Blakes Maphanga Inc v Outsurance Insurance Co Ltd

• Jurisdiction: South Africa
• Citation: 2010 (4) SA 232 (SCA)

Blakes Maphanga Inc v Outsurance Insurance Co Ltd
2010 (4) SA 232 (SCA)

2010 (4) SA p232

Citation	2010 (4) SA 232 (SCA)
Case No	144/2009
Court	Supreme Court of Appeal
Judge	Navsa JA, Malan JA, Shongwe JA, Tshiqi JA and Majiedt AJA
Heard	March 5, 2010
Judgment	March 19, 2010
Counsel	DC Fisher SC (with CS von Castricum) for the appellant.; PJ Vorster SC (with WW Geyser) for respondent.

Flynote : Sleutelwoorde D

E Attorney — Fees — Set-off against moneys collected — Whether fees liquidated or taxation necessary — Attorney's fees not constituting liquidated debt until ascertained by taxation — Disputed fees may be set off only after taxation.

Headnote : Kopnota

F The appellant, a firm of attorneys, had accepted an oral mandate to collect moneys owing to the respondent. Upon termination of its mandate, the appellant set off its untaxed fees and disbursements from funds it had collected on behalf of the respondent, held in its trust account. The appellant claimed that it was an express provision of its mandate that should the respondent fail to pay its monthly accounts timeously, as was alleged it G failed to do, set-off could be applied. The respondent contended that until such time as a bill of costs reflecting the claimed fees and disbursements was taxed by the Taxing Master, an attorney's claim for fees did not qualify as a liquidated debt, and since set-off only applies between liquidated claims, the appellant was not entitled to set off its untaxed fees against the respondent's claim.

H Held, that the right to apply set-off arose ipso iure, but could be excluded by agreement. (Paragraph [15] at 238E.)

Held, further, that set-off could only be applied if both debts were liquidated, in the sense of having been capable of speedy and easy proof. (Paragraph [15] at 238E/F.)

Held, further, that in the case of attorneys' fees, it followed from a client's I entitlement to taxation that the amount of an untaxed disputed bill of costs was not a liquidated debt, but one yet to be ascertained by the taxing master. (Paragraph [17] at 240C - D.)

Held, further, that while the issue of whether a claim was capable of speedy ascertainment was a matter left to the discretion of a court, it was the taxing master and not the court which determined whether the fees charged J related to work done and were authorised and reasonable — not only in cases

2010 (4) SA p233

of fee disputes, but also where the parties agreed on the fee amount. A (Paragraph [18] at 241E - 242A.)

Held, further, that debts owed to a person in a representative capacity such as a trustee were not capable of being set off against debts owing by such person in his or her personal capacity. (Paragraph [14] at 238C.)

Cases Considered

Annotations B

Reported cases

Altech Data (Pty) Ltd v MB Technologies (Pty) Ltd 1998 (3) SA 748 (W): referred to

Arie Kgosi v Kgosi Aaron Moshette and Others 1921 TPD 524: dictum at 526 applied C

Baskin & Barnett v Barnard 1928 CPD 58: referred to

Benson and Another v Walters and Others 1984 (1) SA 73 (A): dicta at 83A - C and 85B - D applied

Botha v Themistocleous 1966 (1) SA 107 (T): referred to

De Beer v Kotze 1913 CPD 252: referred to D

Deeb v Pinter; Shane & Stoler v Munro-Scott t/a House of Bernadi 1984 (2) SA 507 (W): referred to

Dumah v Klerksdorp Town Council 1951 (4) SA 519 (T): referred to

Fatti's Engineering Co (Pty) Ltd v Vendick Spares (Pty) Ltd 1962 (1) SA 736 (T): dicta at 738F - H and 739B - F applied

Goodricke and Son v Auto Protection Insurance Co Ltd (In Liquidation) E 1968 (1) SA 717 (A): referred to

Gramowsky v Steyn 1922 SWA 48: referred to

Haine v Podlashuc and Nicolson 1933 AD 104: referred to

Herrigel NO v Bon Roads Construction Co (Pty) Ltd and Another 1980 (4) SA 669 (SWA): referred to

Lester Investments (Pty) Ltd v Narshi 1951 (2) SA 464 (C): referred to F

Lovell v Paxinos and Plotkin: In re Union Shopfitters v Hansen 1937 WLD 84 at 86: referred to

Maasdorp and Smit v Sullivan 1964 (4) SA 2 (E): referred to

Malcolm Lyons and Munro v Abro and Another 1991 (3) SA 464 (W): referred to G

Mouton and Another v Martine 1968 (4) SA 738 (T): referred to

National Bank v Marks and Aaronson 1923 TPD 69: referred to

Neves Builders and Decorators v De la Cour 1985 (1) SA 540 (C): referred to

Postmaster-General v Van Vuren 1905 TS 582: dictum at 589 applied

Santam Ltd v Ethwar 1999 (2) SA 244 (SCA) ([1999] 1 All SA 252): referred to H

Schierhout v Union Government (Minister of Justice) 1926 AD 286: referred to

S Dreyer and Sons Transport v General Services 1976 (4) SA 922 (C): referred to

Transnet Ltd t/a Metrorail and Another v Witter 2008 (6) SA 549 (SCA): referred to I

Tredoux v Kellerman 2010 (1) SA 160 (C) ([2009] 1 All SA 164): dictum in paras [18] - [21] applied

Truter, Crous, Wiggill & Vos v Udwin 1981 (4) SA 68 (T): referred to

Van Aswegen v Pienaar en Andere 1967 (3) SA 677 (O): referred to

Wolhuterskop Beleggings (Edms) Bpk v Bloemfontein Engineering Works (Pty) Ltd 1965 (2) SA 122 (O): referred to. J

2010 (4) SA p234

Unreported cases A

Melamed & Hurwitz Inc v Goldberg (SCA case No 686/2007, 19 March 2009): referred to.

Case Information

Appeal against a decision of the North Gauteng High Court. The facts B appear from the judgment of Malan JA.

DC Fischer SC (with CS von Castricum) for the appellant.

PJ Vorster SC (with WW Geyser) for respondent.

Cur adv vult.

Postea (March 19). C

Judgment

Malan JA:

[1] This is an appeal, with the leave of this court, against a judgment of D the full court of the North Gauteng High Court upholding the decision of Van Rooyen AJ in the High Court ordering the appellant, Blakes Maphanga Incorporated, a firm of attorneys, to pay to the respondent, their client, a certain amount of moneys collected on its behalf together with interest and costs.

E [2] This case concerns the question whether an attorney may set off against a claim by the client for payment of moneys, collected on its behalf, fees owing by the client that were disputed and not taxed. The appellant represented the respondent in close to 400 litigious matters. On 4 March 2005 the respondent terminated the appellant's mandate and demanded, pursuant to the mandate given to the appellant, that F moneys collected on its behalf be paid over. The appellant sought to 'invoke' set-off. It asserted that it was entitled to set off against the fees owing to it the moneys so collected. The question for decision is whether the fees claimed are liquidated amounts capable of being set off. This, in turn, depends on whether taxation is required to render the fees, which G were disputed, liquidated.

[3] The respondent is a short-term insurance company. It instructed the appellant to represent it. Their relationship was governed by an oral agreement which provided for the remuneration of the appellant in accordance with a fee structure and tariff. According to the respondent, H all moneys collected by the appellant on behalf of the respondent had to be paid over without any deduction or set-off. Separate monthly accounts in respect of all work done and disbursements made had to be rendered to the respondent and payment had to be made within 30 days of delivery of the accounts.

I [4] It is in dispute whether the mandate in terms of which the appellant was appointed included a proviso, as alleged by the appellant, that set-off of the appellant's fees, against moneys collected for the respondent, would be excluded only where the respondent paid the appellant's monthly accounts timeously. Nor is it clear what the terms of any ad hoc arrangement were. Also disputed is whether the terms of the mandate J would endure after its termination.

2010 (4) SA p235

Malan JA

[5] When the respondent cancelled the appellant's mandate it requested A the appellant to hand over all the relevant files to its new attorneys. Negotiations between the parties followed, leading to the appellant's message to the respondent of 7 March 2005, that the appellant was engaged in closing the files and that it would attend to forthcoming trials during March and April. It stated further: B

'We have commenced the necessary administration and wish to advise you that due to the enormous amount of administration involved in closure of the files, that we will be debiting a closure fee of R 150 excluding Vat. The amount includes the courtesy of making your attorneys a complete duplicate file for collection upon final payment of your account.' C

[6] The respondent replied on 10 March 2005 by calling into question the necessity of making duplicate files, undertaking to pay disbursements made by the appellant on behalf of the respondent, but disputing the R150 closing fee per file charged by the appellant, and reserving the right D to refer any fees that may be disputed to the relevant Law Society. In addition the respondent called for delivery of the files by no later than 16 March 2005. In a subsequent letter of 23 March 2005 the respondent intimated that the reason for the termination of the appellant's mandate was, inter alia, that its fees were no longer competitive.

[7] The appellant alleged that during the first half of 2005 the respondent E was in arrears with the payment of fees and imposed a moratorium on new work to be given to the appellant. According to the appellant, by February 2005, the respondent's accounts were in arrears for a period of 180 days. The respondent was thus not meeting its obligation to make payment within 30 days of receipt of statements of account. The F appellant thereupon resolved, in January 2005, to set off the amounts owing for fees against amounts collected on behalf of the appellant. The...