Harmony Gold Mining Company Limited v Gold Fields Limited

Harmony Gold Mining Company (applicant) sought to acquire shares in Gold Fields Limited (first respondent) through an early settlement offer, which was part of a broader transaction to acquire all shares in Gold Fields. The Competition Tribunal dismissed Gold Fields' application that the early settlement offer did not involve an acquisition of control. The Competition Appeal Court (CAC) granted an interim order on 26 November 2004 restraining Harmony from voting or exercising rights attached to shares acquired pending final approval of the merger by competition authorities. The cutoff date for the early settlement offer was 26 November 2004. Subsequently, the date for the early settlement offer passed, a vote on the IAM Gold transaction was concluded, and the proposed merger was set down for hearing before the Tribunal in May 2005. Harmony then applied for leave to appeal to the Supreme Court of Appeal against the whole of the CAC order.

• Whether the dispute had become moot following the passage of the early settlement offer cutoff date and the setting down of the merger hearing before the Tribunal
• Whether the Court had power under section 66(1) of the Competition Act to vary or rescind its order of 26 November 2004
• Whether the original order accurately reflected the true intention of the Court
• Whether leave to appeal to the Supreme Court of Appeal should be granted

1. The order of 26 November 2004 was corrected to interdict Harmony from voting shares acquired which would constitute an attempt to implement the merger as set out in the SENS announcement of 15 October 2004 prior to final determination by the Competition Tribunal or Competition Appeal Court. 2. Harmony was ordered to pay the costs of the appeal, including costs of two counsel. 3. The application for leave to appeal was dismissed with costs, including costs of two counsel.

The binding legal principles established are: (1) Section 66(1)(b) of the Competition Act 89 of 1998 permits the Competition Appeal Court to vary or rescind its orders where there is ambiguity, error or omission, following the common law principle that a court may correct errors to give effect to its true intention without altering the intended sense or substance. (2) A matter becomes moot and not justiciable when, following correction of an order to reflect the Court's true intention, the dispute no longer presents an existing controversy because the legal position is already adequately regulated by statute. (3) Where a proposed merger is subject to section 13A(3) of the Competition Act, the acquirer is already prohibited from implementing the merger (including voting shares) until approval is obtained, rendering an interdict to the same effect academic once the merger is properly before the competition authorities.

The Court made critical observations about the procedural circumstances under which the original order was made: The order of 26 November 2004 was granted "in great haste and under enormous pressure" with the Court having only six days to hear the application based on voluminous records and complex arguments before the cutoff date. The Court was "in no position to provide reasons for the order given" at the time it was issued. The Court observed: "An appellate court should not be placed under this kind of pressure." This constitutes a cautionary statement about the dangers of forcing appellate courts to decide complex matters without adequate time for reflection and the preparation of simultaneous reasons. The Court also made obiter comments about counsel's conduct, noting that while first respondent's counsel "immediately took up the invitation" to propose amendments to the order, "For reasons best known to themselves, applicants' counsel stoutly resisted this invitation during the hearing," only submitting supplementary heads on 31 March 2005.

This case is significant in South African competition law for several reasons: (1) It demonstrates the Competition Appeal Court's willingness to exercise its powers under section 66(1) of the Competition Act to correct orders that do not accurately reflect the Court's true intention, particularly where orders are made under time pressure in urgent merger matters. (2) It clarifies the application of mootness principles in competition law disputes, applying the test from Radio Pretoria v Chairman, Independent Communications Authorities of South Africa that a case is moot if it no longer presents an existing controversy. (3) It illustrates the interaction between interim interdicts in merger cases and the statutory prohibition on implementation in section 13A(3) of the Competition Act. (4) It provides guidance on when appellate courts should resist pressure to make final orders without providing reasons simultaneously, particularly in complex commercial disputes.