Mbombela Municipality and Another v M3 Holdings (Pty) Ltd (A101/2019) [2020] ZAMPMBHC 13 (15 June 2020)

THE HIGH COURT OF SOUTH AFRICA

MPUMALANGA DIVISION, MBOMBELA MAIN SEAT

(1) REPORTABLE: NO

(2) OF INTEREST TO OTHER JUDGES: NO

(3) REVISED.

CASE NO: A101 / 2019

In the matter between:

MBOMBELA MUNICIPALITY

1ST APPELLANT

NEIL DIAMOND

2ND APPELLANT

and

M3 HOLDINGS (PTY) LTD RESPONDENT

Coram: RATSHIBVUMO AJ (MASHILE J AND ROELOFSE AJ CONCURRING)

Heard: 20 MARCH 2020

Delivered: This judgment was handed down electronically by circulation to the parties’ legal representatives by email and release to SAFLII. The date and time for hand-down is deemed to be 10H00 on 15 JUNE 2020.

Summary: Civil contempt – Failure to comply with a court order by a municipality – Sentence of committal sought and granted. Requirements for contempt of court. Whether the conduct is wilful, deliberate and mala fide failure to comply with a court order. Municipality was ordered to enter into negotiations concerning the service level agreement. In a meeting held thereafter, no agreement could be reached owing to Auditor General’s concerns raised over the envisaged agreement.

Held on appeal that the Appellants’ conduct does not meet the minimum standards for conviction on contempt of court – Guilt of the Appellants not proved beyond a reasonable doubt. Appeal upheld.

J U D G M E N T

RATSHIBVUMO AJ:

[1] Introduction.

On 20 March 2019 the honourable Engelbrecht AJ granted an order against the Appellants finding them in contempt of court. It is this finding that they now appeal to the full court, with her leave. For convenient sake, I shall refer to the parties as they appear in this appeal. In terms of that order, Engelbrecht AJ held that the First and Second Appellants are:

“1. [i]n contempt of Court by failing to comply with the order of Court under case number 774/2017 dated 4th of September 2018, in that the First [Appellant] has failed to enter into negotiations with the [Respondent] concerning the service level agreement envisaged by the terms of the extension of contract bid number 48 of 2009;

2. The Second [Appellant] shall be committed to imprisonment for a period of thirty days, which committal is subject to paragraph three and four below;

3. The committal is suspended until 29 March 2019, upon condition that the First [Appellant] purges its contempt by entering into

negotiations concerning the service level agreement envisaged by the terms of the extension of the contract bid number 48 of 2009 within 7 (seven) days from the date of service of this order upon the First [Appellant];

4. Failing compliance by the First [Appellant] with the provisions of paragraph three above, and on condition that the Respondent’s

attorney files an affidavit with the Registrar in which it confirms that the First [Appellant] remains in default, the Registrar shall be authorised and directed to issue a warrant of arrest of Second [Appellant], which warrant shall be effective from 1 April 2019.

5. The First and Second [Appellant] are ordered to pay the costs of this application on an attorney and client scale, the one paying, the other to be absolved.”

[2] Background.

The judgment referred to in the order above was handed down by the honourable Mphahlele J on 04 September 2018 following opposed motion proceedings in which the First Appellant was the respondent and the applicant was the current Respondent. In that matter, the court had made the following order: “The applicant and the respondent are directed to enter into negotiations concerning

the service level agreement envisaged by the terms of the extension of contract bid number 48/2009. No order as to costs.”

[3] I need to highlight from the outset that we heard this appeal without the privilege to read the judgment handed down by Engelbrecht AJ. It was brought to our attention that the same could not be transcribed in that the record was inaudible. For this reason, prior to the hearing of the application for leave to appeal which was heard and granted by Engelbrecht AJ herself, the Appellants directed their request for reasons for judgment to her, and they were unfortunately not made available. In the interest of finality and to give effect to the Norms and Standards issued by the Chief Justice,[1] the appeal was heard without us accessing the judicial reasoning behind the order appealed against.

[4] Contempt of court – the legal framework.

Committal due to civil contempt or non-compliance with a court order is not foreign in our law and it is well developed. To be guilty of contempt of court, one needs not only disobey a court order, but should do so deliberately and mala fides. In Waterston v Waterston,[2] Clayden J held,

“It has to be remembered that proceedings to commit a person for contempt of court are proceedings of a criminal nature, and it is contrary to the criminal law to require the person charged, merely by reason of the charge, to satisfy the Court that he did not do what he was charged with. The proper approach is illustrated by sec. 110 of the General Law Amendment Act, No. 46 of 1935, which makes it an offence to fail to comply with an Order of Court for the payment of maintenance. Sub-sec. (1) creates the offence subject to sub-sec. (3), and as it is an offence the Crown would have to prove the failure. But if the failure is proved, then sub-sec. (3) provides that proof of lack of means shall be a good defence. This corresponds to the law as laid down in O'Reilly v O'Reilly (supra). I cannot, therefore, accept the proposition that, if the respondent fails to satisfy the Court on the balance of probabilities that he has complied with the Order of Court in this case, the applicant is entitled to the relief prayed, namely, committal for contempt.

[5] In Fackie NO v CCII Systems (PTY) LTD[3], the Supreme Court of Appeal dealt with the prerequisites for the committal in respect of contempt of court when it held,

“[9] The test for when disobedience of a civil order constitutes contempt has come to be stated as whether the breach was committed 'deliberately and mala fide'. A deliberate disregard is not enough, since the non-complier may genuinely, albeit mistakenly, believe him or herself entitled to act in the way claimed to constitute the contempt. In such a case, good faith avoids the infraction. Even a refusal to comply that is objectively unreasonable may be bona fide (though unreasonableness could evidence lack of good faith).

[10] These requirements - that the refusal to obey should be both wilful and mala fide, and that unreasonable non-compliance, provided it is bona fide, does not constitute contempt - accord with the broader definition of the crime, of which non-compliance with civil orders is a manifestation. They show that the offence is committed not by mere disregard of a court order, but by the deliberate and intentional violation of the court's dignity, repute or authority that this evinces. Honest belief that non-compliance is justified or proper is incompatible with that intent.”

[6] In Pheko and Others v Ekurhuleni City,[4] the Constitutional Court developed this further when it remarked that where a court finds a recalcitrant litigant to be possessed of malice on balance, civil contempt remedies other than committal may still be employed. These include any remedy that would ensure compliance, such as declaratory relief, a mandamus demanding the contemnor to behave in a particular manner, a fine and any further order that would have the effect of coercing

compliance. It held,

“[W]hile courts do not countenance disobedience of judicial authority, it needs to be stressed that contempt of court does not consist of mere disobedience of a court order, but of the contumacious disrespect for judicial authority. On whether this court should make a civil contempt order against the Municipality, it is necessary to consider whether, on a balance of probabilities, the Municipality's

non-compliance was born of wilfulness and mala fides.”

[7] The last development in this regard is the required proof for contempt where committal is imposed as a remedy, which should be beyond a reasonable doubt. In Matjhabeng Local Muni v Eskom Holdings Ltd and Others[5] the Constitutional Court held that the standard of proof to be applied in contempt cases varied in accordance with the consequences of the remedy. If the sanction involved committal, the criminal standard of proof (beyond reasonable doubt) was always required. But if it involved civil remedies, the civil standard of proof (balance of probabilities) sufficed.

[8] Background facts.

Against the legal framework set out above, I now turn to consider the facts that culminated in the order that is subject of this appeal, which are mainly undisputed. Following the judgement of 04 September 2018, there were several email correspondence between

the Respondent, the Appellants and their respective legal representatives. From these, it is apparent that the Respondent demanded and gave due dates by which the Appellants should schedule a meeting for both parties to negotiate a service level agreement in

accordance with the court order. Although the Appellants initially verbalised their intention to appeal the judgment, in their letter sent through their legal representative to the Respondent’s erstwhile attorneys dated 27 September 2018, they make it clear that they would not appeal.

[9] In the same letter, the Appellants informed the Respondent that they were “in the process of arranging a meeting for the parties to meet and discuss with regards to service level agreement and to see if parties cannot find each other while negotiating the terms of the aforesaid agreement.” The Appellants concluded by making an undertaking to give the Respondent seven days’ notice invitation to this meeting.

[10] A meeting was indeed held between the Appellants and the Respondent on 16 October 2018 at the Appellant’s premises. According to the affidavit deposed to by Ms. Mokaji Mosala in opposing the application by the Respondent for the Second Appellant to be committed for contempt of court; the negotiations could not proceed any further as the parties had an impasse over the concerns raised by the Auditor General.[6] The Respondent confirms the meeting having taken place in a letter written by Mr. Modern (its sole director), dated 30 October 2018.[7] He however accused the Appellants of introducing new evidence that was not before the court when judgment of 04 September 2018 was handed down.

[11] The question that the court a quo had to answer was whether the conduct by the appellants could be said to have been deliberate, wilful and mala fide disobedience of the court order given the meeting of 16 October 2018 and the impasse based on the Auditor General report. On zooming into the judgment of 04 September 2018 following aspects are apparent. The court steered away from ordering the parties to reach an agreement over the service level agreement. It was also expressly indicated in the judgment that it was incapable of making such an order. It only ordered the parties to the negotiating table. No conditions or issues to be considered for negotiations were ordered by the court. Nothing barred any of the parties to bring the Auditor General’s report to the negotiating table. Even when parties do not reach an agreement, they would have complied with the court order if they meet and negotiate.

[12] Lastly, the judgment did not give the parties time frame within which to negotiate. The deadlines were only put in place by the Respondent who demanded a meeting before specific dates, threatening to approach the court with contempt of court application if the Appellants did not comply. This implies that even if no meeting took place on 16 October 2018, the Appellants would not have been in contempt as long as they still intended to meet the Respondent in the future.

[13] As the Supreme Court of Appeal held in Fackie NO v CCII Systems (PTY) LTD,[8] a deliberate disregard is not enough, since the non-complier may genuinely, albeit mistakenly, believe him or herself entitled to act in the way claimed to constitute the contempt. Even if the Appellants may have been mistaken in their understanding of the judgment, the steps they took to hold a meeting following the court order that they should negotiate cannot be said to have been deliberate, wilful and mala fide ignorance of the court order. To the contrary, it appears that the court order was implemented in a meeting held on 16 October 2018 albeit to the dissatisfaction of the Respondent as no agreement could be reached. Given the sanction imposed, the case against the Appellants fails to meet the required test of proving their guilt beyond a reasonable doubt.

[14]

For these reasons I would make the following order

14.1 The appeal is upheld with costs.

14.2 The order of the court a quo is set aside and substituted as follows:

“The application is dismissed with costs.”

TV RATSHIBVUMO

ACTING JUDGE OF THE HIGH COURT

I agree and it is so ordered.

B MASHILE

JUDGE OF THE HIGH COURT

I agree

H ROELOFSE

FOR THE APPELLANTS

: ADV. PL MOKOENA SC

INSTRUCTED BY

: MSIKINYA ATTORNEYS & ASSOCIATES

C/O PIETER SWANEPOEL ATTORNEYS

MBOMBELA

FOR THE RESPONDENT

: ADV LUDIDI

: PARKER & KHANATTORNEYS

C/O TARWA ATTORNEYS

MBOMBELA

[1] In terms of the Norms and Standards published under Government Gazette no. 37390 dated 28 February 2014, item 5.2.5, civil

trials should be finalised within a year.

[2] 1946 WLD 334 at p.337

[3] 2006 (4) SA 326 (SCA).

[4] 2015 (5) SA 600 (CC) para 37 & 42

[5] 2018 (1) SA 1 (CC) at para 61.

[6] See para 10 on p. 144 of the paginated bundle.

[7] See p. 87 of the paginated bundle.

[8] See fn 3 supra.