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[2022] ZAMPMBHC 37
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Majope and Another v Road Accident Fund (308/2021,1309/20) [2022] ZAMPMBHC 37 (26 May 2022)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA,
MPUMALANGA DIVISION (MAIN SEAT)
Case
Numbers:308/2021,
1309/20
REPORTABLE:
YES/ NO
OF
INTEREST TO OTHER JUDGES: YES/NO
REVISED.
26
MAY 2022
In
re
the matters between:
TINA
MAJOPE
Plaintiff
and
THE
ROAD ACCIDENT
FUND
Defendant
ABEDNEGO
MASHABE
Plaintiff
and
THE
ROAD ACCIDENT FUND
Defendant
JUDGMENT
Roelofse
AJ:
Introduction
[1]
The
relationship between an attorney and his or her client is one of
mandate.
[1]
A contract of
mandate is a consensual contract between one party, the mandator, and
another, the mandatary, in terms of which the
mandatary undertakes to
perform a mandate for the mandator.
[2]
As in any other consensual contract, there must be an offer
and an acceptance of the offer in order for a valid and binding
contract
of mandate to come into being. In the case of a contact of
mandate, the mandator makes a request that the mandatory performs
some
act or duty which obligation the mandatory then accepts and
executes.
[3]
The
object of the mandate may not be illegal, wrongful or immoral.
[2]
[4]
In
the attorney and client relationship, the client is the mandator and
the attorney is the mandatary. Unless agreed otherwise between
the
client and the attorney, an attorney is not entitled to payment of
his or her fees (and disbursements) until he or she has
performed his
mandate or until the employment of his or her services has been
terminated.
[3]
[5]
In
the interest of the public, the conduct of legal practitioners
(attorneys and advocates) are regulated, the
Legal Practice Act 28 of
2014
being the principal regulatory instrument. Under the
Legal
Practice Act, a
Code of Conduct was published.
[4]
All legal practitioners are subject to the
Legal Practice Act and
the
provisions of the Code of Conduct.
[6]
In this case, I have to decide the true mandate that was given
by the plaintiffs and accepted by their attorney. More particularly,
was the mandate to prosecute the plaintiffs’ claims against the
RAF on the basis of attorney and own client fee agreements
entered
into between the plaintiffs and the attorney or did the mandate
provide that the attorney would represent the plaintiffs
in their
actions on a contingency basis. I shall refer to the first mentioned
mandate as the “
normal fee mandate
” and the last
mentioned mandate as “
the contingency fee mandate
”.
[7]
I a normal fee mandate, the attorney must be paid whatever the
outcome of the mandate is. In a contingency fee mandate, an attorney
will render his or her services and incur disbursements on behalf of
his or her client on the basis that the attorney’s fees
and
disbursements will only be recovered from his or her client if the
client is successful in the proceedings to which the mandate
relates.
The attorney therefore bears the risk of the outcome of the mandate.
Background
to the matters
[8]
The plaintiffs in the above actions instituted actions against
the RAF arising from motor vehicle collisions in which they were
injured. The plaintiffs were represented by Ngomana and Associates
(“Ngomana”). Ms. Fortunate Nwa-Khosa Ngomana (“Ms
Ngomana”) of Ngomana dealt with the actions on behalf of the
plaintiffs. Adv. Phathutshedzo Tshavhungwe was briefed in the
actions
by Ngomana.
[9]
The RAF did not appear at the hearing on 22 March 2022. Both
Ms Ngomana and Mr Tshavhungwe appeared on behalf of the plaintiffs.
[10]
I allowed the plaintiffs to proceed to prove their claims in
terms of the provisions of Rule 39(1) of the Uniform Rules. The
plaintiffs
presented evidence where after their cases were closed.
I requested the plaintiffs’ attorneys to forward draft orders
to me for consideration. They did so.
[11]
On 24 March 2022, I gave an
ex tempore
judgment in
terms of which I granted judgment in favour of the plaintiffs and
awarded amounts in damages to them.
The
circumstances giving rise to the need for this judgement
[12]
It was recorded in the draft orders that were forwarded to me
in both matters that no contingency fees agreement was entered into
between the plaintiffs and Ngomane. I doubted the veracity of these
statements because: the plaintiff in the first action
has been
unemployed since the accident. Prior to the accident she was
attending a learnership in building construction earning
R 1870 .00
per month. The plaintiff in the second action was employed as a
driver earning R 3500 per month since the accident.
[13]
It is a well-known fact that litigation in RAF matters are
notoriously expensive not only as a result of high legal fees but
also
the high costs of various experts that are usually consulted in
a claim against the RAF. This is the obvious reason why, in the
majority of RAF actions, attorneys represent their clients on a
contingency basis. So for instance, the plaintiff in the first
action
relied upon the expert opinions of a neurosurgeon, clinical
psychologist, occupational therapist, industrial psychologist
and an
actuary. The plaintiff in the second action, in addition to those
experts relied upon by the first plaintiff, also relied
upon the
expert opinions of an orthopaedic surgeon and an ear nose and throat
surgeon.
[14]
What Ngomane represented to court when it furnished the court
with the draft orders was that normal fee mandates applied in the
actions.
[15]
I challenged the allegation with Mr Tshavhungwe that in the
draft orders it was represented that no contingency fees agreements
were entered into in light of the precarious financial position the
plaintiffs most likely found themselves in. It was in my mind
highly
improbable that the plaintiffs would have been in a position to fund
the litigation themselves in terms of a normal fee
mandate.
Questions
posed
[16]
Mindful of the Judgement of the Judge President of this
Division in the matter of
Thobile Khethiwe Mucavele obo Mpho
Siboniso Mucavele v The Mec of Health
, Case Number: 3352/2016
that was delivered 17 March 2022 (“Mucavele”), I directed
Ms Ngomana to file an affidavit wherein
she furnishes the court with
answers to the following questions: (i) What fee was agreed upon?;
(ii) When was such fee supposed
to be paid?; What was the amount of
fee agreed upon; (iv) If no fee was paid (or part thereof), when was
the fee or remainder thereof
to be paid?; (v) If no fee was paid, on
what basis was it alleged that no contingency fee was agreed upon?;
(vi) What was the agreement
between attorney and counsel and when
would counsel furnish his account, if any?.
Answers
to the questions posed
[17]
Ms Ngomana deposed to an affidavit in each matter and filed
same. Both affidavits read the same. The heading of the affidavits
read
as follows: “AFFIDAVIT IN TERMS OF ATTORNEY AND CLIENT
AGREEMENT”.
[18]
Ms Ngomana’s answers to the aforesaid questions were set
out in the affidavits she filed. The answers were as follows: (i)
An
attorney and own client fee agreement was entered into; (ii) The fees
would be payable when the matter was finalized; (iii)
Ngomana will
prepare a bill for costs that an attorney is entitled to recover from
the plaintiffs for the disbursements made on
behalf of the plaintiffs
and for professional services rendered. The costs are payable by the
plaintiffs whatever the outcome of
the matter for which the
attorneys’ services were engaged and are not dependent upon any
award of costs by the court which
will be provided to client for
comment; (iv) No fees has been paid by the plaintiffs as deposit for
service to be rendered as disbursement
fees will be paid on the
finalization of the matter; and (v) Mr Tshavhungwe and Ngomana agreed
on a rate of fees advocates charged
per hour or per day and will
normally receive payment when the costs matter has been paid by the
RAF; and, Mr Tshavhungwe will
furnish his account after when the
matter is settled and/or judgement has been granted.
[19]
On 24 March 2022, Ms Ngomana and Mr Tshavhungwe appeared
before me. I engaged Ms Ngomane on the affidavits she has filed.
During
my engagement with Ms Ngomane, she confirmed that Ngomane
funded the plaintiffs’ litigation. Significantly, Ms Ngomane
informed
the court that in the event the plaintiffs were unsuccessful
in the litigation in the sense that judgment and costs were granted
against them, the plaintiffs would not have had to pay Ngomane any
fees or disbursements. Even more significantly, Ms Ngomana conceded
that the litigation was undertaken for the plaintiffs on a
contingency basis for Ngomana would only be paid if the plaintiffs
had won. Ms Ngomana appeared to suggest that a “directive”
issued by the Legal Practice Council allowed the conduct
she has
followed. The “directive” referred to by Ms Ngomana is in
fact Rules made by the Legal Practice Council in
terms of section 6
of the Contingency Fees Act 66 of 1997 (“the Act”). These
Rules are hereinafter referred as “the
contingency rules”.
[20]
Mr
Tshavhungwe informed the court that Clause 29 of the Code of
Conduct
[5]
allowed an advocate a
discretion to charge a fee or reduced fee or no fee at all. In this
regard, Mr Tshavhungwe referred the court
to clause 29.5 of the Code
of Conduct
[6]
in order in
support of his contention that he was fully entitled to agree to
charge no fee for the services rendered to the plaintiffs
if they had
lost. Mr Tshavhungwe confirmed that he accessed the plaintiffs’
claims, found them meritious and therefore
proceeded to render his
services. Mr Tshavhungwe confirmed that he would only now render an
account because the plaintiffs were
successful. The invoice of
Mr Tshavhungwe delivered that was attached to Ms Ngomana’s
supplementary affidavit (to which
I shall refer later in this
judgment) indeed indicates that the invoice was issued after the
ex
tempore
judgments were delivered.
[21]
However, the point is this - clause 29.5 of the Code of
Conduct contemplates an agreement to charge no fee or a reduced fee
irrespective
of the outcome of litigation. Clearly what Mr
Tshavhungwe did was to agree not to charge a fee if the plaintiffs
would have been
unsuccessful. Because that the plaintiffs were
successful, Mr. Tshavhungwe rendered an account and expects payment
thereof by Ngomane.
[22]
Mr Tshavhungwe also told the court that mention was made on
the draft order that no contingency fee was entered into because the
RAF refused to pay costs on either settlement of the matter or when a
judgment is granted if the order records that no contingency
fee
agreement exists.
[23]
After my engagement with Ms Ngomane and Mr Tshavhungwe, I
referred Ms Ngomane and Mr Tshavhungwe to
Mucavele
and I
invited Ms Ngomane to file a supplementary affidavit explaining the
issue whether the plaintiffs’ matters were taken
on contingency
or not if she wished to do so. Ms Ngomane undertook to send me the
LPC’s directive she has referred to during
our engagement in
court.
[24]
My
registrar forwarded the judgment in
Mucavele
to Ms Ngomane. I did so because in
Mucavele
,
the Court: had to decide over the issue of whether a contingency fee
agreement was entered into and if so ‘…
.whether
the
[contingency
fee agreement]
is
illegal under common law for non-compliance with the Contingency Fee
Agreement Act No. 66 of 1997
’
[7]
;
examined the nature of the agreement between the attorney and the
client and found that the agreement was an illegal contingency
fee
agreement
[8]
; expressed itself
over Rule 1.7 of the Rules Made by the Legal Practice Council in
terms of section 6 of the Act; expressed itself
over Clauses 32.1
[9]
,
32.2
[10]
and 34
[11]
of the Code of Conduct; made orders with considerable impact upon the
litigation and referred the conduct of the practitioners
to the Legal
Practice Council for consideration. I wanted Ms Ngomana to properly
consider
Mucavele
against what was submitted in and to the court.
[25]
Ms Ngomane furnished the court with the attorney and own
client fee agreements relating to both the matters. In both the
matters,
the attorney and own client fee agreements were signed prior
to the issuing of the summonses. Both agreements were identical in
their terms. The agreements provided, amongst other terms, for the
payment of a deposit is so demanded by Ngomana; liability for
disbursement and fees; interim invoices issued by Ngomana and the
payment thereof.
[26]
Ms Ngomane heeded my invitation and filed two supplementary
affidavits on 28 March 2022. This is what is set out in both the
affidavits:
‘
1.
I have read the Judgement
by Legodi, and I have a reserved feeling about it and there are
grounds that a different court may not
be bound by the Judgement. I
feel the issues may be distinguishable and not all relevant sections
of the
Legal Practice Act and
the rules made under the act and the
code of conduct were considered.
2.
One of the issues in the
Judgement is the fact that the instructions in the Judgement referred
to us by this court, the agreement
was on or around the 1
st
of September 2016, the
Legal Practice Act came
into operation on the
1
st
of November 2018. The rest came after 2019. There is
retrospective application of the Act and the rules and codes made
under it
was not dealt with the Judgment.
3.
As I answered when
questions were posed to be during the hearing, I said I advised the
client after assessing the matter and been
satisfied that there was a
good case. That when we agreed on attorney and own client fees. This
is after I have incurred disbursement
to investigate the prospects of
success.
4.
In terms of section 2 and
3 are of the Contingency fees act, if an attorney commences working
on a client's matter without signing
a contingency fee agreement and
even thought the notion is to work on the basis of a contingency fee
agreement and they incur disbursements
prior to signing the
contingency fee agreement. they are barred from entering into the
contingency fee agreement.
5.
In these circumstances
after first consultation clients are reluctant to sign contingency
fees agreement from the onset and as required
by the act you advise
them of the other means of financing the litigation. And they inform
you that they will think about and after
you make the initial
assessment and having incurred disbursement, they elect to proceed
with the matter.
6.
At that point even if you
ask for a deposit, you know well know that you will not receive
anything, and you are faced with the provisions
of 3. Legal
practitioners, candidate legal practitioners and juristic entities
shall:
6.1
Advise their clients at the earliest possible opportunity on the
likely success of such clients’
cases and not generate
unnecessary work, nor involve their clients in necessary expense;
6.2
Use their best efforts to carry out work in a competent and timely
manner and not take on work which
they do not reasonably believe they
will be able to carry out in that manner;
6.3
Be entitled to a reasonable fee for their work, provided that no
legal practitioner shall fail refuse
to carry out work, or continue,
a mandate on the ground of non-payment of fees and disbursements (or
the provision of advance cover
therefor) if demand for such payment
or provision is made at an unreasonable time or in an unreasonable
manner, having regard to
the particular circumstances.
7.
I have no agreement with
advocate Tshavhungwe, that if in this matter we are not successful he
will not charge a fee. I am security
to his fees. If he elects not to
charge as he indicated in terms of section 29.5 he does it at his own
discretion. Section 29.5
Counsel may, in calculating a fee, on the
grounds of a client’s lack of means to pay fees, charge the
client an amount less
than would otherwise be reasonable for the
services rendered, or charge no fee at all.
8.
I have attached hereto
invoices that Advocate Tshavhungwe furnished me as an example to
reflect how this is really done in practice.
There is a write off
option and discounting of the invoice. This is done to give effect to
the provisions of Section 2 of Value-Added
Tax Act No. 89 of 1991.’
The affidavit was deposed
to on 28 March 2022.
[27]
The
“directive” of the Legal Practice Council Ms Ngomana
referred to was the contingency rules.
[12]
The contingency rules prescribe the form and content of a contingency
fee agreement, the manner in which disbursements must be
dealt with
in the contingency fee agreement, the effect of a premature
termination of the mandate, settlement, provisions regarding
fees,
the review of the agreement or fees.
[28]
Significantly, Rule 8 of the contingency rules provides that
the provisions of the Rules do not derogate in any way from the power
of the court to adjudicate upon and make orders in respect of matters
concerning the conduct of a legal practitioner. This power
I shall
exercise in the order this court intends to make.
[29]
Having regard to Ms Ngomana’s affidavit it is
immediately apparent that she does nothing else than to evade the
real issue,
namely why the allegation was made in the draft orders
that no contingency fees agreement was entered into while Ms Ngomana
conceded
in the engagement on 24 March 2022 that the true mandate was
one of contingency.
The
true mandate
[30]
From my engagements with Ms Ngomana and Mr Tshavhungwe
it is clear despite the attorney and own client fee agreements that
were entered into with the plaintiffs by Ngomana, the real mandate
was one of contingency.
[31]
The
Act provides for contingency fees agreements between legal
practitioners (i.e. attorneys and advocates alike
[13]
)
and their clients and provides for matters connected therewith.
Section 1 of the Act defines a contingency fees agreement as any
agreement referred to in section 2 (1) of the Act. Section 2(1) of
the Act provides as follows:
‘
Notwithstanding
anything to the contrary in any law or the common law, a legal
practitioner may, if in his or her opinion there
are reasonable
prospects that his or her client may be successful in any
proceedings, enter into an agreement with such client
in which it is
agreed—
(a)that the legal
practitioner shall not be entitled to any fees for services rendered
in respect of such proceedings unless such
client is successful in
such proceedings to the extent set out in such agreement;
(b)that the legal
practitioner shall be entitled to fees equal to or, subject to
subsection (2), higher than his or her normal fees,
set out in such
agreement, for any such services rendered, if such client is
successful in such proceedings to the extent set out
in such
agreement.’
[32]
Section 3 of the Act sets out the formal requirements for a
contingency agreement. Section of the Act provides as follows:
‘
(1)
(a) A contingency fees agreement shall be in writing and in the
form prescribed by the Minister
of Justice, which shall be published
in the Gazette, after consultation with the advocates’ and
attorneys’ professions.
(b) The Minister of
Justice shall cause a copy of the form referred to in paragraph (a)
to be tabled in Parliament, before
such form is put into operation.
(2) A contingency
fees agreement shall be signed by the client concerned or, if the
client is a juristic person, by its duly
authorised representative,
and the attorney representing such client and, where applicable,
shall be countersigned by the advocate
concerned, who shall thereby
become a party to the agreement.
(3) A contingency
fees agreement shall state—
(a)
the proceedings to which the agreement relates;
(b)
that, before the agreement was entered into, the client—
(i) was
advised of any other ways of financing the litigation and of their
respective implications;
(ii) was informed of the
normal rule that in the event of his, her or it being unsuccessful in
the proceedings, he, she or it may
be liable to pay the taxed party
and party costs of his, her or its opponent in the proceedings;
(iii)
was informed that he, she or it will
also be liable to pay the
success fee in the event of success; and
(iv)
understood the meaning and purport
of the agreement;
(c)
what will be regarded by the parties to the agreement as constituting
success or partial
success;
(d)
the circumstances in which the legal practitioner’s fees and
disbursements relating
to the matter are payable;
(e)
the amount which will be due, and the consequences which will follow,
in the event
of the partial success in the proceedings, and in the
event of the premature termination for any reason of the agreement;
(f)
either the amounts payable or the method to be used in calculating
the amounts
payable;
(g)
the manner in which disbursements made or incurred by the legal
practitioner on behalf
of the client shall be dealt with;
(h)
that the client will have a period of 14 days, calculated from the
date of the agreement,
during which he, she or it will have the right
to withdraw from the agreement by giving notice to the legal
practitioner in writing:
Provided that in the event of withdrawal the
legal practitioner shall be entitled to fees and disbursements in
respect of any necessary
or essential work done to protect the
interests of the client during such period, calculated on an attorney
and client basis; and
(i)
the manner in which any amendment or other agreements ancillary
to
that contingency fees agreement will be dealt with.
(4) A copy of any
contingency fees agreement shall be delivered to the client concerned
upon the date on which such agreement
is signed.’
[33]
The Act legalizes services rendered by legal practitioners
(i.e. attorneys and counsel) on a contingency basis. Prior to the
Act,
services rendered by legal practitioners on contingency, the
common law forebode. In order for legal services to be rendered on
a
contingency basis to be legal and enforceable, it must be in terms of
a contingency fee agreement that must comply with section
3 of the
Act - if not, an agreement to render services on a contingency basis
is null and void and unenforceable.
[34]
In
Mkuyana
v Road Accident Fund
[14]
,
the Full Bench had occasion to deal with the Act. From the court’s
judgment, a number of principles relating to the Act
were laid down.
These principles, insofar as they are applicable to the above actions
include: contingency fee agreements facilitate
access to justice as
they enable litigants to obtain legal representation to prosecute
their claims where the litigant may otherwise
have been unable to do
by reason of the prohibitive cost of litigation; contingency fee
agreements carry with them the inherent
risk of abuse and the
incentive to profit
[15]
;
unregulated, contingency fees agreements have the potential for
earnings by legal practitioners which are excessive and
disproportionate
to the labour and risk invested which will
negatively impact on public confidence in the legal system; the
legislature was clearly
conscious of the risk of exploitation when it
legitimised contingency fee agreements; what the Act therefore sets
out to do is
to carefully regulate the extent to which a legal
practitioner may agree with his client for the payment of an
increased fee;
[16]
contingency
fee agreements are accordingly subject to judicial oversight and
intervention
[17]
; A
contingency fee agreement that is not covered by the Act, or which
does not comply with the requirements of the Act, is invalid
and
unenforceable.
[18]
[35]
The real mandate, that is, the contingency mandate in both
actions, was both unlawful for want of compliance with the provisions
of section 3 of the Act and are therefore invalid and unenforceable.
Effect
of the invalid and unenforceable contingency mandate
[36]
Next I consider the effect of the invalid and unenforceable
contingency mandate. Does the attorney and client fees agreement
survive
the invalid and unenforceable contingency mandate for if it
does Ngomane would be entitled to payment in terms of the attorney
and own client fee agreements - if not, what would Ngomane be
entitled to?
[37]
From
what was disclosed to the court in its engagement it is clear that
Ngomane did not intend to rely upon or enforce the attorney
and own
client fee agreements if the plaintiffs were not suited. Instead they
relied on the contingency mandate. The contingency
mandate, as I have
already said, is invalid and unenforceable want of compliance with
the Act. In
Essop
v Abdullah
[19]
,
the following was said over the performance in terms of an unlawful
contract:
‘
It is a
fundamental truism that a contract for the performance of an unlawful
act will not be enforced by the Courts. The reason
for the principle
is self-evident: no Court will compel a person to perform an
illegality.’
[38]
Therefore, neither the plaintiffs nor Ngomana have any rights
or obligations flowing from the contingency mandates. Ngomana
is not entitled to any payment whether for services rendered or
disbursements that were paid or is still due and the plaintiffs
have
no obligation to pay Ngomane.
[39]
Because no obligation rests upon the plaintiffs to pay
Ngomana, the RAF need not pay any costs as costs are awarded against
a losing
party to a successful litigant in order to compensate the
successful litigant to some extent for the expenses he or she had to
incur in order to enforce his or her rights or claims. In these
matters, neither plaintiffs incurred legal costs and disbursements
because they have no obligation to pay Ngomana.
[40]
Unfortunately, this is not the end of the matter. Rule 8 of
the contingency rules reinforces the court’s power of oversight
in contingency mandates. It is with great anguish that I am duty
bound to consider Ms Ngomane and Mr Tshavhungwe’s conduct.
Ms
Ngomane’s conduct
[41]
In the draft orders it was alleged that no contingency fee was
entered into while. Whilst it is true that no contingency fee was
entered into as contemplated in the Act, the real mandate was one of
contingency. Therefore, the allegation in the draft orders
that no
contingency fee was entered into constitutes a misrepresentation to
the court.
[42]
In
Ms Ngomane’s first affidavit
[20]
,
she records that:
‘
These costs [fees
and disbursements] are payable by the client whatever the outcome of
the matter for which the attorney’s
services were engaged and
are not dependent upon any award of costs by the court which will be
provided to client for comments.’
[43]
In
Ms Ngomana’s supplementary affidavit, Ms Ngomana confirms that
Ngomana agreed with the plaintiffs in attorney and own client
fees.
[21]
[44]
From the engagement on 24 March 2022 where Ms Ngomana conceded
that the plaintiffs would only be required to pay Ngomane’s
fees and disbursements if they succeeded, these statements are
misrepresentations of the true facts as was the allegation in the
draft order that no contingency fees agreements were entered into.
[45]
In both the affidavits, the true mandate was obscured from the
court. In fact, the statement in the first affidavit that ‘…
[T]hese
costs
[fees and disbursements]
are payable by the client
whatever the outcome of the matter…’
amounts to a
misrepresentation to court.
[46]
Clauses 3.3.1 and 3.3.3 of the Code of Conduct provides that
legal practitioners must:
‘
3.3 treat the
interests of their clients as paramount, provided that their conduct
shall be subject always to—
3.3.1
their duty to the court;
…
..
3.3.3 observance
of the law;’
[47]
The conveyance in the draft orders and Ms Ngomana’s
affidavits constitute misrepresentations to the court and therefore
may
constitute a contravention of clause 3.3.1 of the Code of
Conduct.
[48]
As I have already found, the real mandates that were accepted
by Ngomana were illegal. By entering into illegal contingency fees
agreements, Ngomana failed to observe the law. That may
constitute a contravention of clause 3.3.3 of the Code of Conduct.
Mr
Tshavhungwe’s conduct
[49]
During the court’s engagements with Mr Tshavhungwe, he
did not concede that he has accepted the brief from Ngomana on a
contingency
basis. However, what Ms Ngomana sets out in her
affidavits shows otherwise. In the first affidavit, Ms Ngomana sets
out:
‘
[T]hat counsel and
attorney agreed on a rate of fees the advocates charge per hour and
on a day fee and will normally receive payment
when the costs matter
has been paid by the Road Accident fund and counsel will furnish his
account when the matter is settled and/or
judgment has been
granted.’
[22]
[50]
In Ms Ngomane’s supplementary affidavit, Ms Ngomana
says:
‘
I have no
agreement with advocate Tshavhungwe, that if in this matter we are
not successful he will not charge a fee. I am security
to his fees.
If he elects not to charge as he indicated in terms of section 29.5
he does it at his own discretion. Section 29.5
Counsel may, in
calculating a fee, on the grounds of a client’s lack of means
to pay fees, charge the client an amount less
than would otherwise be
reasonable for the services rendered, or charge no fee at all.’
[23]
and
‘
I have attached
hereto invoices that advocate Tshavhungwe furnished me as an example
to reflect how this is really done in practice.
There is a write off
option and discounting of the invoice. This is done to give effect to
the provisions of Section 2 of Value-Added
Tax Act No. 89 of
1991.’
[24]
Two
observations are apparent from what Ms Ngomana says. Firstly, in my
view, these statements can have no other interpretation
than that Mr
Tshavhungwe’s invoice would only be paid if the plaintiffs were
successful. Secondly, the invoice does not provide
for a write off
option and even if it did, on what basis would Mr Tshavhungwe write
off his fees? If it was in the event that the
plaintiffs lost, well
then Tshavhungwe rendered his services on contingency. Payment for
the work he has done was therefore on
the contingency that the
plaintiffs would be successful in their claims. The true nature of Mr
Tshavhungwe’s brief was one
of contingency. Mr Tshavhungwe may
have offended the provisions of clause 34.6
[25]
of the Code of Conduct.
[51]
Mr Tshavhungwe may have contravened clauses 32.1 of the Code
of Conduct by agreeing to render legal services on a contingency
basis
without complying with the Act.
[52]
I do not say that the Code of Conduct was indeed contravened
by Ms Ngomana and/or Mr Tshavhungwe – that is an issue for the
Legal Practice Council to consider and decide.
Conclusion
[53]
I hope that this judgment will stand as a stern warning to
legal practitioners who accept contingency mandates to comply with
the
prescripts of the law for not doing so, as is demonstrated in
this judgment, may have dire consequences. Not only may offending
legal practitioners be left out of pocket despite executing their
mandate properly to finality, but also their conduct may offend
the
strict ethical standards that are expected of them and may subject
them to scrutiny and censure.
[54]
In the premises, I made the following order:
(a)Judgment is granted in
favour of the plaintiff in case number: 308/2022;
(b)The defendant is
ordered to pay the plaintiff in case number: 308/2022 an amount of R
661 795.00 together with interest at the
prescribed rate calculated
from the date of this judgment to the date of payment, both days
included;
(c) Judgment is granted
in favour of the plaintiff in case number 1309/20;
(d)The defendant is
ordered to pay the plaintiff in case number: 1309/20 an amount of R
200 000.00 together with interest at the
prescribed rate calculated
from the date of this judgment to the date of payment, both days
included;
(e)Ngomana and Associates
shall not recover any disbursements or fees from the plaintiffs;
(f) Ngomana and
Associates are directed to furnish a copy of this judgment to the
plaintiffs within 5 (FIVE) days of this
order and to file an
affidavit with this court that it has done so;
(g)The Registrar of this
court is directed to forward a copy of this judgment to:
(i)
The National Office of the Legal Practice
Council;
(ii)
The Mpumalanga Office of the Legal Practice Council;
and
(iii)
The Chief Executive Officer of the Road Accident Fund;
(h)The Director of the
Mpumalanga Office of the Legal Practice Council is directed to:
(i)
Nominate a firm of attorneys to be
appointed by this court for
purposes of receiving the moneys due and payable by the defendant to
the plaintiffs (“the nominated
attorneys”);
(ii)
Within 10 (TEN) days of the date of this order
inform the Registrar
of this court of its nomination in paragraph (i) above;
(i) The Registrar
shall enrol case numbers 308/2021 and 1309/20 upon the unopposed
motion roll for the court to consider the
appointment of the
nominated attorneys;
(j) Upon
appointment of the nominated attorneys (if the court is satisfied
with the nomination), the defendant is directed
to pay the amounts
awarded to the plaintiffs into the trust account of the nominated
attorneys within 30 (THIRTY) days of this
order;
(k) The nominated
attorneys are directed to pay to the plaintiffs the amounts received
on the plaintiffs’ behalf after the
deduction of their taxed
fees for the execution of their appointment;
(l) The Legal
Practice Council is hereby directed to investigate and consider
whether the conduct of Ms Ngomane and Advocate
P Tshavhungwe offended
the provisions the Code of Conduct for all Legal Practitioners,
Candidate Legal Practitioners and Juristic
Entities (Government
Gazette No. 42337).
Roelofse
AJ
Acting
Judge of the High Court
DATE
OF HEARING:
22
AND 24 MARCH 2022
DATE
OF JUDGMENT:
26 MAY 2022
APPEARANCES
FOR
THE PLAINTIFFS:
ADV TSHAVHUNGWE
INSTRUCTED
BY: NGOMANA
AND ASSOCIATES
FOR
THE DEFENDANT:
NO APPEARANCE
[1]
Benson and Another v Walters and Others
1984 (1) SA 73
(A) at 83 A.
Mort NO v Henry Shields-Chiad
2001 (1) SA 464
C.
[2]
See: The Law of South Africa (LAWSA) Mandate and Negotiorum Gestio
(Volume 28(1) - Third Edition) at para. 56.
[3]
Goodricke & Son v Auto Protection Insurance Co Ltd (in
Liquidation)
1968 (1) SA 717
(A) at 722 – 3.
[4]
GN 168 of 29 March 2019: Code of Conduct for all Legal
Practitioners, Candidate Legal Practitioners and Juristic Entities
(Government Gazette No. 42337). The Code of Conduct applies to all
legal practitioners (attorneys and advocates) as well as all
candidate legal practitioners and juristic entities as defined, and
is effective from date of publication in the Gazette.
[5]
GN 168 of 29 March 2019: Code of Conduct for all Legal
Practitioners, Candidate Legal Practitioners and Juristic Entities
(Government Gazette No. 42337).
[6]
Clause
29.5 reads as follows:
“
Counsel
may, in calculating a fee, on the grounds of a client’s lack
of means to pay fees, charge the client an amount less
than would
otherwise be reasonable for the services rendered, or charge no fee
at all.”
[7]
Paragraph 2 of Mucavele.
[8]
Paragraph 42 of Mucavele.
[9]
Which provides as follows:
‘
Counsel
shall not agree to charge on results or agree to reduce or waive
fees if a positive result is not achieved, except in
a matter taken
on contingency in terms of the
Contingency Fees Act 66 of 1997
and/or save as contemplated in section 92 of the Act.’
[10]
Which provides as follows:
‘
Counsel
shall not agree to charge a fee as allowed on taxation except in a
matter undertaken on contingency, or as permitted in
terms of
section 92 of the Act.
[11]
Which provides as follows:
‘
Counsel
shall mark a fee as soon as practicable after the specific service
has been rendered and shall render an account monthly
of all fees
owing by every debtor.
[12]
Ibid [
Para.
19, footnote 5].
[13]
Upon
a proper interpretation of section 3(1) of the Act which requires
attorneys and if applicable advocates also sign the contingency
fees
agreement.
[14]
[2020] 3 All SA 834 (ECG); 2020 (6) SA 405 (ECG).
[15]
Paragraph 15 of Mkuyana.
[16]
Paragraph 16 of Mkuyana.
[17]
Paragraph 21 of Mkuyana.
[18]
Paragraph 22 of Mkuyana.
[19]
[1988] 1 All SA 317 (A).
[20]
Paragraph 3.3 thereof.
[21]
Paragraph 3 thereof.
[22]
Paragraph
3.6 thereof.
[23]
Paragraph
7 thereof.
[24]
Paragraph
8 thereof.
[25]
Which
provides:
‘
Counsel
shall not mark a brief, or in any form record a description of fees
in any record of account, which is false or misleading
as to the
true nature of the brief or of the services rendered…..’