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Trustees for the time being of the Children's Resource Centre Trust and others v Pioneer Food (Pty) Ltd and others (Legal Resources Centre as amicus curiae)

Supreme Court of Appeal

November 29, 2012

Case No: 50/2012

Copyright 2013 Butterworth Publishers (Pty) Ltd Butterworths Constitutional Law Reports

Opinion

Judgment

BY Wallis JA

When may a class action be brought and what procedural requirements must be satisfied before it is instituted? These two questions confront this Court in litigation arising from an investigation by the Competition Commission (the "Commission") into the bread producing industry, initially in the Western Cape, and later in four other provinces in South Africa. In the light of the outcome of that investigation the appellants applied to the Western Cape High Court for the certification of a class action in which they proposed to pursue a claim for damages against the respondents. That application was dismissed and leave to appeal was refused. Such leave was granted on petition to this Court. The determination of the appeal requires that we address the two questions I have described. To that end we heard detailed argument in this and a related application over two days and were furnished with copious reference materials. That has assisted in illuminating the path for us in this novel area of procedural law and it is appropriate at the outset to express our gratitude to Counsel for their assistance.

Background

A brief sketch of the Commission's investigation and the functioning of the bread market is necessary to provide the setting for the present litigation. In 2006 the respondents, 1 to whom I will refer as Pioneer, Tiger and Premier respectively, were the three largest bread producers in the Western Cape. At that time and for a considerable period prior to that they, together with Foodcorp, 2 were the four largest bread producers in South Africa. In December 2006, the Commission received complaints in relation to the apparently co-ordinated implementation of price increases in the Western Cape, in conjunction with apparently co-ordinated changes in the terms upon which the producers dealt with bread distributors, who supplied the informal sector of the bread market. It then commenced an investigation in relation to the Western Cape in terms of the Competition Act 89 of 1998 (the "Act"). Premier came forward and disclosed details of anti-competitive conduct in which it had engaged together with the other three bread producers, not only in the Western Cape but also in other parts of the country. It sought and was granted leniency in terms of the Commission's corporate leniency policy. 3 

The disclosures by Premier led to the Commission instituting a further investigation in relation to other parts of the country, which was referred to, somewhat misleadingly, as the national complaint. Tiger entered into a settlement agreement with the Commission in relation to conduct in both the Western Cape and under the national complaint. Foodcorp entered into a similar agreement in relation to the national complaint only. Both settlements were confirmed in orders of the Competition Tribunal (the "Tribunal"). They involved the payment of administrative penalties of nearly R99 million in the case of Tiger and about R45 million in the case of Foodcorp. The complaints in respect of Pioneer were referred to the Tribunal for adjudication. At the end of a lengthy hearing it was found to have perpetrated anti-competitive conduct in relation to both the Western Cape and the national complaint. Administrative penalties totalling nearly R196 million were imposed upon it. It appealed against that decision but the matter was resolved before the hearing of the appeal. We were not told the basis for that resolution.

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2012 SACLR LEXIS 44; 2013 (3) BCLR 279 (SCA)

Trustees for the time being of the Children's Resource Centre Trust and others v Pioneer Food (Pty) Ltd and others (Legal Resources Centre as amicus curiae)

CORE TERMS

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