THE SUPREME COURT OF APPEAL OF SOUTH AFRICA

Case no 480/2001

REPORTABLE

In the matter between

Menzi Simelane NO                                                                     First Appellant
Ahmore Burger NO                                                                 Second Appellant
Zoleka Ntsaluba NO                                                                   Third Appellant
Willem Pretorius NO                                                                Fourth Appellant
and
Seven-Eleven Corporation SA (Pty) Ltd                                  First Respondent
Seven-Eleven Africa (Pty) Ltd                                             Second Respondent
Before:
Hefer AP, Harms, Schutz, Scott and Brand JJA
Heard:
14 November 2002
Delivered: 26 November 2002
Competition Act – differing functions of Competition Commission and Competition Tribunal -
former investigates and refers – latter adjudicates – former’s doings not reviewable in the normal
course – nor does it have to give a hearing – as a policeman/prosecutor it does not have to display
the impartiality of a judge – entitled to prosecute a test case.
_______________________________________________________________
JUDGMENT
_______________________________________________________________
SCHUTZ JA

[1] This appeal arises out of a successful review application before Van der
Merwe J, reported as Seven-Eleven Corporation SA (Pty) Ltd and Another v
Simelane NO and Others 2002 (1) SA 118 (T).  The applicants (now the
respondents) were two companies to which I shall refer collectively as ‘Seven-
Eleven’.  Their managing director is Mr George Hadjidakis (‘Hadjidakis’).
The ‘decision’ which was reversed was one by the Competition Commission
(‘the Commission’) to refer to the Competition Tribunal (‘the Tribunal’)
complaints that Seven-Eleven was conducting certain ‘prohibited practices’.
The Commission and the Tribunal were both established under the
Competition Act 89 of 1998 (‘the Act’).  The commission was not cited by
name, but four of its officers were.  They are the appellants.  The first of them
is Mr Menzi Simelane (‘Simelane’), the Commissioner.  Like the other three
he is cited nomine officii.  The second is Ms Vernolize Ahmore Burger
(‘Burger’), a Deputy Commissioner.  The third is Ms Zoleka Ntsaluba
(‘Ntsaluba’), an investigator employed by the Commission.  The fourth is Mr
Willem Pretorius (‘Pretorius’), who is an independent advocate holding a
general retainer to assist the Commission.  So the case will pass into history
under Simelane’s name.
[2] The reason why the review application could be brought in the High
Court was that at the time of its institution the Act did not confer review
powers on the Tribunal, although it had exclusive jurisdiction in respect of
matters of the kind with which this case is concerned (s 65(3) of the Act).

Although the Competition Appeal Court (also a creation of the Act) had
exclusive appellate and review powers over the Tribunal’s decisions (s 65(4)),
it also did not have review powers in respect of the Commission.  Accordingly
the High Court at the time of institution retained its common law review
jurisdiction.
[3] Because of the general exclusion of the ordinary courts from
competition matters, I do not propose dealing with the merits of the
complaints laid before the Commission or of its referral of them to the
Tribunal.  However, I shall give a brief general description of the activities of
Seven-Eleven, later to touch on the merits, but only in so far as they have a
bearing on the review.  The frequent invitations by Seven-Eleven in the course
of argument to decide some aspects of the merits will not be accepted.
[4] There were over 200 Seven-Eleven retail convenience stores.  Some of
them were operated by Seven-Eleven itself, but the great majority were
operated by franchisees.  A relatively small number of franchisees laid
complaints with the Commission.  The rest, or most of them, appear to be
content.  Indeed it is Hadjidakis’s case that, apart from making a profit, he has
guided numerous first-time entrepreneurs to success.  He may be correct, but
that is not for us to decide.
[5] Mainly by means of the individual franchise agreements Seven-Eleven
maintains a close control over important aspects of the activities of the
franchisees.  The name of the brand is derived from the requirement that the

stores be open for business from at least 7 am to 11 pm.  Armed by its
experience the franchisor chooses the suppliers and determines the range of
goods to be carried and obtains favourable prices from suppliers, using its
buying power.  The franchisees are thus relieved of having to choose their
stock, but, on the other hand, they are compelled to take what Seven-Eleven
determines they must stock.  In some cases the goods are obtained from a
Seven-Eleven warehouse, in others directly from the supplier.  In either case
Seven-Eleven pays the supplier.  It attends to advertising on behalf of all the
stores and makes available its trade marks, logos and Seven-Eleven brands.
At the time when the application was brought it also determined the prices at
which the franchisees sold.  It would identify locations suitable for the
opening of stores and would, in some cases, hire premises for sub-letting to
franchisees.  When a store was opened Seven-Eleven would at its own
expense provision it with a full range of stock.  The value of this initial stock
would have to be repaid over three years.  Needless to say all of this was not
done out of charity.  In various ways Seven-Eleven recompensed itself, for
instance by way of royalties, rentals, commissions and rebates on purchases.
[6] The complaints were lodged late in 1999.  In terms of s 45(1) it was
then the duty of the Commission to appoint an inspector and investigate the
complaint.  This it did.
[7] On 14 February 2000 Hadjidakis attended a meeting presided over by
Burger.  Also present were Ntsaluba and Pretorius.  Together with Simelane

(who was not present at the meeting) these persons are the appellants.
Hadjidakis complains resentfully about the way in which he says he was
inveigled into attending without legal representation, and about the manner of
the interrogation.  I shall revert to this meeting when dealing with his various
submissions.
[8] At about the time the franchisees lodged their complaints with the
Commission they also brought urgent proceedings before the Tribunal,
seeking an interim interdict.  Such relief was granted (by a majority of two to
one) on 31 March 2000, in respect only of s 5(2) of the Act – that is Seven-
Eleven was interdicted from imposing minimum resale prices.  Seven-Eleven
obeyed the interdict and claims that when it expired after six months, it merely
recommended retail prices without exercising any compulsion.  The remainder
of the interim relief claimed was refused.
[9] On 4 May 2000 Ntsaluba deposed to an affidavit in support of a referral
of the complaints of the discontented franchisees to the Tribunal.  The referral
itself is signed by Simelane, purporting to act for the Commission.  It invokes
sections included in Chapter 2, namely 4(1)(b) (restrictive horizontal
practices), 5(1) (restrictive vertical practices), 5(2) (minimum resale price
maintenance), 8(a) (charging an excessive price by a dominant firm) and 8(d)
(iii) (exclusionary acts by a dominant firm, including selling goods or services
on condition that the buyer purchases separate goods or services unrelated to

the object of a contract, or forcing a buyer to accept a condition unrelated to
the object of a contract).  Seven-Eleven is accused of:
‘enforcing restrictive practices which include rental agreements, forced
purchases, shop fittings, price fixing, insurance, sale of business and
designated supplier.’

[10] Hadjidakis’s complaints about the Commission’s handling of matters
leading to the referral are numerous.  Before dealing with them it is desirable
to broach two matters arising in this appeal.  The first is the application of the
rule in Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3) SA
623 (A).  The heads of argument filed on behalf of Seven-Eleven are replete
with instances where a proposition is advanced with reference to Hadjidakis’s
founding or replying affidavit, whilst the contrary version put forward by the
appellants is ignored or diminished.  Such an approach is the converse of that
laid down in Plascon-Evans at 634H-I, to the effect that in a case such as this,
the decision must be based on those facts averred by the applicant which are
admitted by the respondent, together with the facts averred by the respondent.
Instances in which the rule has been ignored will be mentioned under the
individual complaints.
The second aspect to which I refer relates to the nature of the differing
functions of the Commission and the Tribunal.  Once this is clarified many of
Seven-Eleven’s complaints may be simply answered.

The respective functions of the Commission and the Tribunal
[11] The main underlying legal dispute is whether the Act provides for a
dichotomous procedure for the resolution of a complaint.  The appellants say
that there are two distinct stages.  The role of the Commission is investigative,
whereas that of the Tribunal is adjudicative.  The Commission receives a
complaint, investigates it and then determines whether it should be referred to
the Tribunal.  If it does refer it, then it appears before the Tribunal as
prosecutor.  The Tribunal, on the other hand, conducts a trial in order to
determine whether the complaint is well-founded, and if it is found to be so, it
decides what steps are to be taken.
Seven-Eleven, by contrast, contends that the reliance on such a
dichotomy constitutes the fundamental flaw in the argument of the appellants.
The functions of the Commission are said to be both investigative and
adjudicative and, particularly, adjudicative in the respects with which this
appeal is concerned.  Reliance is placed on cases such as Greub v The Master
and Others 1999 (1) SA 746 (C) at 750A-751D.  In order to determine which
of these contentions as to dichotomy is correct, brief reference to the statute
needs to be made.
[12] Both the Commission and the Tribunal are creatures of statute, the
statute being the Act.  Both bodies must exercise their functions in accordance
with the Act (s 19(1)(c) and s 26(1)(d)).  The Commission consists of a
Commissioner and one or more Deputy Commissioners as may be necessary,

appointed by the Minister of Trade and Industry (s 19(2)).  It must be
independent and impartial and must perform its functions without fear, favour,
or prejudice (s 20(1)).  Among its functions are the investigation and
evaluation of alleged contraventions of Chapter 2 (in which is contained
sections 4 to 9) and the referral, where appropriate, of complaints to the
Tribunal (sections 21(1)(c) and (g)).  Having so referred a matter it is then its
duty and right to appear before the Tribunal and participate in its proceedings
(s 20(1)(g) and s 53(a)).  Section 24(1) empowers the Commission to appoint
inspectors.  Upon the Commission’s receiving a complaint of a prohibited
practice (a practice prohibited under Chapter 2) the Commissioner must
appoint an inspector to investigate it ‘as quickly as practicable’ (s 45(1)).  The
inspector is entitled to question people and they must answer, unless the
answer is self-incriminating (s 45(3)).  Whilst an investigation is in progress
the Commissioner is entitled to summon any person for interrogation and may
require production of books and documents (s 45(4)).  Powers of entry, search
and seizure are conferred by sections 46 to 49.  After ‘completion’ of the
investigation the Commission must refer the matter to the Tribunal if it
‘determines’ that a prohibited practice ‘has been established’ (s 50(a))
(emphasis supplied).  (The argument on behalf of Seven-Eleven is largely
based upon the words ‘determines’ and ‘established’.  Seven-Eleven contends
that these words indicate that a part of the Commission’s functions is
determinative or adjudicatory.  I shall return to this aspect.)  Section 50(b)

goes on to provide that if a positive determination is not made the
Commission must issue a notice of non-referral.  If it does so the complainant
may refer the matter directly to the Tribunal (s 51(1)).
[13] The Tribunal is a tribunal of record (s 26(1)(c)).  When a complaint is
referred to it, it may adjudicate in order to determine whether any conduct
prohibited in terms of Chapter 2 has occurred, and, if so, it may impose a
remedy provided for in Chapter 6 (s 27(1)(c)).  The Tribunal must conduct its
hearings in public in an inquisitorial manner and in accordance with the
principles of natural justice (s 52(2)).  It must issue written reasons for its
decisions (s 52(4)).  Powers of summoning, interrogation and production are
given (s 54).  A witness must answer questions (s 56).  The Commission, the
complainant and the person whose conduct is the subject of complaint are
entitled to legal representation (s 53).
[14] The nature of the functions allotted to the Commission and the Tribunal
has been the subject of detailed consideration by the Tribunal itself, in
Norvatis SA (Pty) Ltd and Others v The Competition Commission and Others
(CT 22/CR/B/Jun 01, 2.7.2001 paras 7 and 35-61).  The reasons for the
Tribunal’s decision in the Norvatis case deal at length not only with the
underlying question whether the functions of the Commission are
determinative as opposed to investigative, but also with more specific
questions which have arisen in the appeal before us.  Speaking generally and
without reference to all conceivable specific cases, I approve of these reasons.

Once they are adopted, in my opinion they largely dispose of all but one of the
arguments raised by Seven-Eleven.  That argument will be dealt with
separately in paras [40] and [41] below.  It relates to whether the decision-
making body within the Commission was properly constituted.  Putting it
aside for the moment, the contentions raised by Seven-Eleven may be listed.
[15] They are:
1.
The referral by the Commission constituted an administrative
decision affecting Seven-Eleven’s rights, such as is subject to
review.
2.
The Commission acted on a ‘hotch-potch’ of complaints without
investigating whether there was substance in them.
3.
The Commission must observe the audi alteram partem rule and
failed to do so.
4.
The persons making the decisions were biased and motivated by
malice.
5.
Further, they were moved by an ulterior purpose.
The Norvatis case
[16] The following paragraphs of the Tribunal’s reasons are relevant to this
case:
’40.
The Commission argues that its decision to refer a complaint is
neither final nor does it have any consequences for the applicants.
Its powers are of a preliminary and investigative nature, comparable
to those of the police services or the Directorate of Serious Economic

Offences.  Accordingly, the Commission submits, it has not engaged
in unfair administrative action.
41.
To decide whether an administrative action has been taken fairly it is
crucial that the decision-making process be viewed as a whole.  The
demands of fairness will depend on the context of the decision
viewed within the procedural context in which it arises.  An essential
feature of the context is the empowering statute, which creates the
discretion, as regards both its language and the shape of the legal and
administrative system within which the decision is taken.11
42.
In Brenco12 the Supreme Court of Appeal had to consider, inter alia,
whether the Board on Tariffs and Trade (BTT) had violated the
principles of natural justice by making recommendations to the
Minister of Trade and Industry without giving the respondents access
to all information at its disposal or the opportunity to respond thereto
prior to making the recommendation.  The Court held that no single
set of principles for giving effect to the rules of natural justice is
applicable to all investigations, official enquiries and exercises of
power.  The Court emphasized the need for flexibility in the
application of the principles of fairness depending on the context.
The Court quoted the dicta of Sachs L.J. in In re Pergamon Press
Ltd13 where he stated:
“In the application of the concept of fair play, there must be
real flexibility, so that very different situations may be met
without producing procedures unsuitable to the object in hand
… It is only too easy to frame a precise set of rules which
may appear impeccable on paper and which may yet unduly
hamper, lengthen and, indeed, perhaps even frustrate … the
activities of those engaged in investigating or otherwise
dealing with matters that fall within their proper sphere.  In
each case careful regard must be had to the scope of the

11 [I have retained the original footnote numbers.] Doody v Secretary of State for the Home Department and
Other Appeals quoted extensively by the Supreme Court of Appeals in Chairman:  Board on Tariffs and
Trade and Others v Brenco Incorporated and Others 2001 (4) SA 511(SCA) at 520H-521E para [13]
12 See footnote 11
13 [1970] 3 ALL ER 535 (CA)

proceeding, the source of its jurisdiction (statutory in the
present case), the way in which it normally falls to be
conducted and its objective.”
43.
The Court then examined the provisions of the BTT Act14 as part of
the context to determine what the requirements of fairness are in
BTT investigations.  It found that in terms of that Act BTT performs
both an investigative and determinative function.  It went on to hold
that:
“Whilst BTT has a duty to act fairly, it does not follow that it
must discharge that duty precisely in the same respect in
regard to the different functions performed by it.  When BTT
exercises its deliberative function, interested parties have a
right to know the substance of the case that they must meet.
They are entitled to an opportunity to make representations.
In carrying out its investigative functions, BTT must not act
vexatiously or oppressively towards those persons subject to
investigation.  In the context of enquiries in terms of sections
417 and 418 of the Companies Act 61 of 1973, investigatory
proceedings, which have been recognised to be absolutely
essential to achieve important policy objectives, are
nevertheless subject to the constraint that the powers of
investigation are not exercised in a vexatious, oppressive or
unfair manner.”
44.
The Court was of the view that when BTT carried out its
investigative functions fairness did not demand that “every shred of
information provided to BTT should be made available to the
respondents”15.  The standard applicable in the conduct of the
investigative function is the general principle that an interested party
must know the “gist” or the substance of the case that it has to meet.
45.
Another complaint made in this matter against BTT was that its
inspectors had obtained information from a party and that the

14 Act No 107 of 1986
15 At paragraph [42]

information had not been given to the respondents so that they could
test its correctness.  On this point the Court held:
“There is no requirement that BTT in the investigation of a
matter must inform the parties of every step that is to be
taken in the investigation and permit parties to be present
when the investigation is pursued by way of the verification
exercise.  There is no unfairness to the respondents in
permitting the officials of BTT to clarify information without
notice to the respondents.  To hold otherwise would not only
unduly hamper the exercise of the investigative powers of
BTT, but would seek to transform an investigative process
into an adjudicative process that is neither envisaged by the
BTT Act, nor what the audi principle requires”.16
46.
The Court found that BTT had not engaged in unfair procedural
action when, in making the recommendation to the Minister, it relied
on information that it had not disclosed to the respondents.
47.
Nor is the result in Brenco surprising or novel.  It represents the
practical and flexible approach our courts have taken on many
occasions to administrative fairness challenges.
48.
In Huisman v Minister of Local Government, Housing and Works
1996 (1) SA 836 (A), Van den Heever JA placed a significant
emphasis on the theme of administrative efficiency and held that
proceedings of administrative bodies could be endlessly protracted
were such “right” (in this case the right to reply) to be held to exist.
Whilst the case deals with a different set of procedures not analogous
to those in this case it does illustrate the consistent approach of our
courts in striking a compromise between fairness and practical
concerns of efficiency.
49.
The same could be said of the Competition Commission – the
administrative efficiency of the Commission in rendering its duties
could be severely affected if, in exercising its discretion in terms of
section 50(2), its every action would be subject to scrutiny under the

16 Brenco supra at paragraph [51]

principle of administrative review in the manner suggested by the
applicants in this matter.
50.
Moreover, there is no express provision in the Act requiring or
compelling the Commission to furnish reasons or to afford the
applicant the opportunity to be heard prior to the Commission
referring the restrictive practice complaint to the Tribunal.  It would
have to be inferred, and it seems to be difficult to read into the Act a
necessary inference which compels the Commissioner to afford the
applicant the right to be heard.
51.
In Park – Ross v Director for Serious Economic Offences 1998 (1)
SA 108 (C) Farlam J had to decide whether an applicant subject to a
proceeding in terms of the Serious Economic Offences Act was
entitled access to written statements given by witnesses to the
Director of Serious Economic Offences.  In coming to the conclusion
that he was not, he remarked:
“It is convenient to deal with the right to be heard first.  I
agree with … that the applicant has no right at this stage to
invoke the audi alteram partem rule.  In my view, it is clear
that the powers of the respondent are as Mr Gauntlett argued,
of a preliminary and investigative nature.  In essence, in this
context, they do not differ from those vested in members of
the police service.”17
52.
In Van der Merwe and Others v Slabbert NO and Others 1998 (3)
SA 613 (N), Booysen J, stated the principle that:
“It is so that bodies required to investigate only need in
general not observe the rules of natural justice and that bodies
are required to investigate facts and make recommendations
to some other body or person with the power to act need not
necessarily apply the rules of natural justice, depending on
the circumstances.”18

17 See judgment at 122.  Although the applicants argued that cases dealing with criminal procedures were not
analogous we fail to see why.  A complaint referral is brought at the instance of a public body in much the
same way as a prosecution and the Tribunal can impose penalties in event of a contravention including an
administrative fine.
18 See judgment at 624

53.
We turn now to the application of the above conclusion to the above
circumstances of the present case.
54.
The Brenco decision is entirely in point in relation to the matter at
hand.  It is our view that the distinction drawn by the Court between
an investigative and a determinative function performed by public
bodies is crucial in ensuring that public bodies are not unduly
restrained in their work where the exercise of their powers carries no
serious or final consequences for affected parties.
55.
In the context of this application the distinction drawn by the Court
between investigative and determinative administrative conduct by
public bodies disposes of the applicants’ case.  In terms of the
decision in the Brenco case the violations of natural justice alleged
by the applicants against the Commission can only be upheld if the
complaint referral by the Commission constitutes a determinative
action.  Our view is that it does not.  Section 21 of the Act, which
deals with the functions of the Commission, states that the
Commission has the power to investigate and evaluate alleged
contraventions of Chapter 2.  Chapter 2 deals with prohibited
practices.  The Commission therefore is empowered to investigate
and evaluate alleged prohibited practices, and, in terms of section
50(2), refer to the Tribunal those complaints that in respect of which,
it “determines”, a prohibited practice has been established.  The
Commission is an investigative body, which in referring the
complaint to the Tribunal is only instituting the initial procedural
step on the road to a hearing.
56.
The Tribunal, on the other hand, is specifically empowered by
section 27(a) of the Act to adjudicate on prohibited practices and to
determine whether a prohibited practice has actually occurred.  In
terms of section 52(2)(a) the Tribunal is explicitly enjoined to apply
the rules of natural justice.  A respondent in proceedings before the
Tribunal clearly is afforded administrative justice rights;  in terms of
the Tribunal Rules it may request information prior to a hearing and
be represented.  The Tribunal clearly exercises a determinative action
as it is empowered to do by the Act and therefore it is enjoined to

conduct its proceedings in accordance with the tenets of natural
justice.  The Commission is not subject to the same requirement
precisely because the legislature, like the Court in Brenco, sought, in
this Act, to distinguish between investigative and adjudicative
procedures.
57.
Thus if one looks at the complaint procedure holistically, in
accordance with the analysis in the Brenco case, and not in
piecemeal fashion, one comes to the conclusion that, on existing case
law which is binding on the High Court, the applicants’ argument
that it is entitled to administrative justice at the complaint referral
stage has no prospect of success before the High Court.  Their
application attempts to transform an investigative process into an
adjudicative process which, in the words of the court in the Brenco
case “is neither envisaged by the BTT Act (read Competition Act),
nor what the audi principle requires”.
58.
Furthermore, this application incorrectly assumes that if the
applicants were in anyway prejudiced by the complaint referral, such
prejudice cannot be remedied through the processes in the Tribunal.
This is clearly not the case.  As a matter of fact MSD, one of the
respondents in the complaint referral, has applied to the Tribunal for
a dismissal of the complaint referral on various grounds.  The
applicants have therefore ignored the fact that Tribunal Rules and
procedures provide them with remedies if the referral is approached
holistically.
59.
If one examines the grounds of the applicants’ complaint about why
the Commission proceeded unfairly we will see that all three are
accommodated in the Tribunal’s procedures as set out in the Act and
the Tribunal’s Rules.  Thus, in the proceedings before the Tribunal,
the applicants would have to be given access to material evidence
adverse to them, would be given a hearing to dispute adverse
evidence and the Commission would have to be able to substantiate
its allegations otherwise its case would fail.
60.
If the applicants’ contentions are correct the complaint referral
process would amount to two sets of hearings, one before the

Commission prior to its act of referring the complaint and then the
process before the Tribunal.  The investigator, the Commission,
would be asked to adjudicate over what it had thus far investigated
despite the fact that it is not the final arbiter.  A more pointless and
inefficient process is hard to imagine.  At the time that the
Commission makes its referral the respondent firm (ie the applicants
in this case) is not required to defend itself.  That takes place when
the hearing procedures evolve as part of the Tribunal process, that is,
after the step of referral.  Fairness is not compromised by denying
natural justice prematurely;  it is only compromised if it is ultimately
denied.
61.
In order to get around the difficulties occasioned by the case law and
in particular the Brenco decision the applicants argued that in
referring a complaint to us the Commission exercises a determinative
action.  Their argument revolves around the wording of section
50(2), which states that the Commission shall refer a complaint to
the tribunal “if it determines that a prohibited practice has been
established” (our underlining).  In the applicants’ argument the use
of the word “determines” is proof that a complaint referral by the
Commission is a determinative function.  In our view the applicants
are emphasizing form over substance.  On the basis of its
investigation the Commission determines whether or not a prohibited
practice has occurred.  If the Commission determines that a
prohibited practice has occurred it cannot impose a fine or any other
remedy, it must refer the complaint to the Tribunal.  Referring a
complaint to the Tribunal is not determinative of the complaint.  All
it means is that the respondent will have to face a hearing before the
Tribunal where it will be given an opportunity to respond to the
allegations that it has engaged in a prohibited practice.  Even where
the Commission decides not to refer a complaint this decision is also
not determinative of the complaint – in terms of section 51(1) of the
Act the complainant has the right to refer the complaint to the
Tribunal directly.  We repeat what we have stated above that the
decision by the Commission to refer a complaint is merely one of the

steps in the resolution of a complaint;  it may be the most important
one but it is not determinative of the complaint.  The respondent gets
an opportunity to state its case before the Tribunal.  The decision of
the Tribunal is determinative of the complaint as a whole and this is
why the Act entitles a respondent in Tribunal proceedings to the
principles of natural justice.  In the light of the above and the Brenco
decision, we see no prospect of this argument succeeding in the High
Court.’

See also The Competition Commission of South Africa v Federal Mogul
Aftermarket Southern Africa (Pty) Ltd and Others (CT 08/CR/B/May 01,
23.8.01 paras 31-35), Brassey et al Competition Law 301 and cf The Master v
Deedat and Others 2000 (3) SA 1076 (N) at 1082F-1084I.
Administrative decision or no – Point 1
[17] I cannot do better than refer to what is said in the Norvatis case.  For the
reasons there stated it is clear that in a case such as the one we are concerned
with the function of the Commission is investigative and not subject to review,
save in cases of ill-faith, oppression, vexation or the like.  Seven-Eleven
should husband its powder for the contest before the Tribunal.
The ‘hotch-potch’ referral without proper investigation – Point 2
[18] I do not think that it would be unduly unkind to say that the argument
under this heading is itself something of a hotch-potch.  In the first place it is
complained that the referral extends to a considerable number of practices of a
disparate nature.  I have difficulty with this argument.  If complainants lodge a
cluster of complaints and the Commission finds that there is prima facie merit
in all of them, then the cluster will be replicated in the referral.

[19] But then it is said that it did not conduct its investigations in sufficient
depth and failed to take all the evidence into account.  For instance, emphasis
is placed on the complaints by franchisees that Seven-Eleven inflicted its
shop-fittings and its insurance policies on them, when Hadjidakis is supposed
to have repelled these complaints at the interrogation on 14 February 2000.  If
there is merit in Hadjidakis’s criticisms (and I express no view on that) then it
may show incompetence on the Commission’s part and result in the failure of
the prosecution on those counts, but I fail to see how it makes the
Commission’s actions reviewable.
[20] Then it is complained that a majority of franchisees actually approve of
Seven-Eleven’s policies, so that those of them who have resorted to the
Commission are simply a dissident minority.  The Commission, it is said,
should have polled all of them and should then have been guided by the
popular will.  The Commission retorts that it is not its function to conduct a
popularity poll, but to investigate and refer prohibited practices.  If they occur
it is its duty to do so.  This is a legitimate stand, in my opinion.
[21] I consider that there is no merit in Point 2.
Audi alteram partem – Point 3
[22] Seven-Eleven contends that the Commission, already at the
investigation stage, should have put its cards on the table, should have told it
what its evidence was, and should then have held a hearing at which Seven-
Eleven would have been given the opportunity to refute the evidence.  For the

reasons set out in the Brenco and Norvartis judgments, as set out above, I
consider that there is no merit in these submissions.  Again, when it appears
before the Tribunal, Seven-Eleven will have a full opportunity to view
documents, hear the witnesses, cross-examine them and lead evidence and
make submissions.  According to the authorities all that it is entitled to at the
investigation stage is the ‘gist’ of the case against it (see para [44] of Norvartis
above), and that, I think it has been told, by means of a copy of the referral
document which it received in May 2000.  This document is mentioned in para
[9] above.  Brief it may be, but it gives dates, sections and the alleged
prohibited practices.  As a matter of law I do not think that Seven-Eleven was
entitled to more than it got.  It may be added that by May 2000 the hearing of
the application for an interim injunction had been concluded.  During the
course of this proceeding detailed evidence was produced.  There can be no
suggestion that by the time of the referral Hadjidakis was still stumbling in the
dark.  He knew in detail what the case was and he chose not to avail himself of
the invitation to have a further meeting with the Commission, as will be set
out below.
[23] But that is not the only reason for holding that there is no merit in the
audi point.  In my opinion Hadjidakis was given the opportunity of a full
hearing.  If he did not make the most of his opportunity, the blame for that
does not lie with the Commission.

[24] A meeting was arranged at the Commission’s offices for 14 February
2000.  According to Hadjidakis he was led into an ambush.  His version is that
a message from the Commission was passed on to him by Seven-Eleven’s
financial manager, Mr Griesel.  When Hadjidakis and Griesel later parted they
were no longer on good terms.  An affidavit was obtained from Griesel by the
Commission, but Seven-Eleven’s counsel did not request that he be subjected
to cross-examination.  (Indeed Seven-Eleven made no request that anyone
should give oral evidence.)  According to Hadjidakis the message conveyed
that the meeting would be ‘quite informal’, that it would be ‘off the record’
and that it was unnecessary that he be accompanied by his legal advisors.
Burger and Griesel agree that the word ‘informal’ was used, but say that by
this was intended that formalities would be curtailed to a minimum and that
the structure would be that of a meeting and not a trial.  At this point the rule
in Plascon-Evans becomes decisive.  They deny that statements to the effect
that the meeting would be ‘off the record’ or that lawyers could be dispensed
with were made.  This is the version which must be accepted.  And the matter
goes much further.  Griesel says that he was told that the purpose of the
meeting was to allow Hadjidakis  to establish Seven-Eleven’s version or
defence and that he would be fully entitled to legal representation and to put
his case before the Commission in whatever way he saw fit.  Griesel further
says that he and Hadjidakis’s attorney, Mr Simon, were fully aware of the
gravity and importance of the meeting.  He pressed upon Hadjidakis the

importance of legal representation and initially Hadjidakis seemed to agree
with him.  At that stage the intention was to brief Seven-Eleven’s legal team,
which included senior counsel.  There was even an initial consultation with
the team.
[25] Then Hadjidakis changed his mind.  He decided, said Griesel, that he
did not need an expensive legal team to deal with something which he was
more than capable of himself disposing of in a morning.  Both Griesel and
Simon strongly advised him against what they considered to be a ‘rash
decision’, but he persisted and went to the meeting alone.  He was, said
Griesel, ‘a man notorious for his temperament and persistence’.  It is clear that
on the papers we must reject Hadjidakis’s version that he was led into an
ambush.  The version of the facts which we must accept is that, having been
earnestly warned against doing so, he decided to encounter the Commission
on his own.
[26] The record of proceedings before the Commission’s representatives,
Burger, Pretorius and Ntsaluba, annexed to Seven-Eleven’s application, is 148
pages long.  The meeting lasted for five hours, with two short breaks.
Hadjidakis version was that he was taken aback to find the cozy meeting
which he had been led to expect, replaced by aggressive cross-examination, in
circumstances in which he was not legally represented, ‘despite my express
desire to consult legal advisors’.  This last statement is contradicted not only
by the Commission’s Burger, who says that she was rather surprised that

Hadjidakis had arrived without representation, but by the record itself.  After
welcoming him she said:
‘You are aware that you can be assisted by an attorney or an advocate in
these proceedings and you elected to attend in your own capacity, is that
correct?’

Hadjidakis responded:

‘Yes, I understand that.’

[27] The meeting then proceeded.  Some time later Hadjidakis protested that
he had been brought there under false pretences, the pretence being that all
that would happen was a cozy chat.  Instead he was being interrogated.  But,
he added:
‘I just want it to go on record, I will carry on with the interrogation, I am
quite capable of answering your questions.’

Some time later he accused the Commission’s representatives of bias
against him.  Pretorius then said to him:
‘George if you want to go, we will just subpoena you back George, it is
fine.’

Hadjidakis replied:
‘I am sorry, next time I will come with my advocate and then they will take
measures.’

[28] Pretorius then told him that if he wished to go home he was free to do
so, but that he would have to come back with his lawyers.  Burger then said ‘I

will then adjourn this meeting’, to which Hadjidakis responded ‘You do not
have to adjourn the meeting’.
[29] Towards the end of the meeting Pretorius told him that he was under no
obligation to come back to them but that he was welcome to do so if he
wished, after he had spoken to his lawyers.
[30] To be added to all this is what Griesel further has to say.  He says that
on the day of the meeting he received two or three telephone calls from
Hadjidakis, who told him that they were having a break in the proceedings.
Hadjidakis expressed concern at the manner in which matters were
developing.  The atmosphere was not amiable and serious allegations were
being made.  Griesel advised him to stop the proceedings and arrange a new
date when his legal team could attend.  Hadjidakis did not take his advice.
[31] From all this it emerges that the Commission representatives were ready
to respect Hadjidakis’s rights, and that it was his own headstrongness that
caused that he went to the meeting unprepared and unrepresented, and insisted
on remaining there despite offers that he could withdraw and come back on
another day with his legal team.
[32] Accordingly, on the facts also, assuming even that there was a duty to
afford a hearing, Hadjidakis had his hearing.  Both on the facts and the law
there is no merit in Point 3.

Bias – Malice – Point 4
[33] Hadjidakis’s complaint is that in a variety of ways the investigating
team manifested forejudgement, with a consequent malicious intent to harm
him.  Examples advanced include the request by the Commission that the
Tribunal impose a maximum penalty percentage of 10 % on certain income,
the making of an application for a default judgment, the failure to interview all
franchisees, unfavourable and favourable (with this point I have dealt already),
and the behaviour of the Commissions’ representatives at the meeting of 14
February.  I do not consider it necessary to determine whether any ‘bias’ in
such respects has been demonstrated, because the point can be disposed of on
another basis.  But I would point out that it is not unusual for a prosecutor or
plaintiff to pitch a strong opening bid (the 10 %), that the Commission was
entitled to apply for a default judgment when Seven-Eleven delayed in filing
its opposition and that a measure of robustness is unsurprising in an
interrogation or a cross-examination (a measure of, not license for,
robustness).
[34] But supposing that there was some ‘bias’ I do not think that any right of
Seven-Eleven was infringed.  The policeman may be impatient to have the
suspect behind bars, but that does not entitle the suspect to his freedom.
Similar was the situation that arose in Receiver of Revenue, Port Elizabeth v
Jeeva and Others:  Klerck and Others NNO v Jeeva and Others 1996 (2) SA
573 (A).  The respondents on appeal were to be examined at an enquiry in

terms of s 418 (read with s 417) of the Companies Act 61 of 1973.  They
complained that the liquidator had shown bias against them.  This Court drew
a clear distinction between the functions of the Commissioner, who presides at
the enquiry, and the liquidator who represents the company in liquidation and
the creditors at the enquiry (at 579G-580B).  The Commissioner has to act in a
quasi-judicial capacity.  The liquidator, by contrast, acts neither in an
administrative nor a quasi-judicial capacity.  He is not in a position of
authority vis-à-vis the witness.  He does not determine or affect any of his
rights.  He may act as adversary of the witness, and he owes no higher duty to
him than any other litigant.  In my opinion the analogy is close.  The duty of
the Tribunal corresponds to that of the Commissioner (under s 418) and the
Commission to  that of the liquidator.
[35] Accordingly I do not consider that Point 4 has any merit either.
Ulterior motive – Point 5
[36] The principle relied upon by Seven-Eleven is that a person or body
which is given powers for a certain purpose may not use them in order to
achieve another purpose:  van Eck NO and van Rensburg NO v Etna Stores
1947 (2) SA 984(A).  The complaint is that the object of the referral is not the
possibly legitimate one of securing the conviction of Seven-Eleven, but the
improper one of securing from the Tribunal a favourable decision on
‘relational dominance’, for use in future cases – this while using the
prosecution of Seven-Eleven as a stalking-horse.  Cf Highstead Entertainment

(Pty) Ltd t/a ‘The Club’ v Minister of Law and Order and Others 1994 (1) SA
387 (C) at 394B-I.
[37] I do not propose giving a detailed description of the meaning of
‘relational dominance’.  Its relevance is to s 8 of the Act (one of the sections
relied on by the Commission) which requires for proof of contravention the
element that the person arraigned is ‘dominant’.  From the internal papers of
the Commission disclosed in the course of the review it is clear that the
Commission does not consider that it will be able to prove ‘dominance’ in any
of the better-established ways.  Hence to secure a s 8 conviction it wishes to
obtain a favourable decision on ‘relational dominance’, which is concerned
with the power of the franchisor to dominate the franchisee and impose anti-
competitive practices on him.  The Commission believes that a favourable
decision will ease its burden of proof in some future cases.  To this extent
Seven-Eleven’s case is being used as a test case.  But I can see nothing wrong
in that.  Indeed I would have thought it the duty of the Commission to obtain a
definitive decision as soon as possible.  If that is done in a particular case, for
the other party it may be irksome, but he has to bear the imposition as one of
the hazards of litigation.  The Commission was not a party to the interim
interdict proceedings, in which the Tribunal found that relational dominance
had not been established.  Those proceedings were brought by some
franchisees.  The Commission was merely an observer.  It believes that it can
make a better case than did the franchisees.

[38] But even though Seven-Eleven’s prosecution is being used as a test
case, it is clear, from the Commission’s internal documents and its affidavits,
that it is seeking to obtain the conviction of Seven-Eleven under s 8 and that it
considers that a favourable decision on relational dominance is crucial to such
a conviction.  That is a legitimate object.  Indeed it may be the Commission’s
duty, depending on the merits of the case upon which it acts.
[39] Accordingly I do not consider that there is any substance in Point 5
either.
Did the correct body, correctly constituted, decide the referral?  Point 0
[40] The point here is the loose-standing one referred to in para [14].  The
Act requires that the Commission decides on a referral.  Seven-Eleven submits
that the Commission did not decide – that either the decision was made by a
committee called Exco, which is not the Commission – or that, if the
Commission did purport to decide the referral, it is invalid because not all its
members participated in the decision – which is what the Act is said to
require.  As to this last point, the legal one, argument was addressed to us, but
I do not consider if necessary to deal with it, as the facts are clear and do not
support either of Seven-Eleven’s factual submissions.
[41] Again applying the rule in Plascon-Evans, we must act on the
Commission’s version.  Whatever supposed inconsistencies there may be in
the affidavits of Simelane and Burger, their purport is plain.  The decision to
refer was taken by the Commission, whatever may have gone before, and it

was taken by all its members.  No purpose would be served by setting out the
details of the evidence.  Seven-Eleven’s case under this head is no more than
speculation based on some of the Commission’s documents.  Accordingly I
consider that there is no merit in this Point 0 either.
Conclusion
[42] Van der Merwe J, a quo, found for Seven-Eleven on all the points with
which I have dealt.  For the reasons I have given I find for Seven-Eleven on
none of them.  Seven-Eleven’s application should have been dismissed.
[43] The appeal is allowed with costs, including the costs of two counsel.
The order made a quo is set aside and is replaced with the following:
“The application is dismissed with costs including the costs of two
counsel.”

____________
W P SCHUTZ
JUDGE OF APPEAL

CONCUR

HEFER AP
HARMS JA
SCOTT JA
BRAND JA