Wbho construction limited v. The competition commission and group five construction limited - (08 Aug 2017)

Annexures are privileged and there is no basis to sever the same from application

MRTP/ Competition Laws

Present is an interlocutory application by WBHO Construction Limited (“WBHO”) against the Competition Commission and Group Five Construction Limited for an order declaring that, certain documents produced by Group Five, and claimed as legally privileged by the Commission are not so and should be discovered.

On 1st September, 2009, the Commission initiated a complaint against a number of named firms in the construction industry, among which were Group Five and WBHO. Not only are Group Five and WBHO mentioned in the Commission’s complaint initiation, but the type of conduct being investigated against them is also mentioned. Shortly afterwards, on 23rd November, 2009, Group Five applied for leniency in terms of the Commission’s Corporate Leniency Policy (“CLP”) for conduct mentioned by the Commission in its initiation. Thereafter Group Five, in its capacity as a corporate leniency applicant met with the Commission on 18th March, 2010. Following Group Five’s leniency application and further investigation, the Commission, on 26th October, 2015, filed a complaint referral with the Competition Tribunal against Group Five and WBHO. Given Group Five’s role as the corporate leniency applicant, the Commission only sought an administrative penalty against WBHO. In the complaint referral WBHO stands accused of contravening Sections 4(1)(b)(i) and (iii), of the Competition Act, 1998 by allegedly entering into a collusive agreement with Group Five to fix the trading conditions for an N17 Project in response to a tender issued by the South African National Road Agency (“SANRAL”).

It is common cause that, the case is concerned only with litigation privilege on the basis of ‘contemplated litigation’, not for purposes of obtaining or giving advice between a client and his or her attorney. There is no dispute between the parties that, the leniency application itself is legally privileged. In respect of the annexures, the Commission indicates in its answering affidavit that, over and above the fact that, annexures are not severable from the leniency application, “the annexures were internal discussions within Group Five in preparation of the drafting of the leniency application and therefore, are subject to litigation privilege.” Commission states on affidavit that the annexures form part and parcel of the leniency application. They were generated “in preparation for the drafting of the leniency application and therefore are subject to litigation privilege”. It goes on further to state that annexures were “produced for use by the Commission in contemplation of litigation”. The Commission further states that: “The central object of producing the CLP application is to use information contained therein to conduct litigation in the Tribunal against such members of the alleged cartel that contest proceedings.”

On the facts of this case, there is no dispute that the CLP is privileged. The Commission’s explanation of the annexures to the CLP, from its answering affidavit, is that they were generated for its use in contemplation of litigation. Even though they were generated before the CLP, given their proximity to the filing of the CLP, there is no reason to doubt the Commission’s explanation. Moreover, as the SCA held, privilege attaches to the person under whose authority the document is produced, not its author. The annexures, even though produced before the filing of the CLP by Group Five, are privileged in the hands of the Commission since they were produced for the Commission’s use. Annexures are privileged and there is no basis to sever them from the application. There is no reason to sever the annexures of the leniency application in this matter from the leniency application itself.

To assert that, there has been a passage of time between the first meeting with a leniency applicant and the referral of a complaint as a result of such meeting indicates that, litigation was never contemplated at the time of the first meeting is unpersuasive. There may be many factors delaying the eventual referral of a matter. This does not detract from the fact that litigation was contemplated as likely well before the matter is heard. The fact that, the Commission also invited firms to settle any contraventions, they may have been involved in, which may also account for some of the delay, does not mean that, the contemplation of litigation ceased.

It is matter of public record that, settlement negotiations were entered into to expedite the conclusion of an industry wide investigation. Transcript of the meeting between the Commission and Group Five was generated in contemplation of litigation and thus, the Commission is within its right to claim privilege over the document. In light of the fact that, any firm before the Tribunal is not at risk of losing its liberty in a finding by the Tribunal, the principles determining fairness in criminal proceedings cannot be said to be applicable to the determination of fairness before the Tribunal. There is nothing stopping the Commission from making a policy choice to give access to its entire docket despite its claim of privilege over some documents in the docket, but there is no legal obligation on it to do so. The application is dismissed.

Tags : PRIVILEGE ANNEXURE DECLARATION