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[2020] ZAGPJHC 213
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Denby v Ekurhuleni Metropolitan Municipality (27338/2017) [2020] ZAGPJHC 213; 2021 (1) SA 190 (GJ) (9 September 2020)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
No.: 27338/2017
In
the matter between:
DENBY
,
MARK
GARY
Plaintiff
and
EKURHULENI
METROPOLITAN
MUNICIPALITY
Defendant
JUDGMENT
Gilbert
AJ
1.
This judgment concerns the court’s jurisdiction to make an
order based upon the agreement of the parties’ legal
representatives but where one of the parties had not agreed to the
order.
2.
The plaintiff was injured on 21 January 2016 at approximately 04h30
when his bicycle struck a pothole whilst he was cycling along
a road
in Kempton Park. He was thrown over the handlebars of his bicycle and
landed on the tarmac, suffered injuries and was admitted
to hospital.
He instituted an action for damages against the Ekurhuleni
Metropolitan Municipality, on the basis that it owned or
controlled
the road and was under a duty to
inter alia
maintain and
repair the road.
3.
On 27 March 2019 the issue of merits were settled 50% in favour of
the plaintiff, and an order to that effect was made by the
court.
4.
The action was enrolled for trial for 31 August 2020 for the
determination of the usual heads of damages: past medical and
hospital
expenses; future medical and hospital expenses, treatment
and modalities; general damages; and loss of earnings and earnings
capacity.
5.
Various medico-legal and actuarial expert reports were exchanged,
which resulted in joint expert minutes between four of the
five sets
of experts instructed by the plaintiff and defendant respectively.
6.
A joint memorandum by the legal representatives recorded that an
extensive pre-trial meeting had been held recently where the
parties
had (i) limited issues, (ii) identified the facts and opinions in
respect of which no dispute existed, (iii) actively engaged,
verified
and determined the quantification of the separate heads of damages,
(iv) considered, debated and agreed on the factual
and legal basis of
the quantification of the damages; (v) resolved that there was no
further factual or legal
lis
which could possibly require
determination by a court; and (vi) agreed that there was no
discernible
lis
between the expert witnesses or the parties in
respect of the issues to be determined.
7.
The joint memorandum also referred to an attached exhibit, which the
parties consented to being entered into the record of proceedings
as
real evidence, which admitted and confirmed agreement on the
quantification of all heads of damages, and which contained an
amount
that the parties’ legal representatives would jointly seek that
the defendant be ordered to pay.
8.
The joint memorandum also recorded that as a result of the agreements
reached between the parties during the pre-trial proceedings
and the
admitted facts and opinions contained in the exhibits, the legal
representatives (i) did not foresee that any oral evidence
or further
legal arguments or submissions would be required during the trial;
(ii) would request an order that the exhibits and
pre-trial minute be
entered into the record of proceedings and that the action be
disposed of on the contents of the exhibits,
pre-trial minute and the
parties’ joint submissions; and (iii) that subject to the
court’s discretion, would jointly
seek an order in terms of an
attached draft order of court.
9.
Uniform
Rule 37
[1]
and the related
provisions of the Practice Manual
[2]
and Directives
[3]
require of the
parties to constructively engage with each other in pre-trial
proceedings to narrow the issues that remain in dispute.
In doing so,
the parties’ legal representatives had reached the conclusion,
as recorded in a recent pre-trial minute, that
“
there
is no discernible lis between the expert witnesses or the parties in
respect of the issues to be determined
”.
10.
But the pre-trial minute also recorded the difficulty that presented
itself: “
the defendant’s legal representatives are
unable to obtain instructions from the defendant, however after
having applied their
mind to the facts, expert reports, case law and
the legal aspects of the case, the defendant’s legal
representatives agreed
to the evidence and content set out in [the
joint memorandum].”
11.
The defendant’s legal representatives found themselves in the
invidious position that they were unable to obtain instructions
from
their client to agree to a consent order but in the discharge of
their professional legal duties both to the court and their
client to
engage constructively with the plaintiff’s legal
representatives in pre-trial proceedings, including in the making
of
appropriate concessions and admissions, had concluded there remained
no discernible
lis
between the parties to be litigated.
12.
It is in these circumstances that the legal representatives for the
parties had agreed upon a joint memorandum, together with
supporting
exhibits, culminating in the parties’ legal representatives
jointly seeking of the court to make an order for
payment in terms of
a draft order that the parties’ respective legal
representatives had agreed upon but which the defendant
had not.
13.
The issue that arises is whether the parties’ legal
representatives can jointly agree to seek an order where it has been
expressly recorded in a document before the court that the
defendant’s legal representatives have no mandate to settle the
matter on those terms.
14.
This raises the parameters of a legal representative’s mandate
from his or her client. Naturally, a legal representative
cannot
settle the matter contrary to the express instructions of his or her
client. This is different to the present situation
where there are no
such express instructions not to settle the matter.
15.
In
MEC for Economic Affairs, Environment and Tourism, Eastern Cape
v Kruizenga and another
2010 (4) SA 122
(SCA) the trial court had
stood down the matter to enable the parties to conduct a pre-trial
conference. Consequent upon the pre-trial
conference the defendant
conceded the merits of the plaintiff’s case as well as
liability for some of the plaintiff’s
heads of damages. The
parties also agreed that they would seek a postponement of the trial
and the remaining disputed heads of
damages would be determined in
due course. This had been recorded in a pre- trial minute. When the
trial resumed shortly after
the pre-trial conference, the court
declined to postpone the trial
in toto
but required that
judgment be granted against the defendant on the admitted heads of
damages. The court then granted an order based
upon the admitted
liability and postponed the trial in relation to the disputed heads
of damages. Thereafter the defendant sought
to rescind and set aside
the order on the basis that its attorneys did not have a mandate to
make admissions or to settle or compromise
claims.
16.
The Supreme Court of Appeal drew a distinction between settlement
agreements reached outside the context of conducting the trial
in the
normal course of events (where generally a party may resile from
agreements made by his attorneys without his knowledge)
and those
settlements consequent upon a rule 37 conference:
“
[6] It is
important to reiterate what was said at the outset - the issue in
this matter is whether the appellant may resile from
agreements made
by his attorney, without his knowledge, at a rule 37 conference. The
judgment does not deal with agreements reached
outside of the context
of conducting a trial in the normal course of events. The rule was
introduced to shorten the length of trials,
to facilitate settlements
between the parties, narrow the issues and to curb costs. One of the
methods the parties use to achieve
these objectives is to make
admissions concerning the number of issues which the pleadings raise.
Admissions of fact made at a
rule 37 conference, constitute
sufficient proof of those facts. The minutes of a pre-trial
conference may be signed either by a
party or his or her
representative. Rule 37 is thus of critical importance in the
litigation process. This is why this court has
held that in the
absence of any special circumstances a party is not entitled to
resile from an agreement deliberately reached
at a rule 37
conference. And when, as in this case, the agreements are confirmed
by counsel in open court, and are then made a
judgment or order of a
court, the principle applies with even more force.
”
17.
Although
the SCA further stated that “
it
is settled law that a client’s instructions to an attorney to
sue or defend the claim does not generally include the authority
to
settle or compromise a claim or defence without the client’s
approval
”,
[4]
there
remained uncertainty as to how this principle was to be applied. It
is in this context that the SCA
[5]
referred to the distinction drawn by our courts, under the influence
of English law, “
between
settlements made outside of and those made during the course of
litigation”
and
that our courts “
appear
to have accepted that the power to settle a claim is one of the usual
and customary powers afforded a legal representative
in the latter
instance
”.
The SCA also summarised the position in relation to the actual
authority of an attorney to transact on his client’s
behalf (as
distinct from the position where the litigant is estopped from
denying the authority of his attorney to settle or compromise
a
claim), that “
attorneys
generally do not have implied authority to settle or compromise a
claim without the consent of the client”
but
that “
[h]owever,
the instruction to an attorney to sue or defend a claim may include
the implied authority to do so, provided the attorney
acts in good
faith
”.
[6]
18.
The SCA
further reasoned
[7]
that the
usual and customary powers associated with the appointment by a
defendant of a legal representative would include instructions
to
defend the claim, to draft a plea and to attend to all pre-trial
procedures, including rule 37 conferences and that it followed
that
given the authority of a legal representative to attend a pre-trial
conference, absent express instructions to the contrary,
he or she
would also have the authority to discharge what is required of him or
her at the pre-trial conference which is making
such admissions as
are appropriate for purposes
inter
alia
of
narrowing the issues between the parties. If this resulted in there
being no
lis
between
the parties, then it would not be untoward for the legal
representative to also agree to the invariable outcome of the
consequence of those admissions.
19.
As reasoned
by the SCA
[8]
“
it
could hardly be asserted that the admissions fell within his usual
authority, but the settlement, which amounts to a string of
admissions, not
.”
20.
Although
Kruizenga
is factually distinguishable on several
grounds including that it was an application for rescission and what
was primarily in issue
was whether the defendant was estopped from
subsequently denying its attorney’s authority to conclude the
settlement agreement
(in the present instance there is an express
recordal in the pre-trial minute that the defendant has not
authorised the settlement
of the matter and so there can be no
question of any misrepresentation by the defendant’s legal
representatives to found
an estoppel), the reasoning set out by the
SCA is persuasive.
21.
Applying
that reasoning to the present instance, the defendant’s legal
representatives in the discharge of their duties under
Uniform Rule
37 makes certain admissions and concessions and engaged
constructively with the plaintiff’s legal representatives
to
reach a position where the issues have been narrowed to such an
extent that there was no longer any
lis
between
the parties. The extensive joint memorandum with supporting documents
detailing the various agreed facts including in relation
to the
expert evidence and referencing applicable case law demonstrates the
extent of the constructive engagement between the parties.
To find
that the defendant’s legal practitioners do not have the
authority to take the final step of agreeing jointly to
the court
making an order in the amount to be paid that was the end result of
that constructive engagement would defeat the purpose
of the rule 37
engagements, which is to encourage settlements, and which would
otherwise severely hamper the conduct of civil trials.
[9]
22.
I further
find support for this approach in several of the authorities referred
to in the
Kruizenga
judgment.
In
Mfaswe
v Miller
[10]
the
attorney’s clerk was, with the knowledge of the client, sent to
conduct a case on behalf of the client in the magistrate’s
court. On the day of trial the client was late in arriving at court,
and the clerk, in order to avoid the consequences of default
which
would ensue if the case was called in his client’s absence,
compromised the case with his opponent. The client subsequently
sued
his erstwhile attorney for the full amount of the original claim on
the basis that the matter had been settled without his
consent. The
then Supreme Court of Cape of Good Hope held that the clerk had acted
bona
fide
in
what he supposed to be the interests of his client and so the
attorney was not liable in damages. Put simply, the attorney’s
clerk consenting to a settlement in a particular amount for the
plaintiff was preferable to the plaintiff being non-suited as he
was
not present when the matter was called in court.
23.
Applying analogous reasoning to the present situation, if the
defendant’s legal representatives did not seek to agree
an
appropriate order with the plaintiff’s legal representatives,
and so either had to withdraw as attorneys of record in
the absence
of instructions or to appear in court but leave it to the plaintiff
to advance his case in which he sought damages
significantly more
than that to which plaintiff was prepared to agree with the
defendant’s legal representatives, would be
seriously
prejudicial to the defendant. The lesser evil, so to speak, was for
the defendant’s legal representatives understandably
to agree
with the plaintiff on suitable amounts of damages, consequent upon
carefully considered concessions and admissions made
during the
course of pre- trial engagements, than to do nothing and let default
judgment go against the defendant for a significantly
larger amount.
In the present instance the plaintiff in his amended particulars of
claim sought damages of R10, 136, 453, whilst
the amount that the
parties’ legal representatives had agreed upon was R1, 337,
793.
24.
There is
nothing on the papers to indicate that the defendant had expressly
withheld from its attorneys the authority to do that
which they are
now doing. In
Dlamini
v Minister of Law and Order and another
[11]
the
court after referring to
Mfaswe
with
approval and the old English authority of
Matthews
and another v Munster
[12]
made the important observation that in
Matthews
the
client did not put an end to the relationship between himself and his
attorney, and so allowed the attorney to continue to act
on his
behalf,
[13]
which may include
in the circumstances the power to settle the matter. In
Matthews
the
defendant’s counsel had settled the matter in circumstances
where his client was not present when the settlement was made,
but
the defendant was nonetheless bound thereto notwithstanding his
absence given that he had not put an end to the relationship
of
advocate and client which existed between himself and his counsel,
and therefore his counsel had complete authority in that
case which
included binding his client by the settlement.
25.
Matthews
was
also cited with approval in
Klopper
v Van Rensburg,
[14]
where a
party was held to be bound by a compromise effected by his counsel at
a time when he was not present. Similarly in
Alexander
v Klitzke
[15]
the
court found that a mandate included making a
bona
fide
compromise
in the interests of the client, and that if the client wished to
terminate that mandate, he should do so timeously.
26.
In the present instance, by all accounts, the defendant has left it
in the hands of its legal practitioners to deal with the
matter.
This, in absence of something to the contrary, would include making
such admissions and confessions at a pre-trial conference
as were
appropriate, which would include the ultimate consequence of agreeing
that an order be granted if that was the outcome
of the pre-trial
engagement.
27.
I conclude that as the defendant’s legal representatives had
the authority to attend and do what was necessary and required
of
them in the discharge of their duties at a pre-trial conference,
which included making admissions and concessions and even settling
the matter, the defendant’s legal representatives were entitled
to take the position that they have as recorded in the joint
memorandum and for them together with the plaintiff’s legal
representatives to jointly seek of the court to make an order
in
terms of the draft order presented to the court.
28.
In the circumstances, I find that I am able to grant an order on the
terms agreed to by the parties legal representatives, not
because of
a consideration by the court of the merits of the claim or because
the defendant itself has agreed to that order, but
rather on the
basis set out above.
29.
As there
does appear to be a gloss in the various cases that a party’s
legal representatives must be acting
bona
fide
in
what they believe to be the interests of their client for the client
to be bound by their actions,
[16]
I add that given the extensive nature of the joint memorandum and the
pre-trial engagements between the parties, there is nothing
to
suggest that what the defendant’s legal representatives have
agreed to is anything other than
bona
fide
.
For example, as appears above, the amounts reflected in the draft
order in respect of the various heads of damages are considerably
less than what was claimed by the plaintiff in his amended
particulars of claim. Reliance is also placed by the parties upon the
joint minutes of the experts save in relation to the actuaries and
where it appears that the defendant’s actuary’s
evidence
prevailed over that of the plaintiff’s actuary.
30.
In the circumstances, an order is made, as per the parties’
draft order marked “X”.
___________________
Gilbert
AJ
Date
of hearing: 31 August 2020
Date
of judgment: 9 September 2020
For
the plaintiff: Advocate P
Uys
Instructed
by: Clive
Unsworth Attorneys
For
the defendant: Advocate F Darby
Instructed
by:
Schumann van den Heever & Slabbert Inc.
[1]
Such as Uniform Rules 37(4) and 37(6)(g).
[2]
See Chapter 6.12, paragraph 4 of the Practice Manual for this
Division (October 2018), which expressly provides that: “Parties
have a continuous obligation to seek to narrow issues and to comply
with the substantive requirements of Rule 37…”.
[3]
See paragraphs 6 to 8 and paragraph 10 of the Judge President’s
Practice Directive 2 of 2019.
[4]
At para 7 citing inter alia Goosen v Van Zyl
1980 (1) SA 706
(O) at
709 F-H.
[5]
In para 8.
[6]
In para 11.
[7]
In para 17.
[8]
In para 19.
[9]
Kruizenga at para 21.
[10]
(1901) 18 SC 172.
[11]
1986 (4) SA 342 (D).
[12]
(1887) 20 QB 141 (CA).
[13]
At 347 B/C.
[14]
1920 EDL 239.
[15]
1918 EDL 88
at 88, cited with approval in Kruizenga at 127F-128A.
[16]
See Alexander v Klitze above at 88; Dlamini above at 346J –
347A.