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[2024] ZALMPPHC 49
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DHR Consulting (Pty) Ltd v Gomes and Others (1227/2023) [2024] ZALMPPHC 49 (20 May 2024)
Latest
amended version: 23 September 2025
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
LIMPOPO
DIVISION, POLOKWANE
CASE
NO: 1227/2023
(1) REPORTABLE: YES/NO
(2)
OF INTEREST TO THE JUDGES: YES/NO
(3)
REVISED.
DATE:
20/05/2024
SIGNATURE:
In
the matter between:
DHR
Consulting (Pty) Ltd
Applicant
And
Bonita
Rodrigues Gomes
1
st
Respondent
Erasmus
Group Holdings(Pty) Ltd
2
nd
Respondent
Paledi
Super Spar & Tops
3
rd
Respondent
Thornhill
Super Spar & Tops
4
th
Respondent
Istores
Messina (Pty) Ltd
5
th
Respondent
Cross
Spar & Tops
6
th
Respondent
Messina
Super Spar Nasionale Weg
7
th
Respondent
Taximark
(Pty) Ltd t/a Kathu Super Spar & Tops
8
th
Respondent
Delivered
:
This judgment is handed down electronically by circulation to the
parties through their legal representatives' email addresses.
The
date for the hand-down is deemed to be the 20
th
May 2024
JUDGEMENT
1.
This is what I refer to as the costs scale dispute. While the parties
are in
agreement that the applicant is to be ordered to pay the
costs, they are in dispute as to whether this must be based on party
and
party scale or on attorney and client scale.
[1]
In the heads of argument, the respondents states that should the
court not be willing to grant a costs order as between attorney
and
own client , the respondents should be granted attorney and client's
scale to compensate for the costs they were put through
without any
good reason.
[2]
2.
On urgent basis, the applicant issued the application to interdict
and restrain
the first respondent from what the applicant regarded as
breaching the confidentiality and restrained of trade agreement for
the
remainder of the restraint period. It also sought to interdict
the second to the eighth respondents from engaging the first
respondent
as employee or consultant for the balance of the
restrained period. The first respondent, employed in 2014, resigned
from her employment
with the applicant on the 25
th
October
2022. The last working day was the 25
th
November 2022
3.
On the 20
th
October 2023 the applicant served the
withdrawal notice for the application set down for the following day
of the 21
st
October 2023. In its heads of argument, the
applicant states that it served two withdrawal notices. One
withdrawal notice tendered
the costs on party and party scale.
Another one tendered the costs in the application. In relevant part,
the costs in the application
withdrawal notice reads: "
the
Applicant hereby withdraws its application, against the Respondents,
which application is enrolled for 21 February 2023, cost
in this
Application
."
4.
On the 21
st
October 2023 the parties' legal
representatives appeared in court when the urgent application was
withdrawn by way of the court.
By agreement between the parties, the
applicant's application was withdrawn with the costs reserved for
later argument on the normal
motion court roll. The court appearance
was at the parties' costs and having received two conflicting
notices, one states that
the costs will be in the application, the
respondents' legal represented cannot be faulted for having attended
the hearing on the
21
st
February 2023 to protect their
clients' interest. The incurred costs need to be recovered and it is
unfair for these costs to be
recovered from the respondents' pockets.
5.
Apart from differing on the scale of costs the applicant is supposed
to use to
pay the respondents' costs, the parties also differ as to
whether the costs should be beyond the 20
th
February 2023.
The applicant argues for the party and party scale up the 20
th
February 2023 and that the respondent should be ordered to pay the
applicant's costs on party and party scale after the 20
th
February 2023 to the 26
th
February 2024. The respondents
argue for attorney and own client's scale, alternatively attorney and
client's scale beyond the
20
th
February 2023 up to the
26
th
February 2024.
6.
In applicant's heads of arguments, it is stated that it must be
assumed that
the reason it withdrew the application and tendered the
costs was its acceptance that it would not be successful on the
merits.
This acceptance must have come after the service of the
respondents' opposing papers, which the applicant does not say
contained
anything new it did not know.
7.
The application having been withdrawn, I do not intend to deal with
the merits of this
application. Whether the application was urgent or
not cannot be decided after it was withdrawn. The court order only
reserved
the question of costs.
8.
The awarding of the costs is within the discretion of the court and
they generally
follow the results. The principle that generally, the
costs follow the results does not apply to frivolous and vexatious
litigation.
[3]
9.
The primary purpose of a costs order is to minimize the extent to
which a successful
litigant will be out of pocket as a result of
litigation such party should not have to endure.
[4]
10.
The costs are awarded to a successful party in order to indemnify
that party for the expense
to which it has been put through having
been unjustly compelled either to initiate or defend a litigation.
Owing to the necessary
operation of taxation, such an award is seldom
a complete indemnity but that does not affect the principle on which
it is based.
Speaking generally, only amounts which the suitor has
paid, or become liable to pay in connection with the due presentment
of the
case are recoverable as costs.
[5]
This dictum reflects the normality that even a successful party will
find that some expenses remains to rest where they fall.
[6]
11.
The costs may be based on party and party or attorney and client
scale. The tariff in Rule
70 is designed for and intended for the
taxation of party and party costs.
[7]
.
When function as a court, a court must operate on the assumption that
Rule 70(3) does achieve what it sets out to achieve, being
that a
party to whom costs are awarded is afforded "full indemnity"
for every expenditure reasonably incurred by such
a party in relation
its claim or defence.
[8]
12.
Rule 70(3) prescribes that the objective of the defeated adversary
paying the successful
litigant's costs is to provide a "full
indemnity" to the successful litigant. The tariff is deemed to
do so even if common
sense reveals the contrary. The payment by a
client to the client's own attorney is not aimed at a " full
indemnity"
, but rather is aimed at payment of a reasonable
recompense for services rendered.
[9]
13.
Attorney and client costs are those costs which an attorney will
recover from his or her
client in respect of professional services
rendered and disbursements made on behalf of his or her client in the
conduct of litigation.
[10]
A
client is liable to his or her attorney to pay these costs and such
liability is not dependent upon the award of costs by court.
[11]
The award of attorney and own client costs had to be seen as an
attempt by a court to go one step further than an ordinary order
of
costs between attorney and client so as to ensure that the successful
party was indemnified with regard to all reasonable costs
of
litigation. Taxation would in such cases be liberal but would not
sanction excessive or unreasonable costs. It is an extraordinary
order which would not be made without good reason.
[12]
14.
The scale of attorney and client is extra ordinary and penal in
nature. It should be awarded
where there is blameworthy conduct
worthy of censure on the part of the guilty party such as fraudulent,
dishonest, vexation conduct
that amount to an abuse of court
processes.
[13]
The costs on
attorney and client scale may also be awarded to ensure more
effectively than it can do by means of a judgement for
party and
party costs that the successful party will not be out of pocket in
respect of the expense caused by the litigation. They
may also be
used by the courts to mark its disapproval of the conduct which
should be frowned upon and where such cost order is
justified having
regard to the particular circumstances of the matter.
[14]
They may not only be meant to punish a losing party, but may be
justified where, in the view of the court, there are circumstances
which gave rise to the litigation, or arising out of the conduct of a
losing party, which would render it just, equitable and necessary
to
ensure that a successful party is not out of pocket.
[15]
15.
At times it may be just and equitable to award costs on a punitive
scale, not just to punish
vexatious litigation, but also to assist a
successful litigant in recouping often substantial expenses.
[16]
16.
The tariff party and party is used as a guide and not binding on the
taxing master on the
taxation of attorney and own client costs, with
the result that that tariff cannot be a default fee rate in respect
of attorney
and own client costs.
[17]
17.
The applicant submits that the respondents will be " fully
indemnified" if the
costs are awarder on party and party scale
up until the 20
th
February 2023.
18.
Relying on Texas case
[18]
, the
applicant submits that the respondents will be " fully
indemnified" if the costs are awarder on party and party
scale
up until the 20
th
February 2023. It submits that the aim of the party and party scale
costs is to indemnify the successful party against cost incurred
in
the litigation. This submission is made in the face of the
applicant's concession that the withdrawal of the urgent application
was on the acceptance that it could not sustain the merits of the
application.
19.
Although the awarding of party and party costs is aimed at giving
"full indemnity"
to the successful party, the taxation in
terms of Rule 70(3) does not necessarily achieve that.
[19]
The function of a taxed bill to be paid by a defeated adversary and
the taxed bill to be paid by a client for services rendered
is not
identical. Rule 70(3) prescribes that the objective of the defeated
adversary paying the successful litigant's costs is
to provide a
"full indemnity" to the successful litigant. The tariff is
deemed to do so even if common sense reveals
the contrary. The
payment by a client to the client's own attorney is not aimed at a "
full indemnity" , but rather is
aimed at payment of a reasonable
recompense for services render.
[20]
20.
In terms of Rule 70(5), the tariff is the default position, which may
be departed from under
the conditions prescribed, being extraordinary
or exceptional cases. The function of a taxed bill to be paid by a
defeated adversary
and the taxed bill to be paid by a client for
services rendered is not identical. Rule 70(3) prescribes that the
objective of the
defeated adversary paying the successful litigant's
costs is to provide a "full indemnity" to the successful
litigant.
The tariff is deemed to do so even if common sense reveals
the contrary. The payment by a client to the client's own attorney is
not aimed at a " full indemnity" , but rather is aimed at
payment of a reasonable recompense for services render. In
addition,
the taxing master must further find that a failure to depart from the
tariff would result in an inequity. Fairness is
the golden threat,
both to the debtor client and the creditor attorney.
[21]
21.
My view is that while the awarded scale is intended to guide the
taxing master with the
regard to the items to be allowed on the
parties' presented bill, the scale does not take way the taxing
master's discretion to
allow or disallow any item on the statement of
a bill . The court order guides taxing master rather than take away
her discretion
with the result that the taxing master may disallow an
item a party regard as being allowed by the court order. The standard
used
by the taxing to allow or disallow the fees is whether they are
reasonable or not.
[22]
22.
My view is that because party and party scale costs are prescribed,
the awarding of costs
on party and party scale places an innocent
party at the risk of being put out of pocket despite its innocence in
the litigation.
This is because while the taxing master has greater
discretion in allowing claimed items where the costs have been
granted on attorney
and client's scale, the taxing master's
discretion is limited to the set out scale where the order is on
party and party scale.
The limitation is that the costs must be
reasonable.
23.
Unless by agreement, the costs tendered a day before the hearing
cannot save the party tendering
the costs incurred by its innocent
opponent. This is because by that time, it is too late for the
innocent opponent to save those
costs by releasing its legal team.
24.
The granting of costs on party and party scale comes with the risk
that the respondents
may not recover all reasonable costs, although
proved to have been incurred, but which fall outside the parameters
of party and
party scale. This is because although party and party
scale is intended to indemnify the successful party, it does not
always achieve
this goal. The respondents do not deserve to be put at
that kind of risk because of the applicant's conduct.
25.
Other than what appears from the heads of argument filed on its
behalf that the withdrawal
of the urgent application is on the
acceptance that it would not sustain the claim on merits, there is no
express explanation either
on the withdrawal notices or the pleadings
why there was withdrawal on the delivery of the respondents'
responding papers. It does
not appear that the respondents raised
anything new the applicant learnt for first time in the responding
papers. The applicant
knew or must have known that when it issued the
urgent application that it would not be successful on the merits. It
is thus difficult
to avoid the conclusion that knowing the strength
of its case, the applicant abused the court processes to interdict
the respondents.
Abuse of court process is one of the basis to
justify attorney and client cost order.
26.
The granting of attorney and client costs does not sanction excessive
and unreasonable costs.
27.
The applicant tender of the costs on the 20
th
February
2023 does not make any difference. The tender was based on party and
party scale. I interpret costs in the application
to mean costs in
the cause, which put the respondents at risk of the costs at the end
of the proceedings.
28.
The awarding of the costs on the party and party scale puts the
respondents in unnecessary
cost risk.
29.
The applicant is to be directed to pay the respondents' costs on
attorney and client scale.
This is not a sanction of excessive or
unreasonable cost
Order
(a) The applicant is
ordered to pay the respondents costs on attorney and client's scale
up to the 26
th
February 2024, including the costs of the
21
st
February 2023
(b) The costs will
include the costs of employment of two counsels, where employed.
LEDWABA
AJ
ACTING
JUDGE OF THE HIGH COURT,
POLOKWANE;
LIMPOPO DIVISION
APPEARANCES
FOR
THE APPLICANT:
Adv M Bresler
INSTRUCTED
BY:
Ehlers Law Incorporated
Unit 7 Pro Park
29 Bendor Drive
POLOKWANE
FOR
THE RESPONDNETS: Adv
M Snyman SC
Adv
N Nortje INSTRUCTED BY: ML Schoeman
C/O Rheeder Attorneys
56A Hoog Street
POLOKWANE
DATE
OF HEARING: 26
February 2024
DATE
OF JUDGEMENT: 20 May 2024
[1]
The heads of argument served on behalf of the respondents states the
only real issues are costs and scale and that only wasted
costs on
party and party scale was tendered by the applicant - paragraph 86
[2]
Paragraph 92
[3]
Mkhatshwa & Others v Mkhatshwa & 6 Others
(2021) ZACC 15
-
paragraphs 17 and 18
[4]
Mkhatshwa & Others v Mkhatshwa & 6 Others
(2021) ZACC 15
-
paragraph 20.
[5]
Texas Co(SA) Ltd v Cape Town Municipality
1926 AD 467
at 488.
[6]
Bowman NO v Avraamides & Another1991(1) SA 92(W)-paragraph 94
[7]
Coetzee v Taxing Master, South Gauteng High Court & Another
(2017) ZAGPJHC 175;
2013 (1) SA 74(GSJ- paragraphs 17,18 and 25
[8]
Bowman NO v Avraamides & Another 1991(1)
SA 92(W)-paragraph 95
[9]
Coetzee v Taxing Master, South Gauteng High Court & Another
(2017) ZAGPJHC175;
2013 (1) SA 74(GSJ- par 10
[10]
Bowman v Avraamides1991(1) SA 92(W).
[11]
Erasmus Superior Court Practice: Service 27, 2007- page B1-428.
[12]
Sentrachem Ltd v Prinsloo
(1996) ZASCA 133
;1997(2) SA 1(SCA)
[13]
Plastic Converters of SA on behalf of members v National Union of
Metal Workers of SA
(2016) ZALAC 39
, (2016) 37 ILJ 2815(LAC); Public
Protector v SA Reserve Bank
(2019) ZACC 29[
2019(6)SA 253(CC)- par 8
[14]
Erasmus Superior Court Practice: Service 27, 2007- page B1-428A
[15]
The Law Society of the Cape of Good Hope v Sizwe : Eastern Cape,
Grahamstown Case 994/2012( 16/06/2013)- par 4; Nel v Waterberg
Landbouers Koperatiewe
1946 AD 597
at 607; Fidelity Bank Ltd v Three
Women (Pty) Ltd & Others (1996) 4 All SA 368(W)
[16]
Mkhatshwa & Others v Mkhatshwa & 6 Others
(2021) ZACC 15-
par 20
[17]
Coetzee v Taxing Master, South Gauteng High Court & Another (
2017) ZAGPJHC 175;
2013 (1) SA 74(GSJ- par 20
[18]
Texas Co (SA) Ltd v Cape Town Municipality
1926 AD 467
par 488
[19]
Mkhatshwa & Others v Mkhatshwa & 6 Others
(2021) ZACC 15-
paragraph 20; Bowman NO v Avraamides & Another 1991(1) SA 92(W)
[20]
Coetzee v Taxing Master, South Gauteng High Court & Another (
2017) ZAGPJHC 175;
2013 (1) SA 74(GSJpar 10
[21]
Coetzee v Taxing Master, South Gauteng High Court & Another (
2017)
ZAGPJHC 175;
2013 (1) SA 74(GSJ- par 14
[22]
Mkuyana v Road Accident Fund (2020) ZAECGHC73 ; 2020(6) SA 405(ECG)
(Grahamstown) -paragraph 24.