On March 15 2011 the Competition Commission referred a case of market allocation in the retail property market to the Competition Tribunal. The referral follows an investigation into an allegation that Erf 179 Bedfordview Pty Ltd, Liberty Group Limited, Bedford Square Properties and Win Twice Properties Pty Ltd - all competitors in the retail property market in and around the Bedfordview area - colluded to divide the markets by allocating customers and territories by means of deeds of restraint.

The case was initiated by the commission on August 27 2009 following the lodging of a complaint as well as subsequent leniency applications from Bedford Square and Win Twice.

The investigation revealed that Bedford Square was prevented, by means of a signed restraint agreement, from concluding lease agreements with Woolworths and Mica Hardware for a period of 11 years as of November 4 2003, while Win Twice was restrained from entering into similar lease agreements for a period of 15 years, commencing on July 12 2004. The commission alleged that such conduct amounted to market allocation.

On March 4 2011 the tribunal confirmed a settlement agreement entered into between the commission and Liberty, whereby it was agreed that Liberty would pay an administrative penalty of approximately R19 million. The commission has further requested that the tribunal impose an administrative penalty on Erf 179.

On March 28 2011 Erf 179 obtained a court order in the South Gauteng High Court interdicting Bedford Square from leasing property to Woolworths. However, the order is conditional on the tribunal's or Competition Appeal Court's findings - namely, whether:

  • the effective provisions of the written agreement of settlement concluded between Erf 179 and Bedford Square and the notarial deed restraint are declared void; or
  • the tribunal grants interim relief to Bedford Square under Section 49C of the Competition Act as a consequence of a complaint that the effective provisions described above are prohibited under Chapter 2 of the act.

An interim relief application, lodged by Bedford Square, is pending before the tribunal in respect of the restraints that form the subject matter of the commission's referral and the above court decision. The hearing for interim relief was held before the tribunal on April 15 2011; to date, no order has been granted.

For further information on this topic please contact Robert Wilson at Webber Wentzel by telephone (+27 11 530 5000), fax (+27 11 530 5111) or email ([email protected]).