had failed to make an application in terms of the
provision in the Competition Act, 1998 that permits a request to
the SCA or the Constitutional Court for an appeal of a CAC
decision, and that for these reasons, the Commission's
applications falls to be dismissed. Further, the judgment concludes
that even if the condonation application was allowed, it is not in
the interests of justice to grant the Commission leave to appeal
directly to the Constitutional Court.
The Loungefoam case saw the Commission appeal the whole judgment
of the CAC which amongst others, found that any amendment including
a new complaint must be initiated before it can be referred. The
majority decision of the Constitutional Court considered similar
factors as those in the Yara judgment and found that irrespective
of one's interpretation of the provision of the Competition Act
which permits appeals to the SCA and Constitutional Court, the
Commission failed to seek leave from the CAC before approaching the
Constitutional Court and showed no compelling circumstances that
would justify a direct appeal. The Constitutional Court held that
the matter fell to be dismissed on this basis alone and thus found
it unnecessary to decide condonation of the Commission's
seemingly excessive delay.
This presents a setback for the Commission in what has been an
extremely long and arduous journey following the Woodlands Dairy
and Another v Competition Commission case in 2010. Merits of
neither matter were considered by the Constitutional Court and the
applications were dealt with on procedural grounds. The analyses
were firmly based on interpretations of the relevant statutes,
rules of court and the importance of due process. These matters are
the last in a chain of cases regarding technical challenges
questioning the Commissions' powers of investigation,
initiation and referral of matters to the Competition
Tribunal.
Despite the fact that this is undoubtedly a setback for the
Commission, all is not lost. The Commission still have pending
applications before the CAC for leave to appeal to the Supreme
Court of Appeal (SCA) in both matters. Whether or not the SCA will
entertain these applications or whether or not the Commission has
the appetite to follow through on these applications in uncertain.
However, what both majority judgments of the Constitutional Court
stress is the importance of due process and procedures and that
failure to adhere to the legislative framework will not be
tolerated. This is not only a crucial lesson for the Commission but
must be borne in mind by all within the legal field.
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