South Africa: Western Cape High Court, Cape Town

Indwe Aviation (Pty) Ltd v The Petroleum Oil and Gas Corporation of South Africa (Pty) Ltd and Another (4610/2011, 14366/2010) [2011] ZAWCHC 249; 2012 (6) SA 110 (WCC) (1 June 2011)

(1.3) First Respondent is directed to allow Applicant to continue providing the services as per the terms and conditions pertaining on 30 June 2010, subject to the provisions of paragraph 1.4 below.

(Pending determination of Applicant s contempt application under case no. 1875/2011 (and in event of such application being determined in Applicant's favour pending the aforesaid judgment of the SCA), Applicant may render the service by employing Sikorsky S-61 and Bell 212 helicopters as in service immediately preceding the order of the Honourable Ms Justice Baartman on 4 February 2011.

(1.5) First Respondent is interdicted and restrained from taking any further steps in respect of the tender issued under tender no. CTT5401 on or about 6 April 2011 for the provision of aviation services.

(2) In the alternative to the relief sought in paragraph 1 above, an order directing that pending the outcome of an appeal before the Supreme Court of Appeal against the orders and judgment of the Honourable Ms Justice Baartman handed down under case no. 14366/2010 on 4 February 2011:

(2.1.) The order of Blignault J issued under the aforesaid case number on 21 July 2010 be revived and/or continue to stand and/or operate, subject to the provisions of paragraph 2.2 below.

(2.2.) Pending determination of Applicant's contempt application under case no. 1875/2011 (and in event of such application being determined in Applicant's favour pending the aforesaid judgment of the Full Bench), Applicant may render the service by employing Sikorsky S-61 and Bell 212 helicopters as in service immediately preceding the order of the Honourable Ms Justice Baartman on 4 February 2011.

(2.3) First Respondent is interdicted and restrained from

taking any further steps in respect of the tender issued under tender no. CTT5401 on or about 6 April 2011 for the provision of aviation services.

(3) First and Second Respondents shall, jointly and severally, bear the costs of this application, including the costs of two counsels."

Basis of opposition to the relief

[17] The first respondent opposed the relief sought on the basis that:

(a) the court had in the main application found that the applicant was not entitled to declaratory or other relief. Therefore, so the argument went "...any rights which the applicant may have had. have now effectively been extinguished."

(b) the applicant's decision on 11 February 2011 to withdraw its services amounted to a waiver or abandonment of its right to apply for interim relief.

(c) the applicant cannot establish that it will suffer irreparable harm if the interim relief is not granted because it withdrew its services despite the prospect of harm.

[18] The second respondent's attitude appears from email correspondence received after the applicant submitted its revised draft order:

"Our view, on behalf of the Minister is that there are no grounds, and certainly on the requirement of an interim interdict that was made against the Minister that she should be slapped with an interim interdict even on the revised terms suggested in the draft. If the Judge is inclined to make an interim interdict order, it should not involve the Minister at all The requirement of an interim interdict has not been met in so far as the Minister is concerned. We did not understand the argument to be that the requirements of an interim interdict which apply in relation to Petro SA apply equally to the Minister. In our view, any interim order against the Minister in this case would be inappropriate and despite its wording, prevent the Minister from engaging with Petro SA at all in respect of any emergency that may arise. We would therefore reject the draft order on the basis that there were no arguments supporting a finding that a right requires protecting as against the Minister."

[19] I deal with the objection grounds as well as the requirements for an interim interdict below.

The requisites for the granting of an interim interdict

[20] The requirements for an interim interdict are the following:

(a) A prima facie right;

(b) A well-grounded apprehension of irreparable harm if the interim relief is not granted and the ultimate relief is eventually granted;

(c) The balance of convenience should favour the granting of an interim interdict;

(d) The applicant has no other satisfactory remedy.

(See The Law of South Africa, First Reissue, second edition

vol.11, page 400 para 403)

[21] The second respondent's attitude in respect of the enquiry as to whether the applicant had met the requirements for an interim interdict appears from the submissions of Advocate Arendse SC, the second respondent's counsel, to have been the following:

"The applicant filed urgent interim interdictory relief against the first respondent... pertaining to a dispute on a contract between the parties. The Minister of Defence and Military Veterans (The Minister) has no interest in that dispute and makes no submissions in respect of the contractual dispute between the applicant and the first respondent. The Minister will only address a limited issue to the dispute and it is whether a court should interdict her from performing and exercising her legislative functions to offer assistance to organs of state if it is in the public interest or an emergency."

A prima facie right

[22] The applicant relied on a contractual and constitutional right, alternatively the legitimate expectation, to good faith negotiations with the first respondent in respect of the conclusion of a 1-year contract. Advocate Rosenberg SC, the first respondent's counsel, submitted that this court had already found that the applicant was not entitled to the declaratories, sought nor to any order directing the first respondent to enter into or conclude good faith negotiations with it for the conclusion of a 1-year contract for the provision of aviation services. He relied on the matter of Plettenberg Bay Entertainment (Pty) Ltd v Minister van Wet en order en 'n Ander 1993 (2) SA 396 (C) for the submission that this court does not have a discretion to grant an interdict for the protection of a right that the court has already found the applicant was not entitled to.

[23] The court in the Plettenberg Bay matter was seized with an application for an interim interdict allowing the applicant in that matter to operate a casino pending an appeal of that court's dismissal of the same interim relief in that main application. The facts of that case appear from page 398 paragraphs g-i to have been the following:

"In die hoofaansoek het applikant aansoek gedoen vir n interdik hangende die afhandeling van 'n aksie vir a finale interdik tot dieselfde effek. Ooreenkomstig die welbekende vereistes vir die toestaan van n pendente lite interdik, moes appiikant sy reg, ter beskerming waarvan die interdik sou dien, minstens op 'n prima facie basis bewys. Die reg waarop appiikant in hierdie verband gesteun het. was sy reg om n casino te bedryf. Die beweerde basis van hierdie reg was die oorgangsbepaling wat vervat is in art 7 van die Wysigingswet op Dobbelary 144 van 1992. ... Namens respondente is die hoofaansoek bestry uitsluitlik op die basis dat appiikant nie daarin geslaag het om sy casino-bedrywighede binne die kader van art 7 tuis te bring nie. dat die casino dus op appiikant se eie weergawe onwetting was en dat appiikant deriialwe geen reg uitgemaak het om die casino te bedryf nie In my uitspraak in die hoofaansoek het ek die respondente gelyk gegee in hiedie standpunt en het ek derhalwe applikante se aansoek om 'n pendente lite aansoek van die hand gewys ten spyte daarvan dat ek aanvaar het dat die applikante voldoen het aan die ander bekende vereistes vir 'n pendente lite aansoek. soos balans van geriefen onstentenis van 'n ander remedie. Kortom was my beslissing in die hoofaansoek dus gefundeer op die basis dat applikante geen reg uitgemaak het om 'n casino te bedryf nie."

[24] As indicated above. Blignault J found that the applicant had established a prima facie right in the interim application. However, in a supplementary note, the first respondent has submitted that it would be illogical to confine the Plettenberg Bay principle to cases where the relief claimed in the main application was pendent lite or interim in nature. That, so the argument went, would undermine the principle. I disagree. In dismissing the main application where the test was different, I found that the applicant had not met the requirements for a final interdict. In my view, that is an important distinction between the present matter and the Plettenberg Bay matter. I am also persuaded that to hold that a court in the circumstances of this matter did not have discretion would be at odds with our Constitutional dispensation which did not exist when the Plettenberg Bay matter was decided.

[25] Therefore. I am of the view that this court is not precluded from enquiring whether on these papers the applicant has established the existence of a substantive right which right can be prima facie although open to some doubt.

[26] The second respondent, who did not file any papers in the main application, has done so in this application and has said that:

-.. .However, my immediate concern following my discussion with my colleague. Ms. Peters was that the first respondent had claimed that they needed emergency assistance due to the fact that the contract with the applicant was due to expire at the end of June 2010.... What I had to consider was my statutory duties and functions in relation to a strategic partner in government which was crying out for assistance.

... accordingly, I confirm that the assistance provided by the SANDF to the first respondent is on an ad hoc nature, and that no formal arrangement to date has been concluded between the parties as the issue remains under discussion given the dispute between the applicant and the first respondent, and certain statutory constraints that may preclude a formal contractual relationship between the applicant and the SANDF."

[27] The applicant has alleged that instead of it being an emergency, the first respondent was merely seeking to avoid the consequences of its obligation to negotiate a 1-year contract with the applicant. That right has on these papers been established at least prima facie although open to some doubt I have in the main application found that the first respondent held the negotiation process with the applicant to ransom while it sought the assistance of the second respondent, its preferred service provider The second respondent has inadvertently confirmed that finding.

Irreparable harm

[28] In an attempt to prove that it will suffer irreparable harm, the applicant alleged the following:

1. Because it rendered a unique service to the first respondent, the applicant had acquired specialised equipment tailor-made to the first respondent's requirements. The first respondent was the applicant's only client.

Therefore, at least in the short term, the applicant lacked the time and capacity to adapt its equipment and general operations to suit the general commercial market Without the required adaptation, the applicant would have difficulty sourcing alternative commercial work.

2. Consequently, in the absence of interim relief, the applicant faced imminent closure with ensuing job losses.

3. As indicated above, the applicant leased the helicopters it used to perform the aviation services and is. in terms of those contracts, liable for certain monthly expenses such as insurance payments.

4. In addition, the applicant indicated that the first respondent had put its required aviation services, which the applicant rendered until 11 February, out to tender. It follows that the first respondent could potentially enter into a contract with a third party thereby denying the applicant its opportunity to engage in good faith negotiations with a view to concluding a 1-year contract as contemplated by the board resolution of 25 May 2010.

[29] As indicated above, the first respondent contends that the applicant's withdrawal on 11 February contradicts its claim of irreparable harm.

The circumstances that led to the applicant's withdrawal appear from correspondence, dated 10 February 2011, in which the applicant's attorney of record informed the first respondent that:

"...(3) Our client is of the view that since that handing-down on the 4^th of February 2011 of judgment by Baartman, J, a contractual relationship no longer exist between our respective clients. We have furthermore advised our client that the noting of an appeal against the aforesaid Judgment does not serve to resuscitate the order of Blignault, J made on 21 July 2010.

(4) We record that since the 5"¹ of February 2011 our client has been providing aviation-and ancillary-services to your client at the latter's special request. Our instructions in this regard are that the parties have not agreed on the terms upon which such services are being provided and our client has, accordingly, instructed us to inform you. as we hereby do, that it is only prepared to continue to providing these services on the terms set out in the Schedule attached hereto.

(5) Our client requires you to confirm to us, in writing, by no later than 16h30 tomorrow that your client accepts the above terms, failing which it will with effect from 17h00 tomorrow cease to provide the aforesaid services."

[30] Instead of accepting the applicant's demands, the first respondent sought and obtained the assistance of the second respondent. I have had the benefit of the history of the stormy contractual relations between the applicant and the first respondent as it appears from the papers filed in the main and the present applications I am therefore persuaded that the applicant's withdrawal is consistent with the tactics on the part of both parties in their relationship; the first respondent secretively stringing the applicant along while holding out for a favourable response from the second respondent, and the applicant threatening to bring the applicant's off-shore activities to a halt and so create an emergency in which to negotiate. It appears from the papers that the applicant was aware or at least suspected that the first respondent was again seeking to obtain the services of the second respondent when it demanded revised rates.

[31] The first respondent bears the onus of proving waiver. I am not persuaded that the conduct of the applicant, in the circumstances of this matter, was such as to leave no reasonable doubt that it intended to waive its right to seek interim relief. It follows that the applicant succeeded in establishing a well-grounded apprehension of irreparable harm.

The balance of convenience

[32] Nicholson J in the matter of Ladychin Investments v South African National Roads Agency 2001 (3) SA 344 (N) at 353 paras F-l said the following on the subject of the balance of convenience:

"Where the applicant cannot show a clear right then he has to show a right which, though prima facie established is open to some doubt. In that event, the applicant will have to show that the balance of convenience favours him. The test for the ground of relief involves a consideration of the prospects of success and the balance of convenience - the stronger the prospects of success, the less the need for such balance to favour the applicant; the weaker the prospects of success the greater the need for the balance of convenience to favour him. By balance of convenience is meant the prejudice to the applicant if the interdict is refused weighed against the prejudice to the respondent if it be granted.

Even if there are material conflicts of fact, the Courts will still grant interim relief. The proper approach is to take the facts as set out by the applicant, together with any facts set out by the respondent, which the applicant cannot dispute and consider whether, having regard to the inherent probabilities the applicant should on those facts obtain final relief at a trial."

[33] The basis on which the applicant alleged that it would suffer irreparable harm was not seriously disputed; instead, the first respondent sought to discount it based on the applicant's withdrawal on 11 February 2011, which withdrawal I have dealt with above. Advocate Rosenberg SC further submitted that the claim of irreparable harm was negated by the "leisurely pace" at which the applicant prosecuted its application for interim relief, approximately 6 weeks, when it had ample opportunity to be heard earlier. I share that sentiment; however, it is only one of the factors I have to take into consideration. In the circumstances of this matter, that fact does not have decisive persuasion.

[34] I have considered that at present the second respondent is providing aviation services to the first respondent on an emergency basis and that the applicant is able to resume service immediately. I have dealt above with the alleged prejudice that the applicant would suffer if it is not granted interim relief. In my view, the balance of convenience strongly favours the applicant.

The use of an alternative helicopter - Bell 212

[35] I have indicated above the circumstances that led to the introduction of the Bell 212 into the aviation services relationship between the applicant and the first respondent.

[36] The first respondent has filed an affidavit by Brink, apparently not an expert in the field, in which it raised several concerns about the safety of the Bell 212. The applicant had in turn filed an expert affidavit by Gideon Johannes Pieter Burger (Burger), from which it appeared that he was a duly licensed and certified helicopter pilot and, in particular, his pilot's licence authorised him to operate a Sikorsky S-61 ZS RFU and a Bell 212. He indicated that for the last

3 years, he had been employed by the applicant to undertake flights under the aviation services contract that had expired on 30 June 2010. Prior thereto. Burger had performed the services on behalf of the applicants' predecessor in title, CHC Helicopters, and in the process had accumulated 7 068 flying hours of which 3 500 hours were in respect of off-shore operations.

[37] Burger had also previously been employed by the South African Air Force (SAAF) as an ORYX helicopter pilot and instructor. As indicated above, the second respondent was currently rendering aviation services to the first respondent with ORYX helicopters. Burger alleged that the ORYX helicopters were not suitable for the relevant off-shore operations in that they neither met the safety standards set by the Civil Aviation Authority (CAA) nor those of International Association of Oil and Gas Produces Standards (the OGP standards) for the aviation transport of passengers to and from ships as well as oil and gas platforms worldwide.

[38] According to Burger. ORYX helicopters are certified for military type off-shore operations but not for commercial industrial off-shore operations. In my view Burger, an expert, has authoritatively disposed of all the safety concerns raised by Brink. Burger asserted and in my view proved that the Bell 212 was a suitable replacement for the withdrawn Sikorsky. I do not find it necessary to deal in any detail with Burgers reasoning, which I accept, because the first respondent had already agreed to the use of the Bell 212 although only on an interim basis as recorded in the order by Erasmus J.

No alternative remedy

[39] The first respondent submitted that a damages claim would be a satisfactory alternative remedy available to the applicant. The applicant has denied that and has indicated that it was likely to cease its operations if unsuccessful in this application. I have already found that the applicant's withdrawal of services was its bargaining tool in the negotiation process for improved rates.

[40] I am not persuaded that a damages claim, in the circumstances of this matter, is a satisfactory alternative remedy.

THE SECOND RESPONDENT

[41] The second respondent responded to an alleged emergency call from a "strategic partner in government" as she was obliged to do. In my view, no case has been made out for interim relief against the second respondent.

CONCLUSION

[42] I, for the reasons set out above, find that the applicant has established a prima facie right, although open to some doubt, for interim relief against the first respondent. The balance of convenience so strongly favours the applicant that I am persuaded to exercise my discretion in its favour.

ORDER

[43] I therefore grant interim relief as per the order annexed hereto marked 'X'.

BAARTMAN, J

IN THE HIGH COURT OF SOUTH AFRICA

(WESTERN CAPE HIGH COURT, CAPE TOWN)

BEFORE THE HONOURABLE JUDGE BAARTMAN

CAPE TOWN: Wednesday, 01 June 2011

Case Number: 14366/2010 4610/2011

In the matter between:

Indwe Aviation (Pty) Limited Applicant

and

The Petroleum Oil and Gas Corporation

of South Africa (Pty) Limited First Respondent

The Minister of Defence Second Respondent

ORDER

Having heard counsel for the applicant and the respondents and having read the papers filed of record:

IT IS ORDERED THAT:

[1] Pending the outcome of an appeal before the Supreme Court of Appeal against the orders and judgment handed down under case no. 14366/2010 on 4 February 2011:

(a) The first respondent is directed to allow the applicant to provide the aviation service envisaged in the order of Blignault J issued under case number 14366/2010 on 21 July 2010 subject to the provisions of paragraph (b) below

(b) Pending determination of the applicant's contempt application under case no 1875/2011 (and in event of such application being determined in the applicant's favour pending the aforesaid judgment of the SCA). the applicant may render the service by employing Sikorsky S-61 and Bell 212 helicopters as in service immediately preceding the order of 4 February 2011.

(c) The first respondent is interdicted and restrained from taking any further steps in respect of the tender issued under tender no. CTT5401 on or about 6 April 2011 for the provision of aviation services.

[2] The first respondent shall bear the applicant's costs of this application, including the costs of two counsel

[3] The application against the second respondent is dismissed with costs such costs to include the costs of two counsel.

BY ORDER OF COURT

COURT REGISTRAR

Western Cape High Court