Taxation of legal costs: Is a cost creditor shielded by legal professional privilege?

• Author: Moosa, F.
• DOI: https://doi.org/10.47348/SALJ/v139/i3a6
• Published date: 25 August 2022
• Date: 25 August 2022
• Citation: (2022) 139 SALJ 623
• Pages: 623-649

623

https://doi.org/10.47348/SALJ/v139/i3a6

TAXATION OF LEGAL COSTS: IS A

COST CREDITOR SHIELDED BY LEGAL

PROFESSIONAL PRIVILEGE?

FAR EED MOOSA†

Associate Professor, Department of Mercantile & Labour Law,

University of the Western Cape

Taxation of legal costs in the high co urts of South Africa is a qu asi-judicial proceeding

during which a Taxing Master assesses the fairness of a bill of costs, quanties the

amount payable to a cost creditor, and issues an allocatur which certies the sum

payable by a cost debtor. It is argued that this legal process, which is regulated by

Uniform Rule 70 read w ith Uniform Rule 69, implicates a cost debtor’s funda mental

right, under s 34 of the Constitution of the Republic of South Africa, 1996, to fair

dispute resolution at any independent forum. In terms of Uniform Rule 70(3B)

(a), prior to the enrolment of a bill for taxation, a cost debtor is entitled ‘to inspect

such documents or notes pertaining to any item on the bill’. This article argues that

the inspection envisaged is a pre-taxation discovery procedure aimed at enabling a

cost debtor to determine which items on a bill of costs are objectionable, and the

grounds therefor.With reference to relevant judicial precedent and the established

principles of interpretation, this article hypothesises that, having regard to the

clear, unambiguous, peremptory language of Uniform Rule 70(3B)(a), as well as

the purpose sought to be achieved by the right of inspection, the law has, in this

context, excluded the operation of the cost creditor’s common-law right to assert legal

professional privilege as regards documentation pertaining to any item claimed in the

bill of costs. This is unlike the position prevailing at a pre-trial discovery procedure

catered for in Uniform Rule 35. This article also argues that, in accordance with

s 39(2) of the Constitution, the broad construction of the right of inspection under

Uniform Rule 70(3B)(a) advanced here promotes both a cost debtor’s fundamental

right in s 34 of the Constitution, and the values of justice and the rule of law which

are deeply imbricated in the Bill of R ights.

Taxation – lega l costs – legal profession al privilege

I INTRODUCTION

‘Civil justice costs too much, and that high cost both denies access to

justice to the average citizen and contributes substantially to the cost of

doing business for the moder n corporation.’1

† BProc LLB ( Western Cape) LLM (Cape Town) LLD (Wester n Cape). https://

www.orcid.org/0000-0002-2161-287X. I disclose that I was the attorney of record

for the applicant in the primary case discussed in t his article.

1 H M Kritzer, A Sarat, D M Trubek, K Bumiller & E McNichol

‘Understa nding the costs of lit igation: The case of t he hourly-fee lawyer’ (1984) 9

American B ar Foundation Research Journal 559.

(2022) 139 SALJ 623

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624(2022) 139 TH E SOUTH AFRICA N LAW JOURNAL

https://doi.org/10.47348/SALJ/v139/i3a6

Section 342 of the Constitution of the Republic of South Africa, 1996

guara ntees the right to every qua lifying per son3 ‘to seek the assistance of a

court’4 for the fair r esolution of a justiciable dispute. T his right ‘ensures the

peaceful, regulated and institutionalised mechanisms to resolve disputes

without resorting to self-help’.5 Hence, this right has, appropriately, been

described as ‘a bulwark against vigilantism, and the chaos and anarchy

which it causes’.6 However, the right to access a court does not guarantee

that access will be obtained whenever it is sought. This is so, in part,

because of the high costs of civil litigation, which sometimes cannot be

funded.7 Litigation costs, especially in the higher courts, are prohibitive.8

They can cause an inequality of arms, a notion antithetical to the values

of fairness and justice underpinning s 34 of the Constitution.9 Therefore,

legal costs can have the eect of deny ing a litigant access to justice.10 Even

if a litigant secures the funds required for exercising the right to institute

or defend civil proceedings, this is not the end of the matter on costs.

Liability for costs looms large throughout the litigation process. The

guiding principle followed by South African courts is that ‘thesuccessful

part y is entitled to his costs u nless the court for good rea son in the exercise

of its discretion deprives him of those costs’.11

2 Section 34 reads: ‘Everyone has the right to have any dispute that can be

resolved by the application of law decided in a fair public hearing before a court

or, where appropriate, another independent and i mpartial tribunal or for um.’

3 Although the Bill of Rights only applies to persons physically present on

South Afr ican soil (see Kaunda v P resident of the Republic of So uth Africa 2005 (4) SA

235 (CC) para 36), for tax administration purposes it ought to apply to persons

located beyond South Africa’s territorial lim its. See Fareed Moosa ‘Does the Bill

of Rights apply extraterritorially for tax administration purposes?’ (2020) 31

Stellenbosch LR 37.

4Barkhuizen v Napier 2007 (5) SA 323 (CC) par a 31.

5Chief Lesapo v North West Agricultural Bank 2000 (1) SA 409 (CC) para 22;

Zondi v MEC for Traditional and Local Government Aairs 2005 (3) SA 589 (CC)

para 61.

6Chief Lesapo ibidpara 22.

7Legal Aid South Africa v Magidiwana 2 015 (6) SA 494 (CC) paras 25 –6.

8Kintetsu World Express South Africa (Pty) Ltd v LDC Consultants CC [2013]

ZAGPJHC 241 para 16.

9S v S 2019 (6) SA 1 (CC) paras 40–1, 45–9.

10AF v MF 2019 (6) SA 422 (WCC) paras 37–56. Also, see Kgomotso

Ramotsho ‘High litigation costs deprive the poor access to justice’ 2018

(November) De Rebus 11.

11Pretoria Garrison Institutes v Danish Variety Products (Pty) Ltd 1948 (1) SA

839 (A) at 863; Ferreira v Levin NO 1996 (2) SA 621 (CC) para 3. An exception

to the usual rule that costs follow the result is the principle emanating from

Biowatch Trust v Registrar, Genetic Resources 2009 (6) SA 232 (CC). The Biowatch

principle, and its underlying rationale, were explained in Harrielall v University

of Kwa-Zulu Natal 2018 (1) BCLR 12 (CC) para 11 as follows: ‘That rule

applies in every constitutional matter involving organs of State.The rule seeks

to shield unsuccessful litigants from the obligation of paying costs to the state.

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