Time limiting section ought to be interpreted in manner that protects public interest, furthers the objects of the Competition Act and enhances the right to access courts.
November 27, 2020
Competition Commission of South Africa v Pickfords Removals SA (PTY) Limited Constitutional Court of South Africa Mogoeng CJ; Jafta, Khampepe, Madlanga, Mhlantla, Theron, Tshiqi, Majiedt JJ; Mathopo, Victor AJJ
November 23, 2020
Reported by Faith Wanjiku & Ian Otenyo
Statutes – interpretation of statutory provisions– section 67 (1) of the Competition Act – time limitation – time limit imposed on the investigation of a prohibited practice – where the appellant initiated investigations on the conduct of the respondent together with other industry players on a date that was outside the three year period captured in the Competition Act – what was the correct complaint date that gave rise to the trigger event – whether section 67(1) of the Competition Act in regard to a complaint in respect of a prohibited practice was a limitation provision proper, which constituted an absolute bar, or a procedural time-bar, capable of being condoned in the event of non-compliance – Competition Act, 89 of 1998
Statutes – statutory provisions – interpretation of statutes – fundamental tenets of statutory interpretation – where legislation could be interpreted in multiple ways – what were the fundamental tenets of statutory interpretation
The appellant filed a suit against the respondent and other furniture removal firms for collusive tendering in the form of cover pricing or cover quoting where the respondent had on several occasions solicited fictitious bids that were higher than its own from competitor firms in order to win contracts when customers asked firms to submit quotations to render services. The respondent’s collusive tendering practices went back as far as the year 2008 and they constituted a breach of section 4(1)(b)(i),(ii) and (iii) of the South African Competition Act. On November 3, 2010, the appellant initiated a complaint in respect of the furniture removal industry where several furniture removal firms were listed but not the respondent’s. The initiated complaint was later amended on June 1, 2011 and the respondent was specifically mentioned therein. Pursuant to further investigations, the 2011 complaint was amended on June 13, 2013, alleging a total of 37 instances of collusive tendering by the respondent.
The appellant had 37 counts of the alleged collusive conduct against the respondent. In the respondent’s defense, it stated that 14 of those counts were time-barred in terms of section 67(1) of the Competition Act and the rest were not sufficiently claimed. The respondent contended that it was the 2011 complaint, rather than the 2010 complaint, that was the trigger event for the commencement of the running of the three year period referred to in section 67(1). The appellant’s case was the converse as it contended that the 2011 complaint was merely an amendment of the 2010 complaint and that the latter was thus the trigger event. The Competition Tribunal found that the 2011 complaint was not an amendment of the 2010 complaint, but a self-standing complaint. The Competition Appeal Court held that the respondent only became a named party when the second complaint occurred. Before that, the alleged prohibited practice did not involve it. Consequently, the appellant filed the instant appeal.
- Whether section 67(1) of the Competition Act in regard to a complaint in respect of a prohibited practice was a limitation provision proper, which constituted an absolute bar, or a procedural time-bar, capable of condonation in the event of non-compliance.
- What was the correct complaint date that gave rise to the trigger event?
- what were the fundamental tenets of statutory interpretation?
Relevant provisions of the law Competition Act, 89 of 1998 Section 67 (1) – Time Limitation
A complaint in respect of a prohibited practice may not be initiated more than three years after the practice has ceased.
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.
- Section 67(1) of the Competition Act barred the Competition Commission from initiating a complaint in respect of a prohibited practice more than three years after the practice had ceased. A determination of the correct date of the trigger event was thus required, since a number of counts would be timely if November 3, 2010 was the end point, but would be out of time if June 1, 2011 was the endpoint.
- Since the Competition Act had not defined the word “initiate” the court ought to go to its ordinary meaning, which was to cause a process or action to begin. The initiation of a complaint set in motion the investigation of that complaint and the alleged prohibited practice by the Competition Commission’s inspectors. It was required that the commissioner should, at a minimum, be in possession of some information about an alleged practice which objectively, could give rise to a reasonable suspicion of the existence of a prohibited practice.
- It was not necessary for the commissioner that initiated a complaint to know all the names of the firms potentially involved in the prohibited practice concerned. There were no formalities required, save for a decision by the commissioner to cause the commencement of an investigation into the alleged prohibited practice. The initial omission of a firm or party at the stage when the complaint was first initiated by the Competition Commission and its subsequent addition to the complaint were not fatal, given the wording of section 49B(1) and the informality of the procedure.
- The 2011 complaint was merely an amendment, it emanated from information, which came to light pursuant to the Commission’s further investigations into the 2010 complaint initiation. It appeared there had been an extensive investigation into many instances of furniture removal transactions involving both the public and private sectors. The 2010 initiated complaint pertinently stated that the collusion was ongoing. The reference to the main companies implicated foreshadowed the possible addition of further firms at a later stage. The 2011 initiation then made it clear that it was an extension of the 2010 initiation. It alluded to further information becoming available. Further, the 2011 complaint retained the names of the firms originally implicated in the 2010 initiated complaint. It was to be expected that ongoing investigations would not only reveal more transgressors, but also additional transgressions.
- The court would not agree with the argument that the trigger event was the 2011 initiated complaint as the approach would misconceive the purpose and objects of the Competition Act, particularly the provisions that relate to the initiation of a complaint whose procedure was very informal.
- If the commissioner that initiated the investigations was required to know the identities of all the parties involved in a prohibited conduct at the commencement of the investigation, then that requirement would render the investigative powers of the Competition Commission of South Africa redundant and defeat the objectives of the Competition Act. The legislature would not require the Competition Commission to embark on an investigation if it was expected to know from the commencement of its investigation the identities of all the prospective respondents.
- The date from which the three-year period for purposes of section 67(1) of the Competition Act ought to have been calculated was the date of the first initiated complaint and that was November 3, 2010.
- The court would employ the tenets of statutory interpretation in determining if section 67(1) of the Competition Act was a substantive time-bar, which placed an absolute prohibition on the initiation of a complaint in respect of a prohibited practice more than three years after the cessation of that practice; or was the section merely a procedural time-bar, which could be condoned by the Competition Tribunal in terms of its powers in section 58(1)(c)(ii) of the Competition Act, provided that good cause was shown.
- A fundamental tenet of statutory interpretation was that the words in a statute should be given their ordinary grammatical meaning, unless to do so would result in an absurdity. Three important interrelated riders to the general principle would be considered,:
a) That statutory provisions should always be interpreted purposively;b) The relevant statutory provision should be properly contextualized; and, c) All statutes should be construed consistently with the Constitution of South Africa, i.e., where reasonably possible, legislative provisions ought to be interpreted to preserve their constitutional validity.
- The court would adapt an interpretation that was least limiting to the right to access courts. In that process, it was necessary to consider the purpose of the Competition Act. In its Preamble, the Competition Act stridently declared that it sought to achieve, amongst other objectives, equal opportunity to all citizens to participate fairly in the economy, to establish a more effective and efficient economy in South Africa and to restrain particular trade practices which undermine a competitive economy.
- The court was of the consideration that the Competition Commission’s work as a public body, acting on behalf of public interest, would be undermined if section 67 (1) were to be interpreted as to impose an absolute substantive time-bar. More importantly, a rigid, inflexible section 67(1) interpretation would drastically undermine the right of access to the courts. A purposive, constitutionally compliant interpretation was thus preferred.
- Section 67(1) of the Competition Act was therefore a procedural time-bar as it enabled the Competition Commission to deliver on the interests of the public by having wide investigatory capacity to combat both recent and older prohibited practices.
The matter to be remitted to the Competition Tribunal for further hearing. Respondent to pay costs of the applicant, in the instant court, the Competition Appeal Court and the Competition Tribunal.
Relevance to the Kenyan Situation
Kenyan courts strictly adhere to statute prescribed time limits but are also considerate when delays in the institution of time barred suits are accompanied with sufficiently compelling reasons. As such, each prohibited act that has been brought before the court outside the prescribed time limit has been dealt with on a case by case basis to evaluate the circumstances surrounding them.
The court denied applicant’s Notice of Motion in the case of Maersk Kenya Limited v Murabu Chaka Tsuma  eKLR, where the applicant had filed its leave to apply for judicial review 34 days after the respondents had issued their decision which meant that they made the application 20 days out of time because the applicant had 14 days to challenge the respondent’s decision. The court dismissed the applicant’s reliance on article 159 2(d) of the Constitution, 2010, which provided for the administration of justice without undue regard to procedural technicalities. The court thus stated:
“The applicant has however relied on article 159 of the Constitution and in the court’s view, article 159(2)(d) of the Constitution cannot be a panacea for all ills. It cannot be relied upon to revive a claim which is expressly extinguished by statute.”
The applicant also relied on theCivil Procedure Rules, Order 50 rule 4, which provides that the days between the twenty first day of December and the thirteenth day of January should be omitted from any computation of time for the amending, delivering or filing of any pleading. In regards to the aforementioned sub legislation, the court stated that:
“If the limited time is prescribed under the Civil Procedure Rules or by an order of the court or by summary notice, the court could enlarge the period. But here the absolute period of six months has been laid down by a different statute namely the Law Reform Act. Order 49 rule 5 of the Civil Procedure Rules cannot be invoked to supersede the express provisions of the Act…Order 49 rule 3A is similarly a piece of delegated legislation and cannot have the effect of amending the express provisions of section 9(2) and (3) of the Act. The said provisions can only be altered or amended by an Act of the Parliament. The long established tradition in commonwealth countries is that we look in the main to the legislature rather than to the courts for the development of our law. Moreover it is a different thing if a statute is ambiguous and capable of different interpretations. Here in this case the legislation is clear and certain and not open to any conflict on interpretations. The duty of the court is to expound what the law is and not what in view of social changes it should be.”
In the case of Republic v Kenya Revenue Authority Ex-Parte Stanley Mombo Amuti  eKLR, where the applicant filed to commence Judicial Review Proceedings 42 after time had passed. The applicant argued that the court had jurisdiction to exercise time elongation. As such, the court stated that:
“Discretion vested in the court is dependent upon various circumstances, which the court has to consider among them the need to do real and substantial justice to the parties to the suit. Discretion must be exercised in accordance with sound and reasonable judicial principles. Discretion is a science, not to act arbitrarily according to men’s will and private affection: so the discretion which is exercised here, is to be governed by rules of law and equity, which are to oppose, but each, in its turn, to be subservient to the other. This discretion, in some cases follows the law implicitly, in others or allays the rigour of it, but in no case does it contradict or overturn the grounds or principles thereof, as has been sometimes ignorantly imputed to this court. That is a discretionary power, which neither this nor any other court, not even the highest, acting in a judicial capacity is by the constitution entrusted with.”
The court further stated that:
“Judicial power, as contradistinguished from the power of the laws, has no existence. Courts are the mere instruments of the law, and can will nothing. When they are said to exercise a discretion, it is a mere legal discretion, a discretion to be exercised in discerning the course prescribed by law; and, when that is discerned, it is the duty of the court to follow it. Judicial power is never exercised for the purpose of giving effect to the will of the judge, always for the purpose of giving effect to the will of the legislature; or, in other words, to the will of the law.”
The court held:
“The ex parte applicant was candid. He explained the financial difficulties he faced and inability to raise the court fees. The delay was not inordinate. The court was persuaded that he has established sufficient cause.In conclusion, the ex parte applicant has sufficiently explained the delay and has established sufficient cause for this court to grant the extension of time sought. Accordingly, the court has allowed the application and order that the application be admitted out of time and that the same was hereby deemed to have been duly and properly filed. The court observed that there were two schools of thought on the issue of time elongation. The first, was the school which propagated that no such enlargement of time for the filing of a substantive motion was envisaged in Order 53 of the Civil Procedure Rules. The same proponents argue that owing to the special procedure adopted in Judicial Review proceedings, a party, other than invoking Order 53 of the Civil Procedure Rules cannot invoke the provisions of the Civil Procedure Act and the Rules made there under. There was the second school of thought which supported the applicant’s position that although the court had no jurisdiction to enlarge the six months period given by the Law Reform Act.From the rival positions presented to this court, the question is whether this court, in the present constitutional framework should still let the former intricacies and obscurities hamper the provision of effective redress to facilitate access to justice for all or should it adopt a flexible approach, which was not necessarily crafting or innovating its jurisdiction, but bearing in mind that much of the old case law on the reach of the Judicial Review remedies may not be of such practical relevance today. But because the Legislature has given no explicit direction on the issue, the court must adopt the interpretation of the silent provisions that best effectuates the legislative intent.”
Section 86 of the Competition Act, 2010, provides for the time within which investigation may be initiated. It states as follows:
“An investigation into an alleged infringement of the provisions of this Act may not be initiated after three years from the date the infringement has ceased.”
Though there is no competition law case on record that required the Kenyan courts to make a determination on whether a prohibited practice could be prosecuted outside the three year limitation period as provided by the Competition Act, 2010, the South African case can be used to build on the existing Kenyan jurisprudence. The South African case exhibits a different approach towards allowing a matter that violates time limitation by interpreting the time limiting statute in a manner that promotes public interest and aids the right to access courts rather than examining the surrounding circumstances of the case. As such, the South African case is of high jurisprudential value to the Kenyan situation as far as statutory time limits are concerned.