It
is further recommended that the Commission also initiate a complaint
against Clover regarding the possible contravention of
section 5
and/or section 8."
[5]
From the Initiation Statement and Memorandum, it is apparent that
respondent ('the Commission') had obtained specific information
about a possible collusion and/or price fixing involving Parmalat
and Ladismith Cheese which is prohibited in terms of section
4(1)
(b) (i) of the Act. In addition, the Commission had obtained
evidence indicating that Clover might be abusing its dominant
position and contravening section 5 and/or section 8 of the Act;
hence the initiation of the complaint.
[6]
On 22 March 2005, acting in terms of section 49A (1) of the Act, the
Commissioner issued a summons against Dr HAJJ Kleynhans,
the Chief
Executive Officer of first appellant ('Woodlands'). It was apparent
from the summons itself that the Commission was
concerned with an
investigation into prohibited conduct in the milk industry under
case number 2005/Feb/1424 (being the case
number of the initiation
statement referred to above).
[7]
On 1 April 2005, Woodlands' attorneys wrote a letter to the
Commission, and having acknowledging receipt of the summons, they
recorded Woodlands' wish to cooperate fully with the Commission and
to comply, to the extent possible, with the provision of
documents
contained in the summons.
[8]
The letter also recorded the view of Woodlands' attorneys that the
description of the complaint referred in the broadest of
terms to
the kinds of activities that constituted prohibited practices as
defined in the Act, and did not provide any particularity
regarding
the actual complaint. The letter proceeded to call for information
to enable Woodlands "to comply fully with the
demand in the
summons". What was called for was the identification of the
parties to the alleged collusion and/or price
fixing, the subject
matter of such collusion and/or price fixing, the parties to the
alleged restrictive vertical practices,
the subject matter of such
restrictive vertical practices, the kind of abuse of dominance being
investigated, the subject matter
of such abuse of dominance and the
parties to such an abuse of dominance.
[9]
On 6 April 2005, the Commission replied to Woodlands' attorneys.
This letter contained the following:
1. The
Commissioner initiated the complaint against Parmalat SA (Pty)
Limited, Ladismith Cheese Company (Pty) Limited and Clover
Industries limited in terms of section 49 B(1) of the Competition
Act 89 of 1998 (as amended) ("the Act").
2. The
Commissioner initiated the complaint to establish whether there is
anti competitive behaviour at 'any level' of the industry.
Through
this, we allowed ourselves the opportunity to evaluate the entire
industry. Therefore, it would be premature for the
Commission to
comment in any industry relationship and to conclude on the
applicable sections of the Act as such an early stage
of the
investigation.
3. Also
please note that the Commission may decide to initiate further
complaints against additional parties during the course
of their
investigation.
4. We
strongly advise you to adhere to the timeframe of the summons
[11]
After this letter, Woodlands raised no further complaints about the
summons. Woodlands and Dr Kleynhans elected to comply
with the
summons, to attend the interviews with the Commission and provide
the documentation called for in terms of the summons.
[12]
On 30 August 2005, the Commission issued a summons against Mr
Stephen Fick of second appellant ('Milkwood'). According to
the
Commission, it was clear that the summons concerned an investigation
into the milk industry under case number 2005/Feb/1424.
[13]
Some six months after the summons had been issued against Dr
Kleynhans, and some five and a half months after Woodlands'
letter
concerning the summons, the interrogation of Dr Kleynhans and Mr
Owen Gush took place.
[14]
The interrogation of Mr Fick took place on the same day, 22
September 2005. The persons involved from the Commission in
the
interrogation of Dr Kleynhans of Woodlands and Mr Fick of Milkwood
were Louise Du Plessis, Johan Liebenberg, H.B. Senekal,
Hilton
Pietersen and Koos Theron.
[15]
On 13 March 2006, the Commission initiated a complaint in terms of
section 49B(1) of the Act concerning Clover, Woodlands,
Parmalat and
Lancewood. The complaint concerned price fixing of the purchase
price of raw milk from milk producers in contravention
of section
4(1)(b)(i) of the Act by way of certain forms of conduct.
[16]
On 12 May 2006, the Commissioner initiated a complaint in terms of
section 49(B)(1) of the Act concerning both Nestle and
Woodlands.
The Initiation Statement made it clear that it had been alleged that
Nestle and Woodlands entered into milk exchange
agreements and that
Woodlands, through an agreement with a competitor, fixed the selling
price of UHT milk; both alleged to be
in contravention of section
4(1)(b)(i) of the Act.
[17]
On the same day, 12 May 2006, the Commissioner initiated a complaint
concerning Clover, Parmalat and Woodlands. The Initiation
Statement
recorded that it had been alleged that Clover, Parmalat and
Woodlands were involved in the removal of surplus milk
through which
they were able to indirectly fix the purchase and selling price of
milk and processed products in contravention
of section 4(1)(b)(i)
of the Act.
[18]
On 6 December 2006, the Commissioner initiated a complaint in terms
of section 49B(1) of the Act concerning Milkwood and
Woodlands. The
Initiation Statement alleged that Milkwood and Woodlands agreed to
fix the prices of UHT milk and that they agreed
not to compete in
certain areas by allocating markets.
[19]
On 7 December 2006, the Commission referred these various complaints
to the Tribunal.
The
appellants' case before the Tribunal
[20]
The appellants then approached the Tribunal for an order to set
aside the complaints which has been initiated by the Commission
against both Woodlands and Milkwood, on the basis that they were
unauthorized, in that there was a contravention of section 49
B of
the Act. They further prayed for an order to set aside the referral
by the Commissioner to the Tribunal of both Woodlands
ad Milkwood in
respect of the complaints referred to above, in that they were
unauthorised and in contravention of section 50
of the Act together
with a declaration that all evidence, whether oral or documentary
elicited by the Commission, directly or
indirectly, pursuant to the
investigation of Woodlands and Milkwood, had been unlawfully
obtained and thus could not be used
in evidence against either of
these parties in a hearing before the Tribunal.
[21]
The Tribunal found that it was a prerequisite for the legality of a
summons in terms of section 49 A that the stipulation
of a
prohibited practice had to be accompanied by some measure of
particularity as to its nature so as to be sufficient to guide
the
addressee to appreciate the scope and boundaries of the request for
documentation. The Tribunal found that neither the Woodlands
nor the
Milkwood summons contained the requisite particularity and
accordingly found both to be void for vagueness and over breath.
Having so found the two summonses to be void, the Tribunal crafted a
preservation order, in effect ordering the registrar to
keep a copy
of all the documents required by the Commission, pursuant to the
summonses ,until such time as the registrar was
notified by the
Commission that the documents could be returned to the appellants on
the conclusion of the proceedings or the
date upon which the
Commission decided to abandon the proceedings. It is essentially
against this remedy crafted by the Tribunal
that the appellant
approached this court for relief.
Appellants'
case
[22]
The essence of appellants' appeal to this court thus turned on an
appeal against the granting by the Tribunal of the preservation
order and the ancillary consequences thereof. However, the
Commission lodged a cross appeal against the finding that the
Woodlands
and Milkwood summonses were vague, over broad and thus
void.
[23]
Mr Gauntlett, who appeared together with Mr Buchanan on behalf of
appellants, correctly approached the dispute on the basis
of dealing
initially with the implication of the cross appeal. In short, if the
two summonses issued against appellants by the
Commission were
invalid, the investigation, which flowed therefrom, would also be
invalid and accordingly evidence, whether oral
or documentary,
procured as a result of these invalid summonses stood to be struck
down.
[24]
Although a range of issues were raised in the heads of argument of
both parties, including the appealability of the decision
of the
Tribunal and the validity of the preservation order, when the matter
was argued before this court the dispute turned essentially
on the
following questions:
a) Were
the summonses valid;
b) If
they were not valid, then how should the evidence, which was
procured pursuant thereto, be treated.
The
validity of the summonses
[25]
In order to determine the validity of the summons it is necessary to
turn to the two key sections which were central to the
dispute.
Section 49 A headed 'Summons" provides thus:
"(1)
At any time during an investigation in terms of this Act, the
Commission may summon any person who is believed to
be able to
furnish any information on the subject of the investigation, or to
have possession or control of any book, document
or other object
that has a bearing on that subject -
a)
to appear before the Commissioner or a person authorised by the
Commissioner, to be interrogated at a time and place specified
in
the summons; or
b)
at a time and place specified in the summons, to deliver or produce
to the Commissioner, or a person authorised by the Commissioner,
any
book, document or other object specified in the summons.
2.
A person questioned by an inspector conducting an investigation, or
by the Commissioner or other person in terms of subsection
(1), must
answer each question truthfully and to the best of that person's
ability, but the person is not obliged to answer any
question if the
answer is self incriminating.
3.
No self incriminating answer given or statement made to a person
exercising any power in terms of this section is admissible
as
evidence against the person who gave the answer or made the
statement in criminal proceedings, except in criminal proceedings
for perjury or in which that person is tried for an offence
contemplated in section 72 or section 73 (2) (d) and then only to
the extent that the answer or statement is relevant to prove the
offence charged."
Section
49 B, headed "Initiating a Complaint" provides as follows:
"49
B Initiating a Complaint
(1) The
Commissioner may initiate a complaint against an alleged prohibited
practice.
(2) Any
person may -
a)
submit information concerning an alleged prohibited practice to the
Competition Commission, in any manner or form; or
b)
submit a complaint against an alleged prohibited practice to the
Competition Commission in the prescribed form.
(3) Upon
initiating or receiving a complaint in terms of this section, the
Commissioner must direct an inspector to investigate
the complaint
as quickly as practicable.
(4) At
any time during an investigation, the Commissioner may designate one
or more persons to assist the inspector."
[26]
Mr Gauntlett submitted that, on the basis of the so called Malherbe
letter, the Commission purported to initiate a complaint
on 9
February 2005. In its initiation statement, the Commissioner made
reference to the memorandum of Liebenberg and Theron and
hence the
allegation of the existence of anti-competitive behaviour in the
market for the supply of milk. The Commissioner then
stated that, in
terms of section 49 B (1) of the Act, he would initiate a full
investigation into the milk industry. In Mr Gauntlett's
view, the
initiation statement sought to invoke "draconian powers of
sections 49 A and B" without any specification
against whom
they might be applied.
[27]
In this connection, Mr Gauntlett referred to an exchange of
correspondence between Woodlands' attorney and the Commission.
On 1
April 2005, Woodlands' attorney wrote:
"The
complaint
has simply said to relate to 'anti competitive behavior in the milk
industry' including 'possible collusion and/or price
fixing possible
abuse of behaviour as well as restricted vertical practices.
In
our view, this description of the complaint merely refers in the
broadest of terms to the kinds of activities that constitute
prohibited practice in terms in terms of the Competition Act . and
does not provide any particularity for regarding the current
complaint."
[28]
On 6 April 2005, the Commission responded:
"The
Commission initiated the complaint to establish whether there was an
anti-competitive behaviour at 'any level' of industry
through this,
we allowed ourselves the opportunity to evaluate the entire
industry. Therefore, it would be premature for the
Commission to
comment on any industry relationship and to conclude on the
applicable sections of the Act at such an early stage
of
investigation.
Also
please note that the Commission may decide to initiate further
complaints against additional parties during the course of
the
investigation."
[29]
The essence of appellants' argument was that section 49 A and
section 49 B, clearly provided that there had to be an initiation
of
a complaint against specified entities and that this decision had to
precede any investigation relating to them.
[30]
By contrast, Mr Bhana who appeared together with Mr Coetzee and Mr
Dalrymple on behalf of the Commission, submitted that
complaints
were initiated against prohibited practices not against specified
parties. Once a complaint had been initiated, the
Commission was
enjoined to investigate the alleged prohibited practice. The
investigation could take place on an industry wide
basis, provided
that what was being investigated was a practice which was prohibited
in terms of chapter 2 of the Act. Thus,
the Commission was entitled
to investigate any party in the course of its investigations into a
prohibited practice and such
a party need not be named or
contemplated in the initiated complaint. In this connection, Mr
Bhana referred to a dictum of
this court in Glaxo
Welcome and 7 others v National Association of Pharmaceutical
Wholesalers and others (15/CAC/Feb02)
at para 15, in which the following was stated by this court about
the need to consider the substance of the complaint
in interpreting
section 49B:
"Section
49B focuses on a 'prohibited practice' and does not require a
complainant to identify prohibited conduct with reference
to various
sections of the Act. A complainant is not required to pigeonhole the
conduct complained of with reference to particular
sections of the
Act. What is required is a statement or description of prohibited
conduct. In this regard form CCI, prescribed
in terms of section 21
(4) and 49B of the Act, is instructive. The form requires a
complainant to 'provide a concise statement
of the conduct' that is
the subject of a complaint. A complaint need only identify the
conduct of which it complained."
[31]
In addition, Mr Bhana submitted that section 49A empowered the
Commission to summon 'any person who is believed to be able
to
furnish any information on the subject of investigation, or to have
possession or control of any book, document or other object
that has
a bearing on the subject'. This section therefore contained no
requirement that persons subjected to a section 49 A
summons must
already be the direct subject of the complaint as initiated in terms
of section 49 B (1).
Evaluation
[32]
When the two critical sections are evaluated, it appears that
section 49 A permits the Commissioner to summons any person
who is
believed to be able to furnish any information on the subject of the
investigation. Section 49 B (3) provides that, upon
initiating or
receiving a complaint in terms of this section, the Commission must
direct an inspector to investigate that complaint
as quickly as
practicable.
[33]
That phrase would appear to refer to the investigation which is
related to the complaint. The dictum
of
this court in Glaxo
Welcome
which was cited by Mr Bhana develops a substantive as opposed to a
formalistic approach to the definition of a complaint. The
question
arises as to whether the complaint had to be against a specified
entity as opposed, for example, to an industry. The
spirit of the
Glaxo
Welcome
dictum
seeks
to promote the objectives of the Act, which, in this context, means
the investigation of practices that may well undermine
the central
objective of the Act: the promotion of a competitive economy. In the
present case, the wording of section 49 B does
not refer to a
specific entity. Hence it is permissible to read the provision to
promote its purpose as sourced in the Act. Were
this restrictive
interpretation to be applied, it would hamper investigations
triggered off by a complaint against a practice
carried on by an
entire industry. That interpretation, not supported by the wording
of section 49 B(1), could prove to be subversive
of a central
purpose of the Act and the approach previously adopted by this court
in Glaxo
Welcome,
supra.
[34]
Mr Bhana also referred to section 21 (c) of the Act in which it is
provided that the Commission is responsible for the investigation
and evaluation of alleged contraventions of chapter 2. Therefore, in
his view, on a proper reading of the Act the initiation
or receipt
of a complaint is not a prerequisite for the conducting of
investigations by the Commission but the latter is entitled
and
indeed carries a responsibility to investigate practices prohibited
in terms of chapter 2 of the Act. The responsibility
does not arise
only on the initiation or receipt of a complaint.
[35]
That construction appears to extend the description of the functions
of the Commission into an autonomous set of powers,
separate from
the approach to investigations as set out in section 49 B of the
Act, which is the only substantive section dealing
with the
question.
[36]
Given this court's interpretation of section 49 B, the solution lies
in an engagement with the wording of section 49 B rather
than a
contrived extension of the meaning of section of section 21 of the
Act. The advocated purposive interpretation of section
49 B supports
the argument that the complaint does not have to be framed against a
specific entity.
The
summonses
[37]
This conclusion leads to the question of the validity of the
summonses. With regard to the Woodland summons, the Tribunal
placed
considerable emphasis on the following passage in the summons:
"The
gist of the complaint initiated by the Commissioner relates to the
reasonable believe (sic) that there exists anti-competitive
behaviour in the milk industry. The alleged prohibited practices
include possible collusion and/or price fixing, possible abusive
behaviour as well as restrictive vertical practices. You are
summonsed in terms of section 49A of the Competition Act No 89 of
1998 (as amended) as part of the above - described investigation by
the Competition Commission. It is believed that you are able
to
furnish information on the subject of the investigation, or have in
your possession or control a book, document or other that
may have a
bearing on this investigation."
(Part
I)
In
part two of the summons the following warning appears:
"You
must produce each document (as specified in Part III below) in its
entirety by including all attachment and all pages,
regardless of
whether they directly relate to the specified subject matter."
On
the basis of the description set out in Part One of the summons,
Woodlands was required, in terms of Part Two, to produce each
document (as specified in Part III below) in its entirety by
including all attachments
and
all pages, regardless of whether they directly relate to the
specified subject matter.
[38]
Documents are defined in extremely sweeping terms in Part Three to
include:
a. All
Business Plans, Strategic Plans and Annual Reports of
the
company.
b. All
planning documents and documents that discuss competitive strategy
or competitors and their possible actions in respect of
milk
procurement.
c. All
internal Presentations and Research Papers, regarding milk
procurement, prepared for or substituted to management or the Board
of Directors.
[39]
The managing director, Dr H Kleynhans, was required to produce 'all
diaries reflecting any meetings and appointments for
the period',
'all messages received on his behalf', 'all flights undertaken
during the period as well as the purpose thereof',
'all his expense
accounts and records', 'all telephone records ... indicating all
received and outgoing calls for the individuals'.
[40]
Mr Gauntlett thus submitted, given the sweeping obligations imposed
on first appellant in terms of the summons, that the
Tribunal had
correctly concluded that some particularity in the stipulation of a
prohibited practice was necessary and furthermore
that a measure of
detail was required to guide the addressee of the summons to
appreciate the boundaries as to the request for
the documentation
contained within the summons.
[41]
In his defence of the summons, Mr Bhana submitted that the
following requirements were necessary for a valid summons in
terms
of the Act:
1.
An investigation in terms of the Act must be in process
2.
The Commissioner needs to hold the belief that the person sought to
be summonsed would have:
2.1.
Information on the subject of the investigation;
2.2.
be in possession or control of a book or document that has a bearing
on the subject;
3.
The information believed to be held must concern "the
subject of the investigation";
4.
The summons must contain details of the time and place of the
interrogation;
5.
The summons must specify the books, documents or other objects
required to be delivered;
6.
It must furnish the time and place for the delivery of such books,
documents or objects.
[42]
In Mr Bhana's view, there was no requirement, in terms of section 49
A, that the summons should specify the particular offence
being
investigated or contain any details of the offence. The summons need
only set out that it was issued in terms of the Act,
that the
Commissioner believed the addressee would be able to furnish any
information on the subject of the investigation or
has possession or
control of any book, documents or other object that has a bearing on
that subject and specified the books,
documents and objects to be
produced.
[43]
Within the context of these competing submissions, a considerable
debate took place between counsel and this Court as to
the
implications of the decision of the Constitutional Court in S
v Zuma
2009 (1) SA 1 (CC), in which the Constitutional Court was required
to determine the constitutional validity of certain search warrants.
[44]
No cogent argument was addressed to the court on the potential
implications of the distinction between a search warrant as
set out
in section 29 of the National Prosecuting Authority Act, Act 32 of
1998 ('NPA Act') and a summons issued in terms of
section 49 A of
the Act. Nor was I able to find any material implication as to the
use of one or either term from research as
undertaken. However the
distinction does, for reasons set out, not appear to be relevant to
the present dispute.
[45]
In Zuma,
supra
at
paragraph 136, the essential argument, with regard to whether the
search warrants in that case were valid, turned on the determination
of the warrants being sufficiently circumscribed to the searches
authorised so as not to authorise 'too broad a search of the
various
premises'. Further, the question arose as to whether the scope of
the searches was defined with sufficient particularity
to render the
warrants intelligible to the persons being searched. In short, it
was contended that the warrants should have specified
the alleged
offences in exact terms as well as where, when and by whom the
offences were suspected to have been committed.
[46]
Of particular significance to this dispute was the approval by Langa
CJ at para 137 of the dictum
in
Powell
NO and others v Van der Merwe NO and others
2005 (5) SA 62 (SCA) at para 59 namely 'that a warrant must convey
intelligibly to both searcher and searched the ambit of the search
it authorises',
[47]
Furthermore, Langa CJ went on to find that the requirements of
section 29 of the NPA Act had to be interpreted so as to promote
the
spirit, purport and objects of the Bill of Rights. In particular,
the learned Chief Justice emphasized the importance of
the State's
power under section 29 in the fight against crime as well as the
constitutional protection of the privacy of the
individual which was
subjected to the search. In short, the NPA Act had to provide
safeguards which ensured that the infringement
of privacy went no
further than was reasonably necessary in the circumstances to
implement the State's mandate to curb crime.
[48]
For this reason, Langa CJ concluded that there was a tension
between these competing concerns and:
"This
tension reflects the need to strike a balance between the privacy
and other personal interest of individuals on the
one hand and the
public interest in the fight against crime on the other both of
which are relevant constitutional principles."
par
140
Accordingly,
Langa CJ found that a warrant issued in terms of section 29 had to
be intelligible; that is in a sense that it is
reasonably capable of
being understood by the reasonably well informed person who
comprehends the relevant empowering legislation
and the nature of
the offences under investigation. para154
[49]
In finding that the warrants met the intelligibility test, Langa CJ
pointed to the particulars set out in the Preamble to
the warrants
in which it was stated:
"[t]hat
the nature of the criminal investigation appears from information
placed on oath before the judge who issued the
warrant. The
investigation arises, the warrants state, from the reasonable belief
that certain offences had been committed or
that attempts have been
made to commit them. The suspected offences are listed as corruption
in contravention of Act 94 of 1992
fraud, money laundering in
contravention of Act 121 of 1998 and tax offences in contravention
of Act 58 of 1962". para
163
On
this basis, the court held that any reasonably well informed person
who had a knowledge of the Act and the relevant classes
of offences
would have a fair idea of the ambit of the authorised search. para
169
[50]
By contrast, the summons issued against Woodlands referred to a
reasonable belief that there exists anti-competitive behaviour
in
the milk industry. The alleged prohibited practices "include
possible collusion and/or price fixing possible abuse of
behavior as
well as restricted vertical practices." A reasonably well
informed reader of this summons would encounter considerable
difficulty in divining precisely the ambit of the implications of
the summons in relation to Woodlands and its organisation,
structure
and its conduct. In short, the specificity contained in the Zuma
warrant
is absent from this summons which fails to provide the necessary
specificity about the link between the alleged offences
and the
potential role of the addressee. Whether it is a summons or a
warrant, the same constitutional imperative applies: a
balance must
be struck between the legitimate purpose of the investigating
authority to fulfill its legislative mandate and the
constitutional
protection of privacy. The summons fails to achieve this balance
owing to its breath and vagueness.
The
Milkwood Summons
[51]
The Milkwood summons contains a Part Three in which the following
passage differs significantly from the formulation adopted
in the
Woodlands summons:
"Part
III: Matter in respect of which you are required to answer
question
relating to the following:
Possible
collusion between competitors through the allocation of markets
fixing of trading conditions and/or price fixing relating
to the
procurement and processing of milk
Possible
abusive behaviour by requiring milk producers to not sell milk to
third parties
Issues
arising from the information submitted in response to the
Commission's summons dated 22/03/2005"
[52]
In this case, the summons specifies in far more detail, than did the
Woodlands' summons, the nature of the enquiry and consequently
the
purpose of the summons. It affords a reasonably well informed
person, with a knowledge of the Act, a fair idea of the ambit
of the
enquiry and the purpose of the summons. It also illustrates that
the Commission could have formulated a similar section
for the
Woodland summons on the basis of the information available to it.
[53]
The Tribunal made much of the third bullet point, that is issues
arising from the information submitted in response to the
Commission's summons dated 22 March 2005. In short,
"Given
the criticism that we had of the unbounded nature of the Woodlands
summons this request to comment on another's documents
solicited in
this way makes the Milkwood interrogation again an unbounded one
given the context set by Part I. This means that
Fick is unaware of
whether the investigation travels beyond bullet points one and two
of Part III cited above, and indeed whether
he will be interrogated
on matter that form part of an industry wide investigation, an
unlawfully wide remit for a section 49A
interrogation."
[54]
However, it would be incorrect to consider this an unbounded
requirement, in that Milkwood could have had access to the
information so submitted and would accordingly have been entitled to
examine such documentation in order to formulate a response;
hardly
the unrestricted form of enquiry which is so manifest in the
Woodlands summons. In other words, reading the three bullet
points
together, Milkwood would reasonably have been able to determine the
nature of the investigation and the impact upon itself.
Conclusion
[54]
In my view, while the Woodlands summons manifestly fails to meet the
intelligibility test which should be applied to a summons
under
section 49 A, that is a test which seeks to balance the legislative
requirements of the Commission to investigate alleged
anti-competitive conduct and to protect the constitutional guarantee
of privacy of the addressee of the summons. However, the
Milkwood
summons, for the reasons advanced, complies with the test and is
accordingly valid.
Consequences
of this finding
[55]
The Tribunal, having found that the summonses were void, then
proceeded to fashion 'a preservation order'. In this connection,
the
Commission contended that the Tribunal was entitled to grant a
preservation order, relying upon the decision of the constitutional
Court in Thint
(Pty) Ltd v National Director of Public Prosecution and others; Zuma
and other v NDPP
2009 (1) SA 1 (CC).
[56]
Only a court is entitled to make such an order in terms of section
172 (1) (b) of the Republic of South Africa Constitution
Act 108 of
1996. ('Constitution'). See para 220 of Thint,
supra.
Manifestly,
the Tribunal is not a court as envisaged in section 172 of the
Constitution and accordingly it is not competent for
it to make such
a preservation order, sourced as such power is in section 172 of the
Constitution.
[57]
Mr Bhana referred in support of his submission that the evidence
from the void summons should not be declared to be inadmissible
by
this court to the judgment of Kriegler J in Key
v Attorney-General Cape Provincial Division and another
[1996] ZACC 25; 1996 (4) SA 187 (CC) at para 13:
"In
any democratic criminal justice criminal justice system there is a
tension between, on the one hand, the public interest
in bringing
criminals to book and, on the other, the equally great public
interest in ensuring that justice is manifestly done
to all, even
those suspected of conduct which would put them beyond the pale. To
be sure, a prominent feature of that tension
is the universal and
unceasing endeavor by international human rights bodies, enlightened
legislatures and courts to prevent
or curtail excessive zeal by
State agencies in the prevention, investigation or prosecution of
crime. But none of that means
sympathy for crime and its
perpetrators. Nor does it mean a predilection for technical niceties
and ingenious legal stratagems.
What the Constitution demands is
that the accused be given a fair trial. Ultimately, as was held in
Ferreira
v Levin
(1) SA 1984 (CC), fairness is an issue which has to be decided upon
the facts of each case, and the trial Judge is the person
best
placed to take that decision. At times fairness might require that
evidence unconstitutionally obtained be excluded. But
there will
also be times when fairness will require that evidence, albeit
obtained unconstitutionally, nevertheless be
admitted."
[58]
On the basis of this dictum,
Mr
Bhana submitted that it was neither possible nor desirable for this
court to strike a balance between the appellants' private
interest
and the Commission's public interest at so earlier stage of
proceedings which went to the heart of the regulation envisaged
in
the Act, namely allegations of cartel behavior. In his view, the
trial court would be in far a better position to evaluate
and strike
the appropriate balance between the private and public interests at
stake and accordingly it would not be appropriate
for this court to
interfere.
[59]
In this case however, it is the Tribunal which itself will be 'the
trial court'. This is not a case like that of Key
where another court, the Constitutional Court, was asked to rule in
advance on conduct pending a criminal trial in the High Court.
Further, in Key's
case Kriegler J stressed that it was not yet known if the impugned
evidence would ever be employed; the state might in fact not
have
used it at all, having other evidence at its disposal. In this case,
it was certain that the evidence was to be used and
that, without
it, the Commission would have no case against either Woodlands or
Milkwood.
[60]
Even when a court has the power to grant a preservation order, there
was a strong indication from the Constitutional Court
in the Thint
case supra,
that,
ordinarily, a court would order a return of objects seized in terms
of overly broad warrants in order to ensure the protection
of the
rights of privacy when it has been unfairly breached by the relevant
authority. That consideration has weight in countering
the approach
urged upon this Court by the Commission.
[61]
As both sides have met with partial success in this appeal, a
costs order would be inappropriate.
[62]
In the result the following order is therefore made.
1.
The decision of the Competition Tribunal dated 17 March 2008,
is set aside and replaced with the following order:
1.1. The
application to set aside the complaints initiated by the Competition
Commission against Woodlands and Milkwood (numbers
1,2,4,5,6 as
against Woodlands and 6 as against Milkwood) are dismissed.
1.2. The
summons in respect of Woodlands, being Annexure B annexed to the
founding affidavit of Alexander Gutsche, is declared
to be void.
1.3. The
respondent is directed to return forthwith to Woodlands all
documents and any copies thereof in their possession and
control or
of their legal representatives procured from Woodlands in these
proceedings together with transcripts of the interrogation
of
Kleynhans and Gush.
1.4. The
application brought by Milkwood against the summons issued against
it on 30 August 2005 is dismissed.
1.5. The
summons issued on 30 August 2005 in respect of Milkwood is declared
to be valid.
1.6. There
is no order as to costs
DAVIS
JP
Patel
JA and Dambuza AJA concurred
