CONSTITUTIONAL COURT OF SOUTH AFRICA

1 CONSTITUTIONAL COURT OF SOUTH AFRICA . Case: CCT 217/15 and CCT 99/16. CCT 217/15. In the matter between: MATJHABENG local MUNICIPALITY Applicant and ESKOM HOLDINGS LIMITED First Respondent MEMBER OF THE EXECUTIVE COUNCIL, local government , FREE STATE PROVINCE Second Respondent NATIONAL ENERGY REGULATOR. OF SOUTH AFRICA Third Respondent MINISTER OF MINERALS AND ENERGY Fourth Respondent MINISTER OF PROVINCIAL. AND local government Fifth Respondent CCT 99/16. In the matter between: SHADRACK SHIVUMBA HOMU MKHONTO First Applicant COMPENSATION COMMISSIONER Second Applicant DIRECTOR-GENERAL, DEPARTMENT OF LABOUR Third Applicant MINISTER OF LABOUR Fourth Applicant and COMPENSATION SOLUTIONS (PTY) LIMITED Respondent Neutral citation Matjhabeng local Municipality v Eskom Holdings Limited and Others; Shadrack Shivumba Homu Mkhonto and Others v Compensation Solutions (Pty) Limited [2017] ZACC 35.

2 Coram: Nkabinde ADCJ, Cameron J, Froneman J, Jafta J, Khampepe J, Madlanga J, Mhlantla J, Mojapelo AJ, Pretorius AJ, and Zondo J. Judgments: Nkabinde ADCJ (unanimous). Heard on: 2 March 2017. Decided on: 26 September 2017. Summary: contempt of COURT requisites for contempt standard of proof in civil and criminal contempt proceedings appropriateness of summary procedure in contempt proceedings non-joinder . duty to comply with COURT orders. ORDER. On appeal from the High COURT of SOUTH AFRICA , Free State Division, Bloemfontein (CCT 217/2015) and the Supreme COURT of Appeal (CCT 99/2016). Under CCT 217/2015 (Matjhabeng local Municipality v Eskom Holdings Limited and Others), the following order is made: 1. Leave to appeal is granted. 2. Condonation is granted. 3. The appeal is upheld. 4. Paragraphs 1 and 2 of the order of the High COURT of SOUTH AFRICA , Free State Division, Bloemfontein are set aside and are replaced with an order dismissing the application.

3 2. 5. Each party is to pay its own costs in this COURT . Under CCT 99/2016 (Shadrack Shivumba Homu Mkhonto and Others v Compensation Solutions (Pty) Limited), the following order is made: 1. Leave to appeal is granted. 2. Condonation is granted. 3. The appeal is upheld. 4. Paragraphs (a) and (b) of the order of the Supreme COURT of Appeal are set aside. 5. Each party is to pay its own costs in this COURT . JUDGMENT. NKABINDE ADCJ (Cameron J, Froneman J, Jafta J, Khampepe J, Madlanga J, Mhlantla J, Mojapelo AJ, Pretorius AJ, and Zondo J): Introduction [1] At their core, these applications raise procedural and substantive issues concerning the requirements of contempt of COURT , specifically when allegations of contempt ex facie curiae (occurring not in the presence of the COURT while sitting), are made. 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 section 12(1) and the fair trial rights in terms of section 35(3) of the Constitution.

4 [2] Cases concerning contempt of COURT are now brought to our courts with more frequency. There is a widely held view that contempt of COURT is neither criminal nor civil. As a result, the standard of proof required in contempt has become somewhat blurred. Not only that. Courts often employ summary contempt procedures followed 3. NKABINDE ADCJ. by imprisonment in motion proceedings. It is thus necessary for this COURT to reflect on and clarify the applicable principles in the process of determining the two matters before us. [3] The applicants seek leave to appeal the decisions of the High COURT of SOUTH AFRICA , Free State Division, Bloemfontein1 (Free State High COURT ) and the Supreme COURT of Appeal2 in terms of which Messrs Mothusi Frank Lepheana (Mr Lepheana). and Shadrack Shivumba Homu Mkhonto (Mr Mkhonto), respectively, were declared in contempt of COURT .

5 They were convicted and sentenced to suspended imprisonment terms. The primary issue for determination is whether the orders of contempt and imprisonment sentences against them are just and equitable. [4] The two applications for leave to appeal were heard at the same time. Before I. deal with the law regarding contempt of COURT , it is expedient to set forth, for clarity, the parties, background, submissions, and to identify the issues, first, in respect of CCT 217/2015 (Matjhabeng) and, second, in respect of CCT 99/2016 (Mkhonto). Matjhabeng Parties [5] The applicant, Matjhabeng local Municipality (Municipality), is the second largest municipality in the Free State. The contempt order was issued against its Municipal Manager, Mr Lepheana (Municipal Manager). The first respondent is Eskom Holdings Limited (Eskom).

6 The second to fifth respondents, collectively referred to as the respondents, are the Member of the Executive Council for local government in the Free State (MEC), the National Energy Regulator of SOUTH AFRICA , the Minister of Minerals and Energy, and the Minister of Provincial and local 1. Matjhabeng local Municipality v Eskom Holdings Limited unreported judgment of the High COURT of SOUTH AFRICA , Free State Division, Bloemfontein, Case No 924/13 (19 February 2015) (Free State High COURT judgment). 2. Compensation Solutions (Pty) Ltd v Compensation Commissioner [2016] ZASCA 59; (2016) 37 ILJ 1625. (SCA) (Supreme COURT of Appeal judgment). 4. NKABINDE ADCJ. government . The second to fifth respondents have not participated in these proceedings. Background [6] Eskom has been embroiled in a protracted effort to force the Municipality to pay its electricity bills.

7 It threatened to terminate the electricity supply to the Municipality if its arrears remained unpaid by 31 March 2013. In response to the threatened termination, the Municipality launched urgent proceedings to interdict Eskom from cutting its electricity supply pending the finalisation of the dispute concerning the arrear amounts. This resulted in a deed of settlement in terms of which the Municipality agreed to pay an amount of R145 404 733. The deed of settlement was made an order of COURT , by Daffue J, on 28 March 2013 (first consent order). Because of the dispute between the Municipality and Eskom regarding the amount which was due and payable, the consent order regulated the monthly payments to Eskom in order to liquidate the [7] A year later, the Municipality had not complied with the first consent order.

8 Eskom then launched an application to set aside the first consent order and to place, in its stead, a structural interdict to enforce payment. On 31 July 2014, another order was granted, by Kruger J, also by agreement between the parties (second consent order). In terms of this order, the Free State High COURT directed, among other things, that the first consent order be set aside; that parties enter into consultations; and that the Municipality would resume payments from July 2014, failing which the Municipal Manager would report to the COURT , setting out the reasons for its This is the order in respect of which Mr Lepheana was held, in 3. The first consent order incorporates the deed of settlement. 4. For completeness, the second consent order reads: 1. The COURT set aside the order granted on 28 March 2013 by the Honourable His Lordship Daffue.

9 2. The [Municipality] to provide [certain copies and documents set out in to ] by 6 August 2014;. 5. NKABINDE ADCJ. his personal capacity, to have been in contempt, and for which he was sentenced to imprisonment. Although Eskom was not provided with all the documents in terms of the second consent order, the parties did meet. An agreement could not be reached in all aspects, but the Municipality undertook to pay the future monthly account in full when same became due and payable. Notwithstanding this, the Municipal Manager did not report the reasons for the failure to make the payments, as required by the second consent order. [8] The Municipality still failed to discharge its obligations in terms of the second consent order, as it had undertaken. Eskom applied to the Free State High COURT to enforce the terms of that order.

10 On 18 September 2014, Kruger J ordered, on an ex parte basis, the Municipality to pay its electricity bill (rule nisi order). The rule nisi order called on the Municipal Manager, in his official capacity, to file a report setting out .. 3. The parties to enter into consultations commencing on 12 August 2014, to be concluded on 19 August 2014, and to report to the above Honourable COURT on or before 11 September 2014. the position of the disputes between the parties, including the [interest] rate to be charged on arrears. 4. The [Municipality] to resume payments of the current account for electricity supplied during July 2014 and thereafter on due date, failing which, the municipal manager is directed to report to the above Honourable COURT reasons therefor within 14 calendar days of the default. 5. The [Municipality] to pay arrears that have accrued since June 2013, together with interest a tempore morae [interest running from the date of judgment], on payment terms to be agreed between the parties in terms of the provisions of clause 3 of this order, failing such agreement or payment, first respondent shall be entitled to terminate the supply of electricity after following due procedure in terms of the Promotion of Administrative Justice Act 3 of 2000.