Berman & Fialkov v Lumb (5395/00) [2002] ZAWCHC 48; [2002] 4 All SA 432 (C) (9 September 2002)

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[2002] ZAWCHC 48
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Berman & Fialkov v Lumb (5395/00) [2002] ZAWCHC 48; [2002] 4 All SA 432 (C); 2003 (2) SA 674 (C) (9 September 2002)

IN
THE HIGH COURT OF SOUTH AFRICA
(CAPE
OF GOOD HOPE PROVINCIAL DIVISION)
CASE
NO: 5395/00
In
the case between:
BERMAN
& FIALKOV
Plaintiff
and
RICHARD
HENRY AUGUSTUS LUMB
Defendant
JUDGMENT: 9 Sept. 2002
VAN
REENEN, J:
1] The plaintiff on 31 July 2000 issued a summons out of this court
against the defendant for the payment of an amount of R230 000,
Value
Added Tax thereon at 14%; interest thereon at the rate of 15.5% per
annum, with effect from 23 June 2000 to date of payment;
and costs of
suit (Claim A) and alternatively, payment of an amount of
R313456,12; interest thereon at the rate of 15.5% with effect
from 23
June 2000 to date of payment; and costs of suit (Claim B).
2] The plaintiff is a firm of attorneys. Mr
Abraham Izak Fialkov, one of the partners in that firm, acted as the
defendant’s attorneys
in litigation with his daughter and
son-in-law M V & P Hebin.
3] The defendant on 9 January 1998 and at Hout Bay
signed an agreement in the following terms:
“MY CLAIM AGAINST M V & P HEBIN
I the undersigned R H A (Gussie) Lumb do hereby agree to the
following in respect of the matter:
I
agree to pay A I (Bram) Fialkov all fees in this matter in
accordance with the Law Society tariff of fees for non litigious
matters
on the highest scale.
I
also authorise the said Bram Fialkov to employ the services of two
senior Counsel to act on my behalf in this matter.
I
also grant to the said Fialkov the option to acquire one plot in
respect of the plots which I am claiming (in the event that
I
succeed in this claim) at a price equal to the total amount allowed
(or agreed) in respect of attorneys’ fees only (excluding
disbursements) in paragraph 1 above.
If
my right to the said plots is settled by way of a cash settlement
then one-third of such settlement figure shall become the subject
of
the option referred to in paragraph 3 above.”
4] After the plaintiff’s mandate had been terminated it caused a
bill of costs to be drawn by an independent cost consultant.
The
amount thereof, exclusive of disbursements and Value Added Tax, came
to R335 000.
5] There were three attempts to have the bill of
costs taxed namely on 22 December 1999; 16 March 2000 and 16 May
2000.
6] The taxing master on the last-mentioned date
ruled that the bill of costs would be taxed on the basis of the Law
Society’s tariff
of fees for non-litigious matters.
7] After approximately 112 of the approximately
1200 items appearing on the bill of costs had been taxed the parties
on the last-mentioned
date entered into settlement negotiations. The
plaintiff alleges that it (represented by Mr Fialkov alternatively
Advocate H. McLachlan)
and the defendant (represented by his attorney
Mr Craig Delport) reached an oral agreement to the effect that the
defendant acknowledged
his indebtedness to the plaintiff in an amount
of R230 000 plus Value Added Tax in full and final settlement of all
fees and disbursements
due to the plaintiff. In terms of the alleged
agreement the said amount would be settled by way of the payment of
an amount of R150
000 plus Value Added Tax by not later than 24 May
2000 and the payment of an amount of R80 000 plus Value Added Tax, on
judgment
or settlement of the proceedings under case number 89/98,
but in any event by not later than 31 December 2000. The alleged
agreement
was subsequently reduced to writing and signed by the
plaintiff but not by the defendant.
8] The alleged agreement of 16 May 2000 forms the
subject-matter of Claim A and the written agreement reached on 9
January 1998 and
the bill of costs drawn pursuant thereto form the
subject-matter of Claim B.
9] The defendant in its plea denied that the
agreement on which Claim A is based was entered into. The defendant
admitted that he
had signed the written agreement entered into on 9
January 1998 but denied that an oral agreement was entered into in
conjunction
with it. He also denied the express alternatively,
implied terms alleged in paragraph 3.3 of the Particulars of Claim.
The defendant
also admitted that he had given the plaintiff an oral
mandate to conduct litigation against M V & P Hebin on his behalf
and that
it was a tacit term of such mandate that defendant would a)
be liable for the plaintiff’s fair and reasonable fees and b)
reimburse plaintiff for any fair and reasonable disbursements made on
its behalf. The defendant in the alternative pleaded that
if it is
found that the written agreement of 9 January 1998 had been entered
into, it is illegal, null and void and unenforceable
because a) it
constituted an agreement to pay a contingency fee alternatively, a
pactum de quota litis
, alternatively a contract of
maintenance; and b) amounted to overreaching the defendant. The
defendant together with its amended
plea on 4 July 2002 filed a
special plea in the following terms:
“
1. In terms of Claim B of the Particulars of Claim
the plaintiff is claiming fees and disbursements on an untaxed bill
of costs;
The
fees and disbursements thus claimed amount to overreaching the
defendant.
The
defendant has never agreed to pay the plaintiff’s fees and
disbursements as set forth in the said untaxed bill of costs.
The
defendant has at all material times insisted on taxation of the
said bill of costs and still does so insist.
3. In the premises the plaintiff is not entitled to recover fees and
disbursements thus claimed until they have been taxed by the
taxing
master of this Honourable court, alternatively the taxing committee
of the society.”
9] On 3 September 2002 the plaintiff by notice of motion sought an
order in terms of Rule 4(1)(a) permitting it to withdraw Claim
A.
As it is not the function of this court to compel a party to continue
with proceedings or part thereof against his/her/its will
(See:
Levy v Levy
1991(3) SA 614 (A) at 620 B) and in order to
obviate the squandering of this court’s time, leave to withdraw
Claim A is granted.
Respondent’s counsel, not surprisingly, did
not object to the order being granted. As the plaintiff did not
tender costs, the
respondent in terms of Rule 41(1)(c), on notice,
applied for the costs occasioned by the institution of Claim A on an
attorney and
own client scale. As there in my view is no
reprehensibility in the prosecution of Claim A or the withdrawal
thereof there is no
warrant for ordering costs on a punitive scale.
Accordingly the costs occasioned by the institution of Claim A is
awarded as between
party and party. It is ordered that such costs
be taxed only once the action has been finalized.
10] The plaintiff in the aforementioned notice of
motion also sought orders in the following terms:
“
2. Directing that the issue of the scale upon which
the taxation of the bill of costs between the parties be taxed be
separated from
all other issues, and determined pursuant to the
provisions of Rule 33(4);
that
all other issues be stayed pending a decision on this issue, and
pending taxation of the bill of costs on the scale so determined;

and
That
this (sic)costs of this application:
If
unopposed, be costs in the cause;
If
opposed, be borne by defendant.”
11] The basis of the application for the separation of issues is that
there is a dispute about the scale on which the bill of costs
should
be taxed. The nature of the dispute is that the plaintiff, whilst
conceding that clauses 3 and 4 of the written agreement
of 9 January
1998 are unenforceable, contends that they are severable from the
remainder thereof and that the bill of costs should
be taxed on the
Law Society’s non-litigious scale whereas the defendant, averring
that the whole of the written agreement of 9
January 1998 is illegal,
null and void and unenforceable contends that it should be taxed on
the High Court scale.
12] The keystone of the application for the
separation of issues is that because of the aforementioned dispute
the bill of costs has
not been taxed and that if it were to go ahead
and the plaintiff’s contention is shown to be incorrect, the entire
time spent on
the taxation would be wasted and that for that reason
it would be convenient to separate the issues as prayed and stay all
further
proceedings pending taxation on the scale found by the court
to be appropriate.
13] The defendant in its answering affidavit
opposed the relief sought in the notice of motion on the basis that
a) the plaintiff
is only entitled to attorney and own client costs
on a High Court scale as fixed by the Taxing Master of this court,
which costs
the defendant has tendered and still does; b) that it
is for the Taxing Master to decide what the scale or tariff should be
and
c) that the issue of the applicable scale cannot be
determined apart from the issue of legality/illegality of the
agreement of
9 January 1998.
14] The applicant in its replying affidavit,
impermissibly, amplified the basis of the application to separate
the issues as follows:
“
14.2 Defendant
has, by means of the amendment to its pleadings raised in April 2002,
formally taken the stance that the agreement
relied upon (which
agreement contains the consensus regarding the scale of costs to be
payable) is illegal, null and void, and unenforceable
by virtue of
the circumstances set out in paragraph 2 of the amended plea.
Plaintiff avers tat it is inappropriate to approach the
Taxing Master
to make a ruling on these issues, which were raised in the pleadings
in April 2002 for the first time.
To
do so would effectively be to require the registrarto decide issues
of legality and severability which otherwise should be determined
by
the above Honourable Court. It is submitted thatit is unfair upon
the Taxing Master to expect him to make a responsible decision
in
this regard.
It
would, Plaintiff avers, be an exercise in futility to persuade the
Taxing Master one way or the other way, only to have the
trial
Court differ
when it becomes seized of the matter
.
For
this reason, it is respectfully submitted that a decision as to the
scale upon which the fees should be taxed (including,
if
necessary, findings as to the averments of illegality and
unenforceability made by the Defendants) should be determined
ante
omnia
.”
(underlining provided)
15] Not only are the underlined averments difficult to reconcile with
what appeared to have been common cause between Mr Kirk-Cohen
(who
appeared for the plaintiff) and Mr Carstens S.C. (who appeared for
the defendant) namely, that the parties addressed the Taxing
Master
fully on 16 May 2002 as regards the legality/illegality of the
agreement of 9 January 1998 before he resolved to apply the
non-litigious scale of the Law Society, but the averments made in
paragraph 14.4 serve as confirmation that prayer 2 of the notice
of
motion was not unintentionally formulated in the terms that it was.
Although Mr Kirk-Cohen conceded that prayer 2 of the Notice
of Motion
was drafted “infelicitously” he did not move for an amendment
thereof.
16] In terms of the provisions of Rule 33(4) in
its present form, an application for the separation of issues by any
party must be
granted unless it appears that such issues cannot
conveniently be decided separately (See:
Edward L Bateman Ltd v
CA Brand Projects (Pty) Ltd
1995(4) SA 128 (T) at 132 D) and it
is incumbent on the party who opposes such an application to satisfy
the court that such an
order should not be granted (See:
Braaf
v Fedgen Insurance Ltd
1995(3) SA 938 (C) at 939 G). The
convenience to be considered is primarily that of the court and the
litigants (
Braaf v Fedgen Insurance Ltd
(supra) at 939 H).
Convenience in the context does not only connote facility or ease or
expedience but also appropriateness in
the sense that in all the
circumstances it is fitting and fair to the parties concerned (
Braaf
v Fedgen Insurance Ltd
(supra) at 940 C – D). The court’s
function is to assess to the best of its ability the nature and
extent of the advantages and
the disadvantages that would result
should the order that is being sought be granted (See:
Minister
of Agriculture v Tongaat Group Ltd
1976(2) SA 357 (D) at 364 D
– E). Such an application will normally be granted if the
advantages that will flow therefrom outweigh
the disadvantages (See:
Grindrod Cotts Stevedoring (Pty) Ltd & Another v Brock’s
Stevedoring Services
1979(1) SA 239 (D) at 241 pr – A).
17] Mr Carstens submitted that separating the
issues of the legality/illegality of the written agreement of 9
January 1998 as well
as the scale on which the bill of costs should
be taxed, and adjudicating them separately, would not serve any
purpose as the taxing
master has already, after arguments submitted
thereanent by the parties, decided that the bill of costs should be
taxed on the non-litigious
scale of the Law Society and has already
commenced taxing it; that any decision arrived at by the court could
not be foisted upon
the taxing master as it would constitute an
impermissible interference with his discretion; that the taxation
would have to run
its course; and that the appropriate remedy is for
the taxation to be reviewed once the taxing master has affixed his
allocatur
to the bill of costs.
18] My understanding of the legal position
expounded in
Benson and Another vs Walters and Others
1984(1) SA 73 (A) at 84 A – B, is that taxation is not a
prerequisite for the institution of an action based on a bill of
costs
but that if the fact that it has not been taxed is raised in
the plea, the action cannot proceed and has to be stayed until
taxation
has been completed. The defendant in a special plea raised
the fact that the bill of costs on which the plaintiff is suing has
not
been taxed and requested that the action be stayed pending the
taxation thereof. It appears to me that the defendant is entitled
to
such an order and that if the order sought in prayer 2 of the notice
of motion is granted it would result in the defendant’s
entitlement
to such an order being negated.
19] Although that, in my view, constitutes a
sufficient basis for refusing the application there is a further
basis upon which I would
do so.
20] Although the taxation of a bill of costs is an
integral part of the proceedings before a court and the taxing master
performs
a judicial and not an administrative function (See:
Bills
of Costs (Pty) Ltd and Another v The Registrar, Cape N.O. and
Another
1979(3) SA 923 (A) at 945 A – C) his/her powers -
which are derived from Rule 70(1)(a) - and functions are not
unlimited. The
general functions of a taxing master were described
as follows by Ramsbottom J in
Martens v Rand Share and Broking
Finance Corporation (Pty) Ltd
1939 WLD 159
at 163:
“…
to decide whether the services have been
performed, whether the charges are reasonable or according to tariff
and whether disbursements
properly allowable as between party and
party have been made; his function is to determine the amount of the
liability, assuming
that liability exists, and the fact that he
requires to be satisfied that liability exists before he will tax
does not show that
there is any liability. The question of liability
is one for the court, not for the taxing master.”
21] It is because a Taxing Master’s functions are so circumscribed
that courts have held that for instance, a Taxing Master does
not
have jurisdiction to adjudicate defences of payment and prescription
(See:
Lubbe v Borman
1938 CPD 211)
; that it is not the
Taxing Master’s function to assess the nature and extent of a
plaintiff’s claim and the defendant’s counterclaim
(See:
NUS
South Africa (Pty) Ltd v R & E Holdings (Pty) Ltd
2000(3)
SA 522 (E) at 528 I – 529 A); that the question whether an
attorney acted without a mandate or exceeded it falls outside
the
ambit of a Taxing Master’s functions (See:
Botha v
Themistocleous
1966(1) SA 107 (T) at 111 E – F); and that the
question whether or not an attorney and his client had agreed that
the former
would render his services in respect of an application for
a fixed predetermined fee is beyond a Taxing Master’s competence
(See:
Composting Engineering (Pty) Ltd v The Taxing Master
1985(3) SA 249 (C) at 250 G – H).
22] The proceedings before the Taxing Master on 15
May 2000 have not been traversed on the papers and I have not have
the benefit
of his input thereanent. If, as was common cause between
the parties’ respective counsel, the question of the legality of
the
agreement of 9 January 2000 was argued before the Taxing Master
two possibilities present themselves. The first is that he decided
in favour of its legality and for that reason proceeded to tax the
bill of costs on the non-litigious scale of the Law Society.
The
second is that he did not consider the legality or illegality of the
said agreement but merely proceeded to apply its terms.
23] 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
1938TPD 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 ambit of a Taxing
Master’s powers and functions: it is an aspect that should be
decided by the court.
24] 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 be 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
(supra)) in
which the amount that is payable in terms of the taxed bill of costs
is claimed.
25] As the scale on which the bill of costs is to
be taxed is dependent on whether the agreement of 9 January 1998 is
enforceable
or not and that issue will arise only once the taxation
is brought on review or in the action after the Taxing Master has
affixed
its allocatur to the bill of costs, it in my view, would be
premature to separate and adjudicate the issues of the
legality/illegality
of the said agreement and the scale on which the
bill of costs has to be taxed. In the premises I incline to the view
that the issues
that the plaintiff requests to be separated cannot
conveniently adjudicated separately.
26] Accordingly the application for a separation
of issues pursuant to the provisions of Rule 33(4) is dismissed with
costs.
27] It is further ordered that the action be
stayed pending completion of the taxation of the plaintiff’s bill
of costs. It is
ordered that the wasted costs occasioned by the stay
- other than the costs awarded in paragraphs 9 and 26 above - stand
over for
determination at the trial of the action.
________________
D. VAN REENEN