GOWORA J: On 13 April 2011
under Case No HC3507/11 PATEL J granted a provisional order in the
following terms;
“INTERIM
RELIEF GRANTED
Pending the determination of this
matter, the applicant is granted the following interim relief;
1. The decision of the Respondent
to cancel the Service Provider Agreement be and is hereby declared
unlawful and is set aside.
2. The Respondent be and is
hereby interdicted from effecting any of the consequences of such
cancellation in terms of Clauses 15 and 16 of the Service Provider
Agreement.
3. The Respondent be and is
hereby ordered to retract its text message sent to the Applicant's
post-paid customers by way of a similar message to the effect that
the Applicant's Service Provider Agreement is still valid and
subsists and that customers should continue to pay their bills to
Zellco Cellullar and that the Respondent regrets the previous
notification of cancellation which was issued in error.
PROCEDURE FOR DETERMINATION OF
FINAL ORDER SOUGHT
N/A
TERMS OF FINAL ORDER SOUGHT
That you show cause to this
Honourable Court why a final order should not be made in the
following terms:
4. The Respondent is interdicted
from invoking and implementing the termination provisions of Clause
15 and 16 of the Service Provider Agreement pending the resolution of
the dispute declared by the Applicant in accordance with Clause 19 of
the Service Provider Agreement.
SERVICE OF PROVISIONAL ORDER
That leave be and is hereby
granted to the Applicant's legal practitioners to effect service of
this Provisional Order upon the Respondent.”
The parties to the dispute under
Case No HC3507/11 are the applicant and the first respondent
respectively. The second, third and fourth respondent were not cited
as parties thereto.
On 10 May 2011 the applicant then
launched these proceedings as an ordinary court application seeking
the following relief:
“IT
IS ORDERED THAT:
1. The second, third, and fourth
respondents be and are hereby held to be properly enjoined to these
proceedings.
2. The respondents be and are
hereby held to be in wilful contempt of the court order by PATEL J on
13 April 2011 in HC3507/11.
3. The first respondent be and is
hereby ordered purge its contempt and to mitigate the consequences of
cancellation of the Service Provider Agreement that it effected
against the applicant in defiance of the court order within 48 hours
of this order as follows:
(a) Remit to the applicant all
payments received directly from the applicant's customers from date
of unlawful cancellation of the Service Provider Agreement to date.
(b) Cancel all contracts or
arrangements for provision of direct services concluded with the
applicant's customers from date of cancellation of the said
Agreement to date.
(c) Provide the applicant with
all call data relating to its customers as from 1 April to date in
the form and detail as ordinarily provided in terms of the Service
Provider Agreement.
(d) Action all requests for
network services submitted by the applicant from 1 April to date.
4. The first respondent be and is
hereby ordered to broadcast within 24 hours of this order the
following text message to the applicant's customers:
“NetOne sincerely regrets the
text messages sent to all Zellco's subscribers on 5 April 2011 and
19 April 2011 which text messages were grossly inaccurate,
misleading, sent in error and should be completely disregarded.
Customers are advised that the Service Provider Agreement is still
valid and subsists and should continue to pay their bills to ZELLCO
CELLULAR. There will be no loss of service.”
5. The second, third and fourth
respondents be and are hereby ordered to ensure full compliance by
the first respondent with the terms of this order failure of which
they shall be committed to prison until such time as full compliance
takes place.
6. The respondents shall not be
heard in any court, whether in this matter or in matters already
before the courts in HC8318/10, HC1587/11 and HC3507/11 or any new
related matter, unless and until they have purged their contempt.
7. The first respondent be and is
hereby ordered to pay a fine for contempt of court in the sum of
USD20,000-00 within 7 days of service of this final court order upon
it.
8. The second, third and fourth
respondents be and are hereby ordered, in their persons, to pay a
fine of USD1,500-00 each within 7 days of service of this final court
order upon them.
9. The respondents be and are
hereby ordered to pay the costs of this application on a higher
scale, that of legal practitioner and client basis, jointly and
severally, one paying the others to be absolved.”
The application is opposed by all
four respondents.
The third respondent has filed an
opposing affidavit on his own behalf and on behalf of the first
respondent.
The respondents have also raised
points in limine.
In so far as the first respondent
is concerned, it is contended that the applicant has failed to abide
by the order of MTSHIYA J under Case No HC3639/11 which was dismissed
with an order of costs payable by the applicant.
The matter had been brought to
court as an urgent matter. The LEARNED JUDGE had dismissed it on the
basis that it was not urgent and had ordered the applicant to pay the
costs. The first respondent had through its legal practitioners sent
an estimate of its costs and an indication of what it had paid to
counsel.
The applicant had not paid.
It was therefore argued on behalf
of the respondents that due to the refusal to pay these costs, the
applicant was in contempt of a court order and until such time that
it had purged its contempt, it should not be afforded a hearing on
the merits of the dispute.
The applicant counters by arguing
that it had sought the taxation of the estimated bill as it
considered that the costs were on the high side.
It was suggested on behalf of the
applicant that counsel did not have the latitude to charge any amount
as his fees and that counsel's fees should be subjected to taxation
in ordinary course. It was in this vein argued that the
reasonableness of counsel's fees must be tested through taxation.
It is trite
that counsel's fees are a disbursement and not subject to taxation
by the Taxing Officer. It is also accepted that counsel's fees are
not regulated by a tariff such as attorney's fees are.
In Logan
v Taxing
Officer &
Ors
NO 2001 (2) ZLR 175 GILLESPIE J noted that the de
facto
bar within this jurisdiction does not work to a tariff of fees. He
bemoaned the absence of such tariff, which he suggested should set
minimum and maximum thresholds for various work.
This point was
reiterated by GUVAVA J in Choto
v CBZ
& Anor
2006 (2) ZLR 277 at 281E thus:
“It is also
accepted that fess charged by legal practitioners who have been so
instructed are generally regulated from the bar from which they
operate. These fees are not determined by any tariff. That this
distinction has been maintained by the legislator may be gleaned from
the provisions of the First Schedule to the High Court (Fees and
Allowances) Rules 2000 (S.I.82 of 2000) as amended by S.I. 195 of
2003, which provides as follows:
'8. When
another legal practitioner is instructed he or she shall not be
required to adhere to this tariff but shall charge such overall fee
as the taxing officer considers fair and reasonable in the
circumstances:
Provided that
this paragraph shall not apply where a legal practitioner is
instructed by a country practitioner'.
In my view,
therefore, there is a recognition by the legislator that there is a
class of legal practitioners who are not bound by the tariff set out
in the Rules.”
The
respondents have argued that the urgent chamber application filed by
the applicant under HC4169/11 wherein the first respondent was
awarded costs was so defective in a manner and to an extent that not
just the respondent but the court before whom it was set down
commented on the defects.
This did not
appear to deter the applicant as it proceeded to file yet another
urgent application substantially on the same basis as the defective
one.
It however did
not pay the costs it had been ordered to pay.
I am persuaded
to agree with the contention by the respondents that the applicant
has taken a decision to mire the respondents in litigation despite
the dispute over the parties' commercial transaction needing
resolution.
A submission
to the effect that the applicant had filed no less than six sets of
proceedings went unchallenged.
When a
litigant files defective proceedings and refuses to pay costs awarded
against it, it is clearly causing the other party unwarranted
expense.
The applicant
was advised that the costs from the abortive urgent applicant
amounted to US$2,205-00, constituting US$2,005-00 being fees due to
counsel and US$200-00 the estimation of the costs due to the
respondent's legal practitioners.
It seems that
the applicant was not unhappy about the estimation of US$200-00 but
required that counsel's fee be taxed.
The basis of
the unhappiness was the assumption that counsel's fee was not a
disbursement.
The law on
that is clear and in the absence of a tariff against which counsel's
fee can be measured it is clear that the taxing officer has no means
by which to test its reasonableness or otherwise.
That said it
was I believe the obligation of the first respondent, in order to
enforce payment of its costs by the applicant, to have the bill
taxed.
I believe that
the requirement that the first respondent have its bill taxed is not
unreasonable as every party to a lis
has the right to have the costs claimed by the successful party
tested as their reasonableness by a taxing officer.
The first
respondent chose not adopt this route but to force the applicant pay
on the basis that it considered the costs reasonable and that the
applicant should accept its position. That was an error on the part
of the first respondent.
It would have
been different if the applicant had chosen not to pay a taxed bill of
costs. That is not the position here.
I therefore
find that the first respondent has not made out a case for these
proceedings to be stayed. The point in limine
therefore fails.
The next issue
raised in limine
is that the second, third and fourth respondents have been wrongly
cited herein and their citation in facts amounts to a mis-joinder.
They are in
fact cited in their official capacities, i.e as representatives of
the first respondent.
It is
contended by the respondents that their citation herein in fact
amounts to a duplication of the citation of the first respondent.
The applicant
has prayed for the joinder of the second, third and fourth
respondents to these proceedings. Since they are already cited it is
difficult to understand why an order for their joinder to these
particular proceedings is being sought.
Para 2 of the
draft order seeks that the respondents be found in contempt for lack
of or refusal to comply with the order granted by PATEL J against the
first respondent under H 3507/11.
It is trite
that an applicant for an order for committal must establish the
following:
1. That an
order was granted against the respondent.
2. That the
respondent was either served with the order or informed of the grant
thereof against him and can have no reasonable ground for
disbelieving that information; and
3. That the
respondent has either disobeyed the order or neglected to comply
therewith.
See Uncedo
Taxi Service Association
v Mtetwa
&
Ors
1999 (2) SA 495; Consolidated
Fish Distributors
(Pty)
Ltd
v Zive
& Ors
1968 (2) SA 517.
Contempt of
court in the context of these proceedings would entail a deliberate
disobedience of a lawful order issued by a court of competent
jurisdiction.
That an order
was granted against the first respondent is not in dispute. The order
was served upon the first respondent's legal practitioners who are
also instructed by the second, third and fourth respondents herein.
Service of the
order upon the legal practitioners clearly constitutes proof of
service upon the first respondent.
The applicant
contends that the first respondent is in contempt of the provisional
order granted against by PATEL J on 13 April 2011. It contends
further that in view of the continued act of contempt by the first
respondent, it, the applicant addressed a letter to the first
respondent through the fourth respondent which letter it copied to
the second and third respondents requesting them to comply with the
order. Despite the letter having demanded action from the
respondents, the applicant contends that the order has not been
complied with.
It is trite that a party cannot
be found to be in contempt of an order which has not been addressed
to it or which has not been served upon such party.
The provisional order granted
against the first respondent is an order ad
factum praestandum an
order to do or refrain from doing a thing.
It is trite that by its nature,
an order ad factum
praestandum, as the
provisional order in this case is, is an order in personam
and consequently is
only binding upon those against whom it has been issued.
The principal object of contempt
proceedings is to compel compliance by a party to an order given by a
court of competent jurisdiction. Before an applicant can be afforded
an order for committal on the basis of contempt of an order of court
an applicant must show that the court's order was either served
upon the respondent personally or has been brought to his personal
attention.
It is correct
as contended by the respondents that the order was not granted
against the other respondents herein but against the first
respondent.
The first respondent is a
corporate entity and the affairs of corporate entities are managed
and run their officers and directors and any disobedience of court
orders must therefore be attributed to the directors of the company.
The directors of a company are its mouth, brains, voices and bodies
through which the company acts. Any proceedings by the company are
directed, managed and implemented by them.
To this end the applicant
contends that the second respondent as chairman of the board has
ultimate authority to cause and direct the first respondent to act in
a certain way. The third respondent is the managing director of the
first respondent and it is contended by the applicant that he ensures
that the decisions of the first respondent and the board are
implemented. The fourth respondent is a legal practitioner who is the
company secretary in the first respondent and it is contended by the
applicant he acts as the legal adviser to the second and third
respondents herein.
I am not aware of any principle
that would seek to hold liable an officer of a company for acts done
by the company unless the person is a member of the board of
directors. Clearly no liability attaches to the fourth respondent
herein.
As for the second and third
respondents, it is clear that as directors, they constitute the
physical arm of the first respondent.
A corporation can only comply
with a court order through its officers.
Thus it can be convicted of
contempt if its officers have refused or neglected to comply with the
court order. A person who also contributes to the commission of the
offence, can, without being a principal, be punishable as an
accomplice.
Consequently, a director who has knowledge of the order and causes
the company to refuse to obey the order is guilty of contempt.
In Twentieth
Century Fox Film Corporation
v Playboy Films
1978 (3) SA 202 KING AJ opined as follows:
“A director of a company, who
with knowledge of an order of Court against the company, causes the
company to disobey the order is himself guilty of contempt of Court.
By his act or omission such director aids and abets the company to be
in breach of the order of Court against the company. If it were not
so a court would have difficulty in ensuring that an order ad
factum praestandum
against a company is enforced by a punitive order. Vide Halsbury 4th
ed vol 9 at 75. Consequently Jagger who had knowledge of the order of
Court is guilty of contempt of an order of this Court. An order ad
factum praestandum
against a company should also be served on its directors if a
punitive order is sought against the directors in order to establish
knowledge of the order of Court.”
The purpose of contempt
proceedings is to ensure that court orders are obeyed.
Courts must jealously guard the
orders they grant against the community and persons appearing before
these courts cannot and should be allowed to disobey or ignore such
orders with impunity.
Since the applicant seeks an
order for the incarceration of the second and third respondents
herein, it should have ensured that the court be served upon each of
them personally.
It did not do this. It addressed
a letter to the fourth respondent.
The applicant has not in these
proceedings proffered any authority to support its contention that
the second, third and fourth respondents, who had not been cited in
the main proceedings and who were not served with the order should be
found to have been in contempt of the provisional order.
Proceedings for committal for
contempt are a form of enforcement of an order ad
factum praestandum. An
applicant for an order for committal must show that the respondent
had personal knowledge of the order from which the proceedings for
contempt emanate. A court will not entertain an application for
committal for contempt unless wilful or reckless disregard for the
order has been proved.
It has been held that before a
person can be found guilty of contempt his disobedience of the order
must be not only wilful but also mala
fide.
It has also been held that in
proceedings for contempt of court, once a failure to comply with an
order of court has been established wilfulness will normally be
inferred and the onus is on the person who failed to comply with the
order to rebut the inference of wilfulness on a balance of
probabilities.
At p 836D-E SMALLBERGER AJA
stated:
“… Once a failure to comply
with an order of Court has been established, wilfulness will normally
be inferred, and the onus will rest upon the person who refused to
comply with such order to rebut the inference of wilfulness on a
balance of probabilities (cf Du
Plessis v Du
Plessis 1972 (4) SA
216 (O) at 220A-D). This can be done by such person establishing that
he did not intentionally disobey the Court's order.”
In this case the applicant relies
on a letter addressed to the company's Secretary and copied to the
second and third respondents.
Even if it were to be inferred
that the second and third respondents were informed through the copy
of the letter in question there is no proof that these copies were
actually delivered to the respondents.
The applicant has in my view
failed to establish personal knowledge of the order on their part and
a wilful decision to disregard it or disobey it.
The position is different as far
as the first respondent is concerned.
The court order in question was
issued against it and served on its legal practitioners.
It deliberated decided to alter
the terms of the order given by PATEL J and inserted its own version.
In his Order PATEL J had ordered
the retraction of the text sent out to customers by the first
respondent and for the respondent to issue a text to the effect that
the applicant service provider contract was still in force and
customers should continue paying their bills to the applicant.
The first respondent did retract
the text but instead of requesting customers to pay to the applicant,
it directed that customers pay their bills to the first respondent.
The cause of the dispute between
the parties was the alleged failure by the applicant to remit
payments from customers to the first respondent. The purported
termination had the effect of changing the mode of payment directly
to the first respondent. The order by PATEL J reversed the
cancellation which is why the first respondent was ordered to retract
its text message. The retraction it published had no effect on the
termination as customers were ordered to pay their bills to it
instead of the applicant as previously obtained.
In the circumstances it defied
the order of court. I have no hesitation in finding that it was
guilty of contempt.
Subsequent to hearing this matter
after having researched on the subject I requested the parties to
address supplementary heads of argument for the benefit of the court.
The respondents were kind enough
to oblige and I am indebted to Miss Moyo for having taken the time to
prepare and file the heads of argument. At the time of preparing this
judgment the applicant had not acceded to this request.
In the heads of argument filed by
Miss Moyo on behalf of the respondents I am informed that the
proceedings herein have been overtaken by events in that the contract
has been cancelled. In her view ordering the first respondent to
purge its contempt by issuing an amended statement is of no force and
effect in view of the position prevailing between the parties.
The only alternative is
consequently that the first respondent be ordered to pay a fine as
prayed in the draft order.
There were no representations
from the respondents on the fine to be paid. I therefore order the
payment of the sum prayed for in the draft.
IT IS ORDERED AS FOLLOWS:
1. The first respondent be and is
found to be in wilful contempt of the Court Order of this court under
Case No HC3507/11 dated 13 April 2011.
2. The first respondent be and is
hereby ordered to pay a fine in the sum of US$20,000-00 within ten
(10) days of the date of service of this order.
3. The first respondent shall pay
the applicant's costs.
4. The application against
second, third and fourth respondent is hereby dismissed with costs.
Chirimuuta & Associates, legal practitioners for the
applicant
Coghlan, Welsh & Guest, legal practitioners for the
respondents
1. Holtz v Douglas & Associates en endere 1991
(2) SA 797 (O)
2. At p 203-C-E
3. See Haddow v Haddow
1974 (2) SA 181 (R) at 182H
4. See Putco Ltd v TV & Radio Guarantee Co
(Pty) Ltd & other related cases 1985 (4) SA 809 at 836E