Singh v Ebrahim
| Jurisdiction | South Africa |
| Judge | Koen J |
| Court | Durban and Coast Local Division |
| Citation | 2010 JDR 0185 (D) |
| Docket Number | 8027/04 |
| Hearing Date | 03 October 2008 |
Koen, J
[1] In the prayer to their Particulars of Claim, plaintiffs claim:
R186 304,09 for past hospital, medical and related expenses and R52 031 and R46 693 for future medical and related expenses;
R13 608 for therapy required by their son Gian Singh;
R50 949 443 for future, hospital, medical and related expenses, future loss of earnings (earning capacity) and general damages for their son Nico Singh.
[2] In my judgment, I awarded to plaintiffs inter alia:
R126 694,77 in respect of their claim in paragraph [1](a) above;
R13 579,20 in respect of Gian Singh;
R9 008 503,40 in respect of Nico Singh.
In paragraph 3 of the order I directed:
2010 JDR 0185 p2
Koen, J
the defendant is ordered to pay the plaintiffs' taxed or agreed costs (excluding the costs of four trial days referred to in paragraph 16 above) on the party and party scale, such costs to include:
the costs consequent upon the employment of two counsel, where applicable, including the preparation of written heads of argument;
the reasonable costs of obtaining medico legal and actuarial reports from those experts who testified and whose qualifying fees are allowed;
the reasonable costs of those experts who attended joint meetings of expert witnesses;
the reasonable qualifying and reservation fees relating to attendance at court of the following witnesses :
Dr R Koch
Dr P Lofstedt
Mr D Rademeyer
Dr G Versfeld
Mr H Schüssler
Mr H Grimsehl
Dr R Wiersma
Miss B Donaldson
Dr M Lilienfeld
Miss I Hattingh
Miss G Steyn
Miss A Crosbie
Mr J Lapp
Dr A Botha
Miss P Jackson
Miss E Bubb
Professor P A Cooper
Dr D Strauss
Mr G Whittaker
the costs of obtaining a transcript of the proceedings"
[3] Unbeknown to me at that time, the defendant on 20 October 2006 had made the following written offer of settlement in terms of Rules 34(1) and 34(5):
"Without prejudice or admission of liability and by way of an offer in full and final settlement of plaintiffs' claim, the defendant hereby offers to settle the plaintiffs' claim by :
payment direct to the plaintiffs of the sum of R12 000 000 (Twelve million) Rand inclusive of the costs of a curator bonis;
the defendant also tenders in the event of this offer of settlement being accepted by the plaintiffs, to pay the plaintiffs' taxed costs as between party and party to date of service of this Notice, including any costs attendant upon obtaining of the amount of R12 000 000 (Twelve
2010 JDR 0185 p3
Koen, J
million) Rand and such costs to include the qualifying expenses (the amount of such expenses to be determined by the taxing master) of such witnesses in respect of whom the plaintiffs have given proper notice in terms of Rule 36 and the cost of two counsel."
[4] The defendant had previously agreed to pay an amount calculated at 7,5% of the capital amount awarded to Nico towards the costs of a curator bonis/trustee. That amount would be R675 637,76. Accordingly, the total amount payable to the plaintiffs in terms of the judgment and the aforesaid agreement is R9 824 415,13.
[5] The defendant has now served a Notice in terms of Rule 34(12) in terms whereof he requests a reconsideration of the costs awarded to the plaintiffs as set out in paragraph 3 of the Order dated 30 July 2008 as the offer to settle exceeds the amounts awarded. He submits that his offer of settlement exceeds the total sum eventually awarded to the plaintiffs by R2 175 584,87.
[6] The issue thus is whether the award of costs to the plaintiffs contained in paragraph 3 of the Order of 30 July 2008 should remain undisturbed.
[7] The purpose of a tender or offer to settle in terms of Rule 34 is to enable a defendant to avoid further litigation, and failing that to avoid liability for the costs of such litigation – see Omega Africa Plastics (Pty) Ltd v Swisstool Manufacturing Co. (Pty) Ltd 1978 (3) SA 465 (A) at 477
2010 JDR 0185 p4
Koen, J
A – B. It enables a defendant to exert pressure upon a plaintiff to accept a settlement on pain of being penalised for costs. The intention of Rule 34(9)(b) is to enable the Court to take into account the fact that an offer of settlement had been refused by the plaintiff, when exercising its discretion as to what order as to costs would be fair in all the circumstances of the case – see Bloom v General Accident and Life Assurance Corporation Ltd and Another 1967 (2) SA 116 (D). More recently in Naylor and Another v Jansen 2007 (1) SA 16 (SCA) the following statement by Denning LJ in Findlay v Railway Executive [1950] 2 All ER 969 (CA) at 972 E – F was quoted namely:
"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."
[8] In Naylor and Another v Jansen (supra) at paragraph 14 it was held that:
"Ordinarily the purpose behind Rule 34 would cause the Judge to order the defendant to pay the plaintiff's costs incurred up to the date of the offer, and the plaintiff to pay the defendant's costs thereafter. That does not mean, however, that there is a 'rule' to this effect, from which departure is only justified in the case of 'special circumstances', as suggested in Van Rensburg v AA Mutual Insurance Co Ltd and Mdlalose v Road Accident Fund. All it means is that the exercise of the Court's discretion as to costs in this way would usually be proper and unimpeachable, and failure to do so would, if unjustifiable, amount to a misdirection. But it needs to be emphasised, as the proviso to Rule 34(12) makes clear, that the Rule does not dictate this result, even provisionally."
2010 JDR 0185 p5
Koen, J
[9] A court in considering the issue of costs in the context of an offer to settle in terms of Rule 34 has an unfettered discretion, to be exercised judicially, not capriciously or upon a wrong principle, not in a biased manner or for not substantial reasons.
[10] In terms of Rule 34(6) a party to whom an offer is made may accept such offer within fifteen (15) days after receipt of the Notice contained in the offer or tender. It has been recognised that the offeree might, in appropriate instances, be entitled to a so-called spatium deliberandi to consider the offer without the risk of incurring further costs. Whether a spatium deliberandi should be provided for at all, and if so, the reasonableness of the duration thereof, will depend on a number of factors including for example, the complexity of the matter, the stage when the offer is made and the like.
[11] Plaintiffs have referred to Omega Africa Plastics (Pty) Ltd v Swisstool Manufacturing Co (Pty) Ltd (supra); Scott v Norwich Union Fire Insurance Society Ltd 1966 (1) SA 72 (SR); Sayed v President Insurance Co Ltd 1967 (2) SA 220 (N); Kakana v Commercial Union Assurance Co of SA Ltd 1975 (3) SA 230 (C); Erasmus v Santam Insurance Ltd and Another 1992 (1) SA 893 (W); Poo v President Insurance Co Ltd The Quantum of Damages in Bodily and Fatal Injury Cases – Corbett and Honey Vol IV page A3 – 96; Griffiths v Mutual &
2010 JDR 0185 p6
Koen, J
Federal Insurance Co Ltd 1994 (1) SA 535 (A); Hassett v Santam Insurance Co Ltd 2000 (1) SA 403 (C); Mdlalose v Road Accident Fund 2000 (4) SA 876 (N) and NM and Others v Smith & Others (Freedom of Expression Institute as Amicus curiae) 2007 (7) BCLR 751 (CC).
[12] The defendant concedes that under Rule 34(12) a trial court retains an overriding discretion on costs – Griffiths v Mutual & Federal Insurance Company Limited (supra), but maintains that the general practice is that where the offer exceeds the amount of the judgment, the defendant will be ordered to pay the plaintiff's costs incurred up to the date of the offer or tender and the plaintiff pay the defendant's costs thereafter.
[13] At the time the offer was made the defendant was faced with a trial which would clearly be protracted, involve numerous issues and be extremely costly. The very nature of the claim was one where the quantum ultimately could not be calculated with arithmetical precision. The court would have difficulty to arrive at a remotely accurate estimation, as I remarked at one stage during the trial, within a million, probably more. That was a difficulty that might also have faced the plaintiffs, and certainly also confronted the defendant.
2010 JDR 0185 p7
Koen, J
[14] The offer made by the defendant was, as it turned out, not only adequate, but generous, exceeding the total amount eventually awarded by more than R2 000 000.
[15] Although some submissions have been made on the issue by the plaintiffs, it is in my view clear and the defendant has not contended otherwise, that the offer made by the defendant to the plaintiffs was an indivisible one.
[16] The acceptance of an offer or tender amounts to the conclusion of a contract which puts a contractual end to the litigation between the plaintiffs and the defendant – see Modise v Standard General Insurance Co Ltd 1989 (2) SA 276 (W), Erasmus v Santam Insurance Co Ltd and Another 1992 (1) SA 893 (W) at 898C, Hassett v Santam Insurance Co Ltd 2000 (1) SA 403 (C) at 406 A. The ordinary principles of contract apply. A court has no discretion to award costs other than that provided for in accordance with the offer (unless the offer is one where no costs are offered as envisaged in Rule 34(9), which is not position in casu). An offer may only be accepted in the terms upon which it is made. Accordingly, the validity and effect of an offer in settlement must be sought by an application of the general principles of contract to the wording used in the context in which they were used. The question becomes one whether it was reasonable for...
To continue reading
Request your trial