Aircraft Completions Centre (Pty) Ltd v Rossouw and Others

JurisdictionSouth Africa
JudgeStegmann J
Judgment Date29 April 2003
Docket Number23790/2001
CourtWitwatersrand Local Division
Hearing Date29 April 2003
Citation2004 (1) SA 123 (W)

Stegmann J:

[1] This is a review in terms of Rule 48 of a taxation of a bill of costs. A question has arisen as to the basis of taxation to be applied when one party ('the costs debtor') has been ordered, or has C agreed, to pay the costs of the other ('the costs creditor') taxed on a scale as between 'attorney and own client'.

The questioned legitimacy of an agreement or order that one party is to pay the costs of another taxed as between 'attorney and own client'.

[2] In the matter of AA Alloy Foundry (Pty) Ltd v Titaco Projects (Pty) Ltd 2000 (1) SA 639 (SCA), Harms JA observed at 648G - I, para [20]: D

'It has become notable that a practice has taken root in some jurisdictions of making awards of costs on an attorney and own client scale where someone other than the own client or his privy is involved. Whether such orders are justified or justifiable in the light of decisions of this Court (such as Nel v Waterberg Landbouwers E Ko-operatieve Vereeniging 1946 AD 597) may be questionable. Further, sight appears to have been lost of the fact that they may have unexpected or unforeseeable consequences (Cambridge Plan AG v Cambridge Diet (Pty) Ltd and Others 1990 (2) SA 574 (T)).' F

[3] These remarks seem to have introduced a different approach from that which had been adopted by the Appellate Division in Cape Pacific Ltd v Lubner Controlling Investments (Pty) Ltd and Others 1995 (4) SA 790 (A) and in Sentrachem Ltd v Prinsloo 1997 (2) SA 1 (A).

[4] In Cape Pacific, at 807C - D, Smalberger JA, delivering the judgment of the majority of the Court, dealt with a G request by the appellant for the costs in the Court below to be paid 'on an attorney and own client scale'. The learned Judge referred to the distinction formulated in Cambridge Plan AG v Cambridge Diet (Pty) Ltd and Others 1990 (2) SA 574 (T) between an order that one H party pay the costs of another 'on an attorney and own client scale' and an order for such costs 'on an attorney and client scale'. The order made (at 808B, para (d)) was that the appellant's costs in the Court below should be paid 'on a scale as between attorney and client'. The legal basis for the distinction was not critically examined. I would respectfully suggest that the mere I reference to the distinction as formulated in Cambridge Plan did not make that distinction a part of the ratio decidendi of the judgment in the Appellate Division in Cape Pacific.

[5] In Sentrachem at 22B - E, Eksteen JA, in the course of delivering the judgment of the Court, discussed the question of making an order that one party pay the costs of his opponent taxed as between attorney and J

Stegmann J

'own' client as if it was an established institution in our law, to which a Judge was free to resort in the exercise of his discretion. However, there was no decision to that effect. The decision of the Court below not to make any special costs order was upheld in the Appellate Division at 24I - J.

Law Society of the Cape of Good Hope v Windvogel B

[6] Before the AA Alloy Foundry case, a Full Bench of three Judges in the CPD had refused, in the case of Law Society of the Cape of Good Hope v Windvogel 1996 (1) SA 1171 (C), to order a losing party to pay the winner's costs taxed as between 'attorney and own client', and had ordered taxation as between 'attorney and client'. The essential reason was that, when C the costs were to be paid by one party to another, the effect of either of the two orders could only be the same as the other. No purpose would therefore be served by making the confusing order that the costs should be taxed as between 'attorney and own client'. Foxcroft J, in whose judgment Selikowitz J and Brand J concurred, said: [1] D

'The suggestion that an order in these terms, namely attorney and own client, entitles a winning litigant to recover more on taxation is a recent phenomenon in the Cape Provincial Division.'

The learned Judges recognised that a different conclusion had been reached by Swart J in Cambridge Plan AG v Cambridge Diet (Pty) Ltd and Others 1990 (2) SA 574 (T), and they disagreed with the latter decision, [2] stating at the end of this passage: E

'(T)he attempt to elevate a direction that costs be paid as between attorney and own client to a different species of order from that of attorney and client cannot achieve what it purports to do. . . . (A) direction that he [the Taxing Master] treat the losing party as if he stood in the same position vis-à-vis the winner's attorney as the winner himself could never result in a F taxation on that simple basis.'

Ben McDonald Inc and Another v Rudolph

[7] Before the AA Alloy Foundry case, the practice of ordering a costs debtor to pay the costs of a costs creditor on a scale G as between attorney and 'own' client had also been questioned by van Dijkhorst J in Ben McDonald Inc and Another v Rudolph and Another 1997 (4) SA 252 (T). At 255J - 257A the learned Judge drew attention to the fact that there should not be room for any categories or scales of taxation other than 'party and party' and 'attorney and client'. He stated that Rule 70(3) of the Uniform Rules [3] H

'is based on the premise that a party who has been awarded an order for costs

Stegmann J

should be afforded ''a full indemnity for all costs reasonably incurred by him in relation to his claim or defence'' and A instructs the Taxing Master to allow ''all such costs, charges and expenses . . . necessary or proper for the attainment of justice or defending the rights of any party . . .''. Normally a successful party would therefore be fully indemnified by an order for party and party costs. . . .

There may, however, be costs which are not strictly necessary or ''proper'' (gepas) but yet are reasonable. In the absence of an order in favour of the successful party these costs are only taxable B between an attorney and his client. [4] The test of reasonableness is applied. . . .

One would have expected that these two categories are all-embracing. There should be no room for a further one. Yet we find that in the last decade the phrase ''attorney and own client costs'' has insidiously replaced the phrase ''attorney and client costs'' in contracts and mortgage bonds and that in litigation orders are increasingly sought for an award of costs on the ''attorney and own client'' basis. . . . C

The term ''own client'' is a misnomer. . . .

It is immediately evident that when an order is made in favour of a successful party that his opponent pays the costs on the basis of attorney and own client, the customary safeguards against sharp practice are absent. A client against whom his own attorney taxes his D bill of costs will know whether there was an agreement to pay to counsel a fee higher than the usual or to do work of an unusual nature and he will vehemently object if that is not so. Should the attorney and client costs have to be paid by his opponent, however, he will take no interest in the taxation and probably rejoice in an exorbitant assessment. The unsuccessful party may be taken to the cleaners. This E is the danger that lurks in an order that the losing party pays costs on the attorney and own client scale.' [5]

[8] In Ben McDonald, at the outset of the litigation, the respondents had signed a written agreement with their own attorneys in terms of which they had agreed to pay their attorneys' fees and disbursements in accordance with the tariff under Rule 70, except that the tariff was not to apply in respect of specified items of work. The specified items thus exempted from the F tariff effectively covered most of the work that had to be done. The excepted items, to which the respondents and their attorney agreed that the tariff should not apply, included

'consultations, perusal of documents, instructions to draft affidavits and the drafting thereof, correspondence, waiting fees at Court, telephone calls, copying of documents, searches, drafting of bills of costs and attendance on taxation'. G

In respect of these excepted items of work, rates of remuneration appreciably higher than those provided for in the tariff were agreed upon.

[9] The applicants in Ben McDonald were unsuccessful in the litigation and were ordered to pay the respondents' costs taxed as between H

Stegmann J

'attorney and own client'. I shall refer to the applicants as 'the costs debtors'. The attorney for the respondents (whom I shall call 'the costs creditors') drew a bill based on the inflated rates of remuneration for which he had stipulated and which the costs creditors, as his clients, had agreed to pay him.

[10] At the taxation of the bill of costs, the case put forward on behalf of the costs creditors was that by reason of the order for B costs as between 'attorney and own client', the costs debtors were obliged to pay the costs at the same rate as the costs creditors had agreed to pay their own attorney; and that the Taxing Master was obliged to tax the bill on that basis. The Taxing Master did not accept that she was bound to enforce the provisions of the agreement between C the costs creditors and their attorney against the costs debtors in this way. She regarded some of the rates agreed upon as unreasonable. For example, the information before the Taxing Master indicated that attorneys of approximately the same standing as the attorney for the costs creditors were at that time charging their clients fees at a rate of R300 to R350 per hour for professional work (but not for mere D waiting at Court). Yet the attorney had stipulated for, and the costs creditors had agreed to pay him, R420 per hour both for time spent on professional work and also for mere waiting at Court. At that time the tariff allowed R50 per half hour for an attorney's waiting time at Court. E

[11] The Taxing Master took the view that it would be unreasonable to enforce...

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11 practice notes
  • General Council of the Bar of South Africa v Geach and Others
    • South Africa
    • Invalid date
    ...Ltd v Barclays Bank International Ltd 1978 (3) SA 699 (A): referred to Aircraft Completions Centre (Pty) Ltd v Rossouw and Others 2004 (1) SA 123 (W): referred to C Algemene Balieraad van Suid-Afrika v Burger en 'n Ander 1993 (4) SA 510 (T): referred Besselaar v Registrar, Durban and Coast ......
  • Taxation of legal costs: Is a cost creditor shielded by legal professional privilege?
    • South Africa
    • Juta South African Law Journal No. , August 2022
    • 25 August 2022
    ...ion of the law applicable to attor ney-client a nd attorney- own client costs, see Aircraf t Completions C entre (Pty) Ltd v Ros souw 2004 (1) SA 123 (W) paras 103–16.18 Mee r v The Taxing Master 1967 (4) SA 652 (D) at 655. © Juta and Company (Pty) Ltd 626 (2022) 139 TH E SOUTH AFRICA N LAW......
  • Quinella Trading (Pty) Ltd and Others v Minister of Rural Development and Others
    • South Africa
    • Invalid date
    ...Others v Traub and Others 1989 (4) SA 731 (A): dicta at 755D - E applied Aircraft Completions Centre (Pty) Ltd v Rossouw and Others 2004 (1) SA 123 (W): referred to Applebee v Berkovitch 1951 (3) SA 236 (C): dicta at 240A - 246 applied Biowatch Trust v Registrar, Genetic Resources, and Othe......
  • Coetzee v Taxing Master, South Gauteng High Court and Another
    • South Africa
    • Invalid date
    ...thedeparture from the tariff. (Paragraph [39] at 82C–D.)Annotations:Case lawAircraft Completions Centre (Pty) Ltd v Rossouw and Others 2004 (1) SA 123(W): discussed and appliedAloes Executive Cars (Pty) Ltd v Motorland (Pty) Ltd and Another 1990 (4)SA 587 (T): dictum at 589B appliedBowman N......
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10 cases
1 books & journal articles
  • Taxation of legal costs: Is a cost creditor shielded by legal professional privilege?
    • South Africa
    • Juta South African Law Journal No. , August 2022
    • 25 August 2022
    ...ion of the law applicable to attor ney-client a nd attorney- own client costs, see Aircraf t Completions C entre (Pty) Ltd v Ros souw 2004 (1) SA 123 (W) paras 103–16.18 Mee r v The Taxing Master 1967 (4) SA 652 (D) at 655. © Juta and Company (Pty) Ltd 626 (2022) 139 TH E SOUTH AFRICA N LAW......

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