CemAir in high court dispute with Swissport SA

Ordered to return airport ground services provider’s equipment.

Privately owned South African airline CemAir has been ordered by the High Court in Johannesburg to return all the equipment owned by airport ground services provider Swissport South Africa that it has in its possession by Sunday.

In a judgment handed down on Tuesday, Judge Leonie Windell ordered CemAir to return the equipment – airport passenger buses, baggage wagons, ground power units, air start units, a narrow body tug and three passenger aid units – within five days of her order.

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She further ordered that if CemAir fails to return the equipment within the stipulated time, the Sheriff of the High Court is then authorised to attach and remove the equipment and deliver it to Swissport’s premises at CemAir’s cost.

Windell said CemAir’s defence essentially is that the parties entered into a tacit lease agreement in terms of which Swissport leased the equipment to CemAir pending a sale agreement that may or may not be entered into at a later stage, and that it is therefore entitled to retain possession of the equipment.

Agreements

In terms of the many agreements between the parties, Swissport provided CemAir with aviation ground handling-related apparatus and services for about seven years prior to April 2023.

On 28 March 2023, after the previous agreements had come to an end, CemAir CEO Miles van der Molen requested a month-to-month lease for the equipment.

This resulted in Swissport and CemAir on 31 March 2023 executing a written “Equipment Lease Agreement (ELA)”.

CemAir was granted permission by the ELA to lease the equipment at many airports located throughout South Africa – but the agreement was only valid for one month, with an expiry date of 30 April 2023 unless it was extended by mutual consent.

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The ELA contained a table that delineated the equipment and the corresponding amounts payable per item, with the rental fee required to be paid in advance.

The ELA was not extended and lapsed, but CemAir failed on 30 April 2023 to return the leased equipment in its possession to Swissport, which on 1 May 2023 did not request the return of the equipment.

Purchase inquiry

Van der Molen on 15 May 2023 inquired about the potential sale of the equipment to CemAir through an email to a Ms Khoza.

Ms Khoza advised on the same day that a possible sale could be considered subject to the approval of the Swissport Group and provided all monies outstanding and owed to Swissport by CemAir were settled.

She also requested CemAir to provide a list of equipment it was considering purchasing.

Judge Windell said to date, no such list was provided, and the dispute about the outstanding monies related to the previous agreements and not to the ELA between the parties is ongoing.

Advance payment for equipment use

CemAir received correspondence from Swissport’s instructing attorney on 18 May 2023 stating the ELA required an advance payment by CemAir for the use of the equipment and an invoice was issued in this regard by Swissport on 1 April 2023.

Swissport’s attorneys demanded payment of the R569 010.19, which was outstanding and payable, plus interest at prime plus 2% into Swissport’s account by no later than 4.30pm on 23 May 2023.

Windell said it is well-established that a party wishing to rely on a tacit agreement must plead and prove the facts from which a court can infer that a genuine and actual consensus occurred.

She said it is unclear from the answering affidavit and the circumstances of the matter as to which conduct of Swissport CemAir relied on to infer that a tacit agreement was reached.

Windell said the circumstances of this case in fact do not provide any evidence that a tacit agreement was entered into.

CemAir, for instance, was denied permission to collect equipment on 22 May 2023 or any subsequent date despite CemAir’s efforts to do so.

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“This contradicts the terms of the alleged tacit agreement.

“[Swissport] had been requesting the return of all equipment in [CemAir’s] custody since 6 June 2023,” she said.

“[CemAir’s] failure to do so was a unilateral action and does not represent a consensus between the parties or an unequivocal act on the part of [Swissport] that could potentially give rise to a tacit agreement.”

Windell said CemAir claimed the tacit agreement commenced upon the termination of the ELA on 30 April 2023.

Payments and non-payment

However, CemAir had never settled a full invoice issued by Swissport in respect of the leased equipment pursuant to its claimed tacit agreement, and most payments were only made after this application was launched.

Windell said there is no indication the parties engaged in any conduct that would suggest an offer and acceptance or a meeting of the minds on the terms of the purported tacit agreement.

She said Swissport’s comprehensive response to CemAir’s claims and the commercially prejudicial terms of the tacit agreement with respect to Swissport demonstrate that the parties were consistently at odds and that no agreement was reached.

She said CemAir’s reliance on the email dated 23 June 2023, in which Swissport attached three invoices for payment, is in her view not sufficient to prove the existence of a tacit agreement.

Windell said Swissport confirmed it was merely attempting to recover at least part of the substantial monies owed to it by CemAir and it was by no means an indication of the existence of a tacit agreement.

She said there is no basis to believe there was any tacit agreement pending a sale agreement – the alleged potential sale agreement claimed by CemAir clearly reached no further than the inquiry or discussion stage, and there was no certainty or undertaking that such a sale agreement would ever come to fruition or would even be possible.

‘Far-fetched’

She said CemAir’s defence, which it disclosed on 31 May 2023 in a letter authored by its in-house legal advisor, was founded on a lien in lieu of a contractual damages claim, as evidenced by the extensive correspondence between the parties.

Windell said no reference was made to the existence of a tacit agreement between the parties that would allow CemAir to retain possession of Swissport’s equipment, and CemAir did not allege the existence of a tacit lease agreement until the answering affidavit was submitted on 30 October 2023.

“The purported tacit agreement is clearly an afterthought in an attempt to escape liability,” she said.

“[CemAir’s] defence of a tacit agreement is untenable and far-fetched and can be rejected outright.

“I am satisfied that the respondent [CemAir] has no legal right to retain possession of the equipment and was unable to show cause why the equipment should not be returned to the applicant [Swissport].”

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