Case CCT141/21
[2022] ZACC 36
Hearing Date: 03 May 2022
Judgement Date: 27 October 2022
Post Judgment Media Summary
The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.
On Thursday, 27 October 2022, the Constitutional Court handed down judgment in an application for leave to appeal against a judgment and order of the Supreme Court of Appeal. The Supreme Court of Appeal found that the High Court of South Africa, Gauteng Division, Pretoria (High Court) had jurisdiction to decide a review application brought by Group Five Construction Limited (Group Five) in terms of the Promotion of Administrative Justice Act 3 of 2000 (PAJA), alternatively the principle of legality, against certain decisions taken by the Competition Commission (Commission).
The underlying factual dispute in this matter is premised on a complaint initiated by the Commission into collusion between construction companies in the process for bidding for tenders to construct stadia for the 2010 Soccer World Cup. Group Five was alleged to be one of the construction companies involved. On 12 November 2014, the Commission subsequently referred a complaint to the Competition Tribunal (Tribunal) against Group Five and the other construction companies involved in the collusion.
Group Five submitted that, because the Commission had previously granted it immunity from prosecution through its Corporate Leniency Policy, its about-face by referring a complaint to the Tribunal was oppressive, vexatious, and motivated by bad faith. As a result, Group Five launched an application in the High Court for the review of the Commission’s decision. In response to this, the Commission sought an order to declare and set aside the review proceedings on the basis that they constituted an irregular step. The Commission contended that the High Court lacked jurisdiction to hear the matter as it pertained to the interpretation and application of Chapters 2, 3 and 5 of the Competition Act 89 of 1998 (Act), which the Tribunal has exclusive jurisdiction over in terms of section 62(1)(a) of the Act. The High Court found against the Commission and held that the matter instead pertained to the lawfulness and validity of the referral and that this fell within the carve-out in section 62(2) of the Act. According to the High Court, the Tribunal only has the powers afforded it in the Act and this does not include a review under PAJA or under the principle of legality
The Supreme Court of Appeal held that the issues raised on review by Group Five were not of a specialist nature which section 62(1) exclusively reserves for the Competition Appeal Court and the Tribunal. That Court agreed with the High Court that the matter instead related to the lawfulness and validity of the initiation and referral of the Commission’s complaint, which is a jurisdictional question and thus a constitutional matter. The Supreme Court of Appeal thus concluded that the High Court’s jurisdiction was not ousted.
In this Court, the Commission submitted that the matter engages this Court’s constitutional and general jurisdiction. The Commission further submitted that there is public interest in the Court granting leave to appeal as the Supreme Court of Appeal’s interpretation conflicts with the language of the Act and undermines the role and functioning of the Tribunal.
The Commission reiterated its contention in that the Tribunal, in terms of section 62(1), has exclusive jurisdiction over the issues Group Five raised in its review application. It submitted that section 27(1)(c) of the Act, read with rule 42 of the Competition Tribunal Rules, gives the Tribunal the power to review a decision taken by the Commission. The Commission further submitted that the initiation, referral and granting of leniency are all purely competition law issues requiring the interpretation of the Act, and should be determined by the Tribunal. Therefore, in the Commission’s view, the High Court ought to have found that it did not have jurisdiction and the Supreme Court of Appeal erred in holding otherwise.
The Commission submitted that section 62(2) must be narrowly interpreted, and that the Supreme Court of Appeal’s wide interpretation of section 62(2) overlooked the Act’s framework by permitting respondents to delay referrals to the Tribunal. This, the Commission contended further, allows for extensive appeal processes of review applications up to this Court when the Competition Appeal Court ought to be the final arbiter of these issues. The Commission submitted this offends the principle of subsidiarity and renders the Tribunal’s statutory review powers nugatory. The Commission further argued that the Supreme Court of Appeal’s approach undermines the policy choice of the Legislature which is geared towards specialisation. In the Commission’s view, due deference must be given to the Tribunal’s expertise and ability to deal with reviews.
Group Five submitted that leave to appeal ought to be refused because this Court, in Competition Commission v Mondi Limited, Hathorn and Sappi Southern Africa Limited CCT 213/2014, already decided that the High Court has jurisdiction to review decisions taken by the Commission when it dismissed the Commission’s application for leave to appeal.
On the merits, Group Five submitted that the threshold to sustain the proposition that the High Court’s jurisdiction is ousted is very high and must either be express or flow by necessary implication. There is nothing in the Act, so Group Five argued, that ousts the High Court’s jurisdiction to hear reviews in terms of PAJA or the principle of legality. In Group Five’s view, the High Court has jurisdiction over all reviews arising from the Commission’s exercise of its powers, save for the limited extent in which section 62(1) grants the Tribunal and the Competition Appeal Court exclusive jurisdiction. The issue in this matter, so Group Five contended, fell within the carve out in section 62(2).
In relation to the Commission’s policy-based argument, Group Five contended that, because this was raised for the first time in the application for leave to appeal before this Court, it was not desirable for this Court to hear it. Group Five further contended that, in any event, there was no merit in the Commission’s policy argument as there is nothing surprising about the notion that a plaintiff might formulate their claim in different ways and thereby bring it before a forum of their choice.
The first judgment, penned by Mlambo AJ (first judgment), found that the matter engaged this Court’s constitutional jurisdiction as it concerned the exercise of public power by the Commission and the jurisdictional ambit of the Tribunal. The first judgment also found that the matter engaged this Court’s extended jurisdiction as clarifying the jurisdictional ambit of the competition authorities vis a vis the civil courts gives rise to a point of law of general public importance. The first judgment also found that it was in the interests of justice that leave to appeal be granted as this Court has not yet expressed an authoritative view on the extent to which, if it all, the High Court’s jurisdiction to review the Commission’s decisions is ousted in favour of the competition authorities, in particular the Tribunal.
On the merits, and considering the contemplated appellate function of the Tribunal under section 27(1)(c), the first judgment found that the Tribunal has the requisite jurisdiction to review the Commission’s impugned conduct. The first judgment reasoned that the Commission’s powers to initiate a complaint, and to grant or refuse immunity or leniency, fall under the exclusive jurisdiction provisions. As the impugned conduct is classified as an exercise of power under the exclusive jurisdiction provisions, the first judgment held that it falls within the Tribunal’s exclusive oversight.
The first judgment further held that the issues on review do not qualify as issues of vires, as they do not require an enquiry into whether the Commission exercised powers beyond its jurisdiction. It held that the issues are, instead, about whether the Commission had improperly exercised the powers that are within its jurisdiction. The first judgment therefore found that a determination of the issues, properly characterised, require the interpretation and application of the exclusive jurisdiction provisions and thus fall within the Tribunal and Competition Appeal Court’s exclusive jurisdiction.
The first judgment further found that the Supreme Court of Appeal’s wide interpretation of section 62(2), which characterised the issues as giving rise to constitutional matters, cannot be sustained. It reasoned that the Commission’s decisions invariably amount to an exercise of a public power. The Supreme Court of Appeal’s interpretation, the first judgment held further, would result in almost all the Commission’s decisions falling into the carve out, thus undermining the Tribunal’s power of review. It reasoned that, from a practical perspective, the Supreme Court of Appeal’s interpretation would allow for forum shopping by litigants and thereby frustrate and delay the determination of competition issues by the Tribunal.
Group Fives’s attempt to characterise the issues on review as primarily a constitutional matter that falls to be reviewed under PAJA or the doctrine of legality was found by the first judgment to be misguided. It held that the issues are foremost of a competition nature, and therefore do not fall under the category of issues contemplated in the statutory carve outs in sections 62(2) and 62(3)(b) of the Act. To characterize them as constitutional matters, the first judgment held further, would undermine the legislative policy choice to create a specialist competition review regime to ensure the efficient and appropriate application of the Act in resolving competition disputes. The first judgment therefore concluded that the High Court and the Supreme Court of Appeal erred in dismissing the Commission’s jurisdictional challenge.
The second judgement (majority), penned by Majiedt J (Kollapen J, Madlanga J, Mathopo J, Mhlantla J, Theron J, Tshiqi J and Unterhalter AJ concurring) (second judgment), agreed with the first judgment that this matter engaged this Court’s jurisdiction, for the reasons it persuasively gave. However, it parted ways with the first judgement on the determination of the central question in this case.
The second judgment found the interplay between sections 62(1) and (2) to be at the core of the dispute. It found that section 62(1) of the Act delineates the shared, exclusive jurisdiction of the Tribunal and Competition Appeal Court. That jurisdiction includes the interpretation and application of various statutory provisions, but excludes a matter referred to in section 62(2). Section 62(2) provides that the Competition Appeal Court has jurisdiction to decide “whether an action taken or proposed to be taken by the Competition Commission or the Competition Tribunal is within their respective jurisdictions in terms of this Act”, as well as any constitutional matter. That, the second judgment holds, plainly confers jurisdiction on the Competition Appeal Court to decide legality or vires challenges; but must be read together with section 62(3)(b), which provides that the Competition Appeal Court’s jurisdiction conferred in subsection (2) is neither exclusive nor final.
The second judgment found that properly considered in its context and purpose, the meaning of the Act’s unequivocal wording is plain. Matters that fall within section 62(1) fall within the exclusive jurisdiction of the Tribunal and the Competition Appeal Court. Matters that fall within the scope of section 62(2) fall within the jurisdiction of the Competition Appeal Court, but not the Tribunal. Finally, the jurisdiction of the Competition Appeal Court in respect of matters that fall within section 62(2), including legality challenges, is neither final nor exclusive. That is clear from section 62(3)(b). In reaching its conclusion, the second judgment also relied on and reaffirmed the principles laid out by the Supreme Court of Appeal in Agri Wire (Pty) Ltd v Commissioner, Competition Commission [2012] ZASCA 134; 2013 (5) SA 484 (SCA), which held “whether an act by the Commission is within its jurisdiction is a matter within section 62(2)(a) of the Act and is therefore not within the exclusive jurisdiction conferred by section 62(1)(b) of the Act”.
Furthermore, section 169 of the Constitution sets out the powers of the High Court. The second judgment held that this section is couched in broad terms and affords original jurisdiction to the High Court to resolve any dispute that is capable of being resolved by resort to law, unless that jurisdiction has been assigned to another forum. The second judgment held that it is well established that ouster of the High Court’s jurisdiction must be in unambiguous terms and there is a strong presumption against it. It held further that this entails a high threshold, as ouster must be either expressly excluded or must appear by necessary implication from the statute’s provisions, and then only to the limited extent of that necessary implication.
The second judgment found that section 169(1)(a)(ii) of the Constitution specifically provides that the High Court may decide any constitutional matter “except a matter that is assigned by an Act of Parliament to another court of a similar status”. It reasoned that the High Court therefore has no jurisdiction to determine constitutional matters which fall within the statutorily assigned purview of specialised forums with similar status. It further held that it is trite that review applications, whether brought under PAJA or the principle of legality, are constitutional matters. The second judgment thus found that the word “assign” in section 169(1)(a)(ii) implies exclusivity; and that if a constitutional matter is not placed within the exclusive jurisdiction of a specialised forum, the High Court’s jurisdiction is not ousted.
As such, the second judgment found that section 62(2)(a), read together with section 62(3)(b), makes clear that jurisdiction to hear legality challenges is extended to the Competition Appeal Court, but that this is neither exclusive nor final. It held that review applications in terms of PAJA can therefore be entertained by the High Court, as that Court retains its review powers by virtue of its constitutional status and powers. The Competition Appeal Court meanwhile, having “a status similar to that of the High Court”, and empowered by section 62(2) of the Act, enjoys non-exclusive jurisdiction to hear PAJA and legality reviews in terms of the two provisions of the Act.
The second judgment found that the same is not true for the Tribunal. It is a creature of statute, created in terms of section 26 of the Act. It can exercise no powers other than those contained within the four corners of its empowering Act. Nowhere in that Act is there any conferral on the Tribunal of jurisdiction to deal with any of the matters in section 62(2), and deliberately so. The Tribunal and Competition Appeal Court do not share jurisdiction in a literal sense. Rather, they enjoy appellate jurisdiction, depending on the decision made and the associated right of appeal. The second judgment thus held that the Tribunal enjoys no plenary review jurisdiction.
The second judgment further held that the point is reinforced by the definitions of “tribunal” and “court” in PAJA. Section 6(1) of PAJA limits a party’s rights to “institute proceedings in a court or a tribunal for the judicial review of an administrative action”.
Section 1 of PAJA, defines “tribunal” as “any independent and impartial tribunal established by national legislation for the purpose of judicially reviewing an administrative action in terms of [PAJA]”. This definition, according to the second judgment, plainly excludes a statutory body like the Tribunal. For all these reasons, the second judgment concludes that theTribunal does not have jurisdiction to adjudicate a PAJA or legality review.
The second judgment found the grounds upon which Group Five seeks to review the decision of the Commission to relate to the validity and lawfulness of the initiation and subsequent referral, of the complaint to the Tribunal. These are questions of vires or legality, issues which typically fall within the ambit of the jurisdiction of the superior courts. The second judgment further held that although those questions arise, in this case, out of a complaint referred and initiated under the Act, the issues on review are not pure competition law matters – that is, matters that, according to the Act, fall within the exclusive competence of the Tribunal and the Competition Appeal Court. The second judgment thus found that once the issue is one of vires, it is a matter over which the Competition Appeal Court has concurrent jurisdiction with the High Court, to the exclusion of the Tribunal.
In the result, the majority of the Constitutional Court ordered that leave to appeal be granted and that the appeal be dismissed..
The Full judgment here
