Case Law[2023] ZAGPPHC 2017South Africa
M.M obo D.M v Road Accident Fund (15651/201) [2023] ZAGPPHC 2017 (1 December 2023)
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# South Africa: North Gauteng High Court, Pretoria
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## M.M obo D.M v Road Accident Fund (15651/201) [2023] ZAGPPHC 2017 (1 December 2023)
M.M obo D.M v Road Accident Fund (15651/201) [2023] ZAGPPHC 2017 (1 December 2023)
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sino date 1 December 2023
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REPUBLIC OF SOUTH
AFRICA
IN THE HIGH COURT OF
SOUTH AFRICA
GAUTENG DIVISION,
PRETORIA
Case Number:
15651/201
REPORTABLE
OF INTEREST TO OTHER
JUDGES
NOT REVISED
In the matter between:
MM
obo DM
Plaintiff
And
ROAD
ACCIDENT FUND
Defendant
Delivered
:
This judgment was prepared and authored by the Judge whose name is
reflected and is handed down electronically by circulation
to the
parties/their legal representatives by e-mail and by uploading it to
the electronic file of this matter on Caselines. The
date and for
hand-down is deemed to be 1 December 2023.
JUDGMENT
FLATELA, J
[1]
The Plaintiff instituted a claim for
damages against the Road Accident Fund (“the Defendant”)
for injuries sustained
by DM, her minor child, in a motor
vehicle-pedestrian (“MVP”) accident which occurred on 4
October 2013 as a result
of the negligent driving of the insured
driver. DM was three years old at the time. The Plaintiff instituted
this action in her
capacity as the mother and natural guardian of the
minor child. She instructed Mr. Nico Brits (“Brits”) of
Brits &
Beukes Inc (hereinafter, “the Plaintiff’s
attorneys”) of Delmas to prosecute this claim on her behalf.
Mr. Brits
then instructed Savage Jooste & Adams Attorneys
(hereinafter, “SJA” attorneys) of Pretoria to serve as
correspondent
attorneys.
[2]
By agreement between the parties, the
Defendant conceded merits 100% in favour of the Plaintiff’s
proven damages. The agreement
was made an order of Court by Ledwaba
DJP on 6 June 2016.
[3]
Mr. Thomas Bell (“Bell”) from
the State Attorney’s office appeared for the Defendant. The
Plaintiff was represented
by Adv. van Dyk with Mrs. Mariette Havemann
(“Havemann”) from SJA attorneys. I was informed that the
loss of earnings
claim was settled
inter-parties
in the amount of R 1 086 780.75 (one million, eighty-six
thousand, seven-hundred and eighty rands, seventy-five cents). The
settlement offer was accepted by SJA attorneys on Friday 24 February
2023.
[4]
I was called to determine the quantum of
general damages. The parties were unable to agree on what would be
fair and reasonable
compensation for general damages.
[5]
From the settlement offer tendered, the
Defendant also offered to settle general damages but the amount
offered was rejected by
the Plaintiff’s attorneys on the basis
that it was unreasonable. I was also informed by Van Dyk that the
Defendant had increased
the offer to R 800 000 (eight-hundred
thousand rands), that offer was unacceptable too. Adv van Dyk
submitted that an amount of
R 1 250 000 (one million, two-hundred and
fifty thousand rands) was a fair and reasonable compensation to the
Plaintiff for general
damages.
[6]
An application for the admission of
experts’ evidence, in terms of Rule 38(2) of the Uniform Rules
of Court, was made on behalf
of the Plaintiff. I granted the
application. I proceeded to hear submissions from counsel on general
damages.
Factual Background
[7]
The Plaintiff averred that on or about 4
October 2013, at 15h40, DM was walking towards a tuck shop near his
home with his ten-year-old
brother. He strayed away from his brother
and went into the road where he was hit by a passing taxi. The
Plaintiff found him lying
on the road and bleeding profusely from the
left leg and left foot.
[8]
The insured driver took him to Bernice
Samuel Hospital where he was seen, stabilized, and admitted for a
night or two. DM sustained
a degloving injury to his left heel. He
was then transferred to Witbank Hospital where he had a skin graft to
cover the defect.
Witbank Hospital admitted him as an in-patient for
approximately two months and one week. Whilst in Witbank, the
Plaintiff presented
DM to Dr. Alastair Lamont, a Plastic and
Reconstructive Surgeon who performed over three operations involving
debridement and skin
grafting to the wound on his left ankle and left
foot to treat the injury.
Injuries sustained by
DM.
[9]
According to Dr. Elmo van Wyk, an
independent medical examiner who completed the RAF 4 Form, DM
sustained a degloving injury to
his left heel and his Whole Person
Impairment (WPI) is 7%. The
sequelae
of his injuries are as follows:
9.1
A hypertrophic scar overlying the
heel of the left foot.
9.2
Cosmetic scarring of the left foot
and left thigh.
9.3
Shortening of the Achilles tendon and
thus resulting in an abnormal gait.
The Medico-legal
Reports
[10]
DM was also examined by several other
experts, including but not limited to, orthopedic surgeons, plastic
and reconstructive surgeons,
radiologists, a neurosurgeon, a clinical
psychologist, an educational psychologist, and occupational
therapist. His loss of earnings
was assessed by an industrial
psychologist and quantified by an Actuary.
[11]
Save for the reports of Drs Lamont and Van
Heerden, both of whom are plastic and reconstructive surgeons, and
Dr. Hans B Enslin,
the Plaintiff’s orthopedic surgeon, none of
the other reports from the various experts that examined DM are
relevant to the
issue before me. DM has already been compensated for
the loss of his earning capacity.
[12]
Whilst the reports of both Drs Lamont and
Van Heerden are relevant, only the Report of Dr. Lamont is discussed.
This I do without
lessening the importance of Dr. Van Heerden’s
report, and neither elevating that of his counterpart. These reports
are, for
the most part,
ad idem,
save
to highlight one or two points covered by the one and not the other
report, it would be repetitive to discuss both reports.
However, the
report of Dr. Hans. B Enslin, the Plaintiff’s orthopedic
surgeon, I discuss in full.
Dr. Hans B. Enslin, an
Orthopedic Surgeon
[13]
Dr. Enslin noted a severe degloving injury
to DM’s left heel, which has caused a deformity of his hind
foot. At the time of
his Report, which was two years after the
accident and due to the hardness of the scar and abnormal pressure on
the heel, Dr. Enslin
observed that the varus deformity of the left
heel is already 10 degrees more than the right. He opined that the
varus deformity
of DM’s heel will probably increase as he
grows. Dr. Enslin’s clinical examination results are as
follows:
a.
Left foot and heel-
his
gait is with a limp. A varus deformity of his heel is seen with
forefoot in a neutral position.
b.
Cosmetic scarring
i.
Left heel
–
a
6cm x 7cm scar with the extension of 7cm on the dorsum of the foot.
ii.
Left thigh
–
a
scar measuring 12cm x 11cm over the anterior aspect of the thigh and
four horizontal scars each measuring 4cm.
c.
Radiological examination
i.
Left foot –
·
a 21° varus deformity of the os calcis
in respect of the tibia on the left side compared to an 11° varus
of the same bone.
·
Broadening of the heel is seen.
·
Subcutaneous tissue is seen, which is
limited to a depth of 1cm on the axial view of the os calcis compared
to a 2cm of soft tissue.
·
The ankle joint appears normal on the
lateral view of the left ankle.
d.
Commentary – by Dr. Enslin
i.
The nature and extent of the injury by the
minor is a severe degloving injury of his left heel, which was
accompanied by severe
pain, which cannot be accurately verbalized by
the patient.
i.
The prolonged period of admission and
resultant separation from his mother would have been traumatic
coupled with the PTSD that
would have been occasioned by the
accident.
ii.
Daily dressings were necessary after the
initial debridement the day after the accident. A skin graft was
performed, and the result
thereof has not been successful. He has a
covering of the bone with functions in the tendons of his foot, but
he has a varus deformity
of his heel and very little subcutaneous
cover. He has the potential to develop degenerative changes in his
subtalar joint if he
is not correctly treated for the varus deformity
of his heel.
iii.
The Patient’s Whole Person Impairment
is 2% due to the injury to his left foot subtalar joint without
narrowing, but with
a varus deformity of the heel.
iv.
If he develops arthritis in his subtalar
joint, the impairment could increase to 2% of the lower extremity
impairment converted
to 9% of the whole person. His impairment is of
importance because of the malfunction in his hind foot, which will,
if he is left
untreated, prevent him from performing prolonged
standing or walking tasks.
Dr. Alastair Lamont -
Plastic and Reconstructive Surgeon
[14]
Upon examination, Dr. Alastair Lamont, a
Plastic and Reconstructive Surgeon, noted the following scars and/or
functional disabilities:
a.
Left
thigh.
There
is a widespread area of donor skin grafting on the left thigh. It
appears as if two areas of grafts have been taken from this
site
encompassing an area measuring 12cm in a vertical dimension measuring
approximately 11cm. These scarred areas represent typical
donor sites
caused by “
deep
spilt”
skin grafts and not
"full
thickness",
as reported by Dr. Van Heerden.
[1]
These
areas have at some time been hypertrophic/keloid, but at present,
these scars appear to have softened and are stable.
b.
Left foot.
He
has a very deep laceration below the ankle joint on the medial
surface of the foot, measuring approximately 6cm in length
surrounding
suture marks.
c.
Left heel.
Over
the back of the left heel is an area of 6cm x 5cm of darkly pigmented
skin grafting. This area stretches from the posterior
aspect of the
weight-bearing part of the heel, up and backward, towards the area
insertion of the Achilles tendon into the back
of the Calcaneus.
d.
Achilles tendon.
The
doctor says that although shortening of the Achilles tendon has been
reported, this appears to be fairly limited in that the
passive
movements of the ankle joint are almost normal with a very slight
flexion restriction of approximately 5 degrees. However,
he will have
a functional shortening of the Achilles tendon as he will tend to
walk on the anterior section of his foot, avoiding
injury or pressure
to the sensitive skin grafting areas further posteriorly.
Furthermore, within the skin-grafted area, some scars
appear to
result from injury to this grafted site, and his mother reports that,
at times, this area does suffer light injuries.
e.
Whole Person body Impairment,
as
assessed from a plastic surgical point of view, Dr. Lamont finds the
Plaintiff’s WPI to be at approximately 15%.
[15]
Regarding future treatment, Dr. Lamont
said:
“
The
weight-bearing organ covering the calcaneus on the heel of a normal
foot is an extremely specialized organ that cannot be replaced
by
skin grafting. However, and fortunately, in the Plaintiff’s
case, not the entire area of the posterior calcaneal covering
has
been damaged, and due to the expected contraction seen in wounds
treated by skin grafting, this area has reduced over time
compared to
the illustrations provided. Furthermore, as he has not lost the total
weight-bearing part of his heel, he could withstand
weight on the
anterior part of his foot.”
[16]
He recommended that because of the slight
mobility in the fixation of the skin to the calcaneus, it may be
possible to bring the
weight-bearing area backward by excising part
of the pigmented scar. However, he warned that it is not advisable to
mobilize the
weight-bearing skin and, in so doing, reduce the
connection to the inferior surface of the calcaneus. Furthermore,
reducing this
rather large, scarred area would need to be done with
caution and circumspection. It is recommended that the procedure be
delayed
until DM is of age and can advocate for himself.
[17]
In his report, Dr. Van Heerden also opined
that the grafted area is amenable to surgical intervention. The
scars, however, are permanent
and not amenable to surgical
intervention. He determined the Plaintiff’s WPI to be 11%.
Discussion
[18]
Moseneke
DCJ in
Van
der Merwe v Road Accident Fund and Another (Women's Legal Centre
Trust as amicus curiae)
[2]
stated that:
“…
non-patrimonial
damages, which also bear the name of general damages, are utilised to
redress the deterioration of a highly personal
legal interests that
attaches to the body and personality of the claimant
.
However,
ordinarily the breach of a personal legal interest does not reduce
the individual’s estate and does not have a readily
determinable or direct monetary value. Therefore, general damages
are, so to speak, illiquid and are not instantly sounding in
money.
They are not susceptible to exact or immediate calculation in
monetary terms. In other words, there is no real relationship
between
the money and the loss. In bodily injury claims, well-established
variants of general damages include “pain and suffering”,
“disfigurement”, and “loss of amenities of life.
…
it is important
to recognise that a claim for non-patrimonial damages ultimately
assumes the form of a monetary award. Guided by
the facts of each
case and what is just and equitable, courts regularly assess and
award to claimants’ general damages sounding
in money. In this
sense, an award of general damages to redress a breach of a
personality right also accrues to the successful
claimant’s
patrimony. After all, the primary object of general damages too, in
the non–patrimonial sense, is to make
good the loss; to amend
the injury.”
[19]
Adv. van Dyk submitted that an amount of R
1 250 000 for general damages is reasonable, whereas the Defendant
was only willing to
offer R 800 000.
[20]
Van Dyk submitted that DM’s injury
cannot merely be classified as scarring or disfigurement. It is a
severe injury resulting
in the minor having leg shortening and an
ambulating limp. This, counsel argued, can be classified as a severe
femur resulting
in a leg length shortening together with severe
scarring, disfigurement, and loss of proper functioning of the left
foot. I do
not agree. None of the Plaintiff’s expert reports
support this submission that the Plaintiff’s orthopedic
injuries
being tantamount to him having suffered a leg shortening or
“losing an organ” as counsel put it. According to Dr.
Enslin,
the Plaintiff’s orthopedic surgeon, the injury
sustained is a degloving injury of the left heel, leaving behind some
severe
disfigurement and resulting in DM walking with an abnormal
gait.
[21]
The
Plaintiff's counsel also relied on the experts' consensus of DM’s
academic difficulties as motivation for the claimed
sum. This claim
falls within future loss of earning capacity, which DM has already
been compensated for. The plaintiff’s
counsel referred to a
number of judgements in support of his submissions none of which I
found applicable in this matter
[3]
.
[22]
In
arriving at an appropriate award for general damages, the learned
author JJ Gauntlett SC in Volume I: General Principles:
The
Quantum of Damages in Bodily and Fatal Injury Cases
4
ed (1995) at 5 referred to the case of
Sandler
v Wholesale Coal Supplies Ltd
[4]
where the learned Watermeyer JA stated:
“
... [l]t must be
recognised that though the law attempts to repair the wrong done to a
sufferer who has received personal injuries
in an accident by
compensating him in money...there are no scales by which pain and
suffering can be measured, and there is no
relationship between pain
and money which makes to express the one in terms of the other with
any approach to certainty. The amount
to be awarded as compensation
can only be determined by the broadest general considerations...”
[23]
In
arriving at the award, I make below, I have paid regard to the cases
mentioned in
Mashigo
v Road Accident Fund
[5]
and the following cases:
Tobi v RAF
[6]
– general damages were awarded in the amount of R 450 000 (
R
730 112.51 in 2023) to a Plaintiff that sust
ained
some scarring to his legs which were unsightly. The Plaintiff was
left, not only with scarring to his legs, but with a disfigured
and
swollen left leg which interfered with various lymphatic functions as
well as scarring to his right knee. He received several
skin grafts.
The general damages awarded to him also considered that his
ambulation was restricted, and he could no longer operate
as a heavy
vehicle driver. On some days, the swelling was so bad that he could
not even put on or take off his pants.
Kobeqo v RAF
[7]
- in this matter a five-year-old girl was struck by a car resulting
in a degloving injury of her right lower leg. She suffered
loss of
the right leg muscle bulk. And she had extensive scarring which she
said made her feel “very sad” and "ugly".
R 350
000 (
R
567 865.28 in 2023)
was awarded for general damages.
[24]
In
NK
v MEC for Health, Gauteng
[8]
it was held:
“
It is also
important that awards, where the sequelae of an accident are
substantially similar, should be consonant with one another,
across
the land. Consistency, predictability, and reliability are intrinsic
to the rule of law. Apart from other considerations,
the principles
facilitate the settlement of disputes as to quantum.”
[25]
However,
this dictum should be read with the principle laid down in
SA
Eagle Insurance Co Ltd v Hartley
[9]
where it was held that when assessing comparable awards, adjustments
should be made to the monetary value of those awards so that
they are
reflected in present day currency values to recognize the ravages of
inflation. But this too is subject to Eksteen J’s
cautionary
note in
Ncama
v Road Accident Fund
[10]
where
he
cautioned
against reckless inflation of awards by reckless application of the
consumer price index. His words were that:
“
The Court will
generally be guided by awards previously made in comparable cases and
will be alive to the tendency for awards to
be higher in recent years
than has previously been the case. In considering previous awards it
is appropriate to have regard to
the depreciating value of money due
to the ravages of inflation. It would however be inappropriate to
escalate such awards by a
slavish application of the consumer price
index. (See for example
AA Onderlinge Assuransie Assosiasie Bpk
v Sodoms
1980 (3) SA 134
(A).)’’.(Original
emphasis)
[26] I have taken the
following considerations into account:
a.
DM walks with a limp. He wears special soft
shoes to help alleviate the pain by providing inner support and
comfort for when he
is walking about. His regular conventional
physical activities for a child of his age are severely limited by
his left foot and
ankle injury.
b.
Physically, DM complains of pain in the
left foot occurring a few times a week. He uses Paracetamol syrup
three times a week to
relieve the pain in his left foot. His walking
endurance is limited. He can only run slowly. He does not want to
wear shoes. He
is self-conscious about the defect of the left foot
and can no longer participate in any sporting activities with his
friends,
whether at home or at school. The intensity of his symptoms
has not improved since the accident.
c.
Drs Enslin and Lamont’s respective
reports each give to an anticipation of the minor experiencing future
complications over
the total of his lifespan because of the injuries
sustained in the accident.
d.
The difference in compensation of the sum
offered by the Defendant from that which is sought by the Plaintiff
is only R 450 000
(four hundred and fifty thousand rands).
e.
Holmes
J, in
Pitt
v Economic Insurance Co Ltd,
[11]
cautioned that “
[T]he
court must take care to see that its award is fair to both sides –
it must give just compensation to the plaintiff,
but it must not pour
out largesse from the horn of plenty at the defendant’s
expense.”
[27] In the circumstances
hereof, I find that an award of R 900 000. (Nine Hundred
Thousand Rand) is fair and adequate compensation
to the Plaintiff.
Original draft order
(1) – 27
th
February 2023 and its evaluation
[28] Having argued for
the above award, counsel for the Plaintiff presented a Draft Order to
be made an order of Court. It was submitted
that provisions were made
for the establishment of a Trust to protect the minor child's award.
Having considered the draft order
and having engaged counsel for the
Plaintiff on the financial implications of a Trust, counsel addressed
my concerns. Importantly,
he submitted that the establishment of a
Trust will not diminish the value of the award as the Defendant will
pay all the administration
costs of establishing the Trust.
[29] The draft order also
recorded that a contingency fee agreement was not applicable. I
doubted that this was the case as the
Plaintiff’s counsel, in
support of the establishment of the trust, referred me to the socio
-economic circumstances of the
minor child’s parents, which
were, that they are unemployed, indigent, and living in a shack. In
the absence of a contingency
fee agreement in a matter involving a
minor child, I enquired from counsel about the fee agreement that
governed the parties. The
response was that in the absence of a
contingency fee agreement, the parties would obviously enter into a
fee agreement. Van Dyk
could not give me a clear answer but assumed
that an attorney and own client fee agreement existed. I enquired
whether his instructing
attorney (who was present in Court) was able
to confirm whether there was an attorney and own client fee agreement
or not in the
absence of a contingency fee agreement. Ms Havemann
could not confirm either. She informed counsel that she had no
knowledge of
the existence of any fee agreement as her firm only
served as correspondent attorneys for the Plaintiff’s
attorneys, Brits
Beukes & Ingelyf Attorneys of Delmas.
[30] The Plaintiff’s
counsel had advised earlier that that the Plaintiff was present in
Court and had no issues with the establishment
of a Trust for her
minor child. The plaintiff was sitting right at the back row with her
minor child. I invited her to the witness
box so that she could clear
up the confusion a fee agreement that is applicable in this matter as
both counsel and Ms Havemann
had no knowledge regarding this issue,
and the Plaintiff’s attorney, Mr. Brits was not present in
Court to give clear instructions
. Counsel advised that the Plaintiff
did not understand English, and that no interpreter had been
organized for the proceedings.
I enquired as to the language she
speaks or understands. I was advised that she speaks IsiNdebele but
understands IsiZulu. I advised
that I was going to speak with the
Plaintiff in Isizulu. There was no objection from the Plaintiff's
counsel. He called the Plaintiff
to the stand to give clarity on the
issue.
[31] This invitation
appeared to have angered an unknown individual who was sitting in the
legal practitioners’ row behind
RAF’s counsel. As the
Plaintiff approached the witness stand, this unknown individual, whom
I would later come to learn to
be one of the Senior Counsel in this
division, began talking with the Plaintiff’s counsel Van Dyk,
using hand gestures whilst
the Court was in session. It was clear to
me that he had apprehension about the Plaintiff being put on the
witness stand, following
my directive. On 21 November 2023 the
said counsel apologised for his conduct and offered explanation,
albeit late. It appeared
that senior counsel had an interest in the
matter as he was previously briefed and had prepared the heads of
arguments. He became
unavailable on trial date as he was to commence
his duties as an acting judge of this division the following day. I
shall shy away
from making remarks on his conduct which appeared to
be unprofessional.
[32] I adjourned the
proceedings for Ms. Havemann to contact her instructing attorney Mr
Brits to take clear instructions on the
issue of the applicable fee
agreement.
[33] When the proceedings
resumed, the Plaintiff’s counsel informed me that a Contingency
Fee Agreement is applicable in this
matter and that there was no
attorney and client fee agreement in place. He explained that there
was a mistake in how this issue
was communicated. He apologised for
the “mistake” which was recorded in the original draft
order that the contingency
fee is not applicable. An amended draft
order reflecting the existence of the contingency fee agreement was
then uploaded on CaseLines.
[34] It is perhaps
prudent to explain why this line of enquiry was necessary. In its
offer for the settlement, the Fund has caveat
which reads as follows
: “
This offer is subject to confirmation regarding the
Contingency Fee Agreement concluded with the proof of
compliance with
sec 4 of CPA (Proof should be either two affidavits
i.e by attorney and the affidavit by claimant o(not 1 affidavit but
both affidavits
, alternatively proof of submission of 2 affidavits
with the Legal Practise Counsel or proof that both affidavits were
filed with
the Court and or where there is no Contingency
Agreement Fee in place , it must be recorded in the court order.
Alternatively,
the attorney must submit an affidavit to confirm that
there is no Contingency Fee Agreement confirmation regarding the
Contingency
Fee Agreement concluded with the proof of compliance with
sec 4 of the Contingency Fee Agreement Act”.
[35] The consequences
which flow from the Fund’s insistence to recording of a)
applicability of a contingency fees agreement;
or b) express
exclusion of it; and in either scenario to be so endorsed by a Court.
It is common cause that in the first scenario
where the contingency
fee is applicable, the contingency fee agreement is uploaded on
CaseLines or is handed in order for the court
to satisfy itself that
the agreement complies with the requirements of the Act. On scenario
(b) where Contingency Fee Agreement
is not applicable this begs the
question, whether the Court is then supposed to be satisfied with
submission from the legal practitioner
regarding the
non-applicability or the invalidity agreement contingency fees’
agreement? I think not. I think that the court
must satisfy itself
that the contingency fee is indeed not applicable, or it is indeed
invalid. Ordinarily, where a draft order
expressly excludes
applicability of a contingency fee agreement, the logical assumption
of the Court, in better circumstances where
ethical integrity
prevailed, as assumed of this noble profession, would have been that
an attorney and own client fee agreement
applies, and thus no need of
further enquiry. Save for the assumption of which I resist to infer,
the same declaration of exclusion
of a contingency fee agreement was
expressly recorded in the draft order of this case too.
[36] It bears to be borne
in mind that the majority of RAF Plaintiff are indigent, illiterate
and the most vulnerable persons of
our society who wholly rely on the
ethical integrity of their attorneys to have their best interested
represented, This trust,
and so has the case law and reasons giving
to the statistics of attorneys being either suspended or struck of
the roll, has unfortunately
now become a coin flipped on its head.
[37]
In the
first event, wherein it is stated that a contingency fees agreement
is not applicable, and for the Fund’s comfort,
excluded by
order of Court, the SCA has held in several judgements that
where the parties have agreed on an attorneys
and own client fee
agreement, the Court has no business in subjecting private contract
to a judicial enquiry.
[12]
The
SCA says, unlike in a contingency fees’ agreement, an attorney
and own client fee agreement is a private affair between
the attorney
and the client.
[13]
Furthermore, in the event of the latter taking issue about fees of
the former, the Plaintiff has recourse to the Taxing Master
if
the issue is about fees,
[14]
or if it is on any other issue, then the Legal Practise Council, as
the case may be.
[38] I am bound by the
decisions of the Supreme Court of Appeal. I must mention that the
facts in this matter are distinguishable
from the facts in Majope and
Others v The Road Accident Fund and other cases referred in that
whilst the counsel for the plaintiff
informed me that the contingency
fee agreement was not applicable, it appeared that the contingency
fee agreement not the attorney
and client fee agreement was
applicable.
[39] On 3 March 2023, Mr
Tjaart Nicolaas Brits of Brits & Beukes Attorneys in Delmas, the
Plaintiff's attorney of record, filed
an affidavit explaining that
the contingency fee agreement was applicable and affirmed that it had
been explained to the Plaintiff
in IsiZulu by Monica Masango and
Maria Elizabeth Sibanyoni, both employed in their firm. He stated
further that he was previously
instructed by the Plaintiff’s
husband, Jomo Mthimunye to prosecute his RAF claim following a motor
vehicle accident that
happened on 14 May 2008. Mr Brits was then
instructed by Mr Mthimunye to prosecute this claim on 21 May 2008.
This claim was successfully
prosecuted. He stated that the
Plaintiff’s husband was aware of the contingency fee agreement
as he consulted them both in
this matter. Supporting affidavits of
the Plaintiff, Mr Mthimunye and that of Ms Monica Masango and Ms
Sibanyoni, who purportedly
and verbally translated and explained the
terms of the Contingency Fee Agreement at the time of signing, were
filed on CaseLines
in support of the Plaintiff's attorney's
explanation.
[40] In her affidavit,
the Plaintiff further stated that she was in Court on 14 June 2018
when the merits were settled and the outcomes
of the hearing were
explained by Mr Buda, the Court’s interpreter in IsiZulu. A
copy of Mr Buda’s invoice was annexed
to the Plaintiff’s
confirmatory affidavit.
[41] I must state that it
is concerning that at the trial, there was no interpreter and yet
throughout the process, there was an
interpreter who was always
available to assist the Plaintiff in the translation of the
agreements and court proceedings. Not even
Ms Masango or Sibanyoni
were present on the day of the trial to assist with translation. In
any event, what the Plaintiff's attorney
did after the fact was what
I needed to know from the Plaintiff’s counsel during trial.
Therefore, this issue should have
been noncontentious.
[42] Having reserved
judgment, I noticed that the matter had a plethora of issues
regarding costs orders that were sought in the
draft orders, and
these concerned me. I issued several directives to parties’
legal address on these issues.
[43]
The
Plaintiff’s counsel submitted that the Contingency Fee
agreement was in compliance with the Contingency Fees Act
[15]
and was valid. I now consider whether the Contingency Fee Agreement
complied with the Act.
The Contingency Fees
Agreement
[44] In her confirmatory
affidavit, the Plaintiff states that Ms Masango explained the whole
RAF claims process to her in IsiZulu,
her language of choice. Ms
Masango further explained that she should not worry about paying the
attorney money because he takes
money at the end of the case, and
only upon him being successful in the prosecution of the claim. She
stated that she was happy
about the fact that she did not need to
worry about paying the attorney because she did not have money to
prosecute the claim with
her own ability. She was happy to pay the
attorney his fees at the end of the trial. The Plaintiff attached the
contingency fee
agreement annexed as “
MM2”
.
She stated that she understood that the attorneys can only
take a maximum of 25% of the claim or lesser amount depending on the
fees payable.
[45] I have now
considered the Contingency Fee Agreement entered into between the
Plaintiff and Mr Nico Brits. I find that that
the contingency
agreement is not in compliance with the provisions of the Act and is,
as I shall demonstrate hereunder, invalid,
and unenforceable.
[46] Attorneys(not the
attorneys in this matter) have expressed in Court that the
Contingency Fee Agreement is a complicated
contract to
understand, and for some obscure reason, of which has also been
argued before me with no particular clarity or understanding
why,
they argue that judgment of Mojapelo J in Masango v Road
Accident Fund
2016 (6) SA 508
(GJ) is the source of this
complication and/or that the confusion which lies patent to their
understanding of the CFA, is
attributable to it. Hence then, they
favour attorney and own client fee agreements. Others take a softer
stance; they say that
attorneys and client and own fee agreement are
more favourable to the clients’ than Contingency Fee
Agreements. If one goes
further in reasoning, it becomes apparent
that this too is also based on a gross misunderstanding of the
Contingency Fees Act.
I propose to deal first with the legal
framework of the Contingency Fee Agreement.
Legal Principles
The Act
[47]
The purpose
of the Contingency Fees Act was considered by the Supreme Court of
Appeal in
Price
Waterhouse Coopers Inc. & Others v National Potato Co-operative
Ltd.
[16]
Southwood AJA neatly summarised the purpose of the Act as follows:
“
The Contingency
Fees Act 66 of 1997 (which came into operation on 23 April 1999)
provides for two forms of contingency fee agreements
which attorneys
and advocates may enter into with their clients. The first, is a “no
win, no fees” agreement (s 2(1)(a))
and the second is an
agreement in terms of which the legal practitioner is entitled to
fees higher than the normal fee if the client
is successful (s
2(1)(b)). The second type of agreement is subject to limitations.
Higher fees may not exceed the normal fees of
the legal practitioner
by more than 100% and in the case of claims sounding in money this
fee may not exceed 25% of the total amount
awarded or any amount
obtained by the client in consequence of the proceedings, excluding
costs (s 2(2)). The Act has detailed
requirements for the agreement
(s 3), the procedure to be followed when a matter is settled (s 4)
and gives the client a right
of review (s 5). The professional
controlling bodies may make rules which they deem necessary to give
effect to the Act (s 6) and
the Minister of Justice may make
regulations for implementing and monitoring the provisions of the Act
(s 7). The clear intention
is that contingency fees be carefully
controlled. The Act was enacted to legitimise contingency fee
agreements between legal practitioners
and their clients which would
otherwise be prohibited by the common law. Any contingency fee
agreement between such parties which
is not covered by the Act is
therefore illegal. What is of significance, however, is that by
permitting “no win, no fees”
agreements the Legislature
has made speculative litigation possible. And by permitting increased
fee agreements the Legislature
has made it possible for legal
practitioners to receive part of the proceeds of the action.”
[48]
The
dictum in
Price
Waterhouse
Coopers Inc
has been followed in a number of cases
[17]
and I need not repeat same. However,
I
will briefly discuss those principles relevant to this matter.
[49]
In
Mfengwana
v Road Accident Fund
[18]
the
court held that:
“
Section 2 of the
Act is the core of the Act. It makes provision for contingency fee
agreements and for the higher-than-normal fee
that an attorney may
charge to ‘offset’ the risk of earning no fee in the
event of him or her not concluding a case
successfully. It provides:
‘
(1)
Notwithstanding anything to the contrary in any law or the common
law, a legal practitioner may, if in his or her opinion there
are
reasonable prospects that his or her client may be successful in any
proceedings, enter into an agreement with such client
in which it is
agreed-
(a) that the legal
practitioner shall not be entitled to any fees for services rendered
in respect of such proceedings unless
such client is successful in
such proceedings to the extent set out in such agreement;
(b) that the legal
practitioner shall be entitled to fees equal to or, subject to
subsection (2), higher than his or her normal
fees, set out in such
agreement, for any such services rendered, if such client is
successful in such proceedings to the extent
set out in such
agreement.
(2) Any fees referred to
in subsection (1) (b) which are higher than the normal fees of the
legal practitioner concerned (hereinafter
referred to as the 'success
fee'), shall not exceed such normal fees by more than 100 per cent:
Provided that, in the case of claims
sounding in money, the total of
any such success fee payable by the client to the legal practitioner,
shall not exceed 25 per cent
of the total amount awarded or any
amount obtained by the client in consequence of the proceedings
concerned, which amount shall
not, for purposes of calculating such
excess, include any costs.’”
[50]
In
Majope
and Another v RAF
,
[19]
Roelofse
AJ (as he then was) stated that:
“
The Act legalizes
services rendered by legal practitioners (i.e., attorneys and
counsel) on a contingency basis. Prior to the Act
services rendered
by legal practitioners on contingency, the common law forebodes. In
order for legal services to be rendered on
a contingency basis to be
legal and enforceable, it must be in terms of a contingency fee
agreement that must comply with section
3 of the Act - if not, an
agreement to render services on a contingency basis is null and void
and unenforceable.”
[51]
Section
3 of the Act deals with the prescribed form and content of the
agreement. It provides:
“
(1)
(a)
A contingency fees agreement shall be in writing
and
in the form prescribed by the Minister of Justice
,
which shall be published in the Gazette, after consultation with the
advocates’ and attorneys’ professions.
(b)
The Minister of Justice shall cause a
copy of the form referred to in paragraph
(a)
to be tabled in Parliament before such form is put into operation.
(2)
A contingency fees agreement shall be signed by the client concerned
or, if the client is a juristic person, by its duly authorised
representative, and the attorney representing such client and, where
applicable, shall be countersigned by the advocate concerned,
who
shall thereby become a party to the agreement.
(3)
A contingency fees agreement shall state—
(a)
the proceedings to which the agreement relates;
(b)
that, before the agreement was entered into, the client –
(i)
was advised of any other ways of
financing the litigation and of their respective implications;
(ii)
was informed of the normal rule that in
the event of his, her or it being unsuccessful in the proceedings,
he, she or it may be
liable to pay the taxed party and party costs of
his, her or its opponent in the proceedings;
(iii)
was informed that he, she, or it will
also be liable to pay the success fee in the event of success; and
(iv) understood the
meaning and purport of the agreement;
(c)
what will be
regarded by the parties to the agreement as constituting success or
partial success;
(d)
the circumstances in which the legal
practitioner’s fees and disbursements relating to the matter
are payable;
(e)
the amount which will be due, and the
consequences which will follow, in the event of the partial success
in the proceedings, and
in the event of the premature termination for
any reason of the agreement;
(f)
either the amounts payable or the method
to be used in calculating the amounts payable;
(g)
the manner in which disbursements made
or incurred by the legal practitioner on behalf of the client shall
be dealt with;
(h)
that the client will have a period of 14
days, calculated from the date of the agreement, during which he, she
or it will have the
right to withdraw from the agreement by giving
notice to the legal practitioner in writing: Provided that in the
event of withdrawal
the legal practitioner shall be entitled to fees
and disbursements in respect of any necessary or essential work done
to protect
the interests of the client during such period, calculated
on an attorney and client basis; and
(i)
the manner in which any amendment or
other agreements ancillary to that contingency fees agreement will be
dealt with.
(4) A copy of any
contingency fees agreement shall be delivered to the client concerned
upon the date on which such agreement is
signed.”
[52]
Section
4 of the Act, which deals with settlement and acceptance of
settlement offers, provides as follows:
“
(1)
Any offer of settlement made to any party who has entered into
a contingency fees agreement, may be accepted after the legal
practitioner
has filed an affidavit with the court, if the matter is
before court
(my emphasis),
or has filed an affidavit
with the professional controlling body, if the matter is not before
court, stating—
(a)
the full terms of settlement;
(b)
an estimate of the amount or other
relief that may be obtained by taking the matter to trial;
(c)
an estimate of the chances of success or
failure at trial;
(d)
an outline of the legal practitioner’s
fees if the matter is settled as compared to taking the matter to
trial;
(e)
the reasons why the settlement is
recommended;
(f)
that the matters contemplated in
paragraphs
(a)
to
(e)
were explained to the client, and the steps taken to ensure that the
client understands the explanation; and
(g)
that the legal practitioner was informed
by the client that he or she understands and accepts the terms of the
settlement.
(2
)
The affidavit referred to in subsection (1) must be accompanied by an
affidavit by the client, stating—
(a)
that he or she was notified in writing of the terms of the
settlement;
(b)
that the
terms of the settlement were explained to him or her, and that he or
she understands and agrees to them; and
(c)
his or her
attitude to the settlement.
(3)
Any settlement made where a contingency fees agreement has been
entered into, shall be made an order of court, if the matter
was
before court.
’
(my
emphasis)
Analysis
of the Terms of
the Contingency Fee’s agreement
concluded between the Plaintiff and Nico Brits of Brits & Beukes
Inc
[53] In this matter, the
contingency fee agreement is not drafted in terms of the prescribed
form, instead, it is incorporated in
a Special Power of Attorney. In
this Special Power of Attorney Incorporating the Contingency Fee
Agreement, the Plaintiff authorizes
and grants power of attorney to
Nico Brits of Brits & Beukes Inc “
to prosecute a claim
against the Road Accident Fund on
her
behalf and/or on behalf of minor son. The claim arises from a motor
vehicle pedestrian (MVP) accident which took place at Delmas
on
04/10/13 to
recover and receive on her behalf the
capital and “party and party costs” from the defendant in
respect of the claim;
and deduct the fees and disbursements from the
capital amount of the claim before payment of the balance to her.
[54] As I shall
demonstrate hereunder, the incorporation the Contingency Fee
Agreement into a special power of attorney as well
as the clauses
concerning the Contingency Fee itself, are all together, problematic,
invalid and unenforceable. The latter two
(invalidity and
unenforceability) are not uncommon. Many a times, Contingency Fee
Agreements are set aside by courts for this or
that other invalid
clause which then renders the whole agreement null and void.
[55] Below are the
relevant clauses:
“
Special
Power of Attorney incorporating (Contingency Fee Agreement)
On costs it
says:
Costs
3
.
The difference between party and party costs and attorney and own
client costs has been explained to me.
4.
I agree to pay fees in respect of the work done
by the nominees and / or such person delegated and / or instructed by
the firm at
the tariff set out herein below.
And
the contingency agreement stipulates
5.
Contingency fee agreement.
I will be bound to a
contingency fee agreement
, the terms of which are as follows:
5.1.
It is recorded that in the
opinion of the nominees there are reasonable prospects that I / we
may be successful in the proceedings
mentioned hereunder and the
nominees therefore undertake to recover no fees from me/ us unless:
5.1.1. I / we
am/are successful in such proceedings; or
5.1.2. The nominees,
as set out hereunder, become entitled to a fee in the event of
partial success in such proceedings.
5.2.
It is further recorded that
before the signing of this agreement I / we was / were:
5.2.1. Advised of
other ways of financing the litigation and of their respective
implications, namely normal payment on account
as set out in
paragraph
5.5.1 [to] 5.5.12
below;
(My emphasis)
=
5.2.3. Informed
that I / we will be liable to pay the success fee to the nominees in
the event of success. (My emphasis)
5.4.
The nominees hereby warrant
that the normal fees on an attorney and own client basis to perform
work in connection with the aforementioned
proceedings as set out in
paragraph 5.10 below. (My emphasis)
5.5.
I / we agree with the nominees
that if I / we am / are successful in the aforementioned proceedings:
5.5.1 An amount shall
be payable to the nominees calculated according to the following
method:
25% of the amount of
money paid out in settlement of the claim subject to the following
minimum and maximum parameters whichever
is the lesser amount:
·
A maximum fee of double the nominees’
normal charge-out rate plus VAT
as
set out in paragraphs 5.5.1 -5.5.11 below.
(My
emphasis)
5.5.2
. The parties
agree that in the event of
the premature termination of the
contingency agreement for any reason or
the contingency agreement
not being enforceable
for any reason I / we
shall owe the attorney an amount to be calculated according to the
fees as calculated as per paragraph 5.5.1-5.5.11
below plus
disbursements. (My emphasis)
And
on the computation of fees it said,
FEES
5.5.6 Costing of
the work [is / will be] on the following basis:
5.5.7.
I agree to fees being charge to me for all
work done and attendances including traveling time by a partner or
professional assistant of
three years or more experience
of the nominees or any other such person delegated or instructed by
them at the rate of R925.00 per quarter hour or part there
of
thereon.
(
My
emphasis
)
5.5.8.
All work done and attendances
including travelling time by a candidate attorney at the rate of
R375.00 per quarter hour or part
thereof thereon;
5.5.9. I agree that
in the event of my mandate to my nominees exceeding 1 (one) year the
costs structure per each item set out above,
shall increase by
12.5%
(TWELVE AND A HALF PERCENT)
on each anniversary of the date of
the power of attorney. (My emphasis)
5.5.10. Any
administrative personnel / professional assistant
or para-legal
assistant
will be charged at R300.00 per quarter hour or part
thereof thereon. (My emphasis)
and
then on disbursements
6.
DISBURSEMENTS
6.1
.
Disbursements by the nominees relating to the matter made or incurred
on behalf of me / us shall be payable on the presentation
of the
nominees’ account or the presentation of the suppliers’
account.
6.2.
I / we agree further that the nominees will be entitled to charge
interest
at two times the
current overdraft interest
rate per annum
as levied by the
nominees to the nominees’ banker from time to time on amounts
disbursed by the nominees on my/ our behalf
and that interest will be
calculated from the time when the payment of disbursements is made
until payment by me / us of such amounts.
(My
emphasis)
8.
Furthermore, and as security
for my indebtedness to the nominees
which
may arise in respect of the said fees and disbursements
,
I hereby cede
to the nominees all right, title and interest in and
to
any proceeds of any claim amount or entitlement paid out or to be
paid out by the defendant or the Road Accident Fund
which
may arise in the prosecution of my / our claim. (My emphasis)
15.
I hereby further agree that in the event that a correspondent will be
used, in Pretoria or any other place, that I will be liable
for all
costs and fees incurred on Attorney–client scale
.
In the event that a bill of costs is drawn on a attorney-client
scale, such bill is to be deducted from any other party-and-party
bill that is drawn on to recover the costs and disbursements, between
myself and the Road Accident Fund, in the event that this
matter is
successfully finalized
.
The
correspondents will be entitled to use the same cost structure as my
Attorney of Record as set out in Paragraph 5.5.1-5.5.11
.”(My
emphasis)
Legal Framework
regarding Contingency Fees Agreement Act
[56] Prior to addressing
the extracted portions of the Contingency Fee Agreement between the
Plaintiff and her attorneys of record,
it is prudent to discuss the
jurisprudence surrounding the contingency fee agreement scheme.
[57]
It has been
already stated by Southwood AJA in
Price
Waterhouse Coopers Inc
that the Act was enacted to legitimise contingency fee agreements
between legal practitioners and their clients, which would otherwise
be prohibited by the common law. Any contingency fee agreement
between such parties, which is not covered by the Act, is
therefore
illegal.
It
was further held in
Mostert
and Others v Nash and Another
[20]
that “
any
non-compliance with or departure from the requirements of the
Contingency Fees Act, either
as to substance or as to form renders
the contingency fee agreement invalid and unenforceable.”
[58]
Section
4(1)
of the
Contingency Fees Act provides
that once an offer of
settlement is made to a claimant who has concluded a contingency fee
agreement with a legal practitioner,
the latter is not entitled to
accept the offer of settlement without the approval of the court, if
it is a litigious matter, or
the profesional controlling body, in
case of a non-litigious matter. The reason for this is well
articulated by Van Zyl DJP, writing
for the Court in
Mkuyana
v Road Accident Fund.
[21]
I would not do justice to this articulation if I were to not export
the relevant passages in full. This is what Van Zyl DJP said:
“
[15]
Contingency
fee agreements facilitate access to justice as they enable litigants
to obtain legal representation to prosecute their
claims where the
litigant may otherwise have been unable to do by reason of the
prohibitive cost of litigation. However, such agreements
carry with
them the inherent risk of abuse and the incentive to profit. The
undesirable features of contingency fee agreements
were highlighted
as follows in
South African
Association of Personal Injury Lawyers v Minister of Justice and
Constitutional Development, (Road Accident Fund,
Intervening Party)
2013 (2) SA 583
(GSJ) at 587 H-I:
‘
The
first is that they compromise the lawyer’s relationship with
his client by introducing conflicts of interest and have
a high risk
of abuse. Contingency fee agreements vest the legal practitioner with
a financial interest in the outcome of the case,
which may adversely
affect a legal practitioner’s ability to give dispassionate and
unbiased advice to clients at the different
stages during the
proceedings. The second feature is that a contingency fee agreement
gives a legal practitioner a material financial
interest in the
outcome of the litigation, and an overriding desire to secure a
successful outcome may tempt him or her into practices
which may
compromise his or her duties to the court, such as coaching
witnesses, misleading the court, falsifying evidence, etc.’
[16]
Unregulated, contingency fees agreements have the potential for
earnings by legal practitioners which are excessive and
disproportionate to the labour and risk invested. This will
negatively impact on public confidence in the legal system. The
legislature
was clearly conscious of the risk of exploitation when it
legitimised contingency fee agreements. What the Act therefore sets
out
to do is to carefully regulate the extent to which a legal
practitioner may agree with his client for the payment of an
increased
fee. It does that in section 2 of the Act’
[21]
Contingency fee agreements are accordingly subject to judicial
oversight and intervention. This is consistent with the
right vested
in the courts at common law to determine the propriety of any
agreement entered into between an attorney and his client
with regard
to fees. The authority of the court to set aside a fee agreement is
founded upon considerations of public policy and
in the context of
the supervisory function of the court over the conduct of its own
officers, and the protection of the court’s
dignity and
reputation.” (Footnotes omitted)
[59]
Another
reason, according to Plasket J in
Mfengwana,
[22]
is that this judicial oversight or monitoring by the professional
controlling body as the case may be, is “…
necessary
to prevent abuses on the part of unscrupulous legal practitioners
willing to take advantage of their clients – a
phenomenon that
is … unfortunately all too common.”
[60]
In
Mofokeng,
[23]
Mojapelo DJP further states that:
“
The
client must not only have agreed to the terms when explained to him
by the attorney but he or she must also still agree to those
terms in
the affidavit before court. The final provision is that the client
must disclose to the court what his or her attitude
is to the
settlement (s 4(2)(c)). The client should thus not only tell the
court that he or she has accepted the terms of the agreement
after
understanding them but also whether he or she is happy or unhappy
about (attitude towards) the settlement.”
[61] One could understand
this statement in one of two ways, or in both ways, as saying that
these intimations by the client must
be averred to in the affidavit
and/or in both the affidavit and viva-voce in Court. The latter can
only be achieved by the client
taking the witness stand. I favour the
interpretation which allows the Court to call the client to confirm
the correctness of averments
made in their affidavit, and that they
truly understand the effects thereof.
Acceptance of the loss
of earnings settlement offer.
[62]
The
settlement and acceptance of the offer in respect of loss of earnings
was accepted by SJA on 24 February 2023, pursuant to a
tender made by
the Defendant on the same date. The acceptance of this offer, even if
it is just in part of the damages claimed
in the suit, was not in
compliance with any of the aforementioned provisions.
[63]
I
am alive to an argument that could be made to the effect that the
settlement was only on a portion of the claim and not in respect
of
the entire claim. My answer thereto is found in section 4(1) of the
Act. The wording, “
a
ny
offer of settlement
made
to any party who has entered into a contingency fees agreement, may
be accepted after the legal practitioner has filed an affidavit
with
the court, if the matter is before court
(
my
emphasis
),
or
has filed an affidavit with the professional controlling body, if the
matter is not before court”
,
does not give an ambiguous interpretation in the stipulation of the
mandatory affidavit that is to be filed with either the Court
or a
professional controlling body, as the case may be, in respect of any
offer tendered to a party that has entered into a contingency
fee
agreement with another. Simply put, whether the accepted offer is to
the claim as a whole or part thereof, any such acceptance
must be in
compliance with section 4(1). I am fortified by the decision of the
Court in
Road
Accident Fund v MKM obo KM and Another; Road Accident Fund v NM obo
CM and Another
[24]
where it was held that:
“
Thus,
pursuant to those provisions, the attorneys were undoubtedly obliged
to obtain judicial approval before accepting the offers
of settlement
agreements from the RAF. As mentioned already, it is common cause
that the attorneys did not comply with this requirement.”
[64] The acceptance of
the offer from the Defendant by the correspondent attorneys is also
another problematic aspect, but I will
not set the settlement aside
due to the fact that I have considered the settlement amount, and I
am satisfied that the settlement
amount is fair and that the minor
will suffer prejudice that will be caused by a further delay in
concluding this matter.
Analysis of the
contingency fees’ agreement
[65] I now address
the clauses of the Contingency Fee Agreement itself. The clauses
which I address are already stipulated
above, therefore, in the
interest of brevity, I limit the discussion of their invalidity to
the main points. The problematic sections
of the Contingency fee
agreement are that:
“
The computation of
the attorneys’ fees is calculated as a payable fee of ‘
25%
of the amount of money paid out in settlement of the claim subject to
the following minimum and maximum parameters whichever
is the lesser
amount
: A maximum fee of double the
nominees’ normal charge-out rate plus VAT as set out in
paragraphs 5.5.1 -5.5.11 below”.
(My emphasis)
[66] In her affidavit,
Ms. Mtsweni stated that she understood that the attorneys “can
only take a maximum of 25%
or lesser
amount
depending on
fees
”. The “depending on fees” adds further
compound to the issues.
[67] This clause is not
too entirely clear. Be that as it may, whatever is meant by the
clause; whether the attorneys’ deductible
fees are
up to
25% or that they take 25% of the award, it is best to clear the
position in terms of law.
[68]
The
legal practitioner first determines his normal fee, which he would
have been entitled to charge without a contingency fee agreement,
and
then increases it in terms of the contingency fee agreement. Mojapelo
DJP puts it this way in
Masango
v Road Accident Fund:
[25]
“
[16]
‘Normal fees’ of an attorney for litigious work are fees
or charges that would ordinarily be allowed on taxation.
The High
Court rule on taxation provides a useful guide as to what fees are
normally allowed on taxation. The Rule provide that
a taxing master
shall be competent to tax a bill of costs “for services
actually
rendered by an attorney in his
capacity as such in connection with litigious work”
(emphasis added). When one focusses on the
concept “for services actually rendered”, it is an
established principle
that charges for work not actually done cannot
be allowed on taxation. The practitioner’s statement for fees
must be specific
in respect of the particular business done and for
which a fee is charged. In
City Deep
(Pty) v Newcastle Town Council and Another
1973 (2) SA 109
(W) at 119F- 120G; Galgut J restated the
well-established principle that in a bill of costs the business or
action of the practitioner
for which a fee is raised should be
specified item by item with each item dated and its subject matter
stated precisely and not
in general terms.
[17]
In a sense, normal fees that an attorney charges his client are the
fees which are included in what is referred to as
attorney and client
costs. Such fees are payable by the client regardless of the
outcome of the matter for which the attorney’s
services were
engaged. They are not dependent on an award for costs by the court.
In a wide sense, such fees include all fees that
an attorney is
entitled to recover against own client on taxation…
by
the taxing master outside any special arrangements. The legal
practitioner (the attorney in this case) and the client are required
by sec 2(2) of the CFA to set out the normal fees in the contingency
agreement concluded.’
[69]
It
is only after the normal fees of the attorney have been set out, that
one can reach a stage of speaking about the “
success
fee”.
A
success fee is a normal fee which has been increased by a pre-agreed
percentage. There is no other way of increasing the normal
fee to the
increased or success fee other than through a percentage. The normal
fee may be increased by up to 100% to reach the
success fee. Success
fee may thus be and is often double the normal fee.
[26]
[70]
In
Masango
,
[27]
Mojapelo DJP explains:
“
In
claims sounding in money the total of the success fee shall not
exceed 25% of the total amount awarded or obtained by client
(excluding costs). It is important to emphasise that there is no
basis for the practitioner to charge 25% of client’s capital
as
his or her fees. The 25% of the client’s capital is introduced
only as a cap: the attorney charges a success fee which
shall not
exceed 25% of the client’s capital award. Twenty-five per cent
of the capital claim is therefore not a fee.
An
attorney can for instance not simply agree with his client to charge
25% or 20% of capital. His charge is neither a percentage
commission
nor a share in the injuries or damages suffered by his client. An
agreement or practice that makes an attorney a partner
in the
injuries suffered by his client is
contra bones mores
and is
therefore unlawful and illegal at common law and under the CFA.”
(My emphasis)
[71] Simply put, the
explanation given in
Masango
is that what makes a contingency
fee agreement is that the attorney can charge up to double (100%) of
his/her normal fees in respect
of prosecuting the claim where success
is attained. Conversely, if the claim is unsuccessful, the client is
not liable as debtor
to the attorney as creditor. In other words, the
attorney cannot claim his/her professional fees from the client in an
unsuccessful
prosecution of the claim.
[72]
In
Mkuyana,
[28]
Van Zyl DJP stated that:
“
The
principle is that the legal practitioner charges his normal fee, and
as an added incentive, to compensate him for the risk of
undertaking
the litigation, he be rewarded by being permitted to agree with his
client to charge an extra fee over and above his
normal fee, either
equal to or a percentage increase on the normal fee. The normal fee
of the practitioner is therefore taken as
the base fee from which a
percentage increase is by agreement with the client permissible to
arrive at the amount of the success
fee.”
[73]
In
Tjatji
v Road Accident Fund and two similar cases,
[29]
it was said that “
The
purpose was also to encourage legal practitioners to undertake
speculative actions for their clients in order to promote access
to
the courts but subject to strict control so as to minimise the
disadvantages inherent in the contingency fee system and to guard
against its abuse.”
[74] The contingency fee
agreement in this matter has set out the normal fees. Clause 5.4.
states that “
the nominees hereby warrant that the normal
fees on an attorney and own client basis to perform work in
connection with the aforementioned
proceedings are set out in
paragraph 5.10 below”.
The reference to paragraph “5.10”
must be an error. The fee arrangement is covered from clauses 5.5.6
up to 5.5.11.
[75] Are the normal fees
set out in the contingency fee agreement all in order? No, they are
not. I elaborate below;
[76] Firstly, clause
5.5.9. states that “
in
the event
of [the Plaintiff’s] mandate to [her attorneys] exceeding 1
(one) year the costs structure per each item set out
above, shall
increase by
12.5% (TWELVE AND A
HALF PERCENT)
on each
anniversary of the date of the power of attorney”
.
This power of attorney was signed on 27 January 2014. The arithmetic
of 12.5% compounded over a period of nine years in personal
injury
claim is cringey. The same goes for clause 6.12 whereby the Plaintiff
has agreed that the attorneys are “
entitled
to charge interest
at two
times the current overdraft interest
rate per annum
as levied by them
their banker from time to time on amounts disbursed by them and that
interest will be calculated from the time
when the payment of
disbursements is made until payment by the Plaintiff.”
[77]
Morison
AJ in
Thulo
v Road Accident Fund
[30]
had this to say about the 25% ceiling cap:
“
[51]
The true function of a proviso is to qualify the principal
matter to which it stands as a proviso — as to which
see, for
example,
Hira and Another v Booysen and Another
1992
(4) SA 69
(A) at 79F – J
and the cases
there cited. In other words, a proviso taketh away, but it does not
giveth. If there is a principal matter (in this
case the right to
charge a success fee calculated at double — 100% more than —
the normal fee) it is not the function
of a proviso to increase or
enlarge that which it follows, it is to reduce, qualify and limit
that which goes before it in the
text.
[52]
As this principle of interpretation is not always applied there is a
danger of a misinterpretation of this section by
legal practitioners.
Incorrectly interpreted it can be used to argue that the client has
to pay (i) double the normal fee or (ii)
25% of the total amount
awarded in a claim sounding in money, whichever is the higher. That
is completely wrong. The practitioner's
fee is limited, on a proper
reading of the section, to (i) 25% of the amount awarded in the
judgment, or (ii) double the normal
fee of that practitioner,
whichever is the lower. If double the normal fee results in the
client having to pay a fee higher than
25% of that which was awarded
to the client in a money judgment (costs aside) the legislature has
put a ceiling on such fee and
said, in effect, 25% of the money
amount awarded is the maximum fee that can be raised. Where, however,
double the normal fee does
not exceed 25% of the money amount awarded
then double the normal fee is the maximum fee that can be raised.”
[78] Secondly; the fees
structure also provides that any work done by “
any
administrative personnel/professional
assistant
or para-legal
assistant
will be charged
at R300.00 per quarter hour or part thereof thereon.”
This too is illegal, and my sentiments above apply
mutatis mutandis.
[79]
Section
33 of the Legal Practice Act
[31]
provides
that:
“
33.
(1) Subject to any other law no person other than a legal
practitioner who has been admitted and enrolled as such in terms of
this Act may, in expectation of any fee, commission, gain or reward—
(a)
…
(b)
draw up or execute any instruments
or documents relating to or required or intended for use in any
action, suit or other proceedings
in a court of civil or criminal
jurisdiction within the Republic.
(3)
No person may in expectation of any fee, commission, gain or reward,
directly or indirectly, perform any act or render any service
which
in terms of any other law may only be done by an advocate, attorney,
conveyancer, or notary, unless that person is an advocate,
attorney,
conveyancer, or notary, as the case may be.”
[80] The work of a legal
practitioner’s employee, save for work done by perhaps a
candidate attorney engaged in the same case,
is an operational
expense of the firm. The principal cannot bill the client for work
done by his employees, whether it be by a
senior law researcher, a
professional /para-legal assistant, in the course of their
employment, and then bill again for his time
(which was actually not
consumed).
[81]
Thirdly,
there is security proviso in disbursements. Clause 8 provides,
“
furthermore
and
as security for my indebtedness to the nominees
which
may arise in respect of the said fees and disbursements
,
I
hereby cede
to the nominees all right, title and interest in and
to
any proceeds of any claim amount or entitlement paid out or to be
paid out by the defendant or the Road Accident Fund
which
may arise in the prosecution of my / our claim.”
The
statement found in paragraph 22 of
Masango
[32]
by
Mojapelo DJP refutes this best. “
An
agreement or practice that makes an attorney a partner in the
injuries suffered by his client is contra bones mores and is
therefore
unlawful and illegal at common law and under the CFA.”
[82] Fourthly, the
inclusion of Value Added Tax (VAT) to the fee payable to the
attorneys. Mojapelo DJP had occasion to consider
the legality of this
in
Masango.
[83]
The legal
question considered in that matter applies aptly to this case. There,
it was considered whether
a
legal practitioner is entitled to charge, as his or her fees, 25% of
the capital amount recovered for his or her client plus 14%
(VAT) in
terms of a contingency fee agreement concluded with the client under
the
Contingency Fees Act
(“the CFA”).
[33]
[84]
After a
thorough exposition of the Value-Added Tax Act
[34]
(“the VAT Act”), Majopelo DJP reached a well-reasoned
conclusion, that
VAT
is a tax on the legal practitioner and not on the client.
Consequently, the legal practitioner pays the tax to the South
African
Revenue Services (SARS). The quoted price (being the legal
practitioner’s fees) is deemed to include VAT, unless the price
is broken down into its components in terms of section 65 of the VAT
Act.
[35]
What the client pays
to the legal practitioner (vendor) is the “price” (fee).
The client does not pay VAT, although
the price may be structured to
account for the VAT payable by the legal practitioner (vendor) to
SARS. Regardless of how the price
is structured or quoted, the final
price charged by a vendor (being the legal practitioner in this case)
is inclusive of VAT.
[36]
The
relationship between the practitioner (vendor) and SARS, in relation
to VAT collected by the latter, is not one of agency,
but is that of
debtor and creditor. This is a further confirmation that the
liability for tax is that of the legal practitioner
and not of his or
her client. It is not a relationship of agency in which the legal
practitioner
collects
VAT on behalf of SARS and pays it over to SARS.
[37]
[85] The conclusion
reached by Mojapelo DJP is well premised in thorough exposition of
the relevant provisions of the VAT Act. In
summary, for the purposes
of contingency fee agreements, VAT cannot be added on top of the fees
payable to the practitioner for
those fees are deemed to be already
inclusive of VAT.
[86] Having addressed the
invalidity of the attorneys’ normal fee structure contained in
the contingency fee agreement, what
follows next is the nullity of
the contract in its entirety of its provisions, and such nullity is
not triggered by the fee arrangement
only but rather by something
more. Pre-emptively, the contract has, in itself, an inherent built
in provision against its unenforceability,
which holds the client
liable for the attorneys’ fees even in the event of the
contingency fee agreement being held to be
unenforceable for any
reason. Clause 5.5.2. reads:
“
The
parties agree that in the event of the contingency agreement not
being enforceable for any reason [the Plaintiff] shall owe
the
attorney an amount to be calculated according to the fees as
calculated as per paragraph 5.5.1-5.5.11 plus disbursements.”
[87] In the event of a
clause or provision of a contract being declared invalid and/or
unenforceable, the traditional provision
of invalidity and
divisibility applies. This principle says that in the event of a
clause or provision of a contract being found
to be invalid or
unenforceable, such clause shall be deemed to be separate and
divisible from the remaining terms and conditions
of the contract, of
which shall not be affected by the invalidated clause.
[88] This clause, truly
put, is a mockery of Judicial authority. If a Court nullifies a
contract, that renders its termination without
consequence and
prejudice to the other party that did not draft the contract and/or
to both parties – and that would be end
of the matter. If this
clause were to be indulged, Judicial orders would be
brutum fulmen
(of empty or ineffectual effect or force).
[89]
The
effect of non-compliance with the provisions of the Act was dealt
with by Boruchowitz J in
Tjatji
v Road Accident Fund and two similar cases
:
[38]
“
[21]
Although the Act does not state in express terms that a failure to
fulfil the statutory requirements will render the contingency
fee
agreement null and void, there are clear indications that this was
indeed the legislature's intention. The primary object of
the Act was
to legitimise contingency fee agreements which were otherwise
prohibited by the common law. The purpose was also to
encourage legal
practitioners to undertake speculative actions for their clients in
order to promote access to the courts, but
subject to strict control
so as to minimise the disadvantages inherent in the contingency fee
system, and to guard against its
abuse (see the report of the South
African Law Commission, chs 2, 3 and 4; KG Druker op cit, chs 6 and
7). The safeguards introduced
to prevent such abuses include ss 2 and
3 of the Act. As these sections are not enabling but prescriptive in
nature, it would undoubtedly
have been the intention of the
legislature to visit nullity on any agreement that did not comply
with these provisions.
[22]
A further indication that non-compliance would be visited with
invalidity arises from the fact that ss 2 and 3 are couched
in
peremptory language. The word “shall” is used extensively
in s 3 (see ss (3)(1)(a), (3)(2), (3)(3) and (3)(4)).
The word
“shall”, when used in a statute, is generally an
indication that the provision is peremptory rather than directory.”
[90]
This is
further supported by the dictum found in
Mostert
[39]
which says that “
any
non-compliance with or departure from the requirements of the
Contingency Fees Act, either
as to substance or as to form renders
the contingency fee agreement invalid and unenforceable
.”
Costs
[91]
In
Coetzee
v Taxing Master, South Gauteng High Court and Another
[40]
,
Sutherland J mentioned that:
“
The
relationship between attorneys and their clients is a private affair
founded on contract. However, the state imposes itself
upon that
relationship to regulate the fees levied by attorneys on their own
clients in order to ensure that clients are not charged
unreasonable
fees. The taxing master is a gatekeeper of fairness about those fees.
(See:
Aircraft Completions Centre (Pty) Ltd Rossouw & Others
2004 (1) SA 123
(W) para 108.).”
[92] In CFAs, this is but
one example whereby the Legislature unapologetically imposes in the
affair of attorney and own client
relationship insofar as the two
have intended to enter into a Contingency Fees Agreement. Having done
so, the Legislature, or at
least, the judicial interpretation of the
Legislature’s intention says,
that it
does not have to be the case that the clauses of the contingency fee
agreement must be substantially invalid; far from it,
the declaration
of invalidity of one or any more clauses of the CFA renders the whole
thing invalid and unenforceable. Furthermore,
this contract, unlike
other contracts, is not capable of rectification
ex
post facto.
Rigidly strict
compliance with the provisions of the CFA does not flow from the
common law but is rather imposed by the Legislature
for reasons
elucidated above.
[93] Having declared the
Contingency Fee Agreement invalid, the common law applies. It has
been held by our Courts that the effect
of invalidity of the
agreement means that the attorney is only entitled to a reasonable
fee in relation to the work performed,
with taxation being the means
of which the reasonableness of the fee is performed. The attorney is
not entitled to charge the success
fees and any normal fees flowing
from the contingency fee agreement. Furthermore, the attorney is
prohibited from enforcing the
clause which states that in the event
of the contingency fee agreement being found to be unenforceable or
set aside for whatever
reasons, the Plaintiff will still be
responsible for the payment of the attorney and client fees.
[94]
In
Tyatji
[41]
,
Boruchowitz
J endorsed the common law position that whereby a contingency fee is
declared invalid and unenforceable for any reason,
“
The
plaintiffs’ attorneys are therefore only entitled to such fees
as are taxed or assessed on an attorney and own client
basis.”
[95]
In
Coetzee,
[42]
Sutherland J alludes to the point that where an attorney and own
client fee agreement is unreasonable, or non-existent, then the
fees
to be paid by the client to that attorney for services rendered shall
be at the discretion of the taxing master, whom may
exercise his/her
discretion to tax the fees identically to
Rule 70
or at a tariff
which s/he may determine to be reasonable in the circumstances.
[96]
In the
circumstances of this matter, the Plaintiff’s attorney shall be
entitled to recover from the Plaintiff, his reasonable
normal fees
for the services rendered to her.
[43]
[97] Regard being had to
the invalidity of the Contingency Fee Agreement in form; in substance
and for reasons elucidated above,
the Plaintiff’s attorney is
not entitled to a “success fee”.
[98] The last issue, but
certainly not the least of the fees structure is the allowance to the
correspondent attorney to charge
the same fees as applied by the
attorneys of record. The plaintiff simply cannot just be mulcted with
double identical costs of
those of his attorney and so duplicated by
the correspondent attorney.
[99] The correspondent
attorney is the agent of the client’s attorneys of record and
not that of the client him/herself. Save
in the pursuance of her
action at the instance and instruction of the client’s
attorneys of record, there is no mandate and
agent relationship that
exists between the client and the correspondent attorney. Therefore,
even if the bill incurred from the
work of the correspondent
attorney, the former is not entitled to charge as if it were the
client’s attorney of record.
[100]
What I have
just demonstrated above is the invalidity of the contingency fee
agreement in its substance. In
Mkuyana,
[44]
at paragraph 25, the following passage appears:
“
A
fee that is unreasonable cannot validly be recovered, and a fee
agreement that authorises an attorney to charge an unreasonable
fee
that amounts to overreachment, will be unreasonable and consequently
unenforceable.
‘
An
agreement would be unreasonable if, for instance, it authorised
unprofessional fees or work or expenses which were unreasonable
or
unnecessary…’
An
unprofessional fee is a fee that constitutes overreachment, that is,
‘
the
extraction by an attorney from his client, by the taking by the
former of undue advantage in any form of the latter, of a fee
which
is unconscionable, exercise or extortionate, and in so overreaching
his client that attorney would be guilty of unprofessional
conduct.’”
(Footnotes omitted)
[101]
In
Hitchcock
v Raaff
,
[45]
the client’s attorney was mandated to procure the setting aside
of a rival trader’s liquor license so that he could
obtain it.
The attorney exacted from his client an agreement to pay a special
remuneration, branded by the court as an unfair bonus
and, as it then
was, an improper contingency fee. Wessels J at 368-369 held that an
attorney cannot behave in such manner. The
critical passage reads:
“
...
[the attorney] cannot contract for himself a bonus, either dependent
on the result of the case or even if the result should
be adverse.
When once his client has embarked on litigation and when once he has
obtained the confidence of his client in that
litigation
he is
bound to charge only the tariff fees allowed to be charged to
solicitors.”
[102]
This
remark, in context, is intended to refer to the absolute prohibition,
even with a client’s consent, of an attorney charging
a fee
that contradicts the reasonableness standard.
[103]
Therefore,
the correspondent attorney is not entitled to charge attorney and own
client fees
as if it were the client’s attorney of
record, regard being had to the clause in the invalidated contingency
fee agreement.
Counsels
Fees
[104] I have taken
note that the latest revised draft order just seeks counsel’s
fees but does not give reference to
senior counsel fees for
preparation of the heads of argument, as the initial draft order
(1)
and its amended form
(2)
. The senior counsel confirmed
that he will relinquish his fees for preparation and drafting heads
of arguments.
Costs of experts
qualifying and preparation fees
[105]
The
Plaintiff’s counsel also sought costs for the experts’
qualifying and preparation fees.
Randall
v Baisley
[46]
provides
a useful analysis of the range of the work of a professional or
expert witness constituting qualifying expenses, or preparation
fees.
The Court held:
“
...the
enquiry does not turn on whether or not he was an expert, but rather
on whether his services were in respect of 'qualifying'
himself as a
witness. The scope of the act of qualifying as a witness was
fully considered by Harcourt J in
Köhne and Another v Union &
National Insurance Co Ltd
1968 (2) SA 499
(N) at 499- 501. I
refer to a number of principles conceived by the learned Judge
to be applicable to the question of qualifying expenses, viz in the
general way it may be said that an expert witness 'qualifies'
when he
reads up, or otherwise masters the details of the particular case on
which he is to give evidence (501F); qualifying fees
are regarded as
part of the costs of production of reasonably required evidence
(501H); they are part of the expense of procuring
information which
might bear upon the issue in dispute and includes the costs of
witnesses preparing themselves for examination
(502A-B); although the
practice has not been entirely consistent, it has long been accepted
that expert witnesses are - subject
to there being an order of court
or agreement - entitled, as between party and party, to 'qualifying'
fees in addition to payment
under any tariff of remuneration of
witnesses (502C); an expert witness is not one who can be subpoenaed
to give his expert opinion,
in doing this he is a volunteer and there
is no objection on the grounds of public policy to an agreement that
he should be paid
additional remuneration for the work necessarily
required to be done in preparation for giving expert opinion evidence
(502E);
a professional witness may make his own terms for doing the
research work which is necessary in order to qualify himself for
expressing
his opinion in the case, such remuneration is not for
attending in court, but for qualifying himself to give evidence
(502G); the
scope of 'qualifying fees' is not precisely defined in
any single case but should be taken to include,
inter
alia
, the attendances involved in
the inspection of persons, places, or things necessary to ensure that
a scientific witness, however
eminent, is far more useful to those
conducting the case if in fact he has had the advantage of viewing
the
locus in quo
(503A-B);
it is expected of experts to read relevant authorities and scientific
journals to enable them to express well-founded
opinions with
reference to learned authority which they may adopt as the evidence
for the assistance of the court (503C); it is
also clear that the
qualifying fee covers expenses of the expert necessarily and properly
incurred in experiments and investigations
involved in qualifying
himself (503H). 'Qualifying expenses', it seems, covers all acts
performed by the expert which relate to
the opinion which he would
express in court. This may include the observation of persons and
places, or the investigation of or
experiments on the
corpus
delicti
. It does however not include
pre-trial examinations or investigations which go to direct proof of
the
factum probandum
.
The pre-trial activity of the expert may relate to both qualifying
and non-qualifying preparatory acts; indeed, it may be difficult
to
unravel the one from the other. But the basis of the distinction
however is clear: qualifying acts bear upon the expert's opinion,
all
other acts fall outside the scope of the concept.”
[106]
What
is clear from both these authorities is that expert qualifying, and
preparation fees are those costs incurred by an expert
where there
was an intention by the concerned litigant to bring the expert in
Court to adduce evidence – his opinion thereto
the issue at
hand. In
The
Government
v.
The
Oceana Consolidated
Co.,
[47]
it
was stated:
"It
seems to me that the cost incurred in putting a witness into a
position to give evidence may well be considered as part
of the costs
of preparing the case and laying it before the Court. There cannot, I
think, be any question as to the desirability
of permitting a party
to recover any such costs as the Court thinks were necessarily
incurred in placing his case before the Court."
[107]
However,
the injunction to this is that that without an order of Court or the
consent of all interested parties, the experts qualifying,
and
preparation fees cannot be allowed on taxation. (See the proviso to
item 5, Section D of the tariff appended to
Rule 70).
[108]
In
RAF cases, the Plaintiff must either obtain an offer or tender or
consent in this regard from the Fund or such orders must expressly
be
requested from the Court. Proper notice must be given to the RAF that
such an order will be applied for, to enable the RAF to
be heard on
this aspect. This is especially ever more so important in the
majority of RAF cases which tend to proceed by default;
and even in
those where there is a dispute as to quantum, such as this case, the
Plaintiffs’ usually make application for
the affidavits of
experts be admitted into evidence in terms of
Rule 38(2)
without
recourse to oral evidence. This is seldom a contentious issue to the
Fund even in those actions where it does not concede
quantum.
[109]
Where,
however, it appears that the party in question originally intended to
call the expert as a witness and that, in the light
of the issues
then subsisting, the expert's evidence would have been relevant, but
that subsequently the issues were narrowed down
or eliminated by
reason of the attitude adopted by the other party rendering the
calling of the person as a witness unnecessary,
then in that
instance, the need for appearance by the expert has been obviated.
However, this does not mean they would have not
prepared and
qualified themselves to give evidence and opinion thereto the matter
in issue. And as such, it may be correct and
reasonable to hold the
view that the said expert is rightfully entitled to their preparation
fees.
[48]
[110]
Since
the experts’ evidence was submitted in terms of
Rule 38(2)
, I
am disinclined to bind the hands of the Taxing Master, and in so
doing, tempering with his/her discretion to tax any bill of
costs as
provided for by
Rule 70
[49]
read together with
Rule 70(3)
[50]
of the Uniform Rules of Court.
[111]
Its trite
law that the taxing master has discretion to allow, reduce or reject
items in a bill of costs. Subrule (5) indicated in
Rule
70
which
provides the discretionary power off the taxing master to tax any
bill of costs, has been interpreted to mean that the taxing
master’s
power to tax “any bill of costs” includes bills as
between adversaries in litigation and as between
a litigant and that
litigant’s own attorney: ie. bills usually described as
“attorney and own client”.
She
must exercise this discretion judicially in the sense that she must
act reasonably, justly and on the basis of sound principles
with due
regard to all the circumstances of the case.
[51]
On this basis thereof, all other costs of suit, as demanded by the
Plaintiff, are best left to the discretion of the taxing master
as
may be taxed and/or agreed between the parties.
Conclusion
[112] The Plaintiff
is substantially successful; I shall therefore grant an order along
the lines proposed in the draft order
with amendments. Regarding the
establishment of the Trust and the draft Trust Deed, the Plaintiff’s
attorneys are to find
an IsiZulu and/or IsiNdebele fluent speaking
Trustee, and in the consent letter to be given by said Trustee, they
should confirm
their fluency in either the isiZulu and/or IsiNdebele
language.
Order
[113] In the
result, I order as follows:
1.
The Defendant is ordered to pay to the
Plaintiff (in her representative capacity on behalf of the minor
child) a Capital Amount
of
R 1 086 780.75
(One million, Eighty-Six thousand, Seven-Hundred and Eighty
Rands, Seventy-Five cents)
in full and
final disposal of the Plaintiff’s claim on behalf of the minor
child,
which amount shall be paid into the trust account of
Savage Jooste & Adams, with banking details:
Nedbank
name : NEDCOR – ARCADIA
Account
type : TRUST ACCOUNT
Branch
code : […]
Account
no : […]
Reference
no : […]
2.
The above-mentioned capital amount consists of the following:
i.
R
1 086 780.75 (one million, eighty-six thousand, seven
hundred and eighty rands, seventy-five cents)
in respect of
Future Loss of Earnings and / or earning capacity. And
ii.
R 900 000
(Nine Hundred Thousand Rands)
in respect of General Damages
3.
It is ordered that the capital amount be paid into the
above-mentioned trust account of Savage Jooste & Adams within 180
(ONE HUNDRED AND EIGHTY DAYS) days from the date of this order.
4.
The Defendant shall capture the payment of the Capital Amount onto
its “Registered Not yet paid / (RNYP) list by no later
than 30
(Thirty) days from the date of this Court Order being granted.
5.
Should the Defendant fail to make payment of the capital within 180
(ONE HUNDRED AND EIGHTY) days from the date hereof, the Defendant
will be liable for interest on the amount due to the Plaintiff at the
prescribed rate per annum, from the 181
st
(ONE HUNDRED AND
EIGHTY FIRST) day from the date of this order to the date of final
payment.
6.
It is declared that the award to the minor be protected by way of a
trust of which the trust is in terms of the provisions
of the Trust
Property Control Act, created with this order. A copy of the
suggested draft Trust Deed setting out the powers
of the trustee and
2023 Pricing Guide is attached hereto marked “
A”
.
7.
The proposed trustee, being Keshma Vallabh of Standard Bank Limited,
is set aside, and the Plaintiff’s attorneys
are ordered to find
a trustee that is fluent in either the IsiZulu and/or IsiNdebele
language, and in the consent letter of said
trustee, the said trustee
must confirm their fluency in either of the languages indicated
above.
8.
The Defendant will furnish the trustee(s) with an Undertaking in
terms of Section 17(4)(a), to compensate the minor for
100%
of the cost of future accommodation in a hospital or nursing home or
treatment of or rendering of a service or supplying of goods
to the
minor
resulting from injuries sustained
by the minor as a result of an accident that occurred on the 4
October 2013. The reasonable
fees and costs of the trustees
will be recoverable in terms of the said Undertaking, which will
include the following:
8.1.
The fees of the trustees of the trust which are fully set out under
paragraph 12
in the suggested Draft
Trust Deed attached hereto. This includes the trustee’s
remuneration for exercising his duties in terms
of the trust,
inclusive of the administration of the section 17(4)(a) Undertaking;
9.
The reasonable out-of-pocket costs of the trustees of the trust,
which costs shall be determined once they have been incurred.
10.
In the event of a dispute relating to the remuneration, fees and
costs of the trustees, such remuneration will be fixed by the
Master
of the High Court.
11.
The appointed trustee or his/her nominee for the trust formed for the
sole benefit of the minor with powers as set out in the
suggested
Draft Trust Deed attached hereto.
12.
The trust will dissolve when the minor reaches age of majority.
13.
The trustee, beneficiary or any other person who has sufficient
interest may approach the court in terms of section 13 of the
Trust
Act, for termination of the trust or to dissolve the trust earlier
than what is set out in 4.5 and 4.6 above, should he /
she be able to
show reasonable cause for such an application.
14.
Any amendment to the Trust Deed shall be subject to the
approval of the High Court.
15.
The trust is ordered to furnish security to the satisfaction of the
Master. The security so furnished will be adjusted from
time to time,
at least once per year to reflect the decrease or increase of the
capital and income from time to time.
16.
The Contingency Fee Agreement is declared invalid.
17.
The Defendant is ordered to pay the
Plaintiff’s costs of suit of the Plaintiff’s instructing
and correspondent attorneys
to date on the party and party High Court
scale
as taxed or agreed.
18.
The Plaintiff’s attorney
shall
be entitled to recover from the Plaintiff his reasonable normal fees
for the services rendered to her
.
19.
All costs remain at the discretion of the
Taxing Master.
20.
Should the Defendant fail to pay the Plaintiff’s party &
party costs as taxed or agreed within 14 (fourteen) days from
the
date of taxation, alternatively date of settlement of such costs, the
Defendant shall be liable to pay interest at the prescribed
mora rate
per annum, such costs as from and including the date of taxation,
alternatively the date of settlement of such costs
up to and
including the date of final payment thereof.
21.
The Plaintiff shall, in the event that the parties are not in
agreement as to the costs referred to in paragraph 17, serve the
notice
of taxation on the Defendant’s attorneys and shall allow
the Defendant fourteen court days to make payment of the taxed costs.
22.
The taxed or agreed costs, as referred to above, shall be paid
into the trust account of Savage Jooste & Adams, with banking
details:
Nedbank
name : NEDCOR – ARCADIA
Account
type : TRUST ACCOUNT
Branch
code : 16-33-45-07
Account
no : 1633357619
Reference no : Mr Hayes/M
Havemann/RB858
23.
Upon taxation of the Bills of Costs by the Taxing Master, the
Plaintiff attorneys are directed to deliver the taxed Bill of Costs
to the Registrar of this Court before deducting any monies due to
them. The Registrar of this Court is then ordered to translate
and
explain to the Plaintiff personally the taxed bills of costs, the
sums thereof, the deductions and payment due to her attorneys
and her
award less all applicable deductions.
FLATELA L
JUDGE OF THE HIGH
COURT
PRETORIA DIVISION
Appearances
Counsel for Plaintiff:
Adv ACJ Van Dyk
instructed by SJA Attorneys, M Havermann
State attorney for
Defendant:
Thomas Bell
Date of Hearing:
27 February 2023
Request for further
submissions: 13 & 14 September 2023
Date of further
submissions: 15 ,19 September 2023 and 21 November 2023
[1]
The
two expert views in this respect are only on diagnosis description
terms, leaning towards semantics and are of such immaterial
difference that I go no further on them.
[2]
[2006] ZACC 4
;
2006 (4) SA 230
(CC) at paras 39 and 41.
[3]
Abrahams
v RAF
(2014) (-12-1) QOD 7(ECP),
Litseo
v RAF
(5637/2016)
[2019] ZAFSHC 52
;
Morris
v RAF
(99303/15) [2018] ZAGPPHC 486;
Roe
v RAF
(2009/16157)
[2010] ZAGPJHC 19;
Khumalo
v RAF
2006
JDR 0289 (W);
Pietersen
v RAF
(08/19299)
[2011] ZAGPHC 73
Anthony
v RAF
(27454/ 2013) [2017] ZAGPPHC 161.
[4]
1941 AD 194
at 199.
[5]
(2120/2014) [2018] ZAGPPHC 539.
[6]
(868/2010) [2013] ZAECGHC 94.
[7]
2013 JDR 2270 (GNP).
[8]
2018 (4) SA 454
(SCA) at para 13.
[9]
[1990] ZASCA 106
;
1990 (4) SA 833
(A) at 841D – E.
[10]
[2014]
LNQD 19 (ECP) at para 26.
[11]
1957 (3) SA 284
(N) at 287E.
[12]
See
Majope
and Others v The Road Accident Fund
(663/2022)
[2023] ZASCA, para 13 (endorsing T
he
Road Accident Fund v Taylor and other matters
(1136-
1140/2021)
[2023] ZASCA 64
, para 13)
[13]
Ibid, para 13
[14]
Ibid,
[15]
Act
66 of 1977.
[16]
2004 (6) SA 66
(SCA) at para 41.
[17]
See:
Mkuyana
v RAF
2020 (6) SA 405
(ECG) and the cases referred to therein.
[18]
2017
(5) SA 445
(ECG) at para 11.
[19]
(308/2021,1309/20)
[2022] ZAMPMBHC 37 at para 33.
[20]
2018 (5) SA 409
(SCA) at para 54.
[21]
2020
(6) SA 405 (ECG).
[22]
Mfengwana
above
n 14 at para 12.
[23]
Id
at para 57.
[24]
2023 (4) SA 516
(SCA) at para 18.
[25]
2016
(6) SA 508 (GJ).
[26]
Id
at para 19.
[27]
Id
at paras 19 and 22.
[28]
Mkuyana
above
n 17 at para 17.
[29]
2013 (2) SA 632
(GSJ) at para 21.
[30]
2011 (5) SA 446 (GSJ).
[31]
Act
28
of 2014.
[32]
Masango
above
n 22.
[33]
Id at para 1.
[34]
Act 89 of 1991.
[35]
Masango
above
n 22 at para 34.
[36]
Id
at para 35.
[37]
Id
at para 41.
[38]
Tjatji
above
n 26.
[39]
Mostert
above
n 16 at para 54.
[40]
2013 (1) SA 74
(GSJ at para 9.
[41]
Tjatji
above
n 26 at para 26.
[42]
Coetzee
above
n 37 at paras 25.6 and 25.7.
[43]
Tjatji
above n 26 at para 26.
[44]
Mkuyana
above
n 17.
[45]
1920 TPD 366.
[46]
1992
(3) SA 448
(EC) at 453C – 454C
endorsed
by Hartle
in
Dutton
v Road Accident Fund
(EL901/2016, ECD2201/2016) [2017] ZAECELLC 18 at para 14.
[47]
1908 TS 43
at 47 – 48.
[48]
(Cf:
Stauffer
Chemical Co v Safsan Marketing Distribution Co
1987 (2) SA 331
at 355 E – H; and See also
Cassel
and Benedick NNO v Rheeder & Cohen NNO
[1991] ZASCA 25
;
1991
(2) SA 846
(A) at 853 E – I.)
[49]
Rule
70:
“
(1)
(a) The taxing master shall be competent to tax any bill of costs
for services actually rendered by an attorney in his capacity
as
such in connection with litigious work and such bill shall be taxed
subject to the provisions of subrule (5), in accordance
with the
provisions of the appended tariff: Provided that the taxing master
shall not tax costs in instances where some other
officer is
empowered so to do.”
[50]
For its
purpose, Rule 70 is to be read with Rule 70(3) which provides:
“
70.
(3)
With a view to affording the party who has been awarded an
order for costs a full indemnity for all costs reasonably incurred
by him in relation to his claim or defence and to ensure that all
such costs shall be borne by the party against whom such order
ha
s
been awarded the taxing master shall, on every taxation, allow all
such costs, charges and expenses as appear to him to have
been
necessary or proper for the attainment of justice or for defending
the rights of any party, but save as against the party
who incurred
the same, no costs shall be allowed which appear to the taxing
master to have been incurred or increased through
overcaution,
negligence or mistake, or by payment of a special fee to an
advocate, or special charges and expenses to witnesses
or to other
persons or by other unusual expenses.
[51]
City of
Cape Town v Arun Property Development (Pty) Ltd and Another
2009
(5) SA 227
(C) 232 at para 17.
sino noindex
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