Publications
Partners
Cape Town - Despite an early legal setback, summons will be still be served on Tiger Brands [JSE:TBS], Pioneer Food Group [JSE:PFG] and Premier Foods as part of a class action against the fixing of bread prices.
The Cape High Court on Friday dismissed an application that sought to clear the way for a consumer class action against the bread price fixing cartel.
However a lawyer for the applicants - four civil society organisations and five individual consumers - said the action would go ahead anyway.
The attorney, Charles Abrahams, said summons would be served on Tiger Brands on Friday, and on Pioneer and Premier Foods as soon as possible thereafter.
"I don't necessarily think it's a blow to the case," he said. "We will still pursue it as a class action."
The application, which was opposed by the three companies, asked the court to formally certify the claim as a class action.
In his ruling, Acting Judge Francois van Zyl dismissed the "consumer" application, but made no costs order.
He also dismissed a similar application brought on behalf of Western Cape bread distributors, this time ordering that the distributors pay costs.
Van Zyl did not give reasons, saying he would supply a full judgment as soon as he could. However, he did say it had been a difficult matter, involving difficult law and facts, and covering "virtually new ground".
If the claim is eventually recognised as a class action, it will be only the second ever heard in South African courts.
Abrahams told reporters that certification would have meant that the applicants were recognised as representing the class of people they claimed to speak for, and that they had standing to bring a court case in the name of that class.
He said they had sought certification at this stage, before serving summonses, because current legal authorities suggested it was "the most appropriate approach".
The summons against Tiger - which has to be served on Friday, as the period in which bread price claims against the company can be lodged closes effectively on Friday night - "will be issued as a class action summons", Abrahams said.
He said certification by Van Zyl would merely have allowed the applicants more certainty that they were proceeding on the basis of class when they launched the main action.
Now, however, the main action would include a request for certification.
"As the judge pointed out, this is completely new territory," he said. All the parties were operating in the absence of either court rules or case law.
The organisations - the Children's Resources Centre Trust, the Black Sash, Cosatu Western Cape and the National Consumer Forum - and the five consumers are seeking damages against the bakeries.
They filed the application on behalf of "all bread consumers in the Western Cape", but later sought to expand that to include the whole country.
They have not quantified the amount of damages yet, but say it will be "massive".
In a joint statement, they said they were disappointed by Friday's ruling.
"However, we are determined to take the class action forward," they said.
"While we acknowledge that there is still a very long and difficult legal road ahead of us, we remain committed and determined to pursue and secure compensation on behalf of the millions of consumers who've suffered as a result of these corrupt business practices."
In February this year, the tribunal imposed a R196m fine on Pioneer for its participation in the price fixing cartel.
This was followed in November by a settlement with the Competition Commission in terms of which Pioneer will pay or forfeit another R660m.
In 2007, the tribunal imposed an administrative penalty of R98.8m on Tiger.
In the same year, Premier was granted "leniency" by the commission in return for full disclosure of its involvement in the cartel, and for helping the commission in prosecuting the other members.
The Cape High Court on Friday dismissed an application that sought to clear the way for a consumer class action against the bread price fixing cartel.
However a lawyer for the applicants - four civil society organisations and five individual consumers - said the action would go ahead anyway.
The attorney, Charles Abrahams, said summons would be served on Tiger Brands on Friday, and on Pioneer and Premier Foods as soon as possible thereafter.
"I don't necessarily think it's a blow to the case," he said. "We will still pursue it as a class action."
The application, which was opposed by the three companies, asked the court to formally certify the claim as a class action.
In his ruling, Acting Judge Francois van Zyl dismissed the "consumer" application, but made no costs order.
He also dismissed a similar application brought on behalf of Western Cape bread distributors, this time ordering that the distributors pay costs.
Van Zyl did not give reasons, saying he would supply a full judgment as soon as he could. However, he did say it had been a difficult matter, involving difficult law and facts, and covering "virtually new ground".
If the claim is eventually recognised as a class action, it will be only the second ever heard in South African courts.
Abrahams told reporters that certification would have meant that the applicants were recognised as representing the class of people they claimed to speak for, and that they had standing to bring a court case in the name of that class.
He said they had sought certification at this stage, before serving summonses, because current legal authorities suggested it was "the most appropriate approach".
The summons against Tiger - which has to be served on Friday, as the period in which bread price claims against the company can be lodged closes effectively on Friday night - "will be issued as a class action summons", Abrahams said.
He said certification by Van Zyl would merely have allowed the applicants more certainty that they were proceeding on the basis of class when they launched the main action.
Now, however, the main action would include a request for certification.
"As the judge pointed out, this is completely new territory," he said. All the parties were operating in the absence of either court rules or case law.
The organisations - the Children's Resources Centre Trust, the Black Sash, Cosatu Western Cape and the National Consumer Forum - and the five consumers are seeking damages against the bakeries.
They filed the application on behalf of "all bread consumers in the Western Cape", but later sought to expand that to include the whole country.
They have not quantified the amount of damages yet, but say it will be "massive".
In a joint statement, they said they were disappointed by Friday's ruling.
"However, we are determined to take the class action forward," they said.
"While we acknowledge that there is still a very long and difficult legal road ahead of us, we remain committed and determined to pursue and secure compensation on behalf of the millions of consumers who've suffered as a result of these corrupt business practices."
In February this year, the tribunal imposed a R196m fine on Pioneer for its participation in the price fixing cartel.
This was followed in November by a settlement with the Competition Commission in terms of which Pioneer will pay or forfeit another R660m.
In 2007, the tribunal imposed an administrative penalty of R98.8m on Tiger.
In the same year, Premier was granted "leniency" by the commission in return for full disclosure of its involvement in the cartel, and for helping the commission in prosecuting the other members.
