Tribunal provides clarity on whether court referrals will be subject to the prescription provisions of the Competition Act

In November 2014, the Competition Tribunal dismissed a point in limine raised by Linpac Plastics South Africa Proprietary Limited (Linpac), against a referral filed by the Western Cape High Court at the instance of Mr Jacobus du Plessis and Others (Mr du Plessis) in terms of s65(2)(b) of the Competition Act, No 89 of 1998 (Act) (Court Referral). In terms of s65(2)(b) of the Act where a party to a civil action raises an issues relating to anti-competitive conduct (which is prohibited in terms of the Act), the Court hearing the civil action must refer the matter to Competition Tribunal or Competition Appeal Court to make a determination.

In a civil dispute between Linpac and Mr du Plessis before the High Court, a legal question arose as to whether Linpac could claim damages from Mr du Plessis as it is allegedly engaging in conduct that is anti-competitive. As the competition authorities have exclusive jurisdiction over the interpretation and application of Chapters 2, 3 and 5 of the Act, a Court Referral was directed to the Tribunal.

Before the Tribunal could decide the matter on its merits, Linpac argued that the Court Referral was brought out of time and averred that all matters before the Tribunal are subject to a prescription period set out in s67(1) of the Act, which limits the right to refer complaints that are brought out of time (Limitation Clause). Linpac relied on an earlier decision of Leonard & Others v Nedbank & Others 84/CR/Aug07 (Leonard-decision), where the Tribunal held that a Court Referral does not preclude it from considering the issue of prescription. Mr du Plessis argued that the application of the Limitation Clause is only applicable to complaint procedures as envisaged in the Act and cannot apply with equal effect to Court Referrals.

The Tribunal found that the Limitation Clause does not apply to Court Referrals for the following reasons:

In terms of the ordinary language approach, the wording in the Limitation Clause makes reference to 'complaint' and 'initiated', whereas the corresponding wording is absent from the Court Referral, which leads to the view that the Limitation Clause is only applicable to a complaint that has been initiated.It would make no logical sense to read these words into the context of the Court Referral.

In terms of the functional approach, the Limitation Clause anticipates two dates: the date on which the conduct ceases and the date on which the conduct is initiated. For the Limitation Clause to be triggered, the date of initiation must be certain or at least capable of certainty. The Tribunal held that the date of initiation is either the date the complaint is filed with the Commission or the date that the Commission commenced the investigation. The same reasoning cannot be applied to a Court Referral as the date of initiation is uncertain and it is not capable of certainty.

In terms of the policy approach, the Act is largely concerned with public enforcement. There are instances where a private civil matter arises and requires the competition authorities' intervention, provided there are compelling policy justifications. The Tribunal is of the view that a Court Referral is one such instance. To deny this right to parties would be to infringe upon a person's right of access to court set out in s34 of the Constitution.

The Tribunal departed from the approach taken in the earlier Leonard-decision as the arguments raised in this case were not considered then. Accordingly, the point in limine was dismissed with no costs.