Case CCT132/22
[2023] ZACC 19
Hearing Date: 02 March 2023
Judgement Date: 26 June 2023
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 Monday, 26 June 2023 at 10h00, the Constitutional Court handed down judgment in an application for leave to appeal against a judgment of the Supreme Court of Appeal (SCA) which overturned a decision of the High Court, Pretoria. Bliss Brands (Pty) Ltd (Bliss Brands), a South African company, competes with Colgate-Palmolive (Pty) Ltd, a South African company, and Colgate-Palmolive Company, an American company (Colgate), in the soap bar market. Colgate, the American company, distributes its products through Colgate-Palmolive (Pty) Ltd. Colgate and many other companies are members of the Advertising Regulatory Board NPC (ARB), a non-profit company, which is an independent, voluntary entity, funded by its members. Bliss Brands is not a member of the ARB. The ARB exercises powers over its members, which are bound by its memorandum of incorporation and Code of Advertising Practice (Code). It regulates advertising among its members. The ARB’s core function is to ensure that advertising by its members accords with its Code.
Colgate laid a complaint with the ARB on the basis that the packaging of Bliss Brands’ Securex soap bar bore such similarities with Colgate’s competing Protex soap bar that it effectively imitated the packaging architecture of Protex, thereby improperly exploiting the advertising goodwill of Protex. Bliss Brands defended the complaint on its merits without complaining that, since it was not a member of the ARB, the ARB could not exercise jurisdiction over it. After a couple of holdings this way and that within the ARB’s adjudicative hierarchy, the ARB’s final holding was in Colgate’s favour. It ordered Bliss Brands to desist from using the offending packaging. Bliss Brands approached the High Court for relief. It contended that the ARB could not exercise powers over it as it was a non-member. It also submitted that the ARB’s processes offend section 34 of the Constitution by ousting the jurisdiction of courts in respect of the merits of complaints on matters involving fundamental rights (chiefly, freedom of expression). Further, it argued that the ARB’s adjudicative processes are not procedurally fair, this too being a breach of section 34 of the Constitution.
The High Court found in favour of Bliss Brands. The SCA upheld an appeal by the ARB and Colgate. In the main, it held that Bliss Brands had consented to the ARB’s jurisdiction and that, therefore, it could not belatedly take issue with such jurisdiction and the ARB’s processes. Bliss Brands brought an application for leave to appeal to the Constitutional Court. It raised similar arguments to those set out above. On the question of consent, whilst accepting that it never voiced its non-acceptance of the ARB’s jurisdiction, it submitted that it would have been futile to object to its jurisdiction. That was so because, even if it had objected and then not participated in the proceedings, the ARB could have gone ahead and, in the event of adjudging the packaging to be unacceptable, it could then have directed its members to act – in relation to the packaging – in a manner that would have had a negative impact on Bliss Brands in that the ARB could have issued an “ad-alert”. The effect of an ad-alert is that ARB members may not accept an advertisement in issue from the non-member concerned or, if the advertisement has already been accepted and published, must withdraw the publication. Therefore, insofar as non-members are concerned, there can never be true consent to the ARB’s jurisdiction.
A unanimous judgment of this Court, penned by Madlanga J (and concurred in by Zondo CJ, Kollapen J, Majiedt J, Makgoka AJ, Mathopo J, Potterill AJ, Rogers J and Theron J), recognised that this matter concerns issues of a constitutional and administrative law nature that reach beyond the role players in the dispute, but adopts a minimalist approach as articulated by the Court in Albutt v Centre for the Study of Violence and Reconciliation [2010] ZACC 4.
The judgment notes that Bliss Brands correctly conceded during the hearing that if this Court were to hold that Bliss Brands did consent to the ARB’s jurisdiction, that would be dispositive of this matter. The springboard for all the grounds of appeal is the idea that the ARB was not entitled to exercise its jurisdiction over Bliss Brands.
In the judgment, Madlanga J points out that Bliss Brands’ argument that there can never be true consent to the ARB’s jurisdiction by non-members loses sight of the fact that the possibility cannot be discounted that some non-members take the conscious decision to participate voluntarily in proceedings of the ARB. Therefore, that means in each case whether there was such voluntary participation or consent to jurisdiction is a question of fact. On the proven facts, Bliss Brands plainly consented to the jurisdiction of the ARB. The Court held thus for the following reasons. The letter from the ARB that advised Bliss Brands of the complaint by Colgate requested Bliss Brands to inform the ARB if it did not consider itself to be bound by the ARB’s jurisdiction. Bliss Brands rendered a detailed response to the merits of the complaint without any objection to the ARB’s jurisdiction. The letter from Bliss Brands’ attorneys not only fully addressed the merits of the complaint but also concluded with a request that, if it was found that Securex was in contravention of the Code and Bliss Brands was directed to withdraw or amend its product packaging, Bliss Brands should be afforded six months from the date of the ruling to do so. This was an unambiguous intimation by Bliss Brands that it was submitting itself to the ARB’s jurisdiction. It participated at all stages of the ARB’s proceedings without a whimper of protest. It was happy with the ARB Directorate’s finding (the first instance finding) which was in its favour. When the intermediate appellate body within the ARB upheld Colgate’s appeal, Bliss Brands appealed on the merits to the final appellate body of the ARB. Crucially, in the High Court review application, Bliss Brands sought remittal to the ARB in the event of the Court refusing to substitute its decision for that of the ARB.
In sum, Bliss Brands’ argument on lack of consent cannot succeed. The Court, therefore, refused leave to appeal and ordered Bliss Brands to pay the costs of the application, including the costs of two counsel.
The Full judgment here
