COMPETITION TRIBUNAL REPUBLIC OF SOUTH AFRICA

Case No: 83/CR/Dec10

In the matter between:

and

Panel:	N Manoim (Presiding Member), Y Carrim (Tribunal Member) and A Wessels (Tribunal Member)

ORDER

The Tribunal hereby confirms the consent agreement annexed hereto, marked.annexure A and the addendum to the consent agreement, marked as annexure B.

N Manoim

		Competition Tribunal 
					South Africa

			Notice of Motion

Concerning the matter between:

and

The Consent Agreement..between the Competition Commission and Liberty Group in terms of section 49D be confirmed as an order of the Competition Tribunal in terms of section 58(1 )(b) of the Competition Act, no 89 of 1998 ( as amended)

Name and Title of person authorised to sign:

Bongani Ngcobo -Acting Chief Legal Counsel

Authorised Signature:					Date: 22/12/10

IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA
			(Held In Pretoria)

					CT Case No.

					CC Case No. 20G9Jul4569/2009Jul4571

In the matter between:

And

In re:

LIMITED

CONSENT AGREEMENT BETWEEN THE COMPETITION COMMISSION AND LIBERTY GROUP LIMITED IN TERMS OF SECTION 49D READ WITH SECTION 58(1) (b) OF THE COMPETITION ACT, NO. 89 OF 1998 (AS AMENDED)

The Competition Commission of South Africa and Liberty Group Limited hereby agree that application be made to the Competition Tribunal for confirmation of this Consent Agreement as an order of the Competition Tribunal in terms of section 49D read with section 58(1) (b) of the Competition Act, No. 89 of 1998 (as amended,) on the terms set out below.

1.1.     For the purposes of this Consent Agreement the following definitions shall apply:
1.1.1. "the Bedford" means the Bedford development, being a mixed-used development featuring a retail component, and which is a combination of Bedford Square and Bedford Centre (which centres have been (inked via an subterranean passage);
1.1.2. "Bedford Centre" means the erstwhile Bedford Centre shopping centre, the retail component of which was classified as a community shopping centre at the time that the Bedford Centre Restraint was concluded and which is situate in the suburb of Bedfordview in Johannesburg;

1.1.3. "Bedford Centre Restraint" means clause 2.3 of the Bedford Centre Settlement Agreement and the entirety of the notarial deed of restraint concluded between Win Twice, Liberty Group and Erf 179 on 14 June 2004 under notarial deed number 000002659 / 2004, in terms of which the Bedford Centre was precluded for a period from letting space to Woolworths;
1.1.4. "Bedford Centre Settlement Agreement" means the agreement concluded between Win Twice, Liberty Group, Erf 179, BOE Bank and Nedbank Limited on or about 4 November 2003;

1.1.6. "Bedford Square Properties" means Bedford Square Properties (Proprietary) Limited, a company duly incorporated and registered in accordance with the laws of the Republic of South Africa with its principal place of business being at 9 Gordon Hill Road, Parktown Johannesburg. Bedford Square Properties is the ultimate owner of the Bedford;
1.1.7. "Bedford Square Restraint" means clause 3.1 of the Bedford Square Settlement Agreement and the entirety of the notarial deed of restraint concluded between Bedford Square Properties, Liberty Group and Erf 179 on 21 June 2004 under notarial deed number 000002655 / 2004, in terms of which Bedford Square was precluded for a period from letting space to Woolworths or Mica;
1.1.8. "Bedford Square Settlement Agreement" means the agreement concluded between Cavaleros, Liberty Group and Bedford Square Properties on or about 4 November 2003
1.1.9. "BOE Bank" means BOE Bank Limited, being the financiers of Bedford Centre;
1.1.10. "Cavaleros" means the Cavaieros Group, being the controllers of Erf 179;
1.1.11. "Competition Act" means the Competition Act, No. 89 of 1998 (as amended);
1.1.12. "Commission" means the Competition Commission of South Africa, a statutory body established in terms of section 19 of the Competition Act, with its principal place of business at 1st Floor, Muiayo Building (Block C), the DTI Campus, 77 Meintjies Street, Sunnyside, Pretoria;
1.1.13. "Commissioner" means the Commissioner of the Commission, appointed in terms of section 22 of the Competition Act;

1.1.15. "DTI" means the Department of Trade and Industry;
1.1.16. "Eastgate" means the Eastgate shopping centre, a super regional shopping centre situate in the suburb of Bedfordview in Johannesburg. Liberty Group owns Eastgate;

1.1.17. "Erf 179" means Erf 179 Bedfordview (Proprietary) Limited, a company duly incorporated and registered in terms of the company laws of the Republic of South Africa, with its registered place of business at 7D Geldenhuis Road, Malvern East, Germiston. Erf 179 owns Village View;
1.1.18. "LCGG" means the Local Council of Greater Germiston;

1.1.19.       "Liberty Group" means Liberty Group Limited, a company duly incorporated and registered in terms of the company laws of the Repubtic of South Africa, with its principal place of business at 1 Ameshoff Street, Johannesburg. Liberty Group owns Eastgate;

1.1.20.       "Liberty Properties" means Liberty Group Properties (Proprietary) Limited, a company duly incorporated and registered in terms of the company laws of the Republic of South Africa, with its principal piace of business at 25 Ameshoff Street, Johannesburg. Liberty Properties is a wholly owned subsidiary of Liberty Group and focuses on property development, property management and property related investments of Liberty Group's property portfolio;

1.1.21.       "Parties" means the Commission and Liberty Group;

1.1.22.       "Mica" refers to Supergroup Limited t/a Mica Hardware, a company duly incorporated and registered in terms of the company laws of the Republic of South Africa, with its principal place of business at 27 Impala Road Chiselhurston, Sandton. Mica is a chain of hardware stores;
1.1.23. "Respondents" means Bedford Square Properties, Liberty Group, Win Twice and Erf 179;
1.1.24. "Restraints" means the Bedford Square Restraint and the Bedford Centre Restraint collectively;
1.1.25. "Settlement Agreements" means the Bedford Square Settlement Agreement and the Bedford Centre Settlement Agreement collectively;
1.1.26. "Summons" means the summons issued by the Commission on 1 October 2009 and served on Liberty Group;
1.1.27. "Tribunal" means the Competition Tribunal of South Africa, a statutory body established in terms of section 26 of the Competition Act, with its principal piace of business at 3rd Floor, Mulayo building (Block C), the DTI Campus, 77 Meintjies Street, Sunnyside, Pretoria;
1.1.28. "Village View" means the Village View neighbourhood shopping centre situate in Bedfordview Johannesburg and which is owned by Erf 179;
1.1.29. "Win Twice" means Win Twice Properties (Proprietary) Limited, a company duly incorporated and registered in terms of the company laws of the Republic of South Africa, with its principal place of business at the Smit Road, Bedford Shopping Centre. At the time that the Bedford Centre Restraint was concluded, Win Twice was the owner of Bedford Centre;
1.1.30. "Woolworths" means Woolworths Limited, a company duly incorporated and registered in terms of the company laws of the Republic of South Africa, with its principal piace of business at 93 Longmarket Street Cape Town. Woolworths is the owner / franchisor of various retail supermarkets throughout South Africa.
The Complaint and the Commission's Investigation
2.1. During July 2009,the Commission initiated two complaints against the Respondents concerning allegations of a contravention of section 4{1)(b)(ii) of the Competition Act in relation to certain notarial deeds of restraint and a settlement agreement entered into between the Respondents pursuant to various objections lodged in relation to town planning issues, and which are more fully described below :

2.1.1. The Bedford Square Settlement Agreement, comprising a settlement agreement dated 4 November 2003 containing various terms of settlement, including that the Bedford Square Restraint is registered;
2.1.2. The Bedford Square Restraint, comprising a notarial deed of restraint registered on 12 July 2004 over the title deed of Erf 39 Bedford Gardens owned by Bedford Square Properties (i.e. Bedford Square) in favour of Liberty Group and Erf 179, which restricts Bedford Square Properties or its successors in title from leasing retail space to Woolworths and Mica for a period of 11 years; and
2.1.3. The Bedford Centre Restraint, comprising a notarial deed of restraint registered on 12 July 2004 over the title deeds of properties described as Erf 50, 51, 54 and 64 of Bedford Gardens Township (i.e. the Bedford Centre) owned by Win Twice in favour of Liberty Group and Erf 179, which restricts Win Twice from leasing retail space to Woolworths for a period of 15 years.

2.2. These complaints were initiated after the Commission had investigated and non-referred a complaint lodged by Bedford Square Properties against Liberty Group in respect of alleged contraventions of section 8(d)(i) of the Competition Act, The Commission consolidated the two complaints for purposes of its investigation in accordance with Rule 17(2) of the Commission Rules.
I//
The Commission's findings
3.1. The Commission's investigations established that the Bedford Square Restraint was concluded between Liberty Group, Erf 179 and Bedford Square Properties, in settlement of an objection lodged by the former two parties with the Townships Board against the LCGG's decision to approve a rezoning application brought by Bedford Square Properties to develop a mixed offering shopping centre ultimately comprising Bedford Square.
3.2. Further, the Commission found that the Bedford Centre Restraint was concluded to settle -disputes concerning; an application by Win Twice for the rezoning of the Bedford Centre so as to extend the Bedford Centre's bulk (square meterage) in a node in which, at the time, Liberty Group felt there to be an oversupply of retail space. Before such rezoning application was heard by the appropriate town planning authority, Liberty, Erf 179, BOE Bank and Win Twice entered into the Bedford Centre Settlement Agreement giving rise to the Bedford Centre Restraint
3.3. The Commission however found that although the Settlement Agreements were entered into by the Respondents in settlement of objections and negotiations regulated by town-planning legislation, a consequence of the Restraints was that they exceeded the scope of such legislation in that Liberty, Erf 179, Bedford Square Properties and Win Twice, in agreeing the terms set out in the Restraints, contravened section 4(1)(b)(ii) of the Competition Act as follows:

3.3.1. Liberty Group as owner of Eastgate, Erf 179 as owner of Village View and Bedford Square Properties as owner of Bedford Square divided markets by agreeing that Bedford Square Properties be restrained from leasing retail space to Woolworths and Mica in Bedford Square for a period of 11 years; and
3.3.2. Liberty Group as owner of Eastgate, Erf 179 as owner of Village View and Win Twice as owner of Bedford Centre divided markets by agreeing than Win Twice be restrained from leasing retail space to Woolworths in Bedford Centre for a period of 15 years.

Liberty Group admits that the Restraints contravened section 4(1)(b)(ii) of the Competition Act.

5.1.     Liberty Group confirms that the conduct under investigation has already ceased and it undertakes -

5.1.1. not to divide markets by allocating customers in contravention of section 4(1)(b)(ii) of the Competition Act;
5.1.2. not to enforce the Restraints nor to require any of either Bedford Square Properties or Win Twice (or their successors in title) to abide by the Restraints;
5.1.3. to develop and implement a compliance programme, with corporate governance, designed to ensure that ail its relevant employees are aware of the provisions of the Competition Act and do not contravene them; and to submit a copy of the aforementioned compliance programme outlined above to the Commission within 90 business days of the date of confirmation of this Consent Agreement as an order of the Tribunal.

6.1. In terms of section 58(1) (a) (iii), and 59(2) and (3) of the Competition Act, Liberty Group is liable to pay an administrative penalty.

6.3. Liberty Group shall pay the administrative penalty into the following bank account of the Commission:

Donald Samuel Ogbu

Commissioner: Competition Commission

(Held In Pretoria)

CT Case No. 83/CR/DEC10

								CC Case No. 2009Jul4569/2009Jul4571

In the matter between:

And

LIBERTY GROUP LIMITED							Respondent

In re:

LIMITED

ADDENDUM TO CONSENT ORDER AGREEMENT ENTERED INTO BETWEEN THE COMPETITION COMMISSION OF SOUTH AFRICA ("THE COMMISSION") AND LIBERTY GROUP LIMITED ("LIBERTY") ON 20-DECEMBER 2010 AT PRETORIA IN TERMS OF SECTION 49D READ WITH SECTION 58(1) (b) OF THE COMPETITION ACT, NO. 89 OF 1998 (AS AMENDED)

WHEREBY IT IS AGREED AS FOLLOWS:

1.1. save as defined herein or where the context clearly indicates to the contrary, terms defined in the designated agreement shall bear the meaning ascribed to them therein when used in this addendum;
1.2. "designated agreement" means the consent order agreement entered into between the parties hereto on 20 December 2010 at Pretoria.

2.1.     By inserting a new clause 5.1.2 A after the existing clause 5.1.2 and before clause 5.1.3 -

" 5.1.2 A to engage in ail such conduct necessary, as is within its power, to partially cancel the notarial deeds of Restraint as between it, Win Twice and Bedford Square Properties. For the avoidance of doubt, Liberty hereby waives all and any right conferred upon it in terms of the notarial deeds of Restraint."

4,       This addendum constitutes the whole agreement between the parties relating to subject matter hereof.

6.	No extension of time or waiver or relaxation of any of the provisions or terms of this addendum shall
operate so as to preclude any party thereafter from exercising its rights strictly in accordance with
this addendum.

Melville Urdang

Director - Liberty Group Properties (Proprietary) Limited, duly authorised representative of Liberty Group Limited

Shan Ramburuth
Commissioner: Competition Commission