REPUBLIC OF SOUTH AFRICA
IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETORIA
Case No: 19825/2022
In the matter between:
CHESTWUN ROMARIO SELLO Applicant
and
ROAD ACCIDENT FUND Respondent
JUDGEMENT
(1) REPORTABLE: yes
(2) OF INTEREST TO OTHER JUDGES: yes
(3) REVISED: NO
29 September 2025 ................................
DATE SIGNATURE
Default judgment – contingency fee agreement to exclude VAT in the 25% limit
on success fee – interpretation of Contingency Fee Act 66 of 1997 and more
specifically section 2(2). Whether the 25% limit on a success fee provided for in
section 2(2) of the Contingency Fee Act 66 of 1997 includes value -added Tax
(VAT) in terms of the Value-Added Tax Act 89 of 1991.
KRÜGER AJ
[1] This matter came before me in the Trial Court and was argued before me on
19 May 2025. The matter was lodged with the defendant on 24 November 2021
and summons was served on 6 April 2022. The defendant then served a notice
of intention to defend on 20 July 2022 and served a plea. The notice of set down
for trial was served on the defendant on 6 June 2023. On the day of trial being
19 May 2025, there was no appearance for the defendant and the matter
proceeded by default of appearance.
[2] The plaintiff served and filed a substantive application in terms of Rule 38(2)
requesting that leave be granted for the evidence of 12 experts to be allowed
by affidavit. The application in terms of Rule 38(2) was granted at the outset of
the hearing of the matter.
Merits
[3] The plaintiff was injured in a motor vehicle accident on 14 August 2020. At the
time of the accident the plaintiff was 20 years old. The merits were conceded
by the defendant in an offer and acceptance of the offer dated 15 September
2022.
Quantum
[4] The plaintiff was treated in a public hospital and there was no claim for past
medical expenses. The plaintiff did claim for future medical expenses in respect
of an undertaking to be awarded in terms of section 17(4)(a) of the Road
Accident Fund Act 56 of 1996.
[5] Prior to the accident the plaintiff was a student at Namakwaland College,
O’kiep, where he studied Human Resources and was in his final year of the
theoretical studies which would then be followed by 18 months of practical
studies. The plaintiff ha d completed grade 12 at school before commencing
with his studies in Human Resources. The plaintiff resided with his mother, who
was a single parent pre-accident. his mother passed away during 2021.
[6] According to the experts that assessed the plaintiff’s injuries and damages the
plaintiff had no pre -existing conditions prior to the accident. The plaintiff
sustained the following injuries as a result of the accident on 14 August 2020:
a. Head injury
b. Multiple abrasions to left hand, left knee and face
c. Multiple lacerations to face and left shoulder
d. Neck injury, dens process fracture
[7] The plaintiff was a passenger at the back of a bakkie at the time of the motor
vehicle collision. The plaintiff was taken by ambulance to Dr van Niekerk
hospital in Springbok and was admitted until 16 August 2020. At the time of
admission, the plaintiffs GCS score was measured as being 15/15. It was also
documented that on 16 August 2020 the plaintiff lost consciousness and the
plaintiff vomited after the accident. After release from Dr van Niekerk hospital,
the plaintiff was then seen at Dr Harry Surtie Hospital in Upington on 16 August
2020. The plaintiff was diagnosed after a CT scan of the brain, with two
intracranial bleeds and a mastoid fracture. The plaintiff was transferred from Dr
Harry Surty Hospital in Upington on 17 August 2020 to Kimberley Hospital,
which transfer was accommodated by the Neurosurgeon on call.
Experts appointed by plaintiff
[8] The Orthopaedic Surgeon, Dr. P.R. Engelbrecht, reported that the plaintiff’s
upper limbs were neurologically intact and that a mild localising tenderness as
upper limbs were neurologically intact and that a mild localising tenderness as
well as muscle spasm was recorded in the upper cervical spine of the plaintiff.
[9] According to the neurosurgeon, Dr Moya, the pl aintiff sustained a moderate to
severe “focal” brain injury based on the following:
a. Abnormal CT brain scan with evidence of inter -cerebral haemorrhage
(two) and overlying skull fracture;
b. A Glascow Coma Scale of 15/15 can present at a moderate to severe
“focal” traumatic brain injury;
c. The plaintiff is suffering from residual neurocognitive and
neuropsychological problems related to his traumatic brain injury;
d. The consequences of the traumatic brain injury is inter alia, a 8% to 10%
risk of post traumatic epilepsy.
[10] Dr Smuts, the neurologist appointed confirms the traumatic brain injury and
adds that the plaintiff suffers from chronic daily headaches, which he terms as
traumatic headaches. Further states that the plaintiff’s memory is very poor
after the accident and that he is unable to return to his studies since he
struggles to concentrate. The plaintiff is forgetful and has become very
intolerant and gets angry easily. Had it not been for the accident then the
plaintiff would have likely completed his diploma studies in 2021.
[11] Dr M Naidoo was of the opinion that the plaintiff sustained a head injury that
was intensely investigated when he was admitted to the second hospital and
that the investigation by neuroimaging revealed abnormalities which inc luded
two intracranial bleeds and mastoid fracture. It was documented that the plaintiff
received prophylactic treatment for post -traumatic epilepsy with loading dose
of phenytoin. The changes in his functioning is impacting negatively on his
mental wellbeing and he is presenting with depressive and some travel related
anxiety symptoms. He diagnosis the plaintiff with mild complicated traumatic
brain injury. He is of the opinion that the plaintiff is presenting with mild
neurocognitive disorder due to traum atic brain injury, as well as mood
disturbance which he describes as clinical significant behavioural disturbance
e.g. psychotic symptoms.
[12] Ingrid Jonker the neuropsychologist is of the opinion that the nature and
severity of the brain injury sustained by the plaintiff should be taken into account
especially with regard given the plaintiff’s educational and occupational
background as well as his best test performances, his results were expected to
fall in the average to high average ranges, however several test scores fell in
the low average, below average and below average to impaired and severely
impaired ranges.
[13] Professor Seabi , the educational psychologist concluded, based on all the
available information (such as depressed cognitive profile, behavioural
difficulties including distractibility, poor working memory, lapse of concentration,
which will serve to add barriers to the plaintiff’s studies, emotional trauma due
to the accident and the sequelae of his injuries), given the accident in question,
grade 12 (NQF 4) will in all likelihood remain the plaintiff’s highest qualification.
[14] Dr Pienaar, the plastic and reconstructive surgeon , stated that upon physic al
examination the plaintiff presented with the following scars:
a. Over his posterior scalp there is a y -shaped 5cm x 1.5cm and a 1.5 cm
scar that is visible through his hair which is very unsightly;
b. On his left cheek there are abrasion scars of 3.5cm x 3.5 cm and 3 cm x
1 cm. they are irregular, hyperpigmented, visible and unsightly;
c. Over his right cheek and upper lip there is a 5cm x 1 cm scar that is
hyperpigmented, irregular, visible and very unsightly. He has a 1cm x
1cm scar on his chin that is hypertrophic and hyperpigmented;
d. There are multiple abrasion scars over both his hands and fingers on the
right of 1 cm x 1 cm, 2.5 cm x 1.5 cm, 3 cm x 1 cm, 1.5 cm x 1 cm and 2
cm x 1.5 cm and on the left 3 cm x 2 cm, 6 cm x 2 cm, 2 cm x 1.5 cm
and eight 1 cm to 1.5 cm. they are irregular, visible and very unsightly
e. Over his left shoulder, on the anterior and posterior aspect, there is a 15
e. Over his left shoulder, on the anterior and posterior aspect, there is a 15
cm x 20 cm hyperpigmented abrasion scar that is very visible and
unsightly;
f. On his left knee there is a 5 cm x 15 cm hyperpigmented, hypertrophic,
irregular, visible and unsightly scar.
[15] K Cumming the Occupational Therapist opined in summary that the plaintiff
presents with cognitive deficits which hamper his capacity to study towards a
more academic career path. His physical deficits hamper his capacity for more
technical learning. His endurance and emotional deficits denote that he is
unlikely to pursue and sustain further studies. The physical assessment reveals
that the plaintiff has the strength for light physical work. Even in a sedentary or
light physical position, he will require an employer who is understanding of his
limitations. He will require a reduced workload, adaptations to his workstation,
reduced work pressure and extended deadlines to compensate for his fear
avoidance behaviour, discomfort, endurance deficits and headaches. The
plaintiff will not be a candidate for skilled employment and will be limited to
unskilled employment. His depressive symptoms would hamper his resilience.
He would not be considere d capable of handling the work stressors of formal
open labour market employment. Occupational Therapy will allow for
independent living but will not improve the aforementioned occupational
potential. The abovementioned conclusions, therefor remain valid e ven with
treatment. At best, if his family assist, he may be a candidate for sympathetic
work in the unskilled market, however this is an unlikely scenario given his lack
of experience.
[16] T Talmud, the Industrial Psychologist postulated the following in regard to pre-
morbid career postulation:
a. The plaintiff would have completed the theory aspect of his studies in
2020. It would have then taken him 3-5 years to enter the formal labour
sector. During this period he would have earned R 59 482.80 per annum.
b. On entry into the formal sector he would have earned a market related
basic salary for roles graded at the Paterson B1 median level.
c. With further training and work experience, the plaintiff would have
progressed to reach his career ceiling by the age of 45 at which time he
progressed to reach his career ceiling by the age of 45 at which time he
would have earned at a level of job complexity and remuneration
commensurate with the annual guaranteed package at Paterson C3
median level.
d. Thereafter he would have received inflationary increases until retirement
at the age of 65.
[17] T Talmud further postulated the following post-morbid:
Past loss of earnings
a. The plaintiff has never secured work. Given that the pre -morbid
postulation indicates that he would have entered the labour market in
2021, but for the accident, past loss of earnings applies to this period of
unemployment. Past loss of earnings is fully attributed to the accident.
Future loss of earnings
b. The plaintiff will enter the labour market 3 to 5 years from now and will
earn in line with the 25th percentile of the demographics (Northern Cape,
informal sector, male, black African and unskilled) for the reasons above
no further progression is foreseen, but he will earn inflationary increases
until retirement age of 65.
c. He would be at significant risk of not even earning at the suggested level
or sustaining this level of earnings until the retirement age of 65. Therefor
it is proposed that a significantly higher than normal contingency is
applied.
[18] The Actuary, GW Jacobson, calculated the loss of earnings of the plaintiff,
taking into account the postulations of the Industrial Psychologist. The
calculation is dated 11 April 2025. Total, past loss after applying 5 %/0%
contingencies and future loss after applying 20%/40% contingencies came to
the amount of R 6 376 275.00
[19] The Court is satisfied that the amounts and suggested contingency deductions
is justified in the circumstances. The Court is however not convinced on the
argument of the counsel for the plaintiff in respect of the costs on scale C and
in this regard the Court will award scale B in respect of costs for counsel.
Contingency fee agreement
[20] The counsel for the plaintiff , then addressed the Court on the validity of the
contingency fee agreement . The contingency fee agreement in this instance
was entered into between the plaintiff and the attorney on 12 September 2020.
It provides inter alia in paragraph 6.1 thereof:
“The Attorney shall be entitled to a success fee of 25% (excluding VAT) of the
full monetary value of the claim, provided that the success fee shall not exceed
the Attorney’s normal fee by more than 100% or exceed 25% (excluding VAT)
of the total amount awarded or any amount obtained by Client in consequence
of the proceedings, whichever is the lesser.”
[21] The Contingency Fee Act 66 of 1997 (“CFA”) provides:
In section 1 thereof:
“’normal fees’ , in relation to work performed by a legal practitioner in
connection with proceedings, means the reasonable fees which may be
charged by such practitioner for such work, if such fees are taxed or assessed
on an attorney and own client basis, in the absence of a contingency fees
agreement”
in Section 2 thereof:
“2 Contingency fees agreements
(1) Notwithstanding anything to the contrary in any law or the common law, a
legal practitioner may, if in his or her opinion there are reasonable prospects
that his or her client may be successful in any proceedings, enter into a n
agreement with such client in which it is agreed-
(a) That the legal practitioner shall not be entitled to any fees for services
rendered in respect of such proceedings unless such client is
successful in such proceedings to the extend set out in such
agreement;
(b) That the legal practitioner shall be entitled to fees equal to or, subject
to subsection (2), higher than his normal fees, set out in such
agreement, for any such services rendered, if such client is
successful in such proceedings to the extend set out in such
agreement.
(2) Any fees referred to in subsection (1) (b) which are higher than the normal
fees of the legal practitioner concerned (hereinafter referred to as the
‘success fee’), shall not exceed such normal fees by more than 100 per cent:
Provided that, in the case of claims sounding in money, the total of any such
success fee payable by the client to the legal practitioner, shall not exceed
25 per cent of the total amount awarded or any amount obtained by the
client in consequence of the proceedings con cerned, which amount shall
not, for purposes of calculating such excess, include any costs.”
[22] It was argued by Counsel for the plaintiff that the CFA does not impose any
conditioning limiting the right to enter into a contingency fee agreement on any
party with regard to his/her status as a registered or unregistered VAT vendor.
Any interpretation of the CFA where VAT is concerned being included in the
25% limitation will impact negatively and unfairly on vat registered vendor (legal
practitioner) and would have no effect on unregistered legal practitioners . It
could therefor never have been the intention of the legislator that the 25%
limitation on the success fee provided for in section 2(2) of the CFA should
include VAT.
[23] It is note worthy at this juncture to add that the CFA is completely silent as to
the VAT registration status of any legal practitioner allowed to enter into a
contingency fee agreement.
[24] The issue before the Court in regard to the Contingency fee agreement as
argued by Counsel for the plaintiff is w hether the 25% cap (“the 25% cap”) on
a success fee provided for in section 2(2) of the CF Act, includes value -added
tax (“VAT”) in terms of the Value -Added Tax Act 89 of 1991 ( “the VAT Act” ).
Put otherwise, is a legal pra ctitioner entitled to charge as his or her fees 25%
of the capital amount recovered for his or her client, plus 14% VAT, in terms of
a contingency fees agreement concluded with the client under the CF Act. 1
According to Counsel this is to be referred to as the “primary inquiry”;2
[25] The value of the supply of goods or services must be established in accordance
with section 10 of the VAT Act, which provides in this regard as follows:
a. Section 10(2):
“The value to be placed on any supply of goods or services shall,
save as is otherwise provided in this section, be the amount of
the consideration for such supply, as determined in accordance
with the provisions of subsection (3), less so much of such
amount as represents tax: Provided that …”.
b. Section 10(3)(a):
“For the purposes of this Act the amount of any consideration
referred to in this section shall be – (a) to the extent that such
consideration is a consideration in money, the amount of the
money; and (b) to the extent that such consider ation is not a
consideration in money, the open market value of that
consideration”.
[26] The statutory duty to account and pay the VAT liability to SARS (the amount by
1 This is how the issue was formulated by Mojapelo DJP in the Honourable Judge’s judgement in
the Gauteng Local Division of the High Court, Johannesburg, in the matter of Masango v RAF
2016 (6) SA 508 (GJ) (“the Masango judgment”). The only difference being that at that stage the
standard rate for VAT was still 14%. The Honourable Ms Justice Van der Schyff J in her recent
judgment in the matter of Martin Eddie Van der Westhuizen v RAF delivered on 29 July 2024
under case number 2 1947/2022 (“the Van der Westhuizen judgment” ), found that she is based
on the principle of stare decisis, bound to follow the principle in the Masango judgment.
2 Van der Schyff J in the Van der Westhuizen judgment at paragraph 4 further crystallized this
issue where she held that: “ I am of the view that the question is more nuanced. No issue arises
if the payment, including the VAT charged on fees, remains within the 25% cap provided for in
if the payment, including the VAT charged on fees, remains within the 25% cap provided for in
section 2(2) of the [CF Act]. The actual question is whether the levying of VAT that renders
payment by a client in terms of a contingency fee agreement to exceed the statutorily decreed
25% of the total amount awarded or any amount obtained by the client in consequence of the
proceedings concerned is in line with the provisions of the CFA.”
which the output tax exceeds the input tax) is imposed on a VAT vendor in terms
of section 28(1) of the VAT Act. Section 28(1) provides as follows:
“Every vendor shall, within the period ending on the twenty -fifth day of
the first month commencing after the end of the tax period relating to
such vendor or, where such tax period ends on or after the first day and
before the twenty-fifth day of a month, within the period ending on such
twenty-fifth day - (a) furnish the Commissioner with a return reflecting
such information as may be required for the purpose of the calculation of
tax in terms of s ection 14 or 16; and (b) calculate the amount of such
tax in accordance with the said section and pay the tax payable to the
Commissioner or calculate the amount of any refund due to the vendor.”
[27] Section 64 of the VAT Act provides as follows:
“64 Prices deemed to include tax
(1) Any price charged by any vendor in respect of any taxable supply of
goods or services shall for the purposes of this Act be deemed to include
any tax payable in terms of section 7 (1) (a) in respect of such supply,
whether or not the vendor has included tax in such price.
(2) The amount of any deposit payable to or refundable by a vendor in
respect of a returnable container shall be deemed to include tax.”
[28] Section 65 of the VAT Act provides as follows:
“65 Prices advertised or quoted to include tax [my emphasis]
Any price advertised or quoted by any vendor in respect of any taxable
supply of goods or services shall include tax and the vendor shall in his
advertisement or quotation state that the price includes tax, unless the
total amount of the tax chargeable und er section 7 (1) (a), the price
excluding tax and the price inclusive of tax for the supply are advertised
or quoted by the vendor: Provided that-
(i) where the price inclusive of tax and the price excluding tax for a
supply are advertised or quoted, both prices shall be advertised or
quoted with equal prominence and impact;
(ii) price tickets on goods need not state that the prices include tax
if this is stated by way of a notice prominently displayed at all
entrances to the premises in which the enterprise is carried on and
at all points in such premises where payments are effected;
(iii) the Commissioner may in the case of any vendor or class of
vendors approve any other method of displaying prices of goods or
services by such vendor or class of ven dors or, where the rate of
tax is increased or reduced, the date on which the increased or
reduced rate of tax takes effect;
(iv) a vendor may not state or imply that any form of trade, cash or
any other form of discount or refund is in lieu of the tax chargeable
in terms of section 7 (1) (a).
(iv) added by s. 174 of Act 60 of 2001.]
[S. 65 amended by GN 2695 of 8 November 1991 and by s. 37 of
Act 136 of 1992.]”
[29] I pause at this juncture to caution that care must be taken as to the applicability
of Sectio n 65 to attorneys and advocates , as they do not advertise per se .
furthermore they must adhere to specific criteria to ensure that their advertising
falls within the ambit of professional conduct and does not breach the rules of
the relevant professional societies or the Legal Practice Council.
[30] Section 2(2) of the CFA does not expressly say whether VAT is included in the
25% cap or not. To arrive at a conclusion regarding the primary issue, either
way, this Court therefore needs to interpret the section.
[31] It was argued by Counsel that i n interpreting section 2(2) of the CF Act, this
Court ought to approach the issue in line with the principles laid down in Natal
Joint Municipal Pension Fund v Endumeni Municipality where the Supreme
Court of Appeal held that:3
“The present state of the law can be expressed as follows: Interpretation
is the process of attributing meaning to the words used in a document,
be it legislation, some other statutory instrument, or contract, having
regard to the context provided by reading the particular provision or
provisions in the light of the document as a whole and the circumstances
attendant upon its coming into existence. Whatever the nature of the
document, consideration must be given to the language used in the light
of the ordinary rules of grammar and syntax; the context in which the
provision appears; the apparent purpose to which it is directed and the
material known to those responsible for its production. Where more than
one meaning is possible each possibility must be weighed in the light of
all these factors. The process is objective, not subjective. A sensible
meaning is to be preferred to one that leads to insensible or
unbusinesslike results or undermines the apparent purpose of the
document.”
[32] The Court was further referred to the matter of Capitec Bank Holdings Limited
and another v Coral Lagoon Investments 194 (Pty) Ltd and others 2022 (1) SA
100 (SCA) the Court with reference to Endumeni held inter alia as follows at
paragraph 25:
“The much-cited passages from Natal Joint Municipal Pension Fund v
Endumeni Municipality (Endumeni) offer guidance as to how to approach
the interpretation of the words used in a document. It is the language
used, understood in the context in which it is used, and having regard to
the purpose of the provision that constitutes the unitary exercise of
interpretation. I would only add that the triad of text, context and purpose
should not be used in a mechanical fashion. It is the relationship between
the words used, the concepts expressed by those words and the place
of the contested provision within the scheme of the agreement (or
instrument) as a whole that constitute the enterprise by recourse to
instrument) as a whole that constitute the enterprise by recourse to
which a coherent and salient interpretation is determined. As Endumeni
emphasised, citing well-known cases, '(t)he inevitable point of departure
is the language of the provision itself'.”
3 Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) para 18 at
603F.
[33] Counsel also referred the Court to paragraph 39 where the following was
stated, which clarified that in interpretation “context is everything”:
“[39] In the recent decision of University of Johannesburg v Auckland
Park Theological Seminary and Another (University of Johannesburg),
the Constitutional Court affirmed that an expansive approach should be
taken to the admissibility of extrinsic evidence of context and purpose,
whether or not the words used in the contract are ambiguous, so as to
determine what the parties to the contract intended. In a passage of
some importance, the Constitutional Court sought to clarify the position
as follows:
'Let me clarify that what I say here does not mean that extrinsic evidence
is al ways admissible. It is true that a court's recourse to extrinsic
evidence is not limitless because "interpretation is a matter of law and
not of fact and, accordingly, interpretation is a matter for the court and
not for witnesses". It is also true that "to the extent that evidence may be
admissible to contextualise the document (since "context is everything")
to establish its factual matrix or purpose or for purposes of identification,
one must use it as conservatively as possible". I must, however, make it
clear that this does not detract from the injunction on courts to consider
evidence of context and purpose. Where, in a given case, reasonable
people may disagree on the admissibility of the contextual evidence in
question, the unitary approach to contra ctual interpretation enjoins a
court to err on the side of admitting the evidence. There would, of course,
still be sufficient checks against any undue reach of such evidence
because the court dealing with the evidence could still disregard it on the
basis that it lacks weight. When dealing with evidence in this context, it
is important not to conflate admissibility and weight.'” (our emphasis)
[34] In Commissioner for the South African Revenue Service v Langholm Farms
[34] In Commissioner for the South African Revenue Service v Langholm Farms
(Pty) Ltd4 the SCA stated with reference to Commissioner SARS v Bosch5 that
the approach in Endumeni to the interpretation is equally applicable to a taxing
statute being that: “A statute must be interpreted in line with ordinary rules of
grammar and syntax taking cognisance of the context and purpose thereof”.
4 Commissioner for the South African Revenue Service v Langholm Farms (Pty) Ltd
(1354/2018) [2019] ZASCA 163 (29 November 2019).
5 Commissioner SARS v Bosch (394/2013) [2014] ZASCA 171 (19 November 2014).
[35] Counsel argued that it was clear that the Court in Masango misinterpreted the
CFA. The Court was then referred in detail to the Masango matter starting with
paragraph 13 thereof which reads:
“[13] In a se nse the validity of the clause depends on the meaning of ‘fees’,
‘normal fees’ and ‘success fees’, as used in the CFA. The term ‘fees’ and its
derivatives ‘normal fees’ and ‘success fees’ are not defined in the CFA. One
should therefore consider the ordinary meaning of these concepts.”
This is clearly patently wrong as normal fees is defined in section 1 of the CFA.
[36] The Masango judgment in paragraph 27 held that:
“For purposes of the VAT question and the VAT Act the word ‘fees’
appears to have the same meaning as ‘price’. Normal fees and success
fees will have meanings that correspond to normal price and success
price respectively”.
[37] There are several sections in the VAT Act where the term “ fee” is used.
However, upon a reading of these sections it is clear that the VAT Act does not
regard fees and price to be the same thing. 6 The Masango judgment did not
consider that a fee is what is charged for the rendering of services by the service
provider, but that the fee has a price: It was explained by Counsel that b oth
Attorney A and B charge a fee. But, for example, attorney A’s hourly fee is priced
at R2,000 per hour and attorney B’s hourly fee is priced at R2,500 per hour.
They both charge a fee, but their price per hour differs. Price does not have to
be stated as an amount of money – in the CFA it is set by percentage - i.e. the
price of the fee may not exceed 25%. 7 This means that the price of the fee is
6 See for instance section 2(1) (financial services) of the VAT Act ; section 12 (exempt supplies);
section 17 Permissible deductions in respect of input tax; and section 6 7 (Contract price or
consideration may be varied according to rate of value-added tax).
7 Bank charges and fees are % based, Sale of properties are % based, etc.
anything between in excess of nil up to and including 25% the attorneys can
agree with their clients – they all agree fees – but at different prices. Thus, it
was argued by Counsel that the court could not equate success fee or normal
fee with success price or normal price – these are not synonyms.
[38] The Masango judgment found that the VAT registered vendor pays the VAT.
This is not correct according to Counsels argument . In its analysis of the VAT
Act, in particular sections 7(1)(a) and 7(2), the court in the Masango judgment
found that:
a. At 29: “The tax is levied on the supply by the vendor and not on the
acquisition of goods or services by the consumer . The vendor is the
supplier.”
b. At 30: “The tax levied is to be paid by the supplier. It ‘shall be paid by
the vendor’;
c. At 34: “Similarly in terms of s 7(2) VAT is paid by the vendor. VAT is
therefore a tax on the legal practitioner and not on the client .
Consequently, the legal practitioner pays the tax to the South African
Revenue Service (SARS)”.
[39] Counsel continued that t he Court in the Masango judgment, in its findings
seems to have confused the concepts of the payment of VAT on supplies over
to SARS, with whom bears the cost of the VAT so charged:
a. The registered vendor charges output VAT on its taxable supplies. After
reconciliation with the allowable input VAT, it pays the net amount
(“Valued added ” per the Metcash8 case) over to SARS, or claims a
refund from SARS if there is a shortfall.
b. The registered vendor is always obliged and mandated in terms of the
VAT Act to charge and recover VAT from the recipients of its goods and
services in addition the value of its supplies.9
c. As such, the court in the Masango judgment did not consider what the
Constitutional Court stated in the Metcash case supra, namely that in a
sense the vendor is an “ involuntary tax collector ”. Put otherwise, the
legal practitioner is an involuntary tax collector, recovering / collecting
the VAT from the client for SARS.
d. In this regard, the court in the Masango judgment also for example failed
to recognise that VAT vendors can be registered on the cash basis. 10
This means that VAT is paid over to SARS only to the extent that the
taxable supply has been paid by the recipient (whether registered vendor
or not).
e. The vendor registered on the cash basis is probably the best example,
since it provides the most simplified explanation of the VAT system and
8 Metcash Trading Ltd v Commissioner South African Revenue Services and Another 2001 (1) SA 1109 CC
9 The VAT Act in sections 64 and 65 explains how the registered vendor is to go about this.
10 Section 15(2)(b) of the VAT Act.
that the VAT burden is not designed to be carried and paid by a
registered vendor who makes the supply, but by the recipient. In such an
instance, the recipient first have to pay the cash basis registered vendor
for the supply, before such supplying vendor incurs the obligation to
account for and pay over the pro-rata VAT to SARS.
f. The court in the Masango judgment was clearly wrong when it stated
that the registered vendors who makes the taxable supplies pay the
output VAT it charged on supplies it makes.
g. Even if the registered vendor making the taxable supply, is registered on
the invoice basis, the vendor at most, and in line with the “involuntary tax
collector function”, “finance” the VAT for a while until the recipient pays.
But, if the supply is not paid by the recipient, and for instance becomes
irrecoverable, the registered vendor is allowed to make an adjustment to
the output VAT. It can, if already paid to SARS, effectively recover it from
SARS. In the result, the vendor does not pay the VAT, it always has this
recovery option from the fiscus.11
[40] Counsel contended that the matter of Price Waterhouse Meyernel v
Thoroughbred Breeders’ Association of South Africa 2003 (3) SA 54 (SCA) is
not applicable because:
a. The Masango judgment at paragraph 51 refers to the judgment of the
11 See section 22 of the VAT Act. The same principle applies when taxable supplies are cancelled
or reduced for whatever reason. A tax credit is issued by the supplier adjusting the output VAT.
SCA in the above matter and quotes in this regard with approval
paragraph 21 of the above judgment.
b. However, the PwC judgment is not applicable regarding the issues
relevant for purposes of the present matter.
c. That judgment concerned whether in taxing a bill of cost the successful
party may claim the input VAT it paid as part of the costs on taxation.
d. Where the SCA refers to vendor in that context it is a reference to the
recipient vendor. Not the vendor making the supply.
e. In any event, as appears from paragraph 22 of the PwC judgment it is
clear that the SCA’s view on the matter is tha t for those purposes it is
unnecessary for it to concern itself with the statutory requirements for
input VAT deductibility.
[41] It was further Counsel’s argument that the client bears the cost of VAT and the
Court in the Masango judgment did not consider who bears the cost for VAT at
all. It appears as if the Court also ignored attorneys’ obligation to levy VAT on
taxable supplies. The court in the Masango judgment also did not consider the
explanation in the Metcash case that: “The basic idea of VAT is that it is
calculated on the value of each successive step as goods move from hand to
hand along the commercial production and distribution chain from their original
source to their ultimate user”.
[42] The question that is thus relevant in the VAT system is who the ultimate user is.
In the present case it is obviously the client who is not a registered vendor. In
this regard it is important to note that the ultimate user of goods or services can
either be a registered vendor, or an unregistered vendor in terms of the VAT
Act. Counsel contended i n this regard, the Court in the Masango judgment’s
finding that the obligation to levy VAT is determined by who the vendor is, and
not by the fact that a recipient acquires something, is flawed. A vendor making
a taxable su pply is, in general, not concerned with the recipient’s VAT
registration status when it has to levy and account for VAT or not.12 It in general
terms simply has no bearing on the vendor’s obligation to levy VAT and the
amount thereof.
[43] With regards to who the ultimate user is and the person’s VAT registration
status, the following was said in Metcash case supra: “As goods move along
the distribution chain, everyone making up the sales chain is first a recipient,
then a supplier. The Act calls these recipients/suppliers, who are engaged in
enterprises, vendors”
[44] Thus, Counsel continued, when the recipient of a supply from a registered
vendor, is not a registered vendor, or the service is not received in the
furtherance of an enterprise, the VAT system ends at that recipient. On the other
hand, as long as the recipient is a registered vendor, the VAT system continues.
For example, a registered vendor’s legal practitioner enters into a 25% cap
contingency fee agreement with a registered vendor client, on the basis that the
12 It excludes certain specific zero rated and exempt supplies, that are not relevant for present
purposes.
fee excludes VAT.13 Then the legal practitioner would levy VAT on the 25%
capped fee as output VAT. The client would have to pay the VAT on the 25%
capped fee as input tax. However, the legal practitioner will have to pay the
output VAT over to SARS. On the other hand, the client may reclaim the input
VAT from SARS. The net VAT effect of the transaction for the two parties are
therefore zero. This is because the client is not the end user. Where the client
is the end user, it will have an effect on the VAT implications, but it should not
have an impact on the fees.
[45] The Court in the Masango matter the Court misinterpreted that VAT is an
indirect tax. Indirect taxes are levied on transactions (goods and services).
Usually these taxes are co llected by an intermediary and not paid to SARS
directly by the person who bears them. The best example of an indirect tax is
VAT. Indirect taxes do not take individual circumstances into account.
[46] Counsel explained this as follows:
a. Thus, simply stated, t he 25% that an attorney as a registered vendor
charge to his or her client, is never a cost to the registered recipient. The
registered recipient in terms of the VAT system, recovers it from the
output VAT charged in its taxable supplies. The fee is not increased with
VAT.
b. The Court in the Masango judgment when considering the fee in excess
13 We accept that this may not usually be the scenario in RAF matters. However, the CF Act applies
to all matters not specifically excluded. Its provisions ought not to be interpreted differently for
RAF and other matters.
of the 25% cap, erred when it disregarded the simple fact that VAT
accrues to SARS if levied by a registered vendor . This is despite it
concluding that the relationship between registered vendor and SARS is
that of debtor and creditor.
c. The non-registered vendor who receives the service from the registered
vendor, will be charged VAT, and as such it is a cost to the recipient (as
the ultimate recipient). If the price of the fee is 25% plus VAT, the cost to
the recipient exceeds 25%. But, the CFA is not concerned with the cost
to the recipient, but the accrual of the fee to the supplier (registered
vendor or not).
d. The question thus is whether the VAT levied by the registered vendor
unconditionally accrues to him: The answer is no – the registered vendor
must account to SARS that it owes the VAT so charged or collected, 14
and include same in the reconciliation of output and input VAT and either
pay to SARS or claim a refund – the origin of the debtor creditor
relationship.
e. It is therefore obvious that the VAT portion of the fee never accrues to
the legal practitioner as VAT registered vendor, in the sense that he is an
involuntary tax collector – he cannot retain the VAT but must pay same
over to SARS. Alternatively, such output reduces any refund due to it by
14 Grayston Technology Investment (Pty) Ltd and another v The State , case number
A225/2014 [2016] 4 All SA 908 (GJ) dated 23 September 2016, at paragraph 50 to 55 .
SARS.
[47] According to Counsel the Court in the Masango judgment does not only conflate
the concepts of fee / price, but also got the value to be placed in terms of section
10(2) of the VAT Act on the supply of goods and services wrong in its equation.
The Court found at paragraph 35 that: “What the client pays to the legal
practitioner (vendor) is the “price” (fee). The client does not pay VAT, although
the price may be structured to account for the VAT payable by the legal
practitioner (vendor) to SARS. Regardless of how the price is structured or
quoted, the final price charged by a vendor is inclusive of VAT. This court
accordingly agrees with Mr C. Badenhorst SC, for the first amicus curiae, that
it is a common misnomer to state that a client or customer pays VAT ”.
Inexplicably, the court then found at parag raph 36 of the Masango judgment
that: “The foregoing becomes even clearer when one has regard to section
10(2) of the VAT Act. The section provides: “(2) The value to be placed on any
supply of goods or services shall, save as is otherwise provided in this section,
be the amount of the consideration 15 for such supply, as determined in
accordance with the provisions of subsection (3), less so much of such amount
as represents tax………”.
[48] Counsel continued that i n order to consider the Court’s comments, it i s
necessary also to consider subsection 10(2)(ii) which reads as follows:
15 Consideration is defined as “consideration, in relation to the supply of goo ds or services to any
person, includes any payment made or to be made (including any deposit on any returnable
container and tax), whether in money or otherwise, or any act or forbearance, whether or not
voluntary, in respect of, in response to, or for the inducement of, the supply of any goods or
services, whether by that person or by any other person, but does not include any payment made
by any person as a donation to any association not for gain:…….”
“Provided that: (ii) where the portion of the amount of the said consideration
which represents tax is not accounted for separately by the vendor, the said
portion shall be deemed t o be an amount equal to the tax fraction of that
consideration.” Thus, it was Counsel’s contention that the value of the supply
of goods or a service, is always the amount excluding VAT, which the legal
practitioner charges. Thus, the value of a supply, wh ether it is made by a
registered or a non-registered vendor – is always determined in the same way
(off course in respect of the same supply). If not, the value of a supply is
dependent on a vendor’s VAT registration.
[49] Counsel then referred the Court to se ctions 64 and section 65 of the VAT Act
and argued t he Court makes much of these sections, but it must be seen
against the Court’s confusion that fee equates to price. The phrase whether or
not the vendor has included tax in such price in section 64(1) was added to
section 64(1) by section 36 of the Taxation Laws Amendment Act 139 of 1992.
According to clause 36 of the Explanatory Memorandum this amendment:
“negatives any suggestion that where tax is payable, it is not recoverable from
the vendor because he has not included it in his price.” It was clearly not meant
to prevent contracting parties from providing for the payment of VAT (in addition
to the price), but to prevent a vendor from the claiming that he is not liable for
VAT where VAT has not been included in the (negotiated price). 16Section 64(1)
deals with prices charged by vendors. However, it would be non sensical that if
parties agreed to a price and state that the price excludes VAT – of say R100
excluding VAT, and on settlement, the consideration given is R115, (adding R15
16 1996 (59) THRHR, page 704: To Tax or not to tax: Vat is the question”. RCH Franzen, BA
van der Merwe
VAT(15%)), that SARS keeps them to R100 as consideration (i.e. including
VAT) – thus collecting VAT as 15/115 of R100 as output VAT, instead of 15/115of
R115 as output VAT. The second interpretation is correct and applied by SARS.
Section 65 is there to protect the public against incorrect pricing and surprises
when they have to pay for goods and services, or enter into contracts for goods
and services if not yet paid. It prevents unscrupulous vendors of adding or
purporting to add VAT to goods and supplies normally after contracting i.e. when
the recipient is bound. The important phrase in the section is advertised or
quoted, thus before any agreement is entered into. What the Court considered
in the Masango judgment was not a quote or advertisement, but an agreement
between parties dealing at arm’s length expressly agreeing that the fee
excludes VAT. Section 65 simply does not apply to agreements, which follows
quotes / advertisements. The deemed inclusion is only ap plied if the price is
fixed one-sidedly, or where the agreement between the parties is silent on VAT.
If an agreement expressly provides that VAT is excluded, that cannot simply be
ignored. Counsel submitted that the requirements of section 65 in respect o f
advertisements and agreements are superfluous when it comes to agreements,
where the parties have already agreed on the price and the exclusion or the
inclusion of VAT. No reliance can be placed on these sections of the VAT Act to
attack the agreement for any reason – the VAT consequences are clearly
spelled out: the price excludes VAT. In addition to the above, the Court makes
an important conflicting statement at paragraph 34 – last sentence where it
held: “The quoted price (fees) is deemed to include VAT, unless the price is
broken down into its components in terms of section 65 of the VAT Act”. The
above is repeated at paragraph 38 last sentence: “The consumer only pays a
price (fee) which is always inclusive of VAT, unless the three compon ents
stipulated in section 65 are stated separately” . Thus, if the legal practitioner
would just have broken down the fees, it would not include VAT. The argument
actually falls flat here. It is illogic, and irrational, not a business -like
interpretation.
[50] Counsel contended that if the Masango judgement is followed in respect of the
issue whether VAT must be included in the success fee, a non-registered VAT
vendor will always get the maximum 25% cap. A registered VAT vendor is
unfairly and for no reason lim ited to a maximum of 21,73913% (25X15/115) -
this is not a business-like interpretation. Besides it is also a business -like to
reduce the fees /value of the service by charging VAT. The issue is that the VAT
concept is about value and not price. See in this regard for instance the article
by T Emslie SC in “The Taxpayer”.17 Here the author states that the 25 per cent
maximum fee that may be charged is the amount of the fee exclusive of VAT,
because if the position were otherwise, the 25% maximum success fee
chargeable by an attorney who is not a VAT vendor would be more than that
chargeable by one who is a VAT vendor – a result which would disturb the
tranquillity of even the most phlegmatic interpreter of legislation.
[51] A vendor who deals with a claim, and registers for VAT during the process and
charges 25%, sits with an invalid agreement after his VAT registration as he is
now entitled to 25% per agreement, but his VAT charge makes the agreement
invalid – this is not a business-like interpretation. The alternative to the
17 The Taxpayer, September 2015 at page 164.
preceding scenario is that the vendor has to agree that his fee drops to
21,73913% - this is not a business-like interpretation.
[52] The Court ignores that a vendor can recover input VAT, thus no cost to him, but
the attorney who is entitled to max 21,73913% per the court’s interpretation,
loses the difference to 25% (15%) in a scenario where the VAT on the fee comes
to nil for the recipient since it claims it as an input. This is not a business-like
interpretation. If the Court’s interpretation in the Masango judgment is applied,
SARS and the legal practitioner will be out of pocket and the client would get
an unintended discount, but only if the legal practitioner is registered for VAT.
[53] In the result, Counsel submitted, the Masango judgment’s interpretation of the
VAT Act is flawed. The Van der West huizen judgment, which followed it, is
therefore equally flawed. The approach the Masango judgement followed in so
far as the interpretation of section 2(2) of the CF A is concerned, was not in
accordance with Endumeni. The Court in the Van der Westhuizen judgment
equally failed to follow Endumeni. In doing so, those Courts reached incorrect
findings. The context in which the definition of normal fees must be understood,
is that if a legal practitioner’s fees are taxed or assessed on an attorney and
own client basis, the taxation is performed in accordance with the provisions of
the rules. The context in which fees in section 2(2), read with the definition of
normal fees should be understood, is therefore rule 70(3A) of the rules. It
provides as f ollows: “Value added tax may be added to all costs, fees,
disbursements and tariffs in respect of which value added tax is chargeable.” It
accordingly follows that VAT may be added to a legal practitioner’s “normal fee”.
A normal fee does not include VAT. Counsel therefore submitted that in terms
of the CFA, a “success fee” also does not include VAT. It may be 100% of the
normal fee.
[54] In the premises, it is submitted by Counsel, that the provision in the contingency
fee agreement limiting the success fee to the 25% cap excluding VAT, is not
contrary to the provisions of the CF A. The Court in the Van Der Westhuizen
judgment also failed to consider the definition of a “ normal fee” in section 1 of
the CFA, read with the provisions of rule 70 (3A). It was in any event not bound
to follow the Masango judgment in view of the stare decisis principle because
that judgment was misconstrued.18
Consideration of Contingency fee agreement and argument
[55] Having considered the caselaw and the relevant statutes, I find myself in broad
agreement with the submissions made by Counsel. It is my view that the Court
in the matter of Masango is misconstrued on the interpretation of the CFA and
more specifically section 2(2)(b) thereof being interpreted to require the
success fee which is capped to 25%, to include VAT.
[56] This is specifically relevant taking into account that in the Commissioner for the
South A frican Revenue Service v Langholm Farms (Pty) Ltd 19 the SCA
confirmed the approach in Endumeni in respect of interpretation as being: “A
statute must be interpreted in line with ordinary rules of grammar and syntax
taking cognisance of the context and purpose thereof”
18 Journals Collection, Juta's/South African Law Journal, The (2000 to date)/The South African Law
Journal/2018 : Volume 135/Part 1 : 1 - 203/Articles/Whose decisis must we stare?
19 Commissioner for the South African Revenue Service v Langholm Farms (Pty) Ltd (1354/2018)
[2019] ZASCA 163 (29 November 2019)
[57] The CFA has the purpose to legalise and regulate agreements between legal
practitioners and their clients. CFA was creat ed to promote access to justice
and the Courts by individuals that can not afford the costs of litigation upfront.
In return the attorney would be entitled to a higher normal fee or a success fee,
whichever is the lesser as an incentive to ‘fund’ litigatio n with the hope of
success.
[58] It is my view that it could not have been the purpose of the legislator to
distinguish between a legal practitioner that is VAT registered and one that is
not, the former having to pay the VAT from his fees or profits and the l atter
where the client will pay the VAT. This would have the effect that where the
former the legal practitioner would be the end user and the latter the client to
be the end user.
[59] The VAT Act came into operation during 1991 and the CFA came into operation
some six years later, during 1997. It follows that the legislator would then have
kept the VAT Act in mind, especially in circumstances where the VAT could be
increased from time to time by publication in the Government Gazette. At the
time the CFA came into operation the VAT was 14%. Therefor in ideal
circumstances where a legal practitioner may be entitled to the success fee as
being the lesser between the legal practitioner’s normal fee time 100% and 25%
of the total amount sounding in money obtained for the client as a consequence
of the litigation, then in that event the legal practitioner that is VAT registered
would be entitled to the 25% less 14% whereas the legal practitioner that is not
VAT registered would be entitled to the full 25%. This would defeat the purpose
of the CFA.
[60] It can not be taken for granted that a legal practitioner would almost never be
entitled to the 25% as per the CFA because it is unlikely that the normal fees
times 100% would rarely exceed the 25%. In many instances the amount
times 100% would rarely exceed the 25%. In many instances the amount
obtained could be as low as R100 000.00 even though litigation had been
protracted over several years. In such instance the 25% would be R 25 000.00
which the legal practitioner would have to take as being lesser than his normal
fees times 100%. This would have the effect that the legal practitioner that is
VAT registered would walk away w ith R25 000.00 minus 15% which equals
R 21 250.00, as opposed to the legal practitioner that is not VAT registered,
who would be entitled to the full R 25 000.00. The effect thereof would be that
the legal practitioner that is VAT registered, would in effect be ‘punished’ for not
only being an involuntary tax collector, but also for entering into a contingency
fee agreement to allow access to justice to individuals that cannot afford the
cost of litigation upfront.
[61] I agree with the argument of Counsel, that should it be that the CFA envisioned
the inclusion of VAT on the 25% and a legal practitioner entered into a
contingency fee agreement and became VAT registered during the process of
litigation, then in that event, the contingency fee agreement so enter ed into
would become invalid because it did not include VAT in the fees or 25%. This
would defy the purpose of the CFA and the ends of justice.
[62] I am of the view that the CFA specifically remained silent on the issue of VAT
because it was never the intenti on of the legislator to include VAT in the 25%
cap it induced in section 2(2)(b).
[63] I do not agree with the interpretation of the CFA in the Masango judgment as I
am of the view that such interpretation does not accord with the interpretation
as discussed herein above and is clearly misconstrued. I find that it was not the
intention of the legislator that VAT be included in the 25% cap placed on the
success fee which a legal practitioner is allowed of the total amount awarded
or any amount obtaine d by the client in consequence of the proceedings
concerned, which amount shall not, for purposes of calculating such excess,
include any costs.
Order
[64] In the premises and in light of the above I make the following order:
[1] The plaintiff’s application in terms of Rule 38(2) is granted as per the
prayers of the notice of motion and supporting affidavits uploaded on
Caselines section 27;
[2] Merits were previously finalised between the parties that the
defendant is 100% liable for the plaintiff’s agreed or proven damages;
[3] The defendant will pay the plaintiff an amount of R 6 432 073.00 (Six
million, four hundred and thirty-two thousand and seventy-three rand)
in full and final settlement of the plaintiff’s claim for Loss of Earnings,
payable into the trust account of the attorneys of record for the plaintiff
with the following details:
Account holder: Ehlers Attorneys
Bank Name: FNB
Branch Code: 261550
Account Number: 62024226799
[4] the claim in respect of General Damages is separated in terms of the
provisions of Rule 33(4) and postponed sine dies . The plaintiff is
permitted to refer the issue of General damages to the HPCSA without
the input and/or assistance of the defendant in ord er to obtain final
outcome/resolution;
[5] The defendant shall be liable for interest on the above-mentioned
amount, at the prevailing rate of interest, as determined from time to
time, in terms of the Prescribed Rate of Interest Act, 55 of 1975, as
amended, per annum, from and including 15 days after date of this
Order, up to and including date of payment thereof;
[6] The defendant is ordered to furnish the Plaintiff with an undertaking,
in terms of Section 17(4)(a) of the Road Accident Fund Act 56 of 1996,
for the costs of administration of any proposed trust, accommodation
in a hospital or nursing home or tre atment of or rendering of service
or supplying of goods to the plaintiff after such costs have been
incurred and on the proof thereof, relating to the injuries sustained by
the plaintiff in the accident which occurred on 14 August 2020;
[7] The defendant is ordered to pay the plaintiff’s taxed or agreed party
and party costs on the High Court Scale, in accordance with Rule 70
of the High Court, subject to the discretion of the taxing master, which
costs may include, but will not be limited to the following:
[7.1] the reasonable taxed fees for consultation with the experts
mentioned below, together with delivery of expert bundles
inclusive of traveling and time spent traveling to deliver
such bundles, preparation for trial, qualifying and
reservation fees (if any and on proof thereof), including the
costs of all consultations (inclusive of telephonic
consultations) with Counsel and/or plaintiff’s attorney and
the costs of all consultations, as well as costs of the
reports, addendum reports, full day fees for Court
attendance (if at Court) of the following experts:
[7.1.1] Dr P Engelbrecht – Orhopeadic Surgeon;
[7.1.2] Dr Moja – Neurosurgeon;
[7.1.3] Dr JA Smuts – Neurologist;
[7.1.4] I Jonker – Neuropsychologist;
[7.1.5] Dr M Naidoo - Psychiatrist;
[7.1.6] Dr Seabi – Educational Psychologist;
[7.1.7] Dr Wetiz – Opthalmologist;
[7.1.8] Dr Pienaar – Plastic Surgeon;
[7.1.9] Dr Fredrericks – Disability and impairment
Assessor;
[7.1.10] Kelly Cummings – Occupational Therapist;
[7.1.11] T Talmud – Industrial Psychologist;
[7.1.12] G Jacobson – Actuary.
[7.2] The costs for accommodation and transportation (as per
prescribed AA rates) of the plaintiff and/or family members,
to the medical legal examination(s) arranged on behalf of
the plaintiff;
[7.3] The costs for accommodation and transportation by JT
Transportation Services or any alternative transport
provider, for the plaintiff as well as family members to
attend Court;
[7.4] The costs for preparation of plaintiff’s bundles of
documents for trial purposes, as well as the traveling costs
(as per the prescribed AA rates), and time spent to deliver
those bundles;
[7.5] The costs for preparation of plaintiff’s bundles of
documents for experts, as well as the traveling costs (as
per t he prescribed AA rates), and time spent to deliver
those bundles and loading same onto Caselines;
[7.6] The costs of Advocate Jaco Bam shall be on scale B in
accordance with Rule 69 and Rule 70 of the High Court
Rules, briefed and appearing for trial, inc luding but not
limited to the following:
[7.6.1] preparation for trial;
[7.6.2] consultations with plaintiff attorney in respect
of preparation for trial;
[7.6.3] drafting heads of argument;
[7.6.4] day fee for 19 May 2025.09.05
[7.7] The costs of the affidavits compiled by the listed experts in
order for the plaintiff to proceed to the trial or on a default
judgment basis.
[8] The defendant is ordered to pay the plaintiff taxed and/or agreed party
and party costs within 14 days from the day the accou nt is taxed by the
Taxing Master and/or agreed between the parties.
[9] The defendant shall be liable for interest on the costs aforementioned at
the prevailing rate of interest, as determined from time to time, in terms
of the Prescribed Rate of Interest Act 55 of 1975, as amended per
annum, from and including 15 days of allocator, up to and including date
of payment thereof.
[10] It is found that the contingency fee agreement signed by the client is
valid.
M KRŰGER
ACTING JUDGE OF HIGH COURT
GAUTENG DIVISION
PRETORIA
Date of hearing: 19 May 2025
Date of judgment: 29 September 2025
For the Applicant : Adv J Bam
Instructed by : Ehlers Attorneys
For the Defendant : Elain v Zyl (no appearance)
Instructed by : State Attorney