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[2011] ZAFSHC 22
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Basson v Standard Bank of South Africa Ltd (5222/2009, 5314/2009) [2011] ZAFSHC 22 (10 February 2011)
FREE STATE HIGH
COURT, BLOEMFONTEIN
REPUBLIC OF SOUTH
AFRICA
Case No.: 5222/2009
5314/2009
In
the matter between:
NICOLAAS JOHANNES
BASSON
….......................................
Applicant
and
THE STANDARD BANK
OF SOUTH AFRICA
LIMITED
…...........................................................................
Respondent
_____________________________________________________
JUDGEMENT:
RAMPAI J
DELIVERED ON:
10 FEBRUARY 2011
_____________________________________________________
[1]
Brevitas causa
I refer to the parties as they were cited in the notice of motion.
These are review proceedings. The respondent applies for the
review
of the taxation. The applicant has filed no papers in opposition of
the application. The taxing officer abides.
[2] The applicant
launched an urgent application on 21 October 2009 against the
respondent to have the sale by public auction of
a specified
immovable property stayed to enable him to apply for the rescission
of default judgment and the judicial attachment
of the property. The
public auction was scheduled for 10:00 on the same day, Wednesday 21
October 2009.
[3] Neither the first
respondent nor the second respondent, the sheriff, opposed the
aforesaid urgent application. By agreement
between the applicant and
the 1
st
respondent, the urgent application was granted but
the costs thereof stood over for later adjudication. On the 11
th
March 2010 the costs were awarded to the 1
st
respondent.
Henceforth I refer to the 1
st
respondent simply as the
respondent.
[4] Pursuant to the
aforesaid costs order, a memorandum of fees and disbursements due to
Messrs Matsepes Inc, the respondent’s
attorneys, was drawn up,
served on 16 April 2010 and filed on 19 April 2010.
[5] On 2 June 2010 the
respondent’s bill of costs was presented to Mr B. Mashinini,
qua the taxing officer, for taxation.
Attorney N A du Toit appeared
for the respondent and Attorney E Visser for the applicant. The
taxation of the consequent bill has
given rise to the current review.
[6] The bill of costs, as
drawn up on behalf of the respondent, indicated that the sum of R16
260,70 was due to the respondent by
the applicant in respect of fees
earned and that the sum of R25 827,15 was similarly due in respect of
disbursements incurred by
the respondent’s attorneys. Therefore
the pre-tax total of the respondent’s bill of costs was R42
087,85.
[7] During the course of
the process of taxation, some items though allowed, were nonetheless
reduced but others were totally disallowed.
There were only two fee
items which fell under the latter category. However, those two items
are not before me in this review.
The rest of the items as regards
both fees and disbursements fell under the former category. The
allocatur
was issued on the 29 June 2010. It showed that the
sum of R4 060,50 in respect of fees was disallowed and of R12 452,95
in respect
of the disbursements component of the bill was also
disallowed. The respondent’s claim of R42 087,85 was
accordingly slashed
by the sum of R16 513,45 to R26 574,40. When all
was said and done the respondent’s bill of costs was taxed and
allowed in
the sum of R29 776,22.
[8] The respondent was
aggrieved by the reduced sum of money so allocated. Consequently, the
respondent called upon the taxing officer
to state a case in terms of
rule 48(1) for the decision of a judge. The respondent’s notice
to that effect was served and
filed on the 19 July 2010. There were
ten items complained off. I shall revert to them in due course.
[9] The taxing master’s
response or stated case in terms of rule 48(2) was served and filed
on 14 September 2010. The taxing
officer mailed his written response
to the parties by way of registered post. I assume, in the absence of
the certificate of posting,
that he did so on the 14 September 2010.
I also assume that the parties received it within seven court days,
in other words, before
the 29 September 2010. Their rights to file
written submissions expired on the 8 October 2010. The respondent did
not submit any
further written submissions or any fresh grounds of
objections not previously advanced at the taxation. Likewise, the
applicant
submitted no such further submissions or fresh grounds.
[10] In the absence of
such submissions, the taxing officer had no final report to frame in
terms of rule 48(2). On the 13 October
2010 he advised the parties
that he had nothing further to add to the stated case. He obviously
considered the matter closed for
submissions by the parties.
[11] The matter was
subsequently allocated to my sister Radebe AJ, as she then was. I
offered to take the matter over from her to
enable her to finalise
her reserved judgment before she left our division to take up her
permanent seat on the KZN bench. We were
privileged to have her on
our bench which she graced with dignity. I am indebted to her for the
ground-work she did before the
take-over. I immensely valued her
input.
[12] The respondent was a
successful party in two applications instituted by the applicant. In
those matters this court had awarded
costs to the respondent against
the applicant on the scale as between party and party (pap scale).
The bill of costs was taxed.
The respondent was not satisfied with
the taxing officer’s decremental adjustment of certain items of
the bill. It applied
for the review of the taxation on the ground
that no valid reason existed to justify the deductions made by the
taxing officer.
Besides that there were no numerous other grounds for
me to advert to.
[13] The court has the
power to interfere and correct the taxing officer’s ruling on
various recognised grounds but also when
it is satisfied that he or
she was clearly wrong. To do so a court must be in the same or better
position than the taxing officer
to determine the point in issue.
LEGAL & GENERAL
ASSURANCE SOCIETY v LIEBERUM NO AND ANOTHER
1968 (1) SA 473
(AD) at 478G – H per Potgieter.
[14] Perhaps the most
crucial questions I am called upon to resolve in this review, is
whether the taxing officer erred in considering
the two matters as
ordinary and uncomplicated applications. The complexity of a matter
is a relevant factor in assessing an attorney’s
disbursement,
relative to the fee paid to an advocate, whether junior or senior
counsel -
LEGAL & GENERAL ASSURANCE SOCIETY v LIEBERUM NO
AND ANOTHER
supra
at 479A – D.
[15] The discretionary
powers of the taxing officer to allow or disallow and the judicial
powers of the court to oversee the taxation
process by way of
revisionary interventions were instructively outlined and contrasted
in
PRELLER v JORDAAN AND ANOTHER
1957 (3) SA 201
(O) at
203B – E. There are two instructive features in the judgment by
Smith AJP. The one is that the taxation of the bill
of cost is
primarily the prerogative of the taxing officer. The other is that
the scope of intervention by the courts is limited.
An important
segment of the taxing officer’s discretion is that costs, which
appear to the taxing officer to have been incurred
by the claimant
through overcaution, should be disallowed. The various ground on
which the court can interfere with the discretion
of the taxing
officer are enumerated in the passage.
[16] The ostensible
purpose of an award of costs was to recompense the successful
litigant. This can be done in two ways. The one
method is called a
party and party scale. The “pap” scale is very formal,
very rigid and very conservative. It is strictly
limited to
indemnifying the winner, not necessarily in full, but rather
partially for costs incurred in connection with the rendering
of
necessary services. Such necessary litigation services are
circumscribed in the attorneys tariff – see rule 70 of the
Uniform Rules. Decisions such as
DBM HUURMASJIENE v
ADMINISTRATEUR, ORANJE VRYSTAAT
1987 (4) SA 264
(O),
CITY
DEEP LTD v JOHANNESBURG CITY COUNCIL
1973 (2) SA 109
(W),
PRELLER v JORDAAN
supra
and
LEGAL &
GENERAL ASSURANCE SOCIETY v LIEBERUM NO
supra
all deal
with bills of costs where costs were awarded on the “pap”
scale. This particular scale seeks not only to recompense
the winner
as far as possible but also to protect the loser from unscrupulous
winners or sharp practices by some legal practitioners.
[17] In contrast to the
aforesaid method,
the other method is called an
attorney and client scale (aac scale). The “aac” scale is
less formal, comparatively flexible
and generous towards the winner.
It recognises the deficit or discrepancy between what the winner can
recover from the loser in
a case where costs were awarded on the
“pap” scale on the one hand and on the other hand what
the winner has actually
expended for the services rendered on which
the success was based.
[18] The “aac”
scale covers not only necessary services but over and above that it
extends to the sphere of liberal
services, sometimes termed luxurious
services, which though desirable are not regarded as necessary in
terms of the “pap”
scale. The “aac” scale is
often used as a punitive rod to disentitle a loser who,
had
displayed some form of reprehensible conduct,
of
the protection which,
as a general norm,
is often afforded good losers. (
CAMBRIDGE
PLAN AG v CAMBRIDGE DIET (PTY) LTD AND OTHERS
1990
(2) SA 574
(T).)
[19]
For
more about “aac” scale see
PROTEA
LIFE CO LTD v MICH QUINET FINANCIAL BROKERS & ANDERE
2001
(2) SA 636
(O) and
BEN McDONALD INC. AND
ANOTHER v RUDOLPH AND ANOTHER
1997 (4) SA
252
(T). Lest we forget, the current review is about the “pap”
scale. To that I shall shortly return.
[20] In the case of
VAN
ROOYEN v COMMERCIAL UNION ASSURANCE CO (SA) LTD
1983
(2) 465 (O)
M T Steyn J
made
some apposite comments about the role-players in a taxation matter as
well as the process of taxation itself:
[21] At 468C – E he
said the following about an attorney:
“
The attorney
is his client's master of costs, often deciding, either on his own or
in conjunction with counsel, what steps to take,
what evidence to
obtain for and use in the litigation, evaluating the work and effort
involved in the matter and what the charges
therefor should be. If
his client is the successful party he then has to see to it that the
client be properly indemnified and
has to draw his party and party
bill of costs accordingly and have it properly taxed. As officer of
the Court the attorney is enjoined
to act responsibly and to draw his
party and party bill of costs so as to include therein only what is
permissible to recover from
the party condemned in such costs.
What
is
permissible is, to my mind, those costs
which an honest, experienced and capable practitioner would consider
reasonable in relation
to the particular claim or defence, bearing in
mind the requirements of efficient practice and the exigencies of
litigation.”
[22] At 468 E – G
he said the following about a taxing officer:
“But even the most
reasonable and capable of minds tend to subjectivity in evaluating
own conduct and estimations. To curb
such subjectivity the office of
Taxing Master was called into
being for
the purpose of introducing an objective standard whereby to judge,
from the outside as it were, the permissibility of
the amounts sought
to be recovered from the losing party. By virtue of his having in
effect to make value judgments on the nature
and amounts of the items
in the bills of costs he has to tax, the Taxing Master must of
necessity be vested with a discretion as
to what he should allow or
disallow. Being like the attorney an officer of the Court, the Taxing
Master is enjoined to act responsibly
in the performance of his
duties and must consequently exercise his discretion judicially.”
[23] At 468G – 469B
he said the following about taxation process.)
“
In essence
the process of taxation is a joint undertaking by attorney and Taxing
Master, aimed at justice being properly
done
in the matter of costs and each making his contribution for that
purpose. It is clearly for this reason that the learned authors
of
Nathan, Barnett and Brink's
Uniform
Rules of Court
2nd
ed remarked at 422 that attorneys, as officers of the Court, have a
"duty
to assist the Taxing Master, where possible, to steer his difficult
course between the Scylla of liberality and the Charybdis
of
niggardliness.
But to evade the fangs of the
monster on the one hand and the vortex of the whirlpool on the other,
the Taxing Master should be
properly appreciative of the role of the
attorney and be ever mindful of the exigencies of the particular
litigation the attorney
was set to handle.
The process in fact requires of each
that he place himself in the position of the other. By way of such
mutual appreciation
the proper balance
needed for an equitable result can the (sic) more readily and
speedily be attained.”
[24] At 469B – C he
said the following about the court:
“
But the
Court remains the ultimate arbiter and it is a well-established
principle of review that the exercise of the Taxing Master's
discretion will not be interfered with
‘
unless it is
found that he has not exercised his discretion properly, as for
example, when he has been actuated by some improper
motive, or has
not applied his mind to the matter, or has disregarded factors or
principles which were proper for him to consider,
or considered
others which it was improper for him to consider, or acted upon wrong
principles or wrongly interpreted rules of
law, or gave a ruling
which no reasonable man would have given’.
per
SMIT
AJP in
Preller
v Jordaan and Another
1957
(3) SA 201
(O)
at
203C - E.”
[25] Having fleetingly
given such instructive exposition of a few principles within the
ambit of the main body of principles of
the law of taxation, I now
proceed to examine the various objections and their grounds, as well
as the taxing officer’s various
rulings and his reasons for
making them.
[26] The first leg of the
dispute concerns item 2 of the bill of costs. The item deals with the
fee for the attorney’s perusal
of the founding affidavit
relative to application number 5222(2009). The fee claimed was
R461.50, disallowed R301,75 and allowed
R159,75.
The respondent’s
ground of objection was that there was no valid reason why the taxing
officer disallowed a portion of the
fee as claimed.
The taxing officer’s
response was that he decided to tax off the aforesaid amount because
it was unnecessary for the respondent’s
attorney to peruse the
founding affidavit.
[27] The applicant filed
no submissions at all. Usually a party in whose favour a bill was
reduced would challenge an opponent’s
objection, request that
the taxing officer’s decision be upheld and pray that an
aggrieved opponent be ordered to pay the
costs of the review
proceedings. In this instance, there was no input whatsoever from the
beneficiary of the taxing officer’s
decision. The respondent’s
review application is therefore unopposed.
[28] The perusing of
documents is provided for in par 1(a) section C of the attorney’s
tariff of fees under Rule 70. It makes
provision for the perusing of
a whole range of things such as, the summons, petition,
affidavit
,
pleading, report, advocate’s advice, advocate’s drafts,
important letter, notice or document. In any court application
a
founding affidavit is an important statement embodying as it does,
the gravamen of the relief an applicant seeks against a respondent.
An attorney cannot properly advise his respondent client and properly
hold a meaningful initial consultation with his client unless
he
reads the very foundation of the relief sought against his client,
the respondent.
[29] It will be readily
appreciated, therefore, that a fee for perusing an affidavit is
expressly provided for in the particular
paragraph of the aforesaid
section of the tariff as a fee recoverable by the winner from the
loser on the “pap” scale.
The applicable tariff rate for
the attorney perusing an affidavit is R35,500 per page. The founding
affidavit is a 13 page document.
The fee claimed is a correct product
of an accurate mathematical multiplication.
[30] In my respectful
view the respondent’s attorney necessarily perused the founding
affidavit. The need for an attorney
to do so is recognised in the
“pap” scale. The submission of the taxing officer that it
was not necessary for the attorney
to peruse such an important
document was clearly wrong.
LEGAL & GENERAL ASSURANCE
SOCIETY v LIEBERUM NO AND ANOTHER
supra
it follows
therefore that the fees disallowed should have been allowed.
[31] In making this
ruling I am fortified by two important facts. Firstly, the fact that
the applicant does not oppose the respondent’s
review
application. Secondly, and this is very fundamental, the fact that
the taxing officer allowed the attorney’s claim
for perusing
the related notice of motion as legitimate fee. As I see it, the
notice of motion and the founding affidavit are birds
of the same
feather. (See par 1(a) section C again.) There seems to be no sound
reason in principle and in logic for distinguishing
the one from the
other. By allowing the fee claimed for the perusing of the notice of
motion, the taxing officer was likewise obliged
to allow the fee
claimed for the perusing of the supporting affidavit.
[32] The failure of the
taxing officer to appreciate the principle that there was no
fundamental distinction between item 2 and
item 1 to warrant
differentiation of assessment was a misdirection so material that it
vitiated his discretionary decision. He
did not properly apply his
mind to the item. In view of such misdirection I am disposed to
interfere with his injudicious exercise
of the discretion entrusted
to him.
[33] As regards items 3,
13 and 14, the dispute was also about the perusing fees. The
respondent’s grounds of objection were
precisely the same as
those raised in respect of item 2. So were the taxing officer’s
reasons.
[34] Item 3 concerned the
fee claimed for perusing annexures to the founding affidavit, viz
item 2. Para 1(a), section C authorises
a fee on a “pap”
scale for the perusing of a
document
. The document is
unspecified. In my view the perusing of annexures to a founding
affidavit are some of the documents perfectly
contemplated by the
drafters of the rule. Therefore I find that the annexures perused in
this instance were covered by the word,
document, of the paragraph
under consideration.
[35] Item 13 concerned
the fee claimed for the perusing of the founding affidavit under the
rescission application number 5413(2009).
Compare item 2
supra
.
Item 14 concerned the fee claimed for the perusing of annexures to
the founding affidavit (item 13). It therefore corresponds
with item
3
supra.
[36] In the light of all
these similarities between items 3, 13 and 14 on the one hand and
item 2 on the other hand, I have nothing
further to add to the views,
findings and rulings I have already expressed and made in connection
with item 2. Such views, findings
and conclusions apply
mutatis
mutandis
to these further three items.
[37] The conference fee
was also a disputed item. Item 27 concerned a fee claimed for the
attorney’s conference with an advocate
in connection with the
aforesaid rescission application. The fee claimed was R1 065,00,
disallowed R532,50 and allowed R532,50.
The respondent’s
grounds of objection were:
“
Item 27:
Attorney spent 1½ hours at the advocates chambers which is
reasonable amount of time considering the case and the
volume of
documents involved. There is no valid reason why 45 min of the said
amount of time should be taxed off.”
The taxing officer’s
reasons were as follows:
“
2)
Item
27
The taxing master allowed only 45
minutes on the consultation on the basis the purpose of the
consultation should have taken 45
minutes for a party to party bill
and the other 45 minutes should form part of attorney and client.”
[38] The attorney’s
conference fee is regulated by para 5, section B. The tariff rate is
R177,50 x time ÷ 15minutes.
The taxing officer gave his
reasons for reducing the fee claimed. The respondent had a right in
terms of Rule 48(2) to submit further
submissions following the
taxing officer’s written response. However, the right was never
exercised. Therefore the decision
of the taxing officer remained
unrebutted.
[39] On the deficient
written material placed before me, the decision of the taxing officer
based on his discretionary assessment
that the alleged duration of
the conference was unnecessarily long, is one which, on review, I
cannot hold to be clearly wrong
or based on no valid reason.
[40] In the circumstances
no valid ground of objection has been established. That being the
case, no interference with the exercise
of the discretion by the
taxing officer appears to be warranted in this connection.
[41] The disbursements
expended by the attorney on behalf of the respondent was also in
dispute. This brings me to item 32. Here
the expense incurred related
to the advocate’s fee. The respondent declared no dispute in
respect of an ancillary expense,
item 33 – being value added
tax on the amount paid to the advocate. The two items have to be
considered together since any
adjustment of item 32 necessarily
affects item 33 as well.
[42] The disbursement
claimed, in respect of item 32, was R5 700,00 disallowed R3 400 and
allowed R2 300. As regards the related
item 33, the disbursement
claimed was R798,00 disallowed R476 and allowed R322. Therefore the
disbursed total allowed was R2 622,00
and disallowed R3 876,00.
The respondent’s
objection and grounds were the same as before. The taxing officer’s
reasons were stated as follows:
“
3)
Item
32
There is valid reason why the R3
400-00 was taxed off. This was a simple matter and did not require a
Senior Council (sic). The
amount of R2 300-00 allowed is reasonable
for this type of the matter which is reasonable if the applicant
could have used a Junior
Council (sic).”
[43] Once again the
respondent did not join issue with the taxing officer’s
submission. There are very important aspects of
the decision which I
have to stress. The first was that the matter was an uncomplicated
legal business. This seems to be reference
to the application for the
stay of the sale in execution or public auction, in common parlance
of ordinary people. The second was
that a junior instead of a senior
counsel, could easily have done a good job in pretty much the same
way as a senior counsel could.
The third was that an amount allowed
was representative of an average fee usually charged by junior
advocates in this division
in similar matters.
[44] In the absence of
further contentions whereby these submissions of the taxing officer
were challenged as unreasonable, such
a decision should stand unless
I should independently find a reason why it should not.
[44] The taxing officer
routinely deals with the taxation of bills of costs. He is an
experienced and senior officer of this division.
On Tuesday the 1
st
February 2011, he began with a new vertical career move in the
Supreme Court of Appeal. Certainly, such a move says something
remarkable about the officer’s experience, abilities and
work-ethic as a whole. In the circumstances, I cannot substitute
my
decision for his in this regard. In my view it cannot be said he
unreasonably exercised his discretion. It is remarkable to
note that
eventually there were no papers filed to oppose that particular
application. Instead, the application for the stay of
the public
auction was granted by consent, save for the costs, which were
initially reserved but ultimately awarded in favour of
the applicant.
This, in my view, materially fortifies the taxing officer’s
decision for disallowing a portion of the disbursements
on the ground
that the application was not a complex matter to warrant the briefing
of a senior counsel -
LEGAL & GENERAL ASSURANCE SOCIETY v
LIEBERUM NO AND ANOTHER
supra
. I would therefore
uphold the decision of the taxing officer in respect of the two
related items. Conversely the objection of the
respondent is
overruled.
[46] Also brought on
review was item 36. The item was also about the question of perusing.
The respondent sought to recover a fee
for its attorney’s
perusal of an opposing affidavit by its own deponent. This item
seemingly refers to the applicant’s
application for the
rescission (case 5413(2009) of the default judgment which was granted
in favour of the plaintiff, the current
respondent, on 10 July 2009
(case 3066/2009)). The fee claimed was R710 disallowed R532 and
R177,50 allowed. The applicable basic
rate as per par 1(1) section C
was R35,50 per page.
[47] The respondent’s
objection reads:
“
Item 36: In
this item 20 pages were perused by attorney (20 x R35.50 = R710.00).
It is the attorney’s responsibility to peruse
these documents.
There is no valid reason why R532.50 should be taxed off.”
The taxing officer’s
written response in this regard was the same as it previously was in
connection with item 2.
[48] Naturally, my
reasoning and conclusion are the same as in respect of item 2 above.
All the same I am inclined to briefly comment
about this sort of
perusing because it is contextually different from the sort of
perusing previously encountered in this judicial
opinion. This item,
unlike item 2, deals with a situation where a party’s own
attorney peruses a document drafted by the
same party’s own
advocate. The taxing officer was deeply troubled by such a claim. He
slashed the fee claimed by a huge amount
which represented 75% of the
fee claimed to signify his dissatisfaction.
[49] Apparently, the
respondent’s attorney consulted with the respondent’s
deponent. After the consultation the attorney
briefed the advocate to
prepare the opposing affidavit. The advocate subsequently sent a
brief, with a revised draft of opposing
affidavit, back to the
attorney for his further action. The next further action taken by the
attorney was to peruse the draft opposing
affidavit as refined and
finalised by the advocate. Having satisfied himself that the draft
was in accordance with the respondent’s
instructions to him as
well as in accordance with his brief to the advocate, the attorney
forwarded the draft to the respondent’s
deponent. By the look
of things, the respondent’s deponent was in Johannesburg at the
time (vide undisputed item 37).
[50] The perusing of an
advocate’s draft(s) is a fee item expressly authorised by “pap”
scale. Because the scale
explicitly makes provision for it, it cannot
be disallowed by the taxing officer on the grounds that the draft
opposing affidavit
was unnecessarily perused. It is always imperative
for an attorney involved in any civil litigation to be cautious in
all his dealings
with the opposite side. In my view it would
generally be unwise for an attorney to proceed or work on the wrong
assumption that
whatever an advocate has done must be correct. An
attorney has to protect the interests of his client diligently. He
cannot claim
to have acted diligently if he can send to his client a
document, as important as an opposing affidavit, which has been
drafted
by someone else for signing by his client without first
having satisfied himself of the correctness of its contents.
[51] Accordingly the fee
disallowed was, in my respectful view, disallowed for a clearly wrong
reason. The taxing officer wrongly
disregarded factors or principles
which were proper for him to consider -
PRELLER v JORDAAN
supra
. The material misdirection justifies interference by the
ultimate arbiter. Therefore I am inclined to reverse the decision of
the
taxing officer.
[52] Item 72 concerned
the disbursement incurred by the respondent in connection with the
advocate’s fees. The disbursement
claimed was R16 800,00
disallowed R7 200,00 and allowed R9 600,00. Although not in dispute,
item 73 was causally connected with
item 72 in that it also concerned
an amount disbursed as 14% value added tax on the advocate’s
fees. The amount expended
in this way and claimed was R2 352,00 of
which R1 344 was disallowed leaving R1 008,00 balance which was
allowed as value added
tax on the capital expended.
[53] The respondent’s
grounds of objections were stated as follows:
“
3.8 Item 72:
The advocates fees are divided as
follows
:
drafting heads of argument, including
research – 4 hours : R 4 800.00;
Opposed application argued including
preparation : R12 000.00;
These above amounts charged by S.C.
Adv. Daffue are very reasonable and can be linked to the fees of
junior counsel.
There is no valid reason why the
amount of R7 200.00 should be taxed off.”
[54] The taxing officer’s
response was the same as that which he gave in respect of item 32. I
suppose my reasoning and conclusions
are likewise the same. However,
I hasten to add two things peculiar to this item. Firstly, it is a
salient principle of the law
of taxation that over-caution should not
be sanctioned by the taxing officer in any circumstances –
PRELLER v JORDAAN
supra
. Secondly, it has to be
borne in mind that as for the respondent, the stakes were not really
high. The matter concerned a straight
forward application by a bond
defaulter to have a default judgment rescinded. Even if the
application was granted, in favour of
the applicant (originally the
defendant) as indeed it was, it did not signal the end of the road
for the respondent’s summons.
[55] Although the sum of
the disallowed disbursements totalled R7 200,00 the taxing officer in
the exercise of his discretion considered
the surplus of R9 600,00 to
be an approximate equitable, and reasonable amount the respondent
would have disbursed had the respondent
bank used the services of a
junior instead of a senior counsel. Moreover, I need to comment that,
in the perking order of advocates,
between a junior counsel and a
senior counsel, there is a rank: a senior junior. The respondent
overlooked those two ranks.
[56] Of course a litigant
has the right to engage the services of any counsel of his choice,
irrespective of such counsel’s
professional status, to do any
matter, for him, however, simple the matter may be but such a
decision has consequences. One of
the consequences thereof, which
must be readily appreciated, is that if the costs are awarded in
favour of such litigant he might,
in certain circumstances, not be
able to recover fully the amount disbursed in the form of advocate’s
fee. This is the protection
which the “pap” scale affords
the loser. That is precisely what has happened here.
[57] In these
circumstances, I am not persuaded that the taxing officer mindlessly
exercised his discretion in disallowing, as he
did, the disbursements
in question. It cannot be seriously argued with conviction that he
disallowed the portion of the disbursement
for no valid reason. I am
not persuaded that he acted upon wrong principles or wrongly gave a
ruling which no reasonable taxing
officer would have given –
PRELLER v JORDAAN
supra
. In my view, the
decision he made in this regard made a whole lot of sense to me. The
respondent’s objection is accordingly
over-ruled. The ruling by
the taxing officer is upheld.
[58] Also in dispute was
item 77 which was about attorney’s fees in respect of letters
written. The fee claimed was R1 846,00,
disallowed R380,50 and
allowed R1 455,50.
[59] The respondent’s
grounds of objections were:
“
3.9 Item 77:
Seven (7) letters were already
subtracted from the total amount of letters written (7 x R35.50 =
R248.50). This is a very reasonable
gesture from our attorney.
There is no valid reason why a further
R390,50 should be taxed off.”
The taxing officer’s
written response was:
“
6)
Item
77
26 letters over a period of 6 months
is too much, the taxing master was lenient towards the applicant is
this regard. Strictly the
taxing master allows 1 letter per month
which means only 6 letters would have been allowed if the taxing
master was not flexible
on this item. The taxing master allowed 15
letters and that is very reasonable for period of six months.”
[60] The relevant
taxation rule is paragraph 3, section B which prescribes a basic rate
of R35,50 per letter written. The rule required
the respondent to
collectively state the number of letters and the total fee claimed
without giving the fine details of each individual
letter, such as:
the date, the sender, addressee and the subject-matter thereof. I am
satisfied that the item was compliant with
the rule.
[61] The taxation rule is
unambiguous, simple and straight forward. The applicant had an
automatic right to inspect, before taxation,
the respondent’s
file not only for the purpose of checking out the number of the
alleged letters but also of verifying the
importance of each letter
in order to ascertain its relevance to the case. At times such an
inspection might bring to light some
helpful grounds for the
disallowance of the fee claimed. For instance, some of the letters
might be proven to fall outside the
ambit of “pap” scale.
Several letters from an attorney to client might have gone astray as
a result of an incorrect
address.
[62] The communication
break up might be caused by a client’s change of his address
without informing his attorney about it
in good time. Such a break
might prompt an attorney to write several letters in an attempt to
re-establish contact with his client.
An attorney may write several
letters to an unco-operative witness whose evidence might be needed
in support of the attorney’s
client. An attorney may exchange a
number of letters with a tracing agent in a bid to track down an
important but missing witness.
Fees relating to all such letters, for
examples, would be recoverable on “aac” scale but not
“pap” scale.
[63] In the instant case
there is no indication that the applicant exercised his right to
inspect the alleged 26 letters. This is
the one thing. The other
thing is that the taxing officer is not empowered by virtue of his
discretion to formulate his own internal
rules. The taxing officer’s
strict formula of one letter per month boils down to an unauthorised
reformulation of the rule.
The formula can readily lead to absurd
consequences. Imagine the dilemma of an attorney who, after writing
one important letter
on the 1
st
day of a month, receives
two extremely urgent and important letters the very next day. In such
a scenario, it would certainly be
unfair and unreasonable to expect
an attorney to wait for one month in respect of one urgent letter and
for two months in respect
of the other urgent letter before he could
reply.
[64] Therefore, it would
be unreasonable to disallow an attorney’s fees claimed in
respect of the relevant two letters on
the grounds that the attorney
had already exceeded the monthly limit. It follows from the above
that there may well be conceivable
practical exigencies dictating the
writing of many letters in one month or even one week. It seems to me
incorrect to disallow
an attorney’s fee in respect of letters
written purely on the basis that the number of such letters exceeded
the taxing officer’s
own expectations. Whether to allow or to
disallow the fee in this connection, the substance and not the number
of the correspondence
should be a decisive factor. Both the substance
and number can only be established through physical inspection of
each and every
letter written.
[65] In a case where the
taxing officer suspects that the attorney concerned was engaged in
sharp practices, (s)he can
mero motu
have the taxation
adjourned or even postponed in order to satisfy herself or himself
that the number of the letters is not inflated;
that the
subject-matter of each letter was indeed relevant and that the letter
was necessarily written. It is not the taxing officer’s
case
that he inspected the respondent’s files to verify that 15 and
not 26 letters were written. In my view, there was a
genuine need to
do so, before a decision was taken to substantially slash the
correspondence. The taxing officer has to responsibly
play a
participative and yet flexible role during the course of taxation -
VAN ROOYEN v COMMERCIAL UNION ASSURANCE CO (SA) LTD
supra
.
[66] A rigid formula such
as the one used in connection with this item is fundamentally
arbitrary. Arbitrariness can never produce
equitable, fair and
reasonable result. In this case there was no evidence, although it is
incumbent for a taxing officer to ensure
that the safeguards against
sharp practice are implemented, that the attorney was involved in a
sharp practice. However, safeguards
against sharp practices must be
enforced –
McDONALD INC AND ANOTHER v RUDOLPH AND ANOTHER
1997 (4) SA 252
(T) at 256H – J.
[67] It will be recalled
that the bill of costs covered two applications. The particular item
apparently related to the sum of the
letters written in those two
files taken together as one for the purposes of taxation. Therefore,
on average, more or less 12 letters
could have been allocated to each
file. Therefore, the total of 24 letters (12 letters per file), over
a period of 6 months was
not disturbingly excessive in my view. I
would therefore sustain the respondent’s objection that there
was no valid reason
for disallowing anything from the fee claimed.
Something more than the formula applied by the taxing officer was
required to justify
the disallowance. Since no inspection was held,
either by the applicant or the taxing officer, nothing untoward was
established
as regards the correspondence in question to justify the
reduction of the fee claimed. The objection is sustained and the
ruling
is set aside. The taxing officer misapplied the rule.
[68] The last objection
concerned item 79. Firstly, it was about the fees for the necessary
telephone calls. The fee claimed was
R1 135.00, disallowed R350.00
and allowed R785. Secondly, it was also about the related
disbursement. The disbursement claimed
was R73.15, disallowed R21.95
and allowed R51.00.
[69] The respondent’s
objection was stated and follows:
“
3.10 Item
79:
As a good gesture, our attorney
already subtracted 4 Telephone calls from the total amount of calls
from the total amount of calls
made (4 x R49.34 = R197.39).
It is unreasonable that a further
R350.00 should be taxed off.”
[70] The taxing officer’s
written response was:
“
7)
Item
79
The telephone calls if not specified
are allowed 3 minute a call and it is within the discretion of the
taxing master especially
when they are not specified. If you take
11.80 times 3 minutes call multiply by 19 calls it gives you R672.60
which means that
actually R462.40 was supposed to be taxed and only
R350.00 was taxed off. The applicant did not specify telephone calls
and the
taxing master was reasonable by taxing off R350-00 whereas he
could have taxed off R462.40.”
[71] Paragraph 3, section
D reads:
“
3. Necessary
telephones calls: The actual cost thereof plus, per quarter of an
hour or part thereof:-
(a) by an attorney R 213,00
(b) by a candidate attorney R 65,00”
The respondent
description of the item contains some unsatisfactory aspects. The
most glaring of them all is that necessary telephone
calls and
necessary consultations were lamentably lumped together and thrown
into the same pot. It is impermissible to brew the
two together.
Necessary consultation is a professional service taxable in terms of
par 1, section A. When a fee is claimed for
holding consultation, the
consultation should be adequately detailed or described so that an
objective assessment can be made to
determine whether it was
necessary or not. See for instance the undisputed items 5 and 15 of
the respondent’s bill of costs.
[72] The question which
immediately arises here is what other unspecified consultations did
the respondent’s attorney purportedly
hold in terms of
paragraph 3, section D with unidentified individuals collectively
described as “alle belanghebbendes”?
Of the 23 telephone
calls made, how many of them were consultative in kind (par 1,
section A) and how many were non-consultative
but purely necessary
telephone calls as envisaged in par 3, section D? There are more
questions than answers. The uncertainty creates
a huge scope for
guesswork. Obviously, the taxing officer cannot guess whether a
telephone call was necessary or not unless its
precise details are
specified. In my view a claim for fees and disbursements as itemised
here was not sufficiently and meaningfully
particularised. The
particulars of the outgoing calls sent or made have to be specified
in a bill of costs. In this case they were
not.
[73] Unless otherwise
agreed with the loser, every telephone transaction has to be
individualised by means of: a number dialled,
a date, duration of the
call and the actual cost thereof and actually vouched before any
mathematical calculation of the fee can
be done. The basic rate is
X/15 x R177,50 where X equals time measured in minutes. Since each
telephone call can be vouched by
the service provider, the exact
number of the calls and their details can be readily verified. There
was virtually no real proof
that 23, or rather 19 calls were made and
that together they endured for 96 minutes. The persons called were
not identified let
alone the purpose of any of those numerous calls.
[74] The required actual
details were amiss. The claim was not actualised. The ball was in the
respondent’s court, as the
claimant, to furnish or exhibit
proof of actual cost and duration of each call. It was never done.
Therefore it could not be said
that the alleged calls, whatever their
accurate number, were necessary telephone calls. The taxing officer
was, in my view, generous
even to allow any amount at all.
[75] In these
circumstances it cannot be persuasively contended that the taxing
officer did not properly apply his mind to the particular
item. The
respondent’s objection was, in my view, rightly overruled.
Accordingly, the taxing officer’s decision to
reduce the fee
and the related disbursements claimed on the grounds that the item
was not specified is sustained. The discretion
was judiciously
exercised. No interference is warranted. In the light of this
conclusion I deem it unnecessary to deal with the
differing
calculation methods employed by the respondent, on the one hand, and
the taxing officer on the other. However, I have
to say, with
respect, that both methods appeared to be at odds with the basic
formula as laid down in par 3, section D.
[76] Accordingly, I make
the following order:
76.1 The respondent’s
review application succeeds in respect of items 2, 3, 13, 14, 36 and
77.
76.2 The respondent’s
review application fails in respects of items 27, 32, 72 and 79.
76.3 The applicant is
directed to contribute R400 plus 14% VAT thereon towards the
respondent’s costs of review.
76.4 The taxing officer
is directed to adjust the
allocator
accordingly.
______________
M. H. RAMPAI, J
Applicant’s
attorneys: Matsepes Inc.
BLOEMFONTEIN
Respondent’s
attorney: Etienne Visser
BLOEMFONTEIN
/eb