Summary of Judgment

Introduction

This was a review of a taxation conducted by a taxing master, brought in terms of rule 48 of the Uniform Rules of Court. The proceedings arose from a dispute about the proper basis on which an attorney’s bill of costs should be taxed, and whether a purported contingency fee agreement could be relied upon at taxation despite a prior court order recording that no such agreement existed.

The review applicant was JB Scott Attorneys, who had acted for the review respondent, Ms Wendy Tetani, in a successful claim against the Road Accident Fund. The present dispute concerned costs claimed by the attorneys from their client for professional services in that successful matter.

Procedurally, the underlying action had been settled and the settlement was made an order of court. In that order, it was expressly recorded that “no contingency fee agreement exists between the Plaintiff and the Plaintiff’s attorneys.” Thereafter, JB Scott Attorneys set down their bill of costs for taxation. At taxation, the taxing master was presented with an attorney-and-own-client bill of costs and a contingency fee agreement said to have been signed between attorney and client. The taxing master made rulings adverse to the attorneys, and JB Scott Attorneys then instituted this rule 48 review to challenge those rulings.

The general subject matter of the dispute was the extent to which a taxing master must give effect to the terms of a costs order, and whether a fee uplift or surcharge could be allowed when the court order recorded the non-existence of a contingency fee agreement.

Material Facts

It was common cause that JB Scott Attorneys rendered professional services to Ms Tetani in a claim against the Road Accident Fund, and that the claim was successfully resolved by way of a settlement that became a court order. It was further an operative fact for purposes of the review that the court order embodying the settlement expressly recorded that no contingency fee agreement existed between Ms Tetani and her attorneys.

At taxation, JB Scott Attorneys presented an attorney-and-own-client bill of costs and also produced a contingency fee agreement said to have been signed between the attorney and the client. Ms Tetani’s representative objected to the reliance on the contingency fee agreement on the basis that the existence of such an agreement had been denied and recorded as non-existent when the court made the settlement order. The taxing master regarded this attempt to rely on a contingency fee agreement at taxation—after the contrary recording in the court order—as a matter of concern, and treated it as raising a question about whether the agreement could be considered at all.

On the basis of the court order, the taxing master ruled that he could not have regard to the contingency fee agreement and that the bill of costs had to be taxed on the basis contemplated by the order and the tariff. He proceeded on the footing that his function was to quantify costs in accordance with the court order, not to ignore it or vary it.

The taxing master was also required to determine whether a surcharge (or fees higher than the prescribed tariff) could be allowed. He disallowed any surcharge or fees above tariff, again reasoning from the court order’s express recording that no contingency fee agreement existed.

These rulings prompted the review application: the attorneys sought to set aside the taxing master’s refusal to consider the contingency fee agreement and his refusal to allow a surcharge or fees above tariff.

Legal Issues

The central legal questions were:

The first question was whether, in taxing the bill, the taxing master was entitled (or obliged) to disregard a contingency fee agreement presented at taxation when an existing court order recorded that no contingency fee agreement existed between the parties.

The second question was whether the taxing master was entitled to disallow a surcharge or uplift (fees higher than the prescribed tariff) in circumstances where such an uplift would ordinarily be sourced in a valid fee agreement, but the court order recorded that no contingency fee agreement existed.

A further legal issue concerned the standard for interference on review with a taxing master’s decision: whether the taxing master’s rulings were “clearly wrong” or differed so materially from what the court considered correct that they should be vitiated.

The dispute primarily concerned the application of legal principles to established procedural facts (the existence and content of the prior court order, and the taxing master’s function in light of it), rather than a credibility-based factual dispute.

Court’s Reasoning

The court located the taxing master’s role within established authority that distinguishes between the court’s function in determining liability for costs and the taxing master’s function in quantifying those costs. The judgment emphasised that the taxing master’s duty is to give effect to the costs order and not to vary it to suit what the taxing master might consider appropriate.

In applying that principle, the court accepted the taxing master’s approach that he could not ignore or contradict the court order that expressly recorded the non-existence of a contingency fee agreement between Ms Tetani and her attorneys. The court treated the taxing master’s adherence to the express terms of the order as consistent with precedent and with the proper limits of the taxing master’s powers.

The court further outlined the threshold for judicial interference with a taxing master’s decision on review. It held that a court will not interfere merely because it would have taken a different view, and will do so only when clearly satisfied that the taxing master’s ruling was clearly wrong, or that the taxing master’s view differs so materially from the court’s that the ruling should be vitiated.

Measured against that standard, the court found no basis to interfere. It held that the taxing master’s reliance on the court order, and his decision to rule in accordance with its provisions, was correct. The court therefore could not fault the taxing master’s assessment of the issues placed before him, and considered the decision aligned with precedent and with achieving justice between the parties.

In relation to the attempted surcharge or fees in excess of tariff, the court accepted the taxing master’s reasoning that such an uplift would require an operative fee arrangement of the relevant kind, yet the court order expressly recorded that no contingency fee agreement existed. The court accordingly upheld the taxing master’s refusal to allow a surcharge or higher-than-tariff fees.

Outcome and Relief

The review application was dismissed in its entirety, including the challenges to the taxing master’s refusal to consider the contingency fee agreement and to allow a surcharge or higher-than-tariff fees.

The court ordered the review applicant (JB Scott Attorneys) to pay the costs of the respondent (Ms Tetani) on an attorney and client basis.

Cases Cited

Vercuil v Magistrate of Wynberg & Another 1928 CPD 532.

Benson v Walters 1984 (1) SA 73 (A).

Lizette Roux v Road Accident Fund, ECJ case no 650/04 (unreported, 19 May 2005).

Ocean Commodities Inc and Others v Standard Bank of SA Ltd and Others 1984 (3) SA 15 (AD).

Legal and General Assurance Society Ltd v Lieberum NO and Another 1968 (1) SA 473 (A) at 478G.

Legislation Cited

No legislation was cited in the judgment.

Rules of Court Cited

Rule 48 of the Uniform Rules of Court.

Held

The court held that the taxing master correctly performed his function by giving effect to the existing court order, which recorded that no contingency fee agreement existed between the client and the attorneys. In consequence, the taxing master was correct to refuse to have regard to the contingency fee agreement produced at taxation and to tax the bill in accordance with the applicable tariff basis contemplated by the order.

The court further held that there was no basis to interfere on review because the taxing master’s rulings were not shown to be clearly wrong, nor to differ so materially from the court’s view as to warrant being set aside. The review was dismissed, with costs awarded against the attorneys on an attorney-and-client scale.

LEGAL PRINCIPLES

A taxing master must give effect to the court’s costs order and does not have authority to ignore or vary that order when quantifying costs.

The court determines liability for costs, while the taxing master determines the amount payable in accordance with the order and the applicable tariff or recognised basis.

On review of a taxation, a court will interfere only where it is clearly satisfied that the taxing master’s ruling was clearly wrong, and not merely because the court would have adopted a different view.

Where a court order records the non-existence of a contingency fee agreement, the taxing master is entitled to proceed on that basis when taxing a bill of costs and when considering whether any uplift or surcharge (fees higher than tariff) can be allowed.