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[2016] ZAKZPHC 112
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SR Naidoo and Company v Maharaj NO and Another (1825/2016) [2016] ZAKZPHC 112 (1 November 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
KWAZULU-NATAL
DIVISION, PIETERMARITZBURG
NOT
REPORTABLE
Case
No: 1825/2016
In the
matter between:
SR
NAIDOO &
COMPANY Applicant
and
JYOTHI
MAHARAJ
NO 1
st
Respondent
MASTER
OF THE HIGH
COURT 2
nd
Respondent
Coram:
Gorven J
Heard:
25 October 2016
Delivered:
1 November 2016
ORDER
1.
The
application is dismissed.
2.
The
first respondent is directed to pay the costs incurred up to 17 May
2016.
3.
The
applicant is directed to pay the balance of the costs.
JUDGMENT
Gorven
J:
[1]
The applicant is a firm
of attorneys which was engaged to litigate on behalf of the deceased
estate of which the first respondent
is now executrix (the estate).
The dispute concerns the fees and disbursements payable by the estate
to the applicant. At the time
the applicant was engaged, the executor
of the estate was Mr Dass. A written Client Mandate and Fee Agreement
(the agreement) was
concluded between the applicant and the estate.
There is no dispute as to the essential terms of the agreement. The
estate was
to pay the applicant’s fees, on an attorney and own
client scale, calculated on the basis of a tariff of fees plus 25%
plus
VAT. In addition, the estate would be liable for reasonably
incurred disbursements.
[2]
The way payments would
take place was set out in paragraph 4 where the estate agreed that:
‘
4.1 the attorney is entitled to render to
the estate interim accounts in respect of disbursements and that at
the conclusion of
the matter he will render me a final account for
his fees and disbursements.
4.2 all disbursements reflected in the account will, so far as
possible, be accompanied by supporting documentation, and that in
respect of fees, the attorney will set out a short cryptic
description of the work done by him together with the total time
spent
in the execution thereof, where applicable.
4.3 should I require the attorney to furnish the estate with a
detailed specified account in respect of services rendered by him
the
estate shall be responsible and liable for the additional costs of
drawing such itemised account and/or attending to the taxation
or
assessment thereof as provided for in the tariff as prescribed from
time to time by the Rules Board for Courts of Law aforesaid
to which
25% is to be added plus VAT
4.4 if I do not object in writing to the account,
or request a specified detailed account, within 30 (thirty) days of
receipt of
the account from the attorney, I will be deemed to have
waived any right which I may have in respect thereof and that I will
also
then be deemed to have accepted the attorney’s account as
fair and reasonable.’
[3]
It is therefore clear
that, when payment was sought, the applicant was obliged to render an
account. The account was to include
fees and disbursements. A short
description of the work done was to support the fees claimed.
Supporting documents for the disbursements
would, where possible,
accompany the account. A final account would be rendered for fees and
disbursements. The final account would
then include fees and
disbursements and reflect as deductions any payments already made by
the estate.
[4]
Once the account was
rendered, three possible courses of action were open to the estate.
First, it could accept the account and
pay. Secondly, it could
request a detailed specified account in respect of the services
rendered by the applicant. In this case,
the estate would be liable
for the additional costs of drawing this itemised account and/or
attending to its taxation or assessment.
If this option was
exercised, once the itemised account was drawn the estate could pay
without requiring taxation. If not, a taxation
or assessment would
take place. Thirdly, the estate could do nothing in which case, after
a period of 30 days, the estate would
be construed as having accepted
the account.
[5]
Pursuant to the
agreement, the applicant rendered services to the estate. This
involved litigation to protect the property of the
estate. This began
in November 2012. Mr Dass was removed as executor on 10 December
2013. The first respondent was appointed as
executrix on 23 December
2013. After the first respondent was so appointed, she terminated the
mandate of the applicant to act
on behalf of the estate. This was
prior to the finalisation of the litigation. The litigation was
finalised by the present attorneys
of record of the estate on
28 May 2014. One Bramdeo was ordered to pay the costs of
the estate on a scale as between
attorney and client.
[6]
A number of disputes
arose between the applicant and the estate relating to the fees
claimed by the applicant. Much correspondence
was exchanged. It is
fair to say that this correspondence generated more heat than light.
It is common cause on the papers that,
at some stage, the estate paid
R36 308.68 to the applicant. This appears from a letter dated 25
March 2014 along with which
the applicant submitted two bills of
costs to the estate. One of these related to the above-mentioned
litigation and the other
apparently related to instructions given to
counsel by the applicant at some stage.
[7]
When disputes arose
concerning the claims of the applicant, it set down the bill of costs
relating to the litigation. It is not
clear what transpired to the
second bill of costs. The taxing master of the high court refused to
tax the bill and invited the
applicant to approach the court if so
advised. This resulted in the present application. The founding
papers assert that the estate
denied liability for the payment of any
of the applicant’s fees. It is clear that at least certain of
the estate’s
responses in the correspondence can be construed
in that light. I shall deal with this later. However, in the
answering affidavit,
the estate conceded that it was liable to pay
pursuant to the agreement.
[8]
The relief sought by
the applicant is:
‘
1. That the Estate of the late SEWNARAIN
NARAYAN MAHARAJH: No.3236/1994(PMB) is ordered to pay the attorney
and client costs incurred
by the Applicant and Mason Inc. in the
matter of ANOOPKUMAR SEWNARAIN DASS N.O. –VS- NADIRA BRAMDEO &
4 Others: Case
No. 11569/12 instituted in this Court, as taxed plus
mora interest thereon at the rate of 15.5% per annum from 11 April
2014 to
date of payment both days inclusive;
2. The taxing master of this Court is directed to tax the costs
referred to in paragraph 1. above;
3. The Estate and the First Respondent shall bear the Applicant’s
costs of this application, jointly and severally, the one
paying the
other to be absolved.’
Shortly
before the hearing of the application, the applicant brought an
application to amend the relief sought which, if granted,
would amend
paragraph 1 of the notice of motion to read:
‘
1. That the Estate of the late SEWNARAIN
NARAYAN MAHARAJH: No.3236/1994(PMB) is ordered to pay the attorney
and client costs incurred
by the Applicant and Mason Inc. in the
matter of ANOOPKUMAR SEWNARAIN DASS N.O. –VS- NADIRA BRAMDEO &
4 Others: Case
No. 11569/12 instituted in this Court in terms of the
Client Mandate and Fee Agreement (Annexure “SRN 5” of the
Applicant’s
Founding Affidavit), as taxed plus mora interest
thereon at the rate of 15.5% per annum from 11 April 2014 to date of
payment both
days inclusive;’
[9]
The application to
amend was opposed. The applicant submitted that there could be no
prejudice to the estate if the application
were to be granted. This
submission is correct. All that would be achieved by the amendment is
a reference to the agreement. The
founding papers clearly rely on the
agreement even without the notice of motion specifically referring to
it. The amendment is
accordingly granted.
[10]
The application is one
for specific performance of the agreement. It is brought on the basis
that the applicant has performed its
obligations and that the estate
refuses to perform its obligations. The crisp issue for decision is
whether, on the papers, the
applicant is entitled to payment and, if
so, to the specific relief which it claims. The payment claimed is of
‘costs incurred
by the Applicant’ in the litigation
referred to above. It seeks to direct the taxing master to tax the
bill of costs which
had been set down previously.
[11]
It is, of course, so
that the applicant did not incur costs in that litigation. The costs
were incurred by the estate. However,
what is clearly meant is the
items included in the bill of costs included in the application
papers. This runs to some 62 pages
and covers the period between
22 November 2012 and 27 March 2014.
[12]
I have set out above
what, apart from the work, is required to be done by the applicant
before it can demand payment. The applicant
is obliged to render an
account. Where, as in the present matter, a payment has been made,
the account must deal with three aspects.
First, what the applicant
claims it is entitled to for fees. Secondly the disbursements
reasonably incurred. Thirdly, it must bring
into account in reduction
of the indebtedness of the estate any payments which were made.
[13]
When the applicant was
asked in argument whether the papers made out a case that any account
had been rendered which included the
payment of R36 308.68, it
was unable to point to any. The bill of costs on which the applicant
relies certainly does not do
so. At the very least, therefore, one
aspect required to be dealt with in an account is missing from the
bill. To claim, in those
circumstances, that the applicant is
entitled to payment at all lacks a legal basis. The obligation of the
applicant to render
such an account is antecedent to the obligation
of the estate to pay. It certainly cannot be argued by the applicant,
therefore,
that the estate has failed to perform its obligations.
This is so even if assertions were made by the estate that it was not
liable
to pay anything at all.
[14]
Put simply,
accordingly, the applicant has not pleaded and proved that it has
performed its antecedent obligation of rendering an
account. That
being so, no relief by way of specific performance can be granted.
This applies even more clearly to the specific
relief sought by the
applicant which requires payment after the taxation of the bill of
costs. The relief sought by the applicant
is not competent on the
papers.
[15]
The applicant therefore
cannot succeed in the application. This then gives rise to the issue
of costs. There is some merit in the
argument of the applicant that,
until the answering affidavit of the estate was put up, it appeared
that the estate was contesting
liability to pay any of the fees and
disbursements of the applicant. In addition, it is clear from the
correspondence that the
estate claimed that its liability was limited
to what it could recover by way of the costs order granted against
Bramdeo. It also
claimed that it was only liable to pay any balance
outstanding once the costs order had been executed. These were
entirely incorrect
assertions and, in my view, misled the applicant
into approaching the court. Regardless of the fact that the relief
sought is not
competent, it is my view that the applicant should not
bear the costs of the application up to the delivery of the answering
affidavit.
This took place on 17 May 2016. The applicant
submits that, if it is entitled to costs, the estate should not be
depleted
and the executrix should be ordered to pay personally. I
disagree. There is no indication that the executrix was doing
anything
other than act on legal advice in good faith.
In
the result, the following order issues:
1 The application is dismissed.
2 The first respondent is directed to pay the costs
incurred up to 17 May 2016.
3 The applicant is directed to pay the balance of the
costs.
_______________________
GORVEN J
DATE OF HEARING: 25 October 2016.
DATE
OF JUDGMENT: 1 November 2016.
FOR
THE APPLICANT: ES Law instructed by SR Naidoo & Company
FOR
THE
1
ST
RESPONDENT: BL Skinner SC instructed by
Gounder & Associates.