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[2016] ZANCHC 4
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Nama Khoi Local Municipality v MEC: Northern Cape Provincial Government (973A/2013, 1389/2013, 10A/B/2014, 2064/2013) [2016] ZANCHC 4 (1 July 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
Northern
Cape Division, Kimberley
Case
numbers: 973A/2013; 1389/2013;10A/B/2014; 2064/2013
Date
heard:
17/06/2016
Date
available:
01
/
07
/2016
In
the matter between:
NAMA
KHOI LOCAL MUNICIPALITY
APPLICANT
And
MEC:
NORTHERN CAPE PROVINCIAL
GOVERNMENT
RESPONDENT
JUDGMENT
IN RESPECT OF THE REVIEW OF TAXATION
Phatshoane,
J
[1]
This is an application for the review of a taxation in terms of Rule
48 of the Uniform Rules brought by Nama Khoi Local Municipality
in
respect of the four bills of costs presented by Cornelissen
Incorporated and taxed on an attorney and own client scale by the
Taxing Master. The application initially served before me through a
Chamber Bench-book. I referred it to an open Court in terms
of Rule
48(6) and directed that the parties file heads of argument; pursuant
to which it was set down in the Motion Court of 17
June 2016. Adv
Stanton, for Nama Khoi Municipality and Duncan & Rothman
Attorneys, handed in Court a Notice to abide the decision
of the
Court by Cornelissen Inc.
[2]
The four bills of costs in issue are in respect of the following four
matters (Case Nos): 973A/2013; 1389/2013; 10A/B/2014;
and 2064/2013.
Nama Khoi Local Municipality was involved in them either as an
applicant or a respondent together with others.
[3]
The background to the stated case by the Taxing Master is as follows.
Cornelissen Inc instituted action against the Municipality
under Case
No: 1553/2014 for the recovery of its legal fees in respect of the
various matters highlighted above. It later filed
an application for
summary judgment. The Municipality resisted it on the basis that the
bills were not liquid documents and that
the remuneration for
services rendered was not for “a liquidated amount in money”
because it was not readily ascertainable.
It was further contended
that neither Mr Joshua Losper nor Mr Nevie Aubrey Baartman, who were
cited as either the respondents or
the applicants in some of the four
matters, were authorised to engage the services of Cornelissen Inc.
The Municipality, it was
contended, had already paid this firm an
amount of R3 649 545.31 for the various application and that
there was a possible
duplication of the accounts.
[4]
Cornelissen Inc withdrew the above action and the application for
summary judgment. It tendered the defendant’s costs
of the
suit. On 18 August 2015 it served the Notice of Intention to Tax the
Bill of Costs on the Municipality and Duncan &
Rothman Attorneys.
[5]
Mr Johannes Gerhardus Steyn of Duncan & Rothman Attorneys deposed
to an affidavit in support of the review of taxation in
terms of Rule
48(1). He intimates that he acted on behalf of Nama Khoi Local
Municipality in all the four applications as the Kimberley
correspondent of Schreuders Attorneys of Springbok. On a cursory
inspection of the four files, it appears that, Cornelissen Inc
also
acted for the Municipality in the four matters.
[6]
On 02 September 2015 Mr Steyn served and filed a notice of objection
in respect of the notice of taxation for every item in
the four bills
of costs. Firstly, on the basis that the tariff in terms of which
these bills of costs were drafted was not based
on any agreement
between Cornelissen Inc and the Municipality. Secondly, that the
items as quantified could not be taxed. Thirdly,
the taxation was
premature and the bills were accordingly non-taxable.
[7]
The proper procedure relating to an application for the review of
taxation of a bill of costs is to give specific notice of
each item
objected to and the grounds on which it is sought to bring such items
under review. It is not sufficient merely to set
out that all the
items disallowed by the Taxing Master will be reviewed. The
respondents are entitled to know the exact case they
have to meet on
review. See
S.A. Milk Products Ltd v Furniss Ltd and Others
1921 WLD 86
;
Brener NO v Sonnenberg, Murphy, Leo Burnett (Pty) Ltd
(formerly D'Arcy Masins Benton & Bowless SA (Pty) Ltd)
1999
(4) SA 503
(W) at 512D-G.
[8]
On 17 September 2015 the bills were presented for taxation at which
proceedings Duncan & Rothman again objected to the taxation
thereof on the aforesaid basis. Mr Steyn says that he suggested that
Cornelissen Inc file an application for declaratory order
(the terms
of which are unspecified) and that the Court be requested to
determine whether a fee agreement existed between Cornelissen
Inc and
the Municipality and if so whether Cornelissen Inc was entitled to
costs on an attorney and own client scale.
[9]
The Taxing Master taxed the bills and affixed his
allocatur
thereto. On 08 October 2015 he was requested by Duncan & Rothman
to provide a stated case for a decision by a Judge in terms
of Rule
48(1) why his decision to attend to and finalise the taxation of the
four bills should not be regarded as pre-mature and
therefore
reviewed and set aside. In his stated case the Taxing Master recorded
the following:
“
1.
On 17 September 2015, the Applicants’ Attorneys [Cornelissen
Inc] presented an Attorney and own
client bill for taxation. The
applicants [Nama Khoi Municipality] instructed a local firm [Duncan &
Rothman] to oppose the
taxation on their behalf.
2.
The Applicants’ attorneys [Cornelissen Inc] argued that, even
in the absence of an agreement
to fees, they are entitled to charge
fees higher than the fees prescribed in the tariff. The applicants
[Nama Khoi Municipality]
argued that the tariff on which the bills of
costs were drafted is not based on any agreement between the
Attorneys and the Applicants.
The items as quantified can
therefore not be taxed and the Taxation is premature and the bills of
costs are not taxable, thus the
argument. The Applicant further
argued that the Applicants’ Attorneys[Cornelissen Inc] should
file an application for
a declaratory order to determine whether a
fee agreement came into existence, and whether the Applicants’
attorneys are entitled
to attorney and own client fees.
3.
After having heard the arguments, a ruling was made that the Bill(s)
will be taxed on the prescribed
tariff as stipulated in Rule 70, on
the Attorney and own client scale. This is the costs that an
attorney is entitled to
recover from his own client. This does
not depend upon an award for costs being made in the attorney’s
favour.
4.
A review notice of taxation in terms of Rule 48(1) has been filed by
the Applicant. In short:
the Applicant requests the Taxing
Master to provide a stated case explaining why his decision to attend
to and finalise the taxation
should not be regarded as premature and
therefore reviewed and set aside.
5.
It is common law that the Applicants’ attorneys cannot issue
summons before he proves the
amount by way of a taxed bill.
6.
The Applicants rely on the fact that the Taxing Master has no power,
nor is it his duty, to hear
evidence in order to resolve any possible
defences such as that clarity must be obtained from the Court to
determine whether a
fee agreement came into existence.
7.
In paragraph 11 of the affidavit to the notice of review, the
Applicants wrongly indicate that
the Taxing master proceeded to tax
on a party and party scale. This is not correct. As mentioned
hereinabove, it was taxed
on an attorney and own client scale.
8.
The Applicants’ Attorneys conceded that there was no agreement;
also that the Applicants
indicated that they do not know whether an
agreement came into existence. If the Applicants indeed rely on
what is stipulated
in paragraph 6 hereinabove, this review has been
brought under the wrong Rule. (See Rule 53).
9.
In the circumstances of this particular taxation and within the
boundaries of reasonableness and
in the interest of justice, the
decision to tax the bills on the tariff as prescribed in Rule 70 was
correct. It was done
to prevent any injustice to the
Applicants’ Attorney.”
[10]
Cornelissen Inc made submissions in terms of Rule 48(5)(a)
[1]
.
Largely these are in support of the ruling made by the Taxing Master.
They conceded that no written fee agreement was concluded
between
them and their client. They further submitted that the taxation was
not premature; it was essential to have the bills taxed
to dispel any
perceptions of overreaching the client and to obtain a liquidated
amount or a quantified bill of costs.
[11]
In
President
of the Republic of South Africa and Others v Gauteng Lions Rugby
Union and Another
2002 (2) SA 64
(CC) at 73 para13 Kriegler J restated the legal
principle on review of taxation as follows:
“
It
is settled law that when a court reviews a taxation it is vested with
the power to exercise the wider degree of supervision identified
in
the time-honoured classification of Innes CJ in the JCI [
Johannesburg
Consolidated Investment Co v Johannesburg Town Council
1903 TS 111]
case. This means:
' . . . that the Court
must be satisfied that the Taxing Master was clearly wrong before it
will interfere with a ruling made by
him . . . viz that the Court
will not interfere with a ruling made by the Taxing Master in every
case where its view of the matter
in dispute differs from that of the
Taxing Master, but only when it is satisfied that the Taxing
Master's view of the matter
differs so materially from its own that
it should be held to vitiate his ruling'.
[12]
Duncan and Rothman did not clearly define the grounds of objection as
required in Rule 48(2)
[2]
.
On perusal of the application and the stated case what appears to be
an issue arising for consideration is whether in the absence
of a fee
agreement between Cornelissen Inc and the Municipality, Cornelissen
Inc was entitled to recover the fees from their client
on an attorney
and own client scale. This contention is captured as follows in the
affidavit of Mr Steyn:
“
6.1
The Municipality disputes that Cornelissen is entitled to
attorney and own client fees as no fees agreement was entered
into in
terms of which Cornelissen (sic).
6.2
In
the absence of any fee agreement, Cornelissen is only entitled to
fees on a party and party scale
.”
[13]
The above statement by Mr Steyn is repeated in para 10.3 of the
founding affidavit. It is also apparent from the Taxing
Master’s
stated case that he was not enjoined to determine the validity or
otherwise of the fee agreement between Cornelissen
Inc and the
Municipality. In any event, it is common cause, such an agreement is
non-existent.
[14]
A Taxing Master has a discretion to award costs as appears to him or
her to have been necessary and proper. In
Botha v Themistocleous
1966 (1) SA 107
(T) at 111 it was held that a Taxing Master is
virtually in the position of an arbitrator or referee appointed to
assist the Court
in determining what the just remuneration should be
for an attorney's services in any particular case. Proof to his
satisfaction
means that he should satisfy himself on such evidence as
may be reasonably necessary for the purpose of ascertaining whether a
fair probability exists that the services were actually rendered. The
Taxing Master discharged his obligation and awarded costs
on an
attorney and own client scale as he deemed meet in the circumstances
of this case. In
Ben McDonald Inc and Another v Rudolph and
Another
1997 (4) SA 252
(T) at 256 the Court defined
attorney and own client costs as follows:
“
These
are costs allowed on taxation of an attorney's bill to his own
client. They include all costs except when unnecessarily incurred
or
of an unreasonable amount. Costs incurred with the express or implied
approval of the client are presumed to have been reasonably
incurred
and where the amount has been agreed upon it is presumed to be
reasonable. It will, however, be open to the client to
show that he
was misled or acted under a misapprehension when granting his
approval.”
[15]
In
Mahomed v Mahomed
1999 (1) SA 1150
(E) at 1152C-E it was
held that:
“
Rule
48(2) does provide for a hearing of sorts: it states that the Taxing
Master shall lay the papers before a Judge, who may then
decide the
matter upon the case and the contentions submitted to him, together
with any further information which he may require
from the Taxing
Master; the Judge may also hear the parties or their advocates or
attorneys in Chambers.
However,
such hearing relates to and is limited to proceedings in terms of
Rule 48. The Judge's competency therefore does not extend
beyond
reviewing the taxation
.”
(my emphasis)
See
also
Brener
NO v Sonnenberg, Murphy, Leo Burnett (Pty) Ltd (formerly D'Arcy
Masins Benton & Bowless SA (Pty) Ltd)
(Supra)
at 519C-D
[16]
Belatedly in heads of argument by the Municipality an attempt is made
to raise lack of authority or mandate by Cornelissen
Inc to have
acted on behalf of the Municipality. In support of the contention
that I should review and set aside the Taxing Master’s
ruling
to tax the bills due to lack of a mandate, Ms Stanton, for the
municipality, relied on the following dictum in
Berman
& Fialkov v Lumb
2003
(2) SA 674
(C) at 682F-I paras 24-25:
“
[24]
Whilst it may be the duty of a Taxing Master to interpret the effect
of an agreement recording an undertaking to pay taxed
costs (see
Miller
v Edenburg and the Taxing Master
1938 TPD 445)
a decision regarding the validity or otherwise of the
agreement in which the obligation to pay the costs that are to be
taxed is
sourced, in my view, falls outside the ambit of a Taxing
Master's powers and functions: it is an aspect that should be decided
by the Court.
[25]
If the Taxing Master, in arriving at the conclusion to apply the
non-litigious scale of the Law Society, did in fact make a
decision
on the legality of the agreement of 9 January 1998, he clearly acted
beyond his competence. If he did not make any decision
regarding the
legality/illegality of the said agreement and proceeded with the
taxation, as is common cause he did, well knowing
that a dispute
existed as regards whether the taxation was to take place pursuant to
the terms of the written agreement or an oral
mandate, he was in
error. In either event, after the Taxing Master has affixed his
allocatur
to the bill of costs, the taxation could be brought on review in
terms of Rule 48(1) (if the dispute falls within its ambit), or
the
common law or the illegality of the said agreement on which the
taxation was based could be raised as a defence in the trial
(see
Lubbe
v Borman
[1938 CPD 211]
(supra)) in which the amount that is payable in terms
of the taxed bill of costs is claimed.”
[17]
As already alluded to, the review of taxation was not predicated on
Cornelissen Inc’s lack of mandate to act on behalf
of the
municipality.
Berman & Fialkov
supra is therefore
distinguishable
.
In my view, the question of lack of
authority may be raised as a defence in a subsequent action, should
such a course be pursued.
The municipality did not demonstrate that
the Taxing Master’s decision was wrong. I can conceive of no
reason to upset same.
It follows that this review must fail.
[18]
Even though Cornelissen Inc filed notice to abide they made written
submission in terms of Rule 48(5)(a). They should not be
out of
pocket. The upshot of this is that costs should follow the success.
In the result I make the following order.
ORDER:
1.
The
application to review and set aside the Taxing Master’s
decision to tax the four bills of costs under
Case
Numbers: 973A/2013; 1389/2013; 10A/B/2014; and 2064/2013
is
dismissed with costs.
___________________
MV
PHATSHOANE J
On
behalf of the applicant: Adv A Stanton (instructed by Duncan &
Rothman Attorneys)
[1]
Rule 48(5)(a) provides: The parties to whom
a copy of the stated case has been supplied, may within 15 days
after receipt
thereof make submissions in writing thereon, including
grounds of objection not raised at the taxation, in respect of any
item
or part of an item which was objected to before the taxing
master or disallowed
mero motu
by the taxing master.
[2]
Rule 48(2) requires that the notice calling upon
the Taxing Master to present a stated case for a decision by a judge
set out
the following: (a) identify each item or part of an
item in respect of which the decision of the taxing master is sought
to be reviewed; (b)
contain the allegation that each such item or
part thereof was
objected to at the taxation by the dissatisfied party, or that it
was disallowed
mero motu
by the taxing master;
(c) contain the grounds of
objection relied upon by the dissatisfied party at the taxation, but
not argument in support thereof;
and (d) contain any
finding of fact which the dissatisfied party contends the taxing
master has made and which the
dissatisfied party intends to
challenge, stating the ground of such challenge, but not argument in
support thereof.