On 27 July 2012 the Competition Appeal Court (CAC) dismissed an appeal by Paramount Mills (Proprietary) Limited (Paramount) against an order of the Competition Tribunal (Tribunal). The Tribunal order had rejected Paramount's application to dismiss a complaint referral by the Competition Commission (Commission) on the grounds of the referral being time-barred and not legally competent.
Paramount appealed against that order to the CAC.
Following the Commission's prosecution of a bread cartel including Premier Foods, Tiger Brands and Pioneer Foods for fixing prices and other trading conditions, the Commission expanded its investigation to include Paramount, which was revealed as a participant in the cartel during its investigation.
On 31 March 2010 the Commission referred a complaint to the Tribunal against Paramount and seventeen other respondents, alleging that they operated a cartel in the milled white maize meal market during the period 1999 to 2007. The Commission sought an administrative penalty of 10% of each respondent's annual turnover.
Paramount denied participation in any cartel meetings with the major market players and reaching agreement in respect of price. Paramount approached the Tribunal for an order dismissing the referral. The company averred that the complaint was not legally competent as it does not meet the test of legality and intelligibility, and that it was time-barred because Paramount was only implicated in telephone conversations that took place in September 2006.
The Tribunal dismissed Paramount's arguments, ruling that Paramount did not plead the prescription point properly in its answering affidavit and did not aver facts to show the conduct had ceased.
The CAC held further that Paramount's reliance on the Woodlands test [Woodlands Dairy (Pty) Ltd v Competition Commission 2010 (6) SA 108 (SCA)] in relation to legality and intelligibility of the complaint referral was misplaced in light of the context.
The CAC further held that Paramount's reliance on Loungefoam (Pty) Ltd and Others v Competition Commission of South Africa 102/CAC/Jun10 was incorrect in that the Tribunal referral proceedings are not equivalent to motion or application proceedings in the High Court.
Lastly, the CAC held that the Commission pleaded with sufficient particularity to enable Paramount to understand the allegations against it. If Paramount had felt disadvantaged it could therefore have raised an objection before filing its answering affidavit.
The CAC dismissed the appeal with costs.