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[2016] ZAWCHC 172
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Harding and Another v Maclear (A272/2016) [2016] ZAWCHC 172 (24 November 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
WESTERN
CAPE DIVISION, CAPE TOWN
REPORTABLE
CASE
NO: A 272/2016
In
the matter between:
MARK
HARDING
First Appellant
MELTRADE
7CC T/A
REMAX
PROPERTY
ASSOCIATES
Second Appellant
And
KAREN
ELIZABETH
MACLEAR
Respondent
JUDGMENT DELIVERED ON
24 NOVEMBER 2016
GAMBLE,
J:
INTRODUCTION
[1]
This is an appeal against a costs order made in favour of the
respondent by the Magistrate for Cape Town in an interlocutory
application. It demonstrates to my mind how, when the stakes are low,
a litigant’s money can be wasted on peripheral issues
rather
than focusing on the core of the case. I have little doubt that the
money already spent in this matter by far exceeds the
capital claimed
by the appellants in the main action.
[2]
There is nothing complicated in the story. In March 2014 the
respondent sold a residential property in Parklands for R850 000.
The deed of sale records that the first appellant was entitled to
brokerage at the rate of 6% plus VAT in respect of the sale.
The
first appellant, representing the second appellant, accepted the
benefits of the agreement in writing. The property was transferred
to
the purchaser in July 2014 with the respondent’s current
attorney of record acting as the conveyancing attorney in the
transaction.
[3]
The amount due to the appellants as commission totalled R 51 000.00.
As is customary the agent’s commission was to be
paid on
transfer out of the proceeds of the sale then being held in the
attorney’s trust account. The conveyancing attorney
however
only made payment of the sum of R32 210.13 to the appellants leaving
an outstanding balance of R25 929.87. The appellants
issued
summons against the respondent on 14 August 2014 for that amount
together with interest and costs. More than two years later
the trial
for payment of a relatively paltry amount has not yet commenced.
Rather, the parties have busied themselves with interlocutory
challenges somewhat akin to a game of legal snakes and ladders.
[4]
When the respondent entered an appearance to defend the matter the
second appellant filed an application for summary judgement
on 9
October 2014. The supporting affidavit was signed by a certain Ms
Caron Leslie in her capacity as a member of the second appellant.
The
respondent filed a 15 page opposing affidavit taking a plethora of
procedural points. The affidavit is unnecessarily verbose,
purporting
to provide a full background history to the matter.
[5]
The substance of the defence to the claim for commission appears to
lie in fact that problems arose with compliance with the
original
deed of sale due to the fact that the purchaser was unable to come up
with the requisite guarantee for payment. The respondent
says that
this necessitated the intervention of her attorney , who she says (in
an affidavit obviously prepared by him) was required
to
“…
advise me on the
envisaged further conduct of the transaction and how to resolve the
crisis. I was adamant that I would not and
should not be liable for
any costs of any nature to rectify [the agreement of sale] and he
should ensure that the sale of the property
was effected and
finalised.”
[6]
It appears that when the time came to transfer the property, the
respondent’s attorney drew up an account relating to
his
attendances in regard to the “rectification” of the deed
of sale. This was said to total R24 228.42. The respondent
goes on to
say that
“
My Attorney duly accounted
for their (sic) interventive (sic) attendances… and
transferred the balance of R32 210.13
…to Remax
…”
[7]
The papers before this court do not indicate what became of the
application for summary judgement but, since the respondent
subsequently filed a plea, it is safe to assume that the respondent
was able to avoid the chop at that stage. The defence articulated
in
the plea is that the respondent’s attorney concluded an oral
agreement with the aforesaid Ms Leslie in terms whereof the
appellants’ commission would be reduced by an amount equivalent
to his account to the respondent for rectifying the sale
agreement.
It would seem then that the respondent’s attorney is likely to
be a material witness if this matter ever gets
to trial.
THE
RULE 54 NOTICE
[8]
On 16 September 2014 the respondent’s attorneys issued a
“
Notice in
Terms of Uniform Court Rule 54(2),(4),(5)
and (6)”
, despite the fact that the matter was before the
Magistrate’s Court and not the High Court where the Uniform
Rules apply.
No doubt the respondent’s attorneys purported to
act in terms of Magistrates Court Rule 54 which provides for a
defendant
to demand of her opponent the issuing of a notice
disclosing who the partners in the plaintiff business are when sued
by a firm
or partnership.
[9]
The notice is oddly worded and commences with the following verbage:
“
Be pleased to take notice
that without being construed as an admission and without prejudice to
defendant’s rights, the alleged
First and Second Plaintiff are
required…. to deliver to the Defendant’s Attorneys in
writing, a statement of the name(s)
and place(s) of residence(s) of
any person(s) who are/were at the time of the accruing of the cause
of action partners/members/associates/trustees/persons
carrying on
business/trading as Meltrade 7 CC T/A Remax Property Associates…”
I
say odd because it is beyond comprehension how one can issue a notice
in a terms of the Rules of Court (other than perhaps an
offer to
settle) on a without prejudice basis.
THE
RULE FIRST 60A NOTICE
[10]
It appears as if the appellants ignored the Rule 54 notice. On 20
January 2015 their attorneys issued a “
Demand for Plea
”
which was served on the respondent’s attorney the same day. The
latter wasted little time in generating yet another
interlocutory
application, this time a notice in terms of Rule 60A(1), which was
served on 23 January 2015 and which sought to
set aside as an
irregular proceeding what was referred to as the “
Plaintiff’s
Notice of Bar
” (it was, as set out above, in fact entiled
“Demand for Plea”) of 20 January 2015, on the basis that
the appellants
had failed to furnish an answer to the aforesaid Rule
54 notice of 16 September 2014.
[11]
When there was yet again no response, the respondent’s attorney
delivered a notice of motion on 27 February 2015 setting
down an
omnibus application for hearing on Monday, 16 March 2015, for relief
“…
in terms of Rule
60(A)(1) declaring that:
1.
Respondent’s “demand for plea” dated 20 January
2015 and received at Applicant’s attorneys of record on 20
January 2015 is declared to be an irregular step and set aside; and
2.
Respondents are to comply with Applicant’s Notice in terms
of Magistrates Court Rule(s) 54 (2),(4),(5) and (6) (“the
Notice”) dated 16 September 2014 and served on Respondents
(sic) Attorneys of record and filed at this Court on 16 September
2015, within five (five) days of this Court Order.
3.
Respondents jointly and/or severally to pay the costs of this
application on an (sic) Attorney-Client scale immediately taxable to
include preparation, waiting and travelling time.
4.
Failing
timeous compliance with this Court Order by Respondents, the
following relief:
4.1.1 Respondents’ claims
against applicant be struck out with costs on the Attorney-Client
scale to be paid jointly and/or
severally to include preparation,
waiting and travelling time, immediately taxable; and
4.1.2 Respondents not be permitted
to reinstitute the action until all costs have been paid.”
[12]
That interlocutory application was opposed by the appellants whose
attorney deposed to an answering affidavit on 12 March 2015
while a
19 page replying affidavit was deposed to by the respondent’s
attorney on 15 April 2015. On 15 May 2015 the Magistrate
dismissed
the application in terms of Rule 60 A with costs, finding (quite
correctly in my view) that Rule 54 could not be resorted
to in
circumstances where the plaintiff was a Close Corporation.
DISCOVERY
AND THE FURTHER RULE 60A(2) NOTICES
[13]
The next procedural step was discovery. The appellants called for
discovery first, initially in a notice in terms of Rule 23
dated 12
June 2015. This notice, however, did not comply with requisite time
period for reply contemplated in the rule (10 days
instead of the
mandatory 20). The respondent was quick out of the blocks and on 30
June 2015 she filed a fresh notice in terms
of Rule 60A(2) asking for
the discovery notice to be set aside as an irregular proceeding in
light of the short time given for
her reply. The appellants wisely
did not proceed with their first discovery notice and on 14 July 2015
gave a second discovery
notice, this time giving the correct time for
a reply.
[14]
On 15 June 2015, possibly spurred on by receipt of the appellants’
notice, the respondent served her discovery notice.
The first and
second appellants complied with the respondent’s notice without
more and filed their discovery affidavits on
22 July 2015. The
respondent’s attorney however was not satisfied with the
wording of the appellants’ discovery notice
and fired off a
third notice in terms of Rule 60 A (2). This time he took a point not
raised in the first Rule 60A notice: objecting
to the fact that the
appellants used the pronoun “you” in the preamble to
their notice in terms of Rule 23(1) –
“
BE PLEASED TO TAKE NOTICE
that Plaintiffs
require
you
within
20 (TWENTY) days after receipt of this Notice to make discovery on
oath….”
(Emphasis
added)
Use
of the same pronoun is made in the accompanying notices in terms of
Rules 23(6),(7),(9) and (11).
[15]
In the third notice in terms of Rule 60A (2) dated 11
th
of
August 2015, the defendant’s attorney complains firstly that
the first and second appellants were not referred to in the
discovery
notice “
separately alternatively jointly
”,
whatever that may mean. Then, the respondent goes on to raise the
following objections:
“
5.4 The discovery notice(s)
refer to a further natural or legal third person referred to as
“you”. “You”
is repeatedly instructed to
comply with directives from Plaintiffs. It is also not clear as to
who Plaintiffs are, as alluded to
in sub-paragraphs 5.1 and 5.2
above.
5.5
We have no knowledge of or mandate from “you” and
unable(sic) to determine the
status of “you” in the
litigation or how ”you” is able or capable to comply.
6.
It is ambiguous, confusing and uncertain as to who
“you”
refers to (sic) and who is to comply with the Discovery Notice
(“the cause of complaint”).”
[16]
The professed ambiguity and confusion raised in the mind of the
respondent and her attorney is farcical, to say the least.
The notice
appears in a document with the correct court heading, is signed by
the appellants’ attorneys of record and is
marked for the
attention of the Clerk of the Court and the respondent’s
attorneys. Surely any sensible attorney would have
realized that a
party doesn’t call on him/herself to discover? And given that
there was only one defendant in the case, from
whom, other than the
respondent could the appellants have sought discovery?
[17]
Finally on this aspect, what purpose is served in a notice under Rule
60A, by placing one’s client’s case before
the court as
was purportedly done in para 5.5 of the Notice: by pleading that the
respondent had “
no knowledge of or mandate”
? Had
this not been an attorney who, according to counsel for the
respondent on appeal, has practiced in this Division for a good
number of years one may have ascribed the objection to rank
inexperience. Absent that, the only reasonable conclusion is that the
attorney was deliberately, and without reason, wasting the court’s
and his opponent’s time and resources by unnecessarily
protracting the matter, while no doubt requiring his client to settle
his fee notes. It seems also that, having failed in the earlier
application under Rule 54, para 5.4 of the third Rule 60A notice was
intended as a subterfuge to attempt to establish, yet again,
who the
members of the 2
nd
appellant were. In the event, it
appears from the record that the respondent did not persist with the
third application under Rule
60A.
THE
APPLICATION TO COMPEL
[18]
When the respondent failed to reply to the appellants’ notice
to discover, the attorneys for the appellants made application
on 7
October 2015 in terms of Rule 60(2) to compel discovery within five
days. The respondent duly complied with this notice by
filing her
discovery affidavit dated 8 October 2015 the following day. In the
result, on 12 October 2015 the appellant’s
attorneys filed a
notice of withdrawal of the application to compel discovery by the
respondent. However, the respondent’s
attorney was not done
yet.
[19]
On 16 October 2015 the respondent launched an application in terms of
Magistrates Court Rule 27 (3) for an order directing
the appellants
to pay the costs of the withdrawn Rule 60(2) application, on the
attorney and client scale, including “
preparation, waiting
and travelling time immediately taxable.”
That application
was opposed by the appellants whose attorney pointed out in the
answering affidavit that the respondent had only
filed her discovery
affidavit after receipt of the application to compel in terms of Rule
60 (2). He went on to point out that
although his clients
“
would be entitled to pursue
a costs order against the defendant in respect of the application to
compel”,
he
had been instructed that:
“
12.2
The Plaintiffs expressly withdrew the compel
(sic) application
without prejudice to their rights and explicitly without prejudice to
the right to pursue a costs award against
the Defendant. The
Defendant was advised however that the Plaintiff’s did not
desire to pursue a costs award in the interests
of pursuing the
matter to trial as swiftly as possible.”
[20]
The respondent’s attorney filed yet another lengthy affidavit
setting out the chequered history of the litigation and
asserting
that the appellants’ attorney (who is repeatedly, and
disparagingly, referred to by the respondent’s attorney
as
“Peter Rogers”, as if to suggest that this is perhaps the
attorney’s
nom de plume)
did not afford him the
collegial courtesy of a prior request to comply with the discovery
notice before launching the application
to compel. While our courts
always encourage collegial courtesy in circumstances where this can
save a client unnecessary expense,
I consider that in light of the
combative manner in which the respondent’s attorney had chosen
to conduct his client’s
case, such a complaint does strike one
as a little rich: a case of the proverbial pot calling the kettle
black.
[22]
The magistrate heard the application to compel the payment of costs
and granted an order in favour of the respondent on 20
January 2016.
The award included the costs incurred by a postponement on 8 December
2015 and were directed to be taxed on the party
and party scale. It
is against that order that the appellants now appeal. The basis for
the magistrate’s finding was that
the appellants had not
tendered the costs of the respondent in the application to compel,
and that the respondent was therefore
entitled to invoke Rule 27(3)
and procure payment thereof.
[23]
Counsel for the respondent argued that there was a further basis, not
argued in the lower court, upon which the respondent
might have
succeeded. With reference to
van
der Schyff
[1]
,
she suggested that Rule 60(2) was not available to the appellants
since there is an in-built remedy in Rule 23 (8) which they
ought to
have used to compel discovery.
[24]
The point is interesting but one which does not fall to be decided
given that it was not taken in the court below. It seems,
in any
event, that
van der Schyff
dealt with a materially
different factual scenario. That case concerned the automatic lapsing
of a Magistrates Court summons under
Rule 10. In such circumstances
it was held that an application under Rule 60(2) an order declaring
the summons to have lapsed was
not competent given that there was
nothing further that a plaintiff could do, or be required to do, in
the circumstances which
prevailed. Rule 60, it was said, was there to
ensure the fulfilment by the defaulting party of non-compliance with
a procedural
step required by the other party under the Rules.
COSTS
AWARDS GENERALLY
[25]
It is trite that an award for costs involves the exercise of a
discretion on the part of a judicial officer . Nearly a century
ago
the Appellant Division summarised the position thus:
“
The rule of our law is that
all costs - unless expressly otherwise enacted – are in the
discretion of the Judge. His discretion
must be judicially
exercised….”
[2]
[26]
In the lower courts, pursuant to the provisions of section 48 (d) of
the Magistrates Court Act, 32 of 1944, the court’s
discretion
is statutorily confirmed – the court being permitted to grant
such costs order “
as
may be just”
in the
circumstances. What is to be understood by “
just”?
In
Intercontinental
Exports
[3]
the Supreme Court of Appeal
offered the following guidance –
“…
The court’s
discretion is a wide, unfettered and equitable one. It is a facet of
the court’s control over the proceedings
before it. It is to be
exercised judicially
with
regard to all relevant considerations. These would include the nature
of the litigation being conducted before it and the conduct
of the
parties (or their representatives).”
[27]
In
Huey
[4]
the Full Bench of this Division
observed that
“ ‘
Judicially’
means ‘not arbitrarily’. It has been held…. that
where the magistrate or judge ‘brings
his unbiased judgement to
bear upon the matter and does not act capriciously or upon any wrong
principle’ a court of appeal
may not interfere with the honest
exercise of a discretion. A court’s discretion is wide, though
not unfettered.”
[28]
In
Blom
[5]
Corbett JA restated the principle as
follows when considering the approach of an appellate court in
reviewing a costs order of a
lower court:
“
In awarding costs, the Court
of first instance exercises a judicial discretion and a Court of
appeal will not readily interfere
with the exercise of that
discretion. The power of interference on appeal is limited to cases
of vitiation by misdirection or irregularity,
or the absence of
grounds on which a court, acting reasonably, could have made the
order in question. The Court of appeal cannot
interfere merely on the
grounds that it would itself have made a different order.”
[29]
It is generally the case that a party which withdraws an action (or
application) is to be regarded as being in the same position
as an
unsuccessful litigant. In such circumstances the opposing party is
ordinarily entitled to be compensated by an award for
costs incurred
in resisting what was essentially a futile case
[6]
.
However, in
Germishuys
[7]
the Court held that an order for costs
can be made against the party against whom the withdrawal has been
effected provided sound
reasons exist therefor. I am of the view that
this is just such a case.
[30]
In the lower court the appellants’ application was withdrawn
because the substantive relief sought therein - to compel
discovery
by the respondent - had become a “
dead issue”
due
to the respondent filing her discovery affidavit after the
application to compel had been served on her attorneys. In my view
the appellants then did the eminently sensible thing: rather than
waste more time and money arguing over the costs of an interlocutory
application that had been effectively settled by the respondent’s
conduct, they elected not to insist on an order for costs
(which they
were manifestly entitled to do in the circumstances) but rather to
press on in order to bring the matter to finality.
This their
attorneys told the respondent in no uncertain terms.
[31]
I consider that the attitude taken up by the respondent in the
circumstances was both dilatory and cynical. It is clear that
the
respondent was not in a hurry to file her discovery affidavit as her
attorney was still busy cavilling about who “
you”
was
in the discovery notice; a tactic which I have already observed was
both obtuse and dilatory. The cynical nature of that tacic
is
adequately demonstrated by what happened when the application to
compel was launched – then the respondent and her attorney
seemingly had no difficulty in establishing who “you” was
and who was obliged to discover. One has to ask why the respondent’s
attorney did not do what happens in similar circumstances in our
motion court every day when there is a reply filed after an
application
to compel has been launched: agree that the costs should
stand over for determination at the trial? Why yet another
interlocutory
application with the concomitant escalation of costs?
[32]
In this matter the magistrate slavishly followed the provisions of
Magistrates Court Rule 27(3)
[8]
believing that the failure on the part
of the appellants, upon withdrawal of the application to compel, to
tender the costs thereof
was fatal. The magistrate manifestly not
apply his mind to the background facts and circumstances giving rise
to this application,
nor the pedantic and obstructive fashion in
which the respondent and her attorney had conducted the matter thus
far. Importantly,
he failed to consider the fact that he had an
overriding discretion in relation to the award of costs and was not
bound by the
strictures of the rule in question. Simply put, the
magistrate did not properly apply his mind to the matter at hand.
[33]
I consider that had the magistrate considered
Germishuys
he
would have realized that there was no merit in the Rule 27(3)
application.Furthermore, had the magistrate properly considered
the
matter he would have realised that the appellants had been put to the
expense of applying for an order to compel the respondent
to
discover, that she had responded thereto immediately notwithstanding
the earlier dilatory tactic employed in attacking the Rule
23 notice,
and that her reply ultimately had the effect of settling the
substantive issue in the interlocutory application. Far
from being
considered the losers, the applicants had succeded in removing a
significant procedural obstacle which enabled them
to move closer to
trial. In my view, therefore, the respondent’s application in
terms of Rule 27(3) should have been refused
with a punitive costs
order in favour of the appellants. Indeed, it would have not been out
of place in this matter to have ordered
the attorney to bear those
costs
de bonis propriis.
[34]
Counsel for the appellants asked the court to consider upholding the
appeal with costs on the scale as between attorney and
client. In my
view, there is nothing in the manner in which the respondent
conducted herself in this court which merits a punitive
costs order.
After all, she was the fortunate beneficiary of a discretionary order
granted in the lower court and she was entitled
to come before this
court to defend that judgement. Her attorney’s conduct in the
lower court is properly addressed by the
scale of costs incurred in
that forum.
[34]
In conclusion I wish to issue a note of caution to practitioners
generally. One sees all too often dilatory tactics and “
smart”
points of law taken on behalf of parties which do not advance the
litigation one jot but only serve to frustrate the opponent from
bringing the case to finality. Ultimately, in such circumstances it
is only the legal practitioners who are the winners. This sort
of
practice is to be deprecated and in appropriate circumstances in the
future, this court will not hesitate to order the practitioner
to
bear those costs personally.
ORDER
OF COURT
A. The appeal is upheld
with costs.
B. The order of the
Magistrate, Cape Town of 20 January 2016 is set aside and replaced
with the following order :
“
The application in terms of
Rule 27(3) is dismissed with costs on the scale as between attorney
and client”
______________________
GAMBLE
J
I
AGREE
:
________________________
SAMELA
J
[1]
Van der Schyff
v Taylor
1984
(2) SA 688 (C)
[2]
Kruger Bros &
Wasserman v Ruskin
1918
AD 63
at 69.
[3]
Intercontinental
Exports (Pty) Ltd v Fowles
1999
(2) SA 1045
(SCA) at [25]
[4]
McDonald t/a
Sport Helicopter v Huey Extreme Club
2008
(4) SA 20
(C) at 22 B-C
[5]
Attorney-General,
Eastern Cape v Blom and Others
1988
(4) SA 645
(A) at 670 D-E
[6]
Cilliers et al,
Law
of Costs, 3
rd
ed Para 8.17.
[7]
Germishuys v
Douglas Besproeiingsraad
1973(3)
SA 299 (NC)
[8]
“
27(3)
Any party served with notice of withdrawal may with in 20 days
thereafter apply to the court for an order that the party
so
withdrawing shall pay the applicant's costs of the action or
application withdrawn, together with the costs in so applying:
Provided that where the plaintiff or applicant in the notice of
withdrawal embodies a consent to pay the costs, such consent
shall
have the force of an order of court and the registrar or clerk of
the court shall tax the costs on the request of the defendant."