NOT REPORTABLE
IN THE EASTERN CAPE HIGH COURT
(SOUTH EASTERN CAPE LOCAL DIVISION)
CASE NO: 2462/2008
In the matter between
GENTECH ENGINEERING PLASTICS CC Applicant
and
SHELDON MAURICE ZIMMER First Respondent
KEITH BLAKE BELLING Second Respondent
SIVALINGUM KEVIN REDDY Third Respondent
UREFLEX CC Fourth Respondent
CASE NO: 1422/2009
In the matter between
GENTECH ENGINEERING PLASTICS CC Applicant
and
SIVALINGUM KEVIN REDDY First Respondent
KEITH BLAKE BELLING Second Respondent
SHELDON MAURICE ZIMMER Third Respondent
UREFLEX CC Fourth Respondent
GRAYMAUR CC Fifth Respondent
VOLKSWAGEN OF SOUTH
AFRICA (PTY) LTD Sixth Respondent
REVIEW OF TAXATION JUDGMENT
2
HARTLE J
1. The applicant seeks a review, in terms of rule 48(1) of the Uniform
Rules of Court, of the taxing master’s decision to reduce the hourly
rate of counsel retained by it in two separate applications in
circumstances where the order of court envisaged the recovery of
costs on the scale as between attorney and client, including the costs
of two counsel.
2. The respondents successfully objected upon taxation that the hourly
rate charged by senior and junior counsel retained by the applicant
was not reasonable having regard to the Eastern Cape Bar Council’s
guidelines for counsel’s fees for their years of experience.
3. The contentious items are the disbursements at items 59, 137, 158,
165, 216, 366, 397, 421 and 439 of the applicant’s bill of costs, being
the accounts of Advocates A P Joubert and G D Wickens , the fees of
whom the taxing master reduced from R3 000.00 to R2 000.00 and
from R1 800.00 to R1 000.00 per hour respectively. (Their day fees
3
were also ostensibly reduced from R30 000.00 to R20 000.00 and
from R18 000.00 to R10 000.00 respectively.)
4. The applications in respect of which the costs order was granted
related to contempt of court proceedings (in two separate applications)
subsequent to the breach by the first to fourth respondents of an
interdict order granted against them in favour of the applicant.
5. The trial court held that the first to fourth respondents acted willfully
and mala fide in breaching the interdict order and were guilty of “a
serious case ” of contempt of court. In his judgment, Kroon J noted
and agreed with the submissions by the applicant’s counsel that a
punitive costs order was justified due regard being had to, firstly, the
nature of the proceedings which sought to uphold the dignity of the
court and, secondly, the first to fourth respondents’ reprehensible
conduct which was described in the judgment as “ calculated, devious
and (a) persistent” flouting of the authority of the court. Kroon J
further agreed with counsels’ submission at the hearing that the
manner in which the first to fourth respondents had conducted the
various proceedings was unacceptable.
4
6. The applicant contends (as it did at the taxation) 1 that since attorney
and client costs were allowed, it was entitled “to recover more than it
would be entitled to recover on a party and party basis to ensure that
it was not out of pocket; an attorney and client costs order being
punitive in nature ”.
7. Additionally it argued upon taxation that, having regard to the nature
of the application and its complexity, the matter not only warranted
the costs of two counsel but especially counsel with Advocates
Joubert and Wickens’ experience and years of practice; and that the
hourly rates charged by them were commensurate with such
experience and years of practice. 2
8. The taxing master – somewhat incompletely, duly stated a case in
terms of the provisions of rule 48(3) as follows:
1 It appears from the taxing master’s stated case that the applicant argued in reply that the costs payable by
the respondents were ordered on an attorney and client basis, hence did not fall to be reduced as being
excessive as contended for by the respondents. This is confirmed by its Notice in terms of rule 48(1) and
(2) in which it went further contending that, by the reduction, it had been placed in an inequitable position
which was not intended by the trial court in awarding the special costs order.
2 This is to be gleaned from the applicant’s notice in terms of rule 48(1) and (2). The taxing master does
not deal with this aspect in the stated case at all.
5
“Has the Taxing Master erred in reducing the Senior Counsel’s rate?” 3
9. His reasons for disallowing portions of counsels’ fees was justified
thus:
“
In the matter of Nel v Waterberg Lanbouers Ko-operatiewe Vereeniging 1946
AD 597 (sic) it was stated that where the attorney and clients costs are to be paid
by the opposite party the taxation should be stricter than in a taxation as between
attorney and client where costs are to be paid by the client to his attorney. Based
on this authority the Taxing Master rejected the Applicant’s submissions and
reduced the Senior Counsel’s account to R2 000.00, which is a fee generally
allowed in this division for matters of this magnitude.”
10. It is abundantly plain that the applicant’s concerns in respect of the
affected items in the bill relate to the fees of both counsel.4 Although
the taxing master’s stated case is framed as if the dispute is limited to
the complaint against the reduction of senior counsel’s fee only (and
seemingly without reference to the applicable scale and basis for the
taxation), I expect that the justification above relates to the reduction
of Advocate Wicken’s fee as well, and I will regard it as such. To re-
3 A more comprehensive description of what is in issue is whether, in the light of the special costs order, the
taxing master correctly reduced the rate of both senior and junior counsel to bring it in line with generally
allowable fees charged by counsel on a party and party basis.
4 The disputed items are referenced by number in the applicant’s rule 48(1) and (2) notice and the taxing
master could not have been under any misapprehension as to the fact that the complaint related to the
reduction of both counsels’ fees.
6
submit the matter to the taxing master to correct this shortcoming will
only result in a further delay 5 and prejudice to the parties who are ad
idem regarding the items of dispute. Notwithstanding later
clarification that the affected items indeed concern the fees of both
counsel, 6 the taxing master has consciously chosen not to add anything
to the stated case, 7 an unfortunate abdication of his responsibility to
clearly define the issues between the parties and to set out the relevant
facts to assist the court.8
11. The taxing master has a discretion to allow, reduce or reject items in a
bill of costs. This discretion must be exercised judicially in the sense
that he must act reasonably, justly and on the basis of sound principles
with due regard to all the circumstances of the case. A court is
reluctant to interfere with his decisions upon matters in respect of
which he is required to exercise a discretion entrusted to him. The
5 There appears to have been a considerable delay in the allocation of the review to a judge.
6 The respondents’ attorneys noted especially in their notice in terms of rue 48(5)(c) that the taxing master’s
submissions had not dealt with the allowable fees with regard to junior counsel, yet aligned themselves
with his “ decision and reasoning ”.
7 I refer in this regard to the taxing master’s report contemplated by the provisions of section 48(5)(b).
8 Rule 48(1) behoves the taxing master in clear and explicit terms to state a case for the decision of a Judge,
which case shall set out each item or part of an item with the grounds of the objection advanced at the
taxation and shall embody any relevant finding of facts by the taxing master. See Fourie v The Taxing
Master 1983 (4) SA 210 (O) at 211G - H in which the purpose and necessity for this function is expounded
upon.
7
general principles governing interference with the exercise of a taxing
master’s discretion have been stated as follows:
“The Court will not interfere with the exercise of such discretion unless it appears
that the Taxing Master has not exercised his discretion judicially and has
exercised it improperly, for example, by disregarding factors which he should
properly have considered, or considering matters which it was improper for him to
have considered; or he has failed to bring his mind to bear on the question in
issue; or he has acted on a wrong principle. The Court will also interfere where it
is of the opinion that the Taxing Master was clearly wrong but will only do so if it
is in the same position as, or a better position than, the Taxing Master to
determine the point in issue… The Court must be of the view that the Taxing
Master was clearly wrong, ie its conviction on review that he was wrong must be
considerably more pronounced than would have sufficed had there been an
ordinary right to appeal.” 9
12. A review of taxation is, therefore, not strictly a “ review ” in the sense
of the court interfering only with the exercise of an improper
discretion; the powers of the court are wider than the known and
recognized grounds to which a power of review is limited at common
law. 10
13. The Appellate Division judgment of Nel v Waterberg Landbouers Ko-
operatiewe Vereeniging 11 is authority for the proposition relied on by
9 Visser v Gubb 1981 (3) SA 753 (C) at 745H - 755C.
10 Legal and General Assurance Society Ltd v Lieberum NO 1968 (1) SA 473 (A) at 478G.
11 1946 AD 597.
8
the taxing master that when a court has ordered a litigant to pay the
other’s costs as between attorney and client and the bill is taxed
against the losing party, the taxing master should apply a “ stricter
taxation ” than he would when taxing a bill as between an attorney and
his client, referred to in the judgment as an “ intermediate basis of
taxation ”. 12 The intermediate scale refers to costs somewhere
between the party and party scale, and that of (pure) attorney and own
client costs. 13
14. Ostensibly what was envisaged by this “stricter ” oversight is to rule
out costs which a winning party has suffered in prosecuting his case
which are (inter alia ) “extraordinary ”, or incurred “ unnecessarily ” or
“superfluously ” (and which cannot justly, and therefore lawfully, be
recovered from the losing party in any circumstances).14 Included in
those charges to be disallowed on taxation against the losing party are
“charges in the nature of luxuries incurred with the approval of the
client, who may happen to be a rich man” and “exceptionally high
fees to counsel ”15
12 Nel (supra) at 608.
13 Aircraft Completions Centre (Pty) Ltd v Rossouw & Others 2004 (1) SA 123 (W) at par [54].
14 Nel supra at 606.
15 Nel supra at 608.
9
15. The reason for the differentiation between the party and party scale
and that applicable when a taxing master is required to tax a bill of
costs for payment to an attorney by his own client is essential “ to
prevent injustice ” to the losing party as a result of the costs award
against him, particularly since he was not a party to the costs
agreement and to avoid a situation where he is fleeced by an
exorbitant assessment.
16. But by the same token, the need to ensure the effectiveness of an order
for costs taxed as between attorney and client cannot be overlooked.
Tindall JA explains the rationale for a special costs order in Nel
(supra) as follows:
“The true explanation of awards of attorney and client costs … seems to be that,
by reason of special considerations arising from the circumstances which give
rise to the action or from the conduct of the losing party, the court in a
particular case considers it just, by means of such an order, to ensure more
effectually than it can do by means of a judgment for party and party costs
that the successful party will not be out of pocket in respect of the expense
caused to him by the litigation. Theoretically, a party and party bill taxed in
accordance with the tariff will be reasonably sufficient for that purpose. But in
fact a party may have incurred expense which is reasonably necessary but is not
chargeable in the party and party bill. See Hearle & McEwan v. Mitchell’s
Executor (1922, T.P.D. 192). Therefore in a particular case the court will try to
ensure, as far as it can, that the successful party is recouped. I say “as far as it
can” because there may be a considerable difference between the amount of the
attorney and client bill which a successful party is bound to pay to his own
10
attorney and the amount of an attorney and client bill which has been taxed
against the losing party. For instance, in the taxation of the attorney’s bill against
his client, the latter could not object to a special fee, however high, to counsel
which he had specially authorized. See Hearle & McEwan v. Mitchell’s Executor
supra.” 16 (Emphasis added)
17. In Aircraft Completions Centre (Pty) Ltd v Rossouw and Others
(supra) the court noted that - whether in respect of either party and
party or attorney and client costs, the taxing master (when taxing
against the losing party) is always required to adhere to the tariff. The
fact that a bill of costs is between attorney and client does not mean
that the fees allowed should be more liberal or that they should be on a
higher scale. Departure from the tariff may well be warranted however
where the taxing master in the exercise of his discretion concludes that
the case is “ extraordinary or exceptional ” within the meaning of Rule
70 (5) (a) of the Uniform Rules of Court 17 and that it would, for that
reason, be inequitable to adhere strictly to the tariff. This approach
accords with that in Nel (supra) vis-à-vis identifying the presence of
16 At 607 – 608.
17 Rule 70(5)(a) provides that the taxing master shall be entitled, in his discretion, at any time to depart
from any of the provisions in the High Court tariff “ in extraordinary or exceptional cases, where strict
adherence to such provisions would be inequitable .”
11
“special considerations ” arising from the particular circumstances
calling for a fuller indemnity. 18
18. In this regard the court in Aircraft Completions Centre (supra )
emphasized the need for the taxing master to look to the objective of
an inter-party attorney and client costs order in order to give it
practical realization: When the court makes a “ special ” costs order
that one party should pay the costs of another taxed as between
attorney and client, it does so for one of two reasons. The first (but
not the main reason for such a special order) is punitive. It is an
expression of the court’s censure of reprehensible conduct on the part
of the costs order that caused the litigation or that made the
proceedings unduly burdensome. Such censure is in itself punitive. It
brings with it the punitive consequences that the costs debtor’s
liability for costs will be increased by the amount the taxing master
finds to be justified in the light of the second and main reason for the
special order.
18 See in this regard Loots v Loots 1974 (1) SA 431 (E) where in a matter where the plaintiff in a divorce
action agreed in a consent paper to pay the defendant’s taxed party and party costs, the court held that, in
taxing the bill the taxing master is bound to apply, or at least to be fairly guided by, the scale of fees
provided in the tariff in Rule 70, and only to depart from it when in his discretion, extraordinary or
exceptional cases present themselves where strict adherence would be inequitable.
12
19. The latter, the second and main reason (the “ true explanation ”
referred to in Nel ), is that the court making the order considers it likely
that, when the costs order comes to be taxed, it will be found by the
taxing master that the reprehensible conduct of the costs debtor that
was censured by the court, was conduct that caused the costs creditor
reasonably to incur extra costs that would not be recoverable on a
strict party and party taxation; and that court considers it just in the
circumstances of the case to ensure more effectually than it can do by
means of a party and party costs award that the successful party will
not be out of pocket in respect of the expenses caused to him by the
litigation.
20. For this reason:
“The taxing master is … required to look to the circumstances in which the court
came to order one party to pay the costs of another taxed as between attorney and
client. He must do so in order to be able to consider whether, and to what extent,
the conduct of the costs debtor that resulted in the special costs order also resulted
in the costs creditor’s having in fact incurred additional expenses that would not
have been incurred but for the misconduct of the costs debtor.” 19
19 At par [80].
13
21. Thus where the attorney and client order follows not by agreement,
but by conduct giving rise to the litigation, or conduct itself in relation
to the litigation which is reprehensible and deserving of the censure of
the court, the order is not merely punitive but:
“(i)t implies that, to the extent that the inappropriate conduct of one of the parties
may, on taxation of costs, be found by the taxing master to have resulted in the
other party’s having reasonably incurred extra costs that would not be recoverable
on a taxation as between party and party, such other party (the “ innocent ” party,
or “ victim ” of the inappropriate conduct of the other party) should be afforded a
fuller indemnity for the costs that he has reasonably incurred than he would
receive on a party and party taxation.”
20
22. The latter approach is no different from that adopted by this court in
Loots v Loots (supra) . It is suggested however that it is self evident
that, whether a taxation on an attorney and client basis arises by
agreement between the parties or is ordered by the court, the taxing
master may when considering the particular circumstances of the case
find them to be “ extraordinary or exceptional ” within the meaning of
Rule 70(5)(a). In the exercise of his discretion, therefore, the taxing
master may be released, by the provisions of that sub-rule from strict
adherence to the tariff in either case.
20 At pages 157 – 158, par [80] & [81].
14
23. In determining what circumstances ought to be singled out as
warranting a departure from a strict tariff, the court noted that:
“it is generally a strong indicator to the Taxing Master that in the Judge’s view the
costs debtor has conducted his case in such a way as to be likely to have caused
the costs creditor to incur costs that ought to have been unnecessary and that may
not be recoverable on a taxation as between party and party. Such a finding by the
Judge would therefore often lead the Taxing Master to conclude that the case is
indeed an extraordinary or exceptional one for the purposes of Rule 70(5)(a), and
that a consideration of the bill of costs will show that strict adherence to the tariff
would be inequitable” .21
24. The taxing master in this instance evidently did not even consider that
anything other than a strict basis was to be applied on taxation leading
him to conclude (without any further question and seemingly without
even having regard to the usual factors in determining what is a
reasonable fee for an advocate in respect of each attendance) that
common generally allowed rates (well at least for senior counsel) were
applicable across the board for him, and exactly one half of that for
the junior advocate retained by the applicant.22
21 At page 16, par [92].
22 Ostensibly the taxing master’s treatment of the affected items flowing from a taxation on a strict party
and party basis led him to deal with the quantum of the junior advocate’s fee on the basis provided for in
Rule 69 (2), this notwithstanding that not every attendance of the junior advocate was a tandem attendance
with the senior advocate.
15
25. The impression gained from such approach is that he had no option
other than to stick to a fee which is generally allowable “ in this
division for matters of this magnitude ” (what this standard is was
nowhere explained), I assume leaning conservatively toward what is
recognized on a party and party basis (by whom and with reference to
what it is not entirely clearly clear) as being the accepted hourly (and
daily) rate for local counsel. 23 If this is what the taxing master
understood by a “ stricter taxation ”, he clearly erred. Evidently the
special costs award and the stern comments of the trial judge
warranted a taxation on the intermediate basis which, whilst it does
indeed call for a stricter taxation vis-à-vis the non client at the
receiving end of an attorney and client award, yet sanctions a
departure from the tariff where applicable amounting to a more
generous hand on taxation than would be permissible in respect of the
assessment of a standard party and party bill of costs. Stegmann J
eloquently explains this difference in approach in Aircraft
Completions Centre (supra) :
23 It bears mentioning that both senior and junior counsel retained by the applicant were from
Johannesburg.
16
“… the ‘intermediate’ basis of taxation established by Nel …was not the
same as the unduly restrictive basis that the English rule of court had
established within the jurisdiction of the English courts, and which had
been criticised both by the English Court of Appeal in Giles Randall,
above, and by the Appellate Division in Nel.
The intermediate basis of taxation identified in Nel does not have its origin
in English law. It is a feature of South African law and practice confirmed
by the decision in Nel. It allows the costs creditor who has an order for
payment by his opponent of costs taxed as between attorney and
client, to recover from the costs debtor what may, depending upon the
circumstances of the particular case, amount to a substantially fuller
indemnity than he could recover on a party and party taxation.
Within the bounds of reasonableness in the circumstances of the case,
the taxing master is expected to tax such a bill generously. He should
allow rates that may reasonably exceed the tariff if the work was of
some complexity and was made unduly burdensome by w hatever
conduct on the part of the costs debtor caused the court to make an
order for attorney and client costs . On the same basis, the taxing master
should allow periods of time for consultations, and for other work
ordinarily charged on a time basis, that may reasonably exceed the time
that he would allow if taxing strictly as between party and party.” 24
(Emphasis added)
26. Seemingly in casu the taxing master erroneously reflected that a
stricter taxation demanded a conservative assessment without regard
to the special considerations applicable which the trial court had in
mind when imposing the costs award, the clear objective of which, to
my mind, was to ensure that the applicant was indemnified more
completely than could be achieved by an order for party and party
costs, in respect of the costs to which the litigation had put it.
24 At par [62]
17
27. The limitation or safeguard to be applied on taxation then is not the
application of a rote restrictive tariff (which seemingly in the
perception of the taxing master limits the recovery to nothing more
than a strict party and party permissible fee for counsel),25 but the
considerably less stringent criterion that costs of the kind for which
the costs creditor has incurred liability reasonably should be allowed
as against the costs debtor to prevent injustice to him, while at the
same time allowing the applicant to receive a fuller indemnity than a
party and party taxation would provide for all reasonable additional
costs to which the respondents’ conduct that received the trial court’s
reproach may have put it. In this regard the taxing master considered
the aspect of the reasonableness of counsels’ fees from an entirely
wrong premise, if he considered that they were reasonable at all
except for the generalized manner in which he appears to have
decided the issue.
28. The taxing master is obliged to remain aware:
“that it is the intention of the court that has ordered a taxation as between attorney
and client that the costs creditor should have a full indemnity for the costs to
which the litigation has put him, except for luxurious, extravagant, unnecessary
25 Stegmann J criticises the notion that this conservative assessment applies where taxation on an
intermediate basis is indicated.
18
and other types of unreasonable expense that it would be an injustice to impose
upon the costs debtor.”26
29. Beyond the basic assumption that a stricter rate for senior counsel’s
fee was warranted, the taxing master did not suggest that such charges
were incurred unnecessarily or that his attendances were superfluous
or beyond what was reasonable to advance the prosecution of the
applications. The respondents’ submissions too, in respect of the rates
adhered to by counsel, were that they were not reasonable, but only in
relation to the guidelines proposed by the Eastern Cape Bar Council
pertaining to their hourly (and daily) rates. Evidently no thought was
given by the taxing master (or the respondents for that matter) to the
question whether the applicant - by virtue of the special costs award,
was not entitled rather to as full an indemnity as possible in the
peculiar circumstances of the matter and in relation to the specific
invoices in contention. Against that yardstick reasonableness was not
assessed. The taxing master ought to have addressed his mind to the
question of the extent to which the extraordinary or exceptional nature
of the case (undoubtedly evidenced by the trial judge’s stern remarks
and rounded criticism of the respondents in their attitude towards the
26 At the end of par [62].
19
matter, the dignity of the court and the reprehensible manner in which
they had conducted themselves in the conduct of the proceedings)
caused the applicant reasonably to incur costs of counsel in excess of
the run-of-the-mill generally allowed fee per hour (and day) permitted
in party and party taxations. He ought to allow such fees charged by
counsel or to tax them off only to the extent that they inflict injustice
upon the respondents.
30. I have already expressed the observation above that the presence of
the special considerations arising in this matter, with particular
reference to the trial judge’s comments and the nature of the special
costs award, ought to have operated in my view in favour of the
applicant in the sense that the intermediate basis as required by Nel
should have been generous to the extent required by it so as to give the
applicant the fullest indemnity envisaged, which to the extent that it is
justified by the circumstances of the case may exceed the ordinary and
generally allowable party and party sanctioned rates for counsel, an
indemnity which the taxing master appears to have thought was
rendered inappropriate following his narrow interpretation of the
manner in which he was required to tax the bill of costs.
20
31. The taxing master ought to have examined each affected invoice in the
bill to determine whether equity requires that the fees charged therein
should have been allowed on a basis more generous to the applicant
than that of the tariff or generally accepted basal rate for senior or
junior counsel as the case may be. By the reduction of counsel’s fees
on a general basis, the applicant was in my judgment placed in an
inequitable position which was not intended by the trial court in
awarding the special costs order
32. In the result it follows in my view that the taxing master has failed to
exercise his discretion in a proper manner, justifying an order that his
reduction of both senior and junior counsels’ fees in the circumstances
be set aside and the bill of costs remitted to him to consider the
applicant’s entitlement afresh.
33. The review accordingly succeeds with costs, which I fix in the sum of
R1 500.00, plus vat.
34. I issue the following order:
21
1. the taxing master’s rulings in respect of items 59, 137, 158, 165,
216, 366, 397, 421 and 439 referred to in the applicant’s bill of
costs are each set aside;
2. the bill is remitted to the taxing master to reconsider the affected
items afresh with due regard to the provisions of Rule 70(5)(a) in
the light of, inter alia, the nature of the special costs award; the
special considerations arising from the circumstances which gave
rise to the applications or from the conduct of the respondents; the
sentiments expressed by the trial judge in his judgment; this
judgment and such information and arguments as the parties may
wish to present on that occasion; and
3. the respondents are to pay the applicant’s costs of the review, fixed
in the sum of R1 500.00, plus vat.
_________________
B C HARTLE
JUDGE OF THE HIGH COURT
22
Date of Judgment: 11 April 2013
For the applicant: Rushmere Noach Incorporated, 5 Ascot Office Park, Conyngham
Road, Greenacres, Port Elizabeth (ref. Ms L Koorsse/mt/MAT17890).
For the respondents: Friedman Scheckter Attorneys, 75 Second Avenue, Newton Park,
Port Elizabeth (ref. Mr G Friedman/ps/L06259).