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[2019] ZAGPPHC 340
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Crs Technologies (Pty) Ltd v McKerrel and Others (47954/2018) [2019] ZAGPPHC 340 (26 July 2019)
THE REPUBLIC OF
SOUTH AFRICA
IN THE HIGH
COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
(1)
REPORTABLE:
NO
(2)
OF
INTEREST TO OTHER JUDGES: NO
(3)
REVISED.
CASE
NUMBER
:
47954/2018
In
the matter between:
CRS
TECHNOLOGIES (PTY) LTD
APPLICANT
and
JAMES
MCKERRELL
FIRST RESPONDENT
FRANCESCO
ARICO
SECOND RESPONDENT
MARK
ANDREW SCHORN
THIRD RESPONDENT
FLASH
CLOUD (PTY) LTD T/A
THE
PEOPLE SOLUTIONS COMPANY
FOURTH RESPONDENT
JUDGEMENT
CORAM :
RAMAPUPUTLA AJ
INTRODUCTION
[1]
This is an application which seeks an order that the first and fourth
respondents
be committed to prison for a period of six months as a
result of the breach of the Court Order dated 18 April 2017.
FACTS
OF THE APPLICATION
[2]
The Order, which was made an order of Court by agreement between the
parties provides
that the respondents may not reproduce the
applicant’s computer programmes; perform or broadcast the
applicant’s computer
programmes in public; cause the
applicant’s computer programmes to be transmitted in a
diffusion service; and let or hire
the applicant’s computer
programmes. The order also provides that the respondents may not
entice the applicant’s customers
to breach the terms of their
contracts and the respondents may not copy or reproduce the systems
manual.
[3]
On 17August 2018, the Court granted additional orders to the effect
that the
first and fourth respondent are interdicted from
directly or indirectly using, copying, distributing, performing,
broadcasting
or adapting the applicant’s proprietary software.
The software comprises the following modules: Human Resources
Administration,
Human Capital Management, Talent Management, Employee
Relations including Disciplinary and Grievance, Occupational Health,
Payroll
Administration, Leave Management, Loan Management and
Employee and Manager Self Service.
APPLICANT’S
SUBMISSION
[4]
The applicant submits
that the respondents are using it’s software programmes and
that they are also enticing it’s customers
away from it in
violation of a court order. This violation amounts to a contempt of
court which is punishable by committal to civil
imprisonment of six
months or a fine. In support of the above assertions, the applicant
claims that a Skype conversation with one
De Richelieu (who is the
applicant’s prospective business partner) revealed similarities
with it’s software programmes.
It is asserted that the
respondents could not have developed their own programmes in
the limited time available to them,
given their shoestring budget and
accordingly must be using the applicant’s programmes. The
applicant contends that its system
is unique and that the
respondents’ system shares these unique features.
[5]
The
applicant’s second complaint is that by providing tech support
to the applicant’s customers, the respondents are
enticing them
to breach their contracts with the applicant, which in turn is a
breach of the Court Order.
RESPONDETS’
SUBMISSIONS
[6]
The
respondents contend that the applicant failed to establish which part
or parts of the Order have been breached by the respondents
and have
failed to proof beyond reasonable doubt, that the respondents have
acted in contempt of the Order. The evaluation copy
is not included
in the Court Order. Therefore,
it
is contended that the Court Order was not wilfully disobeyed or not
complied with.
[7]
Notwithstanding that this
Honourable Court, sits in the civil motion court in civil robes,
it
sits as a criminal court and applies that standard of proof as
required by a criminal court, i.e. beyond a reasonable doubt.
COMMON
CAUSE
[8]
The application is for contempt
of court
ex facie curiae
; the orders were granted; the orders
were served on the respondents
.
LEGAL
POSITION
[9]
The applicant needs to prove
five elements namely: an order was granted; the order was
served on
the respondents; that this order was wilfully disobeyed or not
complied with; that the actions of the respondents were
wilful; and
that the actions of the respondents were
mala fide
.
The
applicant is aided by a presumption that once the first three
elements are proven, that the action is wilful and
mala fide
.
LEGAL
ARGUMENTS
[10]
The applicant submits that once the applicant has proved the
order, service or notice, and non-compliance, the respondent
bears an
evidential burden in relation to wilfulness and
mala
fides
. Should the
respondent fail to advance evidence that establishes a reasonable
doubt as to whether non-compliance was wilful
or
mala
fide,
contempt will have
been established beyond reasonable doubt.
[11]
The first respondent denies having acted with intention
to breach any court order. The respondent further argues
that the
applicant is unable to prove beyond reasonable doubt that the was any
mala fide
in his actions.
REASONS
FOR JUDGMENT
[12]
On 18 June 2018, Mr De Richelieu (“
De
Richelieu
”) contacted the first respondent to request that
the first respondent provide a demo of the fourth respondent’s
software.
According to the respondents:-
1.
the programme shown to De
Richelieu was not the applicant’s main programme but the
latter’s evaluation copy;
2.
though an evaluation copy is
not the same as the main programme, it was used to demonstrate
the capabilities of the applicant’s
software to potential
clients;
3.
it is a partial version of the
software which was given to employees of the applicant, including the
first respondent who worked
as an employee at some point in time.
[13]
The first respondent asserts that he was not comfortable showing De
Richelieu the fourth respondent’s
software and he had resolved
not to have any further business dealings with De Richelieu. In other
words, he submits that he shown
De Richelieu the applicant’s
software in order to protect the fourth respondent’s software.
[14]
The aforesaid assertions compel this Court to subjectively consider
the first respondent’s
state of mind at the time of the
Skype call. Such inquiry is purely factual. The following facts were
clearly put forward by the
first respondent:-
1.
he was uncomfortable with the
tone of De Richelieu’s email and unsure of his
bona
fides
and resolved to speak
to him to gauge for himself whether he could trust him and if so,
whether he wished to go into business with
him;
2.
he did not know that De
Richelieu was not acting independently;
3.
he did not know De Richelieu is
the applicant’s prospective business partner;
4.
he was fully aware of the Court
Order that prohibited him from publicly broadcasting applicant’s
software;
5.
he
was gauging De Richelieu’s
bona
fides
by misleading him with the applicant’s software.
[15]
The first
respondent
is not denying the contents of the transcript of the Skype call
but
submits that it is important for the purposes of issuing a contempt
of Court Order that De Richelieu was acting on behalf of
the first
respondent
.
[16]
From the onset, the first
respondent has never disguised his desire to own the applicant’s
business in its totality. He asserts
that “I had considered at
the time that were the company to be liquidated, I would consider
purchasing the rights to the
software out of the liquidated company.”
It is this covetousness that does not auger well for him.
[17]
The respondents fail to explain
why they chose to use the applicant’s evaluation copy. If the
evaluation copy is used to demonstrate
the applicant’s
programme, why would the respondents use it to for it’s
prospective clients? This defies logic.
The
first respondent states that other than the Skype call with De
Richelieu, the applicant is unable to refer the Honourable Court
to
any other person or company to which the first respondent has
allegedly passed off the applicant’s programme and that
this is
because the first and fourth respondents have not done so.
[17]
Presumably the
applicant seeks only to have the first respondent imprisoned as it is
not possible to imprison the fourth respondent
which is a
company. The first
respondent’s Counsel submits that this application
is an abuse
of court process.
It
is opportune to state that the crime of contempt of court, as it
exists in South Africa today, is directly derived from English
law.
[1]
It
has been held that:
“
The institution of contempt of
court has an ancient and honourable, if at times abused, history. If
we are truly dealing with contempt
of court, then the need to keep
the committal proceedings alive would be strong because the rule of
law requires that the dignity
and authority of the courts, as well as
their capacity to carry out their functions, should always be
maintained. In respect of
contempt of court, the common law drew a
sharp distinction between orders ad solvendam pecuniam, which related
to the payment of
money, and orders ad factum praestandum, which
called upon a person to perform a certain act or refrain from
specified action.
Failure to comply with the order to pay money was
not regarded as contempt of court, whereas disobedience of the latter
order was
[2]
”
.
[18]
The Constitutional
Court held that if the sanction sought involves committal to prison,
“the criminal standard of proof, i.e.
beyond reasonable doubt,
was always required”.
[3]
[19]
In the case of
Matjhabeng Local
Municipality v Eskom Holdings Ltd and Others
[4]
the Constitutional Court cautioned that:-
“
Frequently,
the resultant committal to prison violates the right to freedom and
security of the person — which includes the
right not to be
deprived of freedom arbitrarily or without just cause and not to
be detained without trial — in terms
of s 12(1) and the fair
trial rights in terms of s 35(3) of the Constitution.”
[5]
.
[20]
In
S v
Beyers
[6]
the court held that “
it
is a crime unlawfully and intentionally to disobey a court order.”
[21]
According to
Pheko &
others v Ekurhuleni City
,
[7]
which held the
following:
“
The pre-constitutional
dispensation dictated that in all cases, when determining
contempt in relation to a court
order requiring a person or legal entity before it to do or not do
something (ad factum praestandum),
the following elements need to be
established on a balance of probabilities:
(a) the order must exist;
(b) the order must have been duly
served on, or brought to the notice of, the alleged
contemnor;
© there must have been
non-compliance with the order; and
(d) the non-compliance must have
been wilful or mala fide.”
[22]
In
Fakie NO v CCII
Systems (Pty) Ltd
[8]
Cameron JA stated;
“
It is a crime unlawfully and
intentionally to disobey a Court order. This type of contempt of
Court is part of a broader offence,
which can take many forms, but
the essence of which lies in violating the dignity, repute or
authority of the Court. The offence
had, in general terms, received a
constitution‘l 'stamp of appro’al', since the rule of law
— a founding value
of the Constitution‘— 'requires
that the dignity and authority of the Courts, as well as their
capacity to carry out
their functions, should always be maintained.”
When
a litigant has obtained a court order requiring an opponent to do or
not to do something (
ad factum praestandum
) and there is
non-compliance, he can approach the court again for a further order
declaring the non-compliant party in contempt
of court and for the
imposition of a sanction which usually, but not invariably, has the
object of inducing the non-complier to
fulfil the terms of the
previous order.
[23]
The court in
ABSA Bank Ltd v
Transcon Plant and Civil CC and Another
[9]
(
ABSA Bank
)
held the following
“
Despite the fact that wilful
disobedience of a court order in civil proceedings
constitutes a criminal offence, a
practice exists in the high court in which proceedings are instituted
by way of an application
on notice of motion for committal of a
respondent for contempt of court. In D E Van Loggerenberg Erasmus
Superior Court Practice
2 ed vol 1 at A2-170-171, the authors
summarise the position as follows:
‘
(a) The civil contempt
procedure is a valuable and important mechanism for securing
compliance with court orders, and survives constitutional
scrutiny in
the form of a motion court application adapted to constitutional
requirements.
(b) The respondent in such
proceedings is not an “accused person”, but is entitled
to analogous protections as are appropriate
to motion proceedings.
Contempt
of court, in the present context, has been defined as “the
deliberate, intentional (i.e. wilful), disobedience of
an order
granted by a court of competent jurisdiction”.
[24]
The respondents’ Counsel argument that notwithstanding that
this Honourable Court sits
in the civil motion court in civil robes,
it sits as a criminal court, is flawed up to this extent. The court
in
Fakie
further stated the following, “
I
follow this path because the civil process for a contempt committal
is an oddity that is distinctive in its combination of civil
and
criminal elements, and it seems undesirable to strait-jacket it into
the protections expressly designed for a criminal accused
under s
35.
[10]
Certainly, not all of the rights under that provision will be
appropriate to or could easily be grafted onto the hybrid process.
For similar reasons, the High Court of Australia has observed, in the
context of the English-derived process for contempt, that
‘to
say that [civilly-initiated] proceedings for contempt are essentially
criminal in nature is not to equate them with the
trial of a criminal
charge’
.”
[11]
That this court applies the standard of proof as required by a
criminal court, i.e. beyond a reasonable doubt, is beyond
dispute.
[25]
The Court Order prohibiting the respondent from
using the applicant’s software is couched in such
a way that
the respondents are prohibited from using the applicant’s
specified software programmes. The evaluation copy is
not
specifically mentioned as one of the prohibited software. The
evidence of use of the evaluation copy means the respondents
have
discharged their evidentiary burden of disproving any required
wilfulness and
mala fides
.
[26]
In addition to the above, the reading of the affidavits
of the applicant and the supporting affidavit of it’s
employee,
one is met by egregious contradictions.
In
paragraphs 67.4, 67.11, 67.13, 67.15, 68, and 69 of the founding
affidavit of Mr Ian MCallister, it is clearly asserted that
the first
respondent made mere cosmetic changes.
[27]
On the other hand, in his supporting affidavit,
Luther Aubrey Arendse who is employed as a Software
Developer/Programmer
with the applicant, who has been involved and is
responsible for using, modifying and developing the applicant’s
software,
states “the modifications that were made by the first
respondent to the Evaluation copy are substantial and not
cosmetic.”
[28]
Now the court is at loss as to whether the applicant is complaining
about cosmetic or substantial
changes. These contradictions are of
such a serious nature that it cannot be said that the applicant has
proven that the court
order has been violated and such violation
amounted to a contempt of court.
This obviously brings the
"Plascon-Evans
rule"
[12]
in mind. This rule is to the effect that when factual disputes
arise, relief should be granted only if the facts stated by
the
respondent, together with the admitted facts in the applicant's
affidavits, justify the order. The above contradictions do
not
justify an order in favour of the applicant.
[26]
As regards applicant’s second complaint that
by providing technical support to the applicant’s
customers,
the respondents are enticing them to breach their contracts with the
applicant, which in turn is a breach of the Court
Order, I am not
persuaded that there was any wilful and
mala
fide
disobedience. In the
case of
Clement v Clement
[13]
the Full Court held that disobeying Court Order only amounts to
contempt, if the applicant is able to show that such disobedience
was
both wilful and
mala fide
.
The respondents’ response is to the effect that the clients
approached him because they were not satisfied with the service
they
received from the applicant. This surely cannot be seen as wilful and
mala fides
.
In any event the respondent has offered to repay the applicant, if he
is found to be at fault.
[27]
The court in
Absa
Bank
[14]
further held that;
“
The locus classicus in
respect of civil contempt is the decision of Fakie NO v
CCII Systems (Pty) Ltd. In Fakie
the court, per Cameron JA indicated as follows:
(a) The essence of contempt of
court ‘lies in violating the dignity, repute or
authority of the court.’
[15]
The offence has been approved by the constitutional
court as the rule of law requires
the dignity and authority of the courts to be
maintained.
[16]
(b) ‘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).’
[17]
(c) ‘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.’
[18]
(d) The onus is that of the
criminal standard of proof being proof beyond
reasonable doubt.
[19]
(e) Once an applicant shows an
order in existence and that it came to the notice
or attention of a respondent and
that the respondent had disobeyed or neglected to comply with the
order, wilfulness and mala fides
will be inferred and the applicant
will then be entitled to a committal order. An evidentiary burden
then rests upon a respondent
in relation to the aspect of wilfulness
and mala fides. A respondent must advance evidence that establishes a
reasonable doubt
as to whether non-compliance with such order was
wilful and mala fides. A respondent does not bear a legal burden to
disprove wilfulness
and mala fides. If the respondent fails in
discharging such evidentiary burden, contempt of the court order will
be established
beyond reasonable doubt.’
[20]
“
This type of contempt of
court is part of a broader offence, which can take many forms, but
the essence of which lies in violating
the dignity, repute or
authority of the court. The offence has in general terms received a
constitutional ‘stamp of approval’,
since the rule of law
– a founding value of the Constitution – ‘requires
that the dignity and authority of the
courts, as well as their
capacity to carry out their functions, should always be
maintained’
.”
[21]
[28]
Another factor is that the applicant has not seen the respondents’
full programme. The
evidence of use of the evaluation copy, also
proves that the applicant has failed to prove that there is any
contempt of any court
order. I therefore conclude that the applicant
has failed to meet the required standard of beyond a reasonable doubt
in order to
have the first respondent imprisoned.
[29]
The finding of this application does not mean that the applicant has
failed in the civil claim
he has instituted against the respondents
but only signifies that the applicant does not meet the required
standard of proof for
the court to conclude that there is contempt
which justifies committal to civil imprisonment.
[30]
I am not satisfied that the applicant has proven all the requirements
which will enable this
Court to convict the respondent of contempt of
Court for using the applicant’s software programme and enticing
the applicant’s
clients to breach their contracts with the
applicant, which in turn is a breach of the Court Order.
ORDER
This
application is dismissed costs including costs of Part A.
NE
RAMAPUPUTLA
Acting
Judge, Gauteng Division of the High Court of South Africa, Pretoria
Heard
On:
26 April 2019
Date
of Judgment :
26 July 2019
APPEARANCES
For the
Applicant: Adv. M. Louw
For
the first respondent: Adv. A.G Campbell
For the second
respondent: No appearance
For the third
respondent: No appearance
For the fourth
respondent: Adv. A.G Campbell
[1]
Jordaan ‘The ‘gagging writ’ and
contempt of court – the correct means to the correct end? A
comparative
analysis of South African and English law’ 1990
CILSA 220
[2]
Coetzee v Government of the Republic of South
Africa
[1995] ZACC 7
;
1995 (4) SA 631
(CC) para 60.
[3]
Matjhabeng Local Municipality v Eskom
Holdings Ltd and Others
2018 (1) SA 1
(CC) at [67].
[4]
Supra
at [1].
[5]
Supra
at [1].
[6]
1968 (3) SA 70 (A).
[7]
2015 (5) SA 600
(CC) at para 32.
[8]
[2006] ZASCA 52
;
2006 (4) SA 326
(SCA) at 332. See also
S
v Mamabolo
(ETV and Others
Intervening)
[2001] ZACC 17
;
2001 (3) SA 409
(CC) para 14.
[9]
(3954/17P) [2019] ZAKZPHC 48 at para 5 and 6.
[10]
In re Dormer (1891) 4 SAR 64 at 85 per Kotzé
CJ (‘Contempts of court are certainly in some respects
analogous to
criminal offences, but they are a distinct species of
offence, to which a special mode of summary procedure is applicable,
and
do not admit of the ordinary and usual forms and modes of
criminal procedure’), applied in Afrikaanse Pers-Publikasies
(Edms) Bpk v Mbeki 1964 (4) SA 618 (A) 626.
[11]
Witham v Holloway
(1995)
131 ALR 401
(HC of A) 408, per Brennan, Deane, Toohey and Gaudron
JJ.
[12]
Plascon-Evans Paints
(TVL) Ltd. v Van Riebeck Paints (Pty) Ltd
(53/84)
[1984] ZASCA 51
.
[13]
1961
(3) SA 861 (T).
[14]
Id
at para 6.
[15]
Fakie
para 6.
[16]
S v Mamabolo
(E
TV & others intervening)
[2001] ZACC 17
;
2001 (3) SA 409
(CC) para 14;
Coetzee
v Government of the Republic of South Africa
;
Matiso v Commanding Officer, Port
Elizabeth Prison
[1995] ZACC 7
;
1995 (4) SA 631(CC)
para 61.
[17]
Fakie
para 9.
[18]
Fakie
para 10.
[19]
Fakie
para 33;
at 342B and 344D.
[20]
Fakie
at
344J-345A; para 41.
[21]
In D E Van Loggerenberg Erasmus Superior Court
Practice 2 ed vol 1 at A2-170.