Tribunal goes behind Emfuleni Local Municipality’s discovery affidavit in excessive pricing matter
The Competition Tribunal (“Tribunal”) has ordered Emfuleni Local Municipality (“ELM”), a municipality responsible for distributing electricity in the Emfuleni district, to provide various documents to Cape Gate (Pty) Ltd (“Cape Gate”), a large steel producer and electricity customer.
The Tribunal’s order follows an application by Cape Gate for orders compelling ELM to make further and better discovery.
Cape Gate in a self-referral to the Tribunal alleges that during the period 2016/2017 to date, ELM charged it excessively for the supply of electricity, in contravention of the Competition Act. In its answering affidavit, ELM denies the allegations against it.
The Tribunal has granted Cape Gate’s discovery application and has ordered ELM to provide documents comprising: (i) documents which ELM had objected to producing during the discovery process; and (ii) documents which ELM tendered but failed to produce (“tendered documents”).
The tendered documents include, among others, ELM’s management accounts, board meeting minutes, correspondence to the National Energy Regulator of South Africa (“NERSA”) and correspondence to Eskom in relation to electricity payments, issues of supply and/or electricity tariffs.
During the discovery process, ELM tendered to produce these documents but subsequently stated in its supplementary affidavit that despite a diligent search, it was unable to locate these documents and that they may have been destroyed in a fire that broke out in its offices in May 2018 or lost during the relocation of its offices. Cape Gate disputed the defences raised by ELM for not discovering the tendered documents and requested the Tribunal to go behind ELM’s discovery affidavit and order production of these documents.
The Tribunal found this to be “… a classic case for going behind a discovery affidavit.”
In its Reasons for Decision and Order, the Tribunal notes that it is trite that a discovery affidavit will generally be regarded as conclusive against the party seeking relief, in respect of both the possession of documents and the relevance of their contents. It however explains that “ … a court will go behind a discovery affidavit if it is satisfied that there is a probability that the party making the affidavit had the relevant document in its power or possession. The facts of this case are regrettably such that little reliance can be placed on the affidavits placed before the Tribunal on behalf of ELM.”
The Tribunal in its Reasons further states and notes: “The belated assertion that documents may have been lost in the fire or mislaid in the relocation is a conclusion which lacks any foundation in the form of evidence of primary facts. A conclusory assertion that the documents could not be found after diligent search does not constitute evidence. ELM has produced no direct evidence of what efforts have been made to find the documents, who made those efforts, and when they were made.”
“ELM has on five occasions provided contradictory statements on the status of the tendered documents.”
In the circumstances, the Tribunal concluded that no reliance can be placed on the generalised assertion that the tendered documents cannot be found. It exercised its discretion in favour of going behind ELM’s supplementary affidavit, and ordered production of the tendered documents since:
- ELM had provided contradictory versions (most of them under oath) regarding the tendered documents;
- the alleged fire broke out in May 2018.Most of the documents sought by Cape Gate fell within the complaint period (2016/2017 to date). ELM provided no explanation for its failure to produce the requested documents which would have come into existence after the fire. It had not suggested that they never came into existence;
- despite its allegations about the fire and relocation, ELM had in a number of instances made discovery of documents which came into existence before May 2018. It produced annual financial statements dating back to the 2014/2015 financial year and made partial discovery of its management accounts for the periods 2012 and 2013. There was no adequate explanation for why subsequent management accounts had not been produced; and
- no explanation was provided as to the actual steps taken by ELM to search for the documents, or why there are no electronic copies of these documents.
A non-confidential version of the Tribunal’s Reasons and Order are available on the Tribunal’s website at https://www.comptrib.co.za/case-detail/20220
Issued by:
Gillian de Gouveia, Communications Manager
On behalf of the Competition Tribunal of South Africa
Cell: +27 (0) 82 410 1195
E-Mail: GillianD@comptrib.co.za
Twitter: @comptrib
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