In a recent case, the SCA re-stated the circumstances under which directors of an entity may be held in contempt of court for actions taken by the entity.1
In this case, contempt proceedings arose from a Court Order (the Order) granted against the Eagle Canyon Golf Estate Home Owners Association (the HOA) by the Gauteng Division of the High Court, Johannesburg (the High Court). The Order directed the HOA to, amongst other things, take all necessary steps, including but not limited to, the procurement of a partial demolition order, to enforce compliance with the HOA's Rules by one of the owners of immovable property in the Eagle Canyon Golf Estate.
On 18 September 2019, the respondents applied to the High Court for the appellants to be held in contempt of the Order, and the application was granted. The appellants then appealed to the Supreme Court of Appeal (SCA).
The issue before the SCA was whether the appellants, who had been sued in their capacity as the duly constituted and appointed board of directors of the HOA, were correctly held in contempt of the Order.
To answer this question, the SCA considered: (i) the chronology of events after the Order was granted; and (ii) requirements for contempt of court.
On the first issue, the SCA held that HOA had taken various steps, including the appointment of experts to investigate the extent of the alleged non-compliance with the HOA Rules, to comply with the Order.
The SCA also considered that the Order was granted against the HOA and not the appellants, none of whom were in office when the Order was granted. They were not even cited as respondents in the application that resulted in the Order.
On the second issue, the SCA considered the recent Zuma judgment2 , where the Constitutional Court cited Fakie3 with approval and reiterated that, to establish contempt, the following would have to be established: (i) an order granted against the party in contempt; (ii) service or knowledge of the order; (iii) the party in alleged contempt failed to comply with the order; and (iv) wilfulness and mala fides, which would be presumed if the first three requirements were established.
In this case, the SCA ruled that the respondents did not prove that there was non-compliance with the Order. Also, considering the steps taken by the HOA and that the HOA was always advised by an attorney pertaining to the Order, non-compliance with the Order would not have been wilful and mala fide, even if it had been proven. As a result, the appeal was upheld with costs.