National Association of Pharmaceutical Wholesalers and Others v Glaxo Wellcome (Pty) Ltd and Others

The appellants were pharmaceutical wholesalers who purchased products from manufacturer respondents at a 17.5% discount and resold them to the retail sector. In May 2000, the manufacturers established an exclusive distribution agency (EDA) by converting Druggist Distributors (DD) into Kinesis Logistics to perform logistics services (distribution, order-taking, payment collection) on their behalf. The wholesalers complained this would reduce their historical discounts. In June 2000, they lodged a complaint with the Competition Commission and simultaneously applied for interim relief with the Competition Tribunal under section 59 of the Competition Act 89 of 1998. The Terblanche Tribunal granted interim relief in August 2000, but this was set aside on review by the Competition Appeal Court in September 2001 for being vague, overbroad and prejudicing the manufacturers. After various interlocutory disputes, the Lewis Tribunal heard the matter approximately three years later and refused the interim relief. By the time of the Lewis Tribunal hearing, DD/Kinesis had been sold to an independent third party (Tibbeth & Britten), and certain manufacturers had merged. The wholesalers appealed and also applied for condonation for late filing of the appeal record.

• Whether condonation should be granted for failure to comply with Rule 19 regarding timeous filing of the appeal record
• Whether the relief sought in the notice of motion was competent given factual developments (conversion of DD to Kinesis, sale to independent third party, non-joinder of relevant parties)
• Whether the wholesalers could rely on the omnibus prayer (clausule salutare) for 'further and/or alternative relief' to claim relief different from that specified in the notice of motion
• Whether interim relief under section 59 of the Competition Act should be granted after approximately three years of delay
• Whether the manufacturers engaged in prohibited practices under sections 4, 5, 8 and 9 of the Competition Act
• Whether the balance of convenience favoured granting interim relief
• Whether the third respondent (Pharmacare) should be subject to a special costs order
• Whether on cross-appeal the costs order should include qualifying fees of experts used in preparing opposition papers

Application for condonation refused with costs. The appeal was therefore not entertained on the merits. The eighth appellant (in liquidation) was exempted from paying costs. The third respondent (Pharmacare Limited) was awarded costs on an attorney and own client basis. The manufacturers' cross-appeal regarding expert qualifying fees was dismissed with costs.

The binding legal principles established are: (1) Interim relief under section 59 of the Competition Act (pre-2001 amendment) is meant to ameliorate urgent situations and be of limited duration; granting interim relief after approximately three years defeats this purpose and warrants dismissal on that ground alone. (2) The scope of a clausule salutare (omnibus prayer for 'further and/or alternative relief') is limited: it cannot be used to claim relief substantially different from that specifically claimed unless the basis has been fully canvassed, the opposing party has been fully apprised of the particular relief sought, and has had the fullest opportunity to respond. A party cannot use an omnibus prayer as carte blanche to claim whatever relief they deem appropriate at the hearing. (3) Relief sought in a notice of motion that has become moribund or incompetent due to supervening factual developments (such as the disappearance of entities or sale to third parties) cannot ground interim relief. (4) Interim interdicts cannot remedy past invasions of rights. (5) When material factual circumstances change (such as when the complained-of entity is sold to an independent third party), proper joinder of affected parties is essential.

The Court made several obiter observations: (1) Patel AJA noted it was 'enigmatic' why the sixth and seventh respondents (SAI and Kinesis) remained parties to the dispute given they had been sold and were no longer connected to the manufacturers. (2) The Court observed that the conduct of the litigation by the wholesalers on the issue of defining relief sought 'can only be described as cavalier in the extreme.' (3) The Court noted that 'no fault in general can be found in the Lewis Tribunal's reasoning on the merits of the appeal' including the finding on balance of convenience, though it was unnecessary to fully decide the merits. (4) The Court expressly declined to consider the impact of the Medicines and Related Substances Control Amendment Act of 1997 which introduced a single-exit price, noting this would make prayer 8 difficult to enforce in any event. (5) Regarding the cross-appeal on expert fees, the Court observed that deferring determination of qualifying fees until the main application was appropriate because the wholesalers would utilize the expert evidence in the main proceedings, allowing the tribunal or court to make a better-informed costs ruling at that stage.

This case is significant for several reasons in South African competition law and civil procedure: (1) It emphasizes that interim relief under the Competition Act must be pursued expeditiously and is meant to be temporary, not to persist for years while the main matter languishes; (2) It provides important guidance on the limits of the clausule salutare (omnibus prayer for further/alternative relief), holding that parties cannot use it as carte blanche to claim unspecified relief but must clearly indicate the relief sought and give opponents full opportunity to respond; (3) It demonstrates the importance of proper joinder of parties, particularly when factual circumstances change materially (such as when the entity complained about is sold to a third party); (4) It illustrates that courts will not grant interim relief that has become moribund due to changed circumstances or that would have final effect before merits determination; (5) It confirms that interim interdicts cannot be used to remedy past invasions of rights; (6) It shows that cavalier conduct of litigation, including failure to amend pleadings despite undertakings and opportunities, will result in parties being bound by defective pleadings.