The City of Tshwane Metropolitan Municipality and Anr. Vs. Moipone fleet (Pty) Ltd

South Africa

27.05.2020

Contempt of Court

Contempt of a court order can be issued against the party when the breach is both wilful and mala fide

Present is an appeal against the judgment of the High Court, Pretoria in which she declared the first Appellant, (the City) and the second Appellant, (the City Manager) to be in contempt of an order granted by Davis AJ1 (the Davis order) on 29 March 2017. The Davis order had directed the City to comply with its obligations to procure vehicles under a Public Private Partnership Agreement (the PPA) concluded between it and Moipone Fleet (Pty) Ltd (the Respondent in this appeal) on 24 March 2016. And further interdicted it from concluding an agreement to procure vehicles from any other service provider pending the final determination of the dispute between the parties as to whether the City had validly cancelled the PPA.

As a sanction for holding the Appellants in contempt of the Davis order, Mokose AJ imposed a sentence of six months’ imprisonment on the City Manager, suspended for one year on condition that there was no further contravention of that order. She also interdicted the City from purchasing certain vehicles from any other service provider other than the Moipone Fleet pending the determination of the dispute referred to in the Davis order. The issues in present appeal are thus whether the court a quo was correct in holding the City in contempt of the Davis order and granting the interim interdict against it.

It is also trite that, before a party may be found in contempt of a court order, the breach must have been both wilful and mala fide. It is now established that when interpreting a document, the point of departure is the language in question read in context and having regard to the purpose of the provision and the background to the preparation and production of the document.

Clause 39 is not the clearest of provisions. It must however be read and understood within the context and scheme of the PPA. It is not disputed that, the procuring of the vehicles from Moipone Fleet was through a leasing vehicle system. This much is evident from the agreement, starting with the “definitions clause”, which refers to a ‘full maintenance lease’ and ‘lease agreement’. The preamble refers to a “co-sourcing mechanism” to achieve the purposes of the agreement. In interpreting Clause 39, regard must be had to the Request for Proposal document. The concept of co-sourcing arose from a recommendation in a study commissioned by the City to ascertain the most suitable method of undertaking its fleet services.

Moipone Fleet contends that it is within that stated objective that clause 39 should be understood because acquisition of vehicles through means other than the co-sourced mechanism would undermine the stated objective. According to it, the relevant clause unequivocally states that the City shall ‘source all its fleet requirements from the Private Party’ which should be understood to mean all fleet requirements of the City (without the exclusion of purchasing) would be met by Moipone Fleet. Its view is that the clause does not concern itself with the method of how those requirements would be met.

Nothing in clause 39 read in the context of the agreement indicates that the City was prohibited from purchasing vehicles from other suppliers. The fact that it had found co-sourcing in the form of a leasing arrangement to have been a cost effective mechanism at the time, did not mean that it could not embark on other cost effective methods to source its fleet requirements, including purchasing of its vehicles.

The purchase of vehicles fell outside the purview of the agreement was undoubtedly correct. Under the circumstances, it is evident, that Mokose AJ’s interim order was final in effect because the purchase of the vehicles, which her order prohibited, was not an issue that would be revisited when the validity of the agreement was determined at a later stage. The interim interdict is thus appealable. Based on interpretation of clause 39, it should not have been granted. The appeal succeeds with costs. The order of the court a quo is set aside.

Tags : Interim interdict Contempt Prohibition

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