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[2019] ZAECELLC 22
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Ntloko v Bobotyana (EL18/2019) [2019] ZAECELLC 22 (23 August 2019)
IN THE HIGH COURT OF
SOUTH AFRICA
(EASTERN
CAPE CIRCUIT LOCAL DIVISION, EAST LONDON)
CASE
NO EL 18/2019
In
the matter between:
LOYISO
NTLOKO
Applicant
and
MZWANDILE
TONY CEDRIC
BOBOTYANA Respondent
JUDGMENT
RUSA
AJ:
[1]
This is an application in which the applicant seeks an order in the
following terms:
1.
Directing the respondent to furnish the applicant with the itemized
bill of costs as between attorney and client.
2.
Directing the respondent to deliver to the applicant his file within
5 days from the date of judgment.
3.
Granting applicant leave to amend Notice of Motion and supplement his
papers after receipt of the itemized
bill and the respondent’s
file.
4.
Directing the respondent to pay the costs of the application and if
opposed, on the scale as between attorney
and client.
BACKGROUND
[2]
The applicant, Loyiso Ntloko sustained serious facial injuries during
a motor vehicle
accident, which took place on 2 April 2014.
Following the accident, he instructed, Mzwandile Bobotyana, the
respondent to
lodge a claim for damages against the Road Accident
Fund (RAF). A few years later, the RAF settled the claim and
made payment
of the sum of R650 000 (settlement amount) to the
respondent’s Trust Account. The RAF further issued an
undertaking
for the applicant’s future medical expenses in
terms of section 17(4) of the Road Accident Fund Act (RAF Act).
[3]
It is common cause that the applicant received only the sum of
R10 000 from the
respondent and that the latter never accounted
to the applicant for his fees. It is for this reason that the
applicant brought
this application.
[4]
On 1 August 2019, the respondent brought an application in which he
sought an order
to nullify these proceedings on the basis that the
applicant’s attorney, Mr Matiwane, was not in possession
of a certificate
issued by the Attorneys Fidelity Fund (the Fund)
when he instituted the application. The respondent brought his
application
two days after the Judge President of this division had
issued a directive concerning the filing of the heads of argument by
the
parties and at a time when a date for the hearing of the main
application had been allocated. On 2 August 2019, the
respondent
lodged a further application, which he termed ‘application
for consideration of an interlocutory application’.
[5]
At the commencement of the hearing of the main application, the
respondent sought
to argue his second application and submitted that
Mr Matiwane was precluded from representing the applicant as he was
not in possession
of a certificate from the Fund and that the main
application was thus a nullity. In the interest of justice, I
allowed the
respondent to argue the point so that I could dispose of
his application and so that I could deal with the main application.
[6]
The law dealing with the obligations of legal practitioners to
possess a certificate
is contained in section 84 of the Legal
Practice Act 28 of 2014 (LPA). Section 84(1) provides that:
“
(1)
Every
attorney or any advocate referred to in section 34(2)(a)
[
of
the LPA
]
, other than a legal practitioner in the full-time
employ of the South African Human Rights Commission or the State as a
state attorney
or state advocate and who practises or is deemed to
practise—
(a)
for
his or her own account either alone or in partnership; or
(b)
as
a director of a practise which is a juristic entity, must be in
possession of a Fidelity Fund certificate”.
Section 84(2) provides as
follows:
“
No legal
practitioner referred to in subsection (1) or person employed or
supervised by that legal practitioner may receive or hold
funds or
property unless the legal practitioner concerned is in possession of
a Fidelity Fund Certificate
.”
[7]
In
S v
Mata
[1]
,
Pickering J quoted, with approval, a passage from the judgment of
Blignaut
J
(concurred in by Cleaver J) in
S
v Heji
[2]
in which the Court held that “the possession of a Fidelity Fund
Certificate had no relevant connection with the qualification
or
competence of the attorney and that, accordingly the contravention by
an attorney of the provisions of the then section 41 of
the Attorneys
Act (now repealed) did not result in the invalidity of the criminal
proceedings.”
[8]
There is no merit in the respondent’s applications. It is
clear that the
fact that a legal practitioner is not possession of a
certificate from the Fund does not preclude him or her from
practising. Given
the time lines involved in bringing these
applications, it is my view that the respondent did so in order to
seek postponement
of the main application. In all the
circumstances, the interlocutory applications brought by the
respondent fall to be dismissed.
I now turn to the main
application.
[9]
The applicant’s case is that on 2 April 2014, he was involved
in a motor collision
near Qamata Great Place, in Cofimvaba. He
was a passenger at the time of the accident and he suffered the
following injuries,
namely compression fracture of the fifth cervical
vertebra and multiple facial bone fractures with resultant facial
asymmetry.
He was admitted to St Dominics Hospital, East
London.
[10]
On 6 May 2015, the applicant then instructed the respondent to lodge
a claim with the RAF. This
was done by the respondent on 24
August 2015. The amount claimed by the applicant was the sum of
R1 768 540.
On 14 January 2016, the RAF made a
written offer of the settlement amount in full and final settlement
of the applicant’s
claim for general damages in respect of pain
and suffering he sustained because of the accident but did not make a
tender for payment
of the applicant’s legal costs. On 20
January 2016, the respondent accepted the offer made, without
consulting the
applicant. The RAF made an undertaking in terms
of section 17(4)(a) of the RAF Act dated 3 February 2016.
[11]
On 22 June 2016, the RAF made payment of the settlement amount into
the trust account of the
respondent, held with First National Bank.
As the applicant did not receive any feedback on the status of
his claim from
the respondent, in September 2017, the applicant
directly contacted the RAF and was informed that payment of the
settlement amount
was made into the respondent’s trust account
of as far back as June 2016.
[12]
Upon hearing about this, the applicant approached the respondent who
made an undertaking to the
applicant that he would make payment to
him. It is not clear how much was to be paid to the applicant.
However, on
14 December 2017, the applicant noticed a cash
deposit of the sum of R10 000 was made into his personal bank
account, which
had reference details containing a mobile phone number
as well as the name ‘Bobotyana’ written on the
confirmation
slip. The applicant assumed that the respondent
made such payment, as he (the applicant) was not expecting any funds
apart
from the respondent.
[13]
The applicant then instructed his present attorneys to demand from
the respondent payment of
the whole settlement amount and a letter in
that regard dated 18 January 2018 was sent to the respondent.
As there was no
response to that letter, an application was made to
the RAF in terms of
Promotion of Access to Information Act 2 of 2000
in which the applicant requested the file contents of his claim. The
RAF acceded to the request made and furnished the applicant’s
attorneys with a copy of their file.
[14]
From the reading of the RAF’s file contents, it was not clear
on what basis the remainder
of the settlement amount was retained by
respondent as the documents contained in the file did not justify
fees amounting to R640 000.
As the respondent failed to
provide clarity on this, the applicant then now approached this court
for the relief set out
in the Notice of Motion.
[15]
The respondent raised a point
in limine
of non-joinder of a
c
urator
and the National Director of Public Prosecutions (the
NDPP) as well as Bobotyana and Company Attorneys, which the
respondent submitted
have interest in this application. The
respondent also contended that his mandate had not been terminated
when this application
was lodged by the applicant.
[16]
On the substance of his defence to the application, the respondent’s
contention was that
he communicated the settlement proposal made by
the RAF to the applicant and was instructed by the latter to accept
the offer.
The respondent further contended that he and the
applicant agreed to consult, but for the reasons known to the
applicant the consultation
was delayed.
[17]
More importantly, the respondent contended that he deducted, from the
settlement amount, 25 per
cent contingency fee and monies he loaned
to the applicant as cash advance.
[18]
In reply to the non-joinder point, the applicant denied that either
the
curator
or the NDPP has any interest in this matter.
It was contended that the respondent has not alleged any direct and
substantial
interest. As regards the respondent’s
mandate, the applicant has disputed that he had not terminated such
mandate.
To that end, the applicant referred to the special
power of attorney he gave in favour of Mr Matiwane. Lastly, the
applicant
denied that the respondent proposed any meeting and that
the applicant did not receive any telephone call from the respondent
in
that regard. On the issue of contingency fee, the applicant
averred that the respondent was not entitled to deduct 25 per
cent as
he did, as that was contrary to the Contingency Fee Act 66 of 1997 (
Contingency Fee Act). The applicant further
denied that there
were any loans advanced to him by the respondent.
[19]
I now deal with the joinder issue raised by the respondent. As
was argued by counsel for
the applicant, the test for joinder is
whether a party has a direct and substantial interest in the subject
matter of the action.
The interest referred to is a legal
interest in the subject matter of litigation, which may be affected
prejudicially by the judgment
of the Court
[3]
.
The relief sought by the applicant is for a disclosure of the bill of
costs and the respondent’s file pertaining to
the applicant’s
claim. Such relief has nothing to do with the
curator
or the NDPP and, in any event, the respondent has not demonstrated
any interest, which the two might have on the relief the applicant
seeks. The respondent has failed to demonstrate any legal
interest by the
curator
or the NDPP. The non-joinder point in this regard must fail.
[20]
As regards the non-joinder of the respondents’ own law firm, it
is common cause that the
respondent is the sole director of his firm
and that he was the person handling the applicant’s claim.
It makes no
difference whether or not Bobotyane and Company is joined
in the present proceedings. I agree with the submission by the
applicant’s counsel that the defence advanced by the respondent
in this regard was merely form over substance.
[21]
On the issue of the authority to act, the respondent argued that his
mandate had not been terminated
and that the applicant’s legal
representatives were not entitled to represent the applicant in these
proceedings. The
respondent thus disputed the authority of the
applicant’s attorneys to act in this matter. Rule 7(1) of
the Uniform
Rules of this Court regulates the procedure by which a
party disputes the authority of anyone acting on behalf of a party.
This sub-rule reads as follows:
“
Subject to the
provisions of subrules (2) and (3) a power of attorney to act need
not be filed, but the authority of anyone acting
on behalf of a party
may, within 10 days after it has come to the notice of a party that
such person is so acting, or with the
leave of the court on the good
cause shown at any time before judgement, be disputed, whereafter
such person may no longer act
unless he satisfied the court that he
is authorised so to act, and to enable him to do so the court may
postpone the hearing of
the action or application.”
[22]
The respondent did not deliver a notice as contemplated by the
sub-rule referred to above. In
any event, the applicant has
attached power of attorney in favour of Mr Matiwane. In my
view, that addressed the complaint
the respondent raised. There
is, accordingly, no merit to the point raised by the respondent in
this regard.
[23]
The only substantive ground of opposition raised by the respondent
was that he was entitled to
charge a fee of 25 per cent as per the
contingency fee arrangement he had with the applicant and retain the
balance of the settlement
amount to settle the amounts he loaned to
the applicant. The respondent did not give any details of the
alleged amounts.
The respondent did not produce any invoice or
statement of account detailing how he disbursed the settlement
amount.
[24]
During argument, the respondent was specifically asked by the Court
whether or not he had prepared
a bill of costs, itemizing his
attendances. His response was that he would prefer not to
answer the question. I further
enquired from the respondent
that if I were to be against him, whether or not he would comply with
the court order. The respondent
replied that he would rather
await the judgment of this court. I found his responses to be
extra ordinary. It is clear
that the respondent does not have a
bill of costs and neither is he prepared to draft one.
[25]
The respondent then referred to the Contingency Fee Agreement (CFA)
which, he submitted, was
signed by the applicant and himself.
Even though the respondent did not attach the CFA to his answering
affidavit, I allowed
the CFA to be handed up from the bar, in the
interest of justice as reference was made to it in papers. I
hasten to point
out that the Court is not asked to make a ruling on
the validity or otherwise of the CFA. However, I deem it
necessary to
make a few observations about it.
[26]
The respondent submitted that in terms of the CFA, he was entitled to
charge 25 per cent of the
amount awarded to the applicant.
THE
CONTINGENCY FEE ACT
[27]
The Contingency Fee Agreement is regulated by the Contingency Fee
Act, section 2 of which
reads as follows:
“
2. Contingency
fees agreements.
—
(1)
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.
(2)
Any fees referred to in subsection (1) (b) which are higher than
the normal fees of the legal practitioner concerned
(hereinafter
referred to as the ‘success fee’), shall not exceed such
normal fees by more than 100 per cent: Provided
that, in the case of
claims sounding in money, the total of any such success fee payable
by the client to the legal practitioner,
shall not exceed 25 per cent
of the total amount awarded or any amount obtained by the client in
consequence of the proceedings
concerned, which amount shall not, for
purposes of calculating such excess, include any costs.
[28]
Clause 5 of the CFA, concluded on 6 May 2015, provides that:
“
the
attorney hereby warrants that the fees on an attorney and own client
basis to perform word in connection with the aforementioned
proceedings are calculated on the following basis: “
See
Annexure A attached hereto detailing the basis of the applicable rate
agreed upon
.”
(sic).
There
is no Annexure A to the CFA.
[29]
On the other hand, clause 6 provides that:
“
the
parties agree that if the client is successful in the aforementioned
proceedings and amount shall be payable to the Attorney,
calculated
at 25% of the awarded claim.”
(sic). In other words,
the respondent would deduct 25 per cent of the settlement. This is
clearly not permissible by law.
[30]
In
Johannes
Matthy Erasmus v Mark William
[4]
,
Plasket J said this concerning section 2 “
it
is not intended to be a licence to plunder up to 25% of any award
paid to the client who was entered a contingency fee agreement
(and
who is usually indigent). All that s2 does is to allow an attorney
who is party to a contingency fee agreement to recover
from an award
to his or her client a success fee based on the work done at a
maximum of twice his or her usual fee. The amount
may not,
however, exceed 25 per cent of the award, no matter how much work the
attorney has done. What an attorney has is
certainly, not
allowed to is 25% of the client’s award
”.
[31]
In
Masango
v RAF and Others
[5]
,
Mojapelo DJP held that “
there
is no basis for the practitioner to charge 25% of client’s
capital as his or her fees. The 25% of the client’s
capital is introduced only as a capital in the attorney charges and
success fee which shall not exceed 25% of the client’s
capital
award. Twenty five percent of the capital claim is therefore
not a fee
”.
[32]
As noted in the CFA at clause 6 thereof, the agreement provides for
the respondent to charge
25% of the capital award as fees. The
Act does not sanction such a provision and thus there is no basis for
the respondent
to charge as per that clause. Mojapelo DJP went
further to say that “
an
agreement or practice that makes an attorney a partner to the
injuries suffered by his client in contra bones mores and is
therefore
unlawful and illegal at common law under the CFA”.
[6]
[33]
As I was not called upon to make a ruling on the validity of the CFA,
I make no ruling in that
regard. It is evident that the
applicant, in his Notice of Motion, has foreshadowed further
litigation against the respondent
concerning his claim. It is
possible that the issue pertaining to the validity of the CFA could
be raised in further legal
proceedings the applicant may institute in
future, if any.
DUTY
TO ACCOUNT BY A LEGAL PRACTITIONER
[34]
It was argued on behalf of the applicant that the respondent was
obliged to account to the applicant
and that failure to do so was a
breach of the respondent’s statutory obligation as set out Rule
3.8 of the Code of Conduct
for Legal Practitioners, which provides
that:
“
Legal
practitioners, candidate legal practitioners and juristic entities
shall:
3.8
account faithfully, accurately and timeously for any of their
client’s money which
comes into their possession, keep such
money separate from their own money, and retain such money for as
long only as is strictly
necessary.
”
[35]
One of the acceptable methods of accounting to client by a legal
practitioner is to draft and
furnish client with a detailed bill of
costs itemizing all such practitioner’s attendance in the
matter. It is remarkable
that the respondent has not furnished
a bill of costs, despite numerous requests from the applicant.
Apart from the contingency
fee on which I have already commented, the
respondent appears to believe that he had a licence to deduct the
amounts he loaned,
on his own version, to the applicant without
accounting. The respondent failed to produce evidence of any of
the amounts
he allegedly loaned the applicant. He could not
furnish a statement of account or an invoice reflecting the loan
amounts,
his fees and disbursements.
[36]
Lastly during his argument, the respondent referred to some payment,
which was apparently made
to the applicant by the Attorney Fidelity
Fund (the Fund). He did not give details as to how such payment
came about.
The applicant’s counsel, later in argument,
confirmed the payment and handed up a document titled ‘notification
of
payment’ which showed payment on 4 June 2019, of the sum of
R457 262,00 to the applicant’s bank account. As
a
result of this payment, the respondent argued that the matter had
been resolved. That submission is incorrect. Even
if
payment was made by the Fund, the respondent still has a legal
obligation to account fully to the applicant. In any event, it
is
still open to the applicant to investigate the circumstances under
which this payment was made to him as it appeared that he
had no
knowledge of how such payment came about. Once such an investigation
has been conducted, the respondent may again approach
this Court for
further relief as may be necessary.
[37]
All in all, the applicant is entitled to the relief he seeks and
there is no reason why the respondent
should not furnish the
applicant with his attorney and client bill of costs as well as a
copy of the respondent’s office
file pertaining to the
applicant’s claim. The respondent should be in a position
to furnish the bill and his file to
the applicant’s attorneys
within 10 (ten) days from the date of delivery of this judgment.
COSTS
[38]
This brings me to the issue of costs. It was argued on behalf
of the applicant that the
respondent should be ordered to pay
applicant’s costs of this application on a punitive scale. The
reasons advanced
on behalf of the applicant were,
inter alia
,
that the respondent was an officer of this Court who was duty bound
to account to the applicant and that he failed to respond
to the
written correspondence from the applicant’s attorneys in which
the respondent was requested to furnish his file and
a bill of costs.
The respondent is of the view that, if unsuccessful in his
opposition to this application, he should not
be ordered to pay costs
on a punitive scale.
[39]
There was no reason for the respondent to refuse to furnish his bill
of costs and file to the
applicant. No valid explanation was
advanced by the respondent either in his answering affidavit or in
argument at court
in that regard. Furthermore, when I asked the
respondent about his bill of costs, he was unable to confirm if he
would comply
with a court order and produce such bill in the event
that I were to find against him. The respondent’s
attitude in
that regard clearly demonstrated that he owed no duty to
the applicant, had no regard for him and showed no interest in him at
all. The conduct of the respondent in refusing to account to
the applicant and furnish his bill of costs is unprofessional
and
deplorable. To make matters worse, the respondent brought two
spurious applications which, in my view, were designed
to delay
finalising this application and ultimately avoid accounting to the
applicant. “
These
factors, the spurious defences that the respondent had raised and the
way in which he generally conducted this litigation
are clearly red
flags as to his suitability as an attorney
.”
[7]
I am thus of the view that an award of attorney and client costs
against the respondent is justified. Lastly, there
is no reason
why this judgment should not be brought to the attention of the Legal
Practice Council of the Cape.
[40] In
the result, I make the following order:
(a)
The respondent is directed to furnish the applicant with an itemized
bill
of costs on the attorney and client scale within 10 days from
the date of this order.
(b)
The respondent is directed to deliver to the applicant’s
attorneys
the applicant’s litigation file within 10 days from
the date of this order.
(c)
The applicant is granted leave to amend the Notice of Motion and
supplement
his papers after receipt of the itemized bill and
respondent’s file for any appropriate relief the applicant may
seek.
(d)
The respondent is directed to pay the costs of this application,
including
the application for the nullification of these proceedings,
on an attorney and client scale.
(e)
The Registrar is directed to furnish the Cape Legal Practice Council
with
a copy of this judgment.
_________________
M
RUSA
ACTING
JUDGE OF THE HIGH COURT
Counsel
for the Appellant:
Adv.
Lunga Siyo
Instructed
by: Matiwane
Attorneys
15
Currie Street
Quigney
EAST
LONDON
For
the Respondent:
In
Person (Mr Bobotyana)
No
12 Komani Street
QUEENSTOWN
Date
Heard:
08
August 2019
Judgment
Delivered:
23
August 2019
[1]
S v
Mata
CA&R 307/2017 (ECDZA) 20 OCTOBER 2017 (unreported).
[2]
S v
Heji
2007 (2) SACR 527
(C).
[3]
See
Henri
Viljoen (Pty) Ltd v Awerbuch Brothers
1953(2)
SA 151 (O) at 167D – F. See also
VB
v SB
2016(1)
SA 47 at 53D – F)
[4]
Case No 3364/2016 (ECDZA) (2 November 2016) (unreported).
[5]
Masango
v RAF and Others
2016 (6) SA 508
(GJ).
[6]
Id at 22H.
[7]
Erasmus, above fn 4 at page 5.