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[2015] ZAWCHC 189
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City of Cape Town v South African National Roads Agency Ltd and Others (6165/2012) [2015] ZAWCHC 189 (4 December 2015)
IN THE HIGH COURT OF
SOUTH AFRICA
(WESTERN CAPE DIVISION,
CAPE TOWN)
Case number: 6165/2012
DATE: 04 DECEMBER 2015
In the matter between:
CITY OF CAPE
TOWN
...........................................................................................................
Applicant
And
SOUTH AFRICAN NATIONAL ROADS AGENCY
LTD
.......................................
First
Respondent
MINISTER OF
TRANSPORT
................................................................................
Second
Respondent
MINISTER OF WATER &
ENVIRONMENTAL AFFAIRS
.................................
Third
Respondent
AND SEVEN
OTHERS
...........................................................................
Fourth
to Tenth Respondents
JUDGMENT (Costs)
Delivered 4 December 2015
BINNS-WARD J et BOQWANA J:
[1] As adumbrated in the principal
judgment, we heard argument on the costs issues after the publication
of our decision of the
substantive issues in the main application.
The matters that require determination in this regard concern not
only the costs in
the main application, but also the costs reserved
for later determination in various preliminary and interlocutory
proceedings.
We heard argument on all these matters on 27 November
2015 from counsel for the City and counsel for Sanral. Questions as
to
costs between the City and the second and third respondents have
been settled by agreement.
[2] The City contends that it has been
substantially successful and should therefore be entitled to payment
of its costs by Sanral.
Sanral argued on the other hand that, as
both parties are organs of state and their expenses were therefore
funded from ‘the
common pot’, so to speak, it would be
appropriate for each party to bear its own costs. It cited Minister
of Police v Premier
of the Western Cape
2014 (1) SA 1
(CC), at para
72, and City of Johannesburg Metropolitan Municipality v Gauteng
Development Tribunal
2010 (6) SA 182
(CC), at para 94, in support of
that contention. The City’s counsel countered that the
litigation had in fact not been funded
out of a common pot. They
pointed out that the City was to a large extent funded by the rates
levied on its property-owning residents,
while Sanral’s
activities were funded in the manner provided for in terms of the
SANRAL Act. The City’s counsel also
reminded us that costs
orders had already been made against Sanral in earlier stages of the
current litigation - not only by this
court, but also by the Supreme
Court of Appeal.
[3] The award of costs is, of course, a
matter within the discretion of the court seized of the matter.
While such an order might
be appropriate in given cases, we are not
persuaded that there is, or indeed should be, a general rule that in
all matters in which
the contesting litigants are organs of state
each party should be directed to pay its own costs. As the City’s
counsel have
illustrated, it does not necessarily follow that in
every case the litigation in such matters should be regarded as
having been
financed from a common fund. There is in any event also
the consideration of individual accountability for spending by organs
of state in the context of the division of government revenue between
different departments and other organs of state. The Division
of
Revenue Acts and the Public Finance Management Act demonstrate that
organs of state receive and are individually accountable
for
earmarked and separately identifiable parts of the monies that
comprise the public purse. There is something to be said for
the
idea that if the budgetary shoe pinches as a result of litigation
between organs of state, the pinch should be felt at the
point that
affects the organ that has litigated unsuccessfully or ill-advisedly.
The abovementioned judgments to which Sanral’s
counsel referred
us both involved matters of broad constitutional principle, the
determination of which was of general governmental
interest and
benefit. We do not consider that the current litigation fell into
that category, notwithstanding that the public
interest in an
improved administration of the SANRAL Act was a material factor in
our decision to condone the City’s delay
in taking the impugned
decisions under that statute on judicial review.
[4] In contending that it had been
substantially successful, the City argued that the case had
essentially been about the legality
of the decision to toll the
affected sections of the N1 and N2 national roads. They submitted
that they had prevailed in their
challenge against that decision.
While there is some validity in that argument, we consider that it
oversimplifies what was actually
entailed in the litigation.
[5] The City directed its attack not
only at the tolling decision, but also at the environmental
authorisation for the undertaking
of certain activities listed in
terms of the ECA. The activities in question were necessary if the
upgrading of the roads that
the City itself considered to be
desirable were to be undertaken, quite irrespective of how the
improvements were to be funded.
In this respect the City
unnecessarily and unsuccessfully litigated on a question that was
essentially discrete from that upon
which it achieved success.
Similar observations might be made about its unsuccessful
applications for interdictal relief.
[6] In our judgment, it would be fair
in the circumstances to direct that Sanral should pay part, but not
all, of the City’s
costs in the main application.
[7] Anticipating that that might be our
approach, the City submitted an analysis of the 7473 page record,
which suggested that the
matters on which it had been unsuccessful
accounted for only 9,3% of the pages involved. We have had neither
the time, nor the
inclination to check the analysis. Mr Budlender
SC, for the City, in any event reasonably conceded that a page count
would not
necessarily be the only or indeed appropriate way to deal
with a division of the costs. The amount of time spent in argument on
the various aspects of the case might be another. The apparent
relative importance of the issues concerned in the different heads
of
relief yet another. And our assessment of the relevance and quality
of input should surely play a role in the determination
of how to
make a division. It seems to us that the determining criterion
should be our robust sense of what would be fair in the
context of
having lived through and adjudicated the proceedings.
[8] In our judgment the result of the
case merits an award in respect of costs that would acknowledge the
City’s success in
respect of the matter centrally at issue in
the proceedings, but also mark the effect of Sanral’s
successful opposition to
the attack on the environmental
authorisation decisions and the interdicts sought by the City. In
that regard we have attached
most weight to our sense of the time
that these matters took up in argument and the fact that they
constituted quite discrete aspects
to the overall case.
[9] Subject to the qualification
recorded in the next paragraph, we have concluded that it would be
fair for Sanral to held liable
for 70% of the City’s costs in
the principal proceedings, including the costs of three counsel. The
exceptional magnitude
of the matter justified the employment of three
counsel in respect of most aspects of the matter.
[10] The following experts, not in the
employ of the City, gave opinion evidence in support of the challenge
to the decisions to
declare the roads as toll roads: Barbour (in
respect of his report dated May 2014 – his earlier report,
dated March 2012,
bore essentially on the environmental
authorisation), Floor, Naude, Holland, Rossouw, Snell and Grant
Thornton (G.A. Penrose and
I. Hashim). Sanral will be directed to
pay the qualifying fees of those witnesses.
[11] The costs of the first interim
interdict application launched by the City on 7 October 2011 under
case no. 20705/2011 were
postponed sine die by agreement for later
determination. Case no 20705/2011 was not before us and therefore,
as Sanral’s
counsel rightly contended, the costs in that matter
are not for us to decide. It would be hoped that the parties would
be able
to come to an agreement in this regard to avoid the necessity
for the costs in that matter to be separately argued before a Bench
specially allocated to determine them. Certainly, that would be the
sensible course.
[12] The costs of the second interim
interdict application heard in May 2013 were stood over for
determination in the principal
proceedings. The interdict that was
granted related to the matter in respect of which the City achieved
success in the principal
proceedings. The costs of the second
interim interdict application will therefore be awarded to the City,
including the costs
of three counsel. (The costs attendant on the
interlocutory matters argued at the same time concerning the
amendment of the City’s
notice of motion and certain matters of
disclosure have already been determined in the judgment delivered on
21 May 2013.)
[13] The costs of the application to
introduce supplementary affidavits heard on 4 August 2015 will follow
the result. Sanral will
be ordered to pay the City costs in the
application. We consider that the employment of not more than two
counsel to have been
justified in those proceedings. It is not
expedient to separate the costs of the City’s contingent
counter-application and
we shall direct that they be treated as part
of the costs incurred in Sanral’s application to introduce the
supplementary
affidavits.
[14] It was not necessary for the court
to hear and determine City’s interlocutory applications in
terms of rule 27 and 30A
instituted on 16 January and its application
in terms of rule 6(5)(e) instituted on 4 March 2015 because the
matters concerned
were eventually settled by agreement. We consider
that the institution of those proceedings to have been reasonable and
the order
to be made will direct that the costs incurred by the City
in connection with such applications shall be paid by Sanral.
[15] We consider that the costs
incurred in connection with the various directions hearings before
the successive judicial case
managers in the review proceedings
(Hlophe JP, Traverso DJP and Binns-Ward J, respectively) should be
costs in the review.
[16] The following order will issue:
1. Save as specially provided in terms
of paragraphs 2, 4 and 5 of this order, or previously ordered in
terms of the judgment on
the interlocutory applications delivered on
21 May 2013, the first respondent shall be liable to pay 70 per cent
of the applicant’s
costs of suit, which costs shall include the
costs of three counsel.
2. The costs incurred by the applicant
in respect of the qualifying fees of the following witnesses, as
taxed or agreed, shall be
paid in full by the first respondent.
a. A. H. Barbour (in respect of his
report dated May 2014);
b. B.C. Floor;
c. J.P. Naude;
d. M.K. Holland;
e. J.J. Rossouw;
f. M.J. Snell and
g. Grant Thornton (G.A. Penrose and I.
Hashim).
3. The costs of the interim interdict
application instituted by the applicant on 28 March 2013, which were
stood over for later
determination in terms of the judgment delivered
on 21 May 2013, are awarded to the applicant. The costs so awarded
shall include
the costs of three counsel.
4. The costs of the application to
introduce additional affidavits instituted by the first respondent on
17 July 2015, which was
decided on 4 August 2015, with costs stood
over for later determination, are awarded to the applicant. The
costs so awarded shall
include the costs incurred in respect of the
applicant’s contingent counter-application and the costs of two
counsel.
5. The costs incurred by the applicant
in respect of the interlocutory applications in terms of rules 27 and
30A and rule 6(5)(e)
instituted by the applicant on 16 January 2015
and 4 March 2015, respectively, shall be paid by the first
respondent.
6. The costs incurred by the applicant
in respect of the various directions hearings, including the costs of
the attendance of counsel,
shall be paid by the first respondent as
costs in the cause on the basis provided in terms of paragraph 1 of
this order.
A.G. BINNS-WARD
Judge of the High Court
N.P. BOQWANA
Judge of the High Court