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[2011] ZAGPJHC 120
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Brian Kahn Incorporated v Samsudin (22210/2008) [2011] ZAGPJHC 120; 2012 (3) SA 310 (GSJ) (2 September 2011)
SOUTH GAUTENG HIGH
COURT, JOHANNESBURG
APPEAL
CASE NO: 5060/2010
SGHC
CASE NO: 22210/2008
REPORTABLE
DATE:02/09/2011
In the matter between:
BRIAN
KAHN INCORPORATED
(Applicant
in the court
a quo
)
and
MELLENEY
VENESSA SAMSUDIN
.
(Respondent
in the court
a quo
)
JUDGMENT
VAN
EEDEN AJ
:
1.
In
the court
a
quo
,
presided over by our brother Moshidi J, the appellant applied for
judgment of some R260 000.00, together with interest, the
claim
being based on professional services allegedly rendered by the
appellant, a firm of attorneys, to the respondent, its erstwhile
client. The appellant claimed that there was “
no
dispute of any nature whatsoever in regard to the respondent’s
indebtedness to the applicant”.
[1]
It
further alleged that the respondentfs mandate to it had been
reduced to writing, and in support of that contention it attached
two
documents to its founding affidavit, collectively termed
“
the
engagement letter”
.
The respondent, nevertheless, disputed both the amount of her alleged
indebtedness and the conclusion of the so-called engagement
letter.
That dispute notwithstanding, these clauses of the engagement letter
remain relevant to this appeal:
“
15.1
In accordance with the modern trend throughout the western world to
avoid, wherever possible, litigious or hostile environments,
this
firm commits itself to the process of alternate dispute resolution
(“ADR”) in dealing with you. It is therefore
a term
of this firm’s accepting your mandate (and by extension, our
attorney/client relationship with you) that should there
be any
dispute of any nature whatsoever between this firm and you, whether
in relation to the quantum of our charges or otherwise,
such dispute
is to be resolved by way of:-
15.1.1
mediation (see 15.2.1); and
15.1.2
if mediation is unsuccessful, arbitration (see 15.2.2).
15.5
The aforesaid dispute resolution mechanism (i.e. mediation and
arbitration) replaces the taxation or where applicable
assessment of
charges by the Law Society. In other words, should you at any time
require this firm to justify or determine quantum
(in respect of any
charges – fees, disbursements or interest) there shall be
deemed to be a dispute in regard to the quantum
of our charges and
mediation and arbitration will take place as the only processes
involved in quantifying the charges.”
2.
In
opposing the relief sought, the respondent prayed that the
application be dismissed, alternatively that the application be
stayed
pending the submission to and taxation of the appellantfs
bills of costs.
[2]
The
respondentfs approach to the mediation and arbitration clause
was expressed in these terms:
“
23.2
In the premises, even if the above Honourable court were to find that
I am bound to Applicant in terms of Annexures “NG1”
and
“NG2”
[3]
to
the founding affidavit (which is denied), it is a term of those
documents that:
23.2.1
accounts are payable upon “presentation” and inasmuch as
there was no presentation of the aforesaid accounts
to me, the amount
claimed is not payable;
23.2.2
any dispute in regard to Applicantfs fees has to be resolved by
mediation, and if mediation is unsuccessful,
then arbitration (clause
5 of Annexure gNG2h). There has been no mediation
or arbitration and Applicant was not
entitled to institute these
proceedings.h
[4]
3.
When
the matter was called in the court
a
quo
,
the appellant was represented by Mr Subel SC and Mr Strathern. Mr
Kaplan represented the respondent. He informed the court
that
he wanted to raise a point
in
limine
.
He handed in heads of argument dated 25 March 2010, which was the
date upon which the application was heard in the court
a
quo
.
It appears that he had only advised Mr Subel of this point the
previous day. From the heads of argument it appears
that the
so-called point
in
limine
essentially entailed the contention that since the appellant failed
to allege that the amount claimed had either been agreed upon
or had
been taxed, the appellant could not recover the amount claimed.
Mr Kaplan stated that although the conclusion of the
engagement
letter was in dispute, the court could approach the matter as though
the engagement letter was binding “
for
purposes of this argument”
.
[5]
Mr
Kaplan referred the court to paragraph 15.5 of the engagement letter,
already quoted hereabove, which stipulates that a dispute
of fees
would be submitted to mediation and arbitration to the exclusion of
taxation or assessment of charges by the Law Society.
He then
contended that since the appellant had chosen to launch the motion
proceedings in issue, it was precluded from relying
on Clause 15.5,
i.e. the matter could no longer be referred to mediation and
arbitration, and that the appellant was consequently
obliged to tax a
bill of costs. Mr Kaplan concluded that since it was common
cause that the appellant had refused to submit
to taxation, the
application fell to be dismissed with costs. Mr Subel resisted
the application that the so-called point
in
limine
be argued first. He contended that it was not a discrete issue,
that it formed part of the substance of the application and
consequently had to be argued as such.
It
brooks of no doubt that a court is empowered, in the exercise of its
discretion, to direct that a preliminary point be disposed
of first
in motion proceedings.
[6]
It
will be ordered when the issue is one of substance that may dispose
of the matter as a whole, or at least of a substantial portion
thereof. In such circumstances it will normally be convenient
to allow the parties to first complete argument on the preliminary
issue and, depending on the outcome thereof, to only then proceed
with the remainder of the matter. This procedure is
particularly
apposite when the legal issues are crisp and far removed
from any conflict of fact, much like when parties first argue a legal
issue, but nevertheless request a court to refer the matter to oral
evidence if the appellant should lose the legal point.
[7]
The
court
a
quo
did not expressly rule on the question as to whether the so-called
point
in
limine
had
to be argued first and separately from the remainder of the
application or not. In fact, it seems uncertain that it
afforded
counsel a proper opportunity to debate this issue. Be
that as it may, Mr Kaplanfs point
in
limine
did
not raise a crisp or discrete legal issue. The argument entails
that the engagement letter evidences a contract, and effect
must
consequently be given thereto unless that is prevented by some
impediment. Mr Kaplanfs argument did not raise
a legal
impediment preventing the implementation of the engagement letter
that could justify a dismissal of the application.
Instead, it
required of the court to make further factual findings to determine,
at the very least, whether the appellant had waived
the right to
insist on the mediation and arbitration clause. In other words,
the argument advanced the proposition that the
court should accept
that the engagement letter was binding, but that the mediation and
arbitration clause could no longer be enforced.
If this limited
concession did not raise an academic point that could not
realistically assist in bringing the matter to finality,
it came
perilously close to it. It was made for the limited purpose of
securing an order that the application be dismissed
on the basis of
the argument advanced, and if that failed, the application as a whole
had to be dealt with afresh, but on the true
factual position. If the
court rejected the waiver argument, the limited concession did not
empower the court to refer the dispute
to mediation and arbitration,
nor to grant the applicant the relief it sought. Courts are not
called upon to adjudicate academic
issues, and will generally decline
to decide questions on provisional facts, for that will inevitably
mean that their decisions
are equally provisional.
[8]
In
my view the approach suggested by Mr Kaplan was not one upon which
the court a quo should have acted at all. And whilst
there may
be some doubt as to whether full argument was allowed on the
separation of the point in limine, there is no doubt that
no argument
was heard on the substance thereof. When granting leave to appeal,
the court a quo accepted that counsel for the appellant
did not
present argument in respect of the point in limine.
[9]
I
am convinced that the omission by the court a quo to have afforded
counsel for the appellant the opportunity to address the court,
happened per incuriam and not by design. Nevertheless, the
omission deprived the court of the benefit of oral argument
“
in
which counsel can fully indulge their forensic ability and persuasive
skill in the interest of justice and their clients”
.
[10]
I
accordingly find it surprising that on appeal counsel did not refer
to any authorities relevant to this issue. The court
a
quo
made
these orders which I quote
verbatim
:
“
1.
That the point in limine is upheld.
2.
That the Applicants is to tax his account, if he wants to.
3.
That the Applicant shall pay the costs of the application.h
4.
It
is a fundamental principle that every litigant should be given a fair
opportunity of addressing the court. But the mere failure
on the part
of a court to hear argument is not necessarily an irregularity or
fatal to the proceedings. It was, for instance,
not regarded as
a fatal irregularity when the circumstances were such that there was
a duty to speak on the part of the litigant,
or on his or her
representative. Thus in
Willemse
v Cape Town Stevedoring
[11]
the
court held that notwithstanding
“
a
certain celerity with regard to the proceedings”
,
it was satisfied from the information supplied in counsel’s
affidavit that it would have been possible to call back the
Magistrate who had failed to hear the appellant’s counsel on
the applicability of certain legislation relevant to the case.
Although the application for review was consequently dismissed, Juta
JP emphasised that every party is entitled to put his case
before the
court which is hearing it, and stated that such entitlement included
the right to argue on the facts. Similarly,
in
R
v Cooper
[12]
the
Chief Justice writing for a unanimous and distinguished bench
[13]
,
found that there was no irregularity in the proceedings when a trial
judge inadvertently omitted to ask the appellant whether
he wanted to
address the jury under circumstances where the appellant was quite
aware of his rights, but made no attempt to exercise
them. The
Chief Justice added that even if there had been an irregularity, the
appellant could not take advantage thereof.
In
Serfontein
v Bosch
[14]
De
Villiers JP found himself in full agreement with authorities quoted
“
to
the effect that it is not necessarily a gross irregularity if the
court merely omits to hear argument (exemptly gratia, per incuriam),
for in such circumstances the attorney or advocate should draw the
court’s attention to the omission immediately”
.
And in
S
v Bressler
it was held that if no prejudice is established, the irregularity
will also not be regarded as fatal, and in such an instance a
higher
court will not interfere.
[15]
In
these matters the irregularity has no consequence on appeal or
review.
In
other instances, however, the failure to hear a party, whether
intentional or per
incuriam
,
may be fatal to the proceedings. In
Serfontein
v Bosch
[16]
the
Magistrate dismissed an application for a postponement and without
hearing the defendant’s attorney in argument on the
merits,
granted judgment for the plaintiff. In doing so, the Magistrate
did not commit a mere oversight, but intentionally
refused to hear
the defendant’s attorney. The intentional refusal to hear
argument constituted a gross irregularity,
which resulted in the
proceedings after the closing of the plaintiff’s case to be set
aside. The matter was remitted
back to the Magistrate’s
court for continuation of the trial. Similarly, in
District
Commandant v Murray
[17]
the
Appellate Division upheld a decision of the Cape Provincial Division
setting aside criminal proceedings where an accused was
not given the
opportunity of giving evidence in his own defence, and of calling
such other witnesses as he may desire. In
Shenker’s
case
[18]
an
accused was sentenced where his counsel was afforded no opportunity
to address the court in mitigation. It was held that
the
proceedings were irregular and prejudicial to the appellant and
sentence was accordingly set aside.
Whenever
the failure to hear a litigant, or his or her counsel, is fatal to
the proceedings, the particular circumstances of the
matter must
dictate the future of the matter. If possible, the court of
appeal will adopt a pragmatic approach and will dispose
of the matter
rather than to remit it to the court of first instance. In
Shenker’s
case the accused was, after the setting aside of the sentence,
sentenced afresh by the court of appeal. There are further
examples. In
Bressler’s
case the Appellate Division considered and confirmed the sentence
imposed by the court
a
quo
.
[19]
In
Transvaal
Industrial Foods
[20]
the
Appellate Division acceded to the request to
grehearh
the
matter without having any regard to the findings of the court a quo.
It followed the same approach as it would if a trial
judge had
“ascended
into the arena”
,
namely by having no regard to the court
a
quo
’s
findings on issues such as credibility.
[21]
A
similar approach was adopted in
Ntuli
v Zulu
[22]
,
where a review of the North Eastern Divorce Court came before the
High Court, during which it appeared that the presiding officer
had
refused to hear argument. The court elected not to remit the
matter back for rehearing. In
Simaan’s
case
[23]
the
court also held that all the material necessary for a decision was
substantially before it, and imposed a fresh sentence.
When
granting leave to appeal, the court
a
quo
expressed frustration that appellant’s counsel did not raise
its failure to hear counsel there and then.
[24]
I
am left with the impression that the court
a
quo
raised this consideration to indicate that had attention been drawn
to the oversight, it could or would have rectified the irregularity
that had occurred
per
incuriam
.
On appeal Mr Cassim SC assisted by Mr Kaplan directed some criticism
at their colleagues’ failure in this regard.
Mr
Strathern, who appeared on his own, advised us from the Bar that
there was indeed some discussion on re-approaching the presiding
judge in order to discuss the events, and Mr Kaplan confirmed this.
The parties were, however, unable to agree on how to achieve
that,
mainly I believe, because the respondent adopted the attitude that it
would not abandon the order made. I do not think Mr
Subel and Mr
Strathern can be faulted for failing to direct the court’s
attention to its failure to hear argument from them.
They must
have been taken by complete surprise, not only by the celerity of the
proceedings, but also by the nature of the order
made. The
order was not one which the respondent had moved for. No reasons for
the order were seemingly given, and the absence
thereof could only
have added to their surprise.
[25]
It
seems clear that there was no reasonable opportunity for counsel to
debate the matter with the court
a
quo
,
and they cannot be said to have rested supine when the order was
granted.
[26]
Any
argument placed before a court that has already pronounced on the
issue is not on the same footing as argument presented while
the
matter is open.
[27]
In
my view the failure to hear counsel amounted to an irregularity fatal
to the proceedings, and the appeal must thus succeed.
The
conundrum to be answered is whether the application should be
remitted back, or whether this court should dispose of it.
The
application raised an important issue, namely whether an attorney can
contract out of having a disputed account submitted to
taxation or
assessment by the Law Society, as Clause 15.5 of the engagement
letter purports to achieve. In concluding Clause
15.5 (assuming
that the appellant proves the conclusion of the engagement letter)
the parties clearly sought to oust taxation or
assessment of charges
by the Law Society. In support of this the appellant attached
an unreported judgment of this division
to its heads of
argument.
[28]
In
this matter Pienaar AJ granted an application that the respondent
submits to mediation and arbitration where a similar dispute
existed.
The agreement between the attorney and his client expressly provided
for mediation and arbitration in the event of a dispute
about fees
arising. The respondent argued for an implied or tacit term to
the effect that the attorney’s bills of cost
could nevertheless
be submitted for taxation upon request, and that the agreement
between them did not exclude his right to demand
taxation.
Pienaar AJ held that no implied or tacit term could be read into a
contract where there is a contradictory express
term, and
consequently ordered the respondent to proceed to mediation and
arbitration. The court
a
quo
did not purport to follow Pienaar AJ, and the latter’s decision
is of course not on appeal before us. The decision
does,
however, seem to run counter to the reasoning adopted in the reported
matters dealing with a client’s entitlement to
insist that his
or her attorney’s account be taxed.
[29]
The
reasoning in all of these matters appear to be that when an
attorney’s account is disputed, it has to be determined whether
the work in respect of which the attorney’s claim lies, was
both authorised and performed. In addition, it must of
course
also be determined that the fee in issue is reasonable.
[30]
As
I understand it this function is performed under the auspices of the
relevant Law Society of which the attorney is a member,
and I am
perplexed by the notion that agreement between an attorney and his or
her client can divest the Law Society of these powers.
The Law
Society may very well be an interested party in proceedings such as
these.
The
issues raised by this application are important not only for the
parties in this matter, but also for the whole of the attorneys’
profession and the public at large. Even though these are
motion proceedings, where the evidence is before us on affidavit,
I
still believe that this is not a matter where this court should
itself adjudicate the application. The cases referred to
above,
[31]
where
courts of appeal finally disposed of the matters, stand on a
different footing. No important legal principle was at
stake in
any of the matters. There was no possibility of a further party
having an interest in the result of the matter.
The parties
either requested the court of appeal to finally dispose of the
matter, or acquiesced in that approach. In this
matter both
parties accepted that if the appeal should succeed, the matter would
be remitted back to the High Court, and consequently
did not address
us on the merits. It consequently appears that there is no
compelling reason why this court should also act
as court of first
instance. It would then be more appropriate for this court to
remit the matter back to the High Court,
so that all may benefit from
the insight of a court of first instance, and of such contribution as
the Law Society might offer
to both the factual and legal issues.
In reaching this conclusion, I was guided by the reasoning of the
Constitutional Court
in
Women’s
Legal Centre Trust
,
[32]
even
though that matter concerned an application for direct access to that
court. It seems to me that the Constitutional Court’s
approach is refusing to act as a court of first instance should also
find application to the circumstances of this matter.
5.
The appeal was advanced on the narrow basis
that a fatal irregularity had occurred in the court
a
quo
. There was consequently no
reason for the appellant to file an eight volume record consisting of
some 750 pages, without
at least indicating which portions of the
record were considered relevant and which not. Large portions
of the record turned
out to be irrelevant, such as responses to a
notice in terms of Rule 35(12) and applications for condonation for
the late filing
of affidavits. Mr Strathern submitted that only
the costs of the record should be disallowed and that the costs of
the appearance
on appeal should be ordered to follow the result.
In my view that approach would not sufficiently address the failure
to
exclude the irrelevant material from the record, or at least to
identify the irrelevant material when the heads of argument were
filed. In the circumstances I deem it appropriate to refuse to
make any order in respect of costs.
6.
In the result I propose the following
order:
1.
The appeal is upheld and the orders of the court
a
quo
are set aside.
2. The application is
remitted back to the High Court for hearing on the ordinary opposed
roll.
H
VAN EEDEN
ACTING JUDGE OF THE
HIGH COURT
C J CLAASSEN
JUDGE OF THE HIGH
COURT
I AGREE
C E NICHOLLS
JUDGE OF THE HIGH
COURT
I AGREE
IT IS SO ORDERED
Counsel for appellant:
Adv P Strathern
Instructed by:
Brian Kahn Inc
Counsel for respondent:
Adv N A Cassim SC and Adv J L Kaplan
Instructed by:
Rothbart Inc
Date of argument: 5 May
2011
Date of judgment: 2
September 2011
[1]
Page
6 para 4.
[2]
Page
384 para 3.
[3]
These
documents constitute the so-called engagement letter.
[4]
Page
371 para 23.2.
[5]
Page
724 para 5.
[6]
Raymond
v Abdulnabi & Others
1985 (3) SA 348
(W) 349E. is very often applied when
locus
standi
is
in issue.
De
Reuck v Director of Public Prosecutions, Witwatersrand Local
Division & Others
2002
(6) SA 370
(W) and
Union
Finance Holdings Ltd v I S Mirk Office Machines II (Pty) Ltd &
Another
2001 (4) SA 842 (W).
[7]
Fax
Directories (Pty) Ltd v SA Fax Listings CC
1990 (2) SA 164
(D & CLD).
[8]
Standard
General Insurance Co Ltd v Commissioner for Customs and Excise
2005 (2) SA 166
(SCA) [6] to [9].
[9]
Page
741 line 24.
[10]
Transvaal
Industrial Foods Ltd v BMM Process (Pty) Ltd
1973 (1) SA 627
(AD) 628G.
[11]
Willemse
v Cape Town Stevedoring Company & Another
1916 TPD 507.
[12]
Rex
v Cooper
1926 AD 54.
[13]
Innes
CJ, Solomon, De Villiers, Kotz
é
and
Wessels JJA.
[14]
Serfontein
v Bosch
1930 OPD 75 78.
[15]
S
v Bressler
1967 (2) SA 451
(A) 458B-C.
[16]
Serfontein
v Bosch
1930 OPD 75 78.
[17]
District
Commandant, South African Police & Another v Murray
1924 AD 13.
[18]
Shenker
v Additional Magistrate, Wynberg
1965 (3) SA 121 (CPD).
[19]
S
v Bressler
1967 (2) SA 451 (A) 455 B-H.
[20]
Transvaal
Industrial Foods Ltd v BMM Process (Pty) Ltd
1973 (1) SA 627
(AD) 628G.
[21]
Solomon
& Another, NNO v De Waal
1971 (1) SA 575
(AD) 581A.
[22]
Ntuli
v Zulu & Others
2005 (1) SA 456 (NPD).
[23]
Simaan
v SA Pharmacy Board
1982 (4) SA 62
(AD) 80G.
[24]
Page
741 [8].
[25]
The
Supreme Court of Appeal has recently again stressed the importance
of giving reasons for order – see
S
v Maake
2011 (1) SACR 263
(SCA) [19].
[26]
Compare
S
v Bressler
1967 (2) SA 451
(A) 457G;
Shenker
v Additional Magistrate
supra 125E.
[27]
District
Commandant, South African Police & Another v Murray
1921 AD 13 19.
[28]
Case
No 03/15874
Brian
Kahn Inc v Pereira Salvadore Pais & Others
.
[29]
E.g.
Blakes
Maphanga Inc v Outsurance Insurance Co Ltd
2010 (4) SA 232
(SCA) [17],
Muller v The Master & Others
1992 (4) SA 277
(TPD) 283H and
Benson
& Another v Walters & Others
1984 (1) SA 73
(AD).
[30]
Compare
Malcolm
Lyons & Munro v Abro & Another
1991 (3) SA 464
(W) 469D-E.
[31]
See
paragraph 9.
[32]
Women’s
Legal Centre Trust v President of RSA
2009 (6) SA 94
(CC) [27] and [28].