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2024
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[2024] ZANCHC 78
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Du Toit N.O obo Nkuna v Road Accident Fund (CA&R45/2023) [2024] ZANCHC 78; [2024] 4 All SA 476 (NCK) (23 August 2024)
IN
THE HIGH COURT OF SOUTH AFRICA,
NORTHERN CAPE
DIVISION, KIMBERLEY
Reportable
Case
No:CA&R45/2023
In the matter
between:
ADV AJ DU TOIT N.O obo MAWETHU MAXWELL
NKUNA
APPELLANT
and
THE ROAD ACCIDENT
FUND
RESPONDENT
Neutral citation:
Du Toit N.O v The Road Accident Fund
(Case no.
CA&R45/2023) (23 August 2024)
Heard:
29 April
2024 and 20 May 2024
Delivered:
23 August
2024
Quorum:
Phatshoane AJP, Nxumalo J and Tyuthuza AJ
Judgment
Phatshoane AJP
[1] Pursuant
to the judgment of the trial court in which party and party costs
were ordered in favour of
the appellant, Adv AJ Du Toit, in his
capacity as
curator ad litem
appointed for Mr MM Nkuna (the
patient), against the respondent, the Road Accident Fund,
the appellant launched an application in the court a quo for
the reconsideration of costs essentially seeking to recoup his
irrecoverable
costs (attorney and client costs) with effect from 14
October 2020, the date on which he made a Calderbank offer to the
respondent.
This appeal is with leave of the court a quo
(Eillert AJ) and concerns its refusal to grant the appellant a
special costs order
sought.
[2] The
reconsideration of costs after judgment on the basis of a secret
offer to settle or a Calderbank
offer, which the plaintiff would have
made to a defendant prior to the judgment being delivered, is a
relief fairly new in our
South African jurisprudence but one akin to
that available to a defendant who has made an offer to settle as
provided for in rule
34 of the Uniform Rules of this Court.
Rule
34 is designed to enable a defendant to avoid further litigation or
liability for the costs of such litigation.
The Rule is there not only to benefit a particular defendant but for
the public good generally
.
[1]
The public good which is served by offers to settle was made clear in
Naylor
and Another v Jansen
[2]
by citing Denning LJ’s remarks in
Findlay
v Railway Executive
:
[3]
'The
hardship on the plaintiff in the instant case has to be weighed
against the disadvantages which would ensue if plaintiffs generally
who have been offered reasonable compensation were allowed to go to
trial and run up costs with impunity. The public good is
better secured
by allowing plaintiffs to go on to trial at their
own risk generally as to costs.'
[3]
The
Calderbank
principle has its genesis in the landmark English Court of Appeal
decision in
Calderbank v
Calderbank.
[4]
The issue in
Calderbank
was whether a party could, in a ‘without prejudice’
communication in which an offer of settlement had been made, reserve
that party’s right to waive the confidential or ‘without
prejudice’ nature of the offer in order to rely upon
it for
purposes of making an application for indemnity costs. Cairns LJ held
that that was permissible.
[4]
Originally the
Calderbank
offer was thought to find
application only in matrimonial matters where no payment into court
procedure was available. The position
changed following the English
Court of Appeal decision in
Cutts
v Head.
[5]
There, Oliver LJ emphasised the following passage
in
Computer
Machinery Co. Ltd. v. Drescher
[1983]
1 W.L.R. 1379
by Sir Robert Megarry V.C:
"In
my view, the principle in question is one of perfectly general
application which is in no way confined to matrimonial cases.
Whether
an offer is made 'without prejudice' or 'without prejudice save as to
costs,' the courts ought to enforce the terms on
which the offer is
made so as to encourage compromises and shorten litigation. The
latter form of offer has the added advantage
of preventing the offer
from being inadmissible on costs, thereby assisting the court towards
justice in making the order as to
costs…”
And at 610, Oliver LJ said:
“
I
think that it must now be taken to be established that the Calderbank
formula suggested by Cairns L.J. is not restricted to matrimonial
proceedings but is available in all cases where what is in issue is
something more than a simple money claim in respect of which
a
payment into court would be the appropriate way of proceeding
. .
.
”
[5]
The practice of making offers of compromise on
Calderbank
terms has since been widely accepted beyond England.
[6]
Such offers are also firmly entrenched in international arbitration
practice.
[7]
In some jurisdictions the offers are provided for in the Uniform
Rules.
[8]
Recently, few South African decisions acknowledged the plaintiff’s
common law right to make a secret offer/Calderbank Offer
“without
prejudice save as to costs” to a defendant and to later, after
judgment, avail itself of costs not recoverable
in the ordinary
course against such a defendant, should the Court have made an award
in excess of that tendered.
[9]
In
AD
& Another v MEC for Health and Social Development, Western
Cape
[10]
(the
AD
matter) Rogers J said that the public policy of encouraging
settlements would be better served if litigants appreciated the risk
of adverse costs orders if they disregarded reasonable offers of
settlement.
[6]
Admissions included in a statement by a person involved in a dispute,
which
are genuinely aimed at achieving a compromise, are protected
from disclosure. Such admission may only be accepted into evidence
with the consent of both parties. The rational of the rule is based
on public policy which encourages the private settlement of
disputes
by parties themselves.
[11]
To borrow
from Innes J in
De
Beers Consolidated Mines Ltd v Ettling
[12]
this
is ‘a wholesome rule, and one which should be upheld.’
[7]
In the
AD
Matter
Rogers J narrowed down the enquiry into the admissibility of without
prejudice offers to settle by posing a question whether our
law in
respect of without prejudice communications should permit the
same exception that has been recognised in England and
other
Commonwealth jurisdictions. He considered that our law of evidence on
without prejudice privilege had its origin on the English
law as at
31 May 1961 and had regard, inter alia, to the remarks by T
rollip
JA in
Naidoo
v Marine & Trade Insurance Co Ltd
[13]
where
he said:
“
According
to various statutes in South Africa our Courts are in effect enjoined
to apply the "without prejudice" rule
as developed and
expounded by the English Courts. I emphasize this here because, as
will presently appear, the judicial and
other views expressed in
the USA and Commonwealth countries other than the UK appear to differ
from the English view on a particular
aspect of the rule that is
crucial to the present case. If that is so, then undoubtedly the
English view must prevail. The reason
is that questions relating
generally to the admissibility of evidence, which includes "without
prejudice" communications,
are now governed by s 42 of our
Civil Proceedings Evidence Act 25 of 1965. That section applies the
relevant law of
evidence which was in force in the Republic on 30 May
1961, ie those provisions contained in the various Provincial
statutes on
evidence that were still in force on that date, although
they were later repealed when the above Evidence Act 1965 came into
operation
on 30 June 1967 (see
Gentiruco
AG v Firestone SA (Pty) Ltd
1972
(1) SA 589
(A)
at 617B - F).”
[8]
Rogers J observed that English law, and accordingly South African
law, allows some exceptions
to the privilege which have developed
with reference to the public policy underlying the without prejudice
rule. He held the view
that there is no reason why our law, based as
it is on English law, should not recognise the same exception as has
found favour
in England and other Commonwealth jurisdictions. The
considerations of public policy in favour of settlements
and discouraging
costly litigation are as compelling now as they ever
were.
[14]
He concluded that in principle Calderbank offers are admissible in
relation to costs and can be disclosed to the court for that
purpose
after judgment has been given. Rogers J’s approach is
juristically sound and ought to be endorsed.
[9] The
use of Calderbank offers by plaintiffs is important in the context of
the wider public interest
to conserve and not waste public resources
on unnecessary litigation. There is no rational basis upon which a
plaintiff ought to
be denied access to the benefits of a secret
tender more so where the trial turns arduous and protracted. To risk
promoting intransigence
by a defendant with deep pockets in the face
of a reasonable offer from a plaintiff by refusing to attach any
effect to such an
offer would not be in the public interest and
certainly would defeat the dictates of justice and fairness as a
plaintiff may be
discouraged to pursue a legitimate case because of
the risk of irrecoverable costs were it to be successful. The
plaintiffs’
use of secret offers should not be stifled
but encouraged. In the judgment of this Court in
DC
Arends and Another v Member of the Executive Council for the
Department of Health: Northern Cape Province
[15]
it was held that consideration of the plaintiff’s secret
or Calderbank offer to settle ought to be infused in the Court’s
power to regulate its own process and that the public policy and
public interest consideration which form the basis for penalising
a
plaintiff with costs, for not accepting a defendant’s
reasonable offer, must logically find application where a defendant
fails to accept a plaintiff’s reasonable offer to settle. The
view expressed in
Arends
remains valid.
[10] The background
to the litigation is fairly straightforward. The appellant issued
summons against the respondent
on 30 March 2010 for damages the
patient suffered as a result of a severe head injury sustained when
the patient was a passenger
in a motor vehicle accident that occurred
in the vicinity of Nababeep, Northern Cape, on 18 May 2007. Further
pleadings were exchanged
in the normal course and on 20 July 2017 the
respondent conceded liability on the basis that the appellant would
recover the patient’s
proven or agreed damages in terms of the
Road Accident Fund Amendment Act, 2005
.
[11] Three years
later and two months prior to the trial, on 18 September 2020, the
appellant’s attorneys
addressed a detailed and motivated
“without prejudice settlement proposal” under cover of an
email to the respondent’s
claims handler in respect of which
the respondent was requested to tender the total capital sum of R7
188 988.16. A follow-up email
reminder of the settlement proposal was
sent to the respondent’s representatives on 02 October 2020. A
certain Mr Rafi Mowzer
of the respondent’s Litigation Team Lead
replied that Mr Donovan Frank would attend to the matter “as
soon as humanly
possible”. The appellant did not receive any
response from Messrs Frank and Mowzer.
[12] On 14 October
2020, six weeks before the commencement of the trial, the appellant’s
attorneys dispatched
a formal ‘Calderbank offer’ of
R7 188 988.16 to the respondent’s claims handler
which notified the
respondent that the offer in question, absent its
acceptance within a reasonable time, placed the respondent at risk of
the payment
of attorney and client costs in due course.
[13] The trial was
set down before Mofokeng AJ on 24 to 27 November 2020. The appellant
called two expert witnesses
to testify as well as the patient’s
sister. He also relied on other expert reports filed and the joint
minutes of the experts.
Having heard evidence for the appellant and
the patient, in default of the respondent’s active
participation in the proceedings,
on 11 December 2020 the judgment
was handed down in terms of which the appellant was awarded damages
in the capital sum of R7 208 988.16,
which marginally
exceeded the Calderbank offer by some R20 000.00. Further
consequential relief in respect of costs on party
and party scale was
also decreed.
[14] Mofokeng AJ
noted in her judgment that Mr Rakgwale, the respondent’s
representative, was present in
Court through-out the trial but took
no part. Mr
Rakgwale had, in addition, confirmed that the respondent was aware of
that trial and informed the Court that the respondent’s
claims
handler had submitted some executive summary to the respondent’s
Pretoria office for a mandate and could not make
an offer of
settlement until he had received a mandate. It is not clear whether
Mr Rakgwale is an admitted attorney with the right
of appearance in
the High Court.
[15] Seven days
following receipt of the judgment, on 18 December 2020, the
appellant’s counsel directed
an e-mail to Ms Sago, Mofokeng
AJ’s registrar, and to Mofokeng AJ which was copied to several
other individuals including
the respondent’s representative, Mr
Frank. The email reads in part:
“
As Judge Mofokeng will well
know, the Defendant may place the Plaintiff at risk with a
Rule 34
Offer/Tender (both in respect of liability and the apportionment
thereof, and quantum), and should the Plaintiff fail to “beat”
or better that Offer/Tender, the Plaintiff will be liable for the
Defendant’s costs up to and including the date upon which
the
offer was made.
The Plaintiff may also place the
Defendant at risk with what is known as a ‘Calderbank’
Offer. Accordingly, will you
kindly bring to Judge Mofokeng’s
attention the following attachments;
·
The
Van Reenen v Rosebank Life Hospital
judgment (Free State
Division, 14 May 2019), and in particular paragraphs 1-17, 22-34,
38-47, which succinctly sets out the position
of Calderbank Offers
placing the Defendant at risk with regards to what the Plaintiff is
prepared to accept as a suitable settlement/compromise,
and the
consequent cost orders on an attorney-client scale when the Plaintiff
has bettered what it was prepared to settle on against
the Defendant;
·
The present Plaintiff’s Calderbank Offer of R7 188 988,16,
dated 14 October 2020;
·
Also attached hereto are the ‘read-receipts’ of the
relevant
RAF claims handlers (Mr Donovan Frank in particular who is
referenced in Judge Mofokeng’s judgment) to whom the Calderbank
Offer was sent, and also dated 14 October 2020;
·
Judge Mofokeng’s judgment and Order in the capital amount
of
R7 208 988,16;
·
The Plaintiff has thus not only been successful in proving his
case,
but the capital award has exceeded the Calderbank Offer by some
R20 000,00;
·
It is common cause that the Defendant was repeatedly engaged
to try
and settle this matter, and timeously. Significant costs have been
incurred on behalf of Plaintiff to run a default judgment
trial in
Kimberly, and not all of those costs are going to be recoverable on a
party and party scale;
In the circumstances, I respectfully
request that Judge Mofokeng exercise her discretion in favour of the
Plaintiff and grant the
attached amended Draft Order, awarding the
Plaintiff his costs on the attorney-client scale in view of the
Court’s judgment
on capital beating the Calderbank Offer.”
[16] The appellant’s
counsel directed a follow up e-mail on 13 January 2021 to Ms S De
Villiers, the acting
court manager. This prompted Mofokeng AJ to
request Ms De Villiers to dispatch an e-mail dated 25 January 2021 to
the parties,
the effect of which was that she was disinclined to
entertain the request for reconsideration of costs as contained in
the appellant’s
e-mail of 18 December 2020 and repeated on 13
January 2021 (the Mofokeng AJ decision).
[17] Following the
Mofokeng AJ decision above, which became central to this appeal, the
appellant’s legal
team filed a substantive application for the
reconsideration of costs on 25 February 2021 seeking an order that
the respondent
be held liable for the appellant’s costs on an
attorney and client scale from the date of service of the appellant’s
Calderbank offer upon the respondent. Eillert AJ considered that
application on an unopposed basis. He also noted in his judgment
that
Mr Rakgwale, who had been present throughout the hearing of that
application, had placed on record that “he did not
have any
instructions in the matter”. Having heard argument, Eillert AJ
handed down judgment on 17 December 2021 in which
he ruled:
“
. . . I am therefore of the
view that the plaintiff’s offer of 14 October 2020 is not
admissible at this stage of the judgment
for the purposes of
considering the question of costs afresh, or alternatively, cannot
form the basis for a punitive costs order
against the defendant
herein.
. . . Given the extent of the
quantum, the plaintiff was not offering a fair discount to the
defendant, but was basically asking
the defendant to pay what he was
in any event claiming. Based upon a realistic assessment of the
case, I would not have been
able to find that the defendant was
unreasonable in not reacting to the plaintiff’s offer or not
making a counter-offer”.
[16]
[18] Dissatisfied
with Eillert AJ’s conclusion, the appellant filed an
application for leave to appeal on
07 January 2022. In determining
whether to reconsider the question of costs the court must have
regard to various factors, namely:
whether
the respondent behaved unreasonably and thus put the appellant to
unnecessary expense by not accepting the offer or making
a reasonable
counter-offer; whether the respondent has engaged reasonably in
attempting to settle; whether the appellant had offered
a fair
discount based on a realistic assessment of the case as opposed to
holding out for the best conceivable outcome; whether
the appellant
allowed the respondent a reasonable time to consider the offer;
the extent of the difference between the amount
of the offer and the
amount of the award; and the nature of the proceedings and resources
of the litigants.
[17]
The list is by no means exhaustive as the trial court is entitled, in
the exercise of its discretion, to consider factors which
it may
legitimately take into account. Eillert AJ was of the view, regard
being had to the factors mentioned, that there were reasonable
prospects that another court on appeal would come to a different
conclusion. He therefore granted the appellant leave to appeal
against the whole of his judgment and order on 16 September 2022.
[19] It is
convenient at this stage to get out of the way the respondent’s
principal preliminary attack
against the appellant’s
application for reconsideration of costs which hinges on the Mofokeng
AJ decision of 25 January 2021
to the effect that she was disinclined
to reconsider her order in respect of costs. The relevant part of the
acting court manager’s
e-mail to the appellant’s legal
team, which incorporates the decision , reads:
“
The
contents of your e-mail dated 13 January 2021 with attachments
thereto has been forwarded to Mofokeng AJ.
She
directed via email as follows:
‘
I have carefully considered the
request and most [probably I] need [a] response from the fund(sic).
Given the circumstances [in
which] the default judgment was granted,
I am of the view that the order granted should stand, the fund will
raise all sorts of
technicalities to rescind the judgment and/or
delay [the] payment. In the best interest of the plaintiff I will not
vary the order’.”
[20] The nub of the
respondent’s preliminary point is that the Mofokeng AJ decision
ended the
lis
between the parties on the reconsideration
of costs. It was argued for the respondent that Mofokeng AJ
considered afresh her costs
order and chose to exercise her
unfettered discretion by refusing to award the attorney and client
costs to the appellant. It was
further contended that Mofokeng AJ
“stood by her party and party costs made on 11 December 2020
after she had been alerted
to the appellant’s Calderbank
Offer.” Her decision stands until it is set aside by a court of
competent jurisdiction.
Consequently, so it was contended, the only
course open to the appellant was to seek leave to appeal Mofokeng
AJ’s order
refusing to reconsider her costs order on the
ordinary scale following her knowledge of the Calderbank offer and
not to launch
an ill-conceived substantive application that came
before Eillert AJ.
[21] The
respondent’s argument suggests, without more, that the
proceedings before Eillert AJ were non-sequitur
if not a nullity as
Mofokeng AJ had already decided the question of reconsideration of
costs. It is therefore important to first
consider whether the
Mofokeng AJ decision constituted an order of this Court in a legal
sense, definitive of the parties’
rights and thus appealable.
In
determining the nature and effect of a judicial pronouncement, 'not
merely the form of the order must be considered but also,
and
predominantly, its effect'. A 'judgment or order' is a decision
which, as a general principle, has three attributes, first,
the
decision must be final in effect and not susceptible of alteration by
the Court of first instance; second, it must be definitive
of the
rights of the parties; and, third, it must have the effect of
disposing of at least a substantial portion of the relief
claimed in
the main proceedings.
[18]
[22] As already
alluded to, the procedure for the court’s reconsideration of
costs pursuant to a Calderbank offer
at the behest of a plaintiff is
not provided for in the rules. However, rule 34(12) provides that i
f
the court has given judgment on the question of costs in ignorance of
the offer or tender (by a defendant) and it is brought to
the notice
of the registrar, in writing, within five days after the date of
judgment, the question of costs shall be considered
afresh in the
light of the offer or tender. A plain reading of this suggest to me
that the filing of extensive affidavits for the
purpose of
reconsideration of costs would not be necessary. However, in my view,
nothing would impede an applicant to set out concise
facts it may
wish to draw to the court’s attention, for purposes of
reconsideration of costs, in an affidavit. In the end,
what appears
to be germane is that the offer or tender be brought to the notice of
the registrar in writing.
[23]
The
e-mail communication which had been placed before Mofokeng AJ
to reconsider her decision on costs may appear to be odd as the
motion
had not been set out in a formal notice. What further
compounds the irregular manner in which the application had been
brought
is that its outcome was never embodied in a formal court
order with the official stamp issued by the registrar of this court
as
the orders of this Court would. However, f
orm cannot
be allowed to triumph over substance.
In this case,
notice had been electronically dispatched to all interested parties,
albeit defective, through the registrar’s
office, pertinently
requesting Mofokeng AJ to reconsider the costs following her judgment
on the basis of the Calderbank offer
made. Mofokeng AJ considered the
request and, without affording the parties a proper hearing, refused
to change her initial finding
on party and party costs. She also gave
reasons for her decision although this may not have been convincing.
Her final conclusion,
in my view, was an order in a true legal sense,
definitive of the parties’ rights and thus appealable.
[24] It follows that
the substantive application for reconsideration of costs which served
before Eillert AJ was
not necessary because the issues had already
been decided. This notwithstanding, Eillert AJ came to the same
conclusion as Mofokeng
AJ in that he too refused the application. It
is trite that an appeal does not lie against the reasons for the
decision. It lies
against the substantive order
[19]
.
In
Tecmed
Africa (Pty) Ltd v Minister of Health and Another
[20]
Ponnan
JA said:
'(A)ppeals do
not lie against the reasons for judgment but against the substantive
order of a lower court. Thus, whether or
not a Court of Appeal agrees
with a lower court's reasoning would be of no consequence if the
result would remain the same . .
. .'
[25] As I see it, to
the extent that the order by Mofokeng AJ and that of Eillert AJ were
the same, the argument
that the Mofokeng AJ decision ended the
lis
between the parties amounts to no more than a distinction without a
difference – a fallacy to distinguish between two things
where
no discernible difference exists. The distinction in the orders
is of no more moment so much so that even counsel
for the
respondent could not isolate them in that she sought to persuade us
that “the appellant has failed to set out facts
and exceptional
circumstances which [would] justify this Court’s interreference
with Mofokeng AJ’s order, made on 11
December 2020 and
reaffirmed on 25 January 2021 and Eillert AJ’s order made on 17
December 2021.”
[26]
On the aforegoing exposition it is eminently pragmatic and sensible
to consider
the merits
of this appeal which, in any event, were fully ventilated. A court
has jurisdiction to reconsider costs on the basis
of facts which a
party was prohibited from presenting which are brought to its
attention after judgment. On reconsideration of
costs the court will
exercise its discretion anew with the advantage of the knowledge of
the secret offer and award such costs
it deems appropriate.
[21]
Where the court has
exercised
a discretion in respect of costs the power of interference on appeal
is circumscribed. In
Trencon
Construction (Pty) Ltd v Industrial Development Corporation of
South Africa Ltd and Another
[22]
it was said
:
“
When a
lower court exercises a discretion in the true sense, it would
ordinarily be inappropriate for an appellate court to interfere
unless it is satisfied that this discretion was not exercised —
'judicially, or
that it had been influenced by wrong principles or a misdirection on
the facts, or that it had reached a decision
which in the result
could not reasonably have been made by a court properly directing
itself to all the relevant facts and
principles'.
An appellate
court ought to be slow to substitute its own decision solely because
it does not agree with the permissible option
chosen by the
lower court.”
[27]
In the
AD
matter Rogers J held, on good authority, that in
order to be admissible a Calderbank offer must explicitly state that
it is made
without prejudice 'except in relation to costs' (or words
to similar effect). If the words 'without prejudice' are expressly
qualified
by the phrase 'except in relation to costs', there were no
reasons of policy to treat the communication as inadmissible for
purposes of determining a just and equitable costs order.
[28]
The admissibility of the Calderbank offer was not brought into
question in this appeal. On the contrary,
the respondent accepted
that it had received the Calderbank offer from the appellant and that
these types of offers are admissible
in relation to costs and may be
disclosed to the court for that purpose after judgment. However, it
is important to mention that
Eillert AJ found the Calderbank offer to
have been inadmissible for purposes of reconsideration of costs
because it had not been
prefaced with the words “without
prejudice save as to costs” nor were words to similar effect
employed. The appellant’s
Calderbank offer dated 14 October
2020 is titled “the Plaintiff’s Calderbank offer in terms
of rule 34”. The
reference to Rule 34 in the notice was clearly
incorrect as Eillert AJ correctly found. It also holds true that the
appellant had
not employed words to the effect that the offer was
without prejudice save as to costs. However, in my view, the lack of
the expression
of the words was not reason enough to hold the
Calderbank offer inadmissible. This is so because the offer had been
preceded by
the “plaintiff’s without prejudice settlement
proposal” dated 18 September 2020 which tendered the same
settlement
figure as contained in the Calderbank offer. In addition,
the last paragraph of the Calderbank offer states:
“
BE
PLEASED TO TAKE FURTHER NOTICE that should the above offer not be
accepted by the defendant within a reasonable time and the
eventual
outcome is similar or less favourable to the defendant, the plaintiff
will request that a punitive costs order be made
against the
defendant.”
[29]
The above notice, in my view, is indicative that the offer was
without prejudice except in relation to costs
because it was a bona
fide attempt to settle the dispute and therefore privileged.
Additionally, it sufficiently cautioned
the respondent that the
settlement proposal was likely to be disclosed to the Court in the
event that the amount of damages the
court awarded was more than the
settlement figure offered. The respondent did not advance any
prejudice in respect of the form
or the substance of the offer and I
can conceive of none.
[30]
More significantly, it was argued for the respondent that it did not
act in a manner which was susceptible
to censure in the form of a
punitive costs order in that it did not waste the court’s time
by conceding liability in July
2017 and opted for a day’s trial
in respect of the quantum. In any event, the R20 000 discount in the
offer made was insignificant,
so ran the argument.
[31]
I wish to reiterate some of the policy objectives that underlie the
award of special costs orders following
the Calderbank offers derived
from commonwealth cases. These includes
inter
alia
:
(1) to encourage the saving of private costs and the avoidance
of the inherent risks, delays and uncertainties of litigation
by
promoting early offers of compromise by defendants which amount to a
realistic assessment of the plaintiff’s real claim
which can be
placed before its opponent without risk that its ‘bottom line’
will be revealed to the court; (2) to
save the public
costs which are necessarily incurred in litigation which events
demonstrate to have been unnecessary, having regard
to an earlier
(and, as found, reasonable) offer of compromise made by a plaintiff
to a defendant; and (3) to indemnify
the plaintiff who
has made the offer of compromise, later found to have been
reasonable, against the costs thereafter incurred.
Caution
should also be exercised due to some other competing objectives of
equal importance which is that potential litigants should
not be
discouraged from bringing their disputes to the Courts.
[23]
[32]
The commonwealth authorities are replete with reference to the
principle that it is not necessary to establish
misconduct by the
offeree before the rejection of the offer could be viewed as
unreasonable, as the respondent sought to exculpate
itself from any
misconduct. The lack of merit in the manner a party has conducted its
case is not a prerequisite for costs on attorney
and client basis to
issue.
[24]
Rogers J observed i
n
the
AD
matter that
the
commonwealth cases emphasise that a plaintiff who has made such an
offer is not entitled to attorney and client costs merely
because he
made a secret offer which was less than what the court awarded. The
court must consider whether the defendant behaved
unreasonably,
and thus put the plaintiff to unnecessary expense, by not accepting
the offer or making a reasonable counter-offer.
[25]
[33]
Accordingly, it is important to evaluate whether the respondent’s
rejection of the offer was unreasonable.
What appeared to
weigh with Eillert AJ in dismissing the appellant’s application
for reconsideration of costs was that his
Calderbank offer was not a
“
fair discount
” because of a marginal difference
of R20 000 between his offer and the quantum the trial court awarded.
It is so that the
extent of the compromise
offered
is a factor to be considered amongst the panoply of
other relevant circumstances to be weighed in assessing the
reasonableness
or otherwise of the respondent’s conduct in
rejecting the offer but by no means decisive. The court a quo
incorrectly anchored
its reasoning solely on what it considered to
have been an unfair discount in respect of the offer that was made.
This finding
ignored that the appellant and the patient were still
obliged to incur costs which would not have been recoverable in the
ordinary
course i.e. on the party and party scale in the event the
trial proceeded to its conclusion.
[34]
The respondent’s conduct, as foreshadowed in the factual
background which need not be repeated, demonstrates
an
imprudent refusal to respond to the appellant’s reasonable
Calderbank offer which had been made at least some six weeks
prior to
the trial. The respondent adopted a stance of being an inactive
participant in a trial in respect of which it had no prospects
of
success.
T
he
unreasonable refusal to accede to a secret offer to settle is, by
itself, a proper ground for the award of a special costs on
attorney
and client scale.
[26]
Eillert AJ accepted that:
“
The
defendant [respondent] in the matter at hand did not engage
reasonably in attempting to settle the matter, in fact, the defendant
failed to engage at all. As there is no version of the defendant
before the court, I am left to wonder why that is. A plethora
of
cases have expressed scathing criticism against the Road Accident
Fund for the manner in which it conducted litigation and this
case
could be added to the long list. The plaintiff also allowed the
defendant a reasonable time to consider his offer.”
[35]
As I see it, the court a quo’s above conclusion ought to have
been the end of the enquiry on the unreasonableness
of the
respondent’s conduct. The respondent
is
obliged to conduct itself with due recognition that its very reason
for existence is 'to give the greatest possible protection
... to
persons who have suffered loss through a negligent or unlawful act on
the part of the driver or owner of a motor vehicle'.
[27]
In
Road
Accident Fund v Klisiewicz
[28]
,
cited by Maya JA in
Madzunye
and Another v Road Accident Fund
[29]
Howie JA said:
“
The
[Road Accident Fund] exists to administer, in the interests of road
accident victims, the funds it collects from the public.
It has the
duty to effect that administration with integrity and efficiency.
This entails the thorough investigation of claims
and where
litigation is responsibly contestable, the adoption of reasonable and
timeous steps in advancing its defence. These are
not exacting
requirements. They must be observed.”
[36]
T
he appellant properly placed the
respondent at risk with its timeous Calderbank offer and had reserved
explicitly the question of
its indemnifying costs.
The
respondent’s overt failure to respond to the offer or
alternatively, to make a counter-offer which would have ended the
litigation and obviated the unavoidable escalation of costs is
problematic. Instead, it allowed
litigation
to continue to its conclusion at
considerable
cost to the
public purse and put its
opponent to unnecessary trouble and expense which he ought not to
bear. The required probity with which
the respondent ought to
approach claims does not permit this level of extreme laxity.
[37]
In my view, the respondent’s ineptitude
warranted
a departure from the ordinary rules as to costs.
Insofar as the court a quo found differently its
discretionary
decision was plainly wrong and impels the conclusion that the
discretion had not been properly exercised at all. It
is on the
aforegoing exposition that the appeal ought to be upheld with costs.
[38] What remains is
the question of wasted costs occasioned by the postponement of 29
April 2024. Both
parties filed affidavits explaining why they
ought not to be mulcted in those costs. The appeal which had
been set down for
hearing on 29 April 2024 was postponed to 20 May
2024 to allow the appellant to supplement the record following the
respondent’s
remonstration that a certain portion of the
record, which largely formed the basis of its point in limine, had
been omitted. This
included the trial court’s judgment on the
merits and certain correspondence regarding the reconsideration of
costs after
the judgment had been handed down.
[39] In an attempt
to escape liability for the wasted costs it was submitted for the
appellant that the index
to the record had been dispatched to the
respondent on 09 December 2022 for it to indicate its acceptance of
the contents. In the
absence of a response, the record which
corresponded with the index was filed on 21 December 2022. It was
argued for the appellant
that at no stage did the respondent object
to the record or the index as filed, until belatedly, eight court
days prior to the
hearing of this appeal.
[40] The respondent
countered that the appellant was informed through an e-mail dated 12
December 2022 that the
deponent to the affidavit on costs, Mr Walleed
Adams, was engaged in the matter. However, no further correspondence
had been addressed
to Mr Adams. The appellant’s offices were
closed on 14 December 2022 until 9 January 2023. The record and the
index were
filed on 21 December 2022, during that closure, without
having afforded the respondent the opportunity to consider these
documents.
[41] What the
respondent’s 12 December 2022 e-mail to the appellant reveals
is that Mr Adams was “engaging
with the attorney on the
matter”. This belies any suggestion that he was the responsible
official whom the appellant had
to contact for inputs on the record
and the index as he sought to portray through his deposition. In
truth, the Mofokeng AJ judgment
on the merits and the written
exchange between the court and the parties, following the delivery of
that judgment, had been referred
to and attached to the application
that formed the basis for the reconsideration of costs which served
before Eillert AJ. They
clearly provided the background and
chronology of facts and ought to have formed part of the initial
record of appeal. The respondent’s
point in limine, raised for
the first time on 16 April 2024, eight court days prior to the
hearing of the appeal, pivots on this
background information.
[42] It took the
respondent approximately a year and four months following its receipt
of the record on 21 December
2022 for it to complain about the
insufficiency of the record on 16 April 2024 when it filed its heads
of argument on appeal. In
my view, the delay occasioned by the
postponement of 29 April 2024 is attributable to both parties. This
is so because the appellant,
on the one hand, ought to have ensured
that the complete record is filed with the registrar whereas the
respondent, on the other,
ought to have acted promptly in prosecuting
this appeal by ensuring that it timeously brought to the attention of
the appellant
the need to include the record it intended to rely on
for purposes of advancing its point in limine. That it belatedly
decided
to take the point in limine, during consultation with its
counsel in preparation of hearing, ought not to avail it on the
weight
of authority which enjoins it to take
reasonable
and timeous steps in advancing its defence
. The upshot of this
is that each party must bear its own costs in respect of the
proceedings of 29 April 2024. In the result, I
make the following
order.
Order:
1.
The Appeal is upheld with
costs including the costs of the application for leave to appeal.
2.
The appellant, Adv A J Du toit, in his capacity
as curator ad litem appointed for Mr MM Nkuna (the patient), and the
respondent,
the Road Accident Fund, are to bear their own costs
occasioned by the postponement of 29 April 2024.
3.
The order of the court a
quo is set aside and in its place is substituted the following:
“
1.
The application for reconsideration of costs is upheld with costs.
2.
The defendant is liable for the plaintiff’s costs of the action
on a party and party scale save for all the costs
incurred with
effect from 14 October 2020 (date of service of the Calderbank offer
on the defendant) which the defendant shall
bear on an attorney and
client scale).”
PHATSHOANE AJP
Nxumalo
J
__________________ and
Tyuthuza AJ
_______________ concur
in the judgment of Phatshoane AJP
For
the appellant:
Adv
PC EIA
Instructed by:
Elliot Maris Attorneys,
Kimberley.
For the respondent:
Adv LX Dzai
Instructed
by:
Office
of the State Attorney, Kimberley.
[1]
Naylor
and Another v Jansen
2007 (1) SA 16 (SCA)
para 13.
[2]
Ibid.
[3]
[1950]
2 All ER 969
(CA) at 972E – F].
[4]
[1975] 3 All ER 333 (CA).
[5]
[1983] EWCA Civ 8
;
[1984] 1 All ER 597
(CA) at 608–609.
[6]
For example, Hong Kong, Singapore, New Zealand, Ireland, Canada, and
Australia, all recognise the
Calderbank
offers.
[7]
See Article by Benjamin Kasep- (Barrister-at-Law), ‘
Calderbank
Offers’
;
Available at
<https://13wentworth.com.au/wp-content/uploads/2019/01/calderbankoffers.pdf>
and the authorities cited
therein and the recent unreported judgment
of this court in
DC
Arends and Another v Member of the Executive Council for the
Department of Health: Northern Cape Province
(Case
no. 2250/2016) (31 May 2024).
[8]
Uniform
Civil Procedure Rules 2005 – Rule 42.14 (New South
Wales, Australia).
[9]
See for example:
AD
& Another v MEC for Health and Social Development, Western Cape
2017
(5) SA 134
(WCC);
Van Reenen v Lewis and
Another
[2019]
JOL 44811
(FB); and
RNT
obo DORM and Another v Amanfo and Another
(2011/1359)
[2024] ZANWHC 91
(27 March 2024) and the recent
unreported judgment of this Court in
DC
Arends and Another v Member of the Executive Council for the
Department of Health: Northern Cape Province
(Case
no. 2250/2016) (31 May 2024).
[10]
Ibid
paras 42-43 and 60.
[11]
See Principles of Evidence, Schwikkard & Van Der Merwe, JUTA,
3
rd
ed, a
t
p.322.
[12]
1906
TS 418
at 420.
[13]
1978 (3) SA 666
(A)
at
677F – H.
[14]
AD
Matter
Ibid
paras 47-60.
[15]
Fn 9.
[16]
Du Toit
obo Nkuna v Road Accident Fund
(454/2010)
[2021] ZANCHC 66
(17 December 2021) paras 16-17.
[17]
AD &
Another v MEC for Health and Social Development, Western Cape,
ibid
- fn 9 para 61.
[18]
Zweni
v Minister of Law and
Order
1993
(1) SA 523
(A) at 532-533.
[19]
See
Medox
Ltd v Commissioner, South African Revenue Service
2015 (6) SA 310
(SCA) para 10;
Hyprop
Investment Ltd and Others v NSC Carrier and Forwarding CC and Others
2014 (5) SA 406
(SCA) para 21;
Cape
Empowerment Trust Ltd v Fisher Hoffman Sithole
2013 (5) SA 183
(SCA) para 39.
[20]
2012]
4 All SA 149
(SCA) para 17.
[21]
See
DC
Arends and Another v Member of the Executive Council for the
Department of Health: Northern Cape Province -
fn
9 para 24.
[22]
2015 (5) SA 245
(CC);
(2015
(10) BCLR 1199
;
[2015] ZACC 22)
para 88.
[23]
Hazeldene’s
Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2)
[2005] VSCA 298
paras 21-22.
[24]
In
Hazeldene’s
Chicken Farm v Victorian Workcover Authority (No 2)
(supra) at para 28- t
he
Victorian
Court of Appeal
approved
what Redlich J said
in
Aljade and MKIC v OCBC
[2004]
VSC 351.
[25]
AD &
Another v MEC for Health and Social Development, Western Cape,
(supra)
Fn 9, para 61.
[26]
Hazeldene’s
Chicken Farm Pty Ltd v Victorian Workcover Authority (No 2)
,
(supra) Fn 23, para 28.
[27]
Daniels v
The Road Accident Fund
2011 JDR 0461 (WCC) para 14.
[28]
Unreported Judgment of the SCA-
Case
No. 192/2001 (SCA) para 42.
[29]
2007 (1) SA 165
(SCA)
para
17.