Airports Company of South Africa SOC Limited and Others v CT MED and Trauma (Pty) L ta Cape Medics (A5072_2021) [2023] ZAGPJHC 1397 (30 November 2023)
Did the Airports Company South Africa (ACSA) and its executives act wilfully and mala fide in failing to comply with the Court Order issued on 10 June 2020, thereby justifying a finding of contempt of court?
The case revolves around a contractual relationship between the Airports Company South Africa Soc Limited (ACSA) and Cape Medics, which began with ACSA's issuance of Request for Proposal No. COR130/2016 on 19 January 2018. This request sought various services for the management and operation of South African airports, including emergency medical services. The RFP was divided into five parts: Part A for Occupational Services, Part B for Emergency Medical Assistance and Transportation, Part C for Ambulance Supply, Part D for Medical Equipment Supply, and Part E for Furniture Supply.
ACSA awarded Part A to Novamix and Part B to Cape Medics, leading to the signing of a Service Level Agreement (SLA) on 25 June 2018. However, ACSA did not appoint any service provider for Parts C, D, or E, which meant that Cape Medics was left without the necessary ambulances, medical equipment, and furniture to effectively provide emergency medical services. Cape Medics argued that this situation rendered them ineffective, likening it to sending troops into battle without weapons.
On 13 March 2020, ACSA sent a notice of termination to Cape Medics, prompting Cape Medics to file an application under case number 10223/2020, seeking to interdict the termination of the SLA and to review ACSA's decision to terminate the agreement. This application culminated in a Settlement Agreement and a Court Order issued on 10 June 2020, which incorporated the terms of the SLA and stipulated that ACSA would rescind the termination notice. The Settlement Agreement allowed Cape Medics to use its own ambulances at no extra cost, relieving ACSA of its obligation to provide ambulances.
The contempt proceedings arose from ACSA's alleged non-compliance with specific clauses of the Settlement Agreement, particularly clauses 5.1.5 and 5.1.10, which required ACSA to provide necessary equipment and facilitate licensing for Cape Medics. Cape Medics claimed that ACSA failed to provide nine categories of equipment, leading to the contempt application in the Gauteng Division of the High Court.
During the proceedings, ACSA argued that the dispute resolution clause in the Settlement Agreement mandated arbitration before any contempt proceedings could be initiated. ACSA contended that Cape Medics should have invoked this clause and sought a stay of the contempt proceedings, which was not done. The court below found ACSA in contempt, leading to the appeal that questioned whether ACSA's non-compliance was wilful and mala fide, ultimately resulting in the appeal court's decision to set aside the contempt finding.
The ratio decidendi of the case is that a finding of contempt of court requires clear evidence of wilfulness and mala fides in the non-compliance with a court order. In this instance, the court determined that ACSA's failure to comply with the Settlement Agreement did not meet the threshold for contempt because ACSA had a reasonable belief, based on legal advice, that the dispute resolution mechanisms outlined in the agreement should be exhausted before resorting to contempt proceedings. The court emphasised that the existence of a dispute resolution clause, which was incorporated into the court order, created a legitimate expectation that the parties would first seek resolution through arbitration before pursuing contempt. Consequently, the appeal court concluded that the lower court erred in finding ACSA in contempt, as the evidence did not sufficiently establish that ACSA's non-compliance was intentional or in bad faith.
"The invoking of the arbitration clause did not preclude reliance on contempt of court proceedings but the court a quo ought to have expressly engaged with the question whether the proceedings before it ought to have been stayed."
The court relied on several cases in its reasoning process, including:
- Fakie N.O. v CCII Systems (Pty) Ltd 2006 (4) SA 326 (SCA), which discusses the test for determining whether disobedience of a civil order constitutes contempt, emphasising that a deliberate disregard is not sufficient if the non-complier genuinely believes they are entitled to act in a certain way.
- Secretary of the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector including Organs of State v Zuma and Others CCT 52/21 [2021] ZACC 18, which highlights the importance of obedience to court orders and the need for courts to intervene in cases of disregard for judicial authority.
- Dezius v Dezius 2006 (6) SA 395 (T), which underscores that committal for contempt should only be engaged as a matter of last resort and that the court must scrutinize the facts carefully before issuing a committal order.
- Ansah v Ansah [1977] 2 All ER 638 (CA), which discusses the nature of contempt proceedings and the necessity of good faith in the context of non-compliance with court orders.