Aircraft Completions Centre (Pty) Ltd v Rossouw and Others

• Jurisdiction: South Africa
• Citation: 2004 (1) SA 123 (W)

Aircraft Completions Centre (Pty) Ltd v Rossouw and Others
2004 (1) SA 123 (W)

2004 (1) SA p123

Citation	2004 (1) SA 123 (W)
Case No	23790/2001
Court	Witwatersrand Local Division
Judge	Stegmann J
Heard	April 29, 2003
Judgment	April 29, 2003

Flynote : Sleutelwoorde B

Costs — Attorney and own client costs — Legitimacy of agreement or order that party to pay costs of another taxed as between 'attorney and own client' — Legal position settled by Appellate Division as far back as 1946 but obscured by contemporaneous statement in C textbook — South African law knowing only three bases of taxation of attorney and client costs, being costs due to an attorney by his own client, attorney and client costs out of a common fund and costs due by one party to his adversary — Appellate Division in 1946 case having borrowed the concept of 'intermediate' D costs from English law and adapted it to our system — Costs lawfully recoverable from costs debtor limited — Order (or agreement) for taxation as between attorney and own client not achieving more than order that costs be paid between attorney and client — Court having discretion, but such not extending to create a new basis of taxation.

Costs — Taxation — Review E of — Statement of case by Taxing Master in terms of Rule 48(1) of Uniform Rules of Court — Where dissatisfied party having, in terms of Rule 48(2)(a), identified certain items to be reviewed, but having failed, without good cause, to comply with Rule 48(2)(b), (c) and (d) in respect of those items, Taxing Master under no obligation to state case — No question of dissatisfied party having right to make submissions in terms of Rule 48(5)(a). F

Costs — Taxation — Discretion of Taxing Master — Special order for taxation of costs as between attorney and client — Whether justifying departure from tariff — Rule 70(5)(a) of Uniform Rules of Court — Taxing Master given discretion to depart from tariff where 'extraordinary or exceptional' circumstances present — Special costs order, although strong indicator G that 'extraordinary or exceptional' circumstances indeed present, not necessarily conclusive — Taxing Master might find, despite special costs order, that case not extraordinary or exceptional, or that adherence to tariff would not be inequitable, and thus decided not to order departure therefrom — If deciding that departure justified, Taxing Master to go on to determine extent thereof. H

Costs — Taxation — Discretion of Taxing Master — Agreement by one party to pay costs of other as between attorney and client — Whether justifying departure from tariff — Rule 70(5)(a) of Uniform Rules of Court — Taxing Master given discretion to depart from tariff where 'extraordinary or exceptional' circumstances present — Existence of agreement not necessarily I establishing that case 'extraordinary or exceptional' as intended, or that adherence to tariff inequitable — Taxing Master still having to apply mind to bill to decide said questions — If deciding that departure justified, to go on to determine extent thereof.

Costs — Taxation of — Tariff for appearance by attorney in High Court or for performance of other functions of advocate in terms of Right of Appearance J

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in Court Act 62 of 1995 — Fixing of rate per hour — Such A appropriate for aspects of attorney's work for which tariff in Rule 70 of Uniform Rules making provision for time-related charges, but not for situation in which attorney appearing in the High Court or performing any of other functions of advocate — Rule 69(3) and (5).

Headnote : Kopnota

The fixing of a rate per hour is appropriate for those aspects of an attorney's work for which the tariff in Rule 70 makes provision for B time-related charges, but it would not be appropriate for a situation in which the attorney appears in the High Court or performs any of the other functions of an advocate. (Paragraph [35] at 138A - A/B.)

Where a dissatisfied party has, in terms of Rule 48(2)(a), identified certain items to be reviewed, but has failed, without good C cause, to comply with Rule 48(2)(b), (c) and (d) in respect of those items, the Taxing Master has no obligation to state a case. If the Taxing Master has rightly refrained from stating a case, there can be no question of the dissatisfied party's having a right to make submissions in terms of Rule 48(5)(a). That right is confined to items on the bill in respect of which the Taxing Master has duly stated a case in accordance with Rule 48(3). (Paragraph [44] at 140E - F/G.) D

Our law of costs knows only three principles or bases of taxation of attorney and client costs. Stated briefly, in ascending order of strictness (or descending order of generosity to the costs creditor), they are: (1) taxation of a bill for payment of an attorney by his own client (also known as 'pure' attorney and client taxation); (2) taxation of a bill for payment of attorney and client costs out of a common fund; and (3) taxation of a bill for payment of attorney and client costs by one party to another. (Paragraph [116] at E 183I/J - 184B.)

The proposition that basis (3) gives little more than taxation as between party and party has never reflected the law anywhere in South Africa, at least not since the decision of Nel v Waterberg Landbouwers Ko-operatieve Vereeniging 1946 AD 597. Nel laid down the basis on which such a taxation was to proceed, dubbing it F 'intermediate' because it is intermediate, as regards strictness or generosity, between basis (1) and a party and party taxation. This intermediate basis is, in origin, basis (3), derived from English law and adapted by Nel to the needs of our own legal system. (Paragraph [116] at 184B - D.)

The misperception (traceable to F J Roos's influential 1947 edition of Taxation of Bills of Costs in Superior Courts in South G Africa) that basis (3) suffers from the shortcoming that it gives little more than a taxation between party and party, has led to the current situation in which attempts are frequently made, by way of agreements and by way of prayers and orders in trial actions and in motion proceedings, to compensate for the supposed deficiency in basis (3) by means of a hybrid order. (Paragraph [116] at 184D - E.) H

This hybrid is the order that one party (the costs debtor) is to pay the costs of another (the costs creditor), taxed as between attorney and own client. It is a hybrid because it inappropriately conflates basis (1) and basis (3). It purports to order and to permit a taxation that will condemn the costs debtor to pay all of the costs that the costs creditor may be obliged to pay to his own attorney. (Paragraph [116] at 184E - F.) I

The objective of the hybrid order cannot lawfully be achieved because the law, as authoritatively stated in Nel, recognises that any client (such as a costs creditor claiming costs from his costs debtor) may become bound to pay his own attorney certain costs that cannot justly, and therefore cannot lawfully, be recovered from a costs debtor in any circumstances. (Paragraph [116] at 184F/G - G/H.)

The principles of Nel set a limit on the costs that can lawfully be recovered from J

2004 (1) SA p125

a costs debtor. The Courts do not have the discretionary power to create a new basis of taxation, previously A unknown to the law, that obliges Taxing Masters to tax bills of costs in a manner that circumvents the limits placed on the costs justly and lawfully recoverable by one party from another by the Appellate Division in Nel. A Court is therefore not entitled to issue an order (such an order that a costs debtor should pay the costs of a costs creditor taxed on a scale 'as between attorney and own client') that would oblige the Taxing Master to allow a B costs creditor to recover a greater amount from a costs debtor than can lawfully be recovered in accordance with a taxation on the intermediate basis established in Nel for purposes of a taxation between two parties on a scale as between attorney and client. As Nel has set legal limits beyond which no costs can lawfully be taxed against or recovered from a costs debtor, an order designed to outflank those limits is legally ineffectual, at least to the extent that it seeks to go beyond the legal limit. (Paragraph [116] at 184G/H - 186H.) C

Therefore an order in the hybrid form that one party should pay the costs of another 'taxed as between attorney and own client', does not, as a matter of law, achieve anything more than an order in the established form that one party should pay the costs of another 'taxed as between attorney and client'. Equally, an agreement D in the hybrid form takes the matter no further than an agreement to pay 'attorney and client' costs. (Paragraph [116] at 186H - I/J.)

A Taxing Master is therefore obliged to act on an order that one party is to pay the costs of another 'taxed as between attorney and own client' in exactly the same way as he is obliged to act on an order that one party is to pay the costs of another 'taxed as between attorney and client'. As a matter of law, there is no E difference between them. Both orders are for a taxation on the intermediate basis in accordance with Nel v Waterberg Landbouwers Ko-operatieve Vereeniging (supra). (Paragraph [116] at 187A - B.)

It follows that, although costs are a matter within the discretion of the Court, that discretion does not extend to the power of creating a new basis of taxation previously unknown to the law. If any need for a new basis of taxation should emerge (as I do not think has occurred), F it would be a matter for the Legislature, or perhaps the Rules Board, to remedy. (Paragraph [116] at 187B/C - C/D.)

In terms of Rule 70(5)(a), it is for the Taxing Master to decide whether 'extraordinary or exceptional' circumstances justifying a departure from the tariff are...